COMMERCIAL HOUSE PVT. LTD.,,KOLKATA vs. ITO, WARD - 6(1), KOLKATA

The appeal was presented before the Tribunal on 26.03.2024 against the order of ld. CIT(Appeals) dated 06.01.2023. It shows that the appeal is time barred, but somehow Registry has not raised objection. However, the assessee has filed an application for condonation of delay alongwith affidavit of Shri Lalit Kumar Bagri, son of Manik Chand Bagri. The affidavit of the Director reads as under:-

The ld. Counsel for the assessee submitted that basically this order was not served upon the assessee through e-mail nor it was served physically. It might have been uploaded on the Portal, which the assessee could not lay its hand in time. It could only come to know when penalty notice under section 270A was served upon it.

The ld. D.R., on the other hand, contended that the assessee should be more vigilant about its tax litigation.

We have duly considered the rival contentions and gone through the record carefully. Sub-section 5 of Section 253 contemplates that the Tribunal may admit an appeal or permit filing of memorandum of cross- objections after expiry of relevant period, if it is satisfied that there was a sufficient cause for not presenting it within that period. This expression sufficient cause employed in the section has also been used identically in sub- section 3 of section 249 of Income Tax Act, which provides powers to the ld. Commissioner to condone the delay in filing the appeal before the Commissioner. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon’ble High Court as well as before the Hon’ble Supreme Court, then, Hon’ble Court were unanimous in their conclusion that this expression is to be used liberally. We may make reference to the following observations of the Hon’ble Supreme court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353: 1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.

Similarly, we would like to make reference to authoritative pronouncement of Hon’ble Supreme Court in the case of N. Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under: “Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to 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 7

We do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Honble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the condonation of delay, then such reasons are to be construed with a justice oriented approach.

In the light of above, if we examine the facts and circumstances of assessee’s case, then, it would reveal that basically it is not ascertainable, whether impugned order was physically served upon the assessee or not? It is pertinent to note that if it was not physically served, then, it should be served on the e-mail of the assessee. The details to that effect are also not available. In our opinion, the assessee would not gain anything by making its appeal time barred. Therefore, we are of the view that there might be some bonafide lapse at the end of the assessee in not filing the appeal well in time. Therefore, we condone the delay and proceed to decide the appeal on merit.

The ld. Counsel for the assessee while impugning the order of ld. CIT(Appeals) contended that he has placed on record a statement giving comparative details of the expenditure debited to 9

The ld. D.R., on the other hand, submitted that disallowance has to be worked out as per Rule 8D. If no interest is to be disallowed, then also under sub-clause (3), the administrative expenses are required to be worked out for disallowance.

We have duly considered the rival contentions and gone through the record carefully. A perusal of the record would indicate that assessee’s average investment has been worked out by the ld. Assessing Officer at Rs.13,21,80,634/-. He has worked out a disallowance at 1% of this average investment and made a calculation of Rs.13,21,806/-. The ld. Assessing Officer has not made disallowance out of interest expenses. Therefore, we are of the view that from the total disallowance of Rs.13,21,806/-, credit of Rs.3,10,847/- be granted to the assessee and the rest of the

In view of the above, the appeal of the assessee is partly allowed. Order pronounced in the open Court on 11/09/2024.