SHAKUNTLA THUKRAL vs. COMMISSIONER OF INCOME TAX AAYAKAR BHAWAN RISHI NAGAR LUDHIANA PUNJAB

The appellant-revenue has filed the instant appeal under Section 260A of the Income Tax Act, 1961 (in short, “the Act”) against the order dated 12.04.2016, Annexure A.3, passed by the Income Tax Appellate Tribunal, Chandigarh (in short, “the Tribunal”) in I.T.A. No.429/Chd/2013, for the assessment year 2005-06, claiming following substantial questions of law:- “A) Whether the ITAT is justified in rejecting the appeal against order under Section 271(1)(c) of Income Tax Act, on the ground of delay though supported by affidavit of counsel Gurbax Singh 2017.10.12 10:33

A few facts relevant for the decision of the controversy involved, as narrated in the appeal, may be noticed. The appellant- assessee is a resident of Ludhiana. She is engaged in the business of manufacture, purchase and sale of cloth and fabrication. She is a regular assessee under the Act. She filed her return of income for the assessment year in question declaring total income at ` 2,80,161/- on 31.10.2005. The Assessing Officer passed order dated 27.12.2007 under Section 143(3) of the Act assessing income at ` 58,67,550/-. The addition was made on the ground of suppression of closing stock amounting to ` 28,73,640/- and on account of unaccounted job work done. The Assessing Officer initiated penalty proceedings under Section 271(1)(c) of the Act. The assessee appeared and explained that the imposition of penalty was not maintainable under the law. According to the assessee, on the issue of suppression of closing stock, total stock of ` 27,45,000/- was lying with her. Besides, she was having stock of other parties worth ` 28,73,640/-. The assessee had taken insurance on entire stock since the stock was in her custody, and the responsibility for safety laid with her. To take credit limits and loans from the Bank, the assessee declared the ITA No. 337 of 2016 3

We have heard learned counsel for the parties.

Admittedly, the assessment order in the present case was passed on 27.12.2007 under Section 143(3) of the Act, assessing income at ` 58,67,550/-. The addition was made on the ground of the suppression of closing stock and on account of unaccounted job work done. Penalty proceedings under Section 271(1)(c) of the Act were initiated. Penalty of ITA No. 337 of 2016 4

The appeal before the Tribunal was to be filed within a period of 60 days. The same was filed in April 2013. The explanation putforth by the assessee was that she submitted copy of the order to the learned counsel but the file remained pending with him and it was only in April 2013, when the counsel received the order passed by the Tribunal in quantum appeal that the error was noticed and the counsel realized the mistake about non filing of the penalty appeal under Section 271(1)(c) of the Act. It was categorically recorded by the Tribunal after examining the entire material that the assessee could not bring on record any evidence or reasons to demonstrate that she was prevented by inevitable circumstances or there was a sufficient cause for not filing the appeal in time which was late by 613 days. Thus, the Tribunal declined to condone the delay in filing the appeal and dismissed the same.

This Court in VAT Appeal No. 47 of 2012 (M/s Hansaflon 5.07.2012 following the decisions of the Hon’ble Supreme Court in the Limitation Act, 1963 as under :- “6. From the above, it emerges that the law of limitation has been enacted which is based on public policy so as to prescribe time limit for availing legal remedy for redressal of the injury caused. The purpose behind enacting law of limitation is not to ITA No. 337 of 2016 5

The Hon’ble Apex Court in Oriental Aroma Chemical Industries Ltd. and R.B. Ramlingam’s cases (supra) noticed that the courts should adopt liberal approach where delay is of short period whereas the proof required should be strict where the delay is inordinate. Further, it was also observed that judgments dealing with the condonation of delay may not lay down any standard or objective test but is purely an individualistic test. The court is required to examine while adjudicating the matter relating to condonation of delay on exercising judicial discretion on individual facts involved therein. There does not exist any exhaustive list constituting sufficient cause. The applicant/petitioner is required to establish that inspite of acting with due care and caution, the delay had occurred due to circumstances beyond his control and was inevitable.”

The question regarding whether there is sufficient cause or not depends upon each case and primarily is a question of fact to be considered taking into totality of events which had taken place in a particular case. No cogent and satisfactory explanation has been furnished by the learned counsel for the appellant-assessee even before ‘gs’