THE PIDAVOOR SERVICE CO-OPERATIVE BANK LTD. vs. THE INCOME TAX OFFICER, WARD-2, OFFICE OF THE ADDITIONAL COMMISSIONER OF INCOME TAX, KOLLAM

WP(C)/7468/2019HC KeralaKLHC01019061201915 March 2019Author: HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE5 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that while the Tribunal is correct in expecting cogent reasons for condoning delay and is not bound to upset its findings on facts, it must also weigh the balance of justice. The Court noted that no prejudice would be caused to the revenue if the delay was condoned, whereas the petitioner would suffer if it was not. Therefore, to balance the scales of justice, the delay of 122 days was ordered to be condoned on payment of a cost of Rs. 25,000/-. The petitioner was directed to deposit this cost with the first respondent within three weeks and produce the receipt before the Tribunal. Subsequently, the stay application was to be taken up and disposed of by the Tribunal within three weeks, and coercive steps pursuant to the impugned order were to be deferred until then. The High Court disposed of the writ petition with these directions.

What were the facts?

The petitioner, Pidavoor Service Co-operative Bank Ltd., a co-operative society, filed a writ petition before the High Court of Kerala challenging an assessment order. The society had filed an appeal before the Income Tax Appellate Tribunal (ITAT) but with a delay of 122 days. The society attributed the delay to the illness of its Secretary. The ITAT, while considering the delay application along with another similar appeal from another society, was not satisfied with the explanation provided for the delay. The High Court was therefore approached to consider the condonation of this delay.

What were the issues?

1. Whether the Tribunal was justified in not condoning the delay of 122 days in filing the appeal, considering the explanation provided by the petitioner regarding the illness of its Secretary? (Question of law and fact, turning on the interpretation of principles for condonation of delay). Assessee's Contention: The assessee argued that the delay was due to the illness of its Secretary, which was a cogent reason. They implicitly sought condonation of delay to have their appeal heard on merits. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding the delay. The Tribunal was not satisfied with the explanation provided by the assessee.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE FRIDAY ,THE 15TH DAY OF MARCH 2019 / 24TH PHALGUNA, 1940 WP(C).No. 7468 of 2019 PETITIONER/S: THE PIDAVOOR SERVICE CO-OPERATIVE BANK LTD. NO. 2807, REPRESENTED BY ITS SECRETARY, PIDAVOOR P.O., PATHANAPURAM, KOLLAM DISTRICT 689 695. BY ADVS. SRI.T.R.HARIKUMAR SRI.ARJUN RAGHAVAN RESPONDENT/S: 1 THE INCOME TAX OFFICER, WARD-2, OFFICE OF THE ADDITIONAL COMMISSIONER OF INCOME TAX, KOLLAM RANGE, AYAKAR BHAVAN, NR. KARBALA JUNCTION, KOLLAM 691 001. 2 THE COMMISSIONER OF INCOME TAX APPEALS, 2ND FLOOR AYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM 695 003. OTHER PRESENT: SMT THUSHARA JAMES-GP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15.03.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 7468 of 2019 2

JUDGMENT The petitioner a Co-operative Society, challenging an Assessment Order, filed an appeal before the Income Tax Appellate Tribunal. The appeal was filed with delay of 122 days. The petitioner explained the reasons for the delay with reference to the illness of the Secretary of the Society. The delay application was taken up along with another appeal filed by another society. In that appeal also there was a delay of 122 days. The Tribunal was not satisfied with explanation for the delay.

It is true that the delay is only 122 days. The petitioner must demonstrate cogent reasons to condone the delay. I need upset finding on facts. It is well considered order. However if explanation is not satisfactory, the Tribunal has to weigh balance of justice. No prejudice will be caused to respondents if delay is condoned; if not, petitioner will suffer. In such circumstances reasonable costs would balance the scale of justice. Accordingly, delay is ordered to be condoned on payment of cost of Rs.25,000/-. The cost shall be deposited before the 1st respondent within three weeks and produce the receipt before the Tribunal. On condonation of delay, stay application shall be taken up and disposed within three weeks therein. Till such time coercive steps pursuant to impugned order in appeal shall be deferred.

This writ petition is disposed of. A.MUHAMED MUSTAQUE Dxy JUDGE

Appendix — schedule of exhibits

APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE CERTIFICATE DATED 16/8/2016 ISSUED BY THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES GENERAL PUNALUR. EXHIBIT P2 A TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2014-2015 DATED 29.12.2016. EXHIBIT P3 A TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 156 OF THE INCOME TAX ACT DATED 29/12/2016. EXHIBIT P4 A TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 27IB DATED 29/12/2016. EXHIBIT P5 A TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 271 (1) (C) DATED 29/12/2016. EXHIBIT P6 A TRUE COPY OF THE APPEAL PREFERRED BY THE PETITIONER AGAINST EXHIBIT P2 ASSESSMENT ORDER ALONG WITH COVERING LETTER DATED 9.1.2017. EXHIBIT P7 A TRUE COPY OF THE STAY PETITION DATED 10/1/2017 FILED BY THE PETITIONER ALONG WITH EXT P6 APPEAL. EXHIBIT P8 A TRUE COPY OF THE ORDER DATED 20/2/2018 IN ITA NO. 155/EF/KLM/CIT(A) , TVM /2016-17 PASSED BY THE 2ND RESPONDENT. EXHIBIT P9 A TRUE COPY OF THE CHELLAN OF COURT FEES PAID TOWARDS THE FILING OF ITA NO. 414/2018. EXHIBIT P10 A TRUE COPY OF THE DELAY CON DONATION PETITION IN ITA NO. 41/42018 DATED 18.7.2018, FILED BY THE PETITIONER BEFORE THE TRIBUNAL. WP(C).No. 7468 of 2019 5 EXHIBIT P11 A TRUE COPY OF THE JUDGMENT DATED 21/12/2017 OF THIS HONBLE COURT IN WPC NO. 38566 OF 2017. EXHIBIT P12 A TRUE COPY OF THE ORDER DATED 30/10/2018 IN I.T.A. NO. 414/COCH/2018 OF THE TRIBUNAL. EXHIBIT P13 A TRUE COPY OF THE ORDER DATED 29/8/2018 IN ITA NO. 148/COCH/2018 OF THE TRIBUNAL. EXHIBIT P14 A TRUE COPY OF THE ORDER DATED 16.3.2018 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P15 A TRUE COPY OF THE ORDER DATED 17/12/2018 IN ITA NO. 211/EF/KLM/CIT (A)/TVM/2017-18 ISSUED BY THE 2ND RESPONDENT.

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