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आयकर अपील�य अ�धकरण, कोलकाता पीठ “एसएमसी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH: KOLKATA �ी राजेश कुमार, लेखा सद�य के सम� [Before Shri Rajesh Kumar, Accountant Member] I.T.A. No. 1119/Kol/2023 Assessment Year: 2011-12
Shri Ritu Raj Singh Vs. ITO, Ward-37, Kolkata (PAN: ALQPS 3734 E)
Appellant / (अपीलाथ�) Respondent / (��यथ�)
Date of Hearing / सुनवाई 20.12.2023
क� त"थ Date of Pronouncement/ 05.01.2024 आदेश उ%घोषणा क� त"थ For the Appellant/ Shri Akkal Dudhwewala, FCA नधा+,रती क� ओर से For the Respondent/ Shri Vijay Kumar, Addl. CIT राज�व क� ओर से
This is the appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)- 1, Kolkata [hereinafter referred to as ‘Ld. CIT(A)’] dated 04.12.2017 for the assessment year 2011-12.
Ground no. 1 is general in nature and does not require any adjudication.
The legal issue raised in ground no. 2 is against the order of Ld. CIT(A) upholding the assessment order which is invalid and void ab-initio as the AO has no jurisdiction to frame the assessment.
At the outset, the Ld. Counsel of the assessee pointed out that there is delay of 2083 days in filing the appeal before the Tribunal. The Ld. Counsel of the assessee
2 ITA No. 1119/Kol/2023 Assessment Year: 2011-12 Shri Ritu Raj Singh. submitted before the Bench that the delay in filing the appeal is attributable to the reasons which are beyond the control of the assessee. The ld AR stated that in terms of provisions of Section 253(5) of the Act, the Tribunal has the power to admit the appeal even after expiry of the period referred to in sub-section (3) & (4) of Section 253 of the Act ff the Tribunal is satisfied that there was sufficient cause for not presenting the appeal within the stipulated period. The Ld. Counsel for the assessee submitted that the assessee was earlier resident of Kolkata residing at Block BH 111, Sector 2, Salt Lake, Kolkata-700071. Thereafter the assessee shifted permanently to 71, Pahargaon, Dollygunj, Port Blair. The Ld. Counsel for the assessee submitted that for the relevant assessment year i.e. AY 2011-12, the return of income was on 30.09.2011 by mentioning the address as Austinabad, Port Blair. The Ld. A.R stated that right from AY 2008-09 to 2011-12 the assessee has been filing the returns of income in the office of DCIT, Austinabad, Port Blair and the copies of acknowledgement of the ITRs are placed at page no. 1 to 4. The Ld. A.R also referred to the communication received from the Department and also the intimation issued u/ s 143(1) at Port Blair address mentioning 97/2, Moulana Azad Road, Phoenix Bay, Port Blair, Andaman & Nicobar Islands-744101. The Ld. A.R further stated that the case of the assessee was selected for scrutiny u/s 143 of the Act but the assessment was framed by Range-37, Kolkata in respect of Port Blair in spite of concerned officer being aware that the assessee was no longer resident of Kolkata. Since the assessee was based in Port Blair, most of the notices were issued at Kolkata address and thus remained unattended. The Ld. A.R stated that thereafter the assessee filed appeal before the Ld. CIT(A), Kolkata who again passed ex-parte order dated 4.12.2016 u/s 250 in the month of December, 2017. The Ld. A.R submitted that at that point of time, the assessee was seriously ill and suffering very serious ailments and remained hospitalized for a period of approximately 4 years and was advised bed rest thereafter. The Ld. A.R also referred to the medical report of the assessee to corroborate his contentions. Thereafter COVID-19 pandemic came and the Govt. of India declared a nationwide lockdown in the March, 2020. The Ld. A.R submitted that the period commencing thereafter from 15.03.2020 to 28.02.2022 is covered by the
3 ITA No. 1119/Kol/2023 Assessment Year: 2011-12 Shri Ritu Raj Singh. order of Hon’ble Supreme Court passed in Suo-moto Writ Petition (Civil) No. 3 of 2020 vide order dated 10.01.2022 whereby the period of limitation was extended and in terms of direction of the Hon’ble Apex Court while computing the limitation period for filing of application/appeal the period commencing from 15.03.2020 to 28.02.2022 shall be excluded and additional period of 90 days from 01.03.2022 shall be available to the assessee. In other words, the period of limitation u/s 250(3) should extent upto 30.05.2023. The Ld. A.R submitted that accordingly the impugned order remained unattended due to oversight and it is only when the month of July, 2023 when the assessee engaged services of a new Chartered Accountant for filing tax return and to conduct tax audit for AY 2023-24. The new Chartered Accountant noticed the assessee’s outstanding tax demand for Ay 2011-12. The Ld. A.R stated that the assessee was under the impression that appeal filed before the Ld. CIT(A) was still pending for disposal however as a matter of fact no pending appeal was appearing on the income tax portal.Upon enquiries it was found that from the office of ITO, Port Blair that the assessee was informed that the Ld. CIT(A)-1, Kolkata has already passed ex-parte order and it was from the office of ITO, Ward-3(4), Port Blair that the assessee was finally able to procure copy of the appellate order to enable his CA to draft, prepare and file the present appeal. The Ld. A.R also stated that the finally the appeal was filed on 17.10.2023 before the Tribunal. The Ld.A.R therefore submitted that the delay in filing the appeal is neither intentional nor the assessee is benefitted in any manner from the said delayed filing of appeal. The Ld. A.R submitted that since the reasons attributable to late filing the appeal are beyond the control of the assessee, therefore in the interest of justice and fair play the appeal of the assessee may be admitted and adjudicated. In defense of argument the Ld. A.R relied on the decision of Hon’ble Apex court in the case of Improvement Trust vs. Ujagar Singh & Ors. [2010] 6SCC 786 (SC) and Collector, Land Acquisition vs. Mst. Katiji [1987] 1987 taxmann.com 1072 (SC) . Finally the Ld. A.R prayed that the appeal may be admitted for hearing.
The Ld. D.R on the other hand opposed the contentions of the assessee that the period of 2083 days is beyond the control of the assessee. The ld. D.R submitted that
4 ITA No. 1119/Kol/2023 Assessment Year: 2011-12 Shri Ritu Raj Singh.
it may be true that the assessee may be seriously ill for some time and in the intervening period COVID pandemic has set in . However even thereafter there was a considerable delay in filing the appeal which has not been explained by the assessee. The Ld. D.R also submitted that the assessee is not a small assessee who is not having any knowledge of tax matter and statutory compliances as the assessee has big turnover. The Ld. D.R therefore prayed that the condonation application may kindly be rejected and appeal be dismissed as barred by limitation.
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 this Section has also been used identically in sub-Section 3 of Section 249 of the Act, which provides power to the Id. Commissioner to condone the delay in filing of the appeal before the Commissioner. Similarly, it has been used in Section 5 of the Indian Limitation Act, 1963. Whenever interpretation and consideration of this expression has fallen for consideration before the Hon'ble High Courts as well as before the Hon'ble Supreme Court then, the Hon'ble Courts were unanimous in their conclusion that this expression has to be construed 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. 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.
5 ITA No. 1119/Kol/2023 Assessment Year: 2011-12 Shri Ritu Raj Singh.
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."
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 tliat 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 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 ITA No.201, 202 and 203/Ahd/2020 salutary guideline that when courts condone
6 ITA No. 1119/Kol/2023 Assessment Year: 2011-12 Shri Ritu Raj Singh. the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss." 8. 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 Hon'ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the 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 basically the appeal has been filed after 2083 days of the ld. CIT’s order but almost more than two years is attributable to COVID period, i.e. March ,2020 to May,2022. Besides , we note that the assessee has shifted to Portblair and has been filing the returns of income there only from A.Y. 2008-09 onwards. However the Notices in this case were issued by JCIT ,Range 37 Kolkata and were sent on the kalkata address and hence the proceedings could not be attended. Similarly the appeal of the assessee was also decided ex-parte the order was not served on the Portblair address. Moreover, making the appeal time-barred has not been used by the assessee as a tactics to avoid the litigation with the Revenue because such strategy would not give any benefit to the assessee in this type of litigation. Therefore, we condone the delay and proceed to decide the appeal on merit.
Issue raised in ground no. 2 as stated above is legal issue dealing the assessment on the ground that the AO has no jurisdiction to frame the assessment.
Facts in brief are that the assessee filed return of income on 30.09.2011 declaring total income of Rs. 11,45,325/-. The case of the assessee was selected for scrutiny u/s 143(3) of the Act through CASS . The said return was processed u/s 143(1) on 23.02.2011 and thereafter the case of the assessee was selected for scrutiny and notice u/s 143(2) of the Act was issued by JCIT , Range-37, Kolkata and finally the assessment was framed vide order dated 29.03.2014 passed u/s 143(3) of the Act assessing the total income at Rs. 36,44,839/-.
7 ITA No. 1119/Kol/2023 Assessment Year: 2011-12 Shri Ritu Raj Singh. 12. The assessee challenged the said order before the Ld. CIT(A). However the appeal was dismissed as ex-parte.
After hearing the rival contentions and perusing the material on record, we find that in this case the jurisdiction of assessee was with JCIT, Austinabad, Port Blair whereas the notice u/s 143(2) of the Act was issued by JCIT, Range-37, Kolkata. It is also pertinent to note that the assessee has been filing the returns of income in Port Blair right from A.Y. 2008-09 to 2011-12 and even the communications to the assessee by ACIT CPC Bangluru has been addressed at Port Blair address meaning thereby that even in the PAN data, the address of the assessee has been changed. We note that the assessment has been framed by JCIT, Range-37, Kolkata who is not having the jurisdiction over the assessee. The Ld. A.R also placed before us the copy of CBDT circular being No. 228/2001 [(S.O. 732(E)F. No. 187/5/2001-ITA-1] dated 31.07.2001 states that the Commissioner of Income Tax, West Bengal has the jurisdiction over Union Territory of Andaman and Nicobar Island and Commissioner of Income Tax,-13, Kolkata with Head Quarter Kolkata, West Bengal is neither having the territorial jurisdiction nor pecuniary jurisdiction over the assessee. Thus we note that the assessment has been framed by the AO which is not having the jurisdiction to frame the assessment. Accordingly the assessment is invalid. The case of the assessee finds support from the decision of Co-ordinate Bench, Kolkata in the case of DCIT vs. Smt. Manjula Shukla in ITA No. 285/Kol/2021 for AY 2012-13 dated 26.10.2022 and in the case of M/s Rupasi Bangla Agro Industries Pvt. Ltd. vs ITO in ITA No. 909/Kol/2023 for Ay 2013-14 dated 14.12.2023. We therefore respectfully following the same, quash the assessment framed by the AO and allow the appeal of the assessee on legal issue.
Since the appeal has been allowed on legal issue. The issue on merit are not being adjudicated.
8 ITA No. 1119/Kol/2023 Assessment Year: 2011-12 Shri Ritu Raj Singh. 15. In the result, the appeal of the assessee is allowed.
Order is pronounced in the open court on 5th January, 2024
Sd/-
(Rajesh Kumar/राजेश कुमार) Accountant Member/लेखा सद�य Dated: 5th January, 2024
SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Shri Ritu Raj Singh, 71, Pahargaon, Dollygunj, Port Blair, Andaman & Nicoland-744101 2. Respondent – ITO, Range-37, Kolkata 3. Ld. CIT(A)-1, Kolkata 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail)