Mansi Builders Pvt. Ltd., Ahmedabad V. The ACIT.,Cent.Circle-1(1), Ahmedabad

ITA 1056/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8968 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-09-2009
• Assessment Year: 1996-1997
• Appeal Filed On: 08-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL
• Assessee Lawyers: G C PIPARA
• Keywords: Opportunity of being heard; Principle of natural justice; Condonation of delay; Set aside
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI H. L. KARWA, JM AND N. S. SAINI, AM) ITA NO.1056/AHD/2009 A. Y.: 1998-99 MANSI BUILDERS, VIKASH CHAMBERS, OPP. UNIVERSITY HOSTEL, NR. DADA SAHEB NA PAGLA, NAVRANGPURA, AHMEDABAD PA NO. AAACM 0084 F VS THE A. C. I. T., CENT. CIRCLE-1(1), 3 RD FLOOR, AAYAKAR BHAVAN, ASHRAM ROAD, AHMEDABAD (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI G. C. PIPARA, AR DEPARTMENT BY SHRI SHELLEY JINDAL, DR O R D E R BY BENCH: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST ORDER OF THE CIT(A)-IV, AHMEDABAD DATED 13-03-2007 RELATING TO ASSESSMENT YEARS 1998-99. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS: 1. THE LEARNED CIT(A) HAS ERRED IN LAW WHILE APPLY ING THE JUDGMENT IN THE CASE OF CIT VS. MULTIPLAN INDIA PVT . LTD. 38 ITD 320 (DEL), IN THE CASE OF APPELLANT, AND PASSIN G THE ORDER EXPARTE, DISMISSING THE APPEAL. IN VIEW OF LEGAL PO SITION, THE LEARNED CIT(A) HAS ERRED IN DISMISSING THE APPEAL. 2. THE LEARNED CIT(A) HAS ALSO ERRED CONFIRMING PEN ALTY OF RS.5,00,000/- IMPOSED BY THE A. O. U/S. 271 (1 ) ( C ) OF THE ACT, ON DISALLOWANCE OF CERTAIN EXPENSES AS CONFIRM ED BY THE CIT(A). IN VIEW OF THE FACTS OF THE CASE, THE IMPUG NED PENALTY IMPOSED U/S. 271(1) ( C) REQUIRES TO BE DELETED.. 3. IT IS OBSERVED THAT THE REGISTRY OF THE TRIBUNAL HAS POINTED OUT THAT THERE IS DELAY OF 683 DAYS IN FILING THE APPEAL BEF ORE THE TRIBUNAL. THE ITA NO.1056/AHD/2009 MANSI BUILDERS LIMITED 2 ASSESSEE HAS SUBMITTED AN APPLICATION FOR CONDONATI ON OF DELAY ALONG WITH AFFIDAVIT OF SHRI VIKASH A. SHAH, MANAGING DIR ECTOR OF MANSI BUILDERS. THE AFFIDAVIT READS AS UNDER: I, VIKAS A.SHAH, SON OF SHRI ARVIND MADHUKAR SHAH AGED ABOUT 55 YEARS, RESIDING AT 210, ANAL FLATS , VIJAY CHAR RAS TA ROAD, AHMEDABAD 380 009, DO HEREBY SOLEMNLY DECLARE AND AFFIRM AS UNDER:- 1. THAT I AM THE MANAGING DIRECTOR OF MANSI BUILDERS L TD. AND LOOKING AFTER THE ENTIRE AFFAIRS OF THE SAID COMPAN Y. 2. THAT THE SAID COMPANY HAVE FILED AN APPEAL DATED 12 /4/206, BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS), FO R A. Y. 1996- 97, AGAINST THE ORDER PASSED BY THE ASSTT. COMMISSI ONER OF INCOME-TAX, CENTRAL CIRCLE 1(2), AHMEDABAD U/S. 271 (1)( C ) DATED 6/3/206, IMPOSING A PENALTY OF RS.5,00,000/-. 3. THE SAID APPEAL HAS BEEN DECIDED BY THE COMMISSIONE R OF INCOME-TAX (APPEALS)-I, AHMEDABAD VIDE ORDER DATED 13/3/2007, CONFIRMING THE PENALTY AS EXPARTE, ON THE GROUND TH AT NOTICES ISSUED WERE NOT ATTENDED IAND APPLYING THE JUDGEMEN T OF CIT VS. MULTIPLAN INDIA PVT. LTD. 38 ITD 320 (DEL.). 4. THE SAID ORDER OF THE COMMISSIONER OF INCOME-TAX (A PPEALS DATED I13/3/2007 WAS RECEIVED BY ME ON 27/3/2007 AND ACCO RDINGLY, I SHOULD HAVE PREFERRED AN APPEAL BEFORE THE HONBL E INCOME TAX APPELLATE TRIBUNAL WITHIN A PERIOD OF 60 DAYS FROM 27/3/2007. 5. THAT DURING THE PERIOD MARCH, 2007 TO DECEMBER, 200 7 I WAS HAVING CERTAIN FINANCIAL PROBLEM AND BUSINESS WAS C LOSED AND THAT SINCE DURING THE PERIOD APRIL , 2008 TO DECEMB ER 2008, I WAS MENTALLY DISTURBED ,AS MY ENTIRE PROPERTIES INCLUDI NG THE HOUSE IN THE NAME OF MY WIFE, HAS BEEN ATTACHED BY THE IN COME-TAX DEPARTMENT VIDE AN ORDER U/S. 281B DATED 22/2/2008 AND THEREFORE, THE COMPLETE BUSINESS OF MY COMPANY MANS I BUILDERS LTD. WERE STOPPED, THE CONSTRUCTION ACTIVITY HAS CO ME TO A HALT SAND VARIOUS PERSONS WHO HAS BOOKED FLATS IN OUR SC HEMES HAS DEMANDED REFUND OF THE AMOUNT, WHICH I WAS UNABLE T O PAY AS ALL THE BANK ACCOUNTS WERE ALSO SEALED BY THE INCOM E-TAX DEPARTMENT. EVEN SOME OF THE PROPERTIES RUNNING INT O ABOUT RS.70 TO 80 CROERS OF WORTH , HAS BEEN TAKEN POSSES SION BY CERTAIN PERSONS, UNAUTHORISEDLY AND THEREFORE, I WA S MENTALLY DISTURBED AND ABSOLUTELY PRE-OCCUPIED IN THE LEGAL MATTERS ITA NO.1056/AHD/2009 MANSI BUILDERS LIMITED 3 PERTAINING TO THE RELEASE OF THE PROPERTIES AND THE REFORE, I COULD NOT LOOK INTO ANY OF THE ASPECTS PERTAINING TO FILI NG OF THE RETURN, ASSESSMENT PROCEEDINGS, APPEAL HEARING ETC. 6. THAT IN THE MONTH OF DECEMBER, 2008/ JANUARY, 2009 WHEN I WAS OUT OF MY MENTAL TENSION I STARTED LOOKING INTO VARIOUS OTHER ASPECTS AND THEREAFTER, I CAME TO KNOW THAT THE ORD ER DATED 9/5/2008 PASSED BY THE COMMISSIONER OF INCOME-TAX ( APPEALS), COULD NOT BE ATTENDED FOR FURTHER APPEAL. 7. THAT IN THE MONTH OF JANUARY, 2009/ FEBRUARY, 2009 I STARTED FOR LOOKING FOR ANOTHER CHARTERED ACCOUNTANT TO LOOK AF TER MY INCOME- TAX MATTERS AS CERTAIN APPEALS WERE NOT PREFERRED, CERTAIN ASSESSMENTS WERE MADE EXPARTE WHICH COULD NOT BE AP PEALED BEFORE THE CIT(A) ETC. ETC. , AS THE EARLIER CHARTE RED ACCOUNTANT NAMELY DHIRENDRA & CO. HAS STOPPED LOOKING AFTER MY APPEAL WORK AS HIS FEES COULD NOT BE PAID BY ME IN TIME. 8. THAT IN THE MONTH OF FEBRUARY, 2009 I HAVE APPOINTE D M/S. PIPARA & CO., CHARTERED ACCOUNTANTS TO LOOK AFTER M Y8 INCOME TAX MATTERS AND HANDED OVER ALL THE PENDING ORDERS WHICH WERE TO BE APPEALED AGAINST FURTHER AND OTHER PAPERS TO BE ATTENDED INCLUDING THE PROPERTIES ETC. WHICH HAS BEEN SEIZED . 9. THAT APPEALS PERTAINING TO A. Y. 1996-97 FOR PENALT Y U/S. 271 (1) ( C ) WAS ACCORDINGLY FILED BY M/S. PIPARA & CO., C HARTERED ACCOUNTANTS ON 8/4/2009, BEFORE THE HONBLE INCOME TAX APPELLATE TRIBUNAL, WHICH WAS DELAYED BY 683 DAYS. 10. THAT THE SAID DELAY IN FILING THE APPEAL IS DUE TO MY MENTAL DISTURBANCE DURING THE YEAR 2008 WHEREIN I COULD NO T LOOK AFTER THE MATTER AND THEREFORE, A SEPARATE APPLICATION IS BEING MOVED FOR THE CONDOLENCE OF THE DELAY. WHATEVER STATED ABOVE IS TRUE AND CORRECT TO THE BE ST OF MY KNOWLEDGE AND BELIEF. (VIKASH A SHAH) MANAGING DIRECTOR MANSI BUILDERS LTD. PLACE: AHMEDABAD DATE: SEPTEMBER 17 TH ,2009. 4. SHRI G. C. PIPARA, LEARNED COUNSEL FOR THE ASSE SSEE SUBMITTED THAT JURISDICTION TO CONDONE DELAY SHOULD BE EXERCISE LI BERALLY. THE MATTER ITA NO.1056/AHD/2009 MANSI BUILDERS LIMITED 4 RELATING TO CONDONATION OF DELAY SHOULD BE JUDGED B ROADLY AND NOT IN A PEDANTIC MANNER. HE RELIED ON THE JUDGMENT OF THE H ONBLE SUPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS . MST. KATIJI (1987) 167 ITR 471. ON THE OTHER HAND, SHRI SHELLEY JIDNAL, LE ARNED DR SUBMITTED THAT THERE WAS INORDINATE DELAY IN FILING THE APPEA L BEFORE THE TRIBUNAL. HE FURTHER SUBMITTED THAT EVERY DAYS DELAY MUST BE EXPLAINED BY THE ASSESSEE. ACCORDINGLY, IT WAS SUBMITTED THAT DELAY IN FILING THE APPEAL MAY NOT BE CONDONED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS TRUE THAT THE REASONS GIVEN BY THE ASSESSEE FOR DELAY IN FILING THE APPEAL HAVE NOT BE EN CONTROVERTED BY THE LEARNED DR. IN THE FACTS AND CIRCUMSTANCES OF THE P RESENT CASE, WE ARE OF THE VIEW THAT THE ASSESSEE WAS PREVENTED BY SUFFICI ENT CAUSE FROM FILING THE APPEAL BEFORE THE TRIBUNAL. IT IS SETTLED LAW T HAT THE PHRASE SUFFICIENT CAUSE IS NOT A QUESTION OF PRINCIPLE BUT IT IS A Q UESTION OF FACT. HENCE, WHETHER TO CONDONE THE DELAY OR NOT, DEPENDS UPON T HE FACTS AND CIRCUMSTANCES OF EACH CASE. HENCE, SUFFICIENT CAUS E FOR CONDONATION OF DELAY DEPENDS ON THE FACTS AND CIRCUMSTANCES PLACED BY THE APPLICANT BEFORE THE AUTHORITIES CONCERNED. WE DO NOT FIND AN Y MERITS IN THESE CONTENTIONS OF THE LEARNED DR THAT THERE IS INORDIN ATE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL. IT IS WELL SETTLED LAW THAT LENGTH OF DELAY IS NOT THE MATTER IN THE CONTEXTS OF CONDONATION OF DE LAY. IN OUR VIEW, IN THE MATTER OF CONDONATION OF DELAY, IT SHOULD BE EXERCI SED LIBERALLY. IN THE CASE OF COLLECTOR, LAND ACQUISITION VS MST. KARTIJI (1987) 167 ITR 471, THE HONBLE SUPREME COURT HAS LAID DOWN AS UNDER: THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACTING SECTION 5 OF THE LIMITATION ACT OF 1963 IN 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 ITA NO.1056/AHD/2009 MANSI BUILDERS LIMITED 5 WHICH SUB-SERVES THE ENDS OF JUSTICE THAT BEING THE LIFE PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COUR TS. IT IS COMMON KNOWLEDGE THAT THIS 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: 1. ORDINARILY, A LITIGANT DOES NOT STAND TO BENEFIT 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 C AUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS, WHEN DELAY IS CONDONED, THE HIGHEST THAT CAN HAPPEN IS THAT A CAU SE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. 3. ' EVERY DAY'S DELAY MUST BE EXPLAINED DOES NOT MEAN THAT PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOU R'S DELAY, EVERY SECOND'S DELAY? THE DOCTRINE MUST BE A PPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS 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 O F A NON DELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. 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 RESPECT ED 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. 6. IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE S UPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION (SUPRA),, WE AR E OF THE VIEW THAT THERE WAS SUFFICIENT CAUSE FOR FILING THE APPEAL LATE BY 683 DAYS. ACCORDINGLY, WE CONDONE THE DELAY IN FILING THE APPEAL. ITA NO.1056/AHD/2009 MANSI BUILDERS LIMITED 6 7. AS REGARDS THE MERITS OF THE CASE, WE FIND THAT THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE WITHOUT CONSIDERING FACT S AND GROUNDS RAISED BY THE ASSESSEE. THE CIT(A) OBSERVED THAT THE ASSES SEE FAILED TO PUT IN APPEARANCE ON VARIOUS DATES OF HEARING AND FINALLY ON 13-3-2007 AGAIN, NONE APPEARED NOR ANY INTIMATION SEEMS TO HAVE BEEN RECEIVED ON BEHALF OF THE ASSESSEE NOR THROUGH LEARNED COUNSEL. THE CI T(A) PROCEEDED TO DISMISS THE APPEAL FOR NON-PROSECUTION. THE CIT(A) HAS PLACED RELIANCE ON THE FOLLOWING DECISIONS: 1. THE MANAGER, S. B. I. , LUDHIANA VS CIT, LUDHIANA I N ITA NO.24/CHANDI/2000 FOR ASSESSMENT YEAR 1998-99 DECID ED BY HONBLE ITAT CHANDAGARH, BENCH B, ON 06.02.200 4. 2. G. S. AUTO INTERNATIONAL LT., LUDHIANA VS JCIT SP. RANGE, LUDIANA IN ITA NO.725/CHANDI/2000 FOR ASSESSMENT YE AR 1995-96 BY HONBLE ITAT CHANDIGARH, BENCH A , ON 27.02.2004 3. CIT VS MULTIPLAN INDIA (P) LTD., 38 ITD 320 (DEL), 4. ESTATE OF TUKOJIRAO HOLKAR VS CWT, 223 ITR 480 (M). 8. AFTER HEARING THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES, WE FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR O F THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF ITAT AHMEDAB AD C BENCH IN THE CASE OF GUAJRAT THEMIS BIOSYN LTD. VS JCIT (2000) 7 4 ITD 339 (AHD). ON SIMILAR SET OF FACTS THE TRIBUNAL HAS HELD AS UNDER : 3. WE HAVE CAREFULLY CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS SUBMISSIONS MA DE BEFORE US. THE IMPUGNED ORDER PASSED BY THE CIT(A) IS CLEA RLY VIOLATIVE OF THE EXPRESS PROVISIONS OF SECTION 250( 6), WHICH PROVIDES THAT THE APPELLATE ORDERS OF THE CIT(A) AR E TO STATE THE POINTS ARISING IN THE APPEAL, THE DECISION OF THE A UTHORITY THEREON AND THE REASONS FOR SUCH DECISION. THE UNDE RLYING RATIONALE OF THE PROVISION IS THAT SUCH ORDERS ARE SUBJECT TO FURTHER APPEAL TO THE APPELLATE TRIBUNAL. SPEAKING ORDER WOULD OBVIOUSLY ENABLE A PARTY TO KNOW PRECISE POINTS DEC IDED IN HIS ITA NO.1056/AHD/2009 MANSI BUILDERS LIMITED 7 FAVOUR OR AGAINST HIM. ABSENCE OF THE FORMULATION O F THE POINT FOR DECISION FOR WANT OF CLARITY IN A DECISION UNDO UBTEDLY PUTS A PARTY IN QUANDARY. SECTION 250(6) EXPRESSLY EMBOD IES THE PRINCIPLES OF NATURAL JUSTICE AND SUCH A PROVISION IS CLEARLY MANDATORY IN NATURE. THE IMPUGNED ORDER PASSED BY T HE COMMISSIONER (APPEALS) IN VIOLATION OF THE PROVISIO NS OF SECTION 250(6) CANNOT, THEREFORE, BE SUSTAINED. REG ARDING THE DECISIONS OF THE DELHI BENCH OF THE TRIBUNAL IN MUL TIPLAN INDIA (P.) LTD.'S CASE (SUPRA) CITED BY THE LD. CIT(A), W E FIND THAT THE SAID DECISION IS CLEARLY DISTINGUISHABLE. SECTION 2 54 REFERRING TO THE ORDERS OF THE TRIBUNAL CONFERS PLENARY JURIS DICTION ON THE TRIBUNAL IN THE MATTER OF PASSING ORDERS UNDER SECT ION 254(1). THERE IS NO SUCH EXPRESS STIPULATION IN SECTION 254 AS CONTAINED UNDER THE PROVISIONS OF SECTION 250(6) RE LATING TO THE ORDERS OF FIRST APPELLATE AUTHORITY. THEREFORE, REL IANCE PLACED BY THE CIT(A) ON MULTIPLAN INDIA (P.) LTD.'S CASE ( SUPRA) IS ENTIRELY MISPLACED. SIMILARLY, THE CASE OF ESTATE O F LATE TUKOJIRAO HOLKAR (SUPRA) CITED BY THE LD. CIT(A) IS DISTINGUISHABLE AND DOES NOT SUPPORT THE VIEW TAKEN BY THE CIT(A). 4. FOR THE REASONS INDICATED ABOVE, WE HEREBY SET A SIDE THE IMPUGNED ORDER OF THE CIT(A) AND DIRECT THE CIT(A) TO DISPOSE OF THE APPEAL OF THE ASSESSEE AFRESH AFTER ALLOWING PROPER OPPORTUNITY IN ACCORDANCE WITH LAW. 9. RESPECTFULLY, FOLLOWING THE ORDER OF THE TRIBUNA L (SUPRA), WE SET ASIDE THE ORDER OF THE CIT(A) IN TOTO AND RESTORE T HE MATTER TO THE FILE OF THE CIT(A) WITH A DIRECTION TO DECIDE THE APPEAL OF THE ASSESSEE AFRESH ON MERITS IN ACCORDANCE WITH LAW AFTER AFFORDING DUE A ND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. IN THE RESULT, FOR STATISTICAL PURPOSES, THE AP PEAL IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18-09 -2009 SD/- SD/- (N. S. SAINI) ACCOUNTANT MEMBER (H. L. KARWA) JUDICIAL MEMBER DATE : 18-09-2009 LAKSHMIKANT/- ITA NO.1056/AHD/2009 MANSI BUILDERS LIMITED 8 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD