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Facts
The assessee, a wholesale dealer in milk and milk products, was subjected to an assessment order where additions were made to his total income, and penalties were initiated. The assessee's appeal to the CIT(A) was upheld by the AO. The assessee then filed an appeal before the Tribunal, but there was a delay of 16 days.
Held
The Tribunal condoned the 16-day delay in filing the appeal, citing the principles laid down by the Supreme Court regarding 'sufficient cause' and the importance of substantial justice. The Tribunal found that the delay was unintentional and not attributable to the assessee.
Key Issues
Whether the delay in filing the appeal can be condoned and whether the additions made by the AO are justified based on RBI notifications and CBDT circulars.
Sections Cited
271AAC, 271B, 250, 143(3)
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Income Tax Appellate Tribunal, SMC-‘B’ BENCH : BANGALORE
Before: SMT. BEENA PILLAI
ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal arises out of order dated 12.03.2024 passed by NFAC, Delhi for A.Y. 2017-18.
Brief facts of the case are as under: 2.1 The assessee has filed his return of income on 08.11.2017 vide e-filing declaring the total income of Rs.6,01,010/- and the Page 2 of 7 taxes were paid accordingly. The assessee is a wholesale dealer in sale of milk and milk products by the name Shri Veerabhadreshwara Milk Agencies and the assessee is a distributor for Vijayakanth Dairy and Food Products Ltd. for supply of milk and milk products.
2.2 The Ld.AO passed the assessment order u/s. 143(3) on 04.12.2019 making addition of Rs.19,34,500/- to the total income returned and raised the demand of Rs.20,58,286/- and also initiated penal proceeding 271AAC and 271B of IT Act.
At the outset, it is submitted that, there is delay of 16 days in filing the present appeal before this Tribunal. The Ld.AR furnished affidavit for condonation of delay that reads as under:
1. 1. The impugned appellate order u/s 250 of the Act was passed on 12-03-2024 and this date may be taken as date of receipt. Accordingly, the last date to file the appeal has expired on 11-05-2024.
2. It is submitted that the accountant was entrusted with the responsibility of consulting the tax consultant and filing the appeal. The assessee was under the bonafide impression that the tax consultant who represented the case before the Learned CIT(A) in the faceless appeal would take further steps to file appeal to the Hon'ble Tribunal. The assessee was later informed that the tax consultant was neither filing appeals before the Hon'ble Tribunal nor appearing before it. The assessee was advised to consult the tax consultants at Bengaluru for this purpose. Under these circumstances, it is submitted that the appeal came to be delayed by 16 days, since the appeal is being filed today i.e., on 27-05-2024.
3. In the light of the above-mentioned facts, it is submitted that the delay is unintentional and the assessee does not stand to gain by deliberately delaying filing of the appeal. On the other hand, the assessee faces the prospect of irreparable injury if the delay is not condoned. Further, the Page 3 of 7 delay is minimum and the same may be condoned. It may be further submitted that the limitations under the Limitation Act or other Acts, including the Income Tax Act, 1961 are not meant to destroy the rights of the parties in the absence of any malafides.
Without prejudice to the above, the Appellant most respectfully prays that the Hon'ble Tribunal may be pleased to consider the following submissions: (i) In Collector, Land Acquisition vs. Mst. Kattji & Ors. 167 ITR 0471, the Hon'ble Supreme Court laid down the principle that the expression "reasonable cause" should be liberally construed so as to advance the cause of substantial justice. (ii) Non-condonation of delay has the undesirable effect of throwing out a meritorious case at the threshold, which should be avoided. It is for this reason that the Hon'ble Court has laid down the proposition that when a prayer is made for condonation of delay, the concerned authority has to first examine whether, prima-facie, there is a case. If there is a prima-facie arguable case, condonation should not be refused. It is for this reason, the Hon'ble Court has held that ultimately the question is whether the assessee is liable according to provisions of the law or not, and a liability can't be fastened by refusing condonation of delay.
(iii) The Hon'ble Court further held: “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. Hence, it is respectfully prayed that the Appeals may be admitted and adjudicated on merits.”
3.1 In view of the above, the assessee could not file the appeal before this Tribunal well in time and by the time the appeal papers were prepared for filing, there arose delay of about 16 days in filing the present appeal before this Tribunal. As reason for the delay in filing the present appeal was due to reason
Page 4 of 7 beyond the control of the assessee, he prayed for the delay to be condoned.
3.2 The Ld.DR though objected however could not controvert the reasoning given by the Ld.AR for the delay that was caused in filing the present appeal. We have perused the submissions advanced by both sides in the light of records placed before us.
3.3 In our opinion there is a sufficient cause for condoning the delay as observed by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 in support of his contentions.
3.4 It is also noted that there is no malafide intention on behalf of assessee in not filing the present appeal within time. Considering the circumstances under which the delay was caused in filing the present appeal before this Tribunal we are of the opinion that there was no malafide intention of the assessee in causing the delay to file the present appeal. It is also that nothing contrary could be established by the revenue before us.
3.5 We place reliance on following observations by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 wherein, Hon’ble Court observed as under:- “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 Page 5 of 7 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 other courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that :
1. 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.”
3.6 Considering the submissions by both sides and respectfully following the observation by Hon’ble Supreme Court, we find it fit to condone the delay caused in filing the present appeal as it is not attributable to the assessee. Accordingly, the delay in filing the present appeal stands condoned. 4. Aggrieved by the order of Ld.AO, assessee preferred appeal before the Ld.CIT(A).
It was submitted by the assessee that, he accepted the illegal tender of old notes during the demonetization period through the purchase of milk and milk products. It is submitted that the entire purchase is verifiable which is on day-to-day basis amounting to Rs.19,78,000/- between 09.11.2016 and 30.12.2016. He also placed reliance on RBI Notification No. 2774 S.O. 3554 dated 24.11.2016 for purchase of milk and milk booths operating under the authorization of Central or State Government. The Ld.CIT(A) however upheld the addition made by the Ld.AO without considering the said notifications.
On the contrary, the Ld.DR relied on the orders passed by authorities below have mechanically dismissed the claim of assessee without carrying out proper verification.
In the interest of justice, I find it a fit case to remand to the Ld.AO to verify the above RBI notification and to consider the claim of assessee in accordance with law. The Ld.AO shall also verify the sales in light of following CBDT circulars:- a) The 1st instruction was issued on 21/02/2017 by instruction number 03/2017. b) The 2nd instruction was issued on 03/03/2017 instruction number 4/2017. c) The 3rd instruction was in the form of a circular dated 15/11/2017 in F.No. 225/363/2017-ITA.II and the last one dated 09/08/2019 in F.no.225/145/2019-ITA.II.
Page 7 of 7 Needless to say that proper opportunity of being heard must be granted to assessee. Accordingly, the grounds raised by assessee stands partly allowed for statistical purposes. In the result, the appeal filed by assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 27th June, 2024.