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Income Tax Appellate Tribunal, MUMBAI BENCHES “SMC”, MUMBAI
Before: Shri Joginder Singh,
आदेश / O R D E R
The assessee is aggrieved by the impugned order dated 09/12/2013 of the Ld. First Appellate Authority, Mumbai. The ground raised in this appeal pertains to holding that the amount of Rs.4,41,003/-, being the voluntary contribution received from the members of the cooperative housing society was not exempt from taxation ignoring the principle of mutuality, which is applicable to the said receipts and further though the amount was inadvertently offer to tax, in view of the earlier orders of the ld. Commissioner of Income Tax (Appeals), holding that the same was not exempt from taxation, ignoring the principle of mutuality.
During hearing of this appeal, I have heard Shri Biren Gabhawala, ld. counsel for the assessee and Shri A.K. Dhondial, ld.DR. Before adverting further, I find that there is delay of 468 days in filing the appeal, by the assessee, before this Tribunal. The assessee has filed an application, supported by an affidavit, for condonation of delay, on the reasons stated therein. The ld. counsel pointed out that the manager of the society did not bring to the notice of the secretary of the society that any notice has been received and only when notice was received for levying penalty u/s 271(1)(c) of the Act, the assessee was informed that appeal was filed on 16/01/2012 before the ld. Commissioner of Income Tax (Appeals). It was pointed out that sincere efforts were made to locate the order of the ld. Commissioner of Income Tax (Appeals), which caused delay and ultimately the appeal was filed. It was explained that the delay was unintentional and no useful purpose will be served in filing the appeal late. On the other hand, the ld. DR, opposed the condonation of delay by explaining that each day delay has to be explained by the assessee.
2.1. I have considered the rival submissions and perused the material available on record, affidavit filed by the assessee and the attendant circumstances as has been explained in the application. I am satisfied with the explanation of the assessee that the delay was not deliberate and ultimate aim is that no person should condemned unheard, more specifically when the technicalities are pitted against the substantial cause of justice. My view find support from the celebrated decision from Hon’ble Apex Court in Collector, Land Acquisition vs Mst. Katiji & Ors. 167 ITR 471 wherein, it was 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. The Hon’ble Apex Court in Vedabhai vs Santaram 253 ITR 798 observed that inordinate delay calls of cautious approach. This 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 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.”
2.2. 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. In view of the aforesaid discussion, the delay is condoned.
2.3. So far as, the merits of the appeal is concerned, the ld. counsel for the assessee pointed out that for assessment year 2005-06, the Tribunal vide order dated 15th October, 2010, (ITA No.520/Mum/2010) in the case of assessee itself discuss the issue in a identical situation and following the decision from Hon’ble jurisdictional High Court in the case of Singh Co-oprating Housing Society vs ITO 317 ITR 47 (Bom.), Su Prabhat Cooperative Housing Society Ltd. vs ITO (ITA No.1972 of 2009, order dated 01/10/2009, as well as Shyam Housing Society Ltd. vs CIT (mentioned in para 7 of the order of the Tribunal) held that the principle of mutuality will be apply to the receipts and dismiss the appeal of the Revenue. Further reliance was placed upon the decision from Hon’ble jurisdictional High Court in CIT vs Darbhanga Mansion CHS Ltd. (ITA No.1474 of 2012) order dated 18/12/2014. The ld. DR, defended the conclusion arrived at in the impugned order.
2.4. I have considered the rival submissions and perused the material available on record. In view of the above submissions of the assessee and without going into much deliberation, I find merit in the submissions of the assessee. As per judicial discipline, the ld.CIT(A) is expected to follow the judicial pronouncement from any higher forum i.e. ITAT and Hon’ble jurisdictional High Court, therefore, direct the ld. Commissioner of Income Tax (Appeals) to consider the submissions of the assessee in the light of the aforesaid decisions along with others, (if any cited before the ld. First Appellate Authority, during hearing before him/her) and decide afresh in accordance with law. The assessee is at liberty to furnish evidence, if any, in support of its claim along with case laws. Thus, the appeal of the assessee is allowed for statistical purposes.
Finally, the appeal of the assessee is allowed for statistical purposes.
This order was pronounced in the open Court in the presence of ld. representative of both sides at the conclusion of the hearing on 04/01/2016.