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Income Tax Appellate Tribunal, SMC - ‘C’ BENCH : BANGALORE
Before: SHRI CHANDRA POOJARI
Assessee by : Shri Vignesh, CA : Shri Ganesh R Ghale, Standing Revenue by Counsel for Dept. Date of Hearing : 04-01-2024 Date of Pronouncement : 09-01-2024 ORDER
PER MADHUMITA ROY, JUDICIAL MEMBER
The instant appeal filed by the assessee is directed against the order dated 28.09.2023 passed by the CIT(A) / Addl JCIT (A)-5 Mumbai arising out of the order dated 23.03.2021, the intimation u/s. 143(1) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for A.Y. 2019-20. whereby and whereunder the appeal preferred by the assessee stood dismissed rejecting the explanation rendered
Page 2 in regard to the delay caused to the assessee in filing the said appeal before the CIT(A). Relevant to mention that the merit of the matter has not been considered by the Ld.CIT(A).
Before us, the appeal is barred by limitation for one day. Considering the facts and circumstances of the case, the delay in condoned.
The brief facts leading to this case is this that the assessee, an individual, employed in M/s. Evry India Pvt. Ltd. and earned gross total income of Rs.31,46,189/- from his employment being exercised in India. During the same period, the appellant travelled to M/s. Evry A/S (hereinafter referred to as ‘Norway company’) for an assignment and stayed and exercised his employment in Norway during the period commencing from 10.09.2018 to 18.10.2018 and from 12.11.2018 to 10.03.2019. During the stay at Norway, the appellant earned a sum of 2,69,647/- in Norwegian Krone (NOK) in Indian currency Rs. 20,68,435/-. Further on the same tax of 59,709/- NOK i.e., Rs. 3,21,479/- was paid which is at 15.54% as per the tax assessment notice for 2018 & 2019 issued by the Norway tax department.
On the basis of such earned income and payment of tax, the assessee filed its return of income on 31.08.2019 declaring total income at Rs.26,87,110/- and claimed relief of Page 3 Rs.3,21,479/- u/s. 90 of the Act. The same was, however, dismissed by the Ld.AO.
The assessee preferred an appeal before the First Appellate Authority which was barred by limitation for about 335 days. The assessee explained the delay to this effect that the notice of intimation received by the assessee was found to be a just formality and with that bonafide belief he did not take any action. Thereafter upon realising that the refund were being set off for the subsequent years towards demand for A.Y. 2019-20, a professional advice was sought for by the appellant whereupon he was suggested to file an appeal. The assessee took some time to collect details of all the tax paid from Norway and other relevant informations in order to prefer an appeal before the First Appellate Authority. It is relevant to mention that the assessee received the intimation on 23.03.2021 and the appeal was preferred before the Ld.CIT(A) on 02.06.2022. After availing the gross period for filing the appeal in terms of the Hon’ble Supreme Court judgment, in view of covid pandemic there was actual delay found to be 335 days in preferring the appeal. The explanation rendered by the assessee in support of the condonation of the delay was, however, rejected by the Ld.CIT(A) with the following observations. “2. Decision: The reply of the appellant is considered. It is seen that the reason supplied by the appellant for filing the appeal beyond the limitation date has not been backed by any documentary evidence. The appellant has stated that he
Page 4 was under impression that the said intimation was a mere notice which did not require any action from his end. The said contention lacks merit as the appellant is well qualified, employed in a foreign company/MNC and regular filer of return of income. Hence, he is required to know the scope of section143(1) and intimation which is issued. This contention could have been accepted if the appellant had filed the return of income for the very first time. From the action of appellant to file form 67 to claim the foreign withholding tax it is clear that the appellant was aware of the entire process of filing of return of income and subsequent departmental actions. Therefore, the contention raised by the appellant that due to improper appreciation of intimation issued, the appeal has been delayed, lacks merit. Further, the appellant has also emphasized on the fact that it took some time to gather details of all the tax paid receipts from Norway and other information. The said contention has also been considered, but the same too is not supported by evidence. Since the appellant has made the claim of foreign tax credit in his return of income and has filed the Form 67, it can be easily concluded that all the relevant details were duly available with him at the time of filing of return of income. In view of the facts and circumstances of the case, the undersigned is of the considered opinion that there was no sufficient cause which prevented the appellant from filing of the appeal before the limitation date and hence. the reasons which have been put forward to explain the delay are not sufficient. The appellant has relied on the decision of the Hon'ble Supreme Court in the case of Land Acquisition vs MST Katiji and Others 167 ITR 471 wherein the Apex Court held that the delay in preferring the applications for condoning the delay is required to be condoned in the interest of justice liberally so as to advance substantial justice provided that there can be no gross negligence or deliberate inaction or lack of bona fides imputable to the parties seeking condonation of delay. However, in the instant case, the inordinate delay is attributable to the gross negligence of the appellant as stated above and not because of some "sufficient cause" which prevented the appellant to file the appeal within limitation date. Therefore, the said decision of the Hon'ble Supreme Court has no applicability in the case of appellant.
Page 5 The similar view was also held by the Hon'ble Kerala High Court in the case of Revision vs Mst. Katiji And Others [(1987) CRP.No. 452 of 2010 (A) wherein the Hon'ble Korai High Court considered the decision of the Hon'ble Apex Court in the case of MST Katiji and held that that it must be satisfied that the delay was not deliberate and wilful and in the absence of such circumstances, discretionary jurisdiction of the Court cannot be exercised in favour of the petitioners. Further, the Hon'ble Apex Court in the case of Majji Sinnemma V. Reddy Sridevi 2021 SSC online SC 1260 dated 16/12/2021 has held as under: "Even though limitation may harshly affect rights of a party, but it has to be applied with all its rigour when prescribed by the statue. The expression "Sufficient Cause" cannot be liberally interpreted if negligence in action or lack of bonafides is attributed to the party. If the court starts condoning delay where no sufficient cause is made out by imposing conditions, then that would amount to violation of statutory principle and showing utter disregard to logistics. In the present case, the appellant has not adduced any reasonable cause which prevented it from filing the appeal for 335 days. Unless and until it demonstrated that there was sufficient cause that prevented the appellant from exercising its legal remedy of filing appeal within that prescribed period of 30 days, delay thereafter cannot be condoned. From the facts of the case, it is clear that the statutory right to appeal which was vested with the appellant was not exercised within the stipulated time u/s 249(3). Thus, this clearly is a case of laches and is directly the result of deliberate inaction on part of the appellant. In view of above, the delay of 335 days in filing of appeal in this case is not condoned as no "sufficient cause" has been shown under section 249(3) of the Income Tax Act for the appellants failure to file the appeal within prescribed period of limitation u/s 249(2) of the Income Tax Act r.w.s 5 of the Limitation Act. Since, the delay in filing of appeal has not been condoned, consequently the appeal of the appellant becomes not-est and therefore the same is not admitted.
3. Keeping in view the facts and circumstances and the decision of the Honourable Courts and also the fact that since the appeal of the appellant is not admitted, the grounds of appeal raised by the appellant are not adjudicated on merit and the appeal is dismissed.”
Before us the assessee filed each of the copy of the affidavit shown by him as an employee of M/s. Tietoevry India Pvt. Ltd. (formerly registered as M/s. Evry India Pvt. Ltd.) and another affidavit shown by Shri Shyam Sundar Pattabiraman claimed to be the Chief Financial Officer of M/s. EVRY India Pvt. Ltd., the contents whereof is as follows.
Page 7 ITA No. 967/Bang/2023 Page 8 ITA No. 967/Bang/2023 Page 9 ITA No. 967/Bang/2023 Page 10 ITA No. 967/Bang/2023 Page 11 ITA No. 967/Bang/2023 Page 12 ITA No. 967/Bang/2023
In support of the order impugned in rejecting explanation in regard to delay in filing appeal, the Ld.DR relied upon the judgment of Hon’ble Apex Court in case of Majji Sannemma @ Sanyasirao vs. Reddy Sridevi & Ors. in Civil Appeal No. 7696 of 2021 dated 16.12.2021, a copy whereof has also been submitted before us.
We have heard the submissions made by the respective parties and we have also perused the relevant materials available on record.
It appears that the plea taken by the assessee to explain for not been able to prefer the appeal before the Ld.CIT(A) in time, is sufficient enough to prove that there was no intentional latches on the part of the assessee in doing so. The documents in regard to payment of tax in Norway and other details in support of such payment was the main documents to be considered by the assessee’s advisor in preferring the appeal before the First Appellate Authority, fact whereof needs consideration. It naturally took time particularly considering the situation emancing from covid 19 which was still persistent during the period when the assessee was required to get the details from Norway. Thus no negligence on the part of the assessee is found in preferring the appeal before the First Appellate Authority.
We note that such facts require consideration liberally with the pragmatic view to be taken by the Court or any other statutory body. In fact we find sufficient cause has been shown by the assessee in explaining such delay. We note that the terms “sufficient cause” should be understood in their proper perspective, philosophy and purpose record being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact situation. No gross negligence on the part of the assessee is found in the case in hand. Apart from that we have also considered the prejudicial theory. The appellant in this case would be seriously prejudiced in the event the appeal is not admitted and additions remains unadjudciated.
Page 14 ITA No. 967/Bang/2023 10.1 We have further considered the judgment relied upon by the Ld.DR wherein in paragraph 7.4, the Hon’ble Supreme Court categorically stated as follows: “7.4 In the case of Basawaraj (supra), it is observed and held by this Court that the discretion to condone the delay has to be exercised judiciously based on facts and circumstances of each case. It is further observed that the expression “sufficient cause” cannot be liberally interpreted if negligence, inaction or lack of bona fides is attributed to the party. It is further observed that even though limitation may harshly affect rights of a party but it has to be applied with all its rigour when prescribed by statute. It is further observed that in case a party has acted with negligence, lack of bona fides or there is inaction then there cannot be any justified ground for condoning the delay even by imposing conditions. It is observed that each application for condonation of delay has to be decided within the framework laid down by this Court. It is further observed that if courts start condoning delay where no sufficient cause is made out by imposing conditions then that would amount to violation of statutory principles and showing utter disregard to legislature.”
The “sufficient cause” in this particular case of Basawaraj and Anr. Vs. Special Land Acquisition Officer reported in (2013) 14 SCC 81 mentioned in the above judgment relied upon by the Ld.DR has been said not to be interpreted liberally if negligence, in action or lack of bonafide is attributed to the party. It was further mentioned in the said judgment that the discretion to condone the delay has to be exercised judicially based on facts and circumstances of each case.
In the instant case, we, with our humble understanding, find that the sufficient cause pleaded by the assessee before the Page 15 First Appellate Authority and before us is in affirmity, in favour of the assessee without finding any deliberate delay or gross negligence on the part of him and therefore infact relying upon the judgment and the observations made by the Hon’ble Supreme Court in its proper perspective declined to accept the reason given by the First Appellate Authority in rejecting the explanation rendered by the assessee in preferring the appeal before it. In fact, the explanation was not taken into consideration by the First Appellate Authority in its proper perspective and/or judiciously. We, therefore, condoning such delay in preferring the appeal before the Ld.CIT(A), remit the issue to the file of Ld.CIT(A) to adjudicate the issue afresh upon giving an opportunity of being heard to the assessee and upon considering the relevant evidence on record or which the assessee may choose to file at the time of hearing of the matter. The Ld.CIT(A) is directed to pass order strictly in accordance with law.
In the result, the appeal filed by the assessee stands allowed for statistical purposes. Order pronounced in the open court on 09th January, 2024.