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Facts
The applicant-assessee, a non-filer for AY 2011-12, failed to file a return of income despite notices. The Assessing Officer treated cash deposits of Rs. 12,23,200/- as income and passed an assessment order. The assessee later filed an appeal before the CIT(A) with a significant delay, which was condoned. However, the CIT(A) dismissed the appeal on merits.
Held
The Tribunal considered the assessee's plea for condonation of delay, citing unawareness of law and issues with a consultant. However, it noted the substantial delay of 451 days and the lack of sufficient cause, referencing Supreme Court judgments on condonation of delay.
Key Issues
Whether the delay of 451 days in filing the present appeal is to be condoned based on the grounds presented by the assessee, considering the principles laid down by the Supreme Court regarding sufficient cause.
Sections Cited
148, 142(1), 133(6), 271(1)(b), 271F, 271(1)(c), 249(3)
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Income Tax Appellate Tribunal, MUMBAI BENCHES “SMC”, MUMBAI
Before: Justice (Retd.) C V Bhadang, Hon’ble & Shri B R Baskaran, Hon’ble
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “SMC”, MUMBAI
Before Justice (Retd.) C V Bhadang, Hon’ble President & Shri B R Baskaran, Hon’ble Accountant Member
ITA No. 2963/Mum/2023 for A.Y. 2011-12
Inderjit Singh Manchanda Commissioner of Income Tax- MS Building, 32 27(1)(4) Vs. Room No.1117, Near Golf Club Income Tax Office Chembur Colony Vashi Railway Station Building Chembur-East Navi Mumbai Mumbai – 400 074
PAN : BHVPS4503D (Appellant) (Respondent)
Appellant By : Shri Fenil Bhatt Respondent By : Shri Sunny Kachhwaha
Date of Hearing : 12.12.2023 Date of Pronouncement: 05.01.2024
O R D E R Per Justice (Retd.) C V Bhadang :
This is an application for condonation of delay of 282 days in filing appeal in ITA No. 2963/Mum/2023. According to the office the delay is of 451 days.
The brief facts are that the applicant-assessee is a non-filer and had failed to file return of income (RoI) for assessment year 2011-12. As per the information available on NMS data it was disclosed that during the financial year 2010-11 (assessment year 2011-12) the assessee had deposited cash
ITA 2963/Mum/2023 Inderjit Singh Manchanda
of Rs.12,23,200/- in his SB account with Punjab and Maharashtra Co- operative Bank Ltd. On the basis of the information received, the case was reopened vide notice u/s.148 of the Income Tax Act, 1961 (“Act” for short). dated 23.03.2018. As the assessee failed to file return, fresh notices u/s.142(1) were issued on 17.10.2018 & 25.10.2018 requiring the assessee to file RoI for assessment year 2011-12. However, none of these notices evoked any favourable response.
It appears that notice u/s.133(6) of the Act was also issued to Punjab and Maharashtra Co-operative Bank Ltd.
In the absence of any compliance by the assessee, the Assessing Officer treated the entire cash deposit of Rs.12,23,200/- as income and it was brought to tax accordingly. The assessment order was passed on 30.11.2018. Separate proceedings for imposition of penalty have been initiated u/s.271(1)(b) for non-compliance to the statutory notices as well as u/s.271F for non-filing of the return and penalty u/s.271(1)(c) for concealing the particulars of income.
The assessee challenged the order dated 30.11.2018, before the CIT(A) wherein also there was a delay of about one year. The CIT(A) in his discretion found that the assessee had made out sufficient cause for not filing the appeal within time and the delay was accordingly condoned. The appeal was taken up for adjudication on merits.
A perusal of the order dated 31.3.2022 passed by the CIT(A) shows that the assessee failed to respond to at least four notices issued by the
ITA 2963/Mum/2023 Inderjit Singh Manchanda
CIT(A), as set out in para 6 of the impugned order. The CIT(A) upon examination of the record found that the assessee had failed to furnish any explanation regarding the source of the cash deposited and, in that view of the matter, it was found that there was no reason to interfere with the assessment order. Accordingly, the appeal came to be dismissed by order dated 31.03.2022, which is subject matter of challenge in this appeal wherein according to the office there is a substantial delay of 451 days.
We have heard the learned Counsel for the applicant as well as the learned CIT- DR. Perused record.
It is submitted by the learned Counsel for the applicant-assessee, that the assessee is in the business of dealing with sale and purchase of second hand/used cars. It is submitted that the amount of cash deposit represented the price of the cars, which amount was received from the purchasers and it was for the purpose of its payment to the sellers of the car. It is submitted that the applicant was unaware of the statutory provisions and the consultant engaged by the applicant was also unable to notice various notices on account of his old age and lack of technological expertise. He submitted that the delay is neither intentional nor out of any negligence and the applicant has made out sufficient cause for not filing appeal within time. It is submitted that the applicant would suffer serious prejudice if the delay is not condoned. On behalf of the applicant, reliance is placed on the decision of the Supreme Court in Collector, Land Acquisition Anantnag v. Mst. Katiji, 66 STC 228(SC). He therefore, submitted that the delay be condoned and the appeal be taken up for adjudication on merits.
ITA 2963/Mum/2023 Inderjit Singh Manchanda
The learned CIT-DR has opposed the prayer for condonation. It is pointed out that the assessee has been shown to be indolent on multiple occasions and the substantial delay of 451 days cannot be condoned on the spacious ground of lapse on the part of the consultant.
We have carefully considered the rival circumstances and the submissions made.
It can be seen that the assessee had failed to file RoI for assessment year 2011-12.
Coming to the delay of 451 days in filing the present appeal, the only ground made out is that the applicant was unaware of the nitty-gritties of law and the consultant also failed to give necessary assistance on account of his old age and lack of technological expertise.
We are afraid the reasons are not sufficient to establish sufficient cause within the meaning of Section 249(3) of the said Act. The law relating to condonation of delay is too well settled to be restated. The condonation can be granted only when it is shown that the appellant had sufficient cause for not filing the appeal within time.
The Supreme Court in the case of Esha Bhattacharjee vs. Managing Committee of Raghunathpur Nafar Academy and Ors., in Civil Appeal reported in Manu SC/0932/2013, after taking a survey of several decisions holding the field, (including the decision in Collector, Land Acquisition Anantnag v. Mst. Katiji (supra) on which reliance is placed on behalf of the
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assessee has culled out principles which are germane while considering the prayer for condonation of delay. The principles set out in para 15 and 16 of the judgment (as reported in Manupatra) are as under:
“15. From the aforesaid authorities the principles that can broadly be culled out are:
(i) There should be a liberal, pragmatic, justice-oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.
(ii) The terms "sufficient cause" should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact-situation.
(iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis.
(iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of.
(v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact.
(vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice.
(vii) The concept of liberal approach has to encapsule the conception of reasonableness and it cannot be allowed a totally unfettered free play.
(viii) There is a distinction between inordinate delay and a delay of short duration or few days, for the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation.
ITA 2963/Mum/2023 Inderjit Singh Manchanda
(ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach.
(x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation.
(xi) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation.
(xii) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception.
(xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude.
To the aforesaid principles we may add some more guidelines taking note of the present day scenario. They are:
(a) An application for condonation of delay should be drafted with careful concern and not in a half hazard manner harbouring the notion that the courts are required to condone delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation system.
(b) An application for condonation of delay should not be dealt with in a routine manner on the base of individual philosophy which is basically subjective.
(c) Though no precise formula can be laid down regard being had to the concept of judicial discretion, yet a conscious effort for achieving consistency and collegiality of the adjudicatory system should be made as that is the ultimate institutional motto.
(d) The increasing tendency to perceive delay as a non-serious matter and, hence, lackadaisical propensity can be exhibited in a non-challant manner requires to be curbed, of course, within legal parameters.”
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Applying these principles in the facts obtaining in the present case, we find that no case for condonation of delay is made out. The Hon’ble Supreme Court has, inter alia, held that the concept of liberal approach cannot be allowed “unfettered free play”. It has further been held that there is a distinction between inordinate delay (as in the present case) and a delay of short duration. It has been held that the case of inordinate delay warrants strict approach although a liberal approach can be adopted in case of delay of short duration or few days. Albeit, the question would depend upon the facts and circumstances of each case. Considering the nature and extent of delay and the reason for seeking condonation, we find that no case for condonation of delay is made. The application accordingly stands dismissed.
Accordingly, the appeal stands dismissed. Order pronounced in the open court on 5th January, 2024.
Sd/- Sd/- (B R Baskaran) (Justice (Retd.) C V Bhadang) ACCOUNTANT MEMBER PRESIDENT Mumbai, Dated : 5th January, 2024 SA
ITA 2963/Mum/2023 Inderjit Singh Manchanda
Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The PCIT, Mumbai. 4. The CIT 5. The DR, ‘SMC’ Bench, ITAT, Mumbai BY ORDER
//True Copy// (Assistant Registrar) Income Tax Appellate Tribunal, Mumbai