SHRI OM PARSHAVNATH DEVELOPERS PVT. LTD.,, DURG,DURG vs. ACIT-1(1), BHILAI, DURG

Also, the assessee company has raised additional grounds of appeal which reads as under:

“i) Assessment order passed by the A.O is illegal inasmuch as no order u/s.127 was passed for transfer of case from ITO- 1(1), Bhilai to ACIT-1(1), Bhilai. Assessment order is illegal and liable to be quashed. ii) the addition made by the A.O is illegal inasmuch as the subject matter of additions was not covered within the scope of “limited scrutiny”.

As the assessee company based on the additional grounds of appeal has assailed the validity of the jurisdiction that was assumed by the A.O for framing the impugned assessment, adjudication of which would not require looking any further beyond the facts available on record, therefore, I have no hesitation in admitting the same. My aforesaid view that where an assessee, had raised, though for the first time, an additional ground of appeal before the Tribunal which involves purely a question of law and requires no further verification of facts, then, the same merits admission finds support from the judgment of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC).

3. Thereafter, the A.O vide his order passed u/s. 143(3) of the Act, dated 29.12.2016, inter alia, made two additions, viz. (i) estimated addition to the income of the assessee company based on conviction that the assessee ought to have followed percentage completion method : Rs.30,73,734/-; and (ii) disallowance of 60% of the assessee’s claim for deduction of traveling expenses of Rs.3,21,700/- : Rs.1,93,020/-, determined the income of the assesse company at Rs.32,66,754/-.

4. Aggrieved the assessee company carried the matter in appeal before the CIT(Appeals). As is discernible from the order of the CIT(Appeals), it transpires that he had observed that as the appeal filed by the assessee company before him involved a delay of 365 days, therefore, the appeal on the said count itself was liable to be dismissed as not maintainable. The CIT(Appeals) based on his aforesaid observations dismissed the appeal in limine, observing as under:

“3.1 As per the provisions of the Act, the appellant should have filed the appeal within 30 days from the date of the service of the order i.e. on or before 29.01.2017 but the same has been filed on 29.01.2018 with the of 365 days. The appellant in form 35 mentioned the date of service of order 02.01.2018. The same is not acceptable as this order is passed on 29.12.2016. It is not possible that the appellant had received the order after 369 days after passed. Further, the appellant has not submitted any evidence regarding this claim. Hence, appellant’s claim in this regard is not acceptable. Further the appellant has not submitted any reason for late filing of appeal. 3.2 I have considered the facts of the appeal and it is noticed that the appeal is filed late by 365 days. The appellant has not furnished any explanation/supporting evidences regarding late filing. It is a well settled law that delay in filing the appeal can be condoned only if there is a reasonable and sufficient cause which prevented the assessee to file the appeal within the stipulated time. In the instant case, the appellant failed to show any reasonable or sufficient cause which prevented him to file the appeal within stipulate time. 3.3 There are various judicial pronouncements which laid down the principle for condonation of delay. The basic essence of all the judgment is that delay should be reasonable and justifiable and there should not be any negligence on the part of the appellant. Some of the decisions are relied upon are as under: (i) If the appellant has acted diligently then normally the delay gets condoned. However if the delay is caused due to negligence on the part of the appellant, it become difficult to get the delay condoned. Shakti Clearing Agency (P) Ltd vs ITO [2003] 127 Taxman 49 (Rajkot). (ii) Hon'ble Madras High Court in Krishna v. Chathappan, ILR 13 Mad 269 has held that it is however, necessary to emphasize that even after sufficient cause has been shown a party is not entitled to the condonation of delay in question as a matter of right. The proof of a sufficient cause is a condition precedent for the exercise of the discretionary jurisdiction vested in the court by Section 5. If sufficient cause is not proved nothing further has to be done; the application for condoning delay has to be dismissed on that ground alone. If sufficient cause is shown then the Court has to enquire whether in its discretion it should condone the delay. This aspect of the matter naturally introduces the consideration of all relevant facts and it is at this stage that diligence of the party or its bona fides may fall for consideration;... (iii) In the case of Union of India v. Tata Yodogawa Ltd., [1988 (38) Excise Law Times 739 (SC)], Hon'ble Court while granting some latitude to the Government in relation to condonation of delay, still held that there must be some way or attempt to explain the cause for such delay and as there was no whisper to explain what legal problems occurred in filing the Special Leave Petition, the application for condonation of delay was dismissed.

(iv) Similarly, in the case of Collector of Central Excise, Madras v. A.M.D. Bilai & amp; Co., [1999 (108) Excise Law Times 331 (SC)], the Supreme Court declined to condone the delay of 502 days in filing the appeal because there was no satisfactory or reasonable explanation rendered for condonation of delay. (v) The jurisdictional Gujarat High Court laid down principle for condonation of delay in the case of Baroda Rayon Corporation Ltd. v. Commissioner of Sales Tax, Gujarat, Ahmedabad 1991 (3) TMI 355 — GUJARAT HC [1992] 87 STC 266 (Guj) Dt:15-3-1991 as under:- "In our opinion, the Tribunal was, therefore, right in holding that the assessee had failed to make out sufficient cause for not preferring an appeal to the Tribunal within the prescribed time. For the reasons stated above, the question referred to us is answered in the affirmative, that is, against the assessee and in favour of the department. There shall be no order as to costs in this reference. Reference answered in the affirmative." (vi) The Hon'ble Mumbai Tribunal in the case of Prashant Projects Ltd. vs. DCIT (2013) 37 taxmann.com 137 is significant which is in favour of the revenue holding that by adopting a liberal view in condoning delay is one of the guiding principles in the realm of belated appeals, but liberal approach cannot be equated with a license to file appeals at will-disregarding the time-limits fixed by the Statutes; The behavior of the assessee could be termed as personified inaction and negligence which would not constitute reasonable cause. (vii) Further, Hon'ble Apex Court in the case of Vedabai Alias Vaijayanatabai Baburao Patil Vs. Shantaram Baburao Patil, 253 ITR 798, it was held as follows:-"In exercising discretion under section 5 of the Limitation Act, the Court should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration may arise and such case deserves a liberal approach." (viii) Further, ITAT, Chennai in the case of JCIT vs. Tractors & Farm Equipment’s Ltd. it was held as under:-'The delay cannot be condoned simply because the appellant'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 Hon'ble Supreme Court in the case of Ramlal v. Rewa Coalfields Ltd. AIR 1962 SC 361 has held that the cause for the delay in filing the appeal which by due care and attention could have been avoid 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. Seekers of justice must come with clear hands." (ix) Further in the case of Subodh Parkash Vs. JCIT (2017) [2017-TIOL-2249-HC-P&H-IT], the Hon'ble Mumbai High Court has held as under:- "When the explanation submitted by the assessee does not satisfy the test of `sufficient cause' as required u/s.5 of the Limitation Act, 1963, the delay cannot be condoned. 3.4 In view of the above judicial pronouncements, the basic principle emerges that the delay should be bonafide and there should not be any negligence on the part of the appellant. However, in the appeal under consideration, the appellant has not submitted anything for the delay and the same was not even verifiable from the records. The appellant has not submitted any evidence either along with the appeal or during appellate proceedings even after giving ample opportunities. Therefore, the delay in filing the appeal does not deserve to be condoned and hence appellant's request for condonation is not entertained and rejected. Therefore, the appeal is not admitted and dismissed on this count. 3.5 Accordingly, the appeal stands dismissed.