PREVISION PROJECT MANAGEMENT SYSTEMS PVT LTD,MUMBAI vs. INCOME TAX OFFICER -14(2)(4), MUMUBAI

Per: Smt. Beena Pillai, J.M.: The Present appeal filed by the assessee arise out of order dated 11/07/2024 passed by Ld.CIT(A)-3 Bangaluru, for assessment year 2012-13 on following grounds of appeal: “1) That on the facts and in the circumstances of the case of the appellant and in law Ld. CITA -3, Bengaluru has erred in re-opening the case of the appellant u/s. 147 of the Act for A.Y. 2012-13.

A.Y. 2012-13 M/s. Prevision Project Management Systems Pvt. Ltd. 2) That on the facts and in the circumstances of the case of the appellant and in law Ld. NFAC has erred in making addition u/s. 69C of the Act on account of remittance to Australia amounting to Rs. 4,09,369/-.

3) That on the facts and in the circumstances of the case of the appellant and in law Ld. NFAC has erred in making an addition to business income amounting to Rs. 4,99,600/- u/s. 69A of the Act as unexplained money.

4) That on the facts and in the circumstances of the case of the appellant and in law Ld. NFAC has erred in adding the same amount twice to the income of the applicant leading to double taxation.

5) That the impugned order being contrary to law, evidence, and facts of the case may kindly be set aside, amended, and modified in the light of the grounds of appeal enumerated above and the appellant be granted such relief as is called for on the facts and in the circumstances of the case of the appellant and in law.

6) That each of the grounds of appeal enumerated above is without prejudice to and independent of one another.

7) That the appellant craves leave to reserve to himself the right to add, to alter or amend any of the grounds of appeal before or at the end of the hearing and to produce such further evidence, documents, and papers as may be necessary.”

2. At the outset the Ld.AR submitted that there was delay of about 65 days in filing appeal before the Ld.CIT(A) which was not condoned, by holding that assessee failed to demonstrate sufficient cause for non filing of appeal within due time. The Ld.CIT(A) thus dismissed the appeal in limine.

A.Y. 2012-13 M/s. Prevision Project Management Systems Pvt. Ltd. 2.1 The Ld.AR submitted that, the assessee was suffering from ill health and therefore was unaware about the assessment order being passed causing the delay. It is submitted that the delay was unintentional and in bonafide circumstances. The Ld.AR thus submitted that, there exists sufficient reason in filing the appeal before the Ld. CIT(A) belatedly and prayed for the delay to be condoned. It is submitted that the assessee has good case on merit and may be granted one more opportunity to present its case before Ld.CIT(A). 2.2 On the contrary the Ld.DR relied on orders passed by authorities below. I have perused submissions advanced by both sides in the light of the records filed before this Tribunal.

6.1 On merit the issue is in favour of the assessee. But there is a technical defect in the appeal since the appeal was not filed within the period of limitation. The assessee filed an affidavit saying that the appeal was not filed because of the Counsel’s inability to file the appeal. The Revenue has not filed any counteraffidavit to deny the allegation made by the assessee. While considering a similar issue 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.

A.Y. 2012-13 M/s. Prevision Project Management Systems Pvt. Ltd. (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 nondeliberate 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.

6.2 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 nondeliberate delay. In the case on our hand, the issue on merit regarding allowability of deduction u/s. 80IB of the Act was covered in favour of the assessee by the binding Judgment of the jurisdictional High Court. Moreover, no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the appeal was not filed deliberately. Therefore, we have to prefer 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 2819 days has to be condoned.”

3.2 In the present facts, I have examined the reason stated by the Director of the assessee that caused delay, whether is A.Y. 2012-13 M/s. Prevision Project Management Systems Pvt. Ltd. sufficient and whether, there exists sufficient and reasonable cause, for not presenting the appeal before Ld.CIT(A) within the period of limitation under the statute. In the present case in hand, the assessee explained that delay was due to ill health of the Director who was handling the case at that point of time. This being the position, it constitutes sufficient cause for filing the appeals belatedly. 3.2 In any case, the assessee is not benefitted with the delay caused in filing appeal before Ld.CIT(A). The lapse that occurred on behalf of the Director cannot be attributed to the assessee for which assessee could be punished. In case of People Education & Economic Development Society Vs. ITO reported in 100 ITD 87 (TM) (Chen), it was held that; “when substantial justice and technical consultation 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 non-deliberate delay”. 3.3 The next question that arises is 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 able to file the appeal within the period of limitation. The cause for the delay therefore deserves to be considered, when there exist a reasonable cause, and therefore the period of delay may not be relevant factor. In support, I rely on the decision of Hon’ble 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. Hon’ble Madras High A.Y. 2012-13 M/s. Prevision Project Management Systems Pvt. Ltd. Court thus condoned nearly 21 years of delay in filing the appeal. As compared to 21 years, delay of about 65 days cannot be considered to be inordinate or excessive. 3.4 Hon’ble Madras High Court in the case of Sreenivas Charitable Trust reported in 280 ITR 357 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. A similar view was taken by Hon’ble Madras High Court in the case of Venkatadri Traders Ltd. v. CIT (2001) 168 CTR (Mad) 81 : (2001) 118 Taxman 622 (Mad). 3.5 I also refer to the decision of Hon’ble Mumbai Bench of this Tribunal in the case of Bajaj Hindusthan Ltd. v. Jt. CIT (AT) reported in 277 ITR 1 condoned the delay of 180 days when, the appeal was filed after the pronouncement of the Judgment of the Hon’ble Supreme Court. 3.6 It is also to be noted that the Revenue has not filed any counter-affidavit opposing the application of the assessee for condonation of delay. Hon’ble Supreme Court in the case of Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi reported in 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. Hon’ble Supreme Court also observed that; “It does not mean that when the delay was for longer period, the delay should not be condoned even though A.Y. 2012-13 M/s. Prevision Project Management Systems Pvt. Ltd. there was sufficient cause. 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 deserves to be condoned, irrespective of the duration/period.” I am therefore of the opinion that the reason assigned by the Director of assessee to present the appeal within time before Ld.CIT(A) deserves consideration based on the principles laid down by Hon'ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471. 3.7 Reliance is placed on following observations by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 wherein, Hon’ble Court observed as under:- “The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits". The expression “sufficient cause” employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making a justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that :

1. 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 out at the very threshold and cause of A.Y. 2012-13 M/s. Prevision Project Management Systems Pvt. Ltd. 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. ......................................................1.Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.”

Based on the discussions, I condone the delay in filing the appeal before the Ld. CIT(A).