M/S.AVATHAR JEWELLERS V. THE DEPUTY COMMISSIONER OF INCOME TAX

ITA/47/2019

AI Insights

The case involves Avathar Jewellers, a partnership firm engaged in the jewellery business, which faced a delay in filing appeals against the orders of the Income Tax Appellate Tribunal, Cochin. The appeals were initially dismissed due to the delay, which the Tribunal found inadequately explained. The appellant argued that the delay was due to his police custody, preventing him from signing the necessary documents. The High Court, referencing the Supreme Court's decision in Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy, adopted a liberal approach to the condonation of delay, emphasizing substantial justice over technicalities. Consequently, the court set aside the Tribunal's order and allowed the appeals, directing a decision on the merits.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 686154 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 01-04-2022
• Assessment Year: misc
• Other Referred Cases: Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy and others [(2013) 12 SCC 649]
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: P K MENON; JOSE JOSEPH
• Assessee Lawyers: ANIL NAIR; SREEJITH NAIR; ACHYUT PADMARAJ; ARYA ANIL; NILOOFER NIZAM; GOKULRAJ
• Keywords: Appellate order; Assessment Order; Condonation of delay; Income tax appeal; Police custody
• Section: 143(3); 153C

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI FRIDAY, THE 1ST DAY OF APRIL 2022 / 11TH CHAITHRA, 1944 ITA NO. 45 OF 2019 ITA 580/2017 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S: AVATHAR JEWELLERS ALWA TOWERS,EDAPPAL,MALAPPURAM REPRESENTED BY ITS MANAGING PARTNER MR.U.ABDULLA. BY ADVS. ANIL D. NAIR SRI.SREEJITH R.NAIR SRI.ACHYUT K PADMARAJ SMT. ARYA ANIL SMT. NILOOFAR O. NIZAM SHRI.GOKULRAJ L. RESPONDENT/S: THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE,THRISSUR. BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 01.04.2022, ALONG WITH ITA.51/2019, 47/2019 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA NO. 45, 47, 50 & 51 OF 2019 -2- IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI FRIDAY, THE 1ST DAY OF APRIL 2022 / 11TH CHAITHRA, 1944 ITA NO. 51 OF 2019 ITA 581/2017 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S: M/S.AVATHAR JEWELLERS ALWA TOWERS, EDAPPAL, MALAPPURAM REPRESENTED BY ITS MANAGING PARTNER, MR.U.ABDULLA BY ADVS. ANIL D. NAIR SRI.SREEJITH R.NAIR SRI.ACHYUT K PADMARAJ SMT. ARYA ANIL SMT. NILOOFAR O. NIZAM SHRI.GOKULRAJ L. RESPONDENT/S: THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, THRISSUR-680 001 BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 01.04.2022, ALONG WITH ITA.45/2019 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA NO. 45, 47, 50 & 51 OF 2019 -3- IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI FRIDAY, THE 1ST DAY OF APRIL 2022 / 11TH CHAITHRA, 1944 ITA NO. 47 OF 2019 ITA 582/2017 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S: M/S.AVATHAR JEWELLERS ALWA TOWERS,EDAPPAL, MALAPPURAM,REPRESENTED BY ITS MANAGING PARTNER. M.U.ABDULLA. BY ADVS. ANIL D. NAIR SRI.SREEJITH R.NAIR SRI.ACHYUT K PADMARAJ SMT. ARYA ANIL SMT. NILOOFAR O. NIZAM RESPONDENT/S: THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE,THRISSUR-680001. BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 01.04.2022, ALONG WITH ITA.45/2019 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA NO. 45, 47, 50 & 51 OF 2019 -4- IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI FRIDAY, THE 1ST DAY OF APRIL 2022 / 11TH CHAITHRA, 1944 ITA NO. 50 OF 2019 ITA 583/2017 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S: AVATHAR JEWELLERS ALWA TOWERS, ALWA TOWERS, EDAPPAL, MALAPPURAM, REPRESENTED BY ITS MANAGING PARTNER MR U. ABDULLA BY ADVS. ANIL D. NAIR SREEJITH R.NAIR ACHYUT K PADMARAJ ARYA ANIL NILOOFAR GOKULRAJ L. RESPONDENT/S: THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, THRISSUR - 680001 BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 01.04.2022, ALONG WITH ITA.45/2019 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA NO. 45, 47, 50 & 51 OF 2019 -5- S.V.BHATTI & BASANT BALAJI, JJ. [ITA Nos.45/2019,51, 47 AND 50/2019] JUDGMENT (Dated this the 1st day of April 2022) Basant Balaji J., I.T.A.Nos.45, 47, 50 and 51 of 2019 are filed by the assessee, a partnership firm engaged in jewellery business, against the orders of the Income Tax Appellate Tribunal, Cochin Bench, Cochin in I.T.A. Nos.580/Coch/2017, 582/Coch/2017, 583/Coch/2017 and 582/Coch/2017 respectively. 2. The appellant’s business premises was searched and in the search certain documents were recovered and the assessment was completed under Section 143(3) read with Section 153C of the Income Tax Act as per the Assessment order dated 31.3.2014. Aggrieved by the said assessment ITA NO. 45, 47, 50 & 51 OF 2019 -6- order, the appellant filed statutory appeal before the Commissioner of Income Tax (Appeals) and the appellate authority, by order dated 27.12.2016 dismissed the appeal. The appellant filed second appeal before the Income Tax Appellate Tribunal, Cochin Bench as I.T.A. Nos.580 to 583/Coch/2017. The appeals filed by the appellant were not in time and hence, the application to condone the delay of 217 days in filing the appeal was also filed along with the appeal memorandum. Annexure – D, petition to condone the delay, was filed through the power of attorney holder of the Managing Partner. The Tribunal, by the impugned order, dismissed the delay petition holding that the appellant failed to give proper explanation for condoning the delay. Aggrieved by the said order, these appeals are filed. 3. Annexure-D is the petition to condone the delay in filing the appeal, which was filed along with the appeals before the Appellate Tribunal. In the said application, the ITA NO. 45, 47, 50 & 51 OF 2019 -7- appellant has specifically stated that he was in police custody for few months and only after releasing from the custody, he could sign the requisite documents and hence, the delay occurred in filing the appeal. 4. Heard Shri.Anil D.Nair, learned counsel for the appellant and Shri.Jose Joseph, learned counsel for the respondent. 5. It is a fact that that the appeal was filed with a delay of 217 days, which was sought to be condoned by filing Annexure – D application. The reasons stated in the petition to condone the delay was that he was not physically present to sign the requisite documents to file the appeal as he was in police custody. The person, who is physically not able to sign the documents for filing the appeal because he was in police custody, is a genuine and bonafide reason for condoning the delay. Laches cannot be attributed against him. Moreover, the finding of the Tribunal that there is no proper explanation for condoning ITA NO. 45, 47, 50 & 51 OF 2019 -8- the delay, according to us, is not correct. 6. The learned counsel for the appellant relied on the decision of the honourable Supreme Court reported in Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy and others [(2013) 12 SCC 649], to contend that in dealing with delay petitions, the court should take liberal approach. The Apex Court held in the said decision that:- “(i) there should be a liberal, pragmatic, justice – oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice. (ii) The terms “sufficient cause” should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms basically elastic and are to be applied in proper perspective to be obtaining fact – situation. (iii) Substantial justice being paramount and ITA NO. 45, 47, 50 & 51 OF 2019 -9- pivotal the technical consideration should not be given undue and uncalled for emphasis.” 7. The Honourable Apex Court in a catena of decisions held that in dealing with delay petitions, a liberal view has to be taken and lis has to be decided on the basis of its merits rather its technicalities. According to us, since the physical movement of the appellant was curtailed, since he was in the police custody, we are of the considered opinion that the Tribunal ought to have condoned the delay, and an opportunity to the assessee/appellant to contest the case on merits is afforded. In view of the matter, we set aside the order of the Income Tax Appellate Tribunal in I.T.A. Nos.580 to 583/Coch/2017. Taking note of the circumstances of the case and the explanation offered by the appellant to condone the delay in filing the appeal as well as the dictum laid down by the honourable Apex Court in the decision cited Esha Bhattacharjee (supra), we condone the delay ITA NO. 45, 47, 50 & 51 OF 2019 -10- of 217 days in filing the appeal before the Tribunal. The Tribunal is directed to pass final orders in the appeals filed by the appellant on merits within a period of three months from the date of receipt of a copy of this judgment. In the result, Income Tax Appeals are allowed as above. SD S.V.BHATTI, JUDGE SD BASANT BALAJI, JUDGE dl/ ITA NO. 45, 47, 50 & 51 OF 2019 -11- APPENDIX OF ITA 51/2019 PETITIONER ANNEXURES ANNEXURE-A TRUE COPY OF THE ASSESSMENT ORDER DATED 31.03.2014 FOR THE A.Y.2010-11 ANNEXURE-B TRUE COPY OF THE APPELLATE ORDER DATED 28.1.2016 OF THE COMMISSIONER OF INCOME TAX (APPEALS) ANNEXURE-C TRUE COPY OF THE APPEAL MEMORANDUM BEFORE INCOME TAX APPELLATE TRIBUNAL ANNEXURE-D TRUE COPY OF THE PETITION FOR DELAY CONDONATION BEFORE TRIBUNAL ANNEXURE-E TRUE COPY OF THE ORDER OF THE INCOME TAX TRIBUNAL DATED 27/09/2018 ITA NO. 45, 47, 50 & 51 OF 2019 -12- APPENDIX OF ITA 47/2019 PETITIONER ANNEXURES ANNEXURE -A TRUE COPY OF THE ASSESSMENT ORDER DATED 31.03.2014. ANNEXURE -B TRUE COPY OF THE APPELLATE ORDER DATED 29.12.2016. ANNEXURE -C TRUE COPY OF THE APPEAL MEMORANDUM BEFORE TRIBUNAL. ANNEXURE -D TRUE COPY OF THE PETITION FOR DELAY CONDONATION BEFORE TRIBUNAL. ANNEXURE -E TRUE COPY OF THE ORDER OF THE INCOME TAX TRIBUNAL DATED 27.09.2018. ITA NO. 45, 47, 50 & 51 OF 2019 -13- APPENDIX OF ITA 50/2019 PETITIONER ANNEXURES ANNEXURE A TRUE COPY OF THE ASSESSMENT ORDER DATED 31.03.2014 ANNEXURE B TRUE COPY OF THE APPELLATE ORDER DATED 29.12.2016 ANNEXURE C TRUE COPY OF THE APPEAL MEMORANDUM BEFORE TRIBUNAL ANNEXURE D TRUE COPY OF THE PETITION FOR DELAY CONDONATION BEFORE TRIBUNAL ANNEXURE E TRUE COPY OF THE ORDER OF THE INCOME TAX TRIBUNAL DATED 27.09.2018 ITA NO. 45, 47, 50 & 51 OF 2019 -14- APPENDIX OF ITA 45/2019 PETITIONER ANNEXURES ANNEXURE -A TRUE COPY OF THE ASSESSMENT ORDER DATED 31.3.2014 FOR THE a.y. 2009-10. ANNEXURE -B TRUE COPY OF THE APPELLATE ORDER DATED 27.12.16 OF THE COMMISSIONERE OF INCOME TAX (APPEALS). ANNEXURE -C TRUE COPY OF THE APPEAL MEMORANDUM BEFORE INCOME TAX APPELLATE TRIBUNAL ANNEXURE -D TRUE COPY OF THE PETITION FOR DELAY CONDONATION BEFORE TRIBUNAL. ANNEXURE -E TRUE COPY OF THE ORDER OF THE INCOME TAX TRIBUNAL DATED 27.9.2018. "