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Before: Shri V. Durga Rao & Shri G. Manjunatha
O R D E R
PER V. DURGA RAO, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order of the ld. Principal Commissioner of Income Tax, Madurai-1, Madurai, dated 31.03.2019 relevant to the assessment year 2014-15 passed under section 263 of the Income Tax Act, 1961 [“Act” in short].
2. The appeal filed by the assessee is time barred by 449 days delay in filing the appeal before the Tribunal. In the form of an affidavit, the assessee has filed petition for condonation of delay, wherein, following submissions were made:
“1. That I am competent to swear to this affidavit.
That I am well acquainted with the facts and circumstances of the appeal of Senthil Murugan Jewellers Pvt. Ltd. filed before the Hon’ble Income Tax Appellate Tribunal, Chennai for the assessment year 2014-15.
That the order of the Principal Commissioner of Income Tax, Chennai dated 31.03.2019 passed u/s. 263 of the Income Tax Act, 1961 was received by us on 24.04.2019.
That in order to give effect to the directions of the Principal Commissioner of Income Tax, the Assessing Officer passed an order u/s.143(3) r.w.s.263 dated 31.12.2019.
5. That an appeal was filed by the company before the Commissioner of Income Tax (Appeals) against the order passed u/s. 143(3) r.w.s.263 on 14.01.2020.
6. That during the second week of March 2020, we approached Shri T. Banusekar, Chartered Accountant through our authorized representatives M/s. B. Thiagarajan & Co., Chartered Accountants, Chennai to seek his services for representing the company before the Commissioner of Income Tax (Appeals) in connection with the appeal filed by the company against the order passed u/s. 143(3) r.w.s.263 by the Assessing Officer.
7. That during the course of discussions, Shri T. Banusekar, Chartered Accountant enquired about the order passed by the Principal Commissioner of Income Tax u/s.263 and that whether any appeal was filed against the said order to which we informed Shri T. Banusekar, Chartered Accountant that we were not aware that an appeal could be filed against the said order and also that we were not advised regarding the same.
8. That Shri T. Banusekar, Chartered Accountant on going through the order passed u/s.263 by the Principal Commissioner of Income Tax advised that an appeal can be filed before the Hon'ble Income Tax Appellate Tribunal against the order u/s.263.
9. That we then requested Shri T. Banusekar, Chartered Accountant to draft the appeal against the order u/s.263 and Shri T. Banusekar, Chartered Accountant sought for certain information in order to draft the appeal.
That meanwhile, due to the outbreak of COVID-19 across the world and the lockdown imposed by the Government of India from the third week of March, 2020, there could be no progress on the further course of action to be taken in terms of providing the details sought by Shri T. Banusekar, Chartered Accountant for drafting the appeal and consequently filing the appeal.
That post lifting of the lockdown restrictions on June 30, we could not reach Shri T. Banusekar, Chartered Accountant due to restrictions in the functioning of his office, until mid of August, 2020. 12. That during the last week of August, 2020, we furnished the relevant information sought for by the office of Shri. T. Banusekar, Chartered Accountant in order to draft the appeal. 13. That the appeal was then drafted and sent for our signature and the appeal documents were sent to the Hon'ble Income Tax Appellate Tribunal through speed post on 10.09.2020. 14. That we came to understand that the appeal documents were received by the office of the Hon'ble Income Tax Appellate Tribunal only on 14.09.2020. 15. That hence the appeal was filed on 14.09.2020 with a delay of 449 days. I further affirm that the above stated facts are true and correct to the best of my knowledge.” 3. The ld. Counsel for the assessee has submitted that the Chartered Accountant of the assessee company has not advised the assessee to file the appeal. For that effect, the C.A. filed an affidavit dated 29.10.2022. Since, there is reasonable cause for the delay, the ld. Counsel for the assessee prayed for condoning the delay by relying upon the judgement of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. MST. Katiji & Ors. 167 ITR 471. 4. On the other hand, the ld. DR has submitted that the assessee is a private limited company, well acquainted with Income Tax Act and procedures and they ought to have filed the appeal in time and submitted that the delay should not be condoned. He has relied upon the decision of the Coordinate Benches of the Tribunal in the case of Mrs. Preeti Madhok v. ITO in dated 17.06.2022.
We have heard both the sides, perused the condonation petition filed in the form of affidavit and case law relied upon by both the parties. Admittedly, the assessee has filed its appeal with a delay of 449 days in filing the appeal. The assessee has filed an affidavit, wherein it was stated that the C.A. of the assessee company has not advised the assessee to file an appeal. The C.A. has also filed an affidavit stating that he has not advised the assessee to file an appeal against the order passed by the ld. PCIT under section 263 of the Act. After examining the entire affidavit, we find that the assessee has not asked its C.A. whether to file an appeal or not. When the assessee asked the opinion of the C.A., then the C.A. has to advise as to whether an appeal has to be filed or not. No material was brought on record that the assessee has sought for the advice of the C.A. or not. In the affidavit filed by the C.A. of the assessee company, it was stated that he has not advice the assessee to file an appeal. The affidavit filed by the C.A. of the assessee company is dated 29.10.2022 and therefore, we are of the opinion that the affidavit filed by the C.A. of the assessee company is nothing but an afterthought and the explanation given by the assessee on the basis of the CA’s affidavit cannot be accepted as sufficient cause to condone the delay.
6. The case law relied on by the assessee in the case of Collector, Land Acquisition vs. MST. Katiji & Ors. (supra) has no application to the facts of the present case.
So far as case law relied upon by the ld. DR in the case of Mrs. Preeti Madhok v. ITO (supra), in the absence of any reasonable cause, the Coordinate Benches of the Tribunal has observed and held as under: “5. We have heard both the parties and considered the petition filed by the assessee for condonation of delay of 581 days. We have also carefully considered the reasons given by the assessee for delay in filing of the appeal. We find that prima facie the reasons given by the assessee, in her Affidavit for condonation of delay of 581 days, seems to be not bona fide. Further, in the petition filed for condonation of delay, the assessee claimed that she was not aware of law that an appeal can be filed against the order of the PCIT u/s.263 of the Act, and further, an advice from the Counsel, Mr. T. Banusekar, CA, she came to know that there is a provision to file appeal against the revision order and thus, she took decision to file appeal, which caused delay of 581 days. We have gone through the Affidavit filed by the assessee and also examined sequence of events and after considering necessary facts, we are of the considered view that the reasons given by the assessee in her Affidavit is not bona fide, because, the assessee has very well represented her case through an Authorized Representative before the AO and also before the PCIT during revisional proceedings. She had been represented by Mr. Chandanmal Jain, CA, before the Income Tax Officer. During the course of revision proceedings, she had also engaged the same CA to appear before the PCIT under 263 proceedings. Therefore, we are of the considered view that when she was capable of engaging a professional for appearing before two different authorities at two different points of time, it is impossible to believe her version that she was not aware of filing of the appeal against 263 order within the due date prescribed under the provisions of Income Tax Act, 1961. We further noted that in her petition, she claimed, she met Mr. T. Banusekar, CA, to seek his services for representing the case before the CIT(A) in connection with the appeal filed by the assessee against the order u/s.143(3) r.w.s.263 of the Act. Therefore, from the above, what is clear is that she is an educated person, aware of Income Tax proceedings, including filing of the appeal against the order of the AO. Further, from the contents of the petition filed by the assessee for condonation of delay, what we could understand is that the assessee has chosen not to file the appeal against the order of the PCIT u/s.263 of the Act, because, she can pursue an alternative remedy available with her and represent her case before the AO on the belief that she can get a favourable order from the AO. Once, the assessment order passed by the AO, went against the assessee, then she consulted a different professional, who advised her to file the appeal against the order of the PCIT u/s.263 of the Act, which is clearly evident from the fact that in all proceedings, including assessment proceedings before the AO and revision proceedings before the PCIT and consequential assessment proceedings before the AO, she had appeared through her Authorized Representative and filed necessary details. Therefore, from the above sequence of events, it is very clear that subsequent filing of the appeal against the order of the PCIT passed u/s.263 of the Act, is only an afterthought, but not a case of ignorance of law or unaware of provisions in filing of the appeal before the Tribunal against the order of the PCIT u/s.263 of the Act. Therefore, we are of the considered view that there is no merit in the reasons given by the assessee in her petition for condonation of delay in filing of the appeal.
Be that as it may. Coming back to the legal position evolved by the decision of various High Courts, including the Hon’ble Supreme Court in number of cases, where it has been, time and again, held that when merits and technicalities pitted against each other, then merit alone deserves to be prevailed, because, if you throw out a meritorious case out of judicial scrutiny on the grounds of technicalities, then you may deprive the right of the petitioner in pursuing their case. At the same time, various Courts have held that rules of limitation are not meant to destroy the rights of parties, they are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly, within the time bound prescribed under the Act. Further, in a case, where, for the reasons beyond the control of the petitioner, the appeal could not be filed, then the Courts are well equipped with power to condone the delay, if the petitioner explains the delay in filing of the appeal with a reasonable cause. However, there is no law or mandate in the Act, to condone the delay in each and every case. But, it depends upon all facts of each case and the reasons given by the parties for condonation of delay. Therefore, one has to go by the facts of its own case and the reasons given by the petitioner for condonation of delay. In this case, on perusal of reasons given by the assessee for delay in filing of the appeal, we find that although it appears, the assessee is not deriving any benefit by not filing the appeal within the due date prescribed under the Act, but, from the contents of petition filed by the assessee, we could easily make out a case that the assessee has made an afterthought to file the appeal against the order of the PCIT u/s.263 of the Act, only when she did not get a favourable order from the AO, consequent to the order passed by the PCIT u/s.263 of the Act. Therefore, in our considered view, for these vague reasons, such huge delay of 581 days in filing of the appeal, cannot be condoned.
7. As regards, the case law relied upon by the assessee in the case of Mr.Imam Syed Abdul Kamal Nazar v. ITO in dated 02.06.2022, as we have already stated in earlier part of this order, condonation of delay, has to be examined based on facts of each case. However, it does not depend upon observations of any Court or Tribunal in some other case. Although, in the case law referred by the Ld. Counsel for the assessee, the Tribunal has condoned the delay of 486 days in filing of the appeal, but the said findings of the Tribunal is based on facts of those case and as per the facts of the above case, the assessee himself had represented his case before the PCIT through his Accountant without any help from Professional or /Chartered Accountant or /Advocate. Under those facts, the Tribunal came to the conclusion that although the ignorance of law is not an excuse, but it cannot be expected from each person to know laws of this country. In so far as the arguments of the Ld. Counsel for the assessee, in light of decision of the Hon’ble Supreme Court in the case of Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh &Ors.(supra) that ignorance of law is also an excuse, but if you examine the facts of the present case, we are of the considered view that the assessee is not ignorant of law, because, she was well aware of the Income Tax proceedings and further, hired professional Chartered Accountant, for representing her case. Therefore, we are of the considered view that the assessee cannot claim that she was ignorant of law and because of her ignorance, she could not file appeal against the order of the PCIT u/s.263 of the Act. Thus, we are of the considered view that the case laws relied upon by the assessee, are not applicable to the facts of the present case.
8. In this view of the matter and considering the facts and circumstances of the case, we are of the considered view that the assessee had failed to make out a prima facie case for condonation of delay of 581 days in filing of the appeal before the Tribunal. Further, the reasons given by the assessee in her Affidavit does not come under reasonable cause as prescribed under the Act, for condonation of delay. Hence, we reject the petition filed by the assessee for condonation of delay and dismiss the appeal filed by the assessee.
By considering the submissions of the ld. Counsel as well as reasons stated in the affidavit filed by the assessee for condonation of delay, we are of the considered opinion that the reasons given by the assessee in the affidavit does not come under reasonable cause for condonation of delay, as prescribed under the Act and thus, we reject the petition filed by the assessee for condonation of delay. The case law relied on by the ld. Counsel for the assessee in the case of Collector, Land Acquisition vs. MST. Katiji & Ors. (supra) has no application to the facts of the present case. Since we have rejected the petition for condonation of delay of 449 days in filing the appeal before the Tribunal, the appeal filed by the assessee is not maintainable and accordingly, the appeal filed by the assessee is dismissed.
In the result, the appeal filed by the assessee is dismissed. Order pronounced on 14th December, 2022 at Chennai.