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Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal by assessee is directed against the order of CIT(A) dated 31.7.2015. The assessee has raised following grounds of appeal:-
The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence. probabilities, facts and circumstances of the case. 2. The learned CIT[A] is not justified in disposing off the appeal ex-parte without allowing sufficient and real opportunity to the appellant to represent the case and hence,
ITA No.719/Bang/2021 M/s. Sree Minerals, Bangalore
Page 2 of 21 the impugned order passed requires to be set-aside / cancelled.
Without prejudice to the above, the learned CIT[A] is not justified in refusing to condone the delay in filing the appeal on the ground that the delay in filing the appeal was not supported by any credible reason under the facts and in the circumstances of the appellant's case.
Without prejudice to the above, the learned CIT[A] is not justified in upholding the disallowance of Rs.3,46,78.764/- in respect of depreciation claimed on wind mill ignoring the certificate for commissioning of the Windmill under the facts and in the circumstances of the appellant's case. 5. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.
Initially the assessee filed appeal before CIT(A) against the assessment order u/s 143(3) r.w.s. 154 of the Income-tax Act,1961 ['the Act' for short]. Though the said order was served to the assessee on 29.2.2012, the assessee filed appeal before CIT(A) on 27.4.2012. The CIT(A) not condoned the delay in filing the appeal before him on the reason that assessee not adduced any credible reason for delay in filing appeal before him. He also decided the appeal on merit and dismissed the issue by observing that assessee has failed to establish that the windmill was commissioned before 31.3.2009. Accordingly, he observed that the AO is justified in disallowing the claim of depreciation at Rs.3,46,78,764/-. Against this assessee is in appeal before us. The assessee filed this appeal before this Tribunal on 22.12.2021 though the CIT(A) order was dispatched to the assessee on 30.11.2015 and assessee required to file appeal before this
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Page 3 of 21 Tribunal on or before 29.01.2016. However, the appeal was filed before this Tribunal on 22.12.2021. The assessee explained the delay by way of following affidavit:- “Affidavit for condonation of delay: I, B.V. NAGARJUNA REDDY, Son of Sri B V Sreenivasa Reddy, aged about 24 years, residing at BELLARY, now on camp at BANGALORE, do hereby solemnly affirm and say on oath as under:- 1. That I am the Authorised Signatory and presently partner of the above firm and I am conversant with the facts of the case and competent to swear to the contents of this affidavit in connection with the prayer for condonation of delay in filing the appeal. 2. That the above partnership firm was originally constituted under the Deed of partnership dated 14/11/2006 between Sri B V Sreenivasa Reddy and Smt. B Sreelatha, my father and mother respectively, who were carrying of business of mining of Iron-ore, Manganese, Granites, Quartz and other minerals and transportation of the same at Bellary. 3. That, there was an order of assessment passed under section 143[3] of the Act, dated 30/12/2011 for the aforesaid assessment year 2009-10 by the learned Deputy Commissioner of Income tax, Circle-1, Bellary determining the total income of our firm at Rs. 1,66,80,870/-. 4. That, my father Sri B V Sreenivasa Reddy was the Managing Partner of the firm and he was taking care of all the business activities including filing of the return of income and compliances under the Income tax Act, 1961. 5. That, the aforesaid Sri B V Sreenivasa Reddy was inculpated in certain criminal cases, first by the Central Bureau of Investigation [CBI for short] in connection with the case of illegal mining group of Sri G.Janardhan Reddy and others and he was arrested by the CBI on 5.9.2011. 6. That when the assessment order u/s 143(3) of the Act, dated 30/12/2011 was passed by the learned A.O., my father and Managing Partner of the firm was remanded to judicial custody at Hyderabad Central Jail after having been arrested by the CBI in CC No. 1/2012 pending before the learned Prl. Spt. Judge for CBI cases, Hyderabad.
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Page 4 of 21 7. That, my mother Smt. Sreelatha was the only other partner of the firm at the relevant point of time and she was not very much conversant with the income tax procedures and proceedings 8. That, my mother Smt. Sreelatha had also met with an accident on 4.6.2010 in which she suffered a fracture of her left leg, which was operated on 5.6.2010 during which surgery a titanium rod was affixed, and she was advised complete rest with limited mobility until the removal of the rod affixed for healing of the fractured bone, which ultimately was performed only on 06/08/2013.
That, under the aforesaid circumstances, the assessment order passed u/s. 143[3] of the Act, dated 30/12/2011 was received and my mother Smt. Sreelatha was advised to file a rectification petition u/s. 154 of the Act before the learned A.O. since there were mistakes apparent on record in the order of assessment passed u/s. 143[3] of the Act, dated 30/12/2011. 10. That, accordingly, a rectification petition u/s. 154 of the Act was filed on 14/02/2012 before the learned A.O. and the same was disposed off vide order dated 23/02/2012 deleting the disallowances made u/s. 43B of the Act. 11. That, thereupon, my mother Smt. Sreelatha was advised to file an appeal before the learned Commissioner of Income-tax [Appeals], HUBLI in respect of the disallowance of depreciation on the windmill made in the order of assessment passed u/s. 143[3] of the Act, dated 30/12/2011. 12. That, accordingly, an appeal was filed on 24/04/2012 before the learned Commissioner of Income-tax [Appeals], HUBLI in respect of the disallowance of depreciation on the windmill made in the order of assessment passed u/s. 143[3] of the Act, dated 30/12/2011. 13. That, inadvertently, in Form No. 35 filed, the order appealed against was depicted as the order u/s. 154 of the Act, dated 23/02/2012 instead of the order of assessment made u/s. 143[3] of the Act, dated 30/12/2011. 14. That, the grounds of appeal raised in Form No. 35 relates to the disallowance of depreciation made in the order passed u/s. 143[3] of the Act, dated 30/12/2011 for which a prayer for condonation of delay vide letter dated 19/04/2012 was also filed stating the reasons for the delay on account of the absence of Sri B V Sreenivasa Reddy. 15. That, the learned Commissioner of Income-tax [Appeals], Kalburagi disposed off the appeal numbered as ITA No. CIT[A]/12A/HBL/2012-
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Page 5 of 21 13 vide his order dated 31/08/2015 dismissing the appeal both on the ground of delay in filing the appeal as well as on merits of the disallowance of depreciation. 16. That, the learned CIT[A] has considered the impugned order as the order u/s. 143[3] of the Act, dated 30/12/2011 in the appellate order passed in the title sheet although he has made observations about non-filing of an appeal against the assessment order u/s. 143[3] of the Act, dated 31/12/2011.
That, the aforesaid order of the learned CIT(A) was dispatched on 30.11.2015 and considering the said date of dispatch, an appeal against the aforesaid appellate order ought to have been filed before the Hon'ble Tribunal on or before 29/01/2016. That, the appeal against the-said appellate order came to be 18. instituted before the Hon'ble Income-tax Appellate Tribunal, Bangalore Bench, Bangalore and thus, there is a delay of 2154 days in filing the appeal. The reasons for the delay in filing the appeal are explained hereinafter. 19. That, as mentioned above, the Managing Partner of the firm Sri B V Sreenivasa Reddy, at the relevant point of time, was inculpated in the certain criminal cases of illegal mining, first by the CBI in CC No. 1/2012 and he was arrested on 05/09/2011 and remained in judicial custody until the grant of conditional bail by the Hon'ble High Court of Judicature at Hyderabad for the State of Telangana and Andhra Pradesh in CPL.P No. 13109 of 2014 dated 22/01/2015. 20. That one of the conditions imposed by the Hon'ble High Court was that Sri Sreenivasa Reddy should not visit Bellary District and therefore, the Managing Partner of the firm [at the relevant point of time] could not visit Bellary or take any part in the appellate proceedings before the learned CIT[A] or other proceedings before the Income tax authorities. 21. That, the Hon'ble High Court later relaxed the condition relating to entering Bellary District in CRLMP No. 6446 of 2016 in CRP.P No. 13109 of 2014 vide order dated 08/06/2016 and until then, the said Managing Partner of the firm [at the relevant point of time] was away from Bellary and he was not able to attend to the income tax matters and the appeals filed. 22. That, after Sri Sreenivasa Reddy secured bail in CC No. 1 of 2012 before the CBI Court in Hyderabad, as aforesaid, he was once again arrested on 27/11/2015 by the DSP, Special Investigation Team, Karnataka Lokayukta in CR No. 29/2015 probing certain cases relating to illegal mining.
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Page 6 of 21 23. That, Sri Sreenivasa Reddy secured bail in CR No. 29 of 2015 from the XXIII ADDL. City Civil and Session Judge and Special Judge, Bengaluru Urban District, vide order dated 11/12/2015. 24. That, in the meantime, Sri Sreenivasa Reddy was also inculpated as an accused in another case CR No. 22 of 2015 and he had to secure bail in the said case as well from LXXXI ADDL. City Civil and Session Judge, Bengaluru vide order dated 12/10/2018. 25. That, on account of the aforesaid cases foisted against Sri Sreenivasa Reddy, he became totally depressed and withdrawn and he could not devote any time and attention to the business affairs of the firm, including attending to the income tax litigations since all his time was spent in attending to the criminal cases especially since investigation was still going on in both CR No. 29 of 2015 and CR No. 22 of 2015 and chargesheets were yet to be filed.
26 . That, Sri Sreenivasa Reddy, ultimately retired from the firm on 07/0712017 and_ the firm came to be constituted amongst Smt . B Sreelatha, my mother, my two sisters and myself as the other partners of the firm.
That, after the reconstitution of the firm, I and the other new partners were not aware of the disposal of the appeal by the learned CIT [ A ] vide order dated 31/08/2015 until recently when department has taken the money from the Bank on 12/11/2021 against recovery proceedings initiated, which we were unaware of.
That, thereafter, I undertook a review of the old records and also approached the Department to ascertain the factual position and realized that the appellate order was passed by the learned CIT [ A ] and no appeal was filed before the Hon'ble Tribunal .
That, I approached SRI V SRINIVASAN, Advocate, Bangalore, for seeking advice in the matter and he advised me to file an appeal immediately by seeking condonation of delay explaining the reasons that led to the delay in filing the appeal.
That, thereafter, I took immediate steps to file the appeal before the Hon'ble ITAT without any further delay.
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Page 7 of 21 31. That, the delay of 2154 days in filing the appeal is neither willful nor deliberate and the same was due to the circumstances explained above and thus, there is a reasonable cause for the delay.
Hence, it is prayed that the delay in filing the appeal of 2154 days may kindly be condoned and the appeal may kindly be admitted and disposed off on merits for the advancement of substantial cause of justice.
Further Ld. D.R. submitted that during the relevant time, the Managing Partner of the assessee firm Shri B.V. Srinivasa Reddy was facing 3 separate criminal cases in two different states. As a result of the above, the Ld. A.R. of the assessee submitted as follows:-
“I, V. SRINIVASAN, Advocate and Authorised Representative of the above appellant beg to submit the following for the kind consideration and gracious favourable orders of the Hon'ble Bench as under:- 1. The aforesaid appeal filed by the above appellant was last posted for hearing before the Hon'ble "C" Bench on 18/04/2022 and the same was taken as heard. During the course of hearing, the Hon'ble Bench directed the undersigned to file the written submissions along with the Chronology of events and list of dates and the same is produced below under instructions from the above appellant:-
CHRO NOLO GY OF EVENTS OF LI ST OF DATES
SL. PARTICULARS DATE PAPER BOOK NO PAGE NOS 14/11/2006 01 to 04 1 Date of Formation of the Appellant firm consisting of Sri B V Srinivasa Reddy and Smt. B Sreelatha
2 04/06/2010 12 to 14 Period for which Smt. B Sreelatha, to partner of the appellant firm, met with 13/08/2013 an accident and was undergoing medical treatment
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Page 8 of 21 3 Date on which Sri B V Srinivasa Please see Reddy, Managing Partner of the 05/09/2011 the appellant firm, was arrested by the bail order at CBI. Page No.7 4 Date of Order of Assessment passed u/s 143[3] of the Act by the A.O. for the above assessment year 30/12/2011 5 Date of filing appeal filed before the learned Commissioner of Income- 24/04/2012 Tax(Appeals), Kalaburagi. 6 Date of grant of Bail in CRLP No.13109 of 2014 of the Hon'ble High Court of Judicature at Hyderabad U/s 437 and 439 of 05 to 22/01/2015 Cr.P.0 for release on bail of Sri B V 19l Srinivasa Reddy, Partner of the appellant firm, who was in Judicial Custody in CC No.1/2012 from 05/09/2011 with condition imposed that he should not visit Bellary district. 7 Appellate Order passed by the 31/08/2015 learned CIT[A], Kalaburagi. 8 Date of despatch of the appellate order by 30/11/2015 CIT[A] 8 Date of which Sri B V Srinivasa . 20 Reddy, Managing Partner of the appellant firm, was arrested by the 27/11/2015 Deputy Superintendent of Police, Special Investigation Team, Karnataka Lokayuktha, Bengaluru. 9 Bail Secured in the above case filed by 11/12/2015 17 to 27 Lokayuktha, Bengaluru Date of order relaxing the Bail 10 conditions not to enter Kalaburagi and Bellary District vide order in 08/06/2016 15 to 16 CRLPMP No.6446 of 2016 in CRLP No.13109 of 2014 passed by the Hon'ble High Court 11 Date of re-constitution of partnership wherein new 07/07/2017 37 to 41 partnerswere inducted and Sri B V Srinivasa Reddy retired from the firm.
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Page 9 of 21 12 Date of Bail granted in Cr.No.22 of 2015 by the Hon'ble Court of LXXXI 28 to 36 12/10/2018 ADDL.CITY CIVIL AND SESSIONS ' JUDGE, BENGALURU (CCH82) in the third criminal case filed. 13 Appeal filed before the Hon'ble 22/12/2021 ITAT, Bangalore Bench, Bangalore.
In the backdrop of the aforesaid chronology of events, it is submitted that:
[a] Sri B.V.Srinivasa Reddy, was the Managing partner of theappellant firm until 07/07/2017 when he retired; [b] The other partner of the appellant firm at the relevant point of time was Smt. B.Sreelathaw/o Sri B.V.Srinivasa Reddyand she was not very conversant with business of the firm; [c] During the period Sri B.V.Srinivasa Reddy was the Managing partner of the appellant firm, he was caught up in several criminal cases as mentioned above right from 05/09/2011 i.e., before the assessment order was passed; [d] Further, at the relevant point of time, Smt. B.Sreelatha, the other partnerhad sustained injuries in an accident and was in post operative care and recovery for a considerable length of time; [e] Based on advice received at the relevant point of time, she filed an appeal before CIT[A] with a delay of 89 days and condonation was also sought for the same on account of the absence of the Managing Partner but, the same was not accepted by the learned CIT[A];
Coming to the delay in filing the appeal before the Tribunal, it is submitted that the order of the learned CIT[A] was dispatched on 30/11/2015. At the relevant point of time:
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Page 10 of 21 [a] The then Managing Partner of the appellant firm Sri B.V.Srinivasa Reddy was facing 3 separate criminal cases in 2 different states; • [b] As a result of the above, Sri B.V.Srinivasa Reddyhad spent approximately 5 years in jail between the years 2011 and 2018 and considering the toll the same had on his physical and mental health, the appellate order passed by the learned CIT[A] escaped his attention in as much as he was focused on securing release and was barraged with criminal cases which took up all his attention; [c] While the situation was so, the other partner of the appellant firm Smt. B.Sreelatha was undergoing medical treatment and was mentally distressed by the arrest of her husband. Furthermore, she was not conversant with the workings of business and income tax matters and even the employees of the firm resigned leaving her stranded. [d] In the meanwhile Sri B.V.Srinivasa Reddy was yet again arrested and Smt. B.Sreelatha, his wife, was directing efforts to secure his release and the appellate order also escaped her attention. [e] On 07/07/2017, the appellant firm came to be reconstituted admitting the children Sri B V Srinivasa Reddy, who retired from the appellant firm as he was unable to attendto any matters of business and Smt. B.Sreelatha was not conversant with the business matters; [f] Subsequently, the COVID-19 pandemic led to lockdowns and these factors also contributed to the delay. [g] Finally when the bank account of the appellant's firm was attached on 12/11/2021, the order of the learned CIT[A] disposing off the appeal came to the notice of the new partners of the appellant firm. [h] Immediately, one of the partners BV Nagarjuna Reddy, who is the son of Sri B V Srinivasa Reddy,had filed the appeal before this Hon'ble Tribunal.
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Page 11 of 21 4. Under the aforesaid circumstances, there is an apparent delay of 2154 days in filing this appeal. However, excluding the delay of 648 days in light of the COVID-19 relaxations, the effective delay in filing this appeal before the Hon'ble ITA Bangalore Bench, Bangalore is 1506 days as shown below:
1 Total delay in filing the appeal before 2154 the Hon’ble Income-tax appellate days Tribunal, Bangalore Bench, Bengaluru 2 Less: Relaxations granted because 648 days ofCOVID 19 from 15.3.2020 to 22.12.2021 3 The actual delay in filing an appeal 1506 before the Hon’ble ITAT Bangalore days Bench, Bangalore
5.It is submitted that the delay in filing the appeal is due to sufficient cause and the same is not malafide. There is no dilatory strategy adopted to defeat any rights of the Department. The delay is only on account of the genuine hardships faced by the partners, which circumstances have been tabulated above. In considering the prayer for condonation of delay, it is submitted that the length or period of delay is not determinative but the cause explained alone is to be considered. It has been held by the Hon'ble Supreme Court in the case of MST KATIJI reported in 167 ITR 471 [SC] as follows:
"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 "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
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Page 12 of 21 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:-
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 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 legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so."
It has been held by the Hon'ble Income-tax Appellate Tribunal, "A" Bench, Bangalore in the case of GLEN WILLIAMS in ITANo.1078/Bang/2014 dated 07/08/2015 as follows:
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Page 13 of 21 "5. We have considered the rival submissions. As we have already seen, the fact that the CA received the impugned order of CIT(A) on 22.03.13 and instructed his Assistant to deliver the same to the assessee is borne out from the affidavit of the CA. It is also borne out from the affidavit of the assessee and CA that the Assistant of the CA did not deliver the order to the assessee. The assessee came to know about the impugned order when recovery proceedings were initiated against the assessee. The Id. DR has produced a letter dated 21.7.2014 sent to the assessee by the AO and the same is with reference to the penalty proceedings u/s 271(1)(c) of the Act. There is no doubt, there is a reference in this letter about factum of dismissal of the assessee's appeal by the CIT(A) by order dated 12.03.2013. It is the plea of assessee that since this letter was with reference to penalty proceedings, he did not notice the contents of this letter. We are of the view that this explanation offered by the assessee is acceptable. Law is well settled that in income tax proceedings, the assessee does not gain by delaying the proceedings, nor is there any prejudice to the revenue by correct and proper determination of tax liability. In fact, the Hon'ble High Court of Karnataka in ISRO Satellite Centre, ITA No. 532/2008, expressed the view that in income-tax matters, delay in filing the appeal on the part of the assessee should be condoned, irrespective of the length of delay. The Hon'ble Supreme Court in the case of Collector, Land Acquisition- v Mst. Katiji & Ors, 167 ITR 471 (SC) has also taken the view that there should be a liberal and practical approach in exercising discretionary powers in condonation of delay. Keeping in mind the judicial pronouncements referred to above and considering the facts and circumstances of the present case, we are of the view that the delay in filing the appeal has occasioned due to a reasonable and sufficient cause. Accordingly, the delay in filing the appeal is condoned."
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Page 14 of 21 7. Hence, it is prayed that the delay of 1506 days in filing the appeal may
kindly be condoned.”
Thus, he submitted that the delay in this case is bonafide and may be condoned by this Tribunal in the interest of justice.
On the other hand, the Ld. D.R. submitted that the assessee has not explained the delay in filing the appeal properly and the assessee is a firm having partners who are free to file appeal though the Managing Partner of the assessee firm was in jail during the part of the period and more specifically on 7.7.2017 the assessee firm was reconstituted admitting children of Shri B.V. Srinivasa Reddy as partners and also there was retirement of Shri B.V. Srinivasa Reddy on this date and atleast after reconstitution I.e. after 7.7.2017, the assessee should have taken a step to file the appeal which assessee failed to take proper action. As such, this inordinate delay of 1506 days after excluding the 648 days delay during Covid period is not properly explained by the assessee. Accordingly, she submitted that the appeal may be dismissed in limine.
We have heard the rival submissions and perused the record. In this case, the main plea of the assessee is that the assessee’s Managing Partner Shri B.V. Srinivasa Reddy was facing 3 separate criminal cases in two different states as such, the assessee was prevented from filing appeal before this Tribunal and the delay to be condoned and the issue to be decided on merit. For better understanding of the events, we will chronologically reproduce the events as below:-
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Page 15 of 21
SL. PARTICULARS DATE No. 1 14/11/2006 Date of Formation of the Appellant firm consisting of Sri B V Srinivasa Reddy and Smt. B Sreelatha
2 Period for which Smt. B Sreelatha, partner of 04/06/2010 the appellant firm, met with an accident and to was undergoing medical treatment 13/08/2013
3 Date on which Sri B V Srinivasa Reddy, Managing Partner of the 05/09/2011 appellant firm, was arrested by the CBI.
4 Date of Order of Assessment passed u/s 143[3] of the Act by the A.O. for the above assessment year 30/12/2011 5 Date of filing appeal filed before the learned Commissioner of Income- 24/04/2012 Tax(Appeals), Kalaburagi. Date of grant of Bail in CRLP 6 No.13109 of 2014 of the Hon'ble High Court of Judicature at Hyderabad U/s 437 and 439 of 22/01/2015 Cr.P.0 for release on bail of Sri B V Srinivasa Reddy, Partner of the appellant firm, who was in Judicial Custody in CC No.1/2012 from 05/09/2011 with condition imposed that he should not visit Bellary district. 7 31/08/2015 Appellate Order passed by the learned CIT[A], Kalaburagi. 8 Date of despatch of the appellate order by CIT[A] 30/11/2015
8 Date of which Sri B V Srinivasa Reddy, Managing Partner of the appellant firm, was arrested by the 27/11/2015 Deputy Superintendent of Police, Special Investigation Team, Karnataka Lokayuktha, Bengaluru. 9 Bail Secured in the above case filed by Lokayuktha, 11/12/2015 Bengaluru
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Page 16 of 21 10 Date of order relaxing the Bail conditions not to enter Kalaburagi and Bellary District vide order in 08/06/2016 CRLPMP No.6446 of 2016 in CRLP No.13109 of 2014 passed by the Hon'ble High Court Date of re-constitution of 11 partnership wherein new 07/07/2017 partnerswere inducted and Sri B V Srinivasa Reddy retired from the firm. 12 Date of Bail granted in Cr.No.22 of 2015 by the Hon'ble Court of LXXXI 12/10/2018 ADDL.CITY CIVIL AND SESSIONS JUDGE, BENGALURU (CCH82) in the third criminal case filed. 13 Appeal filed before the Hon'ble 22/12/2021 ITAT, Bangalore Bench, Bangalore.
According to the Ld. A.R., the assessee’s Managing Partner was in jail during this period. We have carefully gone through the above chronological events. As seen from the above, the CIT(A)’s order was passed on 30.11.2015. The assessee ought to have filed the appeal on or before 29.01.2016. However, the assessee filed appeal before this Tribunal on 22.12.2021. Thus, there was a delay of 2154 days. Out of 2154 days, there was a delay of 648 days due to Covid period i.e. 15.3.2020 to 22.12.2021, which is not required to be explained by the assessee in view of the judgement of Hon’ble Supreme Court on this issue in MA No.665 of 2021 in SMW(C)No.3 ofo 2020 dated 23.09.2021.
The assessee is required to explain balance days of delay of 1506 days. Shri B.V. Srinivasa Reddy was arrested by Dy. Superintendent of Police, Special Investigation Team, Karnataka Lokayukta, Bangalore on 27.11.2015. Bail secured by Shri B.V. Srinivasa Reddy on 11.12.2015 in the above case. Later, the bail
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Page 17 of 21 order was amended relaxing conditions not to enter Kalaburagi & Bellary districts on 8.6.2016. He was arrested in one more criminal case bearing No.CR No.22/2015 on 5.9.2011 and he secured the bail from LXXXI, Addl. CT, Civil & Sessions Judge (CCH82) in third criminal case on 12.10.2018. Finally, the appeal has been filed by the assessee on 22.12.2021. Shri B.V. Srinivasa Reddy is ceased to be Managing partner of the assessee firm from 7.7.2017, wherein the assessee firm was reconstituted by admitting the children of Shri B.V. Srinivasa Reddy, as partners. The imprisonment of Shri B.V. Srinivasa Reddy has caused delay could be considered as bonafide upto 7.7.2017 coupling with sickness of his wife Smt. B. Srilatha, who is said to be undergoing medical treatment and was mentally distressed by the arrest of her husband and even considering her helplessness during this period. However, after 7.7.2017, there was a reconstitution of the assessee firm and Shri B.V. Srinivasa Reddy’s children taken over the firm and continued the business of the assessee firm. However, even after reconstitution i.e. from 7.7.2017 up to 15.3.2020, assessee has not taken any positive step to file the appeal before this Tribunal. After reconstitution of firm i.e. from 7.7.2017, it is the responsibility of new partners of the assessee firm to file the appeal before this Tribunal. All the partners slept over the matter and they have not taken any action to file the appeal. The assessee explained the delay from 29.1.2016 to 7.7.2017 that the Managing Partner was in jail. However, after reconstitution of firm there are partners who are at free to take remedial action in all the cases pending with the assessee. B.V. Nagarjuna Reddy who joined the assessee firm on 7.7.2017 and the firm was reconstituted on this date amongst Smt. B. Srilatha (wife of Shri B.V. Srinivasa Reddy), two daughters and one son B.V. Nagarjuna Reddy. All these partners never taken any step to file appeal from 7.7.2017 till 22.12.2021. Even considering the Covid period from 15.3.2020, assessee failed to
ITA No.719/Bang/2021 M/s. Sree Minerals, Bangalore
Page 18 of 21 explain the delay from 7.7.2017 to 15.3.2020 which is about 978 days. There is no explanation from whatsoever from the assessee’s side.
On the other hand, assessee relied on few judgements to condone delay. In the absence of plausible and acceptable explanation, we are posing a question that the delay is to be condoned, merely because they are suffered party. Though we are conscious of the facts that in a matter of condonation of delay when there was no gross negligence or deliberate inaction or lack of bonafide, a liberal construction has to be adopted to advance substantial justice, we are of the view that in the facts and circumstances of the present case, the assessee cannot take advantage of various earlier decisions. The law of limitation undoubtedly binds everybody including present assessee. In our opinion, unless the assessee have reasonable and acceptable explanations for the delay and there was bonafide effort, there is no need to accept the usual explanation that the parties involved herein were not aware of the disposal of the appeal by the CIT(A) vide order dated 31.8.2015 until the department has taken the money from the assessee’s bank account on 12.11.2021 against recovery proceedings initiated, which they were unaware of. Thereafter they undertook a review of the old records and also approached the department to ascertain the factual position and realised that the appeal order was already passed on 30.11.2015 by the Ld. CIT(A) and no appeal was filed before the Tribunal. Had they been exercised diligence as they are doing business, this delay could have been avoided. They have not exercised due diligence in legal matters as they exercise their diligence to get bail to Shri B.V. Srinivasa Reddy. Condonation of delay is an exception and should not be used as an anticipated benefit to the assessee. The law shelters everyone under the same
ITA No.719/Bang/2021 M/s. Sree Minerals, Bangalore
Page 19 of 21 light and should not be swirled for the benefit of a few. In the present case, the assessee failed to explain the delay from 7.7.2017 to 15.3.2020 and only says that the partners are not aware of the present status of the appeal order passed by the Ld. CIT(A), which cannot be considered as a bonafide or as reasonable cause to condone the delay. Further, the assessee not filed any affidavit from Smt. B. Srilatha or other partners who were handling the impugned issue at relevant time who are required to take proper steps in filing the appeal before the Tribunal. In our opinion, the various decisions relied by the assessee are delivered under the facts and circumstances of those cases, which cannot be imported to the present case. Those judgements do not give any direction to the Tribunal to condone the delay blindly and it does not in any way fetter the Tribunal from exercising its discretion to condone or not to condone the delay in filing the appeal before this Tribunal. The condonation petition has to be case specific and the decisions cited by the Ld. A.R. cannot be read so as to ignore the facts and circumstances of the present case. Thus, the submission of the assessee’s counsel cannot be accepted as reasonable cause that the delay in filing the appeal by the assessee before this Tribunal has to be condoned. Therefore, according to us each case for condonation of delay would have to be decided on the basis of the explanation offered by assessee for the delay i.e. is it bonafide or not concocted or not or does it evidence negligence or not. Further, in the present case, assessee is a partnership firm having multiple partners and also assisted by Chartered Accountants/Advocates. The assessee cannot be said that it has exercised due care and diligence in discharging the statutory obligation to file appeal within time before this Tribunal. In our opinion, the reason has came out from the condonation petitions filed by assessee as stated earlier, is that the Managing Partner of the assessee was under imprisonment and he is
ITA No.719/Bang/2021 M/s. Sree Minerals, Bangalore
Page 20 of 21 able to secure the bail only on 12.10.2018. As we observed, he was partner in the firm up to 7.7.2017 and thereafter he is not a partner and he is not obliged to do any duty on behalf of the assessee firm. In our opinion, the reason advanced by the assessee cannot be accepted as a good and sufficient reason to condone the delay. The law will assist those who are vigilant and not who will sleep over their rights as found in the Maxim “Vililantibus Non Dormientibus Jura Subveniunt”. In our opinion, merely because the assessee is not vigilant it cannot follow assessee is bestowed with the right to the delay being condoned. We are conscious of the fact that period of limitation should not come as a hindrance to do substantial justice between the parties. However, at the same time, the party cannot sleep over its right ignoring the statute of limitation and without giving sufficient and reasonable explanation for the delay, except its appeal to be entertained merely because assessee is an aggrieved party. Appeals filed beyond a period of limitation have been entertained by us where the delay has been sufficiently explained, such as in case of bonafide mistake. Thus, the assessee should be well aware of the statutory provisions and period of limitation and should pursue its remedies diligently. It cannot expect their appeals to be entertained because they are after all the assessee, not- withstanding the fact that the delay is not sufficiently explained. Hence, in our opinion, there is no reasonable cause for filing the appeal belatedly before this Tribunal. Accordingly, the delay is not condoned and the appeal is un-admitted.
ITA No.719/Bang/2021 M/s. Sree Minerals, Bangalore
Page 21 of 21
In the result, the appeal filed by the assessee is dismissed in limine. Order pronounced in the open court on 23rd May, 2022
Sd/- Sd/- (Beena Pillai) (Chandra Poojari) Judicial Member Accountant Member
Bangalore, Dated 23rd May, 2022. VG/SPS
Copy to:
The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order
Asst. Registrar, ITAT, Bangalore.