RAM BHAROSE SHARMA,JAIPUR vs. ITO, JAIPUR

PER BHAGCHAND, AM

The appeal filed by the assessee emanates from the order of the ld. CIT(A)-

1, Jaipur dated 15-09-2016 for the Assessment Year 2011-12 raising therein

following grounds of appeal.

‘’1. The ld. CIT(A) has erred in law as well as on the facts of the case in dismissing the appeal in limine without condoning the delay. Even though there did exist reason and sufficient cause behind the delay so caused beyond the control of the appellant.

2 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur

estimated by the AO and confirmed by the ld. CIT(A) being contrary to the provisions of law and facts, the same may kindly be deleted in full. Consequently the trading addition of Rs. 8,548/- on account of the alleged unvouched expenses be deleted in full. 3. Rs. 28,26,010/-: The ld. CIT(A) further erred in law as well as on the facts of the case in confirming the application of NP Rate of 8.50% on the alleged undisclosed contract receipt of Rs. 3,32,47,171/- from M/s. Enercon India Ltd. on account of taxi hiring business. Hence, the NP rate so applied by the AO and confirmed by the ld. CIT(A) and thereby confirming addition of Rs. 28,26,010/- is totally contrary to the provisions of law and facts on the record and hence the addition kindly be deleted in full.

2.1 During the course of hearing, the ld.AR mainly prayed that the ld. CIT(A) has invalidly dismissed the appeal of the assessee in limine without condoning the delay in filing the appeal by 636 days and the ld. CIT(A) should

have decided the case on merit 2.2 Apropos Ground No. 1 of the assessee for not condoning the delay of 636 days in filing the appeal before the ld. CIT(A), the facts as emerges from the order

of the ld. CIT(A) are as under:-

Determination:

3 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur (1) The brief facts of the case are that the assessment order was passed by the AO u/s 143(3) of the Act on 28.02.2014. The assessment order along with notice of demand issued u/s 156 of the Act was received by Sh. Vipin Singhal, CA and AR of the appellant on 04.03.2014. The appeal in the instance case is to be filed in Form No. 35 within 30 days of receipt of order i.e. by 03.04.2014. However, the appeal in Form No. 35 was filed on 29.01.2016, wherein the date of service of order was stated to be "not known to the appellant as perhaps received by his counsel Sh. Vipin Singhal, FCA who handed over to the appellant". Thus, the appeal under consideration was delayed by 636 days. In its application for condonation of delay, it was submitted by the appellant that its tax affairs were being taken care of by Sh. Vipin Singhal, FCA who was of the opinion that no appeal needs to be filed and therefore, he even did not inform it and not pressed to file the appeal. It came to know about the passing of impugned assessment order when the Department pressed for the recovery of demand. Subsequently, the appellant took the files from his earlier AR in the month of December, 2015 and discussed the matter with another tax consultant, who advised the appellant to immediately file an appeal and consequently, the appeal was filed on 29.01.2016. It was the contention of the appellant that the impugned assessment order was received by it from his earlier AR only in the month of December, 2015 i.e. due date for filing of appeal was 31.01.2016 and thus there is no delay in filling the appeal. It was further submitted that even if the date of receipt by the earlier AR is considered, the delay was occurred only due to the peculiar facts and circumstances of the case as the appellant and his wife were suffering from cardiac problems and it was not aware of the complexities of tax laws. In support of its submissions for condonation of delay, the appellant relied upon a number of judicial pronouncements including that of Hon' ble Apex Court in

4 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur the case of Collector, Land & Acquisition v/s Mst. Katiji & Others (1987) 167 ITR 471 (SC). (ii) I have duly considered the application for condonation of delay submitted by the appellant and the judicial pronouncements relied upon by it for condonation of delay and the relevant assessment record. It may be mentioned that the assessment order along with notice of demand and penalty notice u/s 271(1)(c) of the Act was received by Sh. Vipin Singhal, the earlier AR of the appellant on 04.03.2014. An application u/s 154 of the Act was filed by the AR on 08.03.2014 for allowing credit of TDS. A final show cause penalty notice dated 19.08.2014 issued u/s 271(1) (c) and 271B of the Act were served upon the daughter in law of the appellant on 20.08.2014 and vide letter dated 22.08.2014, Sh. Vipin Singhal, the earlier AR of the appellant submitted its reply thereof. The AO vide order dated 26.08.2014 imposed a penalty of Rs. 1,50,000/- u/s 271(1)(c) of the Act. A notice of recovery for outstanding demand was served upon the appellant by affixture as the daughter in law of the appellant, who was available at the relevant time, has refused to accept the said notice. Subsequently, the AO vide its order dated 19.08.2015 issued u/s 226(3) of the Act attached the current account of the appellant with Karnataka Bank, M.I. Road, Jaipur and saving bank account with UCO Bank, Tonk Road, Jaipur. These sequence of events clearly establish that the appellant has not come forward with clean hands while making application for condonation of delay. (iii) Further, the appellant has not brought on record any material to indicate when the assessment order along with notice of demand was handed over to it by Sh. Vipin Singhal, the earlier AR of the appellant and Shri Singhal advised the appellant not to file any appeal against the impugned assessment order. It is trite law that the burden is upon the person who makes the

5 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur allegations. In the instant case under consideration, the appellant failed to substantiate its claim that it did not file the appeal on the advice of Shri Vipin Singhal, its earlier AR. In fact, the appellant has not filed any confirmation from Shri Vipin Singhal in this regard. Further, the appellant has not filed any medical certificates about its illness or the illness of its wife. The appellant has not explained the day to day delay for such inordinate delay of 636 days. (iv) It may be mentioned that Sh. Vipin Singhal, the earlier AR of the appellant attended the proceedings before me in some other case and he was shown the copy of condonation application filed by the appellant as discussed above. Vide his reply dated 24.08.2016, it was submitted by Sh. Vipin Singhal, earlier AR of the appellant as under:

"1. M/s Ram Bharose Sharma contacted to my office for appearing me for his scrutiny case before ITO 2 (4), Jaipur. 2. As per the documents/Papers given by him, I pleaded for his time to time before the relevant authority. 3. When final order comes, I called to him to take his assessment order but he never visited to my office despite for various reminders. 4. I have never deny to him for further legal compliance or for go to in appeal, in spite of contacting to me, he went with other legal practitioner and told to him for me that I have not attended the hearing dates before the assessing authority as well as never suggesting to him for further legal compliance. He is also pleaded in the application for condonation of delay in filling appeal before CIT appeals that, delay in filling the appeal was due to my default any any other bla-bla reasons.

6 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur So please take necessary action against him because he was misguiding to the department."

(v) The above letter of Sh. Singhal was shown to Sh. Fazlur Rehman, the present AR of the appellant for his comments on 07.09.2016 and vide order sheet entry of the same date, it was submitted by Sh. Fazlur Rehman as under: “As the assessee is not aware with the complexities of law and he is totally dependent on his counsel. Due to ignorance of law sufficient cause available with assessee. Hence, kindly in the interest of justice delay may condoned.” (vi) It may be mentioned that the delay can be condoned only if there is no gross negligence or deliberate inaction or lack of bona fide. Secondly, the appellant should furnish acceptable and cogent reasons sufficient to condone delay. These are the pre-requisites for condoning delay. Thus, touchstone for condonation of delay is 'sufficiency/reasonableness of the cause'. Filing of an appeal in time is a normal judicial process, whereas filing a belated appeal is an abnormal step. It is said that extraordinary remedies need existence of extraordinary circumstances. Therefore, the appellant has to prove that abnormal circumstances really and factually existed in its particular case. (vii) The appellant relied upon the decision of Collector, Land and Acquisition vs. M/s Mst. Katiji & Others [1987] 167 ITR 471 (SC). It may be mentioned that in that case, the delay of 4 days was condoned by the Supreme Court because important question as regards principle of valuation was involved. It was found that there was upward revision of the order of compensation by 800% and this revision raised an important question about valuation. Therefore, Hon'ble Apex Court condoned the delay. Thus, the facts of the case of Collector, Land

7 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur and Acquisition (Supra) are not relevant in deciding the issue in the matter under consideration as there is inordinate delay of 636 days in filing the instant appeal under consideration.

(viii) There is no doubt that adopting a liberal view in condoning delay is one of the guiding principles in the realm of belated appeals, but liberal approach cannot be equated with a license to file appeals at will-disregarding the time limits fixed by the statutes. No doubt that the appellants are entitled to wait until the last date of the limitation for filing of the appeal, but when they allow the limitation to expire and come forward with an explanation enumerating reasonable causes for not filing the appeal within the time prescribed under the statute, then the causes, so shown, must establish that because of some event Or circumstances arising before limitation expired. Except for the inaction and negligence of the appellant, there are no other reason for filing a belated appeal. Timely action is the essence of day-today activities of human being a farmer not sowing his fields in time after the rains has to suffer. Principles of nature are equally applicable to human behaviour, including the judicial system. No action was taken by the appellant for a long period to file an appeal against the impugned assessment order. (ix) Therefore, the appellant has to blame itself for the uncomfortable situation in which it finds now. For a period of about two years, it did not bother to file an appeal. Bank accounts of the assessee were attached as per the assessment record, but no effort was made to file the appeal. In my opinion, this behaviour of the appellant can be termed as personified inaction and negligence. Courts are of unanimous opinion that act of negligence and inaction do not constitute reasonable cause. Thus, by not filing appeal in time before the CIT(A), the appellant 7

8 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur had allowed the Income Tax Department to believe that it had a vested right in its favour. Rights of the Sovereign are as important as that of the taxpayers. In matter of condonation of delay both have to show a sufficient cause which a prudent person can believe. In the case under consideration, same is absent. (x) It may be mentioned that in the case of J.B. Advani & Co. (P.) Ltd. v. CIT [1969] 72 ITR 395, the Hon'ble Apex Court had held that explanation of delay for the entire period is necessary. In other words, what is expected of the appellant in such matters is to show that delay was occasioned due to some sufficient cause. The cause pleaded should not only be a probable one but it should be real and sufficiently reasonable. It would not be any sort of assertion that would amount to sufficient cause and would justify the condonation of delay. The cause pleaded must fit in the facts and circumstances of the given case and the explanation offered regarding the delay occasioned by such cause should appeal to reasons so as to get judicial approval. In short, in matters of delay it is neither practicable nor desirable to explain minute- to-minute/hour-to-hour delay, but delay has to be explained. (xi) It may be mentioned that the Hon'ble ITAT, Hyderabad vide its order dated 09.09.2016 in the case of Middi Narsaiah vs. DCIT [2016] 48 CCH 54 (Hyd. Trib.) while rejecting the application for condonation of delay held as under: 4. We are of the view that the reasons mentioned in the petition for condonation are not convincing as the reasons mentioned for delay in filing the appeal before the ITAT are that the assessee’s attention was diverted due to criminal cases and pre-occupation in the business activities. The criminal proceedings were over by 06/03/2013 but the delay beyond this day is pure negligence on 8

9 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur the part of the assessee, the delay of which cannot be condoned as per the reasons mentioned in the petition. In this connection, we refer to the following judgments: 4.1 The Hon'ble Supreme Court in the case of Ramlal Vs. Rewa Coalfields Ltd., AIR 1962 SC 361 has held that cause for delay in filing the appeal which by due care and attention could have been avoided cannot be a sufficient cause within the meaning of the limitation provision. It is only where no negligence, or inaction, or want of bonafides can be imputed to the appellant, a liberal construction of the provisions has to be made in order to advance substantial justice. But, where there is a gross negligence, inaction or want of bonafides on the part of the appellant, the provision to condone the delay in filing the appeal cannot be so liberally construed particularly in view of the fact that where the delay is of a substantial period. 4.2 The Hon'ble Apex Court in the case of Vedabai alias Vaijayanatabai Baburao Patti Vs. Shantaram Baburao Patil, (2002) 253 ITR 798 has held that though in exercising discretion, under section 5 of the Limitation Act, 1963, to condone the delay for sufficient cause in not preferring an appeal or other application within the time prescribed, the Court should adopt a pragmatic approach. A distinction must be made where the delay is inordinate and a case where the delay is of few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor and calls for a more cautious approach, but in the latter case, no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The Court has to exercise its discretion on the facts of each case keeping in mind that in considering the expression "sufficient cause”, the principle of advancing substantial justice is of prime importance. 9

10 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur In this view of the matter, I have no hesitation is saying that where no negligence, or inaction, or want of bonafides can be imputed to the petitioner, a liberal consideration is to be given to the expression 'sufficient cause' while exercising a discretion to condone the delay in not preferring an appeal, but where there is a gross negligence, inaction or want of bonafides is prima-facie imputed on the petitioner, the provision to condone the delay cannot be so liberally construed, and more so where the delay is not of a few days only. 4.3 In this context, we may refer to a recent decision of ITAT, Chennai Bench "B" (TM) in the case of JCIT Vs. Tractors & Farm Equipments Ltd., (2007) 104 ITD 149(Chennai) (TM) where the Third Member agreeing with the view of the Accountant Member and after deliberating upon the decision in the case of Srinvasa Charitable Trust Vs. DCIT, (2006) 280 ITR 357 (Madras), Vedabai alias Vaijayanatabai Baburao Patil Vs. Shantaram Baburao Patil(supra), Collector Land Acquisition Vs. Mst. Katigi, (1987) 167 ITR 471(SC) and Rmalal V. Rewa Coalfields Ltd(supra) has held that there exists no sufficient and good reason for delay of 310 days and had thus observed as under:- "4. The learned counsel for the assessee vehemently relied on the decision of the Apex Court rendered in the case of Mst. Katiji (supra) wherein it was held that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay. In this case an appeal preferred by the State of Jammu & Kashmir arising out of a decision enhancing compensation in respect of acquisition of lands for a public purpose to the extent of nearly 14 lakhs rupees by making an upward revision of the order of 800 per

11 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur cent which also raised important questions as regards principles of valuation was dismissed as time barred being 4 days beyond time by rejecting an application for condonation of delay. Hence, the Collector of Land Acquisition filed appeal by special leave before the Apex Court. The Hon'ble Supreme Court held that there is no warrant for according a step-motherly treatment when the State is the applicant praying for condonation of delay. In fact experience shows that on account of an impersonal machinery and the inherited bureaucratic methodology imbued with the note- making, file-pushing, and passing on the buck ethos, delay on its part is less difficult to understand though more difficult to approve. In any event, the State which represents the collective cause of the community, does not deserve litigant non-grata status. The courts, therefore, have to be informed of the spirit and philosophy of the provision in the course of the interpretation of the expression 'sufficient cause'. So also the same approach has to be evidenced in its application to matters at hand with the end in view to do even-handed justice on merits in preference to the approach which settles a decision on merits. On facts it was found that there existed sufficient cause for the delay. Therefore, the order of the High Court dismissing the appeal before it as time barred was set aside and the delay of 4 days was condoned. 5. In the case of Sreenivas Charitable Trust (supra) the assessee was a charitable trust. The copy of the order served on the assessee was misplaced and thereafter it was found and sent to the counsel for preparing the appeal and then the appeal was prepared and filed before the Tribunal and in that process the delay of 38 days occurred. The delay of 38 days was condoned by the Apex Court in view of the decision of the Apex Court rendered in the case of 11

12 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur Vedabai alias Vaijayanatabai Baburao Patil (supra). In this case it was held that in exercising discretion under section 5 of the Limitation Act the courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The court has to exercise the discretion on the facts of each case keeping in mind that in considering the expression "sufficient cause', the principle of advancing substantial justice is of prime importance. 6. It is pertinent to note that in the case of Mst. Katiji (supra) the delay was only four days. In the case of Vedabai alias Vaijayanatabai Baburao Patil (supra) there was, a delay of seven days in filing the appeal. In this case, the Apex Court clearly laid down that a distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. The law assists those who are vigilant, not those who sleep over their rights. This principle is embodied in the dictum: vigilantibus non dormientibus jura subveniunt. 7. The delay cannot be condoned simply because the appellant's case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay it must be proved beyond the shadow of doubt that the appellant was diligent and was not guilty of negligence whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the 12

13 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur provisions. The Hon'ble Supreme Court in the case of Ramlal Vs. Rewa Coalfields Ltd., AIR 1962 SC 361 has held that the cause for the delay in filing the appeal which by due care and attention could have been avoided cannot be a sufficient cause within the meaning of the limitation provision. Where no negligence, nor inaction, or want of bonafides can be imputed to the appellant a liberal construction of the provisions has to be made in order to advance substantial justice. Seekers of justice must come with clean hands. 8. In the present case, I find that the assessee justified the delay only with reference to the affidavit of Shri M.L.S. Rao, Director of the company. In the said affidavit Mr. Rao stated that the Commissioner (A)'s order was misplaced and forgotten. It was found while sorting out the unwanted papers. Thereafter steps were taken for the preparation of the appeal. Consequently the delay was caused. This clearly shows that the delay was due to the negligence and inaction on the part of the assessee. The assessee could have very well avoided the delay by the exercise of due care and attention. In my opinion there exists no sufficient and good reason for the delay of 310 days. I, therefore, concur with the reasonings adduced by the learned Accountant Member.”

4.4 The decision of ITAT, Chennai Bench (TM) (supra) is a decision of three Member Bench and, thus, it has binding force on the Division Bench consisting of two Members. In the case of DCIT Vs. Padam Prakash (HUF), (2007) 104 ITD 1 (Delhi) (SB), the Hon'ble Special Bench has held that majority decision in the Third Member case is entitled to as much weight and respect as a decision of a 13

14 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur Special Bench and it should be followed and applied by regular Benches and cannot be disregarded unless its views are contradictory to the decision of Special Bench constituted by the Hon'ble President u/s 255(3) of the Act. The relevant observation of the Hon'ble Special Bench, ITAT, Delhi, as extracted from the Head Note, is as under:- " The Delhi High Court in the case of P.C. Puri Vs. CIT(1985) 151 ITR 584 had clearly laid down that where decision is given by the Third Judge on account of difference between the two Judges hearing a matter, his opinion is decisive and, therefore, for that reason, decision by three Judges should be taken as decision by the Full Bench. Therefore, the majority decision in the Third Member case is entitled to as much weight and respect as a decision of a Special Bench and it should be followed and applied by regular Benches and cannot be disregarded. Further, from a reading of sub-section (3) and sub-section (4) of section 255, it is evident that the Special Bench can be constituted by the President under sub-section (3) of section 255. The purpose of constitution of a Special Bench is somewhat different from the purpose mentioned in subsection (4) of section 255, namely, to resolve difference in opinion of the members of the Bench by referring the point of difference to the Third Member for getting the majority view as envisaged in the provision. It is possible that on account of development in law, and several other reasons, facts and circumstances not considered by a Third Member, it becomes necessary for the President to constitute a Special Bench to consider the matter which was earlier considered by the Third Member. Hence, there is no impediment to the constitution of a Special Bench. Therefore, the decision of the Special Bench even of three Members is entitled to all the weight and must have precedence over the decision of a Third Member. Regular Benches are required to

15 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur follow and act upon the decision of the Special Bench and in case its views are contradictory to the views of the Third Member, preference is required to be given to the Special Bench. 4.5 The Hon'ble Supreme Court in the case of Basawaraj & Anr. Vs. The Spl. Land Acquisition Officer, (2013) 14 SCC 81 1 has held as follows: "5. We have considered the rival submissions made by the learned counsel for the parties and perused the record. 5. Admittedly, there was a delay of 5-1/2 years in filing the said appeals under Section 54 of the Act before the High Court. The only explanation offered for approaching the court at such a belated stage has been that one of the appellants had taken ill. 6. Shri Patil, learned senior counsel, has taken us through a large number of judgments of the High Court wherein delay had been condoned without considering the most relevant factor i.e. "sufficient cause" only on the condition that applicants would be deprived of interest for the delay period. These kinds of judgments cannot be approved. The High Court while passing such unwarranted and uncalled for orders, failed jto appreciate that it was deciding the appeals under the Act and not a writ petition where this kind of order in exceptional circumstances perhaps could be justified. 7. It is a settled legal proposition that Article 14 of the Constitution is not meant to perpetuate illegality or fraud, even by extending the wrong decisions made in other cases. The said provision does not envisage negative equality but has only a positive aspect. Thus, if some other similarly situated persons have been granted some relief/ benefit inadvertently or by mistake, such an order does not confer any legal right on others to get the same relief as well. If a wrong is committed in an earlier case, it cannot be perpetuated.

16 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur Equality is a trite, which cannot be claimed in illegality and therefore, cannot be enforced by a citizen or court in a negative manner. If an illegality and irregularity has been committed in favour of an individual or a group of individuals or a wrong order has been passed by a Judicial forum, others cannot invoke the jurisdiction of the higher or superior court for repeating or multiplying the same irregularity or illegality or for passing a similarly wrong order. A wrong order/decision in favour of any particular party does not entitle any other party to claim benefits on the basis of the wrong decision. Even otherwise, Article 14 cannot be stretched too far for otherwise it would make functioning of administration impossible. (Vide: Chandigarh Administration & Anr. v. Jagjit Singh & Anr., AIR 1995 SC 705, M/s. Anand Button Ltd. v. State of Haryana & Ors., AIR 2005 SC 565; K.K. Bhalla v. State of M.P. & Ors., AIR 2006 SC 898; and Fuljit Kaur v. State of Punjab, AIR 2010 SC 1937). 8. Sufficient cause is the cause for which defendant could not be blamed for his absence. The meaning of the word "sufficient" is "adequate" or "enough", inasmuch as may be necessary to answer the purpose intended. Therefore, the word "sufficient" embraces no more than that which provides a platitude, which when the act done suffices to accomplish the purpose intended in the facts and circumstances existing in a case, duly examined from the view point of a reasonable standard of a cautious man. In this context, "sufficient cause" means that the party should not have acted in a negligent manner or there was a want of bona fide on its part in view of the facts and circumstances of a case or it cannot be alleged that the party has "not acted diligently" or "remained inactive". However, the facts and circumstances of each case must afford sufficient ground to enable the Court concerned to exercise discretion for the reason that whenever the Court exercises discretion, it has to be exercised judiciously. The applicant must satisfy the Court that he was prevented by any "sufficient cause" from prosecuting his case, and unless a satisfactory explanation is furnished, the Court should not allow the application for 16

17 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur condonation of delay. The court has to examine whether the mistake is bona fide or was merely a device to cover an ulterior purpose. (See: Manindra Land and Building Corporation Ltd. v. Bhootnath Banerjee & Ors., AIR 1964 SC 1336; Lala Matadin v. A. Narayanan, AIR 1970 SC 1953; Parimal v. Veena @ Bharti AIR 2011 SC 1150; and Maniben Devraj Shah v. Municipal Corporation of Brihan Mumbai AIR 2012 SC 1629.) 9. In Arjun Singh v. Mohindra Kumar, AIR 1964 SC 993 this Court explained the difference between a "good cause" and a "sufficient cause" and observed that every "sufficient cause" is a good cause and vice versa. However, if any difference exists it can only be that the requirement of good cause is complied with on a lesser degree of proof that that of "sufficient cause". 11. The expression "sufficient cause" should be given a liberal interpretation to ensure that substantial justice is done, but only so long as negligence, inaction or lack of bona fides cannot be imputed to the party concerned, whether or not sufficient cause has been furnished, can be decided on the facts of a particular case and no straitjacket formula is possible. (Vide: Madan/al v. Shyamlal, AIR 2002 SC 100; and Ram Nath Sao @ Ram Nath Sahu & Ors. v. Gobardhan Sao & Ors., AIR 2002 SC 1201.)12. It is a settled legal proposition that law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes. The Court has no power to extend the period of limitation on equitable grounds. "A result flowing from a statutory provision is never an evil. A Court has no power to ignore that provision to relieve what it considers a distress resulting from its operation." The statutory provision ma y cause hardship or inconvenience to a particular party but the Court has no choice but to enforce it giving full effect to the same. The legal maxim "dura lex sed lex" which means "the law is hard but it is the law", stands attracted in such a situation. It has consistently been held that, "inconvenience is not" a decisive factor to be considered while interpreting a statute.13. The Statute of Limitation is founded on public policy, its aim being to secure 17

18 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur peace in the community, to suppress fraud and perjury, to quicken diligence and to prevent oppression. It seeks to bury all acts of the past which have not been agitated unexplainably and have from lapse of time become stale. According to Halsbury's Laws of England, Vol. 24, p. 181: "330. Policy of Limitation Acts. The courts have expressed at least three differing reasons supporting the existence of statutes of limitations namely, (1) that long dormant claims have more of cruelty than justice in them, (2) that a defendant might have lost the evidence to disprove a stale claim, and (3) that persons with good causes of actions should pursue them with reasonable diligence". An unlimited limitation would lead to a sense of insecurity and uncertainty, and therefore, limitation prevents disturbance or deprivation of what may have been acquired in equity and justice by long enjoyment or what may have been lost by a pdrty's own inaction, negligence' or /aches. (See: Popat and Kotecha Property v. State Bank of India Staff Assn. (2005) 7 ScC 510; Rajendar Singh & Ors. v. Santa Singh & Ors., AIR 1973 SC 2537; and Pundlik Jalam Patil v. Executive Engineer, Jalgaon Medium Project, (2008) 17 SCC 448). 14. In P. Ramachandra Rao v. State of Karnataka, AIR 2002 SC 1856, this Court held that judicially engrafting principles of limitation amounts to legislating and would fly in the face of law laid down by the Constitution Bench in A. R. Antulay v. R.S. Nayak, AIR 1992 SC 1701. 15. The law on the issue can be summarised to the effect that where a case has been presented in the court beyond limitation, the applicant has to explain the court as to what was the "sufficient cause" which means an adequate and enough reason which prevented him to approach the court within limitation. In case a party is found to be negligent, or for want of bonafide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay. No court could be justified in condoning such an inordinate delay by imposing any condition whatsoever. The application is to be decided only within the parameters laid down by this court in regard to 18

19 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur the condonation of delay. In case there was no sufficient cause to prevent a litigant to approach the court on time condoning the delay without any justification, putting any condition whatsoever, amounts to passing an order in violation of the statutory provisions and it tantamounts to showing utter disregard to the legislature.

(xii) Therefore, in view of the above discussion, it is held that the appellant has failed to bring on record any sufficient cause for condonation of inordinate delay of 636 days in filing appeal before the CIT(A), hence such inordinate delay cannot be condoned and thus the appeal of the appellant is not admitted.”

2.3 The ld.AR of the assessee prayed that the ld. CIT(A) has erred in not

condoning the delay of 636 days in filing the appeal before him. However,

20 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur

the assessee had sufficient reasons for delay in filing the appeal before the

ld. CIT(A) for which the ld.AR of the assessee filed the written

submission as under:-

Submissions:

1.1 In the present case, there was a sufficient cause which prevented the assessee from filing the appeal before the ld. CIT(A) in time. The assessee is an aged person more than 62 years old and was a heart patient. Unfortunately, he had a severe heart attack in the year 2012 and was undergoing treatments in Saket Hospital at Jaipur & Dr. R. K. Caroli at Delhi (PB 38-52). Further unfortunately the wife of the assessee, aged 64 yrs, also had a Cardiac problem in the year 2014 and she was also getting treatment in Narayana Hrudalaya Pvt. Ltd. at Jaipur and thereafter with Dr. Devendra Shrimal at Jaipur (PB 38-52). The elder son Shri Kapil Sharma was residing outside at Rourkela in Punjab and Haryana since 2013 where he was engaged in some construction contract business. The assessee had to remain outside of and on for the purposes of medical consultation and investigation.

1.2 The only source of income of the assessee was from salary in absence of taxable income, he was not regularly filing any return of income except last few or from taxi hiring. The poor assessee is not much literate and a layman was not conversant with the complexities of the tax laws and the statutory procedure requirements. At the relevant time, the tax affairs of the assessee were being taken care by one Shri Vipin Singhal, CA, who appeared during the scrutiny assessment proceedings also. The assessee therefore, was completely dependent upon his CA & Tax Consultant.

2.1 The assessment for AY 2011-12 was selected for scrutiny and the counsel Shri Vipin Singhal, CA was making appearance before the AO. The assessment was completed vide order dated 28.02.2014 u/s 143(3). After completion of the assessment proceedings, the assessment order was also served upon the said AR Shri Singhal who, was of the opinion that no appeal needs to be filed. Unfortunately, Shri Singhal never informed the assessee nor he seriously pressed or 20

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communicated in any manner directly or indirectly to the appellant himself or any of his relative to make them to ensure filling of an appeal. Unfortunately however, because of the prolonged health problem of the assessee and also of his wife he remained under a bonafide belief that the ld. AR Shri Singhal must be taking care.

2.2 It was only later on, when the department seriously pressed for the recovery of the demand, the assessee came to know of passing of the impugned assessment order. (Bank A/c attached in Aug 2015) When came to notice, the assessee immediately took the files from his earlier AR Shri Singhal in the month of December, 2015 and discussed the matter with other Tax Consultant who advised the assessee to immediately file an appeal in as much as looking to the nature of the issue involved, the assessee had got a good chance of success. The assessee accordingly handed over the papers to the new counsel, who took his own time and thereafter an appeal was immediately got prepared and is being filed without further delay.

2.3 In the past, he never faced this type of situation. There was no occasion when a higher assessment was made and no appeal had to be filed. The delay so caused thus, was because of the above reasons. The peculiar circumstances were completely beyond the control of the assessee who never expected to his regular tax consultant not to co-operate with the assessee and to put in a serious trouble. To support the contention on affidavit was filed before the CIT (A). (PB-37)

2.4 By not filing the present appeals or by a delayed filing thereof, the humble appellant-assessee was not going to gain anything. The conduct of the appellant- assessee was not therefore contumacious or dishonest. Hence, there was no deliberate intention on its part to delay the filing of the appeal. Kindly refer the cases of Ratanlal Dangi v/s ITO (1995) 51 TTJ 611 (JP) and CIT v/s Motilal Padampat Sugar Mills Co. (P) Ltd. (1979) 118 ITR 200 (SC?) in support.

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4.1 In para II pg 7 & 8 the ld. CIT (A) has narrated certain events and with the help thereof he drew adverse inference that the appellant has not come forward with clean hands while making an application for condonation of delay. However, the following submission will make it clear that it was a purported misreading of the facts and confusion which the ld. CIT (A) has adopted merely to reject the prayer for condonation. The replies on the allegations are as under:

4.2.1 It is clearly admitted by the ld. CIT(A) that after perusal of the assessment record that the assessment order along with notice of demand and penalty notice u/s 271(1)(c) of the Act was received by Shri Vipin Singhal, the earlier AR of the appellant on 04.03.2014. Thus, it is evidently clear that it is not the assessee or any of its family members but it was the A/R alone i.e. Shri Vipin Singhal, CA who received the notice of demand, assessment order and also the SCN u/s 274 r/w 271(1)(c) of the Act. After receipt of these papers what the A/R was supposed to have done, has been discussed later.

4.2.2 Firstly, the SCN u/s 271(1)(c) and 271B dated 19.08.2014 both might be received but thereafter, it is the A/R only who filed a reply vide letter dated 22.08.2014 to the SCN as noted by the ld. CIT (A) and not by the assessee. It is not known as to what action the ld. AR had taken thereafter upon the receipts of other papers. The CA admits that appellant was illiterate in his reply to AO.

4.2.3 Secondly, even assuming daughter in law received the notices, can one fairly and honestly say that she must be knowing what the provisions of S. 271(1) (c) and 271B meant and what is the impact of such notices and whether issuance / receipts of assessment order implies that assessment order (against which appeal was to be filed), is an event occurring after the passing of the order only (to assume / know that assessment order has been passed).

4.2.4 The ld. CIT (A) further observed that the AO vide order dated 26.08.2014 imposed a penalty of Rs.1,50,000/- u/s 271(1)(c). However, it was not known as to who received the penalty order and what action the ld. AR had taken thereafter upon the receipts of such papers. Whether he sent the papers to the counsel or communicated him for filing appeal. However, there is no answer to these questions. 22

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It is strange that how the ld. CIT(A) has taken help of this very fact which otherwise goes against his own inference and decision. Though such order was found in the file returned back.

4.2.5 The admitted fact stated by the ld. CIT (A) himself is that an application u/s 154 of the Act was filed by the A/R on 08.03.2014 for allowing credit of TDS, itself goes to show that it was the ld. A/R himself, who was receiving the papers and also taking action there upon, Once he could have filed rectification application to claim the credit of TDS why he should not have advised the client to file appeal in the facts of the case looking to the huge quantum of addition made and the consequent penalty proceedings u/s 271(1)(c) for concealment initiated by the AO. But the ld. CIT(A) has conveniently ignored the same.

4.2.6 He also observed that further outstanding demand notice was served upon the appellant by affixture as the daughter in law refused to accept. As stated, the appellant was not residing here at the relevant point of time. It is difficult to believe as to how a lady could understand the implications of the notice of demand and otherwise legally also it could not a valid service upon her. Even the affixture was also illegal.

The fact that the AO attached the bank account in Aug. 2015, could not be within the knowledge of the assessee immediately because as per the prevailing practice the AOs are not used to serve a copy of the notice u/s 226(3) of the Act to the assessee even though the law requires the AO to do so. Unfortunately, such a notice was never served upon the appellant or any other relatives hence, how he could know the fact of attachment and/or passing of the order. Therefore, the allegations of the ld. CIT(A) in para (ii) page 7 and (ix) page 10 are baseless. However, later on Dec. 2015 when came to notice, the AO, started taking action. In Dec. 2015, he took back the files. Thus, what comes out is that these matters/developments were between the A/R and AO only. There was nothing based on which it could be fairly said that the appellant was made known of the fact of the passing of the assessment order with huge additions (to be challenged by way of this appeal).

4.3.1 It is unfortunate that in Para C Para (iii) Page 7, the ld. CIT(A) has blamed the poor appellant himself instead of asking the ld. A/R and Chartered Accountant Shri Singhal, as to what he was supposed to do while discharging his professional duties towards his client after the receipt of the assessment order along with notice of demand and penalty notices.

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4.3.2 As regards his allegations in para (iii), it is submitted that one need not explain the necessity of engaging a counsel before an authority by any client. It is not denied that Shri Singhal was a duly appointed power of attorney holder and was acting as a counsel for and on behalf of the poor appellant. He admittedly appeared before the AO during the assessment proceedings. Admittedly, he was the person who received the notice of the demand, assessment order and even the penalty notices. It is again a fact that huge addition of Rs. 28,34,558/- and consequently, a huge demand pursuant thereto of Rs.11.07 lac. was created. Also it is not denied that penalty proceeding u/s 271 (1) (c) were initiated in the said assessment order (which ultimately resulted into a penalty of a huge amount of Rs.7.71 lakhs). Also it is not denied that penalty of Rs. 1.50 lack u/s 271B was also imposed. A moot question arises as to what the ld. AR has done in the discharge of his professional duties, who was appointed to take care of the tax affairs before the AO. The ld. CIT(A) purportedly did not raise any question on this aspect.

4.3.3 Even if assuming for a moment, the A/R never advised the assessee not to file an appeal then what the ld. A/R did further. What steps he has taken? Whether he tried to contact the appellant to explain the seriousness involving in the matter and the necessity of filing the appeal urgently? Assuming he did inform (though it is not a fact coming out of the record at all nor the ld. CIT (A) appeal has alleged so), why he has not sent the assessment order in original or at least a copy thereof. Why he did not send a written communication to the appellant impressing upon him the necessity of an urgent filing of the appeal within the prescribed time. However, nothing of this sort was done. There is no evidence. There is absolutely no whisper in the order of CIT(A) as to what were the professional duties, which the ld. A/R and Chartered Accountant by profession, was supposed to discharge and whenever he really discharged the same, what to talk of examining any evidence in this regard.

4.4 As regards his comments in para (vi) page 9, there was no lack of bonafidee. The appellant did furnish acceptable and sufficient cogent reasons and has also proved existence of the abnormal circumstances beyond control but the ld. CIT(A) rejected them without considering the facts positively.

4.5 Cases cited by CIT(A) are completely distinguishable: The CIT(A) relied upon some decisions. However, all those cases were based on the peculiar facts available in those cases only which are not obtaining in the present case. They were rendered in different legal factual context and hence, are not at all applicable and be ignored. It was not a case of inordinate delay in the peculiar facts of this case. 24

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4.6.1 It is unfortunate that at the back of the assessee, the ld. CIT(A) made a direct enquiry from the said CA and obtained his reply dated 24.08.2016 [reproduced in para (iv) of page 8 of CIT order] and even blindly believed the same, without at all informing to the poor appellant that he was going to make enquiries. Before doing that he never asked the appellant to bring his confirmation. Even thereafter, no specific notice was given. Unfortunately thus, no opportunity at all in any manner was provided. Neither such confirmation was sent nor opportunity of seeking reply nor of cross examining the CA was ever provided by the ld. CIT(A) before using the same before the assessee.

Coincidentally when the AR Shri Rahman, Adv. happened to be before the ld. CIT(A) in some other matter he was allegedly shown the above reply of the CA and obtained his counter comments thereon. Such an attempt on the part of the ld. CIT(A) is not appreciable and cannot be treated as an sufficient opportunity.

4.6.2 Reply of CA was a self-serving statement. Without any corroborative evidence/ affidavit and rather is against human probability.

4.7 The ld. CIT(A) thus, appeared to be bent upon to believe each and every word said by the said Chartered Accountant and to believe his confirmation as a sacred document but at the same time rejected what the poor appellant has said and even ignored an affidavit filed by the appellant in support of its contention. In absence of any counter affidavit or contrary evidence brought on record to controvert the averments made in affidavit, the facts narrated therein were binding upon the authorities below. The ld. CIT (A) however, conveniently ignored this legal & factual position. Kindly refer Mehta Pareek & Co. 30 ITR 181 (SC) followed by Jaipur and Jodhpur Benches of ITAT also in the cases of ITO v. Dr. Tejgopal Bhatnagar 20 TW 368 (Jp) Paras Cotton Company vs. CIT (2003) 30 TW 168 (JD).

5.1 The Hon'ble Supreme Court in the case of Collector, Land & Acquisition v/s Mst. Katiji & Others (1987) 167 ITR 471 (SC) has advocated for a very liberal approach while considering a case for condonation of delay. The following observations of the Hon'ble Court are notable:

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"The legislature has conferred the power to condone delay by enacting section 5 of the Limitation Act 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 sub-serves 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."

The said judgment is a leading case on the subject and has a binding force on all the officers subordinate thereto. The ld. CIT(A) however, distinguished the same on flimsy grounds and without understanding that it is the ratio which it to be applied and not the facts.

5.2 In Ram Lal & Sons vs. ITO (2006) 99 TTJ 0063 (Asr Trib) (DPB 1-4) held as under: “Appeal [CIT(A)]—Condonation of delay [of 6 years & 3 months]—Lapse on the part of advocate—Assessee’s advocate did not file appeal against order of AO imposing penalty under s. 271(1)(c)—Assessee was under bona fide impression that appeal has been filed—It was only when AO issued further show-cause notice that assessee came to know that appeal has not been filed—Thereafter, it filed appeal within a week—Said fact not challenged by Revenue—CIT(A) ought to have condoned the delay”

5.3 In Rohtak Co-op. Milk Producer Union Ltd. vs. ACIT (2012) 18 ITR 0310 (Del Trib) held as under:

“The term "sufficient cause" is quite elastic so as to enable the courts to apply the law in a meaningful manner which sub-serves the ends of justice. Further, a litigant should not ordinarily suffer for the mistake of the counsel. The delay in this case has been explained by way of the affidavit of the advocate. Since there are plausible reasons for delay as it occurred due to omission on the part of the advocate, the delay should be condoned. — Himachal Pradesh Cricket Association, Una, ITA Nos 110 and 111/Ch/2004 dated 8 September 2004 relied; Chief Post Master General & Others v Living Media India Ltd & another 197 Taxman 435 (Del) distinguished”

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5.4 Arevat & D India Ltd. v/s JCIT (2006) 287 ITR 0555 (Mad) (DPB 5-8), delay of 231 days was condoned, which occurred due to advice of counsel who did not give his affidavit. It was held that

"The assessee could not prefer the appeal within the time on account of the advice alleged to have been given by his counsel, and the assessee could not get an affidavit from the counsel, as insisted by the Tribunal. But, at the same time, it is not in dispute that the director of the assessee- company has sworn to an affidavit. It is a well-settled law that in exercising discretion under s. 5 of the Limitation Act the Courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The Court has to exercise the 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. If that be so, the Tribunal ought to have given a finding whether the assessee has given sufficient cause in the affidavit sworn to by the director of company, instead of refusing to accept the affidavit itself. In the absence of any finding by the Tribunal as to the "sufficient cause" for the alleged delay, the Tribunal has erred in refusing to exercise the discretion under s. 5 of the Limitation Act. The Tribunal was not correct in dismissing the appeal on account of limitation without giving a finding that there was no sufficient cause for the delay. The order of the Tribunal is set aside. The matter is remitted back to the Tribunal for disposal of the same on merits and in accordance with law.—Vedabai alias Vaijayanatabai Baburao Patil vs. Shantaram Baburao Patil (2002) 173 CTR (SC) 300 : (2002) 253 ITR 798 (SC) and Sreenivas Charitable Trust vs. Dy. CIT (2006) 280 ITR 357 (Mad) applied."

5.5 In Anand Shankar Mittal v/s DCIT (2010) 34 DTR 589 (JP Trib) (DPB 9- 19), wherein it was held that:

“Wrong legal advice given by his counsel to the assessee that he would get the required relief on the application under s. 154 and that there was no need to file an appeal in respect of the same matter constituted a sufficient cause for not presenting the appeal in time and, 27

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therefore, CIT(A) was not justified in not admitting the appeal of the assessee and not deciding the same on merits”

Manoj Ahuja & Anr. vs. IAC (1984) 43 CTR (P&H) 229 : (1984) 150 ITR 696 (P&H)

5.6 In Shri Y P Trivedi v/s JCIT in ITA No.5994/Mum/2010 dated 11.07.2012 (MumTrib) (DPB 22-28).

The facts do not suggest that the assessee has acted in a mala-fide manner or that the reasons explained are only a device to cover an ulterior purpose. It is a settled proposition of law that Courts should take a lenient view on the matter of condonation of delay provided the explanation and the reason for delay is bonafide and not merely a device to cover an ulterior purpose or an attempt to save limitation in an underhand way. The Court should be liberal in construing sufficient cause and should lean in favour of such party. Whenever substantial Justice and technical considerations are opposed to each other, cause of substantial Justice has to be preferred. On facts, the reasons explained by the assessee show that due to bonafide mistake and inadvertence, the appeal could not be filed within the period of limitation. Accordingly, the delay of 496 days has to be condoned (Mst. Katiji 167 ITR 471(SC) referred).

5.7 In Improvement Trust vs. Ujagar Singh (2010) 6 SSC 786 / 6 Scale 173 (Supreme Court) (DPB 29-32) Source: www.itatonline.org held

Condonation of Delay – Substantial Justice – Appeal – Unless mala fides are writ large, delay should be condoned. Matters should be disposed of on merits and not technicalities Justice can be done only when the matter is fought on merits and in accordance with law rather than to dispose it on such technicalities and that too at the threshold. Unless mala-fides are writ large on the conduct of the party, generally as a normal rule, delay should be condoned.

5.8 In CIT vs. West Bengal Infrastructure Development Finance Corp. Ltd. (2011) 334 ITR 269 (SC) (DPB 20-21) held that

The department delayed the filing of appeal in the matter involving huge stakes. The High Court dismissed the appeal. Held, considering the amount of tax involved, the High Court ought to have decided the appeal 28

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before it on the merits. The matter was remanded to the High Court to decide de novo in accordance with law.

5.9 In CIT vs. Williamson Tea (Assam) Ltd. (2012) 78 DTR 18 (Gau.) (High Court) held that

Revenue, having regard to the steps taken from time to time, cannot be criticized of being either sluggish, indifferent or causal in its approach to the requirement of filing the appeals. Last date for completing assessment being 22nd Jan., 2008, the AO might have diverted his attention to the assessment cases, which were to get time barred prior thereto, i.e. 31st Dec. 2007. Merely because instructions were provided to the standing counsel by the Revenue on more than one occasion, the same is not demonstrative of unnecessary wastage of time by it. More so, there is nothing to the contrary to even infer the same. Personal problems plaguing the standing counsel have not been controverted by the opposite party so as to discard the same as untrue. On a totality of the considerations the applications have considerable merit and ought to succeed. Delay of 290/287 days in preferring the appeals condoned. (A.Y. 1996-97 & 2000-01)

5.10 In Mukesh Jesangbhai Patel vs. ITO (2013) 213 Taxman 37 (Mag.) (Guj) (High Court) held

S.253: Appellate Tribunal – Appeal – Condonation of delay – High Court condoned the delay of more than one year due to negligence of lawyer. Assessee running a tuition centre, an assessment order was passed. Against said order, assessee filed an appeal before Tribunal with a delay of over one year. Tribunal dismissed appeal being barred by limitation. On appeal, it was noted that on account of negligence of assessee’s lawyer, appeal could not be filed within prescribed time. Further, sickness of mother was also a contributing factor as assessee was engaged in attending to her. The Court held on facts, cause shown by assessee for delay in filing appeal was genuine and bona fide, therefore, impugned order was to be set aside and, matter was to be remanded back for disposal on merits. (A.Y. 1999-2000 to 2001-02)

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5.11 In Vijay Vishin Meghani & ANR. Vs. DCIT & Anr. (Bom.HC), (2017) 100 CCH 0034 (DPB 33-42). held that “Appeal—Condonation of Delay—Claim for deduction under Section 80-O made by Assessee was disallowed by AO for Assessment Year 1993-94 and confirmed by the Commissioner of Income Tax (Appeals)—Against order of Commissioner, assessee preferred appeal before Tribunal—Tribunal restored matter back to file of AO for Assessment Year 1993-94—AO passed order allowing claim under that section of the I.T. Act, 1961—Assessee preferred rectification application to AO to rectify his order for Assessment Year 1994-95 and Assessment Year 1996-97—Rectification application was rejected by AO—CIT(A) upheld order of AO—Assessee filed application for condonation of delay in filling appeal against order of CIT(A)—Tribunal held that assessee simply put responsibility for delay on Revenue—Tribunal dismissed two appeals filed by assessee holding that same as barred by limitation— Tribunal held that delay of 2984 days in filling appeal could not be condoned—Held,Supreme Court in case of Concord of India Insurance Co. Ltd.Vs. Smt. Nirmala Devi and others held that legal advice tendered by a professional and litigant acting upon it one way or other could be sufficient cause to seek condonation of delay and coupled with other circumstances and factors for applying liberal principles and then said delay can be condoned—None should be deprived of an adjudication on merits unless the Court of law or the Tribunal/Appellate Authority found that litigant deliberately and intentionally delayed filing of appeal— Tribunal though aware of these principles but possibly carried away by fact that delay of 2984 days was incapable of condonation—In process Tribunal went about blaming assessee and professionals and equally Department—Tribunal's order did not meet requirement set out in law— Tribunal completely misdirected itself and had taken into account factors, tests and considerations which had no bearing or nexus with issue at hand—Tribunal, therefore, erred in law and on facts in refusing to condone delay—Explanation placed on affidavit was not contested nor Court found that from such explanation , High Court could not arrive at conclusion that assessee was at fault, he intentionally and deliberately delayed matter and had no bona fide or reasonable explanation for delay in filing proceedings—High Court condoned delay of 2984 days in filing appeals—Assessee’s Appeals allowed”.

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5.12 In United Christmas celebration committee charitable trust vs. ITO. (2017) 249 Taxman 0372 (Madras) (DPB 43-47).held that “Appeal—Condonation of delay—Tribunal refused to entertain appeal of Assessee-charitable institution filed against order passed by CIT(A) only on ground that, it was woefully delayed by 1631 days—Held, there was enormous delay in moving appeal before Tribunal—Assessee had not filed petition for condonation of delay, which was supported by affidavit of Assessee—Chartered Accountant engaged in matter was unaware of fact that appeal could be filed against order of CIT, post amendment made in Section 253(1)(c)—Name of Chartered Accountant was mentioned in petition—Counsel could not have conjured up name of Chartered Accountant—Not only period of delay has to be taken in account but also quality of explanation, the legal assistance, if any, sought and rendered to litigant, and detriment that condonation of delay would cause to the opposing party—Assessee did not receive best legal assistance in matter—There was nothing on record to suggest that Revenue refuted this averment made in petition—Therefore, notwithstanding fact that, period of delay was large, delay was condoned, especially in circumstances obtaining in case, as it would not cause detriment to Revenue—Assessee’s Appeal allowed”

5.13 In Hosanna Ministries vs. ITO. (2017) DTR 0008 (Mad.) (DPB 48.53).held that “Appeal (Tribunal)- Condonation of delay- Reasonable cause- Delay of 1902 days in filing appeal against CIT’s order under s. 12AA was, as explained by assessee, on account of non-advise on the part of the professional, who has been engaged by the assessee and the ignorance of law by the assessee itself- Assessee knew well that if a plea of ignorance of law is taken, that would be, on face of it, rejected by court/Tribunal, nevertheless, such a plea alone had been taken by the assessee and that itself would show the inherent genuineness attached with the reason cited by the assessee for such huge delay-court must take a pragmatic view in appreciating the reasons attributable to the delay caused to the party to approach the court of law further reason given by the tribunal for arriving at such a conclusion that the assessee was not engaging in activities in accordance with the objects specified in the trust deed also is not supported by materials as it is clear that the assessee has been functioning after proper registration with the authorities 31

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concerned under the juvenile Act- Impugned order of the Tribunal set aside.”

5.14 Also kindly refer Hampee Dyeing P Ltd vs. ITO, Ward 10(3)(1), Mumbai, ITA No.3060/Mum/2010 on dated 31.05.2011.

2.4 On the other hand, the ld. DR supported the order of the ld. CIT(A). 2.5 We have heard the rival contentions and perused the materials

available on record. Brief facts of the case are that the assessment order in

the case of the assessee was passed by the AO u/s 143(3) of the Act on 28-

02-2014. The assessment order alongwith notice of demand issued u/s 156

of the Act was received by Shri Vipin Singhal, CA and A/R of the assessee

on 4-03-2014. However, the appeal in the instant case was filed on

29-01-2016 wherein the date of service of order was stated to be ‘’Not

Known to the assessee as received by his counsel Shri Vipin Singhal’’.

Thus the appeal filed by the assessee before ld. CIT(A) was barred by

limitation by 636 days. The assessee filed an application dated 01-12-2015

before the ld. CIT(A) for condonation of delay of 636 days in filing the

appeal (PBP-35-37) alongwith copies of the medical prescription of the 32

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doctor for self and his wife treatment. However, the ld. CIT(A) did not condone the delay by stating that the assessee failed to bring on record any sufficient cause for condonation of inordinate delay of 636 days in filing

appeal before him. Thus the appeal of the assessee was not admitted. Aggrieved by the order of the ld. CIT(A), the assessee filed the appeal before us alongwith written submission and case laws cited (supra). It is not imperative to repeat the facts of the case as the ld. CIT(A) has

elaborately discussed the issue of condonation of delay of appeal by the assessee. In this case, it is noted that ld. CIT(A) has tried to reject the appeal of the assessee only on technical ground but the ld. CIT(A) has not

made efforts to dispose off the appeal of the assessee on merit. It is further noted that the ld. CIT(A) has taken the recourse of various decisions cited in his order (supra) but he did not take into consideration that the assessee

is an old person and suffering from heart disease. The assessee has filed his medical certificate of Saket Hospital, Jaipur. The assessee had also suffered from severe heart attack (PBP 50-52). The wife of the assessee

had also a cardiac problem and she was getting treatment from DR. Ashok Pangariya SMS, Hospital and also Naryana Hrudalaya Pvt Ltd. Jaipur (PBP 38-49) It is pertinent to mention that ld. CIT(A) took into consideration

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the letter dated 24-08-2016 of Shri Vipin Singhal, the earlier AR , the relevant para of the ld. CIT(A) is as under:-

‘’iv) It may be mentioned that Sh. Vipin Singhal, the earlier AR of the appellant attended the proceedings before me in some other case and he was shown the copy of condonation application filed by the appellant as discussed above. Vide his reply dated 24.08.2016, it was submitted by Sh. Vipin Singhal, earlier AR of the appellant as under:

"1. M/s Ram Bharose Sharma contacted to my office for appearing me for his scrutiny case before ITO 2 (4), Jaipur. 2. As per the documents/Papers given by him, I pleaded for his time to time before the relevant authority. 3. When final order comes, I called to him to take his assessment order but he never visited to my office despite for various reminders. 4. I have never deny to him for further legal compliance or for go to in appeal, in spite of contacting to me, he went with other legal practitioner and told to him for me that I have not attended the hearing dates before the assessing authority as well as never suggesting to him for further legal compliance. He is also pleaded in the application for condonation of delay in filling appeal before CIT appeals that, delay in filling the appeal was due to my default any any other bla-bla reasons. So please take necessary action against him because he was misguiding to the department."

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From this letter, it is noted that the ld. CIT(A) has not provided any

opportunity to the assessee either to cross examine Shri Vipin Singhal,

C.A. or to seek reply from the assessee which indicates that the ld. CIT(A)

made the enquiry at the back of the assessee and obtained his reply dated

24-08-2016. It is further noted that the ld. CIT(A) had shown the letter of

Shri Singhal to Shri Fazlur Rehman, the present AR for his comments. The

relevant para of the ld. CIT(A) is reproduced as under:-

‘’(v) The above letter of Sh. Singhal was shown to Sh. Fazlur Rehman, the present AR of the appellant for his comments on 07.09.2016 and vide order sheet entry of the same date, it was submitted by Sh. Fazlur Rehman as under: “As the assessee is not aware with the complexities of law and he is totally dependent on his counsel. Due to ignorance of law sufficient cause available with assessee. Hence, kindly in the interest of justice delay may condoned.” The ld.AR of the assessee to this effect submitted as under:- ‘’Coincidentally when the AR Shri Rahman, Adv. happened to be before the ld. CIT(A) in some other matter he was allegedly shown the above reply of the CA and obtained his counter comments thereon. Such an attempt on the part of the ld. CIT(A) is not appreciable and cannot be treated as an sufficient opportunity.’’ From the discussions made above, it is noted that the ld. CIT(A) has not

admitted the appeal of the assessee being time barred by 636 days instead

of deciding the same on merit. Efforts should be made to decide the appeal

on merit instead of rejecting the appeal on technicalitis. We have noted 35

36 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur

that various courts have condoned the delay either in the case of the

assessee or Revenue which are mentioned as under:-

(i) In Ram Lal & Sons vs. ITO (2006) 99 TTJ 0063 (Asr Trib) (DPB 1-4) held as under: “Appeal [CIT(A)]—Condonation of delay [of 6 years & 3 months]—Lapse on the part of advocate—Assessee’s advocate did not file appeal against order of AO imposing penalty under s. 271(1)(c)—Assessee was under bona fide impression that appeal has been filed—It was only when AO issued further show-cause notice that assessee came to know that appeal has not been filed—Thereafter, it filed appeal within a week—Said fact not challenged by Revenue—CIT(A) ought to have condoned the delay”

(ii) In Rohtak Co-op. Milk Producer Union Ltd. vs. ACIT (2012) 18 ITR 0310 (Del Trib) held as under:

“The term "sufficient cause" is quite elastic so as to enable the courts to apply the law in a meaningful manner which sub-serves the ends of justice. Further, a litigant should not ordinarily suffer for the mistake of the counsel. The delay in this case has been explained by way of the affidavit of the advocate. Since there are plausible reasons for delay as it occurred due to omission on the part of the advocate, the delay should be condoned. — Himachal Pradesh Cricket Association, Una, ITA Nos 110 and 111/Ch/2004 dated 8 September 2004 relied; Chief Post Master General & Others v Living Media India Ltd & another 197 Taxman 435 (Del) distinguished”

(iii) Arevat & D India Ltd. v/s JCIT (2006) 287 ITR 0555 (Mad) (DPB 5-8), delay of 231 days was condoned, which occurred due to advice of counsel who did not give his affidavit. It was held that

"The assessee could not prefer the appeal within the time on account of the advice alleged to have been given by his counsel, and the assessee could not get an affidavit from the counsel, as insisted by the Tribunal. But, at the same time, it is not in dispute that the director of the assessee- company has sworn to an affidavit. It is a well-settled law that in exercising discretion under s. 5 of the Limitation Act the Courts should adopt a

37 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur

pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The Court has to exercise the 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. If that be so, the Tribunal ought to have given a finding whether the assessee has given sufficient cause in the affidavit sworn to by the director of company, instead of refusing to accept the affidavit itself. In the absence of any finding by the Tribunal as to the "sufficient cause" for the alleged delay, the Tribunal has erred in refusing to exercise the discretion under s. 5 of the Limitation Act. The Tribunal was not correct in dismissing the appeal on account of limitation without giving a finding that there was no sufficient cause for the delay. The order of the Tribunal is set aside. The matter is remitted back to the Tribunal for disposal of the same on merits and in accordance with law.—Vedabai alias Vaijayanatabai Baburao Patil vs. Shantaram Baburao Patil (2002) 173 CTR (SC) 300 : (2002) 253 ITR 798 (SC) and Sreenivas Charitable Trust vs. Dy. CIT (2006) 280 ITR 357 (Mad) applied."

(iv) In Shri Y P Trivedi v/s JCIT in ITA No.5994/Mum/2010 dated 11.07.2012 (MumTrib) (DPB 22-28).

The facts do not suggest that the assessee has acted in a mala-fide manner or that the reasons explained are only a device to cover an ulterior purpose. It is a settled proposition of law that Courts should take a lenient view on the matter of condonation of delay provided the explanation and the reason for delay is bonafide and not merely a device to cover an ulterior purpose or an attempt to save limitation in an underhand way. The Court should be liberal in construing sufficient cause and should lean in favour of such party. Whenever substantial Justice and technical considerations are opposed to each other, cause of substantial Justice has to be preferred. On facts, the reasons explained by the assessee show that due to bonafide mistake and inadvertence, the appeal could not be filed within the period of limitation. Accordingly, the delay of 496 days has to be condoned (Mst. Katiji 167 ITR 471(SC) referred).

38 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur

(v) In Improvement Trust vs. Ujagar Singh (2010) 6 SSC 786 / 6 Scale 173 (Supreme Court) (DPB 29-32) Source: www.itatonline.org held

Condonation of Delay – Substantial Justice – Appeal – Unless mala fides are writ large, delay should be condoned. Matters should be disposed of on merits and not technicalities Justice can be done only when the matter is fought on merits and in accordance with law rather than to dispose it on such technicalities and that too at the threshold. Unless mala-fides are writ large on the conduct of the party, generally as a normal rule, delay should be condoned.

(vi) In CIT vs. West Bengal Infrastructure Development Finance Corp. Ltd. (2011) 334 ITR 269 (SC) (DPB 20-21) held that

The department delayed the filing of appeal in the matter involving huge stakes. The High Court dismissed the appeal. Held, considering the amount of tax involved, the High Court ought to have decided the appeal before it on the merits. The matter was remanded to the High Court to decide de novo in accordance with law.

(vii) In Mukesh Jesangbhai Patel vs. ITO (2013) 213 Taxman 37 (Mag.) (Guj) (High Court) held :-S.253: Appellate Tribunal – Appeal – Condonation of delay – High Court condoned the delay of more than one year due to negligence of lawyer. Assessee running a tuition centre, an assessment order was passed. Against said order, assessee filed an appeal before Tribunal with a delay of over one year. Tribunal dismissed appeal being barred by limitation. On appeal, it was noted that on account of negligence of assessee’s lawyer, appeal could not be filed within prescribed time. Further, sickness of mother was also a contributing factor as assessee was engaged in attending to her. The Court held on facts, cause shown by assessee for delay in filing appeal was genuine and bona fide, therefore, impugned order was to be set aside and, matter was to be remanded back for disposal on merits. (A.Y. 1999-2000 to 2001-02)

(viii) In Vijay Vishin Meghani & ANR. Vs. DCIT & Anr. (Bom.HC), (2017) 100 CCH 0034 (DPB 33-42). held that

39 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur

“Appeal—Condonation of Delay—Claim for deduction under Section 80-O made by Assessee was disallowed by AO for Assessment Year 1993-94 and confirmed by the Commissioner of Income Tax (Appeals)—Against order of Commissioner, assessee preferred appeal before Tribunal—Tribunal restored matter back to file of AO for Assessment Year 1993-94—AO passed order allowing claim under that section of the I.T. Act, 1961—Assessee preferred rectification application to AO to rectify his order for Assessment Year 1994-95 and Assessment Year 1996-97—Rectification application was rejected by AO—CIT(A) upheld order of AO—Assessee filed application for condonation of delay in filling appeal against order of CIT(A)—Tribunal held that assessee simply put responsibility for delay on Revenue—Tribunal dismissed two appeals filed by assessee holding that same as barred by limitation— Tribunal held that delay of 2984 days in filling appeal could not be condoned—Held,Supreme Court in case of Concord of India Insurance Co. Ltd.Vs. Smt. Nirmala Devi and others held that legal advice tendered by a professional and litigant acting upon it one way or other could be sufficient cause to seek condonation of delay and coupled with other circumstances and factors for applying liberal principles and then said delay can be condoned—None should be deprived of an adjudication on merits unless the Court of law or the Tribunal/Appellate Authority found that litigant deliberately and intentionally delayed filing of appeal— Tribunal though aware of these principles but possibly carried away by fact that delay of 2984 days was incapable of condonation—In process Tribunal went about blaming assessee and professionals and equally Department—Tribunal's order did not meet requirement set out in law— Tribunal completely misdirected itself and had taken into account factors, tests and considerations which had no bearing or nexus with issue at hand—Tribunal, therefore, erred in law and on facts in refusing to condone delay—Explanation placed on affidavit was not contested nor Court found that from such explanation , High Court could not arrive at conclusion that assessee was at fault, he intentionally and deliberately delayed matter and had no bona fide or reasonable explanation for delay in filing proceedings—High Court condoned delay of 2984 days in filing appeals—Assessee’s Appeals allowed”.

(ix) 5.13 In Hosanna Ministries vs. ITO. (2017) DTR 0008 (Mad.) (DPB 48.53).held that “Appeal (Tribunal)- Condonation of delay-

40 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur

Reasonable cause- Delay of 1902 days in filing appeal against CIT’s order under s. 12AA was, as explained by assessee, on account of non- advise on the part of the professional, who has been engaged by the assessee and the ignorance of law by the assessee itself- Assessee knew well that if a plea of ignorance of law is taken, that would be, on face of it, rejected by court/Tribunal, nevertheless, such a plea alone had been taken by the assessee and that itself would show the inherent genuineness attached with the reason cited by the assessee for such huge delay-court must take a pragmatic view in appreciating the reasons attributable to the delay caused to the party to approach the court of law further reason given by the tribunal for arriving at such a conclusion that the assessee was not engaging in activities in accordance with the objects specified in the trust deed also is not supported by materials as it is clear that the assessee has been functioning after proper registration with the authorities concerned under the Juvenile Act – Impugned order of the Tribunal set aside.’’ Taking into consideration the above facts, circumstances of the case and

the case laws cited by us, it is noted that the ld. CIT(A) should not have

rejected the appeal of the assessee on technicalities i.e. barred by limitation

instead of adjudicating upon the appeal of the assessee on merit. In this

view of the matter, the condonation of delay in filing the appeal of the

assessee is allowed and the ld. CIT(A) is directed to decide the other

grounds of appeal raised above on merit by providing adequate opportunity

of being heard to the assessee. Thus the appeal of the assessee is allowed

for statistical purposes as indicated above.

41 ITA No. 1066/JP/2016 Shri Ram Bharose Sharma vs ITO, Ward- 2(4), Jaipur 3.0 In the result, the appeal of the assessee is allowed for Statistical purposes as indicated above. Order pronounced in the open Court on 14-06-2018.

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