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Income Tax Appellate Tribunal, PUNE “B” BENCH, PUNE
Before: SHRI SS VISWANETHRA RAVI & SHRI G. D. PADMAHSHALI
॥ आयकर अपीलीय न्यायाधिकरण, पुणे “बी” न्यायपीठ, पुणे में ॥ IN THE INCOME TAX APPELLATE TRIBUNAL, PUNE “B” BENCH, PUNE BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपऩल सं. / ITA No. 475/PUN/2020 निर्धारण वर्ा / Assessment Year : 2011-2012 Vardhaman Nagari Sahakari Pathsanstha Ltd. Mahatma Gandhi Rd.,Vaijapur, Aurangabad–423701. . . . . . . . अपऩलधथी / Appellant बनाम / V/s. Income Tax Officer, Ward-1(5), Aurangabad. . . . . . . . प्रत्यथी / Respondent द्वारा / Appearances Assessee by : Shri Hari Krishan Revenue by : Shri M. G. Jasnani सपिवधई की तधरऩख / Date of conclusive Hearing : 08/09/2022 घोर्णध की तधरऩख / Date of Pronouncement : 09/09/2022 आदेश / ORDER PER G. D. PADMAHSHALI, AM; This appeal challenges the order of Commissioner of Income Tax (Appeals), Aurangabad [for short “CIT(A)”] dt. 19/07/2019 passed u/s 250 of the Income-tax Act, 1961 [for short “the Act”], which ascended out of assessment order dt. 31/12/2018 passed u/s 143(3) r.w.s 147by the Income Tax Officer, Ward-1(5) Aurangabad [for short “AO”] for assessment year [for short “AY”] 2011-12. ITAT-Pune Page 1 of 20
Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 2. The substantive legal ground of dispute under adjudication seeks to address the maintainability of appeal before Tribunal and the validity of ex-parte order of first appellate authority [for short “FAA”] made pursuant to well-reasoned withdrawal application.
The grounds raised by the appellant in the appeal memorandum are inconsonance with rule 8 of Income Tax Appellate Tribunal Rules, 1963 [for short “ITAT Rules”], hence reproduction thereof is dispensed with.
Succinctly stated, the facts of the case borne out of records are; 4.1 The appellant claimed to be a registered Co- operative Society and is stated to have engaged in providing credit facilities to its member and evidently holding two PANs in its name; one “AABCV4217E” as a company and other “AAAAV9150F” as AOP for the year under appeal.
4.2 In relation to assessed PAN “AABCV4217E”, from an Annual Information Return [for short “AIR”] ITAT-Pune Page 2 of 20
Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 witnessing the substantial cash deposits made by the assessee into its Saving Bank account [for short “SB A/c”] maintained with ‘Axis Bank’, and in the absence of return of income [for short “ITR”] on record, the Ld. AO, recording the reasons & after obtaining the approval, has initiated the proceedings u/s 147 by issue of notice dt. 24/03/2014 u/s 148 of the Act, thereby calling upon the assessee to file ITR and explain the nature source of such cash deposits.
4.3 Upon no response, the assessee was again put to further notice u/s 142(1) which too remained futile, in the event, a detailed information from the ‘Axis Bank’ u/s 133(6) of the Act was called & taken on record, and considering the collective facts, a final show cause notice [for short “SCN”] u/s 144 of the Act was issued to the appellant as last resort.
4.4 Pursuant to SCN, the assessee confirming of its holding two PANs one in the status of Company “AABCV4217E” and second in the status of AOP “AAAAV9150F”, produced a copy of ITR filed with PAN ITAT-Pune Page 3 of 20
Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 AAAAV9150F for the impugned AY. Further confirming on records, the facts of cash deposits made into SB a/c with ‘Axis Bank’ represented by PAN under assessment, the assessee filed a ITR for AABCV4217E (PAN held as Company) declaring total income ₹82,25,217/-, wherein such ITR was accepted by the Ld. AO without variation u/s 143(3) r.w.s. 147 of the Act and assessed as such, determining the total tax liability accordingly.
4.5 On 31/01/2019, the appellant without any substantive ground preferred an appeal before FAA with PAN “AABCV4217E” standing as Company and subsequently by a written and well-reasoned application dt. 12/03/2019 requested for withdrawal thereof. On a panoramic consideration of facts stated and grounds raised in the appeal vis-à-vis reasons of withdrawal application, the Ld. FAA, by an order u/s 250 disposed of the pending appeal as dismissed.
4.6 Blowing hot and cold at the same time, the appellant preferred the present appeal before this ITAT-Pune Page 4 of 20
Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 Tribunal representing itself as AOP under PAN “AAAAV9150F”, whereas the payment of appeal filing fees found to have discharged on 06/07/2020 with PAN “AABCV4217E”, showcasing holding of two PANs.
By the extant appeal, the appellant amongst other grounds, has challenged the order of FAA on a legal ground of ex-parte dismissal in violation of principle of natural justice, socketing itself into decision of Hon’ble Apex Court in “CIT Vs Raj Bahadur Hardutroy Motilal Chamaria” reported in 66 ITR 443 and of Hon’ble High Court Bombay in “CIT Vs Premkumar Arjundas Luthra (HUF)” reported at 297 CTR 614 and the decision of co- ordinate bench in “HV Metal ARC(P) Ltd. Vs ACIT” reported in 173 ITD 606.
Per contra, the learned departmental representative [for short “DR”] taken us through each of the decision relied by the appellant, and has submitted that, in so far as the decision in “CIT Vs Premkumar Arjundas Luthra” (Supra) is concerned it was originated out of the order co- ordinate Pune Bench wherein the Ld. CIT(A) while dealing ITAT-Pune Page 5 of 20
Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 with the merits of the case failed to state point of determination, decision arrived and reasoning thereof in terms of section 250(6) of the Act, and in the absence of any substantial question of law arising out therefrom, the Hon’ble lordships have dismissed the appeal of the revenue as not entertained, thus setting no precedential value. On the other hand, the Hon’ble Apex Court in “CIT Vs Rai Bahadur Hardutroy Motilal Chamaria” (Supra) has dealt with issue relating to determination of jurisdiction and scope of Asstt. Appellate Commissioner under the erstwhile Income Tax Act, 1922 with respect to source and head of income and power to travel beyond the taxable income determined by the assessing officer and not in the context & scope of section 251(1)(c) of the present Act. Furthermore, the Ld. DR also tried to distinguish the present facts and circumstance with that of “M. Loganathan Vs ITO” reported in 350 ITR 373 wherein while dealing with assessee’s appeal, on receipt of written withdrawal application, the Ld. CIT(A) dismissed the appeal pending before him as infructuous, unlike present case before this Tribunal. ITAT-Pune Page 6 of 20
Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 7. In the course of physical hearing, the learned representative of the assessee [for short “AR”] without touching the merits of the case, prayed for remanding file back to the FAA on the ground of denial of natural justice, Ld. DR strongly opposed for unconvincing and fanciful reasons. To drive home the contention of dismissal of appellant’s plea, the Ld. DR intensely submitted that, the appellant in an appeal can be represented either by physical presence or by a written submission, and where the interest is represented by written submission in any pending proceedings and thereby opting out suo-motto from physical presence, then the appellant is precluded from alleging the violation of principle of natural justice as the interest thereof is re-presented by its own written submission made on record. In the present case too, the appellant opting out from physical representation on the scheduled hearing, was re-presented its interest by well- reasoned letter of withdrawal against the pending appeal and which was duly considered by the FAA before arriving at the decision of dismissal; thus the plea of the Ld. AR being contra legem, deserves to be rejected. ITAT-Pune Page 7 of 20
Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 8. After hearing to the rival contentions of both the parties; and subject to the provisions of rule 18 of ITAT Rules, perused the material placed on records till the date of conclusive hearing, case laws relied upon by the appellant as well the respondent and duly considered the facts of the case in the light of settled legal position forewarned to either parties.
At the outset, it transpired that, the present appeal is endorsed by the Registry as delayed by 314 days, and in support of prayer for condonation of delay, the appellant submitted an ‘Affidavit’ dt. 13/07/2020 from the manager of the appellant and from achartered accountant representative citing in verbatim the reason of delay (without figuring the exact number of days delayed) in instituting the appeal within the statutory time limit prescribed u/s 253(3) of the Act.
Before we advert to the merits of the controversy, from the rival submissions, a short point that primarily arises for our determination is ‘Whether appellant have explained sufficient cause for condonation of delay in ITAT-Pune Page 8 of 20
Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 filing the present appeal or not?’ Let us first consider well settled propositions of law relating to condonation of delay. In so far as the liberal approach to be adopted in condonation of delay is concerned, in “Collector, Land Acquisition, Anantnag and Anr. Vs Ms Katiji and Others”reported at 167 ITR 5 (SC), the Hon'ble Supreme Court vide paragraph 3 reiterated certain principles to be followed while dealing with condonation of delay which are summarily stated as; 10.1 Ordinarily a litigant does not stand to benefit by lodging an appeal.
10.2 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.
10.3 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.
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Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 10.4 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.
10.5 There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of malafides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk.
10.6 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.
With this de lege lata, we have now to examine whether the reason put forth by appellant & affiant or deponent expanses cause of sufficienso within the purview of sub section (5) of section 253 of the Act; 11.1 It is not in dispute that impugned order of FAA was passed u/s 250 of the Act on 19/07/2019 and the appellant instituted the present appeal on 27/07/2020.
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Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12
11.2 In this connection, Ld. AR contended that,due to Covid-19 a nation-wide lockdown was declared and pursuant to suo-motto decision from Hon’ble Apex Court in MA/21/2022 the period of limitation stands extended from 15/03/2020 upto 28/02/2022, therefore fraction of the period falling from 15/03/2020 to the date of institution is saved of limitation, thus actual delay in filing of present appeal is 239 days as against the endorsement by the Registry, and the same is supported by affidavit praying condonation.
11.3 Needless to state that,in terms of provisions of section 253(3) of the Act, every appeal u/s 253(1) & 253(2)of the Act shall be filed within sixty days of the date on which the order sought to be appealed against is communicated to the assessee or to the Principal Commissioner or Commissioner .
11.4 In MA/21/2022 what was extended by the suo- motto order of the Hon’ble Apex Court was only ‘the ITAT-Pune Page 11 of 20
Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 period of limitation and not the period upto which delay can be condoned’ in exercise of discretion conferred by the statute, as held by the Hon’ble Lordships in “Sagufa Ahmed And others Vs Upper Assam Polywood Products Pvt Ltd and Others” reported in 2 SCC 317. However we are not unmindful to the fact that, delay relating to period from 15/03/2020 upto institution of appeal i.e. 27/07/2020 is saved by the provisions of section 3(1)(b) of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 [for short “Relaxation Act”] hence to that extent we concur with the Ld. AR that, fractional period of delay falling from the period 15/03/2020 upto the date of institution i.e. 27/07/2020 stands saved by Relaxation Act, consequently 239 days of delay calls for cause of sufficiency with adequate & enough reasoning displaying non- deliberate accidental drive.
11.5 As is evident from the averments made in application for condonation of delay and affidavit filed by the manager of the appellant that, “because of ITAT-Pune Page 12 of 20
Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 heavy work load of preparing the returns of income and completing the audit or large number of clients the representative inadvertently overlooked to take any action for filing the further appeal and on receipt of email for recovery of demand the representative realized that the appeal in this case remained to be filed.” It is further stated in the aforesaid application and affidavit that, the mistake was noticed when recovery proceedings were started by the Department, however the relevant details as to when the recovery proceedings were started and when the matter was referred to the authorized representative have not been mentioned in the said application or affidavit nor even placed before us during the course of hearing. Apparently, the averments in the application and affidavit of the manager are vague and are devoid of any basis and solely based on the averment made by the representative.
11.6 The Ld. AR appearing before us did not establish as to how the averments in the application or affidavit establishes sufficient cause towards delay of 239 days ITAT-Pune Page 13 of 20
Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 in filing the appeal. In view of the foregoing, when the averments in the application or affidavit executed on 13/07/2020 are vague and not corroborated by any independent evidence while no sufficient reasons for delay in filing the appeal attributable to appellant have been submitted, except reproducing the reasons put forth by representative in dealing with the communication, delay stands bottomless of adequate and enough reasons.
We note that, there is no whisper in the entire application regarding a single step taken by appellant to showcase the required seriousness in knowing about the outcome of withdrawal application when made before FAA and preferring appeal there against. In deed the fact of undisputed tax liability was well within the knowledge of the appellant at the very site of withdrawal application preferred before FAA, and therefore subsequent plea of the appellant smoke fancy and unreasonable. Nota bene, the core principles that has been culled down by the Hon'ble Supreme court in “Esha Bhattacharjee Vs Managing committee of Raghunathpur Academy and ITAT-Pune Page 14 of 20
Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 Ors” reported in 12 SCC 649, are compelling to be referred herein before with regards to conduct of the appellant; 12.1 Lack of bonafide imputable to a party seeking condonation of delay is a significant and relevant fact;
12.2 The concept of liberal approach has to encapsulate the conception of reasonableness and totally unfettered free play is not allowed;
12.3 The conduct, behaviour and attitude of a party relating to its negligence cannot be given a total go-bye in the name of liberal approach.
12.4 If the explanation offered is concocted or the grounds urged in the applications are fanciful, the Courts should be vigilant not to expose the other side unnecessarily to face such litigation;
12.5 It is to be borne in mind that no one gets away with fraud, misrepresentation orinterpolation by taking recourse to the technicalities of the law of limitation.
12.6 An Application for condonation of delay should be drafted with careful concern and not in a haphazard manner harbouring the notion that the Courts are required to condone the delay on the bedrock of the
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Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 principle that adjudication of lis on merits is seminal to justice dispensation system;
12.7 The increasing tendency to perceive the delay as a non- serious matter and hence lackadaisical propensity can be exhibited in a nonchalant manner requires to be curbed, of course, with legal parameters
The true, length of delay is no matter and acceptability of explanation is the only criteria as primary function of Tribunal is to adjudicate dispute between the parties and to advance substantial justice. The Hon'ble Supreme Court vide para 15 has summarized the law on the issue in “Basawaraj and Anr vs- Special Land Acquisition Officer” reported in L4 SSC 8U(SC) as; "15. The law on the issue can be summarized to the effect that where a case has been presented in the court beyond limitation, the applicant has to explain the court as to what was the "sufficient cause" which means an adequate and enough reason which prevented him to approach the court within limitation. In case a party is found to be negligent, or for want of bona fide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there
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Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 cannot be a justified ground to condone the delay. No court could be justified in condoning such an inordinate delay by imposing any condition whatsoever. The application is to be decided only within the parameters laid down by this Court in regard to the condonation of delay. In case there was no sufficient cause to prevent a litigant to approach the court on time condoning the delay without any justification, putting any condition whatsoever, amounts to passing an order inviolation of the statutory provisions and it tantamounts to showing utter disregard to the legislature".
In the light of aforesaid decisions, the burden is on the party claiming condonation of delay to place before the court, in clear and explicit terms, all facts on which the party relies, so that the court can come to the conclusion that it is not a case of want of diligence or inaction on the part of the applicant. Inaction or want of diligence on the part of the applicant would not entitle the applicant to the benefit of the provisions of section 253(5) of the Act. In the case under consideration, admittedly, the assessee bank has not shown any action or vigilance for a period of more than 239 days after the impugned order was served upon
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Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 the assessee. In the facts of the present case, the assessee has not proved any inaction or negligence on the part of a third party, much less have they pleaded any action or vigilance on their own part. The assessee did not care to file an appeal for 239 days. The averments made either in the application for condonation of delay or in the aforesaid affidavit of a manager of the bank are not corroborated by any evidence. In view of the foregoing, especially when the assessee has not come with clean hands before us and has also failed to establish with cogent and proper evidence that there existed sufficient cause for not presenting the appeal within the stipulated period and has not substantiated their statements in the application for condonation of delay or in subsequent affidavit executed on 13/07/2020, without even specifying the days delayed in filing the present appeal, cannot be condoned. Since the assessee has failed to make out a case that there was sufficient cause for delay in filing the appeal, the application for condonation of delay is, accordingly, rejected, since the appeal is barred by limitation, it deserves to be rejected on this ground alone ITAT-Pune Page 18 of 20
Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 as the assessee remained negligent and did not initiate any steps at all. Inaction and want of diligence on the part of the applicant would not entitle the applicant to the benefit of the provisions of section 253(5) of the Act.
Keeping in view the propositions of law laid down by the judicial precedents relating to condonation of delay and having regard to the totality of the facts and circumstances of present case as discussed above, in our considered view the appellantis found to be casual, non- serious and non-vigilant in preferring appeal against the impugned orders, therefore, in order to avoid injustice to respondent revenue, application for condonation of delay being devoid of reasonable and sufficient cause, merits, deserves dismissal.
Further, it is also significant to note that applicants are not rustic, ignorant villagers; they constitute a corporal body (society or company as the case may be) and managed by board with educated representatives besides equipping themselves with expert professionals who know well where the appellant’s interest lies. Since the appellant ITAT-Pune Page 19 of 20
Vardhaman Nagari Sahakari Pathsanstha Ltd. ITA No. 475/PUN/2020AY: 2011-12 with the due knowledge of outcome of withdrawal application tendered before FAA, did not bother for its own interest and rights and slept over for long period without any cogent and convincing justification, therefore, in the absence of cogent reasons to condone enormous delay of 239 days in filing appeal, the petition for delay condonation stands rejected, we therefore do not express any opinion on merits of the case.
Resultantly, the appeal of the appellant assessee is dismissed in above terms. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Friday 09th day of September, 2022.
-S/d- -S/d- SS VISWANETHRA RAVI G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/ PUNE ; दिन ांक / Dated : 09th day of September, 2022. आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT, Aurangabad (Mh-India) 4. The CIT(A), Aurangabad (Mh-India) 5. दिभ गीय प्रदिदनदि, आयकर अपीलीय न्य य दिकरण, पुणे “बी” बेंच, पुणे / DR, ITAT, Pune “B” Bench, Pune. 6. ग र्डफ़ इल / Guard File. आिेश नुस र / BY RDER, िररष्ठदनजीसदचि / Sr. Private Secretary आयकरअपीलीयन्य य दिकरण, पुणे / ITAT, Pune. ITAT-Pune Page 20 of 20