SRI SNEHASISH BHAUMIK,KOLKATA vs. PCIT-17, KOLKATA

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ITA 303/KOL/2024Status: DisposedITAT Kolkata22 May 2025AY 2014-157 pages
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What did the Tribunal hold?

The Tribunal condoned the delay of 1722 days in filing the appeal. It reasoned that the delay was due to the assessee's counsel's wrong advice and was beyond the assessee's control, emphasizing that substantial justice should prevail over technicalities. The Tribunal cited the Supreme Court's observations in Collector Land Acquisition Vs. Mst. Katiji & Others, highlighting that refusing to condone delay can defeat the cause of justice and that a litigant does not benefit from delay. On the merits, the Tribunal held that the assessment order passed by the AO u/s 143(3) was neither erroneous nor prejudicial to the interest of the revenue. The Tribunal noted that the AO had examined the Long-Term Capital Gain claim thoroughly, considering the purchase agreement date, possession date, and payments made. The PCIT's view that the acquisition date should be the registration date was not accepted. The Tribunal relied on the Supreme Court decision in Malabar Industrial Co. Ltd. Vs. CIT, stating that for invoking Section 263, the assessment order must be both erroneous and prejudicial to the revenue. Since these conditions were not met, the revisionary jurisdiction was wrongly exercised. The Tribunal also found that the assessee correctly calculated the Long-Term Capital Gain by taking the date of possession as the acquisition date. Consequently, the revisionary order passed by the PCIT was quashed.

What were the facts?

The assessee, Sri Snehasish Bhaumik, filed an appeal before the Income Tax Appellate Tribunal (ITAT) against an order dated 18.03.2019 passed by the Principal Commissioner of Income-tax (PCIT)-17, Kolkata, for Assessment Year 2014-15. The appeal was filed with a delay of 1722 days. The assessee attributed this delay to wrong advice from their previous counsel regarding filing an appeal against the revisionary order passed by the PCIT under Section 263 of the Income Tax Act. The assessment order under challenge was initially passed on 26.10.2016, determining total income at ₹10,83,350/-. The PCIT initiated revision proceedings, alleging the Assessing Officer (AO) failed to make necessary inquiries regarding Short-Term Capital Gain and wrongly allowed the ADSR value as the cost of acquisition for Long-Term Capital Gain. The PCIT's revisionary order dated 18.03.2019 directed the AO to pass a fresh assessment.

What were the issues?

1. Whether the delay of 1722 days in filing the appeal against the revisionary order dated 18.03.2019 passed by the PCIT u/s 263 of the Income Tax Act, 1961, is liable to be condoned? The assessee argued that the delay was due to wrong advice from their previous counsel and was beyond their control, relying on the Supreme Court decisions in Collector Land Acquisition Vs. Mst. Katiji & Others and Improvement Trust vs. Ujagar Singh & Ors. The revenue contended that there was no reasonable and sufficient cause for the delay and the condonation petition should be dismissed. 2. Whether the revisionary order passed by the PCIT u/s 263 of the Income Tax Act, 1961, dated 18.03.2019, is arbitrary, unjustified, and illegal, and liable to be quashed? The assessee argued that the AO had thoroughly examined the Long-Term Capital Gain claim during the assessment proceedings, and the assessment order was neither erroneous nor prejudicial to the interest of the revenue. The revenue, through the PCIT, argued that the AO failed to make necessary inquiries and wrongly allowed the cost of acquisition.

Which sections of the Income-tax Act were involved?

Section 263,Section 253(5),Section 249(3),Section 5,Section 143(3)

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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI SONJOY SARMA, JM

For Appellant: Shri Soumitra Choudhury &, Shri Pranabesh Sarkar, Ars
For Respondent: Shri P.N. Barnwal, DR
Hearing: 08.05.2025Pronounced: 22.05.2025

This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Kolkata-17 (hereinafter referred to as the “Ld. CIT(A)”] dated 18.03.2019 for the AY 2014-15.

2. At the outset, the ld. Counsel for the assessee brought to our notice that there is a delay in filing the appeal by 1722 days, for which the condonation petition along with affidavit dated 26.04.2024 was also filed. The ld. Counsel for the assessee submitted that due to the wrong advice of the counsel, the assessee could not file the appeal against the revisionary order passed by the ld. PCIT u/s 263 of the Act. The ld. Counsel for the assessee submitted that the revisionary order was passed by ld. CIT (A) on 18.03.2019. The ld. Counsel for the assessee further submitted that the said order u/s 263 of the Act

3.

The ld. DR on the other hand strongly opposed the argument of the counsel of the assessee by submitting that there was no reasonable and sufficient cause for not filing the appeal therefore, the condonation deserves to be dismissed in limine.

4. After hearing the rival contentions and perusing the materials available on record, we find that in this case, the assessee has not filed the appeal against the order passed u/s 263 of the Act dated

5.

We have duly considered the rival contentions and gone through the record carefully. 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 this Section has also been used identically in sub-Section 3 of Section 249 of the Act, which provides power to the Id. Commissioner to condone the delay in filing of the appeal before the Commissioner. Similarly, it has been used in Section 5 of the Indian Limitation Act, 1963. Whenever interpretation and consideration of this expression has fallen for consideration before the Hon'ble High Courts as well as before the Hon'ble Supreme Court "1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.

2.

Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.

4.

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.

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

6. It must be grasped that 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.

In the light of above, if we examine the facts of the present case and observe that substantial justice must prevail over technicalities. Moreover, making the appeal time-barred has not been used by the assessee as a tactics to avoid the litigation with the Revenue because such strategy would not give any benefit to the assessee in this type of litigation. Therefore, we condone the delay and proceed to decide the appeal on merit.

7.

The only issue raised by the assessee is against the revisionary order passed u/s 263 of the Act, which is completely arbitrary, unjustified and illegal and prayed to be quashed.

9.

After hearing the rival contentions and perusing the materials available on record, we find that in this case, the assessee has entered into a purchase agreement dated 15.09.2009 for purchase of flat which was handed over to the assessee physically on 15.09.2010. We note that the assessee has made all the payments towards the purchase of flat prior to the date of possession. The said flat was registered in the name of the assessee on 12.12.2011. During the year, the assessee sold the flat 17.09.2013, calculating the Long-Term Capital Gain thereon at ₹4,12,278/-. The ld. PCIT on the other hand was of the view that the purchase date should be taken from the registration of the agreement in favour of the assessee on 12.12.2011 and not from the date of possession. In our opinion, the issue has been raised by the ld. AO during the assessment proceedings and has been examined thoroughly and only after examining all these documents and evidences, the ld. AO accepted the contention of the assessee qua the Long-Term Capital Gain of ₹4,12,278/-. In our opinion, the said assessment framed by the ld. AO dated 26.102.16, u/s 143(3) is neither erroneous nor prejudicial to the interest of the Revenue. Therefore, invoking the revisionary jurisdiction u/s 263 of the Act is bad in law and so is the order passed u/s 263 of the Act. The case of the assessee find force from the decision of Hon'ble Apex Court in the case of Malabar Industrial Co. Ltd. Vs. CIT (2000) 243

10.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 22.05.2025.

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