Anand Jesudas, Coimbatore V. ACIT, Coimbatore

ITA 1041/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8319 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 26-09-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 18-04-2016
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Keywords: Principle of natural justice; Condonation of delay
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . , !' . ! $ , % & ' [ BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ] ./ I.T.A.NO.1041/MDS/2016 / ASSESSMENT YEAR : 2011-12 SHRI ANAND JESUDAS 109/1, MAHATMA GANDHI NAGAR NANDA NAGAR, SINGANALLUR COIMBATORE 641 005 VS. THE ASSTT. COM MISSIONER OF INCOME-TAX SALARY CIRCLE 1 COIMBATORE [PAN AISPA 8126 B] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI VIJAY KUMAR, CA /RESPONDENT BY : SHRI SUPRIYO PAL, JCIT / DATE OF HEARING : 26 - 09 - 2016 ! / DATE OF PRONOUNCEMENT : 07 - 10 - 2016 , / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEEE IS DIRECTED AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-1, COI MBATORE, DATED 28.1.2016 IN I.T.A.NO.440A/14-15 FOR ASSESSMENT YEA R 2011-12 PASSED U/S 143(3) AND 250 OF THE INCOME-TAX ACT, 1961(IN S HORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: ITA NO.1041/16 :- 2 -: 1. FOR THAT THE ORDER OF TH E C OMMISS I ONER OF INCOME TAX (APPEALS) IS CONTRARY TO LAW, FACTS AND C I R CUMSTAN C ES OF THE CASE AND AT ANY R A T E IS OPPOSED TO THE PRINCIPLES OF E QUITY, NATURAL JUSTICE AND FAIR PLAY . 2. FOR THAT THE COMMISSIONER O F INCOME TAX (APPEALS) FAILED TO APPR E C I ATE THAT THE ORDER OF THE ASSESSI N G OFFICER IS WITHOUT JURISDICTION . 3. FOR THAT THE COMMISSIONE R OF INCO M E TAX (APPEALS) ERRED IN NOT CONSIDERING THE REASONABLE C A U SE SHOW N BY THE APPELLANT FOR THE DEL A Y IN FILING THE APPEAL . 4. FOR THAT THE COMMISSIONER OF I NCOME T A X (APPEALS) FAILED TO APPREC I ATE THAT THE APPELLANT COULD HAV E DERIVED NO BENEFIT BY FILING THE APPEAL BELATEDLY AND THAT THE SAME C OU L D NOT HAVE BEEN THE INTENT OF T HE APPELLANT . 5. FOR THAT THE COMMISSIONER OF I N C OME TAX (APPEALS) ERRED IN CONCLUDI N G THAT FILING OF APPEAL BY THE APPE L L AN T IS AN A F TER THOUGHT WITHOUT GETTING IN T O THE MERITS OF THE CASE 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SALARIED EMPLOYEE AND ALSO DIRECTOR (INDIAN OPERATIONS) IN M /S PATHFINDER BUSINESS ANALYSIS PVT. LTD. AND FILED RETURN OF INC OME ON 18.1.2012 ADMITTING TOTAL INCOME OF ` 17,49,080/- AND THE CASE WAS SELECTED FOR SCRUTINY. NOTICE U/S 143(2) DATED 21.8.2012 WAS I SSUED AND DULY SERVED ON THE ASSESSEE. THE LD. AR FOR THE ASSES SEE APPEARED ON VARIOUS DATES AND FILED THE REQUIRED DETAILS. THE INFORMATION EMANATED FROM AIR AND THE REASONS WERE CALLED FOR BY THE ASS ESSING OFFICER. THE ASSESSING OFFICER ON PERUSAL OF THE RECORDS FOU ND THAT THERE ARE CREDIT CARD EXPENSES NOT SUPPORTED AND ALSO HOUSIN G LOAN INTEREST AND ALSO THE ASSESSEE HAS NOT OFFERED INTEREST ON THE SAVINGS BANK UNDER ITA NO.1041/16 :- 3 -: OTHER SOURCES. FURTHER THE ASSESSEE HAS OBTAINED INTEREST FREE LOAN FROM THE COMPANY WHICH WAS NOT CONSIDERED FOR THE P URPOSE OF PERQUISITE, AND THERE WERE CASH DEPOSITS TO THE EXT ENT OF ` 42,60,000/- IN THE BANK ACCOUNT OF THE ASSESSEE IN RESPECT OF PURCHASE OF THE PROPERTY AND THE ASSESSEE HAS SUBMITTED DETAILS OF THE BANK ACCOUNT, LOAN STATEMENT AND ALSO THE SALARY STATEMENT TO SUP PORT THE TRANSACTIONS. THE ASSESSING OFFICER HAS DEALT WITH THIS ISSUE AT PAGES 3 TO 6 OF HIS ORDER AND FINALLY HE WAS OF THE OPINI ON THAT THE ASSESSEE COULD NOT EXPLAIN THE DEPOSITS TO THE SATISFACTION OF THE ASSESSING OFFICER AND MADE THE ADDITION AND ASSESSED THE TOTA L INCOME AT ` 65,22,710/- VIDE ORDER PASSED U/S 143(3) DATED 19. 2.2014. 4. AGGRIEVED THE ASSESSEE HAS FILED AN APPEAL BEFORE THE CIT(A) WITH A DELAY OF 139 DAYS. THE ASSESSEE HAS FILED CONDONATION PETITION EXPLAINING THAT THE DELAY HAS OCCURRED DU E TO MISPLACEMENT OF FILES IN THE AUDITORS OFFICE AND ALSO THE SAME WAS TRACED OUT AND ARRANGEMENTS WERE MADE TO FILE THE APPEAL. THIS MI SPLACEMENT OF FILES WAS NOT INTENTIONAL BUT DUE TO THE WORK PRESSURE OF THE ASSESSEES REPRESENTATIVE. THE CIT(A) HAS MADE A FINDING IN T HE ORDER THAT THE ASSESSEE WANTED NOT TO FILE THE APPEAL AND IT IS AN AFTERTHOUGHT. HE WAS NOT SATISFIED WITH THE SUBMISSION OF THE ASSES SEE AND HAS CONFIRMED THAT THE ASSESSEE HAS AGREED FOR THE ADD ITION AND ALSO ITA NO.1041/16 :- 4 -: THERE IS NO REQUIREMENT OF FILING OF APPEAL. WITH THESE OBSERVATIONS, THE CIT(A) DISMISSED THE APPEAL WITHOUT CONDONING T HE DELAY IN FILING THE APPEAL AND PASSED THE ORDER ON 28.1.2016. 5. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. TH E LD. AR ARGUED THE GROUNDS AND SUBMITTED THAT THE ASSESSEE IS A SALARIED PERSON AND DUE TO MISPLACEMENT OF FILES AT THE AUDI TORS OFFICE, THE APPEAL COULD NOT BE FILED BEFORE THE CIT(A) WITHIN THE STIPULATED TIME. HE PRAYED THAT THE DELAY IN FILING THE APPEAL BEFOR E THE CIT(A) MAY BE CONDONED AND ALLOW THE APPEAL. 6. CONTRA, THE LD. DR RAISED OBJECTIONS TO CONDONE THE DELAY. 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MAT ERIAL ON RECORD. BEFORE US, THE LD. AUTHORISED REPRESENTATI VE OF THE ASSESSEE REITERATED SUBMISSIONS MADE BEFORE THE ASSESSING O FFICER AND ALSO ON DELAY IN FILING THE APPEAL IN APPELLATE PROCEEDING S. CONSIDERING THE SUBMISSIONS OF AUTHORISED REPRESENTATIVE ON DELAY, WE HIGHLIGHT THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F N. BALAKRISHNAN V. M. KRISHNAMURTHY, AIR 1998 SC 3222 OBSERVED AS U NDER :- '11. RULES OF LIMITATION ARE NOT MEANT TO DESTROY T HE 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 RE ASON OF LEGAL INJURY. LAW OF LIMITATION FIXES A LIFE SPAN F OR SUCH LEGAL REMEDY FOR THE REDRESS OF THE LEGAL INJURY SO SUFFE RED. TIME IS PRECIOUS AND THE WASTED TIME WOULD NEVER REVISIT. D URING EFFLUX OF TIME NEWER CAUSES WOULD SPROUT UP NECESSITATING NEWER PERSONS TO SEEK LEGAL REMEDY BY APPROACHING THE COU RTS. SO A ITA NO.1041/16 :- 5 -: LIFE SPAN MUST BE FIXED FOR EACH REMEDY. UNENDING P ERIOD FOR LAUNDERING THE REMEDY MAY LEAD TO UNENDING UNCERTAI NTY AND CONSEQUENTIAL ANARCHY. LAW OF LIMITATION IS THUS FO UNDED ON PUBLIC POLICY. IT IS ENSHRINED IN THE MAXIM INTERES T REIPUBLICAE UP SIT F INIS LITIUM ( IT IS FOR THE GENERAL WELFAR E THAT A PERIOD BE PUT TO LITIGATION). RULES OF LIMITATION ARE NOT MEA NT TO DESTROY THE RIGHT OF THE PARTIES. THEY ARE MEANT TO SEE THA T PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THEIR REMEDY PR OMPTLY. THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. 12. A COURT KNOWS THAT REFUSAL TO CONDONE DELAY WOU LD 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 'SUF FICIENT CAUSE' UNDER SECTION 5 OF THE LIMITATION ACT SHOULD RECEIV E A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE V IDE SHAKUNTALA DEVI JAIN V. KUNTAL KUMARI, AIR 1969 SC 575 AND STATE OF WEST BENGAL V. THE ADMINISTRATOR, HOWAH MUNICAPACITY, AIR 1972 SC 749.' FURTHER, WE REFER THE CASE OF STATE OF WEST BENGAL VS. ADMINISTRATOR, HOWRAH MUNICIPALITY, AIR 1972 SC 749, THE SUPREME C OURT HELD THAT EXPRESSION 'SUFFICIENT CAUSE' SHOULD RECEIVE A LIBE RAL CONSTRUCTION SO AS TO ADVANCE THE PURPOSE OF JUSTICE PARTICULARLY WHEN THERE IS NO MOTIVE BEHIND DELAY. THIS NECESSARILY IMPLIES THAT PARTIES MUST ACT BONAFIDELY, EXPEDITIOUSLY AND WITH DUE CARE. A CASUAL OR A NEGL IGENT LITIGANT WHO HAS ACTED WITH UTTER IRRESPONSIBLE ATTITUDE, CANNOT CLAIM THE CONDONATION OF DELAY IN LAW WHEN THE RIGHT HAS ACCR UED TO THE OTHER SIDE. THE EXPRESSION 'SUFFICIENT CAUSE' WILL ALWAYS HAVE RELEVANCY TO REASONABLENESS. THE ACTIONS WHICH CAN BE CONDONED B Y THE COURT SHOULD FALL WITHIN THE REALM OF NORMAL HUMAN CONDUC T OR NORMAL CONDUCT OF A LITIGANT. IT IS NEITHER EXPECTED NOR C AN IT BE A NORMAL ITA NO.1041/16 :- 6 -: CONDUCT OF A PUBLIC SERVANT OR A LITIGANT THAT THEY WOULD KEEP THE FILES UNMOVED, UNPROCESSED FOR MONTHS TOGETHER ON THEIR T ABLES. HOW THE POWER OF CONDONATION OF DELAY IS TO BE EXERCISED, H AS 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 CONDON E DELAY BY ENACTING SECTION 51 OF THE LIMITATION ACT OF 1963 I N ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PART IES BY DISPOSING OF MATTERS ON DE MERITS '. THE EXPRESSION 'SUFFICIENT CAUSE ' EMPLOYED BY THE LEGISLATURE IS ADEQUATELY E LASTIC 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 I S COMMON KNOWLEDGE THAT THE COURT HAS BEEN MAKING A JUSTIFIA BLY LIBERAL APPROACH IN MATTERS INSTITUTED IN THIS COURT. BUT T HE MESSAGE DOES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHER COURTS IN THE HIERARCHY. AND SUCH A LIBERAL APPROACH IS AD OPTED ON PRINCIPLE AS IT IS REALIZED THAT: 1. ORDINARILY, A LITIGANT DOES NOT STAND TO BENEFI T BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS, WHEN DELAY IS COND ONED, THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULDBE DEC IDED ON MERITS AFTER HEARING THE PARTIES. 1. ' ANY APPEAL OR ANY APPLICATION, OTHER THAN AN A PPLICATION UNDER ANY OF THE PROVISIONS OF ORDER XXI OF THE COD E OF CIVIL PROCEDURE, 1908, MAY BE ADMITTED AFTER THE PRESCRIB ED PERIOD IF THE APPELLANT OR THE APPLICANT SATISFIES THE COURT THAT HE HAD SUFFICIENT CAUSE FOR NOT PREFERRING THE APPEAL OR M AKING THE APPLICATION WITHIN SUCH PERIOD.' ( PAGE 473) 3. ' EVERY DAY'S DELAY MUST BE EXPLAIN ED' DOES NOT MEAN THAT PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOUR'S DELAY, EVERY SECOND'S DELAY? THE DOCTRINE MU ST BE APPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC M ANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDER ATIONS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE ITA NO.1041/16 :- 7 -: DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A N ONDELIBERATE 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 F ACT, HE RUNS SERIOUS RISK. 6. IT MUST BE GRASPED THAT THE JUDICIARY IS RESPEC TED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHN ICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO.' WE CONSIDER THE FACTUAL ASPECTS AND MERITS OF THE C ASE AS THE DELAY IN FILING THE APPEAL WAS NOT WANTON AS PER CONDONATI ON PETITION FILED IN APPELLATE PROCEEDINGS. THE SUBMISSIONS OF LD. AUTHO RISED REPRESENTATIVE ON GENUINE AND SUFFICIENT REASONS FO R DELAY CANNOT BE IGNORED. SO, CONSIDERING THE REASONS, WE FIND THER E IS SUFFICIENT CAUSE IN THE FACTUAL CIRCUMSTANCES AND WE CONDONE THE DEL AY AND DIRECT THE CIT(A) TO DECIDE THE ASSESSEES APPEAL ON MERITS. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, 7 TH OCTOBER, 2016, AT CHENNAI. SD/- SD/- ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER ( . ! $ ) (G. PAVAN KUMAR) % / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 7 TH OCTOBER, 2016 RD ITA NO.1041/16 :- 8 -: %& '()( / COPY TO: 1 . / APPELLANT 4. * / CIT 2. / RESPONDENT 5. (+, - / DR 3. *./ / CIT(A) 6. ,01 / GF