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Income Tax Appellate Tribunal, HYDERABAD BENCH “A”, HYDERABAD
Before: SMT P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN
PER S. RIFAUR RAHMAN, A.M.:
This appeal is preferred by the assessee against the order of CIT(A) – 11, Hyderabad, dated 17/08/2016 for the AY 2010-11.
Briefly the facts of the case are, assessee company filed its return of income on 24/09/2010 declaring a loss of Rs. 7,43,98,643/-. Subsequently, the case was selected for scrutiny through CASS and notices u/s 143(2) and 142(1) were issued and served on the assessee company. In response to the said notices, the assessee company filed the information as called for. After examining the details filed by the assessee, the AO completed the assessment u/s 143(3) determining the loss at Rs. 5,62,18,714/- as against the loss
2 ITA No. 1551 /Hyd/2016 Health Superhiway Pvt. Ltd., Hyd. declared by the assessee at Rs. 7,43,98,643/- by making various additions.
Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A) and the appeal was filed before the CIT(A) with a delay of 241 days.
Before the CIT(A), the assessee filed a petition for condonation of the delay, however, the CIT(A) dismissed the appeal of the assessee in limine on the ground that the assessee was unable to prove the ‘sufficient cause’ for delay in filing the appeal. To come to this conclusion, the CIT(A) relied on various cases, which were discussed in the order.
Aggrieved by the order of CIT(A), the assessee is in appeal before us raising the following grounds of appeal:
The order of the Commissioner of Income Tax (Appeals)-11, Hyderabad ('The Ld. CIT(A)') in not condoning the delay of 241 days is unsustainable both on facts and in law.
The Ld. CIT(A) erred in holding that the reason stated by the Appellant does not meet the test of 'reasonable and sufficient cause' as required by sub section (3) to section 249 of the Income Tax Act 1961 ('the Act').
The Appellant craves to add, modify or amend the above grounds anytime during the appeal.”
Before us, the ld. AR of the assessee relied on the decision of the Hon’ble Madras High Court in the case of M/s Hosanna Ministries Vs. ITO, TC (Appeal) No. 3 of 2017, judgement dated 07/03/2017 wherein the Hon’ble Court has condoned the delay of 1902 days by relying on the judgement of the Hon’ble Supreme Court in the case of Collector, Land Acquisition Vs. MST. Katiju and others, [1987]167 ITR 471, wherein the Hon’ble Apex Court has held as under:
3 ITA No. 1551 /Hyd/2016 Health Superhiway Pvt. Ltd., Hyd. “3. The legislature has conferred the power to condone delay by enacting s. 5 of the Limitation Act of 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on "merits". The expression "sufficient cause" employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice— that being the life-purpose of the existence of the institution of Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But the message does not appear to have percolated down to all the other Courts in the hierarchy.
And such a liberal approach is adopted on principle as it is realized that:
Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.
"Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay ? The doctrine must be applied in a rational common sense and pragmatic manner.
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 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 the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.”
6.1 Ld. AR also relied on the decision in the case of CIT Vs. K.F. Bioplant (P) Ltd., (Bom) 233 Taxman 74, wherein the Hon’ble Bombay High Court has held as under: 8. We have considered the application for condonation of delay keeping in mind the following observations of the Apex Court in State of M.P. v. Pradeep Kumar [2000] 7 SCC 372: 'It is true that the pristine maxim "Vigilantibus Non Dormientiobus Jura Subveniunt (Law assists those who are vigilant and not those
4 ITA No. 1551 /Hyd/2016 Health Superhiway Pvt. Ltd., Hyd. who sleep over their rights). But, even a vigilant litigant is prone to commit mistakes. As the aphorism "to err is human" is more a practical notion of human behaviour than an abstract philosophy, the unintentional lapse on the part of a litigant should not normally cause the doors of judicature permanently closed before him . . .' This we counter-balanced by the likely prejudice to the other side on account of condoning the delay. We are of the view that in view of revenue's mistake the delay of 1845 days in taking out the present motion be condoned and we also set aside the order dated 7.11.2009 and restore the Appeal to the file of this Court. However, a mistake on the part of the revenue would have been averted if appropriate care had been taken by them. Thus, the lack of care which led to a mistake of 1845 days cannot be without costs. Therefore, the delay is condoned subject to the Appellant- revenue paying a cost of Rs.20,000/- to the respondent-assessee on or before 30.3.2015. Needless to state the appellant will also remove the office objections on or before 30.3.2015.”
6.2 Referring to the ratios laid down in the said judgments, the ld. AR pleaded the Bench to restore the matter back to the file of the CIT(A) to condone the delay and decide the appeal on merits.
Ld. DR, on the other hand, supported the order of the CIT(A).
Considered the rival submissions and perused the material facts on record. From the facts, it was brought on record that the assessment order was misplaced by the Accountant inadvertently and could not bring to the notice of higher officials. The Accountant also submitted a written affidavit. Therefore, there are situations due to human probabilities/mistakes. We are in agreement with the ld. CIT(A) that assessee should have followed more robust system of following issues and should have acted promptly. By all possibilities, no one can deny that there is a delay in filing the appeal. Every person has a right to appeal and specifically in the case of company, which depends in the efficiency of various individuals. In the given case, the junior accountant has not brought to the notice of senior management. One cannot deny the above possibility. Merely because the company is professionally managed, we cannot assure that they cannot make any mistake. There is saying that there is dark under
5 ITA No. 1551 /Hyd/2016 Health Superhiway Pvt. Ltd., Hyd. the light. Therefore, in view of the ratios laid down by the Hon’ble Courts (supra) and in the interest of justice, we restore the matter back to the file of the CIT(A) with a direction to condone the delay in filing the appeal before him and decide various grounds of appeal of the assessee on merits. Accordingly, the CIT(A) is directed to afford reasonable opportunity of being heard to the assessee and thereafter decide the appeal on merits.
In the result, appeal of the assessee is treated as allowed for statistical purposes. Pronounced in the open court on 24th January, 2018.
(P. MADHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, Dated: 24th January, 2018 kv Copy to:- 1) Health Superhiway Pvt. Ltd., Life Science Building, Apollo Hospitals Complex, Jubilee Hills, Hyderabad – 500 096. 2) ACIT, Circle – 2(2), Hyd. 3) CIT(A) – 11, Hyderabad. 4) Pr. CIT – 2 , Hyderabad. 5) The Departmental Representative, I.T.A.T., Hyderabad. 6) Guard File