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Income Tax Appellate Tribunal, ‘SMC’ BENCH PUNE
Before: HON’BLE SHRI G. D. PADMAHSHALI & HON’BLE SHRI VINAY BHAMORE
ORDER PER G. D. PADMAHSHALI, AM; This appeal agitates DIN & Orders ITBA/NFAC/S/250/2022- 23/1048342011(1) dt. 29/12/2022 passed by the first appellate authority [‘Ld. NFAC/ CIT(A)’ hereinafter] u/s 250 of the Income- tax Act, 1961 [‘the Act’ hereinafter] which in turn upheld the order of assessment passed u/s 144 r.w.s. 147 of the Act by the Income Tax Officer, Ward-10(3), Pune [‘Ld. AO’ hereinafter] for assessment year 2012-13 [‘AY’ hereinafter]; ITAT-Pune Page 1 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 2. Succinctly narrated facts of the cases are that; the assessee is an individual who did not file return of income for the year under consideration hence was identified as ‘non-filer’. Upon the receipt of information that the assessee purchased an immovable property valued/worth of ₹30.00Lakhs and earned a salary of ₹19.77Lakhs, the case of the assessee vide notice u/s 148 of the Act after recording the reasons and obtaining prior approval from the competent authority was re-opened for assessment u/s 147 of the Act. During the course of assessment proceedings the assessee vide notice dt. 30/03/2019 was called upon to furnish return of income in relation to salary earned and explain the nature & source of investment. In the event of failure on the part of assessee to comply with the aforestated notice, the Ld. AO vide notices dt. 17/07/2019, 07/11/20219 and 26/11/2019 provided further opportunities to the assessee to explain nature & source of investment into immovable property purchased by him and also the reasons for not offering to tax the salary income earned by him. When these notices also remained unanswered by the assessee, the Ld. AO invoking provision of section 144 of the Act put assessee to a show-cause notice dt. 05/12/2019 [‘SCN’ hereinafter] as to why assessment in his case not be completed to the best of judgement on ITAT-Pune Page 2 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 the basis of information vis-à-vis material available on record. When SCN also remained un-responded, the Ld. AO proceeded ex- parte and culminated the proceedings to the best of his judgement and vide order dt. 19/12/2019 framed the assessment u/s 144 r.w.s. 147 of the Act by bringing to tax entire amount of salary earned as the income of the assessee.
3. Aggrieved by the former assessment, the assessee filed an appeal before first appellate authority on 30/09/2021 which the Ld. NFAC dismissed in limine as barred by limitation. Aggrieved by aforestated dismissal of appeal, the assessee instituted the present appeal on 06/05/2024 on following grounds ;
1. The ld CIT(A) erred in law and on facts in not condoning the delay when there was sufficient cause.
2. The ld AO erred in law and on fact in making addition of Rs 19,77,900/- as salary income.
3. The appellant craves leave to add, alter, modify or substitute any ground of appeal at the time of hearing.
4. Without touching grounds & merits of the case, we have heard rival parties on the limited issue of delay in instituting the present appeal and subject to rule 18 of ITAT-Rules, 1963 perused material placed on record, considered the facts concerning delay in the light of settled position of law which are forwarded to the parties present.
ITAT-Pune Page 3 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 5. We note that, the impugned order dismissing first appeal against the assessment was passed by the Ld. NFAC on 29/12/2022 and was admittedly served on the assessee on the same day. The fact of service/communication of impugned order on very same day when it was passed as confirmed is evident from appeal memo Form No 36 [placed on page 1 at under ‘Appeal Details point 3(c)’]. The present appeal thereagainst however is instituted u/s 253(1) of the Act on 06/05/2024 [being the date on receipt of appeal by the Registry of ITAT, Pune]. In terms of provisions of s/s 3 of section 253 of the Act, every appeal u/s 253(1) or 253(2) of the Act is required to be filed within sixty days from the date on which the order sought to be appealed against is communicated to the assessee. The present appeal is admittedly filed with delay of 402 days as endorsed by the Registry as against the assessee’s computation of 434 days delay as stated in the sworn affidavit dt. 21/05/2024 executed before the registered Notary Adv. Nilam Prashant More, Pune [Regn. No-16485 Exp. Dt 06/02/2025] [‘Notary’ hereinafter]. Thus, the present appeal since filed beyond the statutory period of sixty days, hence barred by limitation, therefore, the admission of this appeal is subject to establishing on record the presence of ‘sufficient cause’ behind such delay.
ITAT-Pune Page 4 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 6. The Ld. AR appearing on behalf of the appellant assessee, during the course of hearing readout the reasons from the sworn affidavit dt. 21/05/2024 executed by the assessee at Pune as; „1. . . .
That I am salaried person. I was working with M/s Haliburton Technology Pvt Ltd. up to Jan 2012 at Pune. I left my job in Feb 2012 & joined an Australian Co. I left India in Feb 2012 and shifted my residence in Australia for my employment.
That I was not aware of the order received from NFAC Delhi. I could not look after my income tax matters as I was preoccupied with my employment and physically displaced from India. When I came to know that the order u/s 250 is passed and posted on portal 12/12/2019 it was already delayed by 434 days. I immediately approached the consultant and sought advice.
This is the reason for delay in filing appeal. There is a sufficient cause beyond my control for non-filing of appeal in time. Delay in not intentional. I request to condone the delay & admit the appeal for hearing. 5. I state that the limitation for filing of the appeal expired on dt. 28/02/2023 and the appeal was to be filed on 06/05/2024. There is a delay of 434 days in filing of the present appeal.
. . . . .
Whatever stated above is true and correct to the best of my knowledge, belief and information and therefore I have signed this affidavit on this 21st day of May, 2024 at Pune. (Emphasis supplied)
ITAT-Pune Page 5 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 7. Dilating the reasoning from the aforestated affidavit the Ld. AR sought to condone the delay on twin counts viz; (a) unawareness of the appellant about the outcome of the first appeal and (b) being displaced from India hence was unable to act instantly. Per contra, adverting to appellant’s affidavit Ld. DR Mr Phade contended that; (a) first of all there are no reasons stated in the sworn affidavit, (b) the affidavit is merely narrative of facts (c) displacing from India and unawareness of impugned order do not per-se forms reasons (d) even if they remotely considered ‘reasons’, such reasons are incapable of being ‘sufficient reasons/cause’ for the purpose of condonation. The Ld. DR further averred that, the affidavit when r.w. copy of passport submitted on record prima-facie reveals divergent facts that, as on the date of execution of affidavit the appellant was an Australian citizen and was not in India, but the appellant sworn contrarily therein claiming to be in India. Thus, the appellant executed the affidavit representing him-self falsely as if he was in India, when he was in foreign. Clapping eyes on appeal memo the Ld. DR submitted that, the appellant un-indifferently signed loci stating to be in Pune. Au contraire the assessee could neither deplore the Revenue’s findings nor deprecate the factual position came to light in the course of hearing.
ITAT-Pune Page 6 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 8. Now before vouching ‘sufficiency’ of reasons put forth by the appellant, it is apt to first quote core principles on the subject which are culled out by the Hon'ble Supreme court in ‘Esha Bhattacharjee Vs Managing committee of Raghunathpur Academy and Ors’ reported in [2013, 9 SCR 782 (SC)]; (a) Lack of bonafied imputable to a party seeking condonation of delay is a significant and relevant fact; (b) The concept of liberal approach has to encapsulate the conception of reasonableness and totally unfettered free play is not allowed; (c) The conduct, behaviour and attitude of a party relating to its negligence cannot be given a total go-bye in the name of liberal approach. (d) If the explanation offered is concocted or grounds urged in the applications are fanciful, the Courts should be vigilant not to expose the other side unnecessarily to face such litigation. (e) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of the law of limitation. (f) An application for condonation of delay should be drafted with careful concern and not in a haphazard manner harbouring notion that Courts are required to condone delay on bedrock of principle that adjudication of lis on merits is seminal to justice dispensation system; (g) The increasing tendency to perceive the delay as a non- serious matter and hence lackadaisical propensity can be exhibited in a nonchalant manner requires to be curbed, of course, with legal parameters. (Emphasis supplied)
ITAT-Pune Page 7 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 9. In the instant case, we observed that, the appellant is an Australian Citizen who signed & executed the affidavit & appeal memo claiming to be in India as on that date, when he actually was out of India. Insofar as the delay in instituting the present appeal is concerned, a careful contemplation of former affidavit reveals us that, there is neither any plausible explanation nor any whisper in the entire narration of facts about a single step taken by the appellant to showcase required seriousness, and not even a bonafied affirmation that delay was accidental. We also observed that, neither through such affidavit nor by any other document/petition or application the appellant assessee could demonstrate that there was a ‘sufficient cause’ or ‘sufficient reason’ behind the inordinate delay caused which prevented him from filing the present appeal within the statutory time limit allowed u/s 253(3) of the Act. In the event the lifeline embedded under s/s (5) of section 253 of the Act could hardly come to rescue the appellant from rigors of s/s (3) (supra).
The true length of delay is no matter, the acceptability of explanation is the only criteria in vouching ‘sufficiency of cause/reasons’ as the primary function of quasi-judicial authority is to adjudicate dispute between parties to advance substantial justice.
ITAT-Pune Page 8 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 11. There may be inordinate delay but if supported with sufficient cause/reason, then such delay irrespective of its substantiality qualifies for condonation and vice-versa an insignificant delay unsupported by ‘sufficient cause/reasons’ is not pardonable. So in true sense, not the number but text of explanation is determinative in the matter of condonation of delay. The Hon'ble Supreme Court vide para 15 summarized the law on delay condition in ‘Basawaraj & Anr Vs Special Land Acquisition Officer’ [AIR 2014 SC 746] as; "15. The law on the issue can be summarized to the effect that where a case has been presented in the court beyond limitation, the applicant has to explain the court as to what was the "sufficient cause" which means an adequate and enough reason which prevented him to approach the court within limitation. In case a party is found to be negligent, or for want of bona fide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay. No court could be justified in condoning such an inordinate delay by imposing any condition whatsoever. The application is to be decided only within the parameters laid down by this Court in regard to the condonation of delay. In case there was no sufficient cause to prevent a litigant to approach the court on time condoning the delay without any justification, putting any condition whatsoever, amounts to passing an order in violation of the statutory provisions and it tantamounts to showing utter disregard to the legislature". (Emphasis supplied)
It is trite law that, the burden is on the party claiming condonation of delay to place before the authority, in clear & explicit terms, all facts on which party relies, so that the appellate authority/court can come to conclusion that it is not a case of want of diligence or inaction on the part of the applicant.
ITAT-Pune Page 9 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 13. In the instant case, admittedly, the delay was more than a year, inordinate having regard to provisions of s/s (3) of section 253 of the Act and is unsupported by any adequate, enough or sufficient cause/reason. The assessee on the other hand did initiate no action or vigilance for a year after the service of impugned order. The appellant remained inactive and material placed on record did in no manner showcase that he was diligent with the pending tax litigation. Per contra, the appellant has not proved any inaction or negligence on the part of a third party, much less have they pleaded any action or vigilance on their own part. Thus, in our thoughtful consideration the appellant failed to make out a case that there was sufficient cause for delay in filing the present appeal and as he remained not only negligent but nor did initiate any steps at all. We also note that, the averments made in the affidavit badly lack bonafied imputable, therefore there is much less ‘sufficient cause’. The acceptance of appellant’s request would amount to granting free play. While deciding the issue we are also mindful to the deceptive conduct, behaviour, laxity attitude and sheer negligence towards the prosecution of present appeal which cannot be given a total go-bye. The much less explanation offered against inordinate delay is concocted. The fanciful grounds urged in the affidavit do ITAT-Pune Page 10 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 not in any way capable of suggesting that delay occurred under bonafied circumstances. The appellant’s request smokes harbouring notion that Tribunal is required to condone delay on bedrock of principle that adjudication of appeal on merits. It can very well be made out from the contents of the affidavit that appellant was not at all serious per contra suggest lackadaisical propensity. We are mindful to state that, displacing from India or unawareness about of pending litigation, its implication and inaction on the part of the appellant do in any case not entitle to the benefit of the provisions of s/s (5) of section 253 of the Act, in the event the request for condonation is rejected. Consequently the appeal stands dismissed as barred by limitation.
The assessee left India for employment in the year 2012 therefore he appointed the Ld. AR as his counsel who filed a VAKALATNAMA signed by him on even date & place. Be that as it may, for vouching the loci signature on appeal documents/affidavit, in order to ascertain factual position when enquired the Ld. AR could not set at naught the admitted facts with respect to appeal memo, affidavit & Vakalatnama being signed in Person at Pune on even date. Further the Notarized affidavit of fails to mention the Register number on the affidavit. In upshot, the appellant/Ld AR ITAT-Pune Page 11 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 failed to wriggle out of the issue by providing any conclusive & persuading answer with corroborative evidence in support of claim that the documents were signed by the assessee in Person while on tour to India in the year 2022. Swapping with the earlier stance, it was later submitted that the assessee signed these documents, appeal memo & Vakalatnama sitting in his country ‘Australia’ and posted them to the office of Ld. counsel for filing & execution. However, when on a specific query, no evidential documents relating to postal communication/ correspondence were laid on record. In the event all the oral averments made during the course of hearing were turned out to be sheer conjectures and in our thoughtful consideration was to elude from rigor consequences of s/s (3) of section 253 of the Act. For vouching the veracity of the affidavit, the Tribunal allowed the adjournment request tendered by Ld. AR for submission of copy of Passport in support of contention of having signed physically in presence of Govt. Notary in accordance with the law prevailing in India. On the scheduled day of hearing, the Ld. AR submitted two page from the passport of the appellant which revealed that, the assessee’s previous visit to India was in the year 2022 with latest date of departure from India was on 07/02/2022. Thereafter the appellant did not return or visit ITAT-Pune Page 12 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 India. The impugned order under challenge was passed on 29/12/2022 that is much after appellant’s departure from India. This evidently suggests that, the appellant without any bonafied intention tried to misrepresent the facts in present proceedings thus ineligible for the benefit of s/s (5) of section 253 of the Act all the more so when appellant did not come with clean hands.
In so far as this mis-representation by the appellant is concerned, we are mindful to note from the copy of passport (certified by the Ld. AR) that, the appellant was neither at the time of signing appeal memo nor at the time of signing affidavit and its execution before the Notary was in India. Further there was much less material placed on record to showcase that the executed affidavit complies with the required rules/law and apostilled in accordance with applicable law. On a specific direction to place on record the postal correspondence (if any) made with appellant in relation to posting appeal memo, documents etc., for obtaining approval & signature, the Ld. AR candidly expressed her inability as no such records were maintained pre-empting such a situation/observation for the solitary reasons that the Ld. AR’s office acted on the bonafied believe that appellant did comply with required provisions of law in executing these documents.
ITAT-Pune Page 13 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 16. For the act of this nature the constitutional Hon’ble Court on various occasion either reprimanded the parties or at a time sentenced punishment which are worthy to note here; 12.1. In case of ‘Perry Kansagra’ [2022, CA-3/2021] the Hon’ble Apex court categorically observed that, the tendering of affidavits and undertakings containing false statements by the deponent would amount to criminal contempt of court. A person who makes a false statement before the Court and makes an attempt to deceive the Court, in deed he interferes with the administration of justice and therefore is guilty of contempt of Court in terms of sub-clause (iii) of clause (c) of section 2 of the Contempt of Courts Act, 1971. 12.2. In the case of ‘M/s Anand Nagar & Co. & Anr. Vs CCIT, Thane’ [2022, 444 ITR 552 (Bom)], their hon’ble lordships while dealing with untruthful facts averred in the affidavit or suppression of material facts in the proceedings observed that, courts have consistently deprecated parties or litigants who are economical with truth and who resort to falsehood and unethical means for achieving their goals. 12.3. If clever drafting has created the illusion of a cause of action, the Court must nip it in the bud at the first hearing by examining the party searchingly. An activist judge is the answer to irresponsible law suits said V. R. Krishna Iyer, J. (as he then was) in T. Arivandandam V/s. T. V. Satyapal, (1977) 4 SCC 467. 12.4. In Dalip Singh V/s. State of Uttar Pradesh, (2010) 2 SCC 114, the Court bemoaned that a new creed of litigants has cropped up who do not have any respect for truth and they shamelessly resort to falsehood and unethical means for achieving ITAT-Pune Page 14 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 their goals. Such a litigant who attempts to pollute the stream of justice or who touches the pure fountain of justice with tainted hands is then not entitled to any relief. 12.5. In ‘Sciemed Overseas Inc. V/s BOC India Ltd.’ [2016 All SCR 370] the Hon’ble Apex Court has lamented about the unhealthy trend in filing of affidavits which are not truthful. The para 2 of the said judgment reads as under: “2. A global search of cases pertaining to the filing of a false affidavit indicates that the number of such cases that are reported has shown an alarming increase in the last fifteen years as compared to the number of such cases prior to that. This is illustrative of the malaise that is slowly but surely creeping in. This „trend‟ is certainly an unhealthy one that should be strongly discouraged, well before the filing of false affidavits gets to be treated as a routine and normal affair.” (Emphasis supplied) 12.6. Mr. Kuldip Singh, J. (as he then was) in ‘S.P. Chengalvaraya Naidu (Dead) by LRs. V/s Jagannath (Dead) by LRs.’ [1994, 1 SCC 1], vide para 5 observed that: “5................. We are constrained to say that more often than not, process of the Court is being abused. Property- grabbers, tax-evaders, bank loan- dodgers and other unscrupulous persons from all walks of life find the Court process a convenient lever to retain the illegal-gains indefinitely. We have no hesitation to say that a person, who‟s case is based on falsehood, has no right to approach the Court. He can be summarily thrown out at any stage of the litigation” Emphasis supplied)
12.7. In ‘Oswal Fats and Oils Ltd. V/s Additional Commissioner (Adm), [2010, 4 SCC 728], their Hon’ble lordships have followed the principal that if a person is found guilty of concealment of material facts or making an attempt to pollute the pure stream of justice, the Court not only has the right but a duty to deny relief to such person.
ITAT-Pune Page 15 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 17. In the backdrop of facts of case under consideration and written as well oral submissions made by the rival parties & taking into account the settled position of law based on the judicial precedents sufficiently discussed hereinabove, the misrepresentation committed by assessee by subscribing to affidavit falsely is much nothing much less than an act to deceive, therefore sufficient to vitiate the entire judicial proceeding into nullity. It also transpired from the self-evident action of the Registered Notary who nonchalantly derelicted the lawful requirement of notarizing an affidavit only in presence of applicant & further attested it for presenting as evidence in proceedings without mentioning the Notarial Register number. Such act of the Notary has been strongly condemned by the Hon’ble Supreme Court recently in ‘Bhagwan Singh Vs State of UP & Ors’ [2024, INSC 708 (SC)]’ “37. Similarly, the Notaries Act 1952 regulates the profession of Notaries. The functions and duties of Notaries are enumerated in Section 8 thereof. The transaction of business by a Notary is contained in Rule 11 of the Notaries Rules 1956. Any acts or omissions thereof, on the part of the Notary would tantamount to misconduct, and the person complained against would be unfit to be a Notary.” (Emphasis Supplied) 18. The Hon’ble High Court of Delhi in the case ‘Surya Chemical Ltd. Vs CIT’ [2008, 171 Taxman 163 (Del)] while dealing with such instance their Hon’ble lordship have held that; subscribing falsely in the affidavit is a clear-cut case of perjury. ITAT-Pune Page 16 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 Going a step further in the case of ‘Ramesh Chandra Mundra Vs CIT’ [1995, 128 CTR 410 (Raj)] their Hon’ble lordship allowed the Revenue to launch prosecution and to take such action as is available under law in such like cases where the deponent subscribed incorrect/mis-stating the material facts.
In view of the aforestated judicial precedents we are also mindful to hold that, the reasons stated and averment made in support of delay in instituting the present appeal takes its colour from the very nature of affidavit executed by the appellant. Since the affidavit/document for the former reasons rendered itself unlawful and illicit, thus all the reasons & ground stated therein.
The implication of occurrence of such misrepresentation outweighs all other facts & grounds, therefore it deem fit to impose an exemplary cost of ₹10,000/- for such an act of misrepresentation, which shall paid to the credit of ‘Supreme Court Middle Income Group Legal Aid Society, New Delhi’ in the form of Donation subject to which the certified copy of this order would be supplied by the Registry. Ordered & directed accordingly.
Before departure we state that, the award of an exemplary cost against aforestated conduct of the appellant deemed very much ITAT-Pune Page 17 of 18 Kuldeep Makhija Vs ITO AY: 2012-13 necessary, otherwise it would set an incorrect precedent and allow the taxpayer to speculate a bash that; ‘Income Tax Appellate Tribunal in India’ if loosely deals with the sworn affidavit then the veracity of evidential material placed before it in seeking any tax relief is unimaginable.’
Nevertheless, at the time of giving effect to this order the Ld. AO shall ensure that total income comprising of impugned addition (salary income) is computed in accordance with applicable law and resultant tax liability be arrived only after adjusting prepaid taxes standing to the credit of the appellant in the form of advance tax or taxes deducted at sources etc., (if any) and consequential tax payable by the appellant or refund due to him (if any) be effected strictly within the time limit prescribed under the Act.
In result, the appeal is DISMISSED with aforestated cost. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this, Tuesday 01st day of October, 2024.
-S/d- -S/d- VINAY BHAMORE G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 01st day of October, 2024. आदेश की प्रतितिति अग्रेतिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT Concerned. 4. The CIT(A)/NFAC Concerned. 5. DR, ITAT, ‘SMC’ Bench, Pune 6. ग र्डफ़ इल / Guard File. आिेश नुस र / By Order वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्य य दिकरण, पुणे / ITAT, Pune.
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