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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI D. KARUNAKARA RAO & SHRI C.N. PRASAD
IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER I.T.A. No. 5523/M/2008 (AY: 2003-2004) I.T.A. No. 1381/M/2009 (AY: 2003-2004) C.O. No.253/M/2007 (Arising out of ITA No.1157/M/2007) फनाभ/ Girish G Dube, ITO-25(2)(4), B-1, Kavita Apartment, Mumbai. Vs. Above Bank of India, Carter No.9, Borivali (E), Mumbai-400 066. स्थामी रेखा सं./ PAN : AABPD 5263 D (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) ITA No.1157/M/2007 (AY 2003-04) फनाभ/ ITO-25(2)(4), Girish G Dube, Mumbai. B-1, Kavita Apartment, Vs. Above Bank of India, Carter No.9, Borivali (E), Mumbai-400 066. स्थामी रेखा सं./ PAN : AABPD 5263 D (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent)
अऩीराथी की ओय से / Assessee by : Shri Domesh Joothawat & Mr. Bharat Gandhi प्रत्मथी की ओय से/ Revenue by : Shri Airiju Jaikaran, DR
सुनवाई की तायीख / Date of Hearing : 14.06.2016 घोषणा की तायीख /Date of Pronouncement : 24.06.2016 आदेश / O R D E R PER BENCH: There are three appeals and one Cross Objection (CO) under consideration involving the AY 2003-2004. Out of them, two appeals and CO are filed by the assessee and the other appeal ITA No.1157/M/2007 is filed by the Revenue. Since, the issues raised in these appeals are interconnected, therefore, for the sake of convenience, they are clubbed, heard combinedly and disposed of in this
consolidated order. Appeal wise adjudication is given in the succeeding paragraphs of this order. I. ITA No.5523/M/2008 (2003-04) (By assessee) & II. C.O. No.253/M/2007 (By assessee) 2. At the very outset, Ld Counsel for the assessee brought our attention to a preliminary issue relating to the request for condonation of delay of 539 days in filing the appeal by the assessee. Further, he brought our attention to the CO filed by the assessee and mentioned that the said CO was also filed belatedly with a delay of 191 days. In this regard, Ld Counsel for the assessee brought our attention to the assessee‟s letters dated 10.5.2016 and 31.5.2015 and submitted certain basic facts which include that in respect of ITA No.5523/M/2008, assessee filed an appeal on 2.9.2008 against the due date of 12.3.2007. Reasons given for such delay are mentioned in paras 8 to 10 of his representation and they revolve around the unsubstantiated fact of change of Chartered Accountants (CAs). This is a common reason given for the delay in filing the CO also. For the sake of completeness of this order, we extract the said paras 8, 9 and 10 as under:- “8. The delay has occurred unintentional and I had changed my Chartered Accountants due to wrong interpretation of law. My earlier Chartered Accountant had advised me that once Cross Objection CO/253/Mum/2007 dated 6.2.2007 is filed covering the additions made by the department is more than sufficient, no separate appeal has to be moved. 9. ............. 10. The case may be considered on merit basis and delay may be condoned on imposition of cost, and the same may be liberally constituted and allow natural justice thereof.” 3. From the above, it is the stand of the Ld Counsel for the assessee that the delay is unintentional and the same is attributable to the CAs who is evolved in wrong interpretation of law. It is the prayer of the assessee that he has a strong chance to win the case if the case is adjudicated on merits. He further submitted he shall obey the decision of the Bench if it decides to award cost for condoning the delay. Ld Counsel for the assessee also filed written submissions dated 14.6.2016 and prayed for liberal approach in matters relating to condonation of delay. In support of his contention, he relied on various decisions.
On the other hand, Ld DR for the Revenue submitted that the reasons given by the assessee is general in nature and no specific evidences is furnished to substantiate the reasonableness in furnishing the appeal and the CO belatedly. He also mentioned that the assessee is under obligation to account for each day of the delay. 5. We have heard both the parties and perused the condonation linked affidavits furnished by the assessee in both the cases of appeals along with the submissions given in the covering letters arguing for condonation of delay. We asked the assessee to furnish the evidence in support of the fact that there was wrong interpretation of law furnished by the CA, which was referred to in the affidavit, which in turn demanded change of the CA. The reply was negative. Similarly, we wanted evidence to know if there is any evidence from the said CA in support of the contention that he has given wrong legal advice to the assessee. In reply, no evidence was furnished for this too. We have also perused the submissions and legal decisions / judgments relied upon by the Ld Counsel for the assessee in support of the request for condonation of delay. On perusal of the same, we find, the cases are distinguishable on facts. We find that the issue of condonation is a case-specific and the same has to be decided based on the facts of each case. We find, in this case, no facts are coming forth from the assessee. The explanation and submissions of the Ld Counsel for the assessee appears very general. Further, we also aware of the fact that the “right of appeal” is very precious one and the same cannot be denied to the assessee on frivolous grounds. In this case, the facts that contributed to the delay of 539 days in the case of assessee‟s appeal and 191 days in the case of CO filed by the assessee are not furnished clearly. We have also examined the decision of the Tribunal in the case of ACIT vs. M/s. Petroleum India International in ITA No.8086/M/2003 (AY 2001-02), dated 28.9.2012, wherein one of us (AM) is a party to the said order. We made reference to this case in the open court. On perusal of the same, we find paras 16 to 18 of the said Tribunal‟s order (supra) are relevant in this regard. Considering the significance of the said paras and for the sake of completeness of this order, the same are extracted as under:- “16. We have heard both the parties of the litigation on the preliminary issue of condonation of delay of 1529 days and perused the contents of the said application for condonation and the affidavit submitted by the assessee. There is no dispute on the fact of delay of 1529 days as well as on non furnishing of any affidavit by the Counsels affirming that assessee had a conference with the Counsels which give raise to the
necessity of filing the impugned cross objections. Further, there is no explanation as to why and under what circumstances; the assessee approached the Counsels on 26.12.2008 only and not within 30 days from the receipt of the notice. The explanation given by the assessee, both in the application of condonation as well as in the affidavit of the assessee, are not explained with supportive evidences. In this regard, we have perused the relevant provisions of subsection (4) and (5) of the section 253 of the Act and the same are reproduced here for ready reference as under: “(4) The Assessing Officer or the assessee, as the case may be, on receipt of notice that an appeal against the order of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) or the Assessing Officer in pursuance of the directions of the Dispute Resolution Panel has been preferred under sub-section (1) or sub-section (2) or sub-section (2A) by the other party, may, notwithstanding that he may not have appealed against such order or any part thereof; within thirty days of the receipt of the notice, file a memorandum of cross-objections, verified in the prescribed manner, against any part of the order of the Assessing Officer (in pursuance of the directions of the Dispute Resolution Panel) or Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals), and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3) or sub-section (3A). (5) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in sub-section (3) or sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period.”
Sub-section (4) of section 253 of the Act mandates that the assessee should file Cross Objections within the 30 days from the date of receipt of the notice. In case of failure to file in that period, subsection (5) confers powers on the Tribunal to permit the filing of CO after the expiry of 30 days and the same subjected fulfillment of certain conditions by the assessee. The assessee has the duty of satisfying the Tribunal about the existence of „cause‟ and it should be sufficient enough for not presenting the CO within 30 days specified in subsection (4) of section 253 of the Act. Thus, the onus is on the assessee to explain to the Tribunal about the “sufficient cause” for the delay and the Tribunal should be satisfied about the said sufficient cause. It is true that the words “sufficient cause” for not filing the CO within the period of limitation no doubt is to be applied in a reasonable manner but depending upon the facts and circumstances of each case. Party has to give satisfactory explanation. In any case, it was the duty of Cross Objector to give satisfactory explanation to the Tribunal about the delay in filing the CO. In the absence of the same, the prayer for condonation must not be granted. It cannot be overlooked that on expiry of the period of limitation prescribed for seeking legal remedy, rights accrue in favour of the other party of the litigation. 18. In the present case, assessee failed to explain the cause of delay of 1529 days in filing the Cross Objection. Further, the explanation of the assessee, which revolves around the „oversight‟ and assessee‟s conference with his counsel after expiry of four years, in our opinion does not constitute „sufficient cause‟ within the meaning of section 253(5) of the Act. It is not in the normal course that the assessee has not met his counsel for all these four years. As such there is no confirmation from the said Counsel by way of any affidavit that the assessee had impugned conference to advise for filing the impugned CO. In our opinion, the delay shows the indifferent attitude of the assessee to the matter. In such a factual situation, the sufficient cause as contemplated u/s 253 (5) of the Act does not exist. In the present case, there is a negligence on part of the appellant and it is a case of absence of due diligence. Further also, the assessee has not demonstrated that it was beyond his control that the Cross Objection could not be filed before the expiry of the limitation period of 30 days specified in section 253(4) of the Act. Therefore, delay in filing the Cross Objection
remains unexplained. In view of the above legal and factual discussion, we are of the considered opinion that there is no sufficient cause for condonation of delay of 1529 days. Consequently, the impugned application for condonation of delay by the Cross Objector, Respondent is dismissed.” 6. Per contra, Ld Counsel for the assessee also cited certain decisions. Considering the above, we are of the opinion the onus is on the assessee to explain to the Tribunal about the “sufficient cause” for the delay and the Tribunal should be satisfied about the said sufficient cause for condoning the delay. In the present cases, in our view, there is no such “sufficient cause” for condonation of delay of 539 days in the case of assesee‟s appeal and 191 days in the case of CO filed by the assessee. Consequently, the impugned applications for condonation of delay in filing the assessee‟s appeal as well as in CO, are dismissed. Accordingly, preliminary issue is decided against the assessee and in favour of the Revenue. We have also considered the written submissions dated 14th June, 2016 and 7. find the same become relevant if the assessee supplied valid and sustainable explanation. But, in the present case, the explanation of the assessee in respect of delay is very general and not supported by any evidence. Therefore, the decisions relied are not helpful to the assessee. Further, the onus is on the assessee to give a valid reason along with the documentary evidence for each day of the delay. 7.1. Considering our above decision on the preliminary issue of condonation of delay, we are of the opinion, the adjudication of other issues raised in the assessee‟s appeal as well as in the CO becomes academic. Therefore, they are dismissed as academic. 8. In the result, both the appeal and the CO filed by the assessee are dismissed. III. ITA No.1157/M/2007 (AY 2003-2004) (By Revenue) 9. This appeal filed by the Revenue on 7.2.2007 is against the order of the CIT (A)-XXV, Mumbai for the assessment year 2003-04. 10. At the outset, Ld Counsel for the assessee brought our attention to the grounds raised by the Revenue and mentioned that the tax effect in this appeal is below Rs. 10 lakhs and therefore, the appeal of the Revenue is not maintainable. In support of his argument, he brought our attention to the CBDT Circular No.21/2015, dated 10.12.2015 and submitted that the appeals filed by the Revenue with a tax effect of Rs. 10 lakhs and below are to be either dismissed by
the Tribunal as not maintainable or not pressed by the Revenue. Referring to the above mentioned Board Circular No.21/2015, Ld Counsel for the assessee brought our attention to para 10 and submitted that the said monetary limitation of Rs. 10 lakhs applies to all the appeals filed by the Revenue retrospectively. Considering the significance of the said para 10 of the CBDT Circular (supra) is extracted as under:- “10. This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts / Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn / not pressed. Appeals before the Supreme Court will be governed by the instructions on this subject operative at the time when such appeal was filed.” 11. Considering the above, the appeal filed by the Revenue, wherein the tax effect is below the above stated tax limit of Rs. 10 lakhs, is dismissed as not maintainable. 12. In the result, appeal of the Revenue is dismissed. IV. ITA No.1381/M/2009 (AY 2003-04) (By assessee)
This appeal filed by the assessee on 2.3.2009 is against the order of the CIT (A)-XXV, dated 28.11.2006. In this appeal, the core issue involved is the legality of the penalty levied u/s 271(1)(c) of the Act. In the grounds of appeal, it is the contention of the assessee that the assessee was not given proper opportunity of being heard and is same is against the principles of natural justice. Further, it is also contended that the penalty order was passed without issuing show cause notice as well as definite findings. 14. On perusal of the CIT (A)‟s order, we find, the same was passed in November, 2006 ie ten years ago. The law has evolved on the issue of concealment penalty over the period of time. Considering the same, in all fairness, we are of the opinion as requested by the assessee in ground no.1 for opportunity of being heard, the issue should be remanded to the file of the CIT (A) for want of a reasoned order considering comprehensively the changed law and precedents. We order accordingly and direct the CIT (A) to afford a reasonable opportunity of being heard to the assessee as per the set principles of natural justice and adjudicate the issue afresh. Accordingly, grounds raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes. 16. Conclusively, assessee‟s appeal ITA No.1381/M/2009 is allowed for statistical purposes and other appeals as well as CO are dismissed. Order pronounced in the open court on 24th June, 2016. Sd/- Sd/- (C.N. PRASAD) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक 24.6.2016 व.नन.स./ OKK , Sr. PS आदेश की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : 1. अऩीराथी / The Appellant प्रत्मथी / The Respondent. 2. आमकय आमुक्त(अऩीर) / The CIT(A)- 3. आमकय आमुक्त / CIT 4. 5. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai गार्ड पाईर / Guard file. 6. सत्मावऩत प्रनत //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीऱीय अधिकरण, भुंफई / ITAT, Mumbai