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Income Tax Appellate Tribunal, MUMBAI BENCHES “H”, MUMBAI
Before: SHRI JASON P. BOAZ (AM) & SHRI. AMIT SHUKLA (JM)
These appeals by the assessee are directed against the order of the CIT(Appeals)-32, Mumbai dt. 18/10/2013 for Asst. year 2007-08 and of the CIT(Appeals)-31, Mumbai dt. 27/01/2014 for Asst. year 2008- 09.
The facts of the case, briefly, are as under:- 2.1 For Assessment year 2007-08, The assessee filed his return of income on 24/04/2009 declaring income of Rs. 1,74,68,919/-, wherein the admitted taxes payable of Rs. 60,40,398/- was admittedly not paid by the assessee along with the return of income. The assessment was concluded u/s 143(3) of the Income Tax Act, 1961(in short ‘the Act’) vide order dt. 30/12/2010, wherein the income of the assessed was determined at Rs. 3,37,82,030/-.
2.2 For Assessment year 2008-09, the assessee filed his return of income on 30/09/2009 declaring income of Rs. 2,17,62,204/-, wherein the admitted taxes payable of Rs. 64,28,159 /- was admittedly not paid by the assessee along with the return of income. The return was processed u/s 143(1) of the Act and the case was taken up for scrutiny. The assessment was concluded u/s 143(3) of the Act vide order dt. 29/12/2010 wherein, the income of the assessee was determined at Rs. 4,10,97,960/- 2.3 Aggrieved by the orders of assessment for both Assessment years 2007-08 and 2008-09, the assessee preferred appeals, before the CIT(Appeals)-31 and CIT(A)-32 Mumbai, respectively. The respective Ld. CIT(A) observing from Col: 9 in Form 35 that the assessee had not paid admitted taxes on the returned income, did not admit these appeals for adjudication in accordance of the provisions of Section 249(4) of the Act and accordingly dismissed the assessee’s appeals for both assessment years.
Assessee’s appeal in Asst. year 2007-08 Order on petition for condonation of delay in filing the appeal 3.1 The order of the CIT (Appeals)-32, Mumbai, dt. 18/10/2013 for Asst. year 2007-08 was admittedly received by the assessee on 29/10/2013. In these circumstances, the assessee ought to have filed the appeal before the Tribunal on or before 28/12/2013. The appeal was filed only on 07/05/2014, thereby leading to a delay of 130 days in filing the appeal.
3.2 Before the Tribunal, the assessee has filed a petition seeking condonation of delay accompanied by an affidavit dt. 15/10/2015, submitting therein that in that period he was suffering Severe Financial Problems which got aggravated due to dismissal of his appeals for nonpayment of admitted taxes followed by attachment of his bank account by the Revenue. It is submitted that this resulted in his being advised Medication and bed rest due to stress related ailments and that in view of this he could not attend to matters relating to filing of appeal. In this regard, the assessee has filed a Medical Certificate dt. 10/04/2014 which states that from the period 05/11/2013 to June 2014, the assessee was under treatment as he was suffering from acute chromic neurosis and depression. The Ld AR of the assessee pleaded that the aforesaid reasons put forth by the assessee constitute reasonable cause for the delay in filing the appeal for Asst. year 2007-08 and therefore, prayed that the said delay be condoned.
3.3 Per contra, the Ld DR opposed the condonation of delay in filing the appeal.
3.4.1 We have heard both parties and perused and carefully considered the material on record. Admittedly, there was a delay of 130 days in filing the appeal before the Tribunal. The Hon’ble Apex Court in the case of Collector Land Acquisition (167 ITR 471)(SC), while laying down the principles for considering the matters of condonation of delay in filling appeals has stated that substantial justice should prevail over technical considerations. The Hon’ble Court also explained that ‘everyday’s delay must be explained’, does not mean that a pedantic approach should be taken. The doctrine must be applied in a natural, common sense and pragmatic manner. 3.4.2 Taking into account the facts and circumstances of the case, on the issue of the delay of 130 days in filing this appeal, we are of the view that if the said delay is condoned, there shall be no loss to Revenue, as legitimate taxes payable by the assessee to Revenue, in accordance with law alone will be collected. Moreover, it is hard to believe that an assessee in whose case taxes payable are approx to Rs. 96,68,405/- would wantonly file the appeals belatedly, thereby jeopardizing his own case. In this view of the matter, we are of the considered opinion that this a fit case for condoning the delay in filing this appeal for Asst. year 2007-08 and therefore in the interest of equity and justice condone the said delay.
Order for Asst. year 2007-08 4.1 For Asst. year 2007-08, briefly stated the facts are that the assessee filed the return of income on 24/04/2009 declaring income of Rs. 1,74,68,919/-. The Assessing Officer (AO’) determined the assessee’s income in the order of assessment at Rs. 3,37,82,034/-. On appeal, the Ld. CIT(A) observed that there was a failure on the part of the assessee to pay the admitted taxes of Rs. 60,40,398/- on the income declared by the assessed in the return of income. The Ld. CIT(A) proceeded to dismiss the assessee’s appeal as not maintainable in accordance with the provisions of Section 249(4) of the Act. It is in this context that the assessee’s appeal has come up before us.
4.2 We have heard the rival submissions and perused the material on record, including the judicial pronouncement cited before us. Admittedly, the assessee filed his return of income for Asst. year 2007- 08 declaring total of Rs. 1,74,68,919/- on which the admitted taxes payable amounting to Rs. 60,40,398/- was admittedly not paid by the assessee along with the return of income. Pursuant to the order of assessment wherein the assessee’s income was determined at Rs. 3,37,82,030/-, the assessee preferred an appeal before the Ld. CIT(A) again without payment of tax due on income returned which was not admitted and dismissed as non-maintainable in accordance with the provisions of Section 249(4)of the Act. After the dismissal of the appeal by the Ld. CIT(A), the assessed made good the deficiency by depositing taxes due on returned income in installments, (i.e. amounting to Rs. 73,00,000/-), the evidence in respect of which has been placed on record. The assessee in this appeal now prays for restoration of the appeal to the file of the Ld. CIT(A) for adjudication on merits on the grounds that the amount of admitted tax on returned income has now been paid.
4.3 It would be relevant to peruse the provisions of Section 249(4) of the Act, in the context of which the impugned order has been passed, which is as under:- “249(4) No appeal under this chapter shall be admitted unless at the time of filing of the appeal – (a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or (b) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him: Provided that, on an application made by the appellant in this behalf, the Commissioner (Appeals) may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of that clause.”
4.4 The objective and purpose of Section 249(4) of the Act is to ensure the payment of admitted taxes on returned income before admission of the appeal. In the case on hand, we find that the assessee has paid the admitted taxes on returned income though it is after the disposal of his appeal by the Ld. CIT(A). On payment of the admitted taxes on returned income, the defect in the assessee’s appeal, due to non-compliance of a directory requirement of paying such admitted taxes, of Rs. 60,40,398/- before the filing of the appeal, is removed. In these factual circumstances, we set aside the impugned order for Asst. year 2007-08 and restore the matter to the file of the Ld. CIT(A) for disposed of the appeal on merits. Incoming to this finding, we place reliance on the decision of the co-ordinate bench of ITAT-Mumbai in the case of Bhumiraj Construction vs. Addl CIT (2011) 131 ITD 406.
4.5 In the result, the assesses appeal for Asst. year 2007-08 is allowed for statistical purposes as indicated above.
Assessees appeal for Asst. year 2008-09 in ITA No. 3269/Mum/2014
The facts and circumstances of the case on hand in respect of Asst. year 2008-09 are similar to that of Asst. year 2007-08. For Asst. year 2008-09, the details on record, show that the assessee has paid the admitted taxes on the retuned income (i.e. Rs. 78,00,000/- is totally paid in installments) after the disposal of his appeal by the Ld CIT(A). On payment of the admitted taxes on retuned income, the defect in the assessee’s appeal, due to non-compliance of a directory requirement of paying such admitted taxes of Rs. 64,82,160/- before filing the appeal, is removed. In these factual circumstances, we set aside the impugned order for Asst. year 2008-09 and restore the matter to the file of the Ld. CIT(A) for disposal of the appeal on merits. In coming to this finding, we place reliance on the decision of the co-ordinate bench of the ITAT-Mumbai in the case of Bhumiraj Constructions (supra).
In the result, the assesses appeal for Asst. year 2008-09 is allowed for statistical purposes as indicated above.
Order pronounced in the open court on December 11th, 2015