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Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI
Before: Shri Joginder Singh & Shri Rajendra
आदेश / O R D E R The assessee is aggrieved by the impugned order dated 23/08/2012 of the ld. First Appellate Authority, Mumbai.
We find that the present appeal is barred by limitation for 38 days in filing the appeal before this Tribunal. The assessee has also filed application for condonation of delay supported by an affidavit. The ld. counsel advanced arguments and explained the delay as mentioned in the application/affidavit. The ld. DR contended that assessee is expected to explain the delay of each day, therefore, in the absence of any valid reason, delay may not be condoned.
2.1. We have considered the rival submissions and perused the material available on record. Considering the totality of facts, no doubt filing of an appeal is a right granted under the statute to the assessee and is not an automatic privilege, therefore, the assessee is expected to be vigilant in adhering to the manner and mode in which the appeals are to be filed in terms of the relevant provisions of the Act. Nevertheless, a liberal approach has to be adopted by the appellate authorities, where delay has occurred for “bona fide reasons” on the part of the assessee or the Revenue in filing the appeals. In matters concerning
Administrator of the Estate of Late Mr. E.F. Dinshaw the filing of appeals, in exercise of the statutory right, a refusal to condoned the delay can result in a meritorious matter being thrown out at the threshold, which may lead to miscarriage of justice. 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.
2.2. The Hon’ble Apex Court in a celebrated decision in Collector, Land Acquisition vs Mst. Katiji & Ors. 167 ITR 471 opined that when technical consideration and substantial justice are pitted against each other, the courts are expected to further the cause of substantial justice. This is for the reason that an opposing party, in a dispute, cannot have a vested right in injustice being done because of a non- deliberate delay. Therefore, it follows that while considering matters relating to the condonation of delay, judicious and liberal approach is to be adopted. If “sufficient cause” is found to exist, which is bona-fide one, and not due to negligence of the assessee, the delay needs to condoned in such cases. The expression ‘sufficient cause’ is adequately elastic to enable the courts to apply law in a meaningful manner, which sub-serves the end of justice- that being the life purpose of the existence of the institution of the courts. When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred. This Administrator of the Estate of Late Mr. E.F. Dinshaw means that there should be no malafide or dilatory tactics. Sufficient cause should receive liberal construction to advance substantial justice. The Hon’ble Apex Court in Collector, Land Acquisition vs Mst. Katiji & Ors. (167 ITR 471) observed as under:- “3. 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 subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this 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 others courts in the hierarchy.”
2.3. Furthermore, the Hon'ble Supreme Court in the case of Vedabai Alia Vaijayanatabai Baburao Patil vs. Shantaram Baburao Patil 253 ITR 798 held that the court has to exercise the discretion on the facts of each case keeping in mind that in construing the expression ‘sufficient cause’, the principle of advancing substantial justice is of prime importance. The court held that the expression “sufficient cause” should receive liberal construction.
Administrator of the Estate of Late Mr. E.F. Dinshaw
Having made the aforesaid observation and considering the material facts available on record and more specifically the reason of delay, as mentioned in the application, which is supported by an affidavit, the delay is condoned,
So far as, confirmation of the disallowance of expenses amounting to Rs.25,98,244/- on the plea that expenses were not incurred or expanded wholly and exclusively for the purposes of earning income under the head “income from other sources” is concerned, the ld. counsel for the assessee, Shri Manish Shah, at the outset, contended that the impugned issue is covered by the decision of the Tribunal for A.Y. 1991-92 (ITA No.4892/Bom/1995) order dated 28/05/2002 and the decision for A.Y. 2008-09 (ITA No.4733 and 2327/Mum/2011) order dated 19/02/2014. The ld. counsel further contended that if the aforesaid ground is decided in favour of the assessee then the remaining grounds will remain for academic interest only. This factual matrix was consented to be correct by ld. DR, Shri M. Murli.
3.1. We have considered the rival submissions and perused the material available on record. We find that the Tribunal considered the issue of expenditure in A.Y. 1991- 92 (ground no.4) and finally after hearing the rival submissions reduced the relief to 50% (half). Identically for Administrator of the Estate of Late Mr. E.F. Dinshaw A.Y. 2008-09, while deliberating upon in the cross appeals, the Tribunal, vide order dated 19/02/2014 (ITA No.2327/Mum/2011) in the appeal of the assessee with respect to ground no.2, adjudicating the same in ground no. 11 & 12 held as under:-
“11. Regarding ground no.2, Ld Counsel for the assessee filed a copy of the order of the Tribunal for the assessment year 1991-92 vide and mentioned that the ground no.4 of the said appeal decided by the Tribunal is relevant to the ground no.2 of the present appeal. Bringing our attention to para 7 of the said order of the Tribunal, Ld Counsel mentioned that the issue stands covered to the tune of 50% of the claim of the assessee. Relevant para 7 of the said Tribunal's order (supra) reads as under:
"7. We have heard the rival submissions and perused the material available on record. As per the figures given on pages 8 & 9 of the assessment order, the assessee's overall income earning activities constitute number of transactions i.e., capital gains, interest from deposits made in the capital gains scheme etc. In tect; the assessee has not furnished separate activity-wise details of expenditure. The expenditure incurred against the capital gains impliedly will not be admissible. The CIT (AJ has not considered this aspect. Before the AD no such bread-up was filed. Under these circumstances, the inescapable conclusion which emerges is that the expenditure of Rs. 2,76,334/- comprises of expenses pertaining to capital gains as well as income from other sources. Though the details are not avaIlable, setting aside at this level will again be a repetition of the same exercise. Consequently, we deem it expedient to estimate, to the interest of justice, and direct that one half of the expenditure out of these should be held to be attributable to income from other sources. Consequently, the relief given by the CIT (A) on this issue should be reduced by half. This ground of the Revenue is partly allowed. "
On perusal of the said order of the Tribunal and the facts of the present appeal for the 2008-2009 under consideration, we are of the opinion that the assessee will succeed partly on this issue. Accordingly, we direct the AO to examine the facts of the present case with that of the appeal decided by the Tribunal and grant relief in accordance with the order of the Tribunal dated 28.5.2002. Accordingly, ground nO.2 is decided in the above mentioned manner.”
Administrator of the Estate of Late Mr. E.F. Dinshaw
In the aforesaid order, the Tribunal considering the totality of facts, reduced the disallowances of expenses to 50%. In the absence of any contrary facts or decision, brought to our notice, by either side, following the aforesaid order, the disallowance of expenses is reduced to 50% (as agreed from both sides), thus, the appeal of the assessee is partly allowed.
So far as, the remaining grounds are concerned, the ld. Counsel for the assessee, during hearing, agreed/suggested that if the aforesaid ground is allowed, in terms indicated hereinabove, then, the remaining ground become in-fructuous, therefore, dismissed as such.
Finally, the appeal of the assessee is partly allowed.
This order was pronounced in the open in the presence of ld. representatives from both sides at the conclusion of the hearing on 14/03/2016.