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Before: Shri A. Mohan Alankamony & Shri Duvvuru RL Reddy
आयकर अपीलीय अिधकरण, “डी” �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI �ी ए. मोहन अलंकामणी, लेखा सद� एवं �ी धु�ु� आर.एल रे�ी, �ाियक सद� के सम� Before Shri A. Mohan Alankamony, Accountant Member & Shri Duvvuru RL Reddy, Judicial Member I.T.A. Nos. 1313, 1314, 1315, 1316, 1317, 1318 & 1319/Chny/2017 Assessment Years: 2001-02 to 2007-08 Shri H. Narayanlal, The Deputy Commissioner of 4/28, Bazaar Street, Vrinjipuram, Vs. Income Tax, Vellore. Central Circle IV(1), Chennai 600 034. [PAN: ACHPN3211F] (अपीलाथ� /Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : None ��थ� की ओर से/Respondent by : Dr. M. Sreenivasa Rao, CIT-DR सुनवाई की तारीख/ Date of hearing : 17.07.2018 घोषणा की तारीख /Date of Pronouncement : 23.07.2018 आदेश /O R D E R PER BENCH: This bunch of seven appeals filed by the same assessee is directed against the common order of the ld. Commissioner of Income Tax (Appeals) 1, Chennai dated 28.02.2011 relevant to the assessment years 2001-02, 2002-03, 2003-04, 2004-05, 2005-06, 2006-07 and 2007-08.
The appeal of the assessee is found to have been filed late by 2207 days in filing the appeal. The assessee has filed condonation petition, wherein, it was submitted as under:
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“BEFORE THE INCOME TAX APPELLATE TRIBUNAL, MADRAS BENCH ITA No………. of 2017 H. Narayanlal … PETITIONER/APPELLANT PETITION FOR CONDONATION OF DELAY The Petitioner humbly submits as follows: 1.The Petitioner is an individual hailing from agricultural family born in the desert state of Rajashthan. I not even studied up to VI standard and I do not know any other language except Hindi. 2. I migrated to Chennai in and around 1980 in search of job and I got employment with Sri Sajjanraj and Bhanwarlal from the year 1980 to 2000 After serving for 20 Years, I learned the business of money lending and started the business with initial capital of Rs.2,00,000/-. 3. I received deposits form customers since I had given interest to the customers more than the interest given by the Bank coupled with integrity and honesty in dealings. I acted as a bank and faith reposed by the customers made my lending increased progressively. 4. There was a search in the place of my previous master Sri Sajjanraj and Bhanwarlal on 29/08/2006 and without any rhyme or reason conducted search in my place and they could not seize any money or bullion. 5. I had fully cooperated with the assessment and filed confirmation letters of my customers/depositors. The department summoned them and also recorded a statement. I was not given opportunity nor statements recorded from my customers were given to me and high pitched assessment was made and I filed appeals against the arbitrary order passed by the Assessing officer. 6.My Auditor Shri Krishnamurthy submitted that the CIT (A) is willing to settle the case and all the interest will be waived and penalty will not be levied and the promises were not honoured by the department and also took an affidavit at the instructions of the CIT (A) ,who confirmed the order and failed to discharge his duty as an appellate authority and merely based on his conclusion on remand
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report which was not based upon any enquiry by the learned Assessing officer. 7.The department initiated penalty proceedings and the ITAT had gave partial relief and I filed a misc application on the same is pending as on this date. 8. I was advised to file appeal against the order and in the course of my discussion I came to know that my auditor had not filed an appeal before the IT AT since I was cheated with false representations without knowing the implications of the breach of assurances made by the department. I am a heart patient for several years, I submit that search proceedings was initiated in another case in my town. The department without any satisfaction initiated search proceedings. In my case without any material or justification the search proceedings caused several mental agony and the customers who pledged the jewels troubled for return of jewels and my business was ruined and I was forced to admit income by the learned CIT(A) and was also offered promises of immunity from penalty and consequent proceedings. My then Auditor believed the sweets words of completion of search proceedings and was also forced to sign the affidavit at the instance of my auditor. In the process the credits were not examined and the remand report the learned assessing officer without considering the statement made under section 131 issued on the creditors had accepted the quantum of credits etc. Resulting high pitched and arbitrary assessment. I submit that the learned CIT( A) has no settlement powers and I learnt he was in habit of converting appeal proceedings as settlement proceedings. I had severe road accident in the year 2015 and I was hospitalised and not aware of the result of the proceedings in penalty proceedings and its implication, subsequently my then auditor passed away and the facts of the case, in regard to credits in the nature of loan received from retired army personnel's, agriculturist, etc. At the end there was total miscarriage of justice and I was advised the principle of Ex Debito Justitiah principle applies to my case. The was made without the authority of law and it is assessment and subsequent settlement made by CIT (A) is clear assault on Article 265 of the Constitution which mandates that no tax is sought to be collected without the authority of law. Justice demands fair assessment for an assessee who had not study up the VI St. I state that identical circumstances
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the court has considered long delay and condoned the delay in the case of Swarna. 9. I state that the delay in filing the appeal is neither wilful nor deliberate but due non receipt of advice from my auditor to file the appeal and failure on his part to file a petition seeking grievances of assurances made by the department who could not carry on the job of his sudden demise. 10. I humbly submit that the impugned order is high pitched order is arbitrary and the department adopted blood curdly approach in making assessment and failed to appreciate the fundamental fact that I was employee under and human probability and common- sense should reveal that I could not have earned wealth having started with initial capital in the sum of Rs.2,00,000/- and hence the failure to take note of deposits received from customers is the causacausana for my circulating capital and taxing the creditors was Himalayan blunder committed by the department after summoning and recording the statement from them and thus rankles my heart on account of brooding injustice done by the department. 11. I invite your attention that the supreme court held that manifest illegality cannot sustained on account of laches ( Justice Fathima Bevi SC). 12 The appellant submits and invite attention to Article 39A of the Constitution of India Mandates that Justice should not be denied on account of disability of the Petitioner. I also invite the philosophy of the Government as adumbrated in its circular by way of instructions which is reproduced below: (extract from the judgment reported in 130 ITR 442) (at page 446). i) “In their letter to the CBDT [part of Ex. E (collectively) to the petition] the statements made on behalf of the Board and the assurances given by the Government to the Public Accounts Committee in 1967-68, have been set out. The Committee had inquired whether by reason of considerations of time bar refunds were denied in cases of over-assessments. The Finance Secretary had then stated: “Such instructions are already there. Regarding revision petitions, we advised the Commissioners of Income-tax to condone the delay even though the petitions are filed beyond the permissible limit of two years. We condone delay in hundreds of cases. We have instructed that it should be condoned freely . . . . . . . ..” The Committee in its report has also referred to a note furnished by the Finance Ministry, in which it is stated that “the Government is
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anxious to discharge its moral obligation, waiving legal impediments". In the note, it has been further stated that II) “ under the administrative instructions the Commissioners are required to refer to the Government cases of over-assessments occurring due to mistakes of law or fact relating to the computation of total income or tax thereon which cannot normally be rectified due to the operation of the law of limitation. In all suitable cases the Government does waive the limitation and refunds are invariably allowed ". Similarly the apex court in the case of Commissioner land Acquisition Ms Katiji 167 ITR 471 SC as under:- III)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 sub serves 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 other courts in the hierarchy. (IV) And such a liberal approach is adopted on principle as it is realized that: 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late. 2. 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. 1." Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period."
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“ Every day's delay must be explained 11 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. 3. 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. 4. 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. 5. 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. 6. Making a justice-oriented approach from this perspective, there was sufficient cause for condoning the delay in the institution of the appeal. The fact that it was the “State” which was seeking condonation and not a private party was altogether irrelevant. The doctrine of equality before law demands that all litigants, including the State as a litigant, are accorded the same treatment and the law is administered in an even-handed manner. There is no warrant for according a step-motherly treatment when the “State” is the applicant praying for condonation of delay. In fact, experience shows that on account of an impersonal machinery (no one in charge of the matter is directly hit or hurt by the judgment sought to be subjected to appeal) and the inherited bureaucratic methodology imbued with the note-making, file-pushing, and passing-on-the-buck ethos, delay on its part is less difficult to understand though more difficult to approve. In any event, the State which represents the collective cause of the community, does not deserve a litigant non grata status. The courts, therefore, have to be informed of the spirit and philosophy of the provision in the course of the interpretation of the expression “sufficient cause ". So also the same approach has to be evidenced in its application to matters at hand with the end in view to do even-handed justice on merits in preference to the approach which scuttles a decision on merits. 7. I also invite attention to the decision of the Hon'ble Supreme Court in the case Dehri Rohtas Light Railway ... vs District Board Bhojpur And Ors on 12 March, Equivalent citations: 1992 SCR (2)
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155, 1992 SCC (2) 598 Author: Hon'ble Justice M Fathima Beevi tellingly pointing out that manifest illegality cannot be sustained on account of latches. The pertinent observations are as follows: 8 "The test is not to physical running of time. Where the circumstances justifying the conduct exists, the illegality which is manifest cannot be sustained on the sole ground of laches" Even assuming without admitting, for the sake of argument, there is some sort of negligence on the part of the appellant, still the petitioner is entitled to condonation of delay on the ground that the order of the assessing officer is tainted with dismal illegality since the foundation of jurisdictional fact i.e reason to believe does not exist in the present case and the Learned Assessing Officer failed to record reasons for re-opening the assessment which is a sine qua non for initiating re-assessment proceedings. The petitioner also submitted that the transfer of the case from the business circle to central circle is also bad since there is no proper satisfaction in regard to transfer of file and no incriminating documents were relied on justifying such transfer. Hence the decision of the Hon'ble Supreme Court cited supra heavily supports the condonation of delay. Further, the Hon'ble Supreme Court, in the case of N. Balakrishnan vs Krishnamoorthy reported in JT 1998 (6) SC 242" had again pointed out that the length of delay does not matter. The pertinent observations are as follows: 9. It is axiomatic that condonation of delay is a matter of discretion of the court Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to want of acceptable explanation whereas in certain other cases delay of very long range can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in revisional jurisdiction, unless the exercise of discretion was on whole untenable grounds or arbitrary or perverse. But it is a different matter when the first cut refuses to condone the delay. In such cases, the superior cut would be free to consider the cause shown for the delay afresh and it is open to such superior
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court to come to its own finding even untrammele by the conclusion of the lower court. 10.The reason for such a different stance is thus: The primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice. Time limit fixed for approaching the court in different situations in not because on the expiry of such time a bad cause would transform into a good cause. 11. It has been held by the supreme Court that Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. the object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It 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 right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. 12. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi Jain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there lapse on the part 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 part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court
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should lean against acceptance of the explanation. While condoning delay the Court should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss. In this case explanation for the delay set up by the appellant was found satisfactory to the trial court in the exercise of its discretion and the High Court went wrong in upsetting the finding, more so when the High Court was exercising reversional jurisdiction. Nonetheless, the respondent must be compensated particularly because the appellant has secured a sum of Rs. Fifty thousand from the delinquent advocate through the Consumer Disputes Redressals Forum. We, therefore, allow these appeals and set aside the impugned order by restoring the order passed by the trial court but on a condition that appellant shall pay a sum of Rupee Ten thousand to the respondent (or deposit it in this court within one month from this date. The appeals are disposed of accordingly. 13. The Hon'ble Apex Court in the case of Ram Nath Sahu & Ors. Vs. Gobardhan Sao & Ors. reported as 2002(3) SCC 195 has held that, "acceptance of explanation furnished should be the rule and refusal an exception more so when no negligence or inaction or want of bonafide can be imputed to the defaulting party. However, by taking a pedantic and hyper- technical view of the matter the explanation furnished should not be rejected when stakes are high and for arguable points of facts and law are involved in the case , causing enormous loss and irreparable injury to the party against whom the lis terminates either by default or inaction and defeating valuable right of such a party to have the decision on merit." Raja Jagdambika Pratap Narain Singh v. Central Board of Direct Taxes 100 ITR 698 SC At the first flush it may seem that the assessee's agricultural income having been taxed illegally, a refund was obligatory and the fanatical insistence on the legal “pound of flesh” based on limitation and finality was not to be expected from a party like the State. Indeed, one might go to the extent of quoting the cynical words of the ancient legal wit: “Law and equity are two things which God hath joined, but which Man has put asunder”. We have to examine the merits of the case in the light of the facts Merely because an order
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has been passed by the officer and has not been appealed against, it does not become legal and final if otherwise it is void; for instance, if there is a flagrant violation of natural justice Any legal system, especially one evolving in a developing country, may permit judges to play a creative role and innovate to ensure justice 14. By taking a pedantic and hyper technical view of the matter the explanation furnished should not be rejected when stakes are high and/or arguable points of facts and law are involved in the case, causing enormous loss and irreparable injury to the party against whom the lis terminates either by default or inaction and defeating valuable right of such a party to have the decision on merit. 15. State that the original order of the CIT(A) was received on 10.3.2011 and the appeal ought to have been filed within 60 days from the date of receipt of the order i.e on or before 09.05.2011 However, the appeal was filed on …………. resulting in days delay in preferring the appeal. I state that the delay in filing the appeal is neither willful nor wanton but due to circumstances explained above below: 16. To conclude, it is apt to quote observations of the Justice V.R. Krishna Iyer Supreme Court as follows: "oxygenatehumane justice on human law" It is, therefore, humbly prayed that this Income tax Appellate Tribunal may be pleased to condone the delay of …………days in filing the appeal and hear the case on merits and thus render justice.” 3. The hearing of the appeals were adjourned on many occasions at the request of the ld. Counsel appeared on behalf of the assessee from 26.07.2017 onwards. On 03.05.2018, when the hearing is adjourned to 17.07.2018, by noting the date of hearing, the ld. Counsel has endorsed in the order sheet. However, when the appeals were taken up for hearing, none appeared on behalf of the assessee or any adjournment petition filed
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by the assessee or his counsel. Thus, we proceeded to decide the appeals on merit after hearing the ld. DR.
The ld. DR seriously objected for condoning the inordinate delay of 2207 days in filing the appeal before the Tribunal without assigning any sufficient cause and pleaded that the appeals filed with such an huge delay is not maintainable and should be dismissed.
We have heard the ld. DR and carefully gone through the condonation petition filed by the assessee without supporting affidavit. In this case, there is a delay of 2207 days in filing the appeals and no sufficient cause is emanating from the condonation petition filed by the assessee. In the petition filed for the purpose of condonation of huge delay of 2207 days, the assessee should have explained the valid reasons for the delay in filing the appeals before the Tribunal, whereas, in the petition filed by the assessee, without taking proper plea, some unwanted stories have been mentioned, which cannot be held as sufficient cause for condoning the delay. On perusal of the condonation petition, the assessee as well as his counsel least bother to put even appeal number(s) and number of days of delay in filing the appeal and kept blank, which shows carelessness and lassitude approach of the assessee. The law assists those who are vigilant and not those who sleep over their rights. This principle is embodied in the dictum: vigilantibus non dormientibus jura subveniunt. In the petition filed by the
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assessee, the assessee has made bald statement. On going through the reasons stated in the petition, we find that there exists no sufficient cause to condone the delay.
The petition for condonation of delay runs upto eight pages in which six pages contain reproduction of various decisions/citations. The actual fact prevails over the judicial precedent quoted by the assessee. Just because the Tribunal conferred upon the powers to condone the delay, it is not automatic. When there was no reasonable cause for the delay in filing the appeal before any Court of law, no Court in this country has simply accepted some cock and bull story narrated in the condonation petition and condoned the delay. Further, the delay in filing the appeal is neither wilful nor deliberate was solely depending on the reasonable cause/actual reasons and not the assessee can claim that the delay is neither wilful nor deliberate. What was done in the assessment proceedings and during the course of appellate proceedings are nothing to do with filing of further appeal before the higher forum. In this case, the ld. CIT(A) passed the consolidated appellate order on 28.02.2011 for the assessment years under consideration and till met with the road accident in the year 2015, there was no reason for belated filing of the appeals before the higher forum is available in the condonation petition. It is a common reason of being heart patient for the tax evaders. Moreover, if the auditor has not filed the appeal before the ITAT is
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not a valid reason for condoning the huge delay. The assessee has not given any sufficient reason or reasonable cause for the delay in filing the appeal within the stipulated time. We do not find any reasonable cause to condone the delay since the assessee has given vague reason in the condonation petition, which was not supported by an affidavit or supporting evidence. Thus, we are of the considered opinion that since the assessee has failed to show sufficient cause giving evidence, proof etc. for filing the appeal beyond the stipulated time, the condonation petition filed by the assessee is rejected. Our view find support from the decision of the Hon’ble Jurisdictional High Court in the case of Madhu Dadha v. ACIT [2009] 317 ITR 458, wherein, the Hon’ble High Court dismissed the appeal filed by the assessee and confirmed the order of this Tribunal since the assessee had not taken proper plea to show sufficient cause for condoning the delay in filing the appeal. In the present case, the negligent attitude of the assessee cannot be taken care to preserve the right of appeal since the assessee has slept over more than six years i.e., for 2207 days and not explained sufficient cause to condone the delay in filing the appeals. Since the condonation petition filed by the assessee is rejected, all the appeals filed by the assessee are not admitted for hearing and further adjudication. Accordingly, all the appeals filed by the assessee are dismissed as not maintainable.
In the result, all the appeals filed by the assessee are dismissed.
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Order pronounced on the 23th July, 2018 at Chennai.
Sd/- Sd/- (A. MOHAN ALANKAMONY) (DUVVURU RL REDDY) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated, the 23.07.2018 Vm/- आदेश की �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant, 2.��थ�/ Respondent, 3. आयकर आयु� (अपील)/CIT(A), 4. आयकर आयु�/CIT, 5. िवभागीय �ितिनिध/DR & 6. गाड� फाईल/GF.