M/s.Kerala Medical Services Corpn Ltd, Trivandrum V. The ITO, Wd-1(4), Trivandrum

ITA 109/COCH/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5094 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-05-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 04-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: T M SREEDHARAN
• Keywords: Period of limitation; Question of law; Time period of passing order; Condonation of delay; Set aside
• Section: 43B; 43D; 144; 10; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E S/ SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., J M I .T . A. NO S . 1 0 7, 108 & 109/ COCH/ 20 19 ASSESSMENT YEAR S : 2010 - 11 TO 2012 - 13 KERALA MEDICAL SERVICES CORPORATION LTD., NEAR W & C HOSPITAL, THYCAUD, THIRUVANANTHAPURAM - 695 014. [PAN: A ADCK 4029M] VS. THE INC OME T AX OFFICER , WARD - 1(4), TRIVANDRUM. (ASSESSEE - APPELLANT) (RE VENUE - RESPONDENT) AS SESSEE BY SHRI T.M. SREEDHARAN, SR. ADV. REVENUE BY SMT. A.S. BINDHU, SR. DR D ATE OF HEARING 14 /05/2019 DATE OF PRONOUNCEMENT 20 / 05 /201 9 O R D E R PER CHANDRA POOJARI, AM: TH E S E APPEAL S FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE DIFFERENT ORDER S OF THE CIT(A) , KOTTAYAM DATED 26/11/2018 AND PERTAIN TO THE ASSESSMENT YEAR S 2010 - 11 TO 2012 - 13. 2. THE ISSUE IN THE APPEALS IN ITA NO S. 107 & 108/COCH/201 9 IS WITH REGARD TO DISMISSAL OF THE APPEALS BY THE CIT(A) WITHOUT CONDONING THE DELAY OF 303 DAYS AND 301 DAYS FOR THE ASSESSMENT YEARS 2010 - 11 AND 2011 - 12 RESPECTIVELY. THE ASSESSEE EXPLAINED THE DELAY FOR BOTH THE ASSESSMENT YEARS AS FOLLOWS: I.T.A. NO S . 107 - 109 /COCH/201 9 2 1. I, MINHAJ ALAM, AM THE MANAGING DIRECTOR OF M/S. KERALA MEDICAL SERVICES CORPORATION LTD. 2. OUR AUTHORIZED REPRESENTATIVE SHRI K. SURESH WAS LAID UP WITH SEVERE BACK PAIN FOR LAST ONE YEAR AND HENCE I WAS PREVENTED FROM FILING THE APPE AL WITHIN THE TIME ALLOWED. 3. DURING THE LAST ONE YEAR, THE POST OF MANAGING DIRECTOR OF THE COMPANY WAS HELD BY FIVE PERSONS, EACH FOR A VERY SHORT PERIOD OF TIME. THIS FREQUENT CHANGE IN THE POST OF MANAGING DIRECTOR ALSO PREVENTED THE COMPANY FROM FI LING THE APPEAL WITHIN THE PRESCRIBED TIME. FOR THE REASONS STATED ABOVE, IT IS HUMBLY PRAYED THAT THE HON. COMMISSIONER OF INCOME - TAX(APPEALS) MAY BE PLEASED TO CONDONE THE DELAY CAUSED IN FILING THE APPEAL WITHIN THE STIPULATED TIME. THE COPY OF TH E MEDICAL CERTIFICATE FOR THE ABOVE CAUSE IS ENCLOSED. 3. THE CIT(A) HAS NOT CONDONED THE DELAY IN FILING THE APPEALS BEFORE HIM BY OBSERVING AS FOLLOWS: 4.2. THE ADMISSION OF APPEALS FILED WITH DELAY IS GOVERNED BY THE PROVISIONS OF SECTION 249(3 ) O F THE ACT AND THE SAME READS AS UNDER: 'THE COMMISSIONER(APPEALS) MAY ADMIT AN APPEAL AFTER THE EXPIRATION OF THE SAID PERIOD IF HE IS SATISFIED THAT THE APPELLANT HAD SUFFICIENT CAUSE FOR NOT PRESENTING IT WITHIN THAT PERIOD.' 4.3. BEFORE GOING INTO ISS UE OF CONDONATION OF DELAY, IT WOULD BE RELEVANT TO PLACE ON RECORD PRINCIPLE LAID DOWN BY HON'BLE COURTS WITH REGARD TO CONDONATION OF DELAY. IN THE CASE OF RAM MOHAN KABRA, 257 ITR 773, HON'BLE PUNJAB AND HARYANA HIGH COURT, WHILE DEALING WITH THE ISSUE OF CONDONATION OF DELAY, HAS OBSERVED AS UNDER: 3. THE PROVISIONS OF RELATING TO PRESCRIPTION OF LIMITATION IN EVERY STATUTE MUST NOT BE CONSTRUED SO LIBERALLY THAT IT WOULD HAVE THE EFFECT OF TAKING AWAY THE BENEFIT ACCRUING TO THE OTHER PARTY IN A MEC HANICAL MANN ER. WHERE THE LEGISLATURE SPELLS OUT A PERIOD OF LIMITATION AND PROVIDES FOR POWER TO CONDONE THE DELAY AS WELL, THERE SUCH DELAY CAN BE CONDONED ONLY FOR SUFFICIENT AND GOOD REASONS SUPPORTED BY COGENT AND PROPER EVIDENCE. NOW IT IS A SETTLED PRINCIPLE OF LAW THAT THE PROVISIONS RELATING TO SPECIFIED I.T.A. NO S . 107 - 109 /COCH/201 9 3 PERIOD OF LIMITATION MUST BE APPLIED WITH THEIR RIGOUR AND EFFECTIVE CONSEQUENCES. 4. IN THIS REGARD, REFERENCE CAN BE MADE TO THE LATEST LAW IN THE CASE OF P. K. RAMACHANDRAN V. ST A TE OF KERA L A A IR 1998 SC 2276. THE RELEVANT PORTION READS AS UNDER: 'LAW OF LIMITATION MAY HARSHLY AFFECT A PARTICULAR PARTY BUT IT HAS TO BE APPLIED WITH ALL ITS RIGOUR WHEN THE STATUTE SO PRESCRIBES AND THE COURTS HAVE NO POWER TO EXTEND THE PERIOD OF LIMITATION ON E QUITABLE GROUNDS. THE DISCRETION EXERCISED BY THE HIGH COURT, WAS, THUS, NEITHER PROPER NOR JUDICIOUS. THE ORDER CONDONING THE DELAY CANNOT BE SUSTAINED. THIS APPEAL, THEREFORE, SUCCEEDS AND THE IMPUGNED ORDER IS SET ASIDE. CONSEQUENTLY, THE APPLICATION FO R CONDONATION OF DELAY FILED IN THE HIGH COURT WOULD STAND REJECTED AND THE MISCELLANEOUS FIRST APPEAL SHALL STAND DISMISSED AS BARRED BY TIME. NO COSTS' ONCE THE CONCERNED AUTHORITY APPLIES ITS MIND AND DECLINES TO CONDONE THE DELAY IN FILING THE APPEAL F OR GOOD AND APPROPRIATE REASONS, IN THAT EVENT IT CANNOT GIVE RISE TO A QUESTION OF LAW FOR DETERMINATION.' 4.4 FURTHER, THE HON'BLE SUPREME COURT IN THE CASE OF AJIT SINGH THAKUR SINGH V. STATE OF GUJARAT AIR 1981 SC 733, 735, WHEREIN THE HON'BLE SUP REME COURT HAS MADE FOLLOWING IMPORTANT OBSERVATIONS : 'IT IS TRUE THAT A PARTY IS ENTITLED TO WAIT UNTIL THE LAST DAY OF LIMITATION FOR FILING AN APPEAL. BUT WHEN IT ALLOWS LIMITATION TO EXPIRE AND PLEADS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL EARLIE R, THE SUFFICIENT CAUSE MUST ESTABLISH THAT BECAUSE OF SOME EVENT OR CIRCUMSTANCE ARISING BEFORE LIMITATION EXPIRED IT WAS NOT POSSIBLE TO FILE THE APPEAL WITHIN TIME. NO EVENT OR CIRCUMSTANCE ARISING AFTER THE EXPIRY OF LIMITATION CAN CONSTITUTE SUCH SUFF ICIENT CAUSE. THERE MAY BE EVENTS OR CIRCUMSTANCES SUBSEQUENT TO THE EXPIRY OF LIMITATION WHICH MAY FURTHER DELAY THE FILING OF THE APPEAL. BUT THAT THE LIMITATION HAS BEEN ALLOWED TO EXPIRE WITHOUT THE APPEAL BEING FILED MUST BE TRACED TO A CAUSE ARISING WITHIN THE PERIOD OF LIMITATION.' 4.5. IN THE LIGHT OF THE DECISIONS OF HON'BLE HIGH COURT AND SUPREME COURT, AS ABOVE, IT IS EVIDENT THAT THE APPELLANT SEEKING CONDONATION OF DELAY IN FILING OF APPEAL MUST BRING ALL THE EVIDENCE EXPLAINING THE CAUSE F OR SUCH DELAY. F URTHER, THE CAUSE RELIED MUST BE AN EVENT PERIOD OF LIMITATION. 4.6. NOW, APPLYING THE ABOVE PRINCIPLES TO THE FACTS OF THE CASE, THE MERIT OF THE REASONS STATED BY THE APPELLANT ARE EXAMINED AS UNDER: A) THE APPELLANT HAD STATED THAT THE AUTHORIZED REPRESENTATIVE WAS LAID UP WITH SEVERE BACK PAIN FOR THE LAST ONE YEAR AND THEREFORE THE APPELLANT IS I.T.A. NO S . 107 - 109 /COCH/201 9 4 PREVENTED FROM FILING THE APPEAL WITHIN THE TIME ALLOWED. IN SUPPORT OF THE SAID CLAIM, THE APPELLANT HAD SUBMITTED COPIES OF MEDICAL CERT IFICATES AND THE SAME ARE AS UNDER: MEDICAL CERTIFICATE THIS IS TO CERTIFY THAT MR. K. SURESH, 55YR CHARTERE D ACCOUNTANT RESIDING AT NANDAVANAM, TRIVAND RUM IS UNDER MY TREATMENT FOR B ACKACHE WITH SCIATICA FROM 15.03.2014. HE IS ADVISED REST FOR 3 MONTHS. DR. A. GOPAL MS ORTHO, D.OORTHO, MCH SENIOR CONSULTANT ORTHOPAEDIC SURGERY AHRI, TVM MEDICAL CERTIFICATE THIS IS TO CERTIFY THAT MR. K. SURESH 55YR IS A CASE OF BACKACHE CAME FOR REVIEW ON 15.06.2014. HE IS STILL HAVING BACK PAIN. HE IS ADVISED REST AND TO AVOID LONG DISTANCE TRAVEL FOR ANOTHER 3 MONTHS. DR. A. GOPAL MS ORTHO, D.OORTHO, MCH SENIOR CONSULTANT ORTH OPAEDIC SURGERY AHRI, TVM MEDICAL CERTIFICATE THIS IS TO CERTIFY THAT MR. K. SURESH 55YR IS A CASE OF BACKACHE CAME FOR REVIEW ON 15.09.2014. HE IS STILL HAVING BACK PAIN. HE IS ADVISED REST AND TO AVOID LONG DISTANCE TRAVEL FOR ANOTHER TWO MONTHS. DR. A. GOPAL MS ORTHO, D.OORTHO, MCH SENIOR CONSULTANT ORTHOPAEDIC SURGERY AHRI, TVM B ) AS PER THE MEDICAL CERTIFICATES, AS ABOVE, THE AUTHORIZED REPRESENTATIVE SRI K S URESH WAS SUFFERING FROM BACKACHE FROM 15 . 03.2014. BUT THE CERTIFICATE DOES NOT SHOW THAT THE AUTHORIZED REPRESENTATIVE IS PREVENTED FROM DISCHARGING THE PROFESSIONAL DUTIES. FURTHER, IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE AUTHORIZED REPRESENTATI VE SRI K SURESH HAS APPEARED BEFORE THE ASSESSING OFFICER ON 28.03.2014 AND DISCUSSED THE CASE. THUS, IT IS EVIDENT THAT SRI K SURESH WAS DISCHARGING THE PROFESSIONAL DUTIES EVEN AFTER 15.03 . 2014. THEREFORE, THERE IS NO MERIT IN THE SUBMISSION THAT THE APP EAL COULD NOT BE FILED DUE TO BACK PAIN OF THE AUTHORIZED REPRESENTATIVE. C) THE APPELLANT HAD ALSO STATED THAT APPEAL COULD NOT BE FILED AS THE POST OF MANAGING DIRECTOR OF THE COMPANY WAS HELD BY FIVE PEOPLE AND THE FREQUENT CHANGE IN THE POST OF MANAGI NG DIRECTOR ALSO PREVENTED THE COMPANY FROM FILING THE APPEAL IN TIME. I.T.A. NO S . 107 - 109 /COCH/201 9 5 D) THE APPELLANT HAD NOT SPECIFIED THE DATES WHEN MANAGING DIRECTORS WERE CHANGED AND WHAT WERE THE REASONS FOR WHICH THE PREVIOUS PERSONS HOLDING THE POST OF MANAGING DIRECTOR WERE PRE VENTED FROM FILING THE APPEAL. IN ABSENCE OF SUCH EVIDENCE, THE REASON STATED BY THE APPELLANT CANNOT BE ACCEPTED. 4.7. THEREFORE, IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD THAT THE APPELLANT DID NOT HAVE SUFFICIENT CAUSE FOR NOT FILING OF APPEAL WITHIN THE LIMITATION PERIOD. HENCE, THE DELAY IN FILING OF APPEAL IS NOT CONDONED AND THEREBY, APPEAL IS NOT ADMITTED. 4.8 AS THE APPEAL IS NOT ADMITTED, THE GROUNDS RAISED ON MERITS ARE NOT DISCUSSED AS THE SAME ARE NOT RELEVANT. IN SUMMARY, THE APPEAL IS D ISMISSED. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. THERE WAS A DELAY OF 301 DAYS AND 303 DAYS FOR THE ASSESSMENT YEAR 2010 - 11 AND 2011 - 12 IN FILING THE APPEALS BEFORE THE CIT(A). THE REASON GIVEN BY THE ASSESSEE FOR THE DELAY IN F ILING THE APPEALS BEFORE THE CIT(A) WAS THAT THE CHARTERED ACCOUNTANT OF THE ASSESSEE WAS SUFFERING FROM BACKACHE WHICH WAS SUPPORTED BY THE MEDICAL CERTIFICATE ISSUED BY THE ORTHOPEDIC SURGE ON. IT WAS ALSO SUBMITTED THAT THERE WAS FREQUENT CHANGES OF MAN AGING DIRECTOR OF THE ASSESSEE - CORPORATION. THESE FACTS WERE NOT BELIEVED BY THE CIT(A) ON THE REASON THAT THE ASSESSEES CHARTERED ACCOUNTANT, SHRI K. SURESH ATTENDED THE HEARING BEFORE THE ASSESSING OFFICER ON 28/03/2014. FURTHER, THE CIT(A) STATED TH AT THE ASSESSEE HAS NOT SPECIFIED THE DATES WHEN THE MANAGING DIRECTORS WERE CHANGED AND WHAT WERE THE REASONS FOR WHICH THE PREVIOUS PERSONS HOLDING THE POST OF MANAGING DIRECTOR WERE PREVENTED FROM FILING THE APPEAL S BEFORE THE CIT(A) . IN OUR OPINION, W HEN THERE WAS A VALID MEDICAL CERTIFICATE ISSUED BY THE SPECIALIST DOCTOR, THE CIT(A) CANNOT DOUBT THE SAME WITHOUT BRINGING ANY MATERIAL CONTRARY TO THE FACTS SUBMITTED BY THE ASSESSEE. THE ASSESSEES PRESENT MANAGING DIRECTOR MADE A PETITION/ AFFIDAVIT A FFIRMING THAT THERE W ERE FREQUENT CHANGES OF I.T.A. NO S . 107 - 109 /COCH/201 9 6 MANAGING DIRECTO R S OF THE ASSESSEE - CORPORATION AND IT WAS AN INADVERTENT ERROR ON THE PART OF THE ASSESSEE FOR NOT TAKING STEPS TO FILE THE APPEALS BEFORE THE CIT(A). THE CIT(A) HAS NOT DISPUTED THE FACT OF FRE QUENT CHANGE S OF MANAGING DIRECTORS OF THE ASSESSEE - CORPORATION. HOWEVER, THE CIT(A) W ANTS TO KNOW WHY THE ASSESSEE WAS PREVENTED FROM FILING THE APPEALS BEFORE HIM. THE ASSESSEE HAS ALREADY STATED THAT HIS CHARTERED ACCOUNTANT WAS SICK AND HENCE, THERE WAS DELAY IN FILING THE APPEALS BEFORE THE CIT(A). MORE SO, THE ASSESSMENT ORDERS FOR THESE ASSESSMENT YEARS WERE PASSED EX PARTE BY THE ASSESSING OFFICER U/S. 144 OF THE ACT WHICH ITSELF SHOWS THAT THERE IS NO PROPER PRESENTATION FROM THE COUNSEL OF THE ASSESSEE BEFORE THE ASSESSING OFFICER. HENCE, IN OUR OPINION, THERE ARE GOOD AND SUFFICIENT REASONS FOR FILING THE APPEALS BELATEDLY BEFORE THE CIT(A). 4.1 THE SUPREME COURT IN THE CASE OF VEDABAI ALIAS VAIJAYANATABAI BABURAO PATIL VS. SHANTARAM BABUR AO PATIL (253 ITR 798) HELD AS UNDER: IN EXERCISING DISCRETION UNDER SECTION 5 OF THE LIMITATION ACT THE COURTS SHOULD ADOPT A PRAGMATIC APPROACH. A DISTINCTION MUST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDINATE AND A CASE WHERE THE DELAY IS OF A FEW DAYS. W HEREAS IN THE FORMER CASE, THE CONSIDERATION OF PREJUDICE TO THE OTHER SIDE WILL BE A RELEVANT FACTOR SO THE CASE CALLS FOR A MORE CAUTIOUS APPROACH BUT IN THE LATTER CASE NO S UCH CONSIDERATION MAY ARISE AND SUCH A CASE DESERVES A LIBERAL APPRO ACH. NO HARD AND FAST RULE CAN BE LAID DOWN IN THIS REGARD. THE COURT HAS TO EXERCISE THE DISCRETION ON THE FACTS OF EACH CASE KEEPING IN MIND THAT IN CONSTRUING THE EXPRESSION SUFFICIENT CAUSE, THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PRIM E IMPORTANCE. IN THE ABOVE CASE, THE APEX COURT WAS CONSIDERING A CASE WHERE THE APPLICATION FOR CONDONATION WAS FOR A DELAY OF 7 DAYS IN FILING THE APPEAL AGAINST THE ORDER OF THE TRIAL COURT. IN THE SAME CASE, THE JURISDICTIONAL HIGH COURT ALSO CITED RECENT DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF GANGA SAHAI RAM SWARUP VS. ITAT (271 ITR 512). IN THIS CASE IT WAS HELD THAT IT WAS NOT IN DISPUTE THAT THERE WAS ONLY A DELAY OF 12 DAYS IN FILING THE APPEAL. A LIBERAL VIEW OUGHT TO HAVE BEEN TAKEN BY THE I.T.A. NO S . 107 - 109 /COCH/201 9 7 AUTHORITY AS THE DELAY WAS ONLY FOR A VERY SHORT PERIOD AND THE ASSESSEE WAS NOT GOING TO GAIN ANYTHING FROM IT. 4.2 IT IS TO BE NOTED THAT THE LANDMARK DECISION ON THE ISSUE OF CONDONATION BY THE APEX COURT IN THE CASE OF COLLECTOR LAND ACQUISI TION VS. MST. KATIGI (167 ITR 471) WHEREIN THE APEX COURT HAS GIVEN GUIDELINES THAT COURTS SHOULD HAVE A LIBERAL AND PRACTICAL APPROACH IN EXERCISING THE POWER OF CONDONATION OF APPEAL, THE CONTE X T WAS DISMISSAL AS TIME BARRED FOR 4 DAYS. 4.3 IN THE SAM E CASE, THE APEX COURT HAD ALSO HELD THAT DOCTRINE OF EQUALITY BEFORE LAW IS APPLICABLE TO ALL THE LITIGANTS INCLUDING THE STA T E AS A LITIGANT. THEY ARE ACCORDED THE SAME TREATMENT AND THE LAW IS ADMINISTERED IN AN EVEN HANDED MANNER. 4.3 IT IS ALSO WEL L SETTLED JUDICIAL PRINCIPLE THAT WORDS OR LINES OUT OF A DECISION SHOULD NOT BE EXPORTED TO BE INTERPOLATED AS PRECEDENT WITH COMPLETE DISREGARD OF THE CONTEXT. 4.4 ACCORDINGLY, W E DIRECT THE CIT(A) TO ADMIT THE APPEALS AND DISPOSE OF THE APPEALS ON MERITS. IN VIEW OF THIS, WE REFRAIN FROM GOING INTO OTHER GROUNDS RAISED BY THE ASSESSEE SINCE THE CIT(A) HAD DISMISSED THE APPEALS IN LIMENE. THUS, THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED . I.T.A. NO S . 107 - 109 /COCH/201 9 8 5. REGARDING THE APPEAL IN ITA NO.109/COCH/2019, THE A SSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. T HE CIT (A) OUGHT TO HAVE FOUND THAT THE BROUGHT FORWARD LOSS OF RS.2,03,58,625/ - AS PER PARA 2 OF THE ASSESSMENT ORDER IS ELIGIBLE FOR TO SET OFF AGAINST THE CURRENT YEAR'S INCOME. THE GROUND ON WHICH THE CLA IM IS DISALLOWED IS NOT WARRANTED. 2. IT IS SUBMITTED THAT THE ADDITION OF RS.4,89,48,224/ - BY WAY OF DISALLOWANCE OF VAT BY INVOKING SECTION 43B IS ALSO ILLEGAL. 3. IT IS SUBMITTED THAT THE APPELLANT HAS NOT ENGAGED IN ANY TRADING ACTIVITY NOR RUNNI NG ANY BUSINESS OR EARNING INCOME THEREFROM . 4. THE APPELLANT ALSO HAS NO INCOME TO BE COMPUTED IN ACCORDANCE WITH SECTION 29 OF THE ACT. THERE IS NO COMPUTATION OF PROFITS AND GAINS OF BUSINESS APPLICABLE TO THE APPELLANT COMPANY AND AS SUCH, THE PROVIS IONS OF SECTION 30 TO 43D WOULD NOT APPLY. 5. IN THE ABSENCE OF ANY BUSINESS CARRIED ON BY THE APPELLANT, SECTION 43B WILL NOT APPLY. 6. ANY PAYMENT OF VAT LIABILITY IS ONLY MONEY TRANSACTION BY THE ASSESSEE WHICH IS TO BE DISCHARGED AS A MONETARY/LEGA L LIABILITY. HAVING REGARD TO THE ABOVE FACTS, THE ADDITION OF RS.4,89,48,224/ - IS ALSO ILLEGAL. 7. THE GROUND NOS.(2), (3) AND (7) ARE RAISED WITHOUT PREJUDICE. 8. THE ASSESSING OFFICER AND THE CIT (A) FAILED TO APPRECIATE THAT THE APPELLANT IS A GOVE RNMENT COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 AS PER MEMORANDUM OF ASSOCIATION DATED 24/11/2007 BEFORE THE REGISTRAR OF COMPANIES, KERALA AT ERNAKULAM ON 28/12/2007. THE OBJECTS OF THE COMPANY ARE AS STATED IN THE STATEMENT OF FACTS WHICH CLEARL Y ESTABLISHED THAT THERE IS NO ELEMENT OF TRADING AND COMMERCIAL ACTIVITY CARRIED OUT BY THE APPELLANT. 9. IT IS SUBMITTED THAT NOTWITHSTANDING THE INCOME DECLARED IN THE RETURN, TH E ASSESSING OFFICER AND THE CIT (A) SHOULD HAVE ADJUDICATED UPON THE OBJE CTS OF THE COMPANY AND FOUND THAT THERE IS NO ELEMENT OF COMMERCIAL ACTIVITY IN THE PERFORMANCE OF PURCHASE AND DISTRIBUTION OF MEDICINES, MEDICAL SUPPLIES, ETC. TO VARIOUS MEDICAL INSTITUTIONS RUN BY GOVERNMENT OF KERALA. 1 0. FOR THE REASONS AS ARE STATE D ABOVE, THE ORDER U/S.154 PASSED BY THE ASSESSING OFFICER IS ALSO ILLEGAL IN AS MUCH AS THERE IS NO MISTAKE APPARENT FROM I.T.A. NO S . 107 - 109 /COCH/201 9 9 RECORD, WHICH COULD BE CONSIDERED U/S.154. AS SUCH, THE ADDITION MADE BY RECOURSE TO THE ORDER U/S.154 IS ALSO ILLEGAL. 1 1. THE APP ELLANT HUMBLY PRAYS THAT THE GROUNDS OF APPEAL BEFORE THE CIT (A) MAY ALSO BE CONSIDERED AS PART OF THESE GROUNDS. 1 2. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL GROUNDS AT THE TIME OF HEARING. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIM E OF HEARING, THE APPELLANT HUMBLY PRAYS THAT THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, MAY KINDLY BE PLEASED TO SET ASIDE THE ASST. ORDER, ACCEPT THE GROUNDS URGED HEREIN AND ALLOW THE APPEAL AND RENDER JUSTICE. * 6. THE FACTS OF THE CAS E ARE THAT ON PERUSAL OF THE ACCOUNTS AND SCHEDULES THE ASSESSING OFFICER FOUND THAT THE ASSESSEE COMPANY HAD NOT REMITTED THE AMOUNT OF RS.4,89,48,224/ - BEING VAT PAYABLE BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME. HENCE, THE SAME WAS DISALLOW ED AS PER THE PROVISIONS OF SECTION 43B OF THE ACT. 7. ON APPEAL, THE CIT(A) OBSERVED THAT THE PROVISIONS OF SECTION 43B OF THE ACT ARE NOT APPLICABLE TO THE ASSESSEE SINCE THE ASSESSEE HAD NOT PRODUCED ANY EVIDENCE TO SHOW THAT THE PROVISIONS OF SECTIO N 43B OF THE ACT HAVE BEEN COMPLIED BY THE ASSESSEE. IN THE ABSENCE OF THE SAME, THE CIT(A) CONFIRMED THE ADDITION OF RS.4,89,48,224/ - . 8. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. THE ASSESSEE RELIED ON THE GROUNDS OF APPEAL. I.T.A. NO S . 107 - 109 /COCH/201 9 10 9. THE LD. DR RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. BEFORE THE LOWER AUTHORITIES, THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO SHOW THAT THE PROVISIONS OF SECTION 43B OF THE ACT HAVE BEEN COMPLIED WITH BY THE ASSESSEE. IN THE ABSENCE OF TH E SAME , THE CIT(A) SUSTAINED THE ADDITION. BEFORE US, THE LD. AR PLEADED THAT THE ASSESSEE MAY BE GIVEN AN OPPORTUNITY TO PLACE NECESSARY EVIDENCE IN SUPPORT OF THE CLAIM OF THE ASSESSEE. CONSIDERING THI S REQUEST OF THE ASSESSEE, WE ARE INCLINED TO REMIT THIS ISSUE TO THE FILE OF THE CIT(A) WITH A DIRECTION TO GIVE OPPORTUNITY TO THE ASSESSEE TO PRODUCE EVIDENCE TO SHOW THAT THE PROVISIONS OF SECTION 43B HAVE BEEN COMPLIED WITH BY THE ASSESSEE. ACCORD INGLY, THIS ISSUE IS REMITTED TO THE FILE OF THE CIT(A) FOR FRESH CONSIDERATION. THIS GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, THE APPEAL S OF THE ASSESSEE IN ITA NOS. 107 & 108/COCH/2019 ARE PA RTLY ALLOWED AND THE APPEAL OF THE ASSESSEE IN ITA NO.109/COCH/2019 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH MA Y, 2019 SD/ - SD/ - (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 20 TH MAY , 2019 GJ COPY TO: 1 . KERALA MEDICAL SERVICES CORPORATION LTD., NEAR W & C HOSPITAL, THYCAUD, I.T.A. NO S . 107 - 109 /COCH/201 9 11 THIRUVANANTHAPURAM - 695 014. 2. THE INCOME TAX OFFICER, WARD - 1(4), TRIVANDRUM. 3 . THE COMMISSIONER OF INCOME - TAX (AP P EALS) , TRIVANDRUM . 4. THE PR. COM MISSIONER OF INCOME - TAX, TRIVANDRUM. 5 . D. R., I.T.A.T., COCHIN BENCH, COCHIN. 6 . GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COCHIN