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Income Tax Appellate Tribunal, ‘C’ BENCH : BANGALORE
Before: SHRI N.V. VASUDEVAN & SHRI JASON P BOAZ
Per N.V. Vasudevan, Vice President
1. This is an appeal by the assessee against the order dated 21/9/2017 of CIT(A)-3, Bengaluru relating to the asst. year 2012-13.
The assessee is a company engaged in the business of Digital Signal Processing Systems and Software. The assessee filed a return of income for asst. year 2012-13 declaring a total income of Rs.22,50,63,970/. An order of asst. u/s 143(3) of the Act dated 29/3/2016 was passed by the AO determining the total income of Rs.22,68,13,292/- after disallowing expenses u/s 14A of to the Act of Rs.17,49,322/-.
Aggrieved by the aforesaid order of the AO assessee filed appeal before the CIT(A).
4. The order of the AO was received by the assessee on 1/4/2016 and appeal before CIT(A) ought to have been filed by the assessee on or before 30/4/2016. The appeal was however field by the assesse before the CIT(A) only on 14/3/2017 for the delay of 348 days. Before the CIT(A), the assessee explained the reasons for the delay in filing the appeal in an affidavit before the CIT(A) by the Director of the assessee as follows:-
“3. That, immediately on receipt of the Order I had placed the same with Mr. Raghunandan K S, who Looks into the financial affairs of the Company with an advice to seek instructions from our Auditors on the future course of action to be taken.
The said Mr. Raghunandan K S, due to his certain other pre occupations at that point in time and on the mistaken impression that no addition was made had not followed up on the same further.
5. That, recently when we approached. Mr. SURESK MUTHUKRISHNAN, Chartered accountant, in connection with the appeals to be filed for AY 2013-14 & AY 2014-15 and when we were also reviewing the earlier orders, he observed that the disallowance was more than what was offered by us and hence an appeal ought to have been filed by us within 30 days of receipt of the order and advised us to file the same Immediately along with an application seeking condnation of delay. 6 That, the appeal papers were the immediately prepared and filed by us on 14th March 2017.
That, the delay, of about 348 days iii filing the appeal was due to circumstances mentioned above and the delay Was neither intentional, willful nor deliberate.”
The CIT(A) however, refused to condone the delay for the following reasons:-
The reasons given by the appellant are very generic and do not explain the delay of 326 days. The reasons for delay are not supported by any evidence.
2. During Sept 2016 to Dec 2016, the appellant was actively participating in the assessment proceedings relating to AY 2013-14 as well as AY 2014-15. The appellant attended the hearings before the AO through its authorized representative. These aspects show that that the appellant was pursuing its income tax matters during the above period. 3. The submissions of the appellant that Mr Raghunandan K S who looks after the Financial affairs of the company failed to take the advice of the Auditor under impression that no addition was made, cannot be considered to be reasonable cause of the delay. 4 For AY 2013-14 and 2014-15 the appellant filed appeal before CIT(A) on 18.01.2017. The appeal for AY 2012-13 was filed only on 23.03.2017 whereas appeal for AY 2013-14 and AY 2014-15 was filed on 18.1.2017. 6. For the above reasons, the CIT(A) found no merit in the submissions of the appellant and the delay in filing of the appeal.
7. Aggrieved by the order of the CIT(A) in refusing the condonation in filing of appeal before him and dismissing the appeal of the assessee, the present appeal has been filed before the Tribunal.
We have heard the rival submissions and ld counsel for the assessee placed reliance on certain judicial pronouncements which we will discuss on the later part of this order.
8. The ld DR placed reliance on the order of the ld CIT(A) and also placed reliance on the decision of ITAT Bangalore Bench in the case of Molex India Tooling Pvt. Ltd., Vs. ACIT in IT(TP)A No.839/Bang/2009 order dated 23/12/2016. In the aforesaid order, the Tribunal refused to condone the delay of almost a year in filing the appeal before the CIT(A).
We have given a careful consideration to the rival submissions. The law of limitation is enshrined in the maxim interest reipublicae up sit finis litium (it is for the general welfare that a period be put to litigation). Rules of limitation are not meant to destroy the rights of the parties, rather the idea is that every legal remedy must be kept alive for a legislatively fixed period of time. Reliance was placed by the Assessee on the decision of the Hon’ble Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji & Ors. (1987) 167 ITR 471 and also in the case of Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi and Ors. 118 ITR 507. Further the assessee also relied on decisions of the Hon’ble Apex Court in the case of Radha Krishna Rai v. Allahabad Bank & Ors. (2009) 9 SCC 733 and Commissioner of Income-tax v. West Bengal Infrastructure Development Finance Corporation Ltd. (2011) 334 ITR 269 (SC). At the outset, we observe that the Hon’ble Supreme Court, in the case of Mst. Katiji (supra), has explained the principles that need to be kept in mind while considering an application for condonation of delay. The Hon’ble Apex Court has emphasized that substantial justice should prevail over technical considerations. The Court has also explained that a litigant does not stand to benefit by lodging the appeal late. The Court has also explained that every day’s delay must be explained does not mean that a pedantic approach should be taken. The doctrine must be applied in a rational common sense and pragmatic manner. In the case of Shakuntala Hegde, L/R of R.K. Hegde v. ACIT, for the A.Y. 1993-94, the Hon’ble Tribunal condoned the delay of about 1331 days in filing the appeal wherein the plea of delay in filing appeal due to advice given by a new counsel was accepted as sufficient. The Hon’ble Karnataka High Court in the case of CIT v. ISRO Satellite Centre, ITA No. 532/2008 dated 28.10.2011 has condoned the delay of five years in filing appeal before them which was explained due to delay in getting legal advice from its legal advisors and getting approval from Department of Science and PMO. In the aforesaid decision, the Hon’ble Court found that the very liability of the assessee was non-existent and therefore condoned the delay in filing appeal.
Keeping in mind the aforesaid principles, we shall consider the claim of the assessee in the present case. Admittedly the delay was due to misunderstanding of the person who was attending the financial affairs of the Assessee that no action needs to be taken. It is only when similar addition were made for AY 2013-14 & 2015-16 that the matter was referred to the present counsel who advised the Assessee that appeal should be filed on the disallowance u/s.14A of the Act. Thereafter appeal was filed for A.Y 2012-13 also. Though the appeals for AY 2013-14 & 2014-15 were filed much earlier to the Appeal for AY 2012-13 before the Tribunal, that will not take away the bonafides of the Assessee. We find that there has been no willful neglect on the part of the Assessee. In such matters the advice of the professional would be the point of time at which the Assessee would begin to explore the option of exhausting all legal remedies. We are also of the view that by condonation of delay there is no loss to the revenue as legitimate taxes payable in accordance with law alone would be collected. We therefore accept the reason given for condonation of delay in filing the appeal. The delay in filing the appeal is accordingly condoned.
As far as the decision cited by the ld DR is concerned, we find that the aforesaid principles laid down by the Hon’ble Supreme Court which we have discussed in the earlier paragraphs have not been considered. Apart from the above, we find in that case there is a finding given by the Tribunal that the assessee was not diligent in pursuing his remedies. However, in the present case, we find that there has been no such negligence or lapse on the part of the assessee. We, therefore, hold that the decision relied by the ld DR will not be of any use in the present case.
For the reasons given above, we condone the delay in filing the appeal by the assessee before the CIT(A). Since the CIT(A) has not decided the appeal of the assessee on merits, we direct the CIT(A) to consider the appeal of the assessee on merits after affording opportunity of being heard to the assessee.
In the result, appeal of the Assessee is treated as allowed for statistical purpose.
Pronounced in the open court on February, 2019.