M/S. INSCRIBE GRAPHICS LTD., CHENNAI V. ACIT (OSD), CORPORATE RANGE-2, CHENNAI

ITA 109/CHNY/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1679 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 17-01-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G. CHANDRABABU
• Keywords: Condonation of delay; TDS; Set aside
• Section: 234E; 200A

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , . , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A. NOS. 107, 108 & 109/CHNY/2020 / ASSESSMENT YEARS: 2013-14, 2014-15 & 2015-16 M/S. INSCRIBE GRAPHICS LTD., 174, DEVELOPED PLOTS, INDUSTRIAL ESTATE, PERUNGUDI, CHENNAI 600 096. [PAN:AACCI0211Q] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRALIZED PROCESSING CELL, TDS, GHAZIABAD. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI I. DINESH, ADVOCATE / RESPONDENT BY : SHRI G. CHANDRABABU, ADDL. CIT / DATE OF HEARING : 11.01.2021 /DATE OF PRONOUNCEMENT : 16.02.2021 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THESE THREE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 6, CHENNAI, DATED 19.11.2019 RELEVANT TO THE ASSESSMENT YEARS 2013-14, 2014-15 AND 2015-16. THE EFFECTIVE COMMON GROUNDS RAISED IN ALL THE APPEALS ARE THAT THE LD. CIT(A) HAS ERRED IN NOT CONDONING THE DELAY IN FILING THE APPEALS DISMISSED THE APPEAL WITHOUT CONCLUDING THE APPELLATE ORDER ON MERITS. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE CENTRALIZED PROCESSING CELL TDS, VAISHALI, GHAZIABAD HAS PASSED THE I.T.A. NOS. 107-109/CHNY/20 2 INTIMATION UNDER SECTION 200A OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2013-14 DATED 03.02.2018, FOR THE ASSESSMENT YEARS 2014-15 & 2015-16 DATED 30.11.2014. ONLY AFTER RECEIPT OF NOTICE DATED 09.10.2018 FOR ALL THE ABOVE ASSESSMENT YEARS, THE INTIMATION ISSUED UNDER SECTION 200A OF THE ACT AND RECEIVED BY ONE OF THE EMPLOYEES WAS BROUGHT TO THE NOTICE OF THE ASSESSEE. THEREAFTER, IMMEDIATELY AFTER CONTACTING THE AR, THE APPEAL PAPERS WERE PREPARED AND FILED BEFORE THE LD. CIT(A) WITH A DELAY OF 263 DAYS FOR THE ASSESSMENT YEAR 2013-14, 1425 DAYS DELAY FOR THE ASSESSMENT YEARS 2014-15 AND 2015-16. IT WAS FURTHER SUBMISSION THAT THE INTIMATIONS UNDER SECTION 200A OF THE ACT APPEARS TO HAVE BEEN PASSED AND INTIMATED THROUGH E-MAIL, WHICH WERE LEFT UNNOTICED BY OVERSIGHT. IT WAS FURTHER SUBMISSION THAT BEFORE THE LD. CIT(A), THE ASSESSEE HAS FILED AN AFFIDAVIT EXPLAINING THE REASONS FOR DELAY IN FILING THE APPEALS. IT WAS FURTHER SUBMISSION THAT THE DELAY IN FILING THE APPEALS ARE NEITHER WILFUL NOR WANTON, BUT DUE TO CIRCUMSTANCES BEYOND ITS CONTROL AND PRAYED FOR CONDONING THE DELAY IN FILING THE APPEALS, OR OTHERWISE, THE ASSESSEE WOULD BE IN IRREPARABLE LOSS AND HARDSHIP IF THE DELAY IS NOT CONDONED AND THE APPEALS ARE ADMITTED AND ADJUDICATED ON MERITS. 3. ON THE OTHER HAND, THE LD. DR STRONGLY OPPOSED TO CONDONE THE HUGE DELAY SINCE THERE WERE NO GOOD REASONS SUPPORTED BY COGENT AND PROPER EVIDENCE TO CONDONE THE DELAY. I.T.A. NOS. 107-109/CHNY/20 3 4. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THIS CASE, THE CENTRALIZED PROCESSING CELL TDS, VAISHALI, GHAZIABAD HAS PROCESSED THE TDS STATEMENT FURNISHED BY THE ASSESSEE UNDER SECTION 200A OF THE ACT AND THE INTIMATION WAS COMMUNICATED BY E-MAIL, WHICH WERE UNNOTICED BY THE EMPLOYEES AND ONLY AFTER RECEIPT OF NOTICE DATED 09.10.2018 FOR ALL THE ABOVE ASSESSMENT YEARS, THE RECEIPT OF INTIMATION WAS BROUGHT TO THE NOTICE OF THE ASSESSEE. UNDER THE ABOVE FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THERE WAS NO WILFUL NEGLIGENCE ON THE PART OF THE ASSESSEE. 5. THE EXPRESSION 'SUFFICIENT CAUSE' USED IN SECTION 5 OF THE LIMITATION ACT, 1963 AND OTHER STATUTES IS ELASTIC ENOUGH TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SERVE THE ENDS OF JUSTICE. NO HARD AND FAST RULE HAS BEEN OR CAN BE LAID DOWN FOR DECIDING THE APPLICATIONS FOR CONDONATION OF DELAY BUT OVER THE YEARS VARIOUS COURTS HAVE ADVOCATED THAT A LIBERAL APPROACH SHOULD BE ADOPTED IN SUCH MATTERS SO THAT SUBSTANTIVE RIGHTS OF THE PARTIES ARE NOT DEFEATED MERELY BECAUSE OF DELAY. 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 A SERIOUS RISK. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITORIOUS MATTER BEING THROWN OUT AT THE VERY I.T.A. NOS. 107-109/CHNY/20 4 THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDONED THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DELAY. MOREOVER, IN THE CASE OF N. BALAKRISHNAN V. M. KRISHNAMURTHY (1998) 7 SCC 123, THE HONBLE SUPREME COURT HAS OBSERVED AS UNDER: IT IS AXIOMATIC THAT CONDONATION OF DELAY IS A MATTER OF DISCRETION OF THE COURT. SECTION 5 OF THE LIMITATION ACT DOES NOT SAY THAT SUCH DISCRETION CAN BE EXERCISED ONLY IF THE DELAY IS WITHIN A CERTAIN LIMIT. LENGTH OF DELAY IS NO MATTER; ACCEPTABILITY OF THE EXPLANATION IS THE ONLY CRITERION. SOMETIMES DELAY OF THE SHORTEST RANGE MAY BE UNCONDONABLE DUE TO WANT OF ACCEPTABLE EXPLANATION WHEREAS IN CERTAIN OTHER CASES DELAY OF VERY LONG RANGE CAN BE CONDONED AS THE EXPLANATION THEREOF IS SATISFACTORY. ONCE THE COURT ACCEPTS THE EXPLANATION AS SUFFICIENT IT IS THE RESULT OF POSITIVE EXERCISE OF DISCRETION AND NORMALLY THE SUPERIOR COURT SHOULD NOT DISTURB SUCH FINDING, MUCH LESS IN REVERSIONAL JURISDICTION, UNLESS THE EXERCISE OF DISCRETION WAS ON WHOLE UNTENABLE GROUNDS OR ARBITRARY OR PERVERSE. BUT IT IS A DIFFERENT MATTER WHEN THE FIRST COURT REFUSES TO CONDONE THE DELAY. IN SUCH CASES, THE SUPERIOR COURT WOULD BE FREE TO CONSIDER THE CAUSE SHOWN FOR THE DELAY AFRESH AND IT IS OPEN TO SUCH SUPERIOR COURT TO COME TO ITS OWN FINDING EVEN UNTRAMMELLED BY THE CONCLUSION OF THE LOWER COURT. THE REASON FOR SUCH A DIFFERENT STANCE IS THUS: THE PRIMARY FUNCTION OF A COURT IS TO ADJUDICATE THE DISPUTE BETWEEN THE PARTIES AND TO ADVANCE SUBSTANTIAL JUSTICE. TIME LIMIT FIXED FOR APPROACHING THE COURT IN DIFFERENT SITUATIONS IN NOT BECAUSE ON THE EXPIRY OF SUCH TIME A BAD CAUSE WOULD TRANSFORM INTO A GOOD CAUSE. RULE OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHT OF PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS, BUT SEEK THEIR REMEDY PROMPTLY. THE OBJECT OF PROVIDING A LEGAL REMEDY IS TO REPAIR THE DAMAGE CAUSED BY REASON OF LEGAL INJURY. LAW OF LIMITATION FIXES A LIFE-SPAN FOR SUCH LEGAL REMEDY FOR THE REDRESS OF THE LEGAL INJURY SO SUFFERED. TIME IS PRECIOUS AND THE WASTED TIME WOULD NEVER REVISIT. DURING EFFLUX OF TIME NEWER I.T.A. NOS. 107-109/CHNY/20 5 CAUSES WOULD SPROUT UP NECESSITATING NEWER PERSONS TO SEEK LEGAL REMEDY BY APPROACHING THE COURTS. SO A LIFE SPAN MUST BE FIXED FOR EACH REMEDY. UNENDING PERIOD FOR LAUNCHING THE REMEDY MAY LEAD TO UNENDING UNCERTAINTY AND CONSEQUENTIAL ANARCHY. LAW OF LIMITATION IS THUS FOUNDED ON PUBLIC POLICY. IT IS ENSHRINED IN THE MAXIM INTEREST REIPUBLICAE UP SIT FINIS LITIUM (IT IS FOR THE GENERAL WELFARE THAT A PERIOD BE PUT TO LITIGATION). RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHT OF THE PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THEIR REMEDY PROMPTLY. THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. A COURT KNOWS THAT REFUSAL TO CONDONE DELAY WOULD RESULT 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 'SUFFICIENT CAUSE' UNDER SECTION 5 OF THE LIMITATION ACT SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE VIDE SHAKUNTALA DEVI JAIN VS. KUNTAL KUMARI [AIR 1969 SC 575] AND STATE OF WEST BENGAL VS. THE ADMINISTRATOR, HOWRAH MUNICIPALITY [AIR 1972 SC 749]. IT MUST BE REMEMBERED THAT IN EVERY CASE OF DELAY THERE CAN BE SOME LAPSE ON THE PART OF THE LITIGANT CONCERNED. THAT ALONE IS NOT ENOUGH TO TURN DOWN HIS PLEA AND TO SHUT THE DOOR AGAINST HIM. IF THE EXPLANATION DOES NOT SMACK OF MALA FIDES OR IT IS NOT PUT FORTH AS PART OF A DILATORY STRATEGY THE COURT MUST SHOW UTMOST CONSIDERATION TO THE SUITOR. BUT WHEN THERE IS REASONABLE GROUND TO THINK THAT THE DELAY WAS OCCASIONED BY THE PARTY DELIBERATELY TO GAIN TIME THEN THE COURT SHOULD LEAN AGAINST ACCEPTANCE OF THE EXPLANATION. WHILE CONDONING DELAY THE COURT SHOULD NOT FORGET THE OPPOSITE PARTY ALTOGETHER. IT MUST BE BORNE IN MIND THAT HE IS A LOOSER AND HE TOO WOULD HAVE INCURRED QUIET A LARGE LITIGATION EXPENSES. IT WOULD BE A SALUTARY GUIDELINE THAT WHEN COURTS CONDONE THE DELAY DUE TO LACHES ON THE PART OF THE APPLICANT THE COURT SHALL COMPENSATE THE OPPOSITE PARTY FOR HIS LOSS. 6. IN THE INSTANT CASE, THE ASSESSEE WAS NOT AWARE IN TIME THE LEVY OF LATE FILING FEE PASSED UNDER SECTION 234E OF THE ACT SINCE THE INTIMATION WAS COMMUNICATED BY E-MAIL, WHICH WERE UNNOTICED BY THE EMPLOYEES AND ONLY AFTER RECEIPT OF NOTICE DATED 09.10.2018 FOR ALL THE ABOVE ASSESSMENT YEARS, THE RECEIPT OF INTIMATION WAS BROUGHT TO THE NOTICE OF THE ASSESSEE. THEREFORE, AFTER CONSULTING INCOME TAX PRACTIONERS/ ADVOCATES, THE ASSESSEE PREFERRED APPEALS WITH DELAY BEFORE THE LD. CIT(A). UNDER THE ABOVE FACTS I.T.A. NOS. 107-109/CHNY/20 6 AND CIRCUMSTANCES AND IN VIEW OF THE LEGAL POSITION, WE CONDONE THE DELAY IN FILING THE APPEALS BEFORE THE LD. CIT(A) AND ACCORDINGLY, WE SET ASIDE THE COMMON ORDER PASSED BY THE LD. CIT(A) AND DIRECT HIM TO ADJUDICATE THE APPEALS FOR ALL THE ASSESSMENT YEARS UNDER APPEAL ON MERITS AFTER GIVING SUFFICIENT OPPORTUNITIES OF HEARING TO THE ASSESSEE. 7. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 16 TH FEBRUARY, 2021 IN CHENNAI. SD/- SD/- (G. MANJUNATHA) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 16.02.2021 VM/- /COPY TO: 1. /APPELLANT, 2. / RESPONDENT, 3. ( )/CIT(A), 4. /CIT, 5. /DR & 6. /GF.