K.S.SRIDHAR vs. THE INCOME TAX OFFICER

TCA/660/2018HC Madras22 April 2019Bench: Hon`ble Mr Justice C.V. KARTHIKEYAN5 pages

AI SummaryRemanded

What did the High Court hold?

The High Court held that the matter deserved to be remitted back to the Tribunal for deciding the appeal on merits. The Court found that the Tribunal could have taken a more sympathetic view of the delay, particularly given that a substantial amount of the disputed demand had already been paid by the assessee. The Court condoned the delay of 145 days in filing the appeal before the Tribunal. The ratio decidendi is that appellate forums should consider the merits of a case and the substantial payment made by the assessee when deciding on condonation of delay, especially when the delay is not excessively long and the reasons provided, while perhaps not perfectly documented, indicate genuine hardship. The Court directed the Tribunal to decide the appeal on merits within six months from the date of the order, providing a reasonable opportunity of hearing to the assessee. The assessee was directed to appear before the Tribunal on May 15, 2019. No issue was expressly left undecided.

What were the facts?

The assessee, K.S. Sridhar, an individual and General Manager at M/s. Vibgyor Automotive Private Limited, filed a Tax Case Appeal before the High Court of Judicature at Madras. The appeal challenged an order by the Income Tax Appellate Tribunal (ITAT) dated April 20, 2018. This ITAT order dismissed the assessee's petition to review a previous ITAT order dated December 5, 2017. The earlier order had rejected the assessee's appeal as time-barred due to a delay of 145 days. The assessee cited medical ailments as the reason for the delay, but the ITAT found the supporting evidence, a three-day hospital admission certificate without a doctor's certificate, insufficient. The amount in dispute relates to cash credit entries, with an initial demand of Rs. 7,27,210, of which approximately Rs. 7,00,000 has been paid.

What were the issues?

1. Whether the High Court, in an appeal under Section 260A of the Income Tax Act, 1961, should condone the delay of 145 days in filing the appeal before the Income Tax Appellate Tribunal, considering the assessee's medical reasons, and decide the appeal on merits? Assessee's Contention: The assessee argued that a sympathetic view should be taken regarding the delay, especially since a substantial portion of the demand (approximately Rs. 7,00,000 out of Rs. 7,27,210) has been paid. The assessee also pointed out that there was a delay of only 8 days in filing the appeal before the Commissioner of Income Tax, which was condoned. The assessee's medical ailments, though not perfectly documented, were the reason for the delay. Revenue's Contention: The Revenue supported the impugned order of the ITAT, which had dismissed the appeal as time-barred due to insufficient cause for delay.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

Judgt. dt. 22.4.19 in T.C.A.660/18 K.S.Sridhar v. ITO 1/5 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 22.4.2019 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE C.V.KARTHIKEYAN Tax Case Appeal No.660 of 2018 and C.M.P.No.13038 of 2018 K.S.Sridhar Appellant Vs. 1. The Income Tax Officer, Salary Ward-VI(2), Chennai. 2. The Income Tax Appellate Tribunal, "SMC", C-Branch, Rajaji Bhavan, Besant Nagar, Chennai 600 090. Respondents Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras 'C' (SMC) Bench, Chennai, dated 20.4.2018 made in M.P.No.20/CHNY/2018 in ITA No.3249/Mds/2016. For Appellant : Ms.Kothai Muthu Meenal For Respondents : Mr.T.R.Senthilkumar Senior Standing Counsel assisted by Ms.K.G.Usharani J U D G M E N T (Delivered by DR.VINEET KOTHARI,J) The Assessee K.S.Sridhar, an individual, who was working as General Manager in a Private Company viz., M/s.Vibgyor Automotive Private Limited, http://www.judis.nic.in Judgt. dt. 22.4.19 in T.C.A.660/18 K.S.Sridhar v. ITO 2/5 Chennai, has filed this Tax Case (Appeal) under Section 260-A of the Income Tax Act, aggrieved by the order passed by the learned Income Tax Appellate Tribunal dated 20.4.2018, dismissing the petition filed by him praying to review the order passed by the Tribunal on 5.12.2017, rejecting the Appeal filed by the Assessee as barred by limitation which was filed after a delay of 145 days. The reasons assigned by the Assessee for the delay viz., Medical Ailments of the Assessee were not found to be sufficient by the learned Tribunal as they were not supported by the Doctor's Certificate and the admission certificate produced was only for three days. 2. The relevant portion of the order passed by the Tribunal dated 5.12.2017 is quoted below for ready reference:- "4. In the present case, the assessee justified the delay only with reference to the Affidavit by the assessee stating that the assessee was suffering from Hypertension, Rhemotoid Arthritis and other problems and he was admitted in Vijaya Hospital on 3.3.2016 and discharged on 5.3.2016 as per Vijay Medical & Educational Trust's discharge summary (at page 41 of file) baring IP No.2347/2016, Bed No.309, dated Nil. This reason advanced by the assessee is not supported by Doctors' Certificate and the admission certificate was only 3 days i.e., from 3.3.2016 to 5.3.2016. Therefore, I am of the opinion that this kind of delay does not warrant http://www.judis.nic.in Judgt. dt. 22.4.19 in T.C.A.660/18 K.S.Sridhar v. ITO 3/5 condonation, since the assessee has not shown any valid proof for undergoing treatment on the advice of doctor in filing the appeal belatedly 145 days. Accordingly, the appeal filed by the assessee stands dismissed as un- admitted." 3. The learned counsel appearing for the Revenue however, supported the impugned order. 4. Having heard the learned counsel appearing for the parties and upon perusal of the reasons stated in the impugned order, we are satisfied that the learned Tribunal could have taken sympathetic view of the matter and decided the Appeal proceedings on merits. There was a delay of 8 days in filing the Appeal before the Commissioner of Income (Tax) and 145 days in filing the Appeal before the Tribunal. Both the Appellate Forums have failed to consider the case of the Assessee on merits and decide his Appeal with regard to the Cash Credit entries of which disallowance was made by the Assessing Authority. 5. The learned counsel for the Assessee submitted before us that as against the demand of Rs.7,27,210/-, a substantial amount viz., Rs.4,75,000/- stands paid by the Assessee during the period from May 2010 to June 2018 as per the details furnished in the Memorandum of Appeal filed by the Assessee and even after filing of the present Appeal, further payments have been made and in total, around Rs.7,00,000 has been paid. http://www.judis.nic.in Judgt. dt. 22.4.19 in T.C.A.660/18 K.S.Sridhar v. ITO 4/5 6. Therefore, we are of the opinion that the matter deserves to be remitted back to the Tribunal for deciding the Appeal on merits. Accordingly, we condone the delay in filing the said Appeal and we request the learned Tribunal to decide the Appeal on merits and in accordance with law within a period of 6 months from today, after providing a reasonable opportunity of hearing to the Assessee. The Assessee shall appear before the Tribunal in the first instance on 15.5.2019. The Tax Case Appeal is disposed of accordingly. No costs. The connected miscellaneous petition is closed. (V.K.,J.) (C.V.K.,J.) 22.4.2019 Index : Yes/No Internet : Yes/No ssk. 1. The Income Tax Officer, Salary Ward-VI(2), Chennai. 2. The Income Tax Appellate Tribunal, "SMC", C-Branch, Rajaji Bhavan, Besant Nagar, Chennai 600 090. http://www.judis.nic.in Judgt. dt. 22.4.19 in T.C.A.660/18 K.S.Sridhar v. ITO 5/5 DR.VINEET KOTHARI, J. and C.V.KARTHIKEYAN, J. ssk. TCA No.660 of 2018 22.4.2019. http://www.judis.nic.in

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