SRIYEDUVAKA KRISHNAM NAIDU,CHENNAI vs. ACIT, CHENNAI

आदेश / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER:

The appeal filed by the assessee is directed against order of the Commissioner of Income-tax (Appeals)-5, Chennai in ITA No.102/ CIT(A)-5/13-14, dt. 24.02.2016 for the assessment year 2010-

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2011 passed u/s.143(3) and 250 of the Income Tax Act, 1961 (herein

after referred to as ‘the Act’).

The assessee is an individual engaged in civil contractor work 2.

doing business in the name of S.V. Construction. The assessee filed

Return of income on 15.10.2010 admitting a total income of

�30,07,450/- and the same was processed u/s.143(1) of the Act. The

case was selected for scrutiny under CASS and the notice u/s.143(2) of

the Act was issued. The ld. Assessing Officer completed assessment

u/s.143(3) of the Act determining total income at �1,14,40,648/- and

disallowed deductions u/s.40(a)(ia) of the

Act for the payment towards freight charges to M/s. Pavithra Transport

made before 1.10.2009 for non deduction of TDS � 4,00,786/-,

Disallowance of expenditure towards payments of equipment hire

charges amounting to �3,37,159/- and lodging and testing charges

amounting to 5,64,037/- for non deduction of tax at source,

disallowance of repair/renovation expenses of office premises

�3,84,375/- and disallowance expenditure u/s.40A(3) �67,46,841/-,

aggregating to �84,33,198/-. Aggrieved by the order, the assessee

filed an appeal before Commissioner of Income Tax (Appeals).

In the appellate proceedings, the ld. Authorised 3.

Representative raised grounds on the genuiness of expenses were the

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ld. Assessing Officer has overlooked the nature and commercial

expediency of business which was considered in earlier assessments.

The Commissioner of Income Tax (Appeals) found that the assessee

has mentioned the receipt of the assessment order on 02.04.2013. As

per the provisions of Sec.249 of the Act, the assessee has to file an

appeal within a period of 30 days from the date of intimation of order.

Whereas the appeal was filed on 07.05.2013 and condonation petition

was filed explaining the reasons and circumstances referred at page

4 of CIT order as under:-

“ For the assessment year 2010-11, the Assessing Officer passed the assessment order u/s.143(3) on 02.04.2013; appeal against the said assessment order ought to have been filed within 30 days from the date of receipt of the order i.e. on or before 02.05.2013, However, the appeal is field today with delay of 5 days.

The reason for delay in filing the appeal is original demand notice has been misplaced and could not be traced immediately. While re-arranging the papers, the original demand notice was traced and the appeal is being filed today. Hence, there is a delay of 5 days, in filing the appeal. The delay in filing the appeal is neither willful nor wonton but due to the bonafide reasons stated above.

It is prayed to ld. Commissioner of Income Tax (Appeals) may be pleaded to condone the delay of 5 days in filing the appeal and disposed off the same on merits.’’

The Commissioner of Income Tax (Appeals) considered the findings of

the Assessing Officer and without going into merits as the assessee

could not explain circumstances and substantiate the delay of 5 days in

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condonation petition and ignored the fact that original demand notice

has been misplaced and could not be traced immediately. The ld.

Commissioner of Income Tax (Appeals) observed that the assessee

does not have sufficient cause for delay and affidavit filed is not in

order as per the law and there is no due diligence of the provisions

of the Act and dismissed the appeal in limine without condoning the

delay. Aggrieved by the order of Commissioner of Income Tax

(Appeals), the assessee assailed an appeal before Tribunal.

The ld. Authorised Representative argued that original 4.

demand notice has been misplaced and could not be traced

immediately, while re-arranging the papers, the original demand notice

was traced and the appeal was filed and there was a delay of 05 days

in filing the appeal, and the delay in filing the appeal is neither willful

or wonton and prayed for allowing the appeal.

Contra, the ld. Departmental Representative raised 5.

objections to condonation of delay.

record. Before us, the ld. Authorised Representative of the assessee

reiterated submissions made before the Assessing Officer and also on

delay in filing the appeal in appellate proceedings. Considering the

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submissions of Authorised Representative on delay, we highlight the

decision of the Hon'ble Supreme Court in the case of N. Balakrishnan

V. M. Krishnamurthy, AIR 1998 SC 3222 observed as under:-

"11. Rules of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort 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 laundering 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 f inis litium ( it is for the general welfare that a period be put 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. 12. A court knows that refusal to condone delay would result in 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 Jain V. Kuntal Kumari, AIR 1969 SC 575 and State of West Bengal V. the Administrator, Howah Municapacity, AIR 1972 SC 749."

Further, we refer the case of State of West Bengal vs. Administrator,

Howrah Municipality, AIR 1972 SC 749, the Supreme Court held that

expression "sufficient cause" should receive a liberal construction so as

to advance the purpose of justice particularly when there is no motive

behind delay. This necessarily implies that parties must act bonafidely,

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expeditiously and with due care. A casual or a negligent litigant who

has acted with utter irresponsible attitude, cannot claim the

condonation of delay in law when the right has accrued to the other

side. The expression "sufficient cause" will always have relevancy to

reasonableness. The actions which can be condoned by the Court

should fall within the realm of normal human conduct or normal

conduct of a litigant. It is neither expected nor can it be a normal

conduct of a public servant or a litigant that they would keep the files

unmoved, unprocessed for months together on their tables. How the

power of condonation of delay is to be exercised, has been explained

by the Apex Court in the case of Collector, Land Acquisition v Mst.

Katiji And Others- 167 ITR 471 (SC) as under:- ( Pages 472 ).

" The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits ". The expression "sufficient cause " employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which sub serves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that the court has been making a justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that: 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

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highest that can happen is that a cause wouldbe decided on merits after hearing the parties. 1. " Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period." ( Page 473) 3. " Every day's delay must be explained" does not mean that 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 and pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, the 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 nondeliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of malafides. A litigant does not stand to benefit by resorting to delay. In f act, he runs serious risk. 6. It must be grasped that the 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."

We consider the factual aspects and merits of the case as the delay in

filing the appeal was not wanton as per condonation petition filed in

appellate proceedings. The submissions of ld. Authorised

Representative on genuine and sufficient reasons for delay cannot be

ignored. So, considering the reasons, we find there is sufficient cause

in the factual circumstances and we condone the delay. As the

assessee raised ground with regard to merit of the addition made

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u/s.40(a)(ia) of the Act, since the Commissioner of Income Tax (Appeals) not adjudicated the ground, we remit the issue to the file of the Commissioner of Income Tax (Appeals) to decide the issue on merits.

In the result, the appeal of the assessee is partly allowed 7. for statistical purpose.

Order pronounced on Friday, the 22nd day of April, 2016, at Chennai.

Sd/- Sd/- (चं� पूजार�) (जी. पवन कुमार) (CHANDRA POOJARI) (G. PAVAN KUMAR) �या�यक सद�य/JUDICIAL MEMBER लेखा सद�य /ACCOUNTANT MEMBER

चे�नई/Chennai �दनांक/Dated:22.04.2016 KV

आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 3. आयकर आयु�त (अपील)/CIT(A) 5. �वभागीय ��त�न�ध/DR 2. ��यथ�/Respondent 4. आयकर आयु�त/CIT 6. गाड� फाईल/GF