M/S.AL ZARAFA TRAVELS & MANPOWER CONSULTANTS P. LTD,ERNAKULAM vs. THE ACIT, ERNAKULAM

Per CHANDRA POOJARI, AM:

These appeals filed by the assessee are directed against common order of

the CIT(A)-III, Kochi dated 19/10/2018 and pertain to the above assessment

years.

together and are being disposed of by this common order.

assessment orders were passed on 28/12/2016 and therefore, the appeals

should have been filed on or before the end of January, 2017. However, the

appeals had been filed on 22/06/2018. The assessee requested for condonation of delay. On the issue of late filing of appeals, the Assessing Officer wrote a

letter dated 11/07/2018 as follows:

“Subsequent to the search action u/s 132 of the IT Act against Shri Varughese M. Uthup on 27.03.2015, notices u/s 153C was issued to the company M/s Al-Zarafa Travels and Manpower Consultants Private Limited in which the said assessee had played a vital role and also been the Director of the company. The proceedings resulted in a tax and penalty demand of Rs. 248 crores and Rs. 156 crores respectively in the hands of the said company.

Order u/s 179 was also passed on 14.08.2017 holding Shri. M. Uthup Varughese holding jointly and severally liable for the payment of tax and penalty demand of M/s Al-Zarafa Travels and Manpower Consulants Pvt. Ltd.

Due to complete non-cooperation by the assessee company, the assessment of the company had to be completed with the help of materials available on record.

Taking into account the contumacious conduct of the said Shri Varughese M. Uthup an order u/s 230 of the IT Act was passed on 05/03/2018 after approval from the DGIT, rendering it necessary for him to obtain a certificate from the Income Tax Authority that he has no liabilities under this act or the wealth tax act or that satisfactory arrangements have been made for the payment of all or any such taxes that has become payable before he leaves the territory of India.

Shri Varughese M. Uthup filed a writ petition against order u/s 230. The Honorable High Court Kerala upheld the order passed u/s 230. The matter was then taken to the Division Bench of the honorable High Court Kerala wherein also it was upheld. The order passed u/s 230 had an element of demand passed u/s 179 being the demand of M/s Al-Zarafa Travels and Manpower Consultants Pvt. Ltd. The Honorable High Court Kerala has also directed this office to redo the order u/s 179 and also have a relook at order u/s 230. During the course of hearing, it was submitted that M/s Al-Zarafa Travels and Manpower Consultants Pvt. Ltd has decided to file appeals against the assessment and penalty orders passed.

It is seen that the company has decided to file appeals after around 19 months of delay therefore, apparently bared by limitation. The assessee in the appeals has raised the following grounds: i. After search, the company was abandoned by Shri. Renny Eapen and other director being his spouse Mrs. Susan Thomas was not in knowledge about the happenings in the company.

ii. Shri. Varughese M. Uthup came to know about the assessment orders passed only on 13.03.2018 and after that the employees of the company were contacted and the assessment was received.

iii. The subsequent delay is due again inaction by the other director and time was taken to get digital signature facility and PAN.

As one of the directors, it is the bounden duty of Smt. Susan Thomas to show due care and diligence in respect of the company. Her gross neglect and breach of duty of her part in relation to the affairs of the company and claiming lack of knowledge about the happenings cannot be a ground for condonation.

From the submission itself it is apparent that the company was in possession of the assessment orders passed as Shri. Varughese M. Uthup had stated that he had taken copies of the orders after contacting the employees and the erstwhile chartered accountant. Notwithstanding to his contention, the assessee has again not brought sufficient grounds to explain even the enormous delay they have taken after the so called receipt of assessment orders on 13.03.2018. It may thus appear that the company might have waited for a positive decision by the court in respect of order u/s 230A and having filed in this regard has taken recourse to file an appeal.

During the course of sworn statement on 04.07.2018, Shri. Varughese M. Uthup the spouse of Smt. Susan Thomas had stated that he had come to know about the search from T.V. Channels in U.A.E Further, he stated that he had called one of the staffs of the company and was appraised of the happenings. That being the case, the plea of Smt. Susan Thomas that she was unaware of the happenings in the company appears unfathomable.

Notwithstanding to any of the above, it is seen that the Director Mrs. Susan Thomas is a non-resident and whereas, the appeal has been uploaded in Kochi. It is not known as to how the appeal has been digitally signed in Kochi when the director is physically present in U.A.E

It is submitted that the reasons given by the company is unsustainable and it is apparent that the assessee could not bring on record any reasons which was beyond the control of him that caused delay in the filing of appeal. It is therefore pleaded that the appeal filed by the company may please be dismissed as barred by limitation."

such delay was more than 500 days. The CIT(A) summarized the main reasons

given for the delay as follows:

i. After the search, the Managing Director, Shri Renny Eapen abandoned the company and did not inform the other Director, Smt. Susan Thomas.

ii. Smt. Susan Thomas is a non-resident she is employed in UAE for last two decades.

iii. No one attended the assessment proceedings and the assessment had to be completed ex-parte.

iv. The other Director, Smt. Susan Thomas was unaware of the happenings in the company.

v. The assessment order was served on the erstwhile chartered accountant of the company and was received by Shri. Varughese M. Uthup on 13.03.2018.

vi. Smt. Susan Thomas had to obtain digital signature, so that the appeal could be filed.

5.1 After considering the reasons given by the assessee, the CIT(A) found these

reasons quite frivolous. According to the CIT(A), Shri Renny Eapen, the

Managing Director abandoning the company, Smt. Susan Thomas, the other

director, not being aware of the happenings, even though she is the wife of Shri

Varughese M. Uthup, the main person controlling the affairs of the company was

far from convincing. In fact, it was observed that all the happenings, post-

search, was a story of non-cooperation on the part of the company and nothing was beyond control of the assessee company. The CIT(A) was of the opinion

that both Mr. Renny Eapen, Mrs. Susan Thomas and also Mr. Varughese M.

Uthup were well aware of their responsibilities and consequences. The CIT(A)

was of the opinion that the non-cooperation and delay was willful and therefore,

the delay in filing the appeal cannot be condoned. Since delay in filing the appeal

was not condoned, the grounds of appeal relating to the merits of the case were

also not considered. In view of the above, all the appeals were treated as invalid

and therefore, dismissed.

the assessment order was passed on 28/12/2016. He drew our attention to a

table showing relevant dates which reads as follows:

TABLE SHOWING RELEVANT DATES & ADDITIONAL SUBMISSIONS

SI. No Matter Date

2 Date of Receipt of the Assessment order by the ex- 31.12.2016 employee of the company

3 Date of handing over the order by ex-employee Mr. Paul 15.02.2017 Varghese (Roy) to the erstwhile Chartered Accountant of the company Mr. James Thomas

4 Date of Receipt of the Assessment Order by Director, Smt. 13.03.2018 Susan Thomas's husband Mr. Varughese M. Uthup

5 Date of death of erstwhile Chartered Accountant Mr. James 15.06.2018 Thomas 6 Date of filing Appeal 22.06.2018

7 Delay in filing appeal if the date of receipt of assessment 71 days order is taken as the date on which Smt. Susan Thomas's husband received the assessment order from the erstwhile Chartered Accountant of the appellant

8 Delay in filing appeal if the date of receipt of appeal by ex- 510 days employee is treated as date of receipt of Assessment Order

6.1 He also drew our attention to the affidavit dated 15/01/2019 filed by Shri

Paul Varghese who was the ex-employee of the company and received the

assessment order on behalf of the company which reads as follows:

“I, PAUL VARGHESE, alias Roy, aged 57, Son of P. P.Varghese, residing at Vadakenadayil Vadavathoor P. O., Kottayam District do hereby solemnly affirm and state as follows:-

I was an employee of the company, Al Zarafa Travels and Manpower Consultants (P) Ltd, Kochi till 31.03.2015, when the company was functioning at Door No. 39, 1st Floor, Lakeview Apartments, Church Landing Road, Kochi - 682 016. After the search initiated by the Income Tax Department at the premises of the company on 27.03.2015, I stopped attending the company and the business of the company was closed down.

On 31.12.2016, a staff of the Income Tax Department contacted me over telephone and requested me to collect some documents relating to the company Al Zarafa Travels and Manpower Consultants (P) Ltd. Since I was to leave to my home town at Kottayam by train, the staff member came to the Railway Station at Ernakulam Junction and handed over the assessment orders of the company to me.

Since the Managing Director of the Company. Sri. Renny Eapen could not be contacted, the assessment orders were retained by me. I was not aware of its relevance and importance. On 15.02.2017, I handed over the assessment orders to the erstwhile Chartered Accountant of the company Sri. James Thomas at his residence at Kottayam. The Chartered Accountant advised me to request the Managing Director Sri. Renny Eapen to contact him for taking further steps. However, I could not contact the Managing Director Sri. Renny Eapen.

On 13.03.2018, Sri. Varughese M. Uthup contacted me and asked me whether I had received any communication from Income Tax Department. I appraised him about the fact that the assessment orders were handed over to Chartered Accountant, Sri. James Thomas.”

6.2 He also drew our attention to the death certificate of assessee’s ex-

Chartered Accountant, Shri James Thomas dated 15/06/2018. He placed reliance

on the condonation petition filed before the CIT(A) and explained the reason for

delay in filing the appeal before the CIT(A) as follows:

“After the search initiated on the company, a series of cases were initiated on the company by enforcement directorate and other agencies. Consequent to this, the managing director of the company, Sri. Renny Eapen, who was managing the full affairs of the company, abandoned the company without even informing the only other director, Smt. Susan Thomas. Smt. Susan Thomas is a non-resident for more than two decades and is employed in UAE and was not at all involved in the affairs of the company and was not in knowledge about the happenings in the company. When Susan Thomas's husband, Sri. Varughese M. Uthup had to appear in a court in Kochi on 14.03.2018, an order u/s 230 of the Income Tax Act was handed over to the court by the departmental lawyer. The order u/s 230 was issued pursuant to the demands raised on the appellant company. On knowing about the demands, appellant's husband contacted one of the employees of the appellant company who informed that the assessment orders were handed over to the erstwhile Chartered Accountant of the company. The appellant contacted the Chartered Accountant and the assessment orders were received from him only on 13.03.2018. On receipt of the order, the managing director was contacted and was requested to file appeal against the order. Though he agreed to file the appeal, no action was taken by him. In the above circumstances, Smt. Susan Thomas took the initiative to file the appeal. But, for filing the appeal, Digital Signature was mandatory. To get Digital Signature, PAN was also mandatory. Hence, she had to apply for PAN, get PAN and then apply for Digital Signature. All this resulted in delay of filing the appeal. The delay in filing the appeal was on account of reasons beyond the control of the appellant and was not intentional. In these circumstances, it is prayed to condone the delay in filing the appeal and accept the appeal as valid.”

6.3 Before us, the Ld. AR submitted that after the search initiated on the

Company, its offices and business were closed down and it has never been re-

opened. As a natural outcome, all the employees also had to discontinue from

the services, although officially no termination notices were issued. The

assessing officer, his staff, contacted one of such ex-employees Mr. Paul

Varghese (Roy) whose telephone number was gathered by him. Since the

Managing Director of the Company Sri. Renny Eapen abandoned the Company,

the ex-employee, after waiting for one and a half months handed over the

assessment orders to the erstwhile Chartered Accountant of the Company Sri.

James Thomas on 15.02.2017. Sri. James Thomas was sick and was confined to

his house and on 15.06.2018 he succumbed to his sickness and died. Smt.

Susan Thomas's husband Mr. Varughese M. Uthup had collected the assessment

orders from the Chartered Accountant on 13.03.2018. After that he contacted

another Chartered Accountant to file the appeal, but only then it was known that

Digital Signature is required for filing the appeal as the Department had changed

the procedure of filing appeal from manual to online. When it was tried to get

Digital Signature it was known that PAN was mandatory for obtaining Digital

Signature. Smt. Susan Thomas being non - resident for more than 20 years had

no PAN. She had to apply for PAN. The application forms were to be prepared

and sent to UAE. After affixing the signature, the same had to be returned to

India. The postal delay took considerable time. Moreover, allotment of PAN took

nearly 2 weeks. After getting PAN, application for Digital Signature had to be prepared and the same had also to be sent to UAE. After signing the same, it

had to be returned to India and application for Digital Signature had to be

submitted. After getting Digital Signature, appeals against 6 assessment orders

and 6 penalty orders were to be prepared, vetted and filed. Considering this, the

delay of 71 days from the date of receipt of assessment order by Smt. Susan

Thomas's husband is reasonable. Even if the delay is taken as 510 days if the

date of service of orders on ex-employee is treated as date of receipt of order,

the delay is on account of genuine and meritorious reasons. It was submitted

that the main objection raised by the Assessing Officer before the CIT (Appeals)

against condonation of delay was that after the receipt of assessment order on

13.03.2018, the delay of 71 days in filing the appeal was not on account of

reasons beyond the control of the assessee. It was submitted that from the

reasons cited by the assessee before the CIT (Appeals) and before this Bench, it

is evident that the delay was not intentional and was on account of reasons

beyond the control of the assessee. Considering the above, it was prayed to

condone the delay and set aside the orders of both the CIT (Appeals) and

assessing officer and remit the case back to the files of the assessing officer to

adjudicate the matter afresh after providing the assessee an opportunity of being

heard.

6.4 It was further submitted that rejection of the appeal on account of delay

would cause great hardship to the company and its directors. The director's husband against whom travel ban u/s 230 of the Income Tax Act had been

issued is a chronic patient having acute diabetes and hyper tension and is in

treatment at Imperial College of Diabetes Centre at Abu Dhabi. He is also under

treatment for renal related ailments at Sheikh Kaleefa Medical City at Abu Dhabi.

Due to the pending tax dues on the company, he is not in a position to travel to

Abu Dhabi where he has been undergoing treatment. His health is getting

weakening. Considering the above, it was prayed to condone the delay and

accept the appeal as valid.

6.5 The Ld. AR also placed reliance on the following judgments:-

a) Collector,Land Acquisition Anantnag and Another vs. MST. Katiji and others (2002-TIOL-444-SC-LMT).

b) Shri S. Muralikrishna vs. DCIT (ITAT, Bangalore Bench) (ITA Nos. 1649&1850/Bang/2016 dated 02/12/2016).

c) Elnet Technologies Ltd. vs. DCIT (ITA No.997/2008 dated 08/10/2018)(Mad.).

d) Rajeshsingh Khadak Bahadur vs. ITO (ITAT, Ahmedabad Bench)(ITA Nos. 615&616/Ahd/2014 dated 25/06/2015).

and submitted that there is no reasonable cause for filing the appeals belatedly

by 510 days and the condonation petition is to be dismissed.

delay of 510 days from the date of receipt of the assessment order by the ex-

employee of the assessee to the filing of the appeal by the assessee. On the

other hand, it was submitted that the delay would be 71 days from the date of

receipt of the assessment order taken as the date on which Smt. Susan

Thomas’s husand received the assessment order from the ex-chartered

accountant of the assessee. In our opinion, at this stage, it is more appropriate

to consider the date of receipt of the assessment order by the husband of Smt.

Susan Thomas as the effective date of receipt of the assessment order so as to

condone the delay in this case. We have gone through the condonation petition

explaining the reasons for the delay in filing the appeal. There is no dispute in

this case that the original assessment order was passed ex parte u/s. 144 of the

I.T. Act and this was received by the assessee’s ex-employee, namely Shri Paul

Varghese on 31/12/2016 as per his sworn affidavit dated 15/01/2019. It was

explained by the ex-employee of the Company, Shri Paul Varghese that after the

search initiated by the Income Tax Department at the premises of the company

on 27.03.2015, he stopped attending the company since the business of the

company was closed down. On 31.12.2016, a staff of the Income Tax

Department contacted him over telephone and requested him to collect some

documents relating to the assessee-company which is said to be the assessment

order. Thereafter, Mr. Paul Varghese went to the Railway station at Ernakulam

Junction for collecting the assessment order from the staff of the Department.

To that extent, there is no dispute that the assessee’s ex-employee had received

the assessment order from the staff of the IT Department. The Department has

not filed an counter affidavit in this regard. Shri Paul Varghese handed over the

assessment order to the assessee’s erstwhile Chartered Accountant, Shri James

Thomas on 15/02/2017 who later expired on 15/06/2018. The assessee had

also filed death certificate dated 15/01/2019, confirming the sad demise of Shri

James Thomas, CA on 15/06/2018.

8.1 It was submitted before the CIT(A) that assessee’s Managing Director, Shri

Renny Eapen abandoned the company without informing the other Director, Smt.

Susan Thomas. Smt. Susan Thomas is a non-resident who is employed in UAE

for last two decades and was not conversant with the affairs of the company.

8.2 Subsequent to the search action u/s 132 of the IT Act against Shri

Varughese M. Uthup on 27.03.2015, notices u/s 153C was issued to the company

M/s Al-Zarafa Travels and Manpower Consultants Private Limited in which the

said Shri Varughese M. Uthup had played a vital role and also been the Director

of the company. The proceedings resulted in a tax and penalty demand of Rs.

248 crores and Rs. 156 crores in the hands of the said company and directed

respectively which is evident from para 7 of the CIT(A)’s order. Order u/s 179

was also passed on 14.08.2017 holding Shri Varughese M. Uthup jointly and

severally liable for the payment of tax and penalty demand of M/s Al-Zarafa Travels and Manpower Consultants Pvt. Ltd. Due to complete non-cooperation

by the assessing company, the assessment of the company had to be completed

with the help of materials available on record. Taking into account the

contumacious conduct of the said Shri Varughese M. Uthup an order u/s 230 of

the IT Act was passed on 05/03/2018 after approval from the DGIT, rendering it

necessary for him to obtain a certificate from the Income Tax Authority that he

has no liabilities under this act or the wealth tax act or that satisfactory

arrangements have been made for the payment of all or any such taxes that had

become payable before he leaves the territory of India. Shri Varughese M.

Uthup filed a writ petition against order u/s 230. The High Court Kerala upheld

the order passed u/s 230. The matter was then taken to the Division Bench of

the High Court Kerala wherein also it was upheld. The order passed u/s 230 had

an element of demand passed u/s 179 being the demand of M/s Al-Zarafa

Travels and Manpower Consultants Pvt. Ltd. The High Court Kerala had also

directed this office to redo the order u/s 179 and also have a relook at order u/s

and Manpower Consultants Pvt. Ltd had decided to file appeals against the

assessment and penalty orders passed. In the meantime, Smt. Susan Thomas's

husband, Sri. Varughese M. Uthup had to appear in a court relating to his matter

on 14.03.2018. On knowing about the demands, the assessee contacted one of

the employees of the assessee-company who informed that the assessment

orders were handed over to the erstwhile Chartered Accountant, Shri James Thomas of the company. Smt. Susan Thomas’s husband Shri Varughese M.

Uthup received the assessment orders from him only on 13.03.2018. On receipt

of the order, the managing director was contacted and was requested to file

appeal against the order but no action was taken by him. In view of this, Smt.

Susan Thomas took the initiative to file the appeal. But. for filing the appeal,

Digital Signature was mandatory. To get Digital Signature, PAN was also

mandatory. Hence, she had to apply for PAN, get PAN and then apply for Digital

Signature. All this resulted in delay of filing the appeals before the CIT(A).

8.3 Therefore, we have to consider whether the assessee’s failure is sufficient

cause for condoning the delay. The Madras High Court considered an issue in the

case of Sreenivas Charitable Trust v. Dy. CIT (280 ITR 357) and held that mixing

up of papers with other papers are sufficient cause for not filing the appeal in

time. The Madras High Court further observed that the expression "sufficient

cause" should be interpreted to advance substantial justice. Therefore,

advancement of substantial justice is the prime factor while considering the

reasons for condoning the delay.

8.4 There is a technical defect in the appeals since the appeals were not filed

within the period of limitation. The assessee filed an affidavit stating that the

appeals were not filed because of the improper service of notice by the

Department. The Revenue has not filed any counter-affidavit to deny the

allegation made by the assessee. While considering a delay in filing the appeal, the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors.

(167 ITR 471) laid down six principles. For the purpose of convenience, the

principles laid down by the Apex Court are reproduced hereunder:

(1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late.

(2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.

(3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner.

(4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.

(5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk.

(6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

8.5 When substantial justice and technical consideration are pitted against each

other, the cause of substantial justice deserves to be preferred, for the other side

cannot claim to have vested right for injustice being done because of non

deliberate delay. Moreover, no counter-affidavit was filed by the Revenue

denying the reasons advanced by the assessee. It is not the case of the Revenue

that the appeal was filed deliberately with delay. Therefore, we have to prefer 16 substantial justice rather than technicality in deciding the issue. As observed by

Apex Court, if the application of the assessee for condoning the delay is rejected,

it would amount to legalise injustice on technical ground when the Tribunal is

capable of removing injustice and to do justice. Therefore, this Tribunal is bound

to remove the injustice by condoning the delay on technicalities. If the delay is

not condoned, it would amount to legalising an illegal order which would result in

unjust enrichment on the part of the State by retaining the tax relatable thereto.

Under the scheme of Constitution, the Government cannot retain even a single

pie of the individual citizen as tax, when it is not authorised by an authority of

law. Therefore, if we refuse to condone the delay, that would amount to legalise

an illegal and unconstitutional order passed by the lower authority. Therefore, in

our opinion, by preferring the substantial justice, the delay of 71 days has to be

condoned.

8.6 The next question may arise whether delay was excessive or inordinate.

There is no question of any excessive or inordinate when the reason stated by

the assessee was a reasonable cause for not filing the appeal. We have to see

the cause for the delay. When there was a reasonable cause, the period of delay

may not be relevant factor. In fact, the Madras High Court in the case of CIT vs.

K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of

delay and held that there was sufficient and reasonable cause on the part of

the assessee for not filing the appeal within the period of limitation.

Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 71 days cannot be considered to be

inordinate or excessive. Furthermore, the Chennai Tribunal by majority opinion in

the case of People Education and Economic Development Society (PEEDS) v. ITO

(100 ITD 87) (Chennai) (TM ) condoned more than six hundred days delay. It is

pertinent to mention herein that the view taken by the present author in that

case was overruled by the Third Member.

8.7 We also place reliance on the decision of this Tribunal in the case of Midas

Polymer Compounds (P.) Ltd vs. Asstt. CIT in ITA No. 288/Coch/2017 dated

25/06/2018 wherein this Tribunal condoned the delay of 2819 days. Insofar as

the reliance on the decision of the Tribunal in the case of Midas Polymer

Compounds (P) Ltd. cited supra is concerned, we are of the view that the

Tribunal condoned the delay on the part of the assesse in filing the appeals by

observing that the Chartered Accountant who was handling the matter failed to

take proper steps to file the appeals and the Chartered Accountant filed affidavit

stating that the appeals for AYs. 1999-2000 to 2004-05 in respect of the group

concern and appeals for the AYs. 2005-06, 2007-08 and 2008-09 of the assessee

were filed and represented by the Chartered Accountant at Cochin and he was

under the impression that the appeal for the AY 2006-2007 was also filed by that

Chartered Accountant in Cochin. It was also stated that the issue in all these

appeals were covered in favour of the assessee by the order of the High Court of

Kerala for the assessment years 2005-06 to 2008-09. The non-filing of the

appeal was noted only when the Assessing Officer had enquired about the status of the case and payment of tax in the last week of May, 2017. The assessee was

under the impression that the Chartered Accountant had already made

arrangements for filing the appeal and as so many appeals were pending before

the ITAT, he was under the impression that the appeal for this year also was

filed. It was submitted that the non-filing of the appeal was due to an

inadvertent omission on his part in handing over the file to the AR at Cochin.

Hence, it was prayed that the delay of 2819 days in filing the appeal may be

condoned. As such, this Tribunal condoned the above delay of 2819 days.

8.8 The Madras High Court in the case of Sreenivas Charitable Trust (supra)

held that no hard and fast rule can be laid down in the matter of condonation of

delay and the Court should adopt a pragmatic approach and the Court should

exercise their discretion on the facts of each case keeping in mind that in

construing the expression "sufficient cause" the principle of advancing substantial

justice is of prime importance and the expression "sufficient cause" should

receive a liberal construction. Therefore, this Judgment of the Madras High Court

(supra) clearly says that in order to advance substantial justice which is of prime

importance, the expression "sufficient cause" should receive a liberal

construction. In this case, the issue on merit regarding granting of deduction u/s.

80IB was covered in favour of the assessee by the Judgment of the Madras High

Court. Therefore, for the purpose of advancing substantial justice which is of

prime importance in the administration of justice, the expression "sufficient

cause" should receive a liberal construction. In our opinion, this Judgment of the Madras High Court is also squarely applicable to the facts of this case. A similar

view was taken by the Madras High Court in the case of Venkatadri Traders Ltd.

v. CIT (2001) 168 CTR (Mad) 81 : (2001) 118 Taxman 622 (Mad).

8.9 The Mumbai Bench of this Tribunal in the case of Bajaj Hindusthan Ltd. v.

Jt. CIT (AT) (277 ITR 1) has condoned the delay of 180 days when the appeal

was filed after the pronouncement of the Judgment of the Apex Court.

Furthermore, the Revenue has not filed any counter-affidavit opposing the

application of the assessee for condonation of delay. The Apex Court in the case

of Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi (AIR 1978 SC 537) held

that non-filing of affidavit in opposition to an application for condonation of delay

may be a sufficient cause for condonation of delay. In this case, the Revenue has

not filed any counter-affidavit opposing the application of the assessee,

therefore, as held by the Apex Court, there is sufficient cause for condonation of

delay. The Supreme Court observed that when the delay was of short duration, a

liberal view should be taken. "It does not mean that when the delay was for

longer period, the delay should not be condoned even though there was

sufficient cause. The Apex Court did not say that longer period of delay should

not be condoned. Condonation of delay is the discretion of the Court/Tribunal.

Therefore, it would depend upon the facts of each case. In our opinion, when

there is sufficient cause for not filing the appeal within the period of limitation,

the delay has to be condoned irrespective of the duration/period. In this case,

the non-filing of an affidavit by the Revenue for opposing the condonation of delay itself is sufficient for condoning the delay in filing the appeals before the

CIT(A).

8.9.1 In case the delay was not condoned, it would amount to legalise an illegal

and unconstitutional order. The power given to the Tribunal is not to legalise an

injustice on technical ground but to do substantial justice by removing the

injustice. The Parliament conferred power on this Tribunal with the intention that

this Tribunal would deliver justice rather than legalise injustice on technicalities.

Therefore, when this Tribunal was empowered and capable of removing

injustice, in our opinion, the delay in filing the appeals before the CIT(A) has to

be condoned and the appeals of the assessee have to be admitted and disposed

of on merit.

8.9.2 In view of the above, we condone the delay in filing the appeals before

the CIT(A) and remit the issue to the file of the CIT(A) to decide the issue on the

merit of the additions made by the Assessing Officer. Since the assessment

order was passed ex parte u/s. 144 of the Act, the CIT(A), if required, may call

for the remand report from the Assessing Officer and confront the same to the

assessee before deciding the appeals. We also make it clear that if the CIT(A) or

the Assessing Officer relied on any statement of the third parties so as to frame

the impugned assessments on an earlier occasion, the same is to be confronted

to the assessee and if the assessee requires any cross examination of the parties

concerned, the same is to be provided. With these observations, we remit the issue to the file of the CIT(A) to decide the issue afresh regarding the merit of

the additions.

sd/- sd/- (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER

Place: Kochi Dated: 4th February, 2019 GJ Copy to: 1. Al Zarafa Travels & Manpower Consultants (P) Ltd., 1st Floor, Lake View Apartments, Church Landing Road, Ernakulam-682 016. 2. The Assistant Commissioner of Income-tax, Central Circle-2, Kochi. 3. The Commissioner of Income-tax(Appeals)-III, Kochi. 4. The Commissioner of Income-tax, Central, Kochi. 5. D.R., I.T.A.T., Cochin Bench, Cochin. 6. Guard File. By Order

(ASSISTANT REGISTRAR) I.T.A.T., Cochin