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Income Tax Appellate Tribunal, DEHRADUN BENCH, DEHRADUN
Before: Dr. B.R.R. Kumar & Sh. Yogesh Kumar U.S.
1 ITA Nos. 35 & 36/DDN/2020 Narendra Kumar Jain Vs. DY. CIT
IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN BENCH, DEHRADUN Before Dr. B.R.R. Kumar, Accountant Member & Sh. Yogesh Kumar U.S., Judicial Member
ITA No.35/DDN/2020 Assessment Year: 2015-16
Vs Narender Kumar Jain, Dy. CIT Arihant Oil Mill, Someshwar Circle-1(4) (1) Rishikesh Nagar, Rishikesh, PAN: AAQPJ2497J (APPELLANT) (RESPONDENT) PAN No. AFYPB4513J
ITA No.36/DDN/2020 Assessment Year: 2016-17
Vs Narender Kumar Jain, ITO Arihant Oil Mill, Someshwar Circle-1(4) (1) Nagar, Rishikesh, Rishikesh PAN: AAQPJ2497J (APPELLANT) (RESPONDENT) PAN No. AAQPJ2497J
Assessee by : Shri K. K. Juneja, Adv Revenue by : Smt. Poonam Sharma, Sr.DR Date of Hearing: 29.04.2022 Date of Pronouncement: 29 .04.2022
ORDER Per Yogesh Kumar U.S., Accountant Member:
These two appeals have been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), Dehradun dated 19/09/2020 and 21/09/2020 for the Assessment Years 2015- 16 & 2016-17 respectively.
2 ITA Nos. 35 & 36/DDN/2020 Narendra Kumar Jain Vs. DY. CIT
ITA No.35/DDN/2020 (Assessment Year: 2015-16)
In the instant appeal, the assessment order has been passed on 28/12/2017 by making an addition of Rs. 48,92,040/-. As against the assessment order, the assessee has instituted an appeal before the CIT(A) on 16/01/2019. As per Section 249 (2) of the Act, the appeal shall be presented within 30 days to the CIT (A). The assessee has preferred the appeal before the CIT(A) with a delay of 352 days. The assessee has claimed that, the assessee could not file the appeal due to his lack of knowledge and after receiving the assessment order for the Assessment Year 2016-17 on 18/12/2018, the assessee realized that he should file an appeal for the Assessment Year 2015- 16 and sought for condonation of the delay. The reasons assigned by the Assessee before CIT (A) for condonation of delay are as follows:
“that with reference to the facts mentioned in the Statement of Facts, it is respectfully stated that the land purchased during the assessment year 2014-15 was sold during the assessment year 2015-16 and 2016-17. During the assessment year 2015 — 16, the assessee had computed and disclosed the short-term capital loss of Rs. 10, 23, 992/-. Since during the assessment year 2015-16 there was no other income under the head capital gains, hence the assessee had opted to carry forward the said loss to the next assessment year. Since while completing the assessment for the assessment year 2015-16, the Ld. A.O. was of the view that the assessee was not entitled to claim any short-term capital loss and hence he disallowed the carry forward of the said loss, consequently such disallowance did not cause any additional tax burden for the assessment year 2015 - 16 since the assessee did not have any other income under the head capital gains. Due to his ignorance, the assessee could not decipher the financial impact of such this allowance. The assessee was completely not aware of the fact that such this allowance of the carry forward of the loss would disentitle
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him in claiming the set off thereof in the subsequent assessment years. Hence due to his lack of knowledge he could not file an appeal. Later, the case of the assessee for assessment year 2016 - 17 was also taken for the scrutiny u/s 143 (3) and through the assessment order dated 18/12/2018 the assessee was informed that he was not entitled to claim the set - off of the brought forward losses since its carry forward was disallowed by the erstwhile Ld. A.O. while completing the assessment for the assessment year 2015- 16 through the assessment order dated 28/12/2017. Now, it is only after the receiving the assessment order for assessment year 2016 - 17 on 18/12/2018, the assessee could reasonably realize that he should have filed an appeal for assessment year 2015-16 within the prescribed time. It is humbly prayed that having regard to the principles of natural justice, the unintended delay caused in filing the appeal be condoned.”
The Ld. CIT(A) without satisfying with the above reasons, dismissed the appeal filed by the assessee on the grounds of delay in latches without adjudicating the appeal on merit vide impugned order dated 19/09/2020. Aggrieved by the order dated 19/09/2020 passed by CIT(A) on the following grounds:-
“That in facts and circumstance of the case, the AO i.e. Dy. CIT, Circle 1(4)(1), Rishikesh does not have a Jurisdiction over the case, completion of the assessment without proper jurisdiction is illegal and void ab initio, the same may be annulled.
That in facts and circumstance of the case, the AO has wrongly disallowed the Short Term Capital Loss of Rs. 10,23,992/- and for which the appeal was file and the CIT(A) has not entertained the same as the appeal was filed late, the same is arbitrary and unjustified.
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That in facts and circumstances of the case, the CIT(A) has not appreciated the reason for not filing the appeal in time which was beyond the appellant's control, the same is unfair and unwarranted.
That in facts and circumstances of the case, the AO has failed to give the credit of the proportionate amount of Rs. 17,08,000/- which has been disclosed under section 56(2)(vii)(b) and due taxes has been paid in the immediate previous year is against the principal of accounting and natural justice.
That in facts and circumstances of the case, the presumptions of the Authorities below that being the same circle rate of the property at the tune of purchase and sale is same there cannot be any loss is incorrect without providing any opportunity to the appellant.
That in facts and circumstances of the case, the AO has completed the assessment without application of mind, disallowed the Short Term Capital Loss of Rs. 10,23,992/- taking into consideration the revised return filed on 24.03.2017 for Rs. 8,12,190/-but while computing the income he has taken the figure of original ITR filed on 30.09.2015 for Rs. 10,79,440/-, the same is erroneous and unjust.
That the revised income of Rs. 8,12,190/- be taken as against original income Rs. 10,79,440/- and the disallowance of Rs. 10,23,992/- may kindly be allowed.”
We have heard Ld. Counsel for the assessee and also Ld. AR perused the record and gave our thoughtful consideration.
The Ld.CIT(A) summarily dismissed the appeal on the ground of delay in latches. The reasons assigned by the assessee for condoning the delay was that ‘due to the ignorance of the assessee could not decipher for the financial impact, and not other of the fact that the allowance of the carry forward loss
5 ITA Nos. 35 & 36/DDN/2020 Narendra Kumar Jain Vs. DY. CIT
could disentitle him in claiming the set of thereof in the subsequent assessment years (pursuant to the assessment order for the AY 2015-16). The assessee could realize only after receiving the assessment order for the AY 2016-17 on 18/12/2018 the assessee could reasonably realized that he should have filed an appeal for AY 2015-16’ and prayed for condonation of delay before CIT(A). Further, in the subsequent year AY 2016-17 also the similar additions have been made on the basis of the addition made in the year under consideration (AY 2015-16) and the issue has not been dealt independently and not recorded any independent finding in the AY 2016-17. By looking into the peculiar facts and circumstances, in our view the CIT(A) ought have taken liberal view in condoning the delay.
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:
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 highest that can happen is that a cause would be 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,
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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." 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 non-deliberate 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 fact, 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."
Here we would also like to refer the finding of the Apex Court in the case of N. Balakrishnan V. M. Krishnamurthy, AIR 1998 SC 3222. The Apex Court held 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 finis 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.
7 ITA Nos. 35 & 36/DDN/2020 Narendra Kumar Jain Vs. DY. CIT
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 Muni-capacity, AIR 1972 SC 749." 8. In the light of the above discussion and considering to adopt justice oriented approach with an intention to renderer substantial justice, we find that there was sufficient cause for condoning the delay in the institution of appeal before the CIT(A) by the assessee. The CIT(A) ought to have condoned the delay keeping in view of the laws laid down by the Apex Court in the above cases cited and ratio laid down by the Hon'ble Madras High Court in the case of Areva T and D India Ltd., Vs. JCIT, [2006] 287 ITR 555 (Mad) wherein the delay was condoned. Therefore, without expressing anything on the merit of the case, we inclined to remit the file of the CIT(A) with a direction to condone the delay and decide the appeal on merit after providing reasonable opportunity of being heard to both the sides. Thus we allow the Grounds of Appeal No. 3. Since the matter is remanded to CIT(A) to decide the issues involved in the other grounds, the Ground of Appeal No. 1 to 4 to 8 requires no adjudication by us.
In the result, appeal of the assessee is partly allowed for statistical purpose. ITA No.36/DDN/2020 Assessment Year: 2016-17 1. That in facts and circumstance of the case, the AO has wrongly disallowed the Short Term Capital Loss of Rs. 1,85,152/- for which the appeal was filed but the CIT(A) did not appreciated the fact and sustained the addition, the same is arbitrary and unjustified.
8 ITA Nos. 35 & 36/DDN/2020 Narendra Kumar Jain Vs. DY. CIT
That in facts and circumstances of the case, the AO has failed to give the credit of Rs. 2,58,252/- the proportionate amount of Rs. 17,08,000/- which has been disclosed under section 56(2)(vii)(b) and due taxes has been paid in the earlier year is against the principal of accounting and natural justice.
That in facts and circumstances of the case, the Authorities below has not appreciated the provisions of section 49(4) of the Income Tax Act, 1961, the same is unwarranted and uncalled for.
That in facts and circumstances of the ease, the AO has disallowed to give the credit of brought forward Short Term Capital Loss of Rs. 10,29,202/-, the same is erroneous and arbitrary.
That in facts and circumstances of the case, appellant praise to the Hon'ble Bench to please allow the brought forward losses of Rs. 10,23,992/- and allow the Short term capital loss of Rs. 1,85,152/- as claimed in his revised return filed on 24.03.2017.
Brief facts of the case are that, the original return was filed electronically for Ay 2016-17 in ITR-4, on 17/10/2016 declaring total income at Rs.17,19,320/-. However, the total income was revised to Rs. 11,87,080/- vide the revised return filed on 24/03/202017. The original ROI was processed u/s 143(1) of the Act on 28/10/2016 resulting into a refund of Rs. 1120/- which was issued to the assessee. The case was selected for limited scrutiny through Computer Aided Scrutiny Selection “CASS.” The reason descriptions for Limited Scrutiny were (i) Large amount not credited to profit and loss account as per schedule A-O1 of Return and (ii) Taxable income shown in revised return is less than taxable income shown in the original ITR and large refund has been claimed. The
9 ITA Nos. 35 & 36/DDN/2020 Narendra Kumar Jain Vs. DY. CIT
assessment proceedings have been initiated against the assessee and the Representative of the assessee has participated in the proceedings. The assessment order has been passed on 18/12/2018 by disallowing claim of the carry forward of short term capital loss of Rs.10,23,992/- and added back to the total income, a loss claimed u/s 49(4) by the assessee of Rs. 1,85,152/- also disallowed. We find that, both the above additions have been made by the A.O on the ground that similar additions have been made in the earlier assessment year i.e. AY 2015-16 by the Assessing Officer by following the principle of consistency the additions/disallowances have been made for the year under consideration. The Ld. A.O has not adjudicated the issues independently on merit and wholly relied on findings, reasoning of the assessment order for the AY 2015-16 and passed the assessment order for AY 2016-17 on 18/12/2018.Further the CIT(A) has also not dealt with the appeal on merit and dismissed the Appeal merely on the ground ‘that similar disallowances/additions were made in the AY 2015-16, the assessee did not file any appeal against the said assessment order till passing of the assessment order dated 18/12/2018.
We have alredy remanded the issues involved in AY 2015-16 to the file of CIT (A) in ITA No. 35/DDN/2020 with a direction to decide the matter on merit, since the similar issues are involved in the year under consideration and which is also consequential to AY 2015-16, in interest of justice we find it proper to restore the matter to the file of CIT(A) to adjudicate the issues on merit in accordance with law along with matter involved in AY 2015-16.
10 ITA Nos. 35 & 36/DDN/2020 Narendra Kumar Jain Vs. DY. CIT
In the result, the Appeal of the Assessee is allowed for statistical purpose.
Order Pronounced in the Open Court on 29/04/2022.
Sd/- Sd/- (Dr. B. R. R. Kumar) (YOGESH KUMAR U.S.) Accountant Member Judicial Member Dated: 29/04/2022 *R. N. Sr. PS*