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Income Tax Appellate Tribunal, “A”
Before: HON‟BLE SH. SANDEEP GOSAIN, JM & HON‟BLE SH. G. MANJUNATHA, AM
IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI
BEFORE HON‟BLE SH. SANDEEP GOSAIN, JM & HON‟BLE SH. G. MANJUNATHA, AM
आयकरअपीलसं./ I.T.A. No. 6274/Mum/2008 आयकरअपीलसं./ I.T.A. No. 5474/Mum/2011 (निर्धारणवर्ा / Assessment Year: 1999-2000) & आयकरअपीलसं./ I.T.A. No. 1093/Mum/2010 आयकरअपीलसं./ I.T.A. No. 5475/Mum/2011 (निर्धारणवर्ा / Assessment Year: 2005-2006)
DCIT 4(1) Anish Metals Pvt. Ltd. 107, Natwar house, 1st Aayakar Bhavan, M. K. बिधम/ Road, Mumbai-400 020 floor, Room No. 7/8, C. P. Vs. Tank, V. P. Road, Mumbai-400004. स्थायीलेखासं./जीआइआरसं./ PAN No. AAACA5990L (अपीलाथी/Appellant) (प्रत्यथी / Respondent) :
अपीलाथीकीओरसे/ Appellant : Shri Vipul Joshi & Ms. Dinkle Hariya, ARs by प्रत्यथीकीओरसे/Respondentby : Shri Satishchandra Rajore, DR सुनवाईकीतारीख/ : 17.01.2019 Date of Hearing घोषणाकीतारीख / : 29.03.2019 Date of Pronouncement
2 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. आदेश / O R D E R Per Sandeep Gosain, Judicial Member: The present four (4) Appeals have been filed by the assessee against the order of Commissioner of Income Tax (Appeals), Mumbai, dated 04-5/08/08 & 25.05.11 for AY 1999- 2000 and 2005-06 respectively.
Since the issues raised in these appeals are identical, therefore, for the sake of convenience, these appeals are clubbed, heard and disposed of by this consolidated order.
I.T.A. No. 6274/Mum/2008 (AY 1999-2000) 3. First of all we take up assessee’s appeal in I.T.A. No. 6274/Mum/2008 (AY 1999-2000) on the grounds mentioned herein below:-
The learned CIT(A) erred in holding that, the appellant did not have sufficient cause for delay of 11 months in filing the appeal and consequently refusing to condone the delay overlooking the fact that, as held by the apex court, the appellate authority has to 3 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. exercise the discretion on the facts of each case keeping in mind that in construing the expression "Sufficient Cause", the principles of advancing substantial justice is of prime importance.
Having held thus, the learned CIT(A)'s has erred in: i. Not adjudicating on the issue of order u/s.143(3) r.w.s 147 dated 26.12.2006 being illegal, bad in law and without appreciating the facts of the case,
ii. Not adjudicating on the issue of disallowance of depreciation amounting to Rs.31,51,106/- on leased assets which was forming one of the grounds of appeal before the learned CIT(A).
Each of the above grounds of appeal is without prejudice to the others.
The appellant reserves the right to alter, amend or add to the above grounds of appeal.
As per the facts of the present case, the return of income for the year under consideration was filed on 17.12.99 declaring total income at Rs. 97,63,520/-. The return was processed u/s 143(1). Subsequently, proceedings u/s 147 was initiated by issue
4 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. of notice u/s 148 and after serving statutory notices, assessment order was passed u/s 143(3) r.w.s 147 of the I.T. Act thereby making additions /disallowances. 5. Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties dismissed the appeal of the assessee by holding that the appeal was barred by limitation. 6. Aggrieved by the order of Ld. CIT(A), assessee filed the present appeal before us on the grounds mentioned herein above.
Ground No. 1 7. This ground raised by the assessee relates to challenging the order of Ld. CIT(A) in holding that assessee did not have sufficient cause for delay of 11 months in filing the appeal and consequently refusing to condone the delay.
Ld. AR reiterated the same arguments as were raised by him before Ld. CIT(A) and submitted before us that they had filed detailed affidavit of Mr. Kiriti Babulal Shah, director of the assessee company, wherein at para no. 24 of the detailed
5 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. affidavit, the reasons for delay in filing the appeal has been elaborately explained. According to which, during the relevant assessment year, the AO passed order u/s 143(3) r.w.s. 147 of the Act on 28.12.06, which order, according to the Department was sent by Speed Post on 30.12.06. According to the assessee, the said order seems to have been received by Mr. Pawar, as it was he only who was attending the office of the assessee regularly during that period. According to the assessee, for the said reason and due to sudden resignation of Mr. Pawar w.e.f 15.01.07 and in the absence of any other employee to look after the account of the company, the order escaped the attention and hence the assessee was not aware of the same. The receipt of the order came to the knowledge of the assessee on Dec 2007, while going through old files. Accordingly, the last date of filing appeal before the Ld. CIT(A) was 02.02.07, therefore because of the said reason, there was delay in filing the appeal before Ld. CIT(A). Apart from this, the assessee had also relied upon the documents annexed with the affidavit bearing page no. 1 to 219 and also relied upon judgments of Hon’ble Supreme Court, High Court and of Tribunal for reference Ld. AR relied upon the judgment in 6 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. the case of State of West Bengal vrs. Administrator, Howrah Municipality (AIR 1972 SC 749), Collector, Land Acquisition Vrs. Mst. Katiji (1987) 167 ITR 471 (SC) and N. Bal Krishanan Vrs. M. Krishnamurthy (1998) 7 SCC 123, Ram Nath Sao vrs. Gobardhan Sao (AIR 2002 SC 1201), Auto Centre Vrs. State of UP & Ors (2005) 278 ITR 291 (all), Areva T & D India Ltd vrs. JCIT (2006) 287 ITR 555 (Mad), Mukesh Jesangbhai Patel vrs. Ito (2013) 29 taxmann.com 389 (Guj) and Gujrat Electricity Board Vrs. DCIT (2013) 36 taxmann.com 340(Guj), etc.
On the other hand, Ld. DR relied upon the orders passed by the revenue authorities and also rejoinder dated 21.01.19 containing judgments such as AKK Nambiar Vr.s Union of India, AIR 1970 SC 652, Kunal Sharma Vrs. ITO (36 taxmann.com 319), Shri Venkatesa Paper & Boards Ltd. Vrs. DCIT (2006) 98 ITD 200 (Chen) and Nihalkaran Vrs. CWT
(1989) 175 ITR 14, etc.
7 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. 10. We have heard the counsels for both the parties and we have also perused the material placed on record, judgments cited by the parties as well as the orders passed by revenue authorities. After considering the facts of the present case, we find that the moot question to be adjudicated is with respect to sufficient cause or reasons for condonation of delay. Broadly, we are of the view, that the Courts and the quasi-judicial bodies are empowered to condone the delay, if a litigant satisfies the Courts that there was sufficient reason for availing the remedy after the expiry of limitation. Such reasoning should be to the satisfaction of the Court. The expression “sufficient cause or reasons” as provided in sub-section (5) of section 253 of the Act is used in identical position in the Limitation Act 1963, and in CPC. Such expression has also been used in other sections of the Income Tax Act such as section 273, 274, etc. Keeping in mind, the authoritative pronouncement from Hon’ble Apex Court, it is admitted position that the words “sufficient cause” appearing in sub-section (5) of section 253 of the Act should receive a liberal construction so as to advance substantial justice. It must be remembered that in 8 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. every case of delay, there can be some lapses on the part of the litigant concern. That alone is not enough to turn down the plea and to shut the doors against him, unless and until, it makes a mala-fide or a dilatory tactics, the court must show utmost consideration to such litigant. Further the length of delay is immaterial, it is the acceptability of the explanation and that is the only criteria for condoning the delay.
In such a situation, no doubt filing of an appeal is a right granted under the statute to the assessee and is not an automatic privilege, therefore, the assessee is expected to be vigilant in adhering to the manner and mode in which the appeals are to be filed in terms of the relevant provisions of the Act. Nevertheless, a liberal approach has to be adopted by the appellate authorities, where delay has occurred for “bona fide reasons” on the part of the assessee or the Revenue in filing the appeals. In matters concerning the filing of appeals, in exercise of the statutory right, a refusal to condoned the delay can result in a meritorious matter being thrown out at the threshold, which may lead to miscarriage
9 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. of justice. The 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.
In the present case, we have gone through the detailed affidavit filed by the director Shri Kirtibabulal Shah, wherein details of family disputes and difficulties in pursuing or managing the day to day affairs of the company has been mentioned in detail in para no. 1 to 25. Whereas on the contrary, no rebuttal affidavit has been filed by the revenue in order to rebut the contentions of the assessee.
The Hon’ble Apex Court in a celebrated decision in Collector, Land Acquisition vs Mst. Katiji & Ors. 167 ITR 471 opined that when technical consideration and substantial justice are pitted against each other, the courts are expected to further the cause of substantial justice. This is for the reason that an opposing party, in a dispute, cannot have a vested right in injustice being done because of a non- deliberate delay. Therefore, it follows that while considering matters relating to the condonation of delay, judicious and liberal approach is to be 10 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. adopted. If “sufficient cause” is found to exist, which is bona- fide one, and not due to negligence of the assessee, the delay needs to condoned in such cases. The expression „sufficient cause‟ is adequately elastic to enable the courts to apply law in a meaningful manner, which sub-serves the end of justice- that being the life purpose of the existence of the institution of the courts. When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred. This means that there should be no malafide or dilatory tactics. Sufficient cause should receive liberal construction to advance substantial justice. The Hon’ble Apex Court in Collector, Land Acquisition vs Mst. Katiji & Ors. (167 ITR 471) observed as under:-
“3. The legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits. The expression “sufficient cause” employed by the legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making a justifiably liberal approach in matters instituted in this court. But the 11 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. message does not appear to have percolated down to all the others courts in the hierarchy.” The judgments referred and relied upon by the revenue are not applicable upon the facts and circumstances of the present case.
In the light of the above judicial pronouncements and keeping in view the facts of the present case and also principles of natural justice, we are of the considered view that the lis between the parties be decided on merits and no person should be condemned unheard. Therefore, the delay on the part of the assessee in filing appeal before Ld. CIT(A) is condoned subject to cost of Rs. 10,000/- upon the assessee which shall be paid in the Prime Minister’s Relief Fund within one month from the date of receipt of this order by the assessee and in case, assessee fails to pay the cost within the stipulated period, then in that eventuality, the present appeals shall stands dismissed. With this condition, the impugned order of Ld. CIT(A) is set aside and the appeal is remanded back to the file of Ld. CIT(A) to decide the same on merits afresh. It is needless here to mention that before passing the order, Ld. CIT(A) shall provide sufficient
12 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. opportunity of hearing to the assessee. Before parting, we may make it clear that our decision to restore the matter back to the file of Ld. CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the Ld. CIT(A) independently in accordance with law. Resultantly this ground is allowed.
Since we have restored the appeal back to Ld. CIT(A) for fresh adjudication, therefore other grounds raised by the assessee before us stands infructuous.
Consequently, the appeal filed by the assessee stands allowed for statistical purposes. 16. Now we take up assessee’s appeals in ITA No. 1093/Mum/2010 (AY 2005-06).
13 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. 17. At the very outset, Ld. AR appearing on behalf of the assessee drawn our attention towards letter dated 08.02.10 which relates to condonation of delay in filing appeal before Hon’ble ITAT. Ld. AR submitted that the present appeal could not be filed within time because of the reasons mentioned in the detailed affidavit of Shri Kirtibabulal Shah, i.e. director of the company and thus the delay in filing the present appeal be condoned.
On the other hand, Ld. DR requested for dismissal of the said application.
We have heard the counsels for both the parties and we have also perused the judgments cited by the parties as well as the application for seeking condonation of delay, affidavit and while taking into consideration the contents of application filed by the assessee, supporting affidavit, whereby the assessee has mentioned the reasons in detail for not filing the appeal within limitation, therefore keeping in view the reasons mentioned in the affidavit and also taking into consideration that we have already decided the similar question in ITA No. 6274/Mum/2008
14 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. for AY 1999-2000 and condoned the delay. Therefore, while following the decision of Hon’ble Supreme Court in the case of “Land Acquisition Collector Vrs. MstKitzi, AIR 1987 S.C. 1353/(1987) 167 ITR 471 (SC) and our own decision in ITA No. 1678/Mum/17, we apply the same findings in these present appeals in order to maintain judicial consistency which is applicable mutatis mutandis. Resultantly, this application is allowed and appeal is admitted to be heard on merits.
Ground No. 1 (1.1 & 1.2) 20. These grounds raised by the assessee are inter connected and inter related and relates to challenging the order of Ld. CIT(A) in confirming the assessment order in breach of the principles of natural justice and by not giving sufficient opportunity of being heard given to the assessee, therefore we though it fit to dispose of the same by this common order.
After hearing the parties at length and after going through the detailed unrebutted affidavit of Shri Kiritibabulal Shah, the director of the assessee company, we are of the view that it is the 15 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. bounded duty of the assessee or his representative to appear before the authorities on each and every date of hearing and to assist and cooperate the authorities for the early disposal of the case/appeal.
Be that as it may, considering the facts and circumstances of the present case and keeping in view the substantial cause of justice, we are of the considered view that the ends of justice would be met only, when we provide one more opportunity of hearing to the assessee for contesting the appeal on merits. In our view, if the assessee is allowed to represent his case before Ld. CIT(A) then in that eventuality, no prejudice would be caused to the interest of revenue as legitimate taxes due on the assessee’s correct income will be adjudicated. Whereas, if the contrary view is taken then in that eventuality the assessee may be put to great hardship and difficulty. Therefore, keeping in view the above discussion, we set aside the ex-parte order passed by Ld. CIT(A) and remit the matter back to the file of Ld. CIT(A) with a direction to provide one more opportunity to the assessee to represent his case subject to cost of Rs. 10,000/- upon the 16 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. assessee which shall be paid in the Prime Minister’s Relief Fund within one month from the date of receipt of this order by the assessee and in case, assessee fails to pay the cost within the stipulated period, then in that eventuality, the present appeals shall stands dismissed. With this condition, the impugned order of Ld. CIT(A) is set aside and the appeal is remanded back to the file of Ld. CIT(A) to decide the same on merits afresh. It is needless here to mention that before passing the order, Ld. CIT(A) shall provide sufficient opportunity of hearing to the assessee. Before parting, we may make it clear that our decision to restore the matter back to the file of Ld. CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the Ld. CIT(A) independently in accordance with law. Resultantly this ground is allowed.
Since we have restored the appeal back to Ld. CIT(A) for fresh adjudication, therefore other grounds raised by the assessee before us stands infructuous.
17 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. 24. Consequently, the appeal filed by the assessee stands allowed for statistical purposes.
ITA No. 5474 & 5475/Mum/2011 (AY 1999-2000 & 2005-06) 25. Now we take up assessee’s appeals in ITA No. 5474 & 5475/Mum/2011 (AY 1999-2000 & 2005-06). Since we have already decided the similar grounds of appeal in ITA No. 6274/Mum/08 and 1093/Mum/2010 on merits. Therefore, following our own decision in ITA No. 6274/Mum/08 and 1093/Mum/2010, we apply the same findings in these present appeals in order to maintain judicial consistency which is applicable mutatis mutandis.
Consequently, both the appeal filed by the assessee stands allowed for statistical purposes.
18 I.T.A. No. 6274/Mum/2008 & 1093/Mum/10 & ITA No. 5474 & 5475/Mum/2011 M/s Anish Metals Pvt. Ltd. 27. In the net result, all the four appeals filed by the assessee bearing ITA No. 6274/Mum/08 & 1093/Mum/10, ITA No. 5474 & 5475/Mum/11 stand allowed for statistical purposes.
Order pronounced in the open court on 29th March, 2019. (G. Manjunatha) (Sandeep Gosain) लेखासदस्य / Accountant Member न्याययकसदस्य / Judicial Member मुंबई Mumbai;यदनांकDated : 29.03.2019 Sr.PS. Dhananjay
आदेशकीप्रनिनिनिअग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent आयकरआयुक्त(अपील) / The CIT(A) 3. 4. आयकरआयुक्त/ CIT- concerned 5. यवभागीयप्रयतयनयध, आयकरअपीलीयअयधकरण, मुंबई/ DR, ITAT, Mumbai 6. गार्डफाईल / Guard File आदेशधिुसधर/ BY ORDER, .उि/सहधयकिंजीकधर (Dy./Asstt.