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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI G. MANJUNATHA, HON’BLE & SHRI ANIKESH BANERJEE
आदेश / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order of the Principal Commissioner of Income Tax, Chennai-1, dated 20.11.2018, passed u/s.263 of the Income Tax Act, 1961, and pertains to assessment year 2014-15.
2. The assessee has raised the following grounds of appeal:
1. For that the order of the Principal Commissioner of Income Tax is without jurisdiction, is contrary to law, facts and circumstances of the case and at any rate is opposed to the principles of equity, natural justice and fair play.
2. For that the Principal Commissioner of Income Tax failed to appreciate that there was no error or prejudice much less both to warrant the invocation of the powers conferred u/s.263.
3. For that the Principal Commissioner of Income Tax failed to appreciate that the Assessing Officer had duly called for and verified the details regarding the purchase of property during the course of assessment proceedings u/s.143(3).
4. For that the Principal Commissioner of Income Tax cannot invoke the provisions of section 263 to substitute his view on the issue which has already been considered by the Assessing Officer.
5. For that the Principal Commissioner of Income Tax failed to appreciate that the provisions of section 56(2)(vii)(b) are not invocable in the facts and circumstances of the case.
6. For that without prejudice to the above, the Principal Commissioner of Income Tax failed to appreciate that no addition can be made in the hands of the appellant since the entire consideration for the property purchased during the impugned assessment year was paid by the appellant's husband.
PRAYER
For these grounds and such other grounds that may be adduced before or during the hearing of the appeal, it is prayed that the Hon'ble Tribunal may be pleased to (a) Quash the order passed u/s.263 and / or (b) Pass such other orders as the Hon'ble Tribunal may deem fit.
3. At the outset, we find that the appeal filed by the assessee is time barred by 581 days, for which, a petition for condonation of delay in filing of the appeal along with Affidavit explaining the reasons for delay, has been filed by the assessee. The Ld.AR for the assessee referring to petition filed by the assessee submitted that, the PCIT, Chennai-1, passed order u/s.263 of the Act, on 20.11.2018 and the said order of the PCIT was received by the assessee on 29.11.2018. The assessee could have ordinarily filed the appeal on or before 28.01.2019. The assessee, however, filed the appeal on 31.08.2020 i.e. with a delay of 581 days beyond the time allowed for filing the appeal. The Ld.AR, further, submitted that during the second week of August, 2020, the assessee approached Mr.T.Banusekar, CA to seek his services for representing the assessee’s case before the Ld.CIT(A) in connection with the appeal filed by the assessee against the order u/s.143(3) r.w.s.263 of the Act, passed by the AO. During the course of discussion with the assessee, Mr.T.Banusekar, CA, enquired about the order u/s.263 of the Act, passed by the PCIT and that whether any appeal was filed against the said order. In response to the same, the assessee informed to Mr.T.Banusekar, CA, she was not aware, an appeal can be filed against the said order and also that she was not advised regarding the same. Thereafter, Mr.T.Banusekar, CA, on goring through the order of the PCIT advised that an appeal can be filed before the ITAT against the order u/s.263 of the Act, along with a petition for condoning the delay in filing of the said appeal. This leads to a huge delay in filing of the appeal. However, such delay is neither intentional nor to derive any undue benefit, but purely on wrong professional advice and also ignorance of law. Therefore, the delay in filing of the appeal may be condoned and the appeal may be admitted for hearing. In this regard, he relied upon the decision of the Hon’ble Supreme Court in the case of Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh & Ors. reported in [1979] 118 ITR 0326.
4. The Ld.DR for the Revenue, on the other hand, strongly opposing the petition filed by the assessee for condonation of delay, filed Written Submissions and relevant contents of objections filed by the Ld.DR are re- produced as under:
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Background of the case:
The appellant had filed appeal before Hon'ble ITAT against the order of 263 dated 20.11.2018 passed by the Pr. CIT-I, Chennai. The Pr. CIT had initiated the proceedings u/s 263 of the IT Act against the assessment order passed by ITO, Non-Corporate Ward 2(5), Chennai dated 26.5.2016 where the return of income filed by the appellant was accepted. The PCIT found that the assessment order passed by the AO was erroneous and prejudicial to the interest of revenue and issued notice u/s.263 of the IT. Act.
Before the PCIT, Shri Chandanmal Jain, CA has appeared for hearing. It is seen from the assessment order that the same Shri Chandanmal Jain, CA only appeared before Assessing Officer during the assessment proceedings. The PCIT had passed a speaking order vide dated 20.11.2018 by setting aside the assessment order u/s.263 of the I. T. Act with a direction to redo the assessment. The appellant did not prefer any appeal against the 263 order within the statutory time limit prescribed in the Income Tax Act.
Upon receipt of the 263 order, the AO had passed the order giving effect to the 263 order on 19-12-2019. Against this order, the assessee had filed appeal before the CIT(A) 05-02-2020.
2. Delay in filing appeal and affidavit for condonation of delay:
The appellant filed appeal against the 263 order before Hon'ble [TAT on 25-08- 2020 with a delay of 581 days. This delay was beyond the statutory time limit of filing of appeal prescribe in IT Act. On perusal of that affidavit filed by the appellant, it is noticed that the appellant tried to give some vague excuses for the delay and prayed for condonation of delay on account of those reasons. Main reasons for delay as per the affidavit are as under; i. The appellant had mentioned in her affidavit that she had approached Shri T. Banusekar, C.A. to seek his service for representing his case before the CIT(A) in connection with the appeal filed by her against the order passed u/s 143(3) r.w.s. 263 of the IT Act, by the AO. ii. She had mentioned that during the course of discussion, Shri T. Banusekar, CA enquired about the filing of appeal against the order passed by PCIT u/s 263 of the LT. Act. iii. In her affidavit she had pleaded that she was not aware that an appeal could be filed against the said order and accordingly as per the advices of Shri T. Banusekar this appeal was filed before Hon'ble ITAT on 25.8.2020 with a delay of 581 days.
However, this case does not deserve condonation of delay on account of the following facts:
1. The appellant is not an illiterate person.
She had engaged a Chartered Accountant by name Shri Chandanmal Jain, for appearing before the ITO during the course of assessment proceeding.
3. She had also engaged the same CA to appear before PCIT-1, Chennai during the course of 263 proceedings.
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4. For both the proceedings, she might have given the duly signed authorised power of attorney by appointing Shri Chandanmal Jain, CA as AR.
5. When she was capable of engaging a CA for appearing before two different authorities at two different point of time, she cannot claim that she was not aware of filing appeal on 263 order within due date prescribed in the provisions of IT Act.
6. By taking such vague excuse, this appeal was filed with a delay of581 days by engaging another Chartered Accountant by name Shri T. Banusekar. He is the next CA in her case.
During the course of appeal before ITAT, several paper books were filed on 28.2.2022 and 3.6.2022. Those paper books were signed by K. Vishva Padmanabhan, Authorised Representative and H. Y eshwant Kumar, Authorised Representative. Presuming that these two people were also CA by profession, the appellant was capable of engaging multiple chartered accountants on different occasions. These two CAs were third and fourth and CA engaged by her.
8. This demonstrates that she is very well aware the income tax proceedings and its procedures and capable of representing the cases before any authority by engaging multiple CAs.
9. Her ignorance of law and procedure in filing appeal mentioned in her affidavit is not appears to be true and genuine ..
10.In this connection the latest order of Jurisdictional ITAT 'A' Bench, Chennai pronounced on 23.5.2022 in the case of Smt. Jumma Khan Pathar Nisha in is relied upon.
11.The Hon'ble ITAT observed in that case that the appellant engaged a CA before the assessment proceedings and she had engaged one ITP before the first appellate authority and she had engaged same ITP before Hon'ble ITAT. The ITAT observed that the appellant had engaged competent professionals before the authorities for effective representation of her case at various stages. Hence, the general and vague reasons given by the appellant for delay in filing appeal was not found acceptable. The Hon'ble ITAT also held that "rules of limitations are not meant to destroy the rights of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly". Accordingly, the delay was not condoned by the ITAT and the appeal was dismissed.
12.In the said decision the appellant engaged one CA and one ITP for assessment and appeal. However, in the present case the appellant engaged multiple CAs as mentioned above at different point of time.
In, view of the above, this case also liable to be dismissed without any condonation of delay of 581 days.
Availability of alternate remedy:
As the appellant had already preferred appeal against the order passed u/s 143(3) r.w.s. 263 of the IT Act and the alternate remedy was available, she can approach the respective authority for getting relief, if any, she deserves. As the PCIT-1,
Chennai had righty invoked the provision of263 of the LT. Act on the erroneous assessment order passed by the AO, it is prayed that the order passed by PCIT may kindly be upheld without condoning the inordinate delay of 581 days of filing of appeal.
Analysis of Form -36:
Without prejudice to the above, it is submitted that this appeal was filed in a casual manner. The attention is drawn to Form no. 36 of the appellant. It is noticed that the appellant mentioned Income Tax Officer, Non-Corporate Ward- 2(5), Chennai as the Respondent. In the present case, appeal was preferred against the 263 order passed by PCIT-1, Chennai. The ITO, Non-Corporate ward cannot be the respondent in this case. It shows that the appeal was filed in a casual manner after 581 days of receipt of 263 order without giving sanctity to the judicial proceedings.
Condonation of delay in such case will lead to irreparable damage to the quasi- judicial proceedings carried out by the PCIT in accordance with law.
5. Prayer:
Hence it is prayed before Hon'ble ITAT that the appeal filed with delay of 581 days without any valid reason by filing incorrect Form-36 may kindly be dismissed. As the appellant have alternate remedy where she had filed appeal before CIT(A) against the order passed u/s.143(3) r.w.s.263 of the IT Act, dismissal of this appeal will not cause any injustice to the appellant.
We have heard both the parties and considered the petition filed by the assessee for condonation of delay of 581 days. We have also carefully considered the reasons given by the assessee for delay in filing of the appeal. We find that prima facie the reasons given by the assessee, in her Affidavit for condonation of delay of 581 days, seems to be not bona fide. Further, in the petition filed for condonation of delay, the assessee claimed that she was not aware of law that an appeal can be filed against the order of the PCIT u/s.263 of the Act, and further, an advice from the Counsel, Mr.T.Banusekar, CA, she came to know that there is a provision to file appeal against the revision order and thus, she took decision to file appeal, which caused delay of 581 days. We have gone through the Affidavit filed by the assessee and also examined sequence of events and after considering necessary facts, we are of the considered view that the reasons given by the assessee in her Affidavit is not bona fide, because, the assessee has very well represented her case through an Authorized Representative before the AO and also before the PCIT during revisional proceedings. She had been represented by Mr.Chandanmal Jain, CA, before the Income Tax Officer. During the course of revision proceedings, she had also engaged the same CA to appear before the PCIT under 263 proceedings. Therefore, we are of the considered view that when she was capable of engaging a professional for appearing before two different authorities at two different points of time, it is impossible to believe her version that she was not aware of filing of the appeal against 263 order within the due date prescribed under the provisions of Income Tax Act, 1961. We further noted that in her petition, she claimed, she met Mr.T.Banusekar, CA, to seek his services for representing the case before the CIT(A) in connection with the appeal filed by the assessee against the order u/s.143(3) r.w.s.263 of the Act. Therefore, from the above, what is clear is that she is an educated person, aware of Income Tax proceedings, including filing of the appeal against the order of the AO. Further, from the contents of the petition filed by the assessee for condonation of delay, what we could understand is that the assessee has chosen not to file the appeal against the order of the PCIT u/s.263 of the Act, because, she can pursue an alternative remedy available with her and represent her case before the AO on the belief that she can get a favourable order from the AO. Once, the assessment order passed by the AO, went against the assessee, then she consulted a different professional, who advised her to file the appeal against the order of the PCIT u/s.263 of the Act, which is clearly evident from the fact that in all proceedings, including assessment proceedings before the AO and revision proceedings before the PCIT and consequential assessment proceedings before the AO, she had appeared through her Authorized Representative and filed necessary details. Therefore, from the above sequence of events, it is very clear that subsequent filing of the appeal against the order of the PCIT passed u/s.263 of the Act, is only an afterthought, but not a case of ignorance of law or unaware of provisions in filing of the appeal before the Tribunal against the order of the PCIT u/s.263 of the Act. Therefore, we are of the considered view that there is no merit in the reasons given by the assessee in her petition for condonation of delay in filing of the appeal.
Be that as it may. Coming back to the legal position evolved by the decision of various High Courts, including the Hon’ble Supreme Court in number of cases, where it has been, time and again, held that when merits and technicalities pitted against each other, then merit alone deserves to be prevailed, because, if you throw out a meritorious case out of judicial scrutiny on the grounds of technicalities, then you may deprive the right of the petitioner in pursuing their case. At the same time, various Courts have held that rules of limitation are not meant to destroy the rights of parties, they are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly, within the time bound prescribed under the Act.
Further, in a case, where, for the reasons beyond the control of the petitioner, the appeal could not be filed, then the Courts are well equipped with power to condone the delay, if the petitioner explains the delay in filing of the appeal with a reasonable cause. However, there is no law or mandate in the Act, to condone the delay in each and every case. But, it depends upon all facts of each case and the reasons given by the parties for condonation of delay. Therefore, one has to go by the facts of its own case and the reasons given by the petitioner for condonation of delay. In this case, on perusal of reasons given by the assessee for delay in filing of the appeal, we find that although it appears, the assessee is not deriving any benefit by not filing the appeal within the due date prescribed under the Act, but, from the contents of petition filed by the assessee, we could easily make out a case that the assessee has made an afterthought to file the appeal against the order of the PCIT u/s.263 of the Act, only when she did not get a favourable order from the AO, consequent to the order passed by the PCIT u/s.263 of the Act. Therefore, in our considered view, for these vague reasons, such huge delay of 581 days in filing of the appeal, cannot be condoned.
7. As regards, the case law relied upon by the assessee in the case of Mr.Imam Syed Abdul Kamal Nazar v. ITO in dated 02.06.2022, as we have already stated in earlier part of this order, condonation of delay, has to be examined based on facts of each case.
However, it does not depend upon observations of any Court or Tribunal in some other case. Although, in the case law referred by the Ld.Counsel for the assessee, the Tribunal has condoned the delay of 486 days in filing of the appeal, but the said findings of the Tribunal is based on facts of those case and as per the facts of the above case, the assessee himself had represented his case before the PCIT through his Accountant without any help from Professional or /Chartered Accountant or /Advocate. Under those facts, the Tribunal came to the conclusion that although the ignorance of law is not an excuse, but it cannot be expected from each person to know laws of this country. In so far as the arguments of the Ld.Counsel for the assessee, in light of decision of the Hon’ble Supreme Court in the case of Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh & Ors.(supra) that ignorance of law is also an excuse, but if you examine the facts of the present case, we are of the considered view that the assessee is not ignorant of law, because, she was well aware of the Income Tax proceedings and further, hired professional Chartered Accountant, for representing her case. Therefore, we are of the considered view that the assessee cannot claim that she was ignorant of law and because of her ignorance, she could not file appeal against the order of the PCIT u/s.263 of the Act. Thus, we are of the considered view that the case laws relied upon by the assessee, are not applicable to the facts of the present case.
In this view of the matter and considering the facts and circumstances of the case, we are of the considered view that the assessee had failed to make out a prima facie case for condonation of delay of 581 days in filing of the appeal before the Tribunal. Further, the reasons given by the assessee in her Affidavit does not come under reasonable cause as prescribed under the Act, for condonation of delay. Hence, we reject the petition filed by the assessee for condonation of delay and dismiss the appeal filed by the assessee.
In the result, the appeal filed by the assessee is dismissed as not maintainable.
Order pronounced on the 17th day of June, 2022, in Chennai.