ESTATE OF LATE SUNDERLAL C. PARIKH,MUMBAI vs. ASST CIT CPC BANGALORE, MUMBAI

आदेश / O R D E R

Per Joginder Singh (Judicial Member) The assessee is aggrieved by the impugned order dated

21/03/2016 of the First Appellate Authority, Mumbai,

dismissing the appeal of the assessee and not condoning

the delay, resulting into confirmation of the order of the

AC-CPC, ignoring the factual matrix and not applying

correct charge of tax applicable u/s 159 r.w.s 168 and

further in not computing the tax in terms of section

168(1)(a) of the Income Tax Act, 1961 (hereinafter the Act).

Ms. Neha Paranjape, invited our attention to the factual

matrix by explaining that the assessee is an estate of Late

Sunderlal Parikh which was under distribution as on

31/03/2011. Being an estate the correct status of the

assessee is ‘AOP’ however, since, there is only executor, the

same is to be taxed at the rate of individual in terms of

section 168(1)(a) of the Act. It was contended that the

income of Rs.3,68,063/- was declared and the tax was

3 ITA No. 3706/Mum/20146 Estate of Late Sunderlal C. Parikh calculated at the rate applicable to an individual, as per

section 159 r.w.s 168 of the Act, thus, the total tax liability

of Rs.21,430/- was computed against which TDS credit of

Rs.32694/- was claimed, resulting a refund of Rs.11,260/-.

It was explained that the return of income was processed

by CPC Bangalore computing the tax liability at maximum

marginal rate applicable to LLP ignoring the correct charge

of tax applicable u/s 159 r.w.s. 168 of the Act. The Ld.

counsel explained that the email order u/s 143(1) was

received on 29/01/2012 and the appeal u/s 246(1)(a) was

filed against the order on 30/08/2013 resulting into delay

of 18 months. The Bench raised the query as to why the

delay occurred in filing the appeal before the Ld.

Commissioner of Income Tax (Appeal). The Ld. counsel

explained that the e-mail received from CPC got mixed up

other various males and was diverted to ‘SPAM mails’ and

thus skipped the notice of the recipient. It was contended

that a lenient view may be taken and the delay is

condoned, so that the matter may be heard on merit. The

Ld. counsel empathetically contended that the prima-facie

the assessee is having a good case. On the other hand, Shri

Rajesh Kumar Yadav, Ld. DR, contended that it was a

4 ITA No. 3706/Mum/20146 Estate of Late Sunderlal C. Parikh negligence on the part of the assessee, therefore, delay may

not be condoned. The Ld. DR relied upon the decision of

the Tribunal in the case of Shri Kunal Surana vs Income

Tax Officer (ITA No.3297/Mum/2012) order dated

19/04/2013.

2.1. We have considered the rival submissions and

perused the material available on record. In view of the

assertions made by the ld. respective counsel, 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 appeal is 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 appeal. In matters concerning

the filing of appeal, 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 of justice. The judiciary is respected not on

5 ITA No. 3706/Mum/20146 Estate of Late Sunderlal C. Parikh 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.

2.2. 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

6 ITA No. 3706/Mum/20146 Estate of Late Sunderlal C. Parikh cause of substantial justice deserves to be preferred. The

Hon’ble Apex Court in Vedabhai vs Santaram 253 ITR

798(SC) observed that inordinate delay calls of cautious

approach. This means that there should be no mala-fide 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.”

2.3. Furthermore, the Hon'ble Supreme Court in the

case of Vedabai Alia Vaijayanatabai Baburao Patil vs.

Shantaram Baburao Patil 253 ITR 798 (SC) held that the

court has to exercise the discretion on the facts of each

case keeping in mind that in construing the expression

7 ITA No. 3706/Mum/20146 Estate of Late Sunderlal C. Parikh ‘sufficient cause’, the principle of advancing substantial

justice is of prime importance. The court held that the

expression “sufficient cause” should receive liberal

construction.

2.4. 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,

therefore, we are satisfied with the explanation of the

assessee and condone the delay and direct the First

Appellate Authority to adjudicate the appeal of the assessee

8 ITA No. 3706/Mum/20146 Estate of Late Sunderlal C. Parikh afresh on merit and decide in accordance with law. The

assessee be given opportunity of being heard to

substantiate the claim.

Finally, the appeal of the assessee is allowed for

statistical purposes only.

This Order was pronounced in the open court in the

presence of ld. representatives from both sides at the

conclusion of the hearing on 30/01/2018.

Sd/- Sd/- (G. Manjunatha) (Joginder Singh) लेखा सद�य / ACCOUNTANT MEMBER �या�यक सद�य / JUDICIAL MEMBER मुंबई Mumbai; �दनांक Dated : 30/01/2018 f{x~{tÜ? P.S/.�न.स., आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to :

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील�य अ�धकरण, मुंबई / ITAT, Mumbai