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Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SMT. P. MADHAVI DEVI & SHRI JASON P BOAZ
Per Smt. P. MADHAVI DEVI, JM: This appeal by the assessee is against the order of the CIT(A)-I, Bangalore, dated 25/07/2014 for assessment year 2004-05, in not condoning the delay of 607 days in filing of the appeal before the CIT(A) and not disposing of the appeal on merits.
ITA No.1282/Bang/2014 Karnataka State Beverages Corporation Ltd. Page 2 of 7 2. Brief facts of the case are that the assessee-company which is engaged in the business of canalizing liquor/beer/RS, filed its return of income for the relevant assessment year on 01/11/2004 declaring a total income of Rs.28,46,907/-. The income was assessed at Rs.3,79,01,907/- vide assessment order u/s 143(3) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short]. Subsequently an order u/s 263 of the Act was passed by the CIT on 26/08/2008 holding that the assessment order was erroneous and prejudicial to the interests of revenue and therefore directed the AO to make a fresh assessment after examining the matter in detail with reference to facts of the case after giving an opportunity of being heard to the assessee. Consequently, AO completed the assessment by bringing to tax the following: i. Provisions for leave encashment - Rs.8,57,768/- ii. Provision for electricity charges - Rs.1,60,072/- iii. Privilege fee disallowed u/s 43B – Rs.3,50,00,000/- and iv. Donations - Rs.55,000/-.
Aggrieved by the above assessment, assessee preferred an appeal before the CIT(A) along with a petition dated 15/3/2012 for condonation of delay of 607 days from date of receipt of the attested copy of the order or 782 days from the date of assessment order. In the said application, the assessee explained the reasons for the delay as under:
ITA No.1282/Bang/2014 Karnataka State Beverages Corporation Ltd. Page 3 of 7 The order u/s 143(3) r.w.s. 263 was not communicated to the assessee and the attested copy of the assessment order and demand notice u/s 156 was received by the assessee only on 17/06/2010 and only when the assessee approached the counsel for filing an appeal against the order of the Tribunal before the Hon’ble High Court with regard to the order u/s 143(3) r.w.s. 263 was he advised to file an appeal against the order dated 24/12/2009 (on 5/3/2012) and it is thereafter that the appeal was filed on 15/3/2012. The CIT(A), was therefore, requested to take a lenient view and condone the delay of 607 days in filing the appeal from the date of receipt of the attested copy of the order and without prejudice to the above contention to condone the delay of 782 days in filing the appeal from the date of assessment order. The CIT(A) called for remand report from the AO. Remand report was filed by the AO stating that as per records available with the AO, order u/s 143(3) r.w.s.263 dated 14/12/2009 was dispatched by post on 24/12/2009 and though the postal records are not traceable, since the letter has not been returned back, it is to be presumed that the assessment order has been served on somebody on behalf of the assessee and since the assessee had full knowledge of the assessment proceedings, the delay is wilful and wanton. The assessee filed a rejoinder to the said remand report and after considering the same, the CIT(A) held that there has been wilful negligence for more than 782 days on the part of
ITA No.1282/Bang/2014 Karnataka State Beverages Corporation Ltd. Page 4 of 7 the assessee. Therefore, he rejected the application for condonation of delay, against which, the assessee is in appeal before us.
The learned counsel for the assessee reiterated the submissions made by the assessee before the authorities below and relied upon the following decisions in support of his contentions:
i. Collector, Land Acquisition, vs. Mst Katiji & others (1987) (167 ITR 471); ii. Concord of India Insurance Co. Ltd. vs. Smt. Nirmala Devi & Others (118 ITR 507 (SC); iii. Radhakrishna Rai vs. Allahabad Bank & others (2009) 9 SCC 733; and iv. CIT vs. West Bengal Infrastructure Development Finance Corporation (334 ITR 259) The learned departmental representative, however, opposed the above contentions of the assessee.
Having regard to the rival contentions and the material on record, we find that as per the CIT(A), the assessee had received the copy of the order u/s 143(3) r.w.s.263 on 24/12/2009 but there is no acknowledgment of receipt of the said order. It is also seen that the assessee had filed an appeal against the order u/s 263 before the Tribunal and the Tribunal vide order dated 18/01/2012 in ITA No.186/Bang/2011 has upheld the order of the CIT and it was against this order that the
ITA No.1282/Bang/2014 Karnataka State Beverages Corporation Ltd. Page 5 of 7 assessee had approached his counsel for filing further appeal before the Hon’ble High Court. It was at this time that the counsel for the assessee had advised the assessee to file an appeal before the CIT(A) against the order u/s 143(3) r.w.s. 263 of the Act and it was immediately thereafter, that the assessee has filed an appeal before the CIT(A).
From the above facts it is clear that the assessee has not been negligent in pursuing its legal remedies. The Hon’ble Supreme Court, in the case of Collector, Land Acquisition vs. Mst Katiji & others (cited supra) has explained the principles to be kept in mind while considering an application for condonation of delay and emphasized that substantial justice should prevail over technical considerations. The said decision of the Hon’ble Apex Court has been followed by various benches of the Tribunal including ‘B’ Bench of this Tribunal in Raghavendra Constructions in ITA No.425/Bang/2012 dated 14/12/2012 wherein on similar ground viz., that the plea of delay in filing of appeal due to advise given by the counsel was accepted as sufficient to condone the delay. The Tribunal relied upon the decision of the Hon’ble Karnataka High Court in the case of CIT vs. ISRO Satellite Centre in ITA 532/Bang/2008 dated 28/10/2011 wherein the delay of five years in filing appeal before them was condoned and the Tribunal has condoned the delay of 678 days in filing of the
ITA No.1282/Bang/2014 Karnataka State Beverages Corporation Ltd. Page 6 of 7 appeal before the Tribunal. The relevant paragraphs are reproduced hereunder: “13. We have considered the rival submissions. At the outset, we observe that the Hon’ble Supreme Court, in the case of Mst. Katiji (supra), has explained the principles that need to be kept in mind while considering an application for condonation of delay. The Hon’ble Apex Court has emphasized that substantial justice should prevail over technical considerations. The Court has also explained that a litigant does not stand to benefit by lodging the appeal late. The Court has also explained that every day’s delay must be explained does not mean that a pedantic approach should be taken. The doctrine must be applied in a rational common sense and pragmatic manner. In the case of Shakuntala Hegde, L/R of R.K. Hegde v. ACIT, ITA No.2785/Bang/2004 for the A.Y. 1993-94, the Hon’ble Tribunal condoned the delay of about 1331 days in filing the appeal wherein the plea of delay in filing appeal due to advice given by a new counsel was accepted as sufficient. The Hon’ble Karnataka High Court in the case of CIT v. ISRO Satellite Centre, ITA No. 532/2008 dated 28.10.2011 has condoned the delay of five years in filing appeal before them which was explained due to delay in getting legal advice from its legal advisors and getting approval from Department of Science and PMO. In the aforesaid decision, the Hon’ble Court found that the very liability of the assessee was non-existent and therefore condoned the delay in filing appeal. 14. Keeping in mind the aforesaid principles, we shall consider the claim of the assessee in the present case. Admittedly the advice was given by the counsel who appeared on behalf of the Assessee before the Hon’ble High Court. The decision of the Hon’ble High Court was rendered on 28.2.2012. The appeal has been filed by the Assessee before the Tribunal on 26.3.2012. Hence, we find that there has been no willful neglect on the part of the Assessee. In such matters the advice of the professional would be the point of time at which the Assessee would begin to explore the option of exhausting all legal remedies. We are also of the view that by condonation of delay there is no loss to the revenue as legitimate taxes payable in accordance with law alone would be collected. We therefore accept the reason given for condonation of delay in filing the appeal. The delay in filing the appeal is accordingly condoned. ”
ITA No.1282/Bang/2014 Karnataka State Beverages Corporation Ltd. Page 7 of 7 Respectfully following the same and facts and circumstances of the case before us being similar, we deem it fit and proper to condone the delay and remand the matter to the file of the CIT(A) with a direction to dispose of the appeal on merits after giving the assessee a fair opportunity of hearing.
In the result, the assessee’s appeal is treated as allowed for statistical purposes.
Pronounced in the open court on 30th July, 2015.
sd/- sd/- (Jason P Boaz) (Smt. P.Madhavi Devi) ACCOUNTANT MEMBER JUDICIAL MEMBER eksrinivasulu Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. 6. Guard file By order
Assistant Registrar Income-tax Appellate Tribunal Bangalore