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Income Tax Appellate Tribunal, MUMBAI BENCHES “E”, MUMBAI
Before: Shri Joginder Singh, & Shri N.K. Pradhan
आदेश / O R D E R
Per Joginder Singh (Judicial Member) The assessee is aggrieved by the impugned order dated 15/03/2016 of the Ld. First Appellate Authority, Mumbai, imposing penalty of Rs.1,77,54,868/- u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter the Act).
2. During hearing, the ld. counsel for the assessee, Komal Keswani, contended that the quantum addition on the basis of which penalty was imposed was set aside by the Tribunal to the file of the Ld. Assessing Officer (ITA No.2972/Mum/2014), order dated 22/02/2018, therefore, the penalty will not survive. On the other hand, the Ld DR, Shri V. Justin, contended that penalty was justified but did not controvert the fact that the quantum addition was set- aside to the file of the Ld. Assessing Officer by the Tribunal.
We have considered the rival submissions and perused the material available on record. In view of the above, we are reproducing hereunder the relevant portion
3 Nandkishore Steel Industries Pvt. Ltd. Tribunal dated 22/02/2018 for ready reference and analysis:-
“The assessee is aggrieved by impugned order dated 19.12.2012 of the learned first appellate authority Mumbai rejecting the return loss of Rs. 5,23,74,244/- (which is as per the return of Rs. 4,99,90,320/- ignoring the fact that the assessment order was framed under section 144 of the Income Tax Act, 1961 (hereinafter the Act).
During hearing, ld. counsel for the assessee Sh. R.V. Loya, invited our attention for condonation of delay of 397 days. The assessee is also moved an application for condonation of delay, supported by an affidavit, explaining the reasons of delay. It was submitted that considering the reasons, the delay may be condoned. On the other hand, the ld. DR – T. A. Khan contended that the assessee was expected to explain delay of each day, therefore, delay may not be condoned.
We have considered the rival submissions and perused the material available on record. So far as, condonation of delay is concerned 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 condone the delay can result in a meritorious matter being thrown out at the threshold, which may lead to miscarriage of justice. The judiciary is respected not on account of its power to legalize in justice on technical grounds but because it is capable of removing injustice and is expected to do so.
4 Nandkishore Steel Industries Pvt. Ltd. 3.1. 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 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. The Hon’ble Apex Court in Vedabhai vs Santaram 253 ITR 798 observed that inordinate delay calls of cautious approach. 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 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 message does not appear to have percolated down to all the others courts in the hierarchy.”
3.2. Furthermore, the Hon'ble Supreme Court in the case of Vedabai Alia Vaijayanatabai Baburao Patil vs. Shantaram Baburao Patil 253 ITR 798 held 5 Nandkishore Steel Industries Pvt. Ltd. that the court has to exercise the discretion on the facts of each case keeping in mind that in construing the expression ‘sufficient cause’, the principle of advancing substantial justice is of prime importance. The court held that the expression “sufficient cause” should receive liberal construction. 3.3. The decision of the Tribunal in People Infocom Private Ltd. v/s CIT (ITA No.210/Mum/2013) order dated 19/05/2016, M/s Neutron Services Centre Pvt. Ltd vs ITO (ITA No.1180/Mum/2012) order dated 18/02/2016, Shri Saidatta Coop-. Credit Society Ltd. v/s ITO (ITA No.2379/Mum/2015) order dated 15/01/2016 and Mr. Nikunj Barot (Prop. Enigma) vs ITO (ITA No.4887/Mum/2015) order dated 06/01/2016, wherein, substantial delay was condoned, supports the case of the present assessee. Having made the aforesaid observation and various decisions discussed hereinabove, including from Hon’ble Apex Court, the circumstances narrated by the assessee, wherein, he has stated the reasons which caused the delay, we are satisfied that there are bonafide reasons of delay, therefore, the delay is condoned.
So far as the merits of the issue is concerned, the ld. counsel contended that the ld. Assessing Officer did not provide sufficient opportunity for which our attention was invited to the assessment order. As is evident from assessment order the return was processed by Income Tax Officer Nagpur and he issued letter dated 25.4.2008 for TDS verification and there was a request for migration of PAN to Nagpur. It was observed by the learned Assessing Officer that the said letter was not signed by the Director of the Company and was signed by other person. It was further observed that there was no power of attorney in favour of that person. One of them Sh. Jaiprakash Mishra stated that he himself from the assessee company and filed reply. The learned Assessing Officer observed Sh. Mishra was also not having power of attorney and in the reply dated 21.12.2009 furnished on 24.12.2009 the signature were not legible. The Assessing Officer framed assessment under section 144
6 Nandkishore Steel Industries Pvt. Ltd. Act. Considering the totality of facts and mandate of Article 265 of Constitution of India only due taxes has to be levied / collected. The assessee is directed to make a effective representation before the learned Assessing Officer and to file necessary details. The learned Assessing Officer is directed to examine the claim of the assessee afresh and after providing due opportunity of being heard adjudicate the case of the assessee in accordance with law. Thus the appeal of the assessee is allowed for statistical purposes.
Finally, the appeal of the assessee is allowed for statistical purposes.”
2.2. We find that in the aforesaid order, the First Appellate Authority, rejected the loss of Rs.5,23,74,244/- claimed in the return. The assessment was framed u/s 144 of the Act and there was a delay of 397 days. The Tribunal has followed various decisions including from Hon'ble Apex Court and condoned the delay. So far as the merits of the appeal was concerned, the return was processed by the Income Tax Officer, Nagpur, and he issued letter dated 25/04/2008 for TDS verification and there was request for migration of PAN to Nagpur. Since, the quantum addition was directed to be examine afresh after providing due opportunity of being heard to the assessee and in accordance with law, therefore, the penalty so imposed will be dependent upon the outcome of the adjudication by the 7 Nandkishore Steel Industries Pvt. Ltd. Ld. Assessing Officer, therefore, in all fairness, the penalty also deserves to be set-aside to the file of the Ld. Assessing Officer. So far as, the contention of the Ld. counsel for the assessee that penalty may be deleted, considering the totality of facts, is not accepted. This penalty appeal is also sent to the file of the Ld. Assessing Officer for fresh adjudication. The assessee be given opportunity of being heard. Thus, the appeal of the assessee is allowed for statistical purposes only.
Finally, the appeal of the assessee is allowed for statistical purposes.
This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 21/05/2018.