ROLTA INDIA LTD THROUGH MAMTA BINANI IRP ,MUMBAI vs. DCIT CENTRAL CIRCLE -1(1), MUMBAI
Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI AMIT SHUKLA, JM & MS PADMAVATHY S, AM
Per Padmavathy S, AM:
This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)-47, Mumbai [for short 'the CIT(A)] dated 27.11.2024 for the AY 2020-21. The assessee raised the following ground of appeal:-
“The learned CIT (Appeals) has erred in law and on the facts of the case in not condoning the delay of 503 days in filing the appeal and dismissing the same.”
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2. The assessee is a public limited company. The assessee filed the return of income for AY 2020-21 on 15.02.2021 declaring Nil income. The return was processed under section 143(1) of the Income Tax Act, 1961 (the Act) where an addition of Rs. 7,299.37 crores was raised. Aggrieved the assessee filed appeal before the CIT(A). There was a delay of 503 days in filing the appeal before the CIT(A). The assessee filed a petition condoning the delay along with the affidavit from the Executive Director, the reasons submitted by the assessee before the CIT(A) is extracted as below:
“1. Rolta India Ltd started facing financial crunch from 2016-17 onwards due to the investments made in the Battlefield Management System (BMS) contract provided by the Ministry of Defence. In order to tide over the financial crunch
Rolta India decided to disinvest one of the subsidiaries namely Rolta BI & Big
Data Analytics Private Ltd to UK based company. One of the condition was that the NOC of the Consortium banks to be provided. Out of the four Banks, three banks provided the NOC but Bank of India could not provide the NOC due to which the deal was cancelled.
Due to the above reason, the account turned NPA and Union Bank of India filed an application on 10th September, 2018 with NCLT. The company could not pay the salary of the employees due to which the employees started leaving the service without even serving the Notice Period.
The NCLT admitted the application of one of the employees in May, 2021 and appointed the Interim Resolution Professional. This resulted in many of the employees leaving the services and by October, 2021, almost all the employees left and there was nobody to attend to the Accounts and Finance operation. Even the CFO was not attending the office and used to come intermittently as he was also not paid his remuneration.
Subsequently, the assessee has appealed before NCLTAT and thereafter before the Hon'ble Supreme Court and the Hon'ble Supreme Court vacated the order of the NCLT.
As submitted above, the assessee had a debt of Rs. 1,413.47 crores to Union Bank of India and other banks. Union Bank of India had filed an application on 10-09-2018 before NCLT and the same was admitted on 19-01-2023. The company is still going through CIRP proceedings.
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4. The company had given corporate guarantee to the tune of U 200
millions and U 300 millions to D.B. Trustees (HK) Ltd. and Citicorp
International Ltd. The said corporate guarantees were due on 16-05-2018 and 27-04-2019 which were defaulted by the assessee company. The said parties have also filed an application before NCLT.
On the facts of the case on similar facts your goodself has allowed the appeal for assessment year 2021-22. 6. The assessee relies on the decision of the Bombay High Court in the case Vijay Vishin Meghani vs. DCIT 86 taxmann.com 98 (copy enclosed) wherein delay of 2984 days for filing appeal before the Hon'ble Tribunal was condoned by the Hon'ble Bombay High Court.”
The CIT(A) however did not condone the delay and dismissed the appeal in limine. The assessee is in appeal before the Tribunal against the order of the CIT(A).
The ld. AR submitted that the delay in filing the appeal before the CIT(A) is not wilful and the assessee had a reasonable cause for the delay. The ld. AR further submitted that the assessee was in severe financial crunch and there were many litigation against the company which required considerable time and effort. The ld. AR also submitted that all the employees including the CEO of the assessee have left at one point and therefore there was no one to look into the income tax issues that led to the delay in filing the appeal before the CIT(A). Accordingly, the ld. AR prayed for a direction to the CIT(A) to condone the delay. On merits the ld. AR submitted that the contingent liability has been inadvertently mentioned in the Tax Audit Report as being claimed as a deduction in the Profit & Loss A/c whereas it is not claimed as a deduction as such. The ld. AR submitted that the huge addition made in the intimation is sustainable if the issue is considered on facts and evidences. The ld. AR accordingly prayed that an opportunity may be given to represent the case on merits before the CIT(A).
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5. We heard the parties and perused the material on record. The only issue contended before us is that the CIT(A) ought to have condoned the delay which according to the assessee is due to genuine cause. We in this regard notice that the Hon'ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) while considering the issue of condonation of delay, laid down certain principles as reproduced here under :-
(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, common sense 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.
In assessee's case from the perusal of the reasons submitted by the assessee for the delay in filing the appeal, we notice that due to financial crisis and the employees leaving the organization, the assessee could not pursue the income tax issues in time. The argument that given the quantum addition made in the intimation, the assessee would not have had any reason not to seek relief before the appellate authority also merits consideration. Therefore in our view the assessee
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has no reason to delay the filing of appeal and that the delay on the part of the assessee is not deliberate but due to the facts as stated in the petition for condonation filed before the CIT(A). It is also relevant to take into account the submission of the ld AR that the addition is due to the inadvertent error in the tax audit report and that the same is not sustainable when considered on merits. The Hon'ble Supreme Court in the case of Mst. Katiji and Ors (supra) has held that when substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred. Therefore considering the facts and circumstances of the we deem it fit to direct the CIT(A) to condone the delay and admit the appeal for consideration on merits. We further direct the CIT(A) to call for relevant details as may be required to adjudicate the impugned issue on merits and give relief to the assessee in accordance with law. The assessee is directed to file the details before the CIT(A) and co-operate with the appellate order. It is ordered accordingly.
In result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 06-03-2025. (AMIT SHUKLA) (PADMAVATHY S)
Judicial Member Accountant Member
*SK, Sr. PS
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent
3. DR, ITAT, Mumbai
4. 5. Guard File
CIT
BY ORDER,
(Dy./Asstt.