PRISM INDUSTRIES LIMITED,,BARODA vs. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-4,, BARODA

The solitary grievance of the assessee in both these appeals is that the learned CIT(A) has erred in not condoning the delay in filing the appeals before him and dismissing the appeals being time barred.

With the assistance of learned representatives, we have gone through the record carefully. It emerges out from the record that the quantum appeal of the assessee was time barred before the First Appellate Authority by a period of one year and three days; whereas the penalty appeal was

During that time your appellant was passing through extremely difficult financial position and the company had turned sick. The company had made application to BIFR for registration as Sick Company and sanction of rehabilitation package to restore the company back to health. On account of this cash flow was extremely poor and the company was not in a position to meet even salary obligations. On account of this many staff members left the services and remaining staff was also looking for other avenues. All the work therefore had to be got done with the help of minimum staff available. In view of this certain important things unintentionally remained unattended.

On account of consistent loss the company was closing down its offices in other cities and in particular the office at Mumbai. In view of this the records of the office were also shifted to the office at Kalamsar, Dist: Anand. This led to piling of huge record leading to difficulty in locating required papers. This led to many papers requiring urgent attention being left out to be attended.

On account of this factor beyond the control of the management-the matter as regards filing of appeal was left out. The delay therefore in filing of appeal was not intentional. It was on account of these exceptional circumstances that the matters requiring attention were left out. It can be appreciated that there was no casual approach and that the management was helpless to the extent and was forced into the circumstances. It is therefore respectfully submitted that the delay in filing of the appeal may please be condoned and appeal accepted.”

After going through the above explanation, learned CIT(A) was not satisfied with the reasonable cause given by the assessee and did not condone the delay. Accordingly, both the appeals of the assessee were dismissed by the learned First Appellate Authority.

Before us, learned Counsel for the assessee reiterated his contentions as were raised before the First Appellate Authority. On the other hand, learned Departmental Representative contended that there is no plausible reason assigned by the assessee for not filing the appeal within the time.

We have duly considered the rival contentions and gone through the record carefully. We find that sub-section 5 of Section 253 contemplates that the Tribunal may admit an appeal or permit filing of memorandum of cross- objections after expiry of relevant period, if it is satisfied that there was a sufficient cause for not presenting it within that period. This expression "sufficient cause" employed in the section has also been used identically in sub-section 3 of section 249 of Income Tax Act, which provides powers to the ld. Commissioner to condone the delay in filing the appeal before the Commissioner. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon'ble High Court as well as before the Hon'ble Supreme Court, then, Hon'ble Court were unanimous in their conclusion that this expression is to be used liberally. We may make reference to the following observations of the Hon'ble Supreme Court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353:

Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this

"Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.

When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.

There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk.

It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so."

Similarly, we would like to make reference to authoritative pronouncement of Hon'ble Supreme Court in the case of N.Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under:

We do not deem it necessary to recite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Hon'ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the condonation of delay, then such reasons are to be construed with a justice oriented approach. If we look the explanation of the assessee, in the light of proposition propounded by the Hon'ble Courts, then, it would reveal that the assessee could not afford to make its appeal time-barred knowingly. The delay in filing the appeal happened on account of communication gap between the management as well as part-time accountant, who has collected copy of the order from the tax consultant office and subsequently left the job. In the case of N.Balakrishnan Vs. M.Krishnamurthy (supra), the Hon'ble Court has ITA No.2496/Ahd/2013 observed that every case of delay, there must be some negligence, but that negligence is to be viewed whether to make an appeal time barred was adopted by way of conscious decision as a dilatory strategy. In the present case, by making the appeal time barred, the assessee

In the result, both appeals of the assessee are allowed.