Sri. Mahesh N., Bangalore V. ITO, Bangalore

ITA 1065/BANG/2011

• Counselvise Citation: 106521114 RSA 2011
• Duration Of Justice: 1 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 11-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSAN THOMAS JOSE JT
• Assessee Lawyers: SRINIVASA KAMATH
• Keywords: Condonation of delay
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N. BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI N.V. VASUDEVAN, JUDICIAL MEMBER ITA NOS. 1065 TO 1067/BANG/2011 ASSESSMENT YEAR : 2005-06 SHRI MAHESH N., NO.47, 1 ST FLOOR, RAGHAVENDRA PLAZA, DHARMARAJA KOIL STREET, BANGALORE 560 001. PAN : ADCPM 7565M VS. THE INCOME TAX OFFICER, WARD 1(2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI SRINIVASA KAMATH, C.A. RESPONDENT BY : SMT. SUSAN THOMAS JOSE, JT.CIT(DR) DATE OF HEARING : 27.11.2012 DATE OF PRONOUNCEMENT : 07.12.2012 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THESE ARE APPEALS BY THE ASSESSEE AGAINST THE CO MMON ORDER DATED 16.08.2011 OF THE CIT(APPEALS)-I, BANGALORE R ELATING TO ASSESSMENT YEAR 2005-06. ITA NOS.1065 TO 1067/BANG/2011 PAGE 2 OF 8 2. THE ASSESSEE IS AN INDIVIDUAL. FOR THE A.Y. 20 05-06, HE FILED A RETURN OF INCOME DECLARING TOTAL INCOME OF Q 3,10,210. THE ASSESSEE CARRIES ON THE BUSINESS OF DEALING IN COMPUTERS, ST ATIONERIES, FAX MACHINES AND PERIPHERALS. THE ASSESSMENT WAS COMPLETED BY T HE AO U/S. 143(3) OF THE ACT MAKING SEVERAL ADDITIONS TO THE TOTAL INCOM E DECLARED BY THE ASSESSEE. AN ORDER U/S.1433 OF THE ACT DATED 31.10 .2007 WAS PASSED BY THE AO DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT Q 10,48,058. 3. AGGRIEVED BY THE VARIOUS ADDITIONS MADE BY THE A O IN THE ORDER OF ASSESSMENT U/S. 143(3) OF THE ACT, THE ASSESSEE FIL ED AN APPEAL BEFORE THE CIT(APPEALS). THERE WAS A DELAY IN FILING THE APPE AL BY THE ASSESSEE BEFORE THE CIT(A). THE ORDER OF THE AO WAS RECEIVE D BY THE ASSESSEE ON 31.10.2007. THE ASSESSEE OUGHT TO HAVE FILED AN AP PEAL BEFORE THE CIT(A) AGAINST THE ORDER OF ASSESSMENT BY 30.11.2007. BUT THE ASSESSEE FILED THE APPEAL ONLY ON 28.01.2009. THERE WAS THEREFORE A D ELAY OF 14 MONTHS IN FILING THE APPEAL BEFORE THE CIT(A). 4. WHILE COMPLETING THE ASSESSMENT U/S. 143(3) OF T HE ACT, THE AO ALSO INITIATED PENALTY PROCEEDINGS AGAINST THE ASSESSEE FOR CONCEALMENT OF PARTICULARS OF INCOME U/S. 271(1)(C) OF THE ACT IN RESPECT OF THE VARIOUS ADDITIONS MADE BY THE AO IN THE COURSE OF ASSESSMEN T PROCEEDINGS. THE AO ALSO INITIATED PENALTY PROCEEDINGS AGAINST THE A SSESSEE U/S. 271(1)(B) OF THE ACT FOR THE ASSESSEES FAILURE TO COMPLY WIT H THE NOTICE ISSUED U/S. 143(2) OF THE ACT. THE AO PASSED AN ORDER LEVYING PENALTY U/S. 271(1)(C) OF THE ACT DATED 29.04.2008 HOLDING THAT THE ASSESS EE FURNISHED INACCURATE PARTICULARS OF INCOME AND CONCEALED PARTICULARS OF INCOME. THE AO ALSO PASSED AN ORDER DATED 24.03.2008 IMPOSING PENALTY O N THE ASSESSEE U/S. ITA NOS.1065 TO 1067/BANG/2011 PAGE 3 OF 8 271(1)(B) OF THE ACT. THE ORDER U/S. 271(1)(C) OF THE ACT WAS SERVED ON THE ASSESSEE ON 29.04.2008 AND THE ORDER U/S. 271(1)(B) OF THE ACT WAS SERVED ON THE ASSESSEE ON 24.03.2008. AGAINST THESE ORDER S, THE ASSESSEE OUGHT TO HAVE FILED APPEALS BEFORE THE CIT(A) ON OR BEFOR E 28.05.2008 AND 23.04.2008 RESPECTIVELY. THE ASSESSEE HOWEVER FILE D APPEALS BEFORE THE CIT(A) ONLY ON 02.02.2009. THERE WAS THEREFORE A D ELAY OF ABOUT 10/9 MONTHS IN FILING THE APPEALS BEFORE THE CIT(A) AGAI NST THE ORDERS U/S. 271(1)(C) AND 271(1)(B) OF THE ACT RESPECTIVELY. 5. ALL THE THREE APPEALS I.E., APPEALS AGAINST ORDE R U/S. 143(3) AND ORDER IMPOSING PENALTIES U/S. 271(1)(C) AND 271(1)( B) OF THE ACT CAME UP TOGETHER FOR CONSIDERATION BEFORE THE CIT(A). THE QUESTION BEFORE THE CIT(A) WAS REGARDING CONDONING THE DELAY IN FILING THE THREE APPEALS BY THE ASSESSEE BEFORE THE CIT(A). 6. THE ASSESSEE EXPLAINED THE REASONS FOR FILING TH E APPEAL BELATEDLY AS OWING TO MOTHERS ILLNESS AND ALSO DUE TO THE FA CT THAT THE ASSESSEE OPENED A NEW BRANCH OFFICE IN BOMBAY DURING THE REL EVANT PERIOD AND WAS BUSY. THE CIT(A) HOWEVER WAS OF THE VIEW THAT REAS ONS FOR THE DELAY COULD NOT BE CONSIDERED AS SUFFICIENT FOR CONDONATION OF DELAY. IN THIS REGARD, THE FOLLOWING OBSERVATIONS WERE MADE BY THE CIT(A):- 3. NOTICES OF HEARING WERE SERVED ON THE APPELLANT AND IN RESPONSE, SRI S. SRINIVAS KAMATH, CA, AR APPEARED O N 12-8- 20111. THERE IS DELAY IN FILING THE APPEAL BY MORE THAN 14/10/9 MONTHS. THE REASONS EXPLAINED ARE (I) MOTHERS ILLNESS AS PER THE CONDONATION OF DELA Y PETITION. (II) DUE TO THE OPENING OF A NEW BRANCH OFFICE IN BOMBAY DURING THE YEAR, THE APPELLANT WAS BUSY AND HENCE T HE DELAY IN FILING. ITA NOS.1065 TO 1067/BANG/2011 PAGE 4 OF 8 THE REASONS EXPLAINED FOR THE DELAY IS NOT CONSIDER ED SUFFICIENT AND HENCE NOT ADMITTED. THE REASONS ARE SUCH THAT THE ASSESSEE COULD NOT REMAIN BUSY CONTINUOUSLY FOR LONG 14/10/0 9 MONTHS SO THAT HE WOULD NOT HAVE GOT ANY TIME TO FILE THESE A PPEALS. I SEE CARELESSNESS AND CALLOUSNESS ON THE PART OF THE ASS ESSEE IN FILING THESE APPEALS. IN THE CASES OF (I) CIT V. SANJAY K. SARASWAGI (2008) 301 ITR 232 ( BOM) (II) ORNATE TRADER (P) LTD. V. ITO (2008) 173 TAXM ANN 192 (BOM) THE HONBLE HIGH COURT OF BOMBAY HAS HELD THAT THE LIBERAL ATTITUDE OF CONDONING THE DELAY OF MORE THAN 150 DA YS SHOULD BE ABANDONED BECAUSE SUCH GENERATES AMONGST THE ASSESS EES THE FEELING I WILL DEAL WITH THE MATTER AT LEISURE AND AT MY CONVENIENCE WHICH MUST NOT BE ENCOURAGED. 4. IN VIEW OF THE ABOVE, I HOLD THE APPEALS INFRUCT UOUS AND DISMISS THE APPEALS FOR STATISTICAL PURPOSE. 7. AGGRIEVED BY THE COMMON ORDER OF THE CIT(A), THE ASSESSEE HAS PREFERRED THE PRESENT APPEALS BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS FILED AN AFFIDAVIT BEFORE US EXPLAININ G THE REASONS FOR THE DELAY IN FILING THE APPEAL. ALONG WITH THE AFFIDAV IT, THE ASSESSEE HAS ALSO FILED EVIDENCE REGARDING THE ILLNESS OF HIS MOTHER. THE EVIDENCE SO FILED IS A HOSPITAL DISCHARGE SUMMARY DATED 04.04.2006, 24.0 4.2006 AND 31.08.2010. THE LD. COUNSEL FOR THE ASSESSEE BESID ES RELYING ON THOSE CERTIFICATES TO SUBSTANTIATE THE ILLNESS OF ASSESSE ES MOTHER, ALSO BROUGHT TO OUR NOTICE THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF COLLECTOR, LAND ACQUISITION V. MST. KATIJI & ORS. 1 67 ITR 471 (SC) , WHEREIN THE HONBLE SUPREME COURT HAS HELD THAT W HEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGA INST EACH OTHER, THE ITA NOS.1065 TO 1067/BANG/2011 PAGE 5 OF 8 CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERR ED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE A VESTED RIGHT IN INJUSTICE BE ING DONE BECAUSE OF A NON-DELIBERATE DELAY. IT WAS ALSO SUBMITTED THAT T HE DECISIONS ON WHICH THE LD. CIT(A) PLACED RELIANCE WERE ON DIFFERENT FACTS AND NOT APPLICABLE TO THE CASE OF THE ASSESSEE. FOR INSTANCE, IN THE CASE OF SANJAY K. SARASWAGI (SUPRA) , THE COURT WAS CONCERNED WITH A DELAY WHICH WAS EX PLAINED BY THE REVENUE AS OWING TO RESTRUCTURING THAT HAPPENED IN THE DEPARTMENT. THE RESTRUCTURING HAD TAKEN PLACE FROM 2001 AND APPEAL WAS FILED IN 2003 AND THE HONBLE COURT DIRECTED THE DEPARTMENT TO FILE A DDITIONAL AFFIDAVIT AND BETTER AFFIDAVIT EXPLAINING AS TO HOW THERE WAS A D ELAY BETWEEN THE TIME OF RESTRUCTURING AND FILING OF APPEAL. THE REVENUE DI D NOT FILE SUCH AFFIDAVIT AND THE APPLICATION FOR CONDONATION OF DELAY WAS DI SMISSED BY THE HONBLE COURT. SIMILARLY, IN THE CASE OF ORNATE TRADERS PVT. LTD. (SUPRA) , THE DELAY WAS 18 TO 1474 DAYS. IDENTICAL REASONS WERE GIVEN FOR CONDONATION OF DELAY AND THE HONBLE COURT DISMISSED THE SAME H OLDING THAT THERE WAS NO SUFFICIENT CAUSE AND THE DELAY WAS INORDINATE. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DELAY IN THE CASE OF THE ASSESSEE WAS NOT INORDINATE AND THERE WAS A VALID REASON FOR THE DELAY. THE LD. DR, ON THE OTHER HAND, WHILE RELYIN G ON THE ORDER OF THE CIT(A), SUBMITTED THAT THE APPEALS OUGHT TO HAVE BE EN FILED BY THE ASSESSEE ON 30.11.07, 28.05.08 & 23.04.08. SHE POI NTED OUT THAT THE ILLNESS OF THE MOTHER AS EVIDENCED BY THE HOSPITAL DISCHARGE SUMMARY WAS ON 04.04.06, 24.04.06 AND 31.08.2010. IT WAS HER S UBMISSION THAT AT THE RELEVANT POINT OF TIME WHEN THE ASSESSEE OUGHT TO H AVE FILED APPEALS BEFORE THE CIT(A), THERE WAS NO HOSPITALIZATION OF THE ASSESSEES MOTHER. IT ITA NOS.1065 TO 1067/BANG/2011 PAGE 6 OF 8 WAS ALSO SUBMITTED THAT THERE IS NO EVIDENCE TO SHO W THE OPENING OF NEW BRANCH AT BOMBAY AND THE NECESSITY OF THE ASSESSEE TO TRAVEL TO BOMBAY AT THE RELEVANT POINT OF TIME. THE LD. DR THEREFOR E SUBMITTED THAT THE LD. CIT(A) HAD RIGHTLY REFUSED TO CONDONE THE DELAY IN FILING THE APPEALS BY THE ASSESSEE. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT TH E OUTSET, WE OBSERVE THAT THE HONBLE SUPREME COURT IN THE CASE OF MST. KATIJI (SUPRA) HAS EXPLAINED THE PRINCIPLES THAT NEED TO BE KEPT IN MIND WHILE CONSIDERING THE APPLICATION FOR CONDONATION OF DELA Y. THE HONBLE APEX COURT HAS EMPHASIZED THAT SUBSTANTIAL JUSTICE SHOUL D PREVAIL OVER TECHNICAL CONSIDERATIONS. THE COURT HAS ALSO EXPLAINED THAT A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING THE APPEAL LATE. THE COURT H AS ALSO EXPLAINED THAT EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT MEAN T HAT A PEDANTIC APPROACH SHOULD BE TAKEN. THE DOCTRINE MUST BE APP LIED IN A RATIONAL COMMON SENSE AND PRAGMATIC MANNER. KEEPING IN MIND THE AFORESAID PRINCIPLES, WE SHALL CONSIDER THE CLAIM OF THE ASSE SSEE IN THE PRESENT CASES. 10. ADMITTEDLY, THERE WAS A DELAY OF 14 MONTHS IN F ILING THE APPEAL BEFORE THE CIT(A) AGAINST THE ORDER OF ASSESSMENT U /S. 143(3) AND DELAY FOR A PERIOD OF 10 MONTHS & 9 MONTHS IN FILING THE APPEALS AGAINST THE ORDERS U/S. 271(1)(C) AND 271(1)(B) OF THE ACT RES PECTIVELY. IT IS NO DOUBT TRUE THAT THE RELEVANT POINT OF TIME AT WHICH THESE APPEALS OUGHT TO HAVE BEEN FILED WERE ON 30.11.07, 28.05.08 & 23.04.08 AN D THE ASSESSEES MOTHERS ILLNESS & HOSPITALIZATION WAS IN APRIL, 20 06 & AUG. 2010. THE FACT THAT THE ASSESSEES MOTHER WAS ILL AND NEEDED ATTEN TION CANNOT BE LOST ITA NOS.1065 TO 1067/BANG/2011 PAGE 7 OF 8 SIGHT OF, JUST BECAUSE THE MOTHER WAS NOT HOSPITALI ZED AT THE RELEVANT POINT OF TIME WHEN THE ASSESSEE OUGHT TO HAVE FILED APPEA LS BEFORE THE CIT(A). THE FACT THAT EVEN IN THE YEAR 2010, THE ASSESSEE S MOTHER HAD TO BE HOSPITALIZED ONLY GOES TO SHOW THAT ALL WAS NOT WEL L WITH THE ASSESSEES MOTHER IN TERMS OF HER HEALTH. WE ARE THEREFORE O F THE VIEW THAT THERE WAS SUFFICIENT CAUSE FOR THE ASSESSEE IN NOT FILING THE APPEALS BEFORE THE CIT(A) WITHIN THE PRESCRIBED TIME VIZ., OWING TO ILLNESS O F THE ASSESSEES MOTHER. THIS REASON, IN OUR VIEW, WOULD BE SUFFICIENT TO CO NDONE THE DELAY IN FILING THE APPEALS BEFORE THE CIT(A). WE THEREFORE HOLD THAT THE DELAY IN FILING THE APPEALS BEFORE THE CIT(A) SHOULD BE CONDONED. WE ACCORDINGLY CONDONE THE DELAY IN FILING THE APPEALS BY THE ASSE SSEE BEFORE THE CIT(A). SINCE THE CIT(A) HAS NOT DECIDED THE APPEALS ON MER ITS, WE THEREFORE DIRECT THE CIT(APPEALS) TO DECIDE THE APPEALS OF THE ASSES SEE ON MERITS AFTER AFFORDING THE ASSESSEE THE OPPORTUNITY OF BEING HEA RD. THUS, THE APPEALS OF THE ASSESSEE ARE ALLOWED. 11. IN THE RESULT, ALL THE THREE APPEALS BY THE ASS ESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF DECEMBER, 2012. SD/- SD/- ( N. BARATHVAJA SANKAR ) ( N.V. VASU DEVAN ) VICE PRESIDENT JUDIC IAL MEMBER BANGALORE, DATED, THE 7 TH DECEMBER , 2012. DS/- ITA NOS.1065 TO 1067/BANG/2011 PAGE 8 OF 8 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.