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Income Tax Appellate Tribunal, C BENCH: BANGALORE
Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of assessee is directed against the order of ld. ADDL/JCIT(A)-11 Mumbai dated 5.6.2024 vide DIN & Order No. ITBA/APL/S/250/2024-25/1065409663(1) for the AY 2018-19 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”).
The assessee has raised following grounds of appeal:
1. The order passed by the learned Commissioner of Income Tax (Appeals) (NFAC), under section 250 of the Income Tax Act, 1961 ("the Act"), insofar as it is against the Appellant, is opposed to law, weight of evidence, natural justice and probabilities on the facts and circumstances of the Appellant's case.
2. The order passed by the learned CIT(A) is without jurisdiction on the facts and circumstances of the case.
4. The learned CIT(A) failed to appreciate that there is existed sufficient cause in filing the appeal with a delay of 120 days on the facts and circumstances of the case.
5. The Appellant denies itself liable to be assessed on a total Income of Rs.37,05,940/- as against the returned income of Rs.16,55,470/- on the facts and circumstances of the case.
6. The learned CIT(A) erred in law in upholding the adjustment made by Assessing Officer aggregating to Rs. 20,50,473/- under section 36(1)(va)of the Act on account of delay in remittance of PF & ESI contribution on the facts and circumstances case.
7. The CIT(A) failed to appreciate that the intimation issued by the learned Assessing Officer under section 143(1) of the Act is bad in law on the facts and circumstances of the case.
The authorities below failed to appreciate that the processing of the return of income under section 143(1)(iv) of the Act, was prospective and no adjustment w.r.t. increase in income was permitted prior to AY 2022-23, on the facts and circumstances of the case.
The authorities below failed to appreciate that the adjustment made under section of the Act is bad in law as it exceeds the limited scope to carry out prima facie adjustments and arithmetical corrections stipulated under section 143(1)(a) of the Act and consequently, the adjustment made is liable to be deleted on the facts and circumstances of the case.
Without prejudice, the CIT(A) erred in law and on facts in not allowing the delayed contribution of ESI and PF aggregating to Rs. as business expenditure under section 37 of the Act on the facts and circumstances of the case.
The Appellant denies liability to pay interest under section 234A, 234B and 234C on the facts and circumstances of the case. The Appellant craves to add, alter, modify, substitute, change and delete any or all of the grounds and to file a paper book at the time of hearing the appeal.
There is a delay of 37 days in filing the appeal before this Tribunal. The ld. Counsel for the assessee has drawn our attention on the application for condonation of delay filed along with an Rebecca Pooja Dsouza, Bangalore Page 7 of 12 3.1 On going through the above application, the main reason as cited for the delay in filing the appeal before this Tribunal is that the Chartered Accountant of the assessee initially advised her not to file an appeal in view of the Supreme Court’s decision in Checkmate Services (P) Ltd. Reported in [2022] 143 taxmann.com 178 (SC) where a similar issue was purportedly adjudicated. However, upon seeking advice from the current tax counsel, she was advised to file an appeal as the facts of the present case are distinguishable from those in Checkmate Services (P) Ltd cited supra. Accordingly the assessee immediately filed the present appeal with a short delay of 37 days. Further, the ld. A.R. of the assessee vehemently submitted that the delay was neither intentional nor deliberate and arose due to circumstances beyond the control of the assessee & accordingly prayed to condone the short delay and admit the appeal for adjudication.
3.2 The ld. DR on the one hand though opposed for the condonation of delay but could not controvert the submissions made therein.
We have heard the rival submissions and perused the materials available on record. In our opinion, it cannot be said that assessee is very callous in its approach in filing the appeal before us. Being so, when substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserve to be preferred, for the other side cannot claim to have vested right for injustice being done because of non-deliberate delay. Moreover no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the belated appeal was filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. Therefore, in our opinion, this is Rebecca Pooja Dsouza, Bangalore Page 8 of 12 a fit case to condone the short delay of 37 days in filing the appeal before this Tribunal. Accordingly, the delay is condoned and the appeal is admitted for adjudication.
At the outset, the ld. AR of the assessee also drawn our attention to the order of the ld. ADDL/JCIT(A)-11 & submitted that there was a delay of 120 days in filing the appeal before the ld. ADDL/JCIT(A)-11 also, which was not condoned by the ld. ADDL/JCIT(A)-11 on the ground that there was no sufficient cause given by the assessee to file the appeal delayed by 120 days and accordingly rejected the submission for condonation of delay. Further the ld. ADDL/JCIT(A)-11 is also of the view that as the delay is not condoned, no adjudication on merits is warranted and accordingly dismissed the appeal of the assessee. Aggrieved the assessee is in appeal before us.
We have also gone through the reasons explained by the assessee for filing the appeal belatedly before the ld. ADDL/JCIT(A)- 11 . The main reason as stated by the assessee in filing the appeal belatedly before the ld. ADDL/JCIT(A)-11 is that the impugned intimation under section 143(1) of the Act which was served through the email on 16/10/2019 was not perused by the staff of the assessee and the same came to the notice of the Chartered Accountant only in the month of April 2020 upon which all the necessary steps were taken to file the appeal immediately. We note that the ld. ADDL/JCIT(A)-11 by holding that the reason cited is general in nature & there is no reasonable cause cited by the assessee. We are of the opinion that the assessee has not only filed an separate application for condonation of delay before the ld. ADDL/JCIT(A)-11 but also mentioned in column No. 15 of the Rebecca Pooja Dsouza, Bangalore Page 9 of 12 Form No.35 filed by the assessee. It is not a case that the assessee has not cited any reasonable cause for filing appeal belatedly as observed by the ld. ADDL/JCIT(A)-11. The ld. ADDL/JCIT(A)-11 also could not brought any material on record to controvert the cause of delay cited by the assessee but simply affirmed that the reasons cited by the assessee is general in nature. At this juncture, it is appropriate to mention the judgement of Hon’ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:
(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 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. (3) '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, commonsense and pragmatic manner. (4) When substantial justice and technical consideration 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 nondeliberate delay. (5) 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.
Rebecca Pooja Dsouza, Bangalore Page 10 of 12 (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.
6.1 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of non deliberate delay. Moreover, no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the delayed appeal was filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. 6.2 Further, in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein held that “when substantial justice and technical consultation 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 non-deliberate delay”. 6.3 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM) condoned more than six hundred days delay.
Rebecca Pooja Dsouza, Bangalore Page 11 of 12 6.4 The Madras High Court in the case of Sreenivas Charitable Trust (280 ITR 357) (Mad.) held that no hard and fast rule can be laid down in the matter of condonation of delay and the Court should adopt a pragmatic approach and the Court should exercise their 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 and the expression "sufficient cause" should receive a liberal construction. Therefore, this Judgment of the Madras High Court (supra) clearly says that in order to advance substantial justice which is of prime importance, the expression "sufficient cause" should receive a liberal construction.
In view of the above deliberations, we are of the opinion that, by preferring the substantial justice, the delay of 120 days has to be condoned and accordingly we are setting aside the Order of the ld. ADDL/JCIT(A)-11 with a direction to condone the delay of 120 days in filing appeal before him. Further as the ld. ADDL/JCIT(A)-11 has not adjudicated the case on merits as the delay was not condoned, we also direct to adjudicate the case on merits in accordance with the law after giving reasonable opportunity of being heard to the assessee. It is ordered accordingly.