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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
आदेश / O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by appeal-order dated 30.11.2016 passed by learned Commissioner of Income-Tax (Appeals)-1, Bhopal [“CIT(A)”] which in turn arises out of assessment-order dated 17.03.2015 passed by learned ITO-1(2), Bhopal, [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2012-13, the assessee has filed this appeal on following grounds:
“(1) That on the facts and in the circumstances of the case and in law, the decision of the Ld. CIT(A) is materially incorrect and bad on facts and unsustainable in law and his findings are materially incorrect.
Vaishali Developers & Builders,Bhopal AY 2012-13 (2) That on the facts and in the circumstances of the case and in law, the appellant submits that its housing project fulfills all the conditions laid down in section 80IB(1) of the Income-tax Act, 1961, and, therefore, the income from such project is deductible under the said provisions. The Ld. CIT(A) erred and not justified in his findings that the appellant is not eligible for the deductible u/s 80IB(10) of the Income-tax Act, 1961, and, therefore, that findings of the Ld. CIT(A) be quashed and the exemption as claimed u/s 80IB(10) be kindly allowed. (3) That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in affirming the view of the AO that “the appellant had acted merely as a contractor after selling the plot and not as a developer. Therefore, the appellant was not eligible for claiming deduction u/s 80IB(10) on the profits claimed from this project”. (4) That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in appreciating the fact that rejecting the claim u/s 80IB(10) of the I.T. Act of the appellant mentioning that the appellant had acted as a contractor and not as a Developer and Builder for the only reason that the appellant had not registered the sale deeds in favour of the customer for the full value of the units as agreed amongst them. (5) That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding the view that “it is evidently clear that the appellant had acted merely as a contractor after selling the plots and not as a developer. Therefore, the appellant was not eligible for deduction u/s 80IB(10) of the Act on the profits derived from this project.” Therefore, disallowed the deduction claimed u/s 80IB(10) of the I.T. Act by the appellant. (6) That on the facts and in the circumstances of the case and in law, the levy of interest u/s 234B is unlawful and hence, be cancelled.”
The registry has informed that there is a delay of 2,425 days in filing this appeal, therefore the appeal is time-barred. Ld. AR for assessee submitted that the assessee has filed an application for condonation of delay with supporting documents. The documents filed by assessee are scanned and re-produced below:
Vaishali Developers & Builders,Bhopal AY 2012-13 Vaishali Developers & Builders,Bhopal AY 2012-13 Vaishali Developers & Builders,Bhopal AY 2012-13 Vaishali Developers & Builders,Bhopal AY 2012-13 Vaishali Developers & Builders,Bhopal AY 2012-13 Vaishali Developers & Builders,Bhopal AY 2012-13 Vaishali Developers & Builders,Bhopal AY 2012-13 Vaishali Developers & Builders,Bhopal AY 2012-13
3. Drawing our attention to these documents one by one, Ld. AR submitted that the impugned order was passed on 30.11.2016 and the time- limit of 60 days for filing appeal was available upto 29.01.2017. Accordingly, the assessee got appeal papers ready on 13.01.2017. Then, the assessee paid appeal fee of Rs. 10,000/- on 25.01.2017 as is evident from copy of challan re-produced above. And then the assessee arranged to file appeal through counsel M/s Ayachit & Associates, Chartered Accountants on 27.01.2017 but unfortunately the counsel’s person filed papers to the office of DR instead of the office of ITAT as is evident from an acknowledgement endorsed by the seal of office of DR affixed on assessee’s covering letter re- produced above. The assessee was, however, not aware of this mistake having occurred on the part of counsel. Subsequently, when the assessee enquired from Counsel as to the status of appeal, the Counsel in turn wrote letter dated 07.08.2023 to the Registry of ITAT requesting for fixation of appeal. In reply, the Registry of ITAT, vide letter dated 08.09.2023, informed that there was no such appeal. It is only thereafter that the Counsel re- verified documents and came to notice that the appeal had been wrongly presented to the office of DR. The Counsel has filed a letter dated 02.04.2024 (inadvertently the date of 02.04.2023 has been mentioned in the letter) to the office of ITAT on 03.04.2024 acknowledging all these facts and also admitting the mistake having occurred on their part, copy of letter is re- produced above. With these submissions, Ld. AR prayed that the assessee has taken all steps to file the present appeal in time through his counsel but Vaishali Developers & Builders,Bhopal AY 2012-13 due to lapse on the part of counsel, the appeal got filed in the office of DR instead of the office of ITAT. Ld. AR submitted that the delay is solely attributable to counsel and there is no role of assessee nor there is any lethargy or negligence on the part of assessee. He submitted that the counsel’s lapse constitutes a “sufficient cause” as held in Concord of India Insurance Co. Ltd. Vs. Smt. Nirmla Devi (1979) 118 ITR 507 (SC), Mahaveer Prasad Jain Vs. CIT (MP HC) 172 ITR 331 and Vijay Vishin Meghani Vs. DCIT (2017) 251 Taxmann 270 (Bombay HC). Relying upon these decisions, Ld. AR prayed to condone the delay.
4. Per contra, Ld. DR for revenue strongly opposed assessee’s prayer with following contentions:
(i) It is submitted that there is a delay of as many as 2,425 days which is highly inordinate. The law mandates filing of appeal within a prescribed period only and even one day delay is objectionable. Ld. DR submitted that a small delay of few days or even few months can be condoned on sufficient cause being shown but the revenue is seriously against condonation of delay of several years-months-days as has happened in present case.
(ii) It is submitted that the assessee is a firm and not an individual. The assessee has all staff at its command to monitor who can take care of statutory obligations.
Vaishali Developers & Builders,Bhopal AY 2012-13 (iii) Ld. DR submitted that it is not a lapse of the counsel alone, the assessee has also contributed in making delay which is discernible from a clinching fact that the assessee had pursued appeals of other assessment-years, namely AY 2007-08 to 2009-10 & 2011-12 before
ITAT, Indore Bench and still not taken care of this appeal for AY 2012-
Ld. DR relied upon a decision of this very Bench in C.I. Builders
Private Limited Vs. ACIT, Bhopal & 248/Ind/2023 order dated 23.01.2024 wherein a delay of 7 years & 104 days was not condoned by Bench.
We have considered rival contentions of both sides and perused the orders of lower-authorities as well as the material held on record to which our attention has been drawn. At first, we refer section 253(5) of the Income Tax Act, 1961 which empowers the ITAT to admit an appeal after expiry of prescribed time if there is a “sufficient cause” for not presenting appeal within prescribed time. Then, we are also aware of the landmark judgement of Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 stipulating following principles in the matter of condonation of delay and for that matter while looking into “sufficient cause”:
“…….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 for 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 Vaishali Developers & Builders,Bhopal AY 2012-13 other Courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that:-
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.
"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 common sense pragmatic manner.
When substantial justice and technical considerations are pitted against each other, 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 non-deliberate 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.
6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.”
6. Now coming to the facts of present case, there are certain vital aspects namely (i) the impugned order was passed on 30.11.2016 and the assessee was having time upto 29.01.2017 for filing appeal, (ii) the assessee has paid appeal-fee of Rs. 10,000/- to Govt. A/c on 25.01.2017 and (iii) the counsel of assessee has also filed appeal to the office of DR on 27.01.2017. These facts cannot be disputed or controverted by Ld. DR or by anyone. Then, the letter of assessee’s counsel is on record admitting fault on their part in filing appeal to the office of DR instead of the office of ITAT. From the evidences available on record which remain uncontroverted, it is clear that the default is committed by assessee’s counsel and not by assessee. On perusal of decisions quoted by Ld. AR, we find that there is a judicial view holding that Vaishali Developers & Builders,Bhopal AY 2012-13 the counsel’s mistake constitutes a “sufficient cause”. Therefore, having regard to the provision of section 253(5) of the Income-tax Act, 1961 and the guiding principles laid down by Hon’ble apex court in Collector, Land Acquisition Vs Mst. Katiji (supra), we find that it’s a proper case for condoning the delay.
The decision of this Bench in C.I. Builders Private Limited (supra) relied by Ld. DR was having different set of facts and easily distinguishable.
In that case, the Bench found that the assessee had also contributed in the process of delay alongwith the counsel. Further, the Bench also found that the assessee was having grossly negligent attitude. The relevant paras of the order of ITAT are extracted below for a ready reference:
“5. We have considered rival contentions of both sides and perused the orders of lower-authorities as well as the material held on record to which our attention has been drawn. We are aware of section 253(5) of the Act which empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a “sufficient cause” for not presenting appeal within prescribed time. We are also conscious of the landmark judgement of Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 holding in favour of condonation of delay in appropriate situations. But it is also true that the condonation request has to be dealt with great caution and care and it should not result in giving concession to an erring assessee. In the present case, though the assessee is claiming that the delay in filing has occurred solely due to lapse of counsel but the fact is that the assessee has also contributed to a large extent in the process of delay. As can be seen from Ld. DR’s arguments that the assessee has filed appeals of other two years i.e. AY 2011-12 and 2013-14 on 07.09.2022 and even at that stage, had not taken care to enquire and see the status of present appeals. This clearly shows lethargic attitude of assessee………”
Vaishali Developers & Builders,Bhopal AY 2012-13
The grossly negligent attitude of assessee is further discernible from one more fact. As can be seen from first pages of impugned orders re-produced earlier in Para No. 4(iv) of this order, the assessee received impugned orders on 20.01.2016 and 13.02.2017. Thus, when the assessee received later order on 13.02.2017, wasn’t it a duty of assessee to enquire from his counsel about filing status of appeal against former order received on 20.01.2016? Had the assessee exercised any care at that stage itself, he would have not only rushed to file appeal against impugned order dated 20.01.2016 with a smaller delay but also could ensure timely filing of appeal against order dated 13.02.2017. However, the assessee did not exercise any such care even at stage and only continued with its negligent or lethargic attitude. Therefore, the assessee is also a contributor in causing delay in filing.”
In present case, it is true that the assessee had pursued appeals of other assessment-years, namely AY 2007-08 to 2009-10 & 2011-12 before ITAT, Indore Bench but if we carefully look into the chronology of dates, we would find that the assessee’s appeals for AY 2007-08 to 2009-10 (ITA No. 497/Ind/2012, 18/Ind/2013 & 19/Ind/2013) were decided by ITAT through an order dated 25.11.2014 and appeal for AY 2011-12 (ITA No. 77/Ind/2016) was decided through order dated 12.01.2017. Thus, the matters for earlier years had already closed on 25.11.2014/12.01.2017 which was prior to the filing of present appeal on 27.01.2017 by assessee’s counsel in DR’s office. Thus, it cannot be said that the assessee was pursuing appeals of earlier years at the time of filing present appeal. That apart, the facts in C.I. Builders Private Limited Vs. ACIT clearly demonstrated negligent attitude of assessee whereas in present case, the assessee has taken positive steps of complying statutory provisions by paying appeal fee and even by filing appeal well in time before expiry of Vaishali Developers & Builders,Bhopal AY 2012-13 statutorily available period upto 29.01.2017 through the counsel. Therefore, the reliance by revenue on C.I. Builders Private Limited Vs. ACIT is mis- placed.
The above discussion brings us to conclude that the facts of present case show a “sufficient cause” of delay. Therefore, we condone the delay, admit this appeal and proceed to adjudicate on merit.
So far as merit of case is concerned, Ld. AR submitted that while passing impugned order, the CIT(A) has dismissed assessee’s first-appeal for non-prosecution. Ld. AR went on submitting that the assessee’s appeal of earlier AY 2011-12 having identical issues was decided by ITAT vide order dated 12.01.2017 wherein the matter was remanded back to the file of CIT(A) with a direction to decide first-appeal afresh after taking into consideration all relevant facts and evidences. For AY 2012-13 under consideration also, identical disallowances/additions have been made by AO on the same basis as in AY 2011-12 and the CIT(A) has merely upheld AO’s action. Therefore, Ld. AR prayed, the present case should also be remanded back to CIT(A) with similar direction. Taking into account these submissions and in the interest of justice and fair play, we deem it fit that the present appeal for AY 2012-13 should also be restored to the file of CIT(A) for decision afresh after considering all relevant facts and evidences of assessee.
Accordingly, this appeal is set aside to the file of CIT(A) for fresh adjudication.
Vaishali Developers & Builders,Bhopal AY 2012-13
Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in open court on 30.04.2024.