ZEE ENTERTAINMENT ENTERPRISES LTD,MUMBAI vs. ASST CIT CIR 11(1), MUMBAI

आदेश / O R D E R PER R.C.SHARMA (A.M):

These are the appeals filed by assessee against the order of CIT(A)-3, Mumbai dated 01/01/2010 for the A.Y.1995-96, 1996-97 and 1997-98 in the matter of order passed u/s.150 of the Income Tax Act. 2. Grievance of the assessee in all the years relates to upholding deduction u/s.80HHC of the Act to be allowed with reference to income after reducing profit of 80IA manufacturing unit instead of both incentives to be calculated independently with reference to profit of the unit.

M/s. Zee Entertainment Ltd., 3. There was a substantial delay in filing the appeal in all the years under consideration. The assessee has filed an affidavit explaining the reasons for delay which reads as under:-

AFFIDAVIT IN SUPPORT OF APPLICATION FOR CONDONATION OF DELAY I, Mr. Punit Goenka, son of Shri Subhash Chandra, the managing director of Applicant, having my office at 1 8th Floor, Marathon Futurex, N.M Joshi Marg, Lower Parel, Mumbai - 400 013 and identified by my Permanent Account Number AAEPG2529E do hereby solemnly affirm and state as follows:-

1.

2. I say that the order dated 1st January 2010 was received by the Applicant on 27th January 2010 and hence the last date for filing an appeal before this Hon’ble Tribunal fell on 28th March 2010; I say that the above appeals have been lodged on 25th October, 2016 and there is therefore a delay of 2403 days in filing the appeal.

3. I say that the above delay is caused in the following circumstances: 4. I say that the Commissioner of Income-tax (Appeals) - 3 vide order dated 1st January 2010 directed the Assessing Officer to reduce deduction under section 80IA from eligible profits while computing deduction under section 80HHC of Act relying on the decision of the Special Bench of the Hon'ble Delhi Tribunal in the case of Hindustan Mint & Agro Products [123 TTJ 577 (Del.) (SB)]. Since there was no contrary decision in favour of the Applicant of the Jurisdictional High Court, the decision of the Commissioner of Income-tax (Appeals) -3 was accepted and no appeal was preferred to the Hon'ble Tribunal.

5. I say that the Hon'ble Jurisdictional High Court in the case of Associated Capsules (P.) Ltd. Vs. DCIT 332 ITR 42 came to be passed on 10th January 2011 holding that the deduction under sections 80HHC and section 80IA was to be computed independently. Therefore, the legal position was resolved by the Hon'ble Bombay High Court in favour of the M/s. Zee Entertainment Ltd., Applicant and the view of the Commissioner Income Tax (Appeals)-3 view was impliedly overruled.

6. I say that the Assessing Officer however vide order dated 12th April 2011 gave effect to the order of Commissioner of Income-tax (Appeals) - 3 and computed the deduction under section 80HHC of the Act after reducing deduction under section 80IA therefrom, in accordance with the direction of the Commissioner of Income-tax (Appeals) -3 and contrary to the decision of the Hon'ble Bombay High Court in the case of Associated Capsules (P.) Ltd. (supra).

M/s. Zee Entertainment Ltd., employed by the legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which sub serves the ends of justice that being the life purpose of the existence of the institution of court. It is common knowledge that this court has been making justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other Courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that: (i) Ordinarily, a litigant does not stand to benefit by lodging an appeal late. (ii) 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. (iii) "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 and pragmatic manner. (iv) When substantial justice and technical considerations are pitted against each other, the 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. (v) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (vi) It must be grasped that 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.”

“The primary function of a court is to adjudicate the dispute between the parties & to advance substantial justice. The time limit fixed for approaching the court in different situations is not because on the expiry of such time a bad cause would transform in to a good cause. 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 seen their remedy promptly. Law of limitation is thus founded on public policy. It is enshrined in the maxim "interest republic up sit finis lithium" (it is for general welfare that a period be put to litigation). Rules of limitation are not meant to destroy the rights of the parties. There is no presumption that delay in M/s. Zee Entertainment Ltd., approaching the court is always deliberate. In every case of delay, there can be some lapse on the party of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as per of a dilatory strategy, the court must show utmost consideration to the suitor.”

7. Applying the proposition laid down in the above judicial pronouncements and keeping in view the substantial interest of justice we condone the delay in filing the appeals and the appeals are being heard on merits. 8. With regard to assessee’s claim for deduction under Sections 80IA and 80HHC, we observe that for the relevant assessment years under consideration the Assessing Officer vide order under section 143(3) of the Act had disallowed the assessee's claim for deduction under section 80HHC of the Act, which was confirmed by the CIT(A). Aggrieved by the aforesaid order of the CIT(A), the assessee filed an appeal before the ITAT. Before the Tribunal, the assessee made an additional claim for deduction under section 80IA of the Act. The Tribunal allowed deduction under Sections 80HHC and 80IA of the Act in principle and directed the Assessing Officer to verify and compute the same. Thereafter, the M/s. Zee Entertainment Ltd., Assessing Officer vide order dated 12.04.2007 while giving effect to the order of the Tribunal computed deduction under section 80IA on the balance profits after reducing deduction under section 80HHC of the Act.

9. The assessee filed an appeal before the CIT(A) contending that the deduction under sections 80IA and 80HHC are to be computed independently. The CIT(A) vide order dated 1st January 2010, directed the Assessing Officer to reduce the deduction under section 80IA while computing deduction under section 80HHC. He relied on the decision of the Special Bench of the Delhi Tribunal in the case of Hindustan Mint & Agro Products [123 TTJ 577 (Del.) (SB).

10. Thereafter, the Hon'ble Jurisdictional High Court in the case of Associated Capsules (P.) Ltd. vs. DCIT [332 ITR 42] passed its judgment and order dated 10th January 2011 holding that the deduction under sections 80HHC and section 80IA were to be computed independently. Therefore, the legal position was resolved by the Hon'ble Bombay High Court in favour of the assessee and the view of the CIT(A) was impliedly overruled.

M/s. Zee Entertainment Ltd., 12. For Assessment Years 1996-97 and 1997-98, the assessee filed an appeal before the CIT(A) against the aforesaid order giving effect. The CIT(A) dismissed the said appeals vide order dated 12th January 2015 and 2nd January 2015 respectively. However, the assessee’s rectification application dated 15th June 2011 was completely ignored by him, though filed in an earlier point of time. No appeal was filed for A.Y. 1995-96 since there was no tax effect on account of the present dispute in question.