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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI
Per Chandra Poojari, Accountant Member
This appeal by the assessee is directed against the order of the Principal Commissioner of Income-tax, Madurai-2, Madurai [Pr. CIT] dated 15.2.2018 on the following grounds:-
“1. The order of the Pr. Commissioner of Income-tax passed under sec.263 dated 15.2.18 is contrary to law, erroneous and unsustainable on the facts of the case. 2. The Pr. CIT erred in directing the officer to re-do the assessment for verifying the agricultural activities of the assessee, that have been examined and concluded in the proceedings under sec.143(3) of the Act.
3. The Pr. CIT failed to appreciate that the order of the assessing officer passed u/s.143(3) dated 01.10.15 is neither erroneous nor prejudicial to the interests of the revenue and his direction to examine the issue afresh is untenable in law.
The Pr. CIT further failed to appreciate that the officer had considered the cultivation of silver oak in the midst of the coffee plantations by assessee and hence the observations of the CIT on the absence of verification by the officer is wholly misplaced, arbitrary and unjustified on the facts of the case. 5. The Pr. CIT further failed to appreciate that the officer having gone through the books, the details of cultivation of silver oak over the last many years and thus accepted the agricultural income returned and hence the order of officer does not suffer from any error or prejudice and hence the impugned proceedings are untenable in law. 6. The Pr. CIT further failed to appreciate that his observations and directions are on assumptions and hence there is no basis for his conclusion regarding the lack of enquiry on these issues by the officer warranting action under sec.263. 7. The CIT further failed to appreciate that the impugned proceedings u/s.263 are without jurisdiction since admittedly it was not a case of lack of enquiry and that examination of the cultivation of silver oak from the earlier years had been conducted by the officer in the assessment, there is no case for revision as the twin conditions for action under sec. 263 are not satisfied. 8. The CIT failed to appreciate under sec.263 is not permissible merely because there was no discussion in the assessment order and he disagrees with the conclusion reached by the officer and therefore the directions given to the officer to re- examine the issue is contrary to the spirit of completion of assessment under sec.143(3) of the Act. 9. The CIT, in any event, ought to have duly considered the catena of decisions by various Courts holding that the officer having considered the issue and reached a conclusion in the course of assessment, action u/s.263 is not permissible merely
because he entertains a different view and hence the impugned order is liable to be set aside. 10. The CIT, in any view of the matter, ought to have seen that the twin conditions, namely, that the order of the officer is erroneous and prejudicial to the interests of revenue are not satisfied and hence the order u/s.263 needs to be cancelled.”
The Pr.CIT observed from the assessment records, that the assessee had admitted timber receipts in the income and expenditure account pertaining to M/s. Grove 'A' Estate, Pollibetta and M/s. Sri Narayana Estate, Chetalloi respectively. Also it is noticed from the Income & expenditure account that no expenses were incurred for growing of silver oak trees and they are forest trees being spontaneously grown without any human effort of cultivation. Hence, the income derived from the sale of timbers should not be treated as agricultural income as per Sec 2(1A) of the Income-tax Act, 1961 [the Act]. Accordingly, he invoked the provisions of section 263 of the Act and after considering the submissions of the assessee, he held as under:-
“The above submission of the assessee have been carefully considered with the facts and other circumstances of the case and the assessee's request for dropping the proceedings under section 263 is not acceptable, since the assessee's claim of plantation and cultivation of timber trees as one of the assessee's regular agricultural activities, needs thorough verification by way of field inquires, requirement of Govt. authorities permission for cultivation, etc. In the instant case, this aspect has not been examined by the AO while completing the assessment. No enquires have been conducted on this aspect. In view of the above, the issues are remitted back to file of A.O, with a direction to re-examine the issues in accordance with law after causing necessary enquiries and after affording adequate opportunities to the assessee.”
Against the impugned order of the Pr.CIT, the assessee is in appeal before us.
4. At the outset, there is a delay of 353 days in filing this appeal before the Tribunal. The assessee has filed petition for condonation of delay as follows:-
“ The petitioner submits that the order of the Pr. Commissioner of Income-tax-2, Madurai dated 15.02.2018 was received on 26.03.2018. The appeal to the Appellate Tribunal ought to have been filed on or before 25.05.2018 Instead, the appeal was filed on 08.05.2019 resulting in a delay of 353 days. The petitioner submits that after the order of the Pr. CIT was served, there was a marriage function in the house. Later, the assessee fell sick for a brief period. The auditor who had been attending to the tax matters of assessee also did not inform the assessee of the need to file an appeal. In the commotion of these happenings, the assessee failed to bring to the notice of the chartered accountant about the receipt of the order of CIT. The receipt of the order was brought to light only when the assessing officer took up the matter to give effect to that order in the month of December. By that time, the assessee had appointed a new auditor, Mr.S.Gurumurthy, to take care of his tax matters. At that point of time, the assessee was advised to file an appeal challenging the order passed under sec.263. Then, the assessee recovered the order and handed it over to the chartered accountant for preparation and filing of appeal. Thereafter, my auditor took steps to draft the appeal and send it across for my signature. The appeal was eventually filed on 08.05.2019 with a resultant delay of 353 days. The petitioner submits that the delay was neither wilful nor wanton but due to circumstances beyond the control of the assessee. If the delay is not condoned and the appeal disposed of on merits, the assessee would be put to considerable hardship and injury. The condonation of delay and disposal of the appeal on merits would give an opportunity to the assessee to address the issue on merits and cancel the addition, which otherwise would be fastened on the assessee.
It is therefore prayed that the Hon'ble Tribunal may be pleased to condone the delay of 353 days in filing the appeal, admit the same, hear and dispose it off on merits and thus render justice.” 5. The ld. AR prayed for condonation of delay for the reasons mentioned in the petition.
The ld. DR strongly opposed the same and submitted that the delay was not explained by the assessee properly and there is no sufficient and good reason to condone the delay.
We have heard both the parties and perused the material on record. In this case, the Pr. CIT passed the order on 15.2.2018 received by the assessee on 26.3.2018. The appeal ought to have been filed by the assessee on or before 25.5.2018 before this Tribunal. However, the appeal was filed on 8.5.2019. Thus there was a delay of 353 days in filing the appeal before the Tribunal. The assessee explained that the assessee fell sick during the period. Also, the auditor attending the tax matters of the assessee did not inform the assessee of the need to file an appeal against the impugned order u/s. 263 of the Act. At the same time, it is mentioned by the assessee that it failed to bring to the notice of the CA about the receipt of the impugned order. This was informed to the CA only after the AO took up the matter to give effect to the order of the Pr.CIT. At that time, the assessee appointed a new auditor to take care of this matter. The submissions of the assessee herein are very contradictory in nature and also not based on any material brought on record. First of all, there is no medical certificate to show that the assessee fell sick. The assessee has alleged that the auditor has not brought the matter to the knowledge of assessee about the need to file appeal. In the same breath, the assessee stated that it failed to bring it to the notice of the CA about the receipt of the impugned order. Out of these reasons, which is the correct one, we do not know. In our opinion, the assessee has not come up with clean hands and its action cannot be said to be bona fide. There is no reason as to why the assessee ought not to have filed the appeal before this Tribunal in time upon coming to know of the passing of the impugned order of the Pr. CIT u/s. 263 of the Act.
The submissions of the assessee do not inspire any confidence of existence of a bona fide reason. Firstly, the very fact that the assessee did not explain the reason for delay in filing the appeal before this Tribunal on account of medical reason as there is no supporting document to say that the assessee fell sick. Secondly, the assessee submitted that it failed to bring to the notice of the Auditor who had been attending the tax matters of assessee also did not inform the assessee of the need to file appeal before the Tribunal. Even here, the assessee has not mentioned the name of the auditor who attended before the Pr.CIT during the course of proceedings u/s. 263 of the Act. Thirdly, it was stated there was a marriage in the family during the time when it received the impugned order of Pr.CIT. Even here, the assessee has not mentioned which family member’s marriage was held during this period. Each and every information is not disclosed by the assessee. In such circumstances, in our opinion, the assessee has not explained the reason for delay in filing the appeal before this Tribunal sufficiently and there was inordinate delay in filing the appeal. Law assists those who are vigilant, not those who sleep over their rights. The delay cannot be condoned simply because the assessee’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 provisions. 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 bona fides can be imputed to the appellant a liberal construction of the provisions has to be made in order to advance substantial justice. In the present case, the reasons for delay in filing the appeal is not sufficiently explained by the assessee and it shows that the delay was due to negligence and inaction on the part of assessee which cannot be condoned. Therefore, we dismiss the petition for condonation of delay and accordingly the appeal is unadmitted.
In the result, the appeal by the assessee is dismissed.
Pronounced in the open court on this 25th day of October, 2021.