The ITO, Ward-8(3), Ahmedabad V. ShivShakti Consultancy Pvt.Ltd., Ahmedabad

CO 95/AHD/2009

• Counselvise Citation: [2010] 122 COUNSELVISE.COM (IT) 4787 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-06-2010
• Assessment Year: misc
• Appeal Filed On: 22-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Period of limitation; Retrospective amendment; Difference of opinion; Tax effect; Condonation of delay; Change of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND D. C. AGRAWAL , AM) C. O. NO.9 5/AHD/2009 (IN IT (SS) A NO.107/AHD/2005 FOR B. P. 1-4-1995 TO 31-03-2001) THE INCOME TAX OFFICER, WARD-8(3), 4 TH FLOOR, AJANTA COMMERCIAL CENTRE, A WING, ASHRAM ROAD, AHMEDABAD VS SHIV SHAKTI CONSULTANCY PVT. LTD., 14, RANAJN PARK SOCIETY, VIBHAG-I, NR. NARANPURA POST OFFICE, NARANPURA, AHMEDABAD PA NO. AACCS 6240B (CROSS OBJECTOR) (RESPONDENT) CROSS OBJECTOR BY SHRI ANIL KUMAR, DR RESPONDENT BY SHRI P. M. PATEL, AR O R D E R PER BHAVNESH SAINI: THIS CROSS OBJECTION IS DIRECTED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A)-I, AHMEDABAD DATED 21-12-2004 FOR THE ABOVE BLOCK PERIOD CHALLENGING T HE DIRECTION OF THE LEARNED CIT(A) FOR NOT CHARGING THE SURCHARGE OF RS .85,966/-. 2. THE LEARNED CIT(A NOTED IN THE IMPUGNED ORDER TH AT SINCE SEARCH WAS CONDUCTED IN THE CASE OF THE ASSESSEE PRIOR TO INSERTION OF PROVISO TO SECTION 113 OF THE IT ACT, THEREFORE, SURCHARGE IS NOT LEVIABLE. 3. ACCORDING TO THE OFFICE THE CROSS OBJECTION IS T IME BARED BY 1555 DAYS. THE CROSS OBJECTION IS FILED IN THE OFFICE OF THE TRIBUNAL ON 22-05-2009 AND IT IS INTIMATED THAT THE DATE OF COM MUNICATION OF THE APPELLATE ORDER IS DATED 18-01-2005. THE AFFIDAVIT OF ITO, WARD-8(3), AHMEDABAD IS FILED ON RECORD FOR EXPLAINING THE DEL AY IN FILING THE CROSS OBJECTION. IT IS STATED IN THE AFFIDAVIT THAT THE A SSESSEE FILED APPEAL AGAINST THE ORDER OF THE LEARNED CIT(A) ON 06-04-20 05 AND CONSIDERING THE QUANTUM OF TAX INVOLVED AND THE LEGAL POSITION EXISTING AT THAT TIME NO APPEAL HAS BEEN FILED AGAINST THE ISSUE OF CHARG ING OF SURCHARGE. C. O. NO.95/AHD/2009 (IN IT(SS)A NO.107/AHD/2005) ITO, WARD 8(3), AHMEDABAD VS SHIV SHAKTI CONSULTANC Y PVT. LTD. 2 HOWEVER, SUBSEQUENTLY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS SURESH N. GUPTA 297 ITR 322 HAS HELD THAT SURCHARGE IS LEVIABLE IN THE CASES WHERE SEARCHES HAVE BEEN CONCLUDED PRIOR TO 0 1-06-2002 I.E. GIVING RETROSPECTIVE EFFECT. THE LEARNED CIT(A) VID E LETTER DATED 11-05-2009 HAS DIRECTED TO FILE THE ABOVE CROSS OBJ ECTION. IT IS, THEREFORE, EXPLAINED THAT DUE TO THE ABOVE FACT THERE IS A DEL AY OF 1555 DAYS IN FILING THE CROSS OBJECTION. IT WAS EXPLAINED THAT DELAY HA S OCCURRED DUE TO GENUINE AND BONA FIDE REASONS AND THE SAME MAY BE C ONDONED. THE LEARNED DR STRONGLY RELIED UPON THE AFFIDAVIT FILED BY THE ITO AND SUBMITTED THAT THE REVENUE HAS GOOD PRIMA FACIE CAS E, THEREFORE, DELAY MAY BE CONDONED. ON THE OTHER HAND, THE LEARNED COU NSEL FOR THE ASSESSEE SUBMITTED THAT MERELY BECAUSE THE HONBLE SUPREME COURT HAS DELIVERED JUDGMENT LATER ON IN FAVOUR OF THE REVENU E, HAS NO GROUND FOR CONDONATION OF DELAY IN FILING THE CROSS OBJECTION. HE HAS SUBMITTED THAT THE REVENUE DELIBERATELY DID NOT FILE THE CROSS OBJ ECTION ON TIME; THEREFORE, THE SAME IS LIABLE TO BE DISMISSED. HE H AS FURTHER RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN T HE CASE OF VARELI TEXTILE INDUSTRIES VS CIT 284 ITR 238 IN WHICH IT W AS HELD THAT CROSS- OBJECTIONS HAVING BEEN FILED AFTER A DELAY OF ONE Y EAR AND ELEVEN MONTHS AND ASSESSEE HAVING FAILED TO SHOW ANY CAUSE ON MERITS, DELAY WAS RIGHTLY NOT CONDONED BY THE TRIBUNAL. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD. ACCORDING TO SECTION 253(4) OF THE IT AC T THE AO OR THE ASSESSEE AS THE CASE MAY BE, COULD FILE THE CROSS O BJECTION ON RECEIPT OF THE NOTICE OF THE APPEAL WITHIN 30 DAYS OF RECEIPT OF THE NOTICE. SECTION 254(5) PROVIDES THAT THE TRIBUNAL MAY ADMIT THE CRO SS OBJECTION AFTER THE EXPIRY OF THE RELEVANT PERIOD IF IT IS SATISFIE D THAT THERE WAS SUFFICIENT CAUSE FOR NOT PRESENTING IT WITHIN THAT PERIOD. SUF FICIENT CAUSE MEANS A CAUSE WHICH IS BEYOND THE CONTROL OF THE PERSON. SU FFICIENT CAUSE MEANS WHICH PREVENTS A REASONABLE MAN OF ORDINARY PRUDENC E ACTING UNDER C. O. NO.95/AHD/2009 (IN IT(SS)A NO.107/AHD/2005) ITO, WARD 8(3), AHMEDABAD VS SHIV SHAKTI CONSULTANC Y PVT. LTD. 3 NORMAL CIRCUMSTANCES WITHOUT NEGLIGENCE OR INACTION OR WANT OF BONA FIDE. THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIB UNAL IN ITA NO.107/AHD/2005 ON 07-04-2005. THEREAFTER, IT WAS F IXED FOR HEARING AND THE LEARNED DR ON BEHALF OF THE REVENUE STARTED APPEARING BEFORE THE TRIBUNAL. IT IS STATED IN THE AFFIDAVIT OF THE ITO THAT SINCE THE QUANTUM OF THE TAX EFFECT INVOLVED AND THE LEGAL PO SITION EXISTING AT THE TIME OF RECEIPT OF THE NOTICE WAS NOT IN FAVOUR OF THE REVENUE, THEREFORE, NO APPEAL WAS FILED BEFORE THE TRIBUNAL AGAINST NON -CHARGING OF SURCHARGE. IT WOULD, THEREFORE, SHOW THAT ON RECEIP T OF THE NOTICE OF APPEAL OF THE ASSESSEE, THE REVENUE THOUGHT IT PROP ER NOT TO PREFER ANY CROSS APPEAL OR CROSS OBJECTION BEFORE THE TRIBUNAL BECAUSE OF THE LOW TAX EFFECT AND THE LEGAL POSITION WAS AGAINST THE R EVENUE. THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SURESH N. GUPTA (SUPRA) WAS DELIVERED ON 07-01-2008; MEANS THE PERIOD OF LIMITA TION FOR FILING OF THE CROSS OBJECTION HAD ALREADY EXPIRED ON THE DATE OF DELIVERY OF THE ABOVE JUDGMENT. ABOUT 2 YEARS AND 9 MONTHS HAVE EXPIRED F ROM THE DATE OF FILING OF THE APPEAL BY THE ASSESSEE AND THE JUDGME NT DELIVERED BY THE HONBLE SUPREME COURT IN THE CASE OF SURESH N. GUPT A (SUPRA). IT IS, THEREFORE, CLEAR THAT THE REVENUE NEVER WANTED TO F ILE CROSS APPEAL OR CROSS OBJECTION DURING THIS PERIOD. THE MATTER OF C HARGING OF SURCHARGE HAS BECOME FINAL FROM THE POINT OF VIEW OF THE REVE NUE UNTIL THE DECISION IN THE CASE OF SURESH N. GUPTA (SUPRA) WAS DELIVERE D. IT WOULD, THEREFORE, SHOW THAT THE REVENUE PREFERRED THE CROSS OBJECTION BELATEDLY MERELY ON SUBSEQUENT DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SURESH N. GUPTA (SUPRA). THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS RAMACHANDRA HATCHERIES 305 ITR 117 HELD THAT THE ASSESSING OFFICER IN VIEW OF SUPREME COURT DECISION REOPENED ASSESSME NT AND DISALLOWED DEDUCTION IN REASSESSMENT ASSESSING OF FICER HAS NO JURISDICTION TO REOPEN PROCEEDINGS ON ISSUE WHICH W AS ADJUDICATED UPON. REOPENING OF ASSESSMENT BAD IN LAW. HONBLE BOMBAY HIGH C. O. NO.95/AHD/2009 (IN IT(SS)A NO.107/AHD/2005) ITO, WARD 8(3), AHMEDABAD VS SHIV SHAKTI CONSULTANC Y PVT. LTD. 4 COURT IN THE CASE OF SESA GOA LTD. VS JCIT 294 101 HELD THAT REASSESSMENT IN THE LIGHT OF SUBSEQUENT JUDICIAL D ECISION NOT A CASE OF NON-DISCLOSURE FULLY AND TRULY OF ALL MATER IAL FACTS BUT CHANGE OF OPINION ON SUBSEQUENT DECISION REASSESS MENT NOTICE INVALID. CONSIDERING THE FACTS OF THE CASE AS NOTED ABOVE, IT IS CLEAR THAT THE REVENUE PREFERRED THE CROSS OBJECTION MERE LY ON SUBSEQUENT DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F SURESH N. GUPTA (SUPRA). IT MAY ALSO BE NOTED HERE THAT THE ABOVE D ECISION WAS DELIVERED ON 07-01-2008 AND THE REVENUE REMAINED SILENT FOR A CONSIDERABLE PERIOD AND ONLY PREFERRED THE CROSS OBJECTION ON 22 -05-2009. NO EXPLANATION IS GIVEN AS TO WHY THE CROSS OBJECTION WAS NOT FILED IN BETWEEN 07-01-2008 TO 22-05-2009. IN THE ABSENCE OF ADEQUATE EXPLANATION AND MATERIAL ON RECORD, WE ARE OF THE V IEW THAT THE REVENUE HAS FAILED TO EXPLAIN SUFFICIENT CAUSE IN FILING TH E CROSS OBJECTION BELATEDLY. 5. IT WOULD BE APPROPRIATE TO REFER TO SOME OF THE JUDICIAL PRONOUNCEMENTS ON THE ISSUE OF DELAY IN FILING THE APPEALS/CROSS OBJECTIONS. IN THE CASE OF HIND DEVELOPMENT CORPN., VS. ITO (1979) 118 ITR 873, THE CALCUTTA HIGH COURT HELD THAT A TRIBUN AL CAN CONDONE THE DELAY IF THERE WAS SUFFICIENT CAUSE FOR THE DELAY I N THE SUBMISSION OF THE APPEAL/CROSS OBJECTION. IN THE CASE OF VEDABHAI ALI AS VIJAYANATABAI BABURAO PATIL VS. SHANTARAM BABURAO PATIL (2002) 25 3 ITR 798 (SC), WHERE IT WAS HELD THAT WHILE EXERCISING DISCRETION UNDER SECTION 5 OF THE LIMITATION ACT, 1963, TO CONDONE DELAY FOR SUFFICIE NT CAUSE IN NOT FILING THE APPEAL WITHIN THE PERIOD PRESCRIBED, COURTS SHO ULD ADOPT A PRAGMATIC APPROACH. A DISTINCTION MUST BE MADE BETW EEN A CASE WHERE THE DELAY IS INORDINATE AND A CASE WHERE DELAY IS O F A FEW DAYS. THE COURT OBSERVED THAT WHEREAS IN THE FORMER CONSIDERATION O F PREJUDICE TO THE OTHER SIDE WILL BE RELEVANT FACTOR AND CALLS FOR A MORE CAUTIOUS APPROACH. IN THE LATTER CASE NO SUCH CONSIDERATION MAY ARISE AND SUCH A CASE C. O. NO.95/AHD/2009 (IN IT(SS)A NO.107/AHD/2005) ITO, WARD 8(3), AHMEDABAD VS SHIV SHAKTI CONSULTANC Y PVT. LTD. 5 DESERVES A LIBERAL APPROACH. NOW IN THE PRESENT CAS E DELAY IS NOT OF A FEW DAYS BUT OF 1555 DAYS . BESIDES, THERE IS ABSOLUTELY NO VALID EXPLANATION/REASON FOR THE DELAY. IN THE CASE OF CI T V. RAM MOHAN KABRA (2002) 257 ITR 773, THE HONBLE PUNJAB & HARY ANA HIGH COURT HAS HELD AND OBSERVED THAT WHERE THE LEGISLATURE SP ELLS OUT A PERIOD OF LIMITATION AND PROVIDES FOR POWER TO CONDONE THE DE LAY AS WELL, SUCH DELAY CAN ONLY BE CONDONED ONLY FOR SUFFICIENT AND GOOD REASONS SUPPORTED BY COGENT AND PROPER EVIDENCE. IT IS A SE TTLED PRINCIPLE OF LAW THAT PROVISIONS RELATING TO THE SPECIFIED PERIOD OF LIMITATION MUST BE APPLIED WITH THEIR RIGOUR AND EFFECTIVE CONSEQUENCE S. IN THIS CASE DELAY FOR FILING THE APPEAL LATE FOR ONLY A FEW DAYS WAS NOT CONDONED. IN THE CASE OF ASSTT. CIT V. TAGGAS INDUSTRIES DEVELOPMENT LTD. (2002) 80 ITD 21 (CAL), TRIBUNAL, CALCUTTA BENCH, CALCUTTA, DID N OT CONDONE THE DELAY FOR FILING THE APPEAL LATE BY 13 DAYS BECAUSE THE D ELAY WAS NOT DUE TO SUFFICIENT CAUSE. 6. CONSIDERING THE ABOVE DISCUSSION AND RELYING UPO N THE ABOVE JUDGMENTS, WE HOLD THAT THE REVENUE HAS FAILED TO E XPLAIN THAT THE DELAY IN FILING THE CROSS OBJECTION WAS DUE TO SUFFICIENT CAUSE. WE, THEREFORE, DO NOT INTEND TO CONDONE THE DELAY IN FILLING THE C ROSS OBJECTION. WE ACCORDINGLY, HOLD THAT THE CROSS OBJECTION IS TIME BARRED. SAME IS ACCORDINGLY DISMISSED. 7. AS A RESULT, THE CROSS OBJECTION OF THE REVENUE IS DISMISSED BEING TIME BARRED. ORDER PRONOUNCED IN THE OPEN COURT ON 11-06-2010 SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : -06-2010 LAKSHMIKANT/- C. O. NO.95/AHD/2009 (IN IT(SS)A NO.107/AHD/2005) ITO, WARD 8(3), AHMEDABAD VS SHIV SHAKTI CONSULTANC Y PVT. LTD. 6 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD