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Income Tax Appellate Tribunal, ‘C’ BENCH, KOLKATA
Before: Shri Rajpal Yadav, Vice-(KZ) & Dr. Manish Borad
Per Rajpal Yadav, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals),
(A.Y. 2018-2019) Kaizen Industries National Faceless Appeal Centre (NFAC), Delhi dated 28th February, 2024 passed for assessment year 2018-19.
The appeal of the assessee before the ld. 1st Appellate Authority against the assessment order dated 28.03.2023 was time barred by 136 days. The assessee has filed an explanation for condonation of delay by way of an affidavit, wherein it was submitted that notices were issued by the ld. Assessing Officer during the course of reassessment proceedings on the e-mail ID of Shri Ajay Kumar Joshi being ajaykrjoshi@yahoo.co.in, who was Tax Consultant of the assessee during the relevant time but thereafter he has left the work of the assessee and did not intimate about the status of these notices to the assessee. The order was also sent to him and the assessee could not locate that. The ld. CIT(Appeals) did not accept the explanation of the assessee and dismissed it being time barred.
The ld. Counsel for the assessee submitted that the delay in filing the appeal before ld. 1st Appellate Authority be condoned and the issues be set aside before the ld. 1st Appellate Authority to decide on merit.
4. On the other hand, ld. D.R. contended that the assessee should be more vigilant in conducting his income tax proceedings.
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 (A.Y. 2018-2019) Kaizen Industries 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 Honble High Court as well as before the Honble Supreme Court, then, Honble 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.
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.
(A.Y. 2018-2019) Kaizen Industries 3. "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.
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.
(A.Y. 2018-2019) Kaizen Industries 6. Similarly, we would like to make reference to authoritative pronouncement of Honble Supreme Court in the case of N. Balakrisknan Vs. M. Krishnamurtky (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 the delay was occasioned by the party deliberately 5
(A.Y. 2018-2019) Kaizen Industries to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss”.
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 of the present case, then it would reveal that due to some miscommunication between the assessee vis-à-vis his Tax Consultant, the assessee could not lay its hand on the assessment order for challenging it before the ld. CIT(Appeals). Had the assessment order served physically on the assessee, probably this situation would have not arisen. It is pertinent to note that in changing the whole proceeding system before the tax authority, it is bound to happen some communication gap, which will result certain proceedings time barred. The ld. CIT(Appeals) ought to have adopted a sympathetic approach while disposing the appeal. The punishment in the shape of tax
(A.Y. 2018-2019) Kaizen Industries liability is disproportionate to the alleged negligence and, therefore, assessee ought to have been given opportunity to contest the appeal on merit instead of dismissing it being time barred. It is also pertinent to note that no assessee will gain by making the appeal time barred because it has to pay the demand without contesting it on merit. Therefore, we condone the delay and remit the issue to the file of ld. CIT(Appeals) for deciding it on merit. The assessee is directed to verify its correct e-mail address in Form No. 35 and if it is not correct, then supply the fresh communication address to the ld. CIT(Appeals) along with copy of the order passed by the ITAT so that the matter can be taken up for fresh hearing.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 02/07/2024.