D.C.I.T CIR - 2,KOLKATA, KOLKATA vs. M/S AMRI HOSPITAL LTD, KOLKATA

आदेश /O R D E R

PER Waseem Ahmed, Accountant Member:-

This appeal as well as Cross Objection (CO) filed by the Revenue and assessee is directed against the order of Commissioner of Income Tax (Appeals)-I, Kolkata dated 03.01.2013. Assessment was framed by ACIT, Range-2, Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 13.12.2011 for assessment year 2009-10.

ITA No.807 & CO 01/Kol/2013 A.Y. 2009-10 DCIT Cir-2, Kol. Vs. Amri Hospital Ltd. Page 2 Shri Debasish Banerjee, Ld. Departmental Representative represented on behalf of Revenue and Shri D.K. Kothari, Ld. Authorized Representative appeared on behalf of assessee.

First we take up assessee’s CO No.01/Kol/2013. 2. Grounds raised by the assessee in its CO are as follows:- “A. Grounds to support order of CIT(A): 1. In view of facts and circumstances of the case learned CIT(A) has rightly allowed relief, in relation to various grounds, which have been challenged by the Assessing Officer (AO)vide ground nos 1-4, so the order of learned CIT(A) may be confirmed. B. Grounds to seek further, additional and alternate relief: 1) For that ld. Assessing Officer (AO) may be directed not to apply section 115JB since there is no computation of: (a) gross total income, (b) deductions under Chapter VIA, (c) total income and (d) tax payable and therefore, pre-conditions of charging and computation provisions of S. 115JB read with relevant other provisions are not satisfied and S. 115JB is not at all applicable and the learned AO was wrong in invoking S 115JB.

2) For that in view of the judgments of the Calcutta Tribunal in the case of Vishnu Sugar Mills Ltd. which have been approved by the Calcutta High Court, and has attained finality, section 115JB is not at all applicable in case of assessee for the year under consideration for the reasons as stated in earlier ground.

3) For that learned AO may be directed not to apply S. 115JB since assessee company is not a dividend paying company and in view of decision of ITAT, Kolkata, dated 31.10.2008 in case of Neeraj Vanijya P Ltd. in ITA No. 1504/Kol/2008 (which has also attained finality), section 115JB is not applicable in case of non-dividend paying companies.”

ITA No.807 & CO 01/Kol/2013 A.Y. 2009-10 DCIT Cir-2, Kol. Vs. Amri Hospital Ltd. Page 3 normal provisions of the Act. Thus, there was no lapse on part of assessee being a company who has to rely on natural persons being agents engaged for attending tax matters. Therefore, it is prayed that the delay be granted and appeal be heard on merit in interest of justice and to render justice. The ld. AR in support of his claim has relied on the following judgments. 1. Collector, Land Acquisition V Master kastiji - 167 ITR 471 (SC). 2. G. Ramegowda v. Special Land Acquisition Officer, [1998] 2 SCC 142 3. N.Balkrishnan V M.M.Krishna Murthy AIR 1998 se 3222. 4. Office ofthe Chief Post Master General Versus Living Media India Ltd. 2012 348 ITR 7 in which above three and many other judgments were considered. 5. State of MP Vs. Pradeep Kumar (2000) 7 SC 372, 376-77) cited on page no. 12747 In Book of Shri Chaturvedi and Pithisaria (vol 8) Sixth edition 2014, in which the following summary is given: " ... Even a vigilant litigant is prone to commit mistakes. As the aphorism 'to err is human' is more a practical notion of human behaviour than an abstract philosophy, the intentional lapse on the part of a litigant should not normally cause the doors of the judicature permanently closed before him. The effort of the court should not be one of finding means to pull down the shutters of adjudicatory jurisdiction before a party who seeks justice, on account of any mistake committed by him, but to see whether it is possible to entertain his grievance if it is genuine"

The rules laid down in various judgments are summarized: 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. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay,

ITA No.807 & CO 01/Kol/2013 A.Y. 2009-10 DCIT Cir-2, Kol. Vs. Amri Hospital Ltd. Page 4 every second's delay? The doctrine must be applied in a rational common sense pragmatic manner. 4. 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." 7. in G. Ramegowda v. Special Land Acquisition Officer, [1998] 2 SCC 142 laid down that the expression sufficient cause in Section 5 of the Limitation Act, 1963 must receive a liberal construction so as to advance substantial justice where no gross negligence or deliberate inaction of lack of bonafide is imputable to the party seeking condonation of delay. 8. Length of delay is not to matter in context of COD. In view of above judgments it is requested that complexity of tax law and ignorance some applicable judgments (particularly unpublished judgments) and lack of advice, persons who looked after tax matters earlier is a good and sufficient cause. Finally the AR requested the Bench to condone the delay in filing the CO. On the other hand the Ld DR submitted that the law on the issue can be summarized to the effect that where a case has been presented in the court beyond limitation, the applicant has to explain the court as to what was the "sufficient cause" which means an adequate and enough reason which prevented him to approach the court within limitation. In case a party is found to be negligent, or for want of bonafide on his part in the facts and

ITA No.807 & CO 01/Kol/2013 A.Y. 2009-10 DCIT Cir-2, Kol. Vs. Amri Hospital Ltd. Page 5 circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay. No court could be justified in condoning such an inordinate delay by imposing any condition whatsoever. The application is to be decided only within the parameters laid down by this court in regard to the condonation of delay. In case there was no sufficient cause to prevent a litigant to approach the court on time condoning the delay without any justification, putting any condition whatsoever. In the absence of sufficient reasons for the delay in filing the appeal, in such situation the delay should not be condoned. The ld. has relied in the judgment of Hon’ble Supreme Court in the case of Basawaraj & Anr. Versus The Spl. Land Acquisition Officer in CIVIL APPEAL NO. 6974 of 2013.

ITA No.807 & CO 01/Kol/2013 A.Y. 2009-10 DCIT Cir-2, Kol. Vs. Amri Hospital Ltd. Page 6 not meant to destroy the rights of parties. They are meant to see that parties did not resort to dilatory tactics but seeking their remedy promptly. Condonation of delay is a matter of discretion of the Court. Length of delay is no matter acceptability of explanation is the only criterion. In every case of delay there will be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the Court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay is occasioned by the party deliberately to gain time, then the Court should lean against acceptance of the explanation. There is no presumption that the delay in approaching the Court is always deliberate. The words 'sufficient cause' should receive a liberal construction so as to advance substantial justice. In the light of the aforesaid principle laid down by the Hon'ble Supreme Court, it was to be held in the instant case that the assessee was prevented by sufficient cause from preferring the CO and the delay had to be condoned. The assessee could not be faulted for having bona fide belief for the applicability of the MAT provisions. The assessee had nothing to gain by delaying the filing of the appeal. The assessee's explanation was bona fide and the facts did not show that the assessee deliberately delayed the filing of the appeal. For those reasons, the delay in question had to be condoned. Thus we condone the delay and admit the appeal for hearing.

ITA No.807 & CO 01/Kol/2013 A.Y. 2009-10 DCIT Cir-2, Kol. Vs. Amri Hospital Ltd. Page 7 computation of income. Ld. AR submitted that Assessing Officer also framed assessment u/s. 143(3) of the Act at loss under the normal provision of Income Tax Act due to unabsorbed depreciation. However, the assessee has paid tax u/s 115JB of the Act due to its mistake and ignorance of law. It was also submitted that it recommended no dividend in the last two years. In view of above provisions, Ld. AR submitted that the provisions of Sec. 115JB of the Act are not applicable to the present case of assessee. Ld. AR of the assessee in support of his claim has also relied on the order of this Tribunal “E” Bench in the case of CIT vs. M/s Vishnu Sugar Mills Ltd. in ITA Nos. 2131, 2133/Kol/2004, 193 & 774/Kol/2005 and 918/Kol/2002 dated 17.08.2005 relating to AYs 2001-02,1998-99, 1996-97, 1997-98.

6.1 After hearing the Ld. AR of the assessee we find that the instant issue was not raised before the Ld. CIT(A) by assessee. Therefore, same was not adjudicated. However, we further find that issue raised by assessee is legal in nature and we are inclined to admit the same after having reliance in the judgment of Hon'ble Supreme Court in the case of National Thermal Corporation of India vs. CIT reported in 229 ITR 383 (SC). As the issue is not arising from the order of Authorities Below, therefore, we are inclined to restore this issue to the file of Assessing Officer for fresh adjudication in accordance with law and in the light of above stated discussion. Hence, the CO fled by assessee is allowed for statistical purpose. 7. In the result, assessee’s CO is allowed for statistical purpose. Coming to Revenue’s appeal in ITA No.807/Kol/2013. 8. First issue raised by Revenue in ground No. 1 and 2 is that Ld. CIT(A) erred in accepting the book profit as computed by the assessee u/s 115JB of the Act without making the required adjustment in the book profit as per the provisions of law. 9. At the outset, we find that issue raised by Revenue depends on the outcome of the issue raised by assessee’s CO. It is also important to note that the issue raised by assessee in its CO has been restored to the file of AO for

ITA No.807 & CO 01/Kol/2013 A.Y. 2009-10 DCIT Cir-2, Kol. Vs. Amri Hospital Ltd. Page 8 fresh adjudication in accordance with law. Considering the facts in totality, we are inclined to restore the issue to the file of AO to adjudicate afresh as per law and in the light of the observation made in the CO filed by assessee. Hence, this issue raised by Revenue is allowed for statistical purpose. 10. Next issue raised by Revenue in ground No. 3 and 4 is that Ld. CIT(A) erred in deleting the addition made by the AO on account of TDS deposited in Central Govt. account after the stipulated time. 11. At the outset, it was observed that Ld. CIT(A) has given very clear finding to allow the appeal of assessee if the TDS has been deposited before due date specific u/s. 139(1) of the Act. The grievance of Revenue is that the amendment brought by the Finance Act 2010 in section 40(a)(ia) is applicable prospectively from the AY 2010-11 and the instant issue relates to the AY 2009-10. Thus the amended provisions are not applicable to the instant case before us. The law prior to the amendment u/s 40(a)(ia) by the Finance Act 2010 reads as under : Amounts not deductible. 40. Notwithstanding anything to the contrary in sections 30 to 67[38], the following amounts shall not be deducted in computing the income chargeable under the head “Profits and gains of business or profession”,— 68(a) in the case of any assessee— 69[(i) ------------------------- (ia) any interest, commission or brokerage, 70[rent, royalty,] fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, 71[has not been paid,— (A) in a case where the tax was deductible and was so deducted during the last month of the previous year, on or before the due date specified in sub-section (1) of section 139; or (B) in any other case, on or before the last day of the previous year [Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted—

ITA No.807 & CO 01/Kol/2013 A.Y. 2009-10 DCIT Cir-2, Kol. Vs. Amri Hospital Ltd. Page 9 (A) during the last month of the previous year but paid after the said due date; or (B) during any other month of the previous year but paid after the end of the said previous year,such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid.]

As per the old provision the TDS was deductible & payable before filing the income tax returns under section 139(1) of the Act if it relates to the last month of the previous years and if it relates to other months then within the financial year. However the above provision was amended by the Finance Act 2010 effective from the AY 2010-11 which reads as under : Amounts not deductible. 40. Notwithstanding anything to the contrary in sections 30 to 88[38], the following amounts shall not be deducted in computing the income chargeable under the head “Profits and gains of business or profession”,— 89(a) in the case of any assessee— 90[(i) … … … … (ia) any interest, commission or brokerage, 91[rent, royalty,] fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, 92[has not been paid on or before the due date specified in sub-section (1) of section 139 :] 93[Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid.]

From the plain reading of the above provisions, it is clear that the TDS pertaining to the financial year should have been deducted & paid within the time allowed under section 139(1) of the Act. The amendment to section 40(a)(ia) of the Act i.e. vide Finance Act, 2010 w.e.f. 01.04.2010, whereby the deposit of tax deducted at source, deposited with the central government by the due date of the filing the return for the relevant year, i.e., where the tax was deductible at any time during the relevant previous year, has been

ITA No.807 & CO 01/Kol/2013 A.Y. 2009-10 DCIT Cir-2, Kol. Vs. Amri Hospital Ltd. Page 10 interpreted by the Hon'ble courts of law as retrospective in nature, so that it would apply for the current year as well. The decisions by the higher courts of law, as in the case of CIT v. Rajinder Kumar [2014] 362 ITR 241/220 Taxman 3/[2013] 39 taxmann.com 126 (Delhi) and CIT v. Naresh Kumar [2014] 362 ITR 256/221 Taxman 59/[2013] 39 taxmann.com 182 (Delhi), have read down the said amendment, holding it as retrospective on the ground of it being only clarificatory and toward mitigating the hardship being caused and, further, of the payment by due date qua the deductions effected for the first eleven months of the relevant previous year as sufficient compliance of the provision. Accordingly, we find no infirmity in the order of ld. CIT(A). We decide accordingly. 12. In the result, Revenue’s appeal is partly allowed for statistical purpose and that of assessee’s CO is allowed for statistical purpose. Order pronounced in the open court 22/03/2017 Sd/- Sd/- (Aby. T. Varkey) (Waseem Ahmed) (Judicial Member) (Accountant Member) Kolkata, *Dkp �दनांकः- 22/03/2017 कोलकाता । आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. आवेदक/Assessee-M/s Amri Hospital Ltd., 4&5 CIT Scheme LXXII, Gariaha Road, Kol-29 2. राज�व/Revenue-DCIT, Circle-2, Aayakar Bhawan, P-7, Chowringhee Sqr, Kolkata-69 3. संबं�धत आयकर आयु�त / Concerned CIT Kolkata 4. आयकर आयु�त- अपील / CIT (A) Kolkata 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, कोलकाता / DR, ITAT, Kolkata 6. गाड� फाइल / Guard file. By order/आदेश से, /True Copy/ उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, कोलकाता ।