Perfect Knitters Limited, Secunderabad V. DCIT, Circle-16(3), Hyderabad

ITA 1168/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66534 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 02-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V V RAMANA RAO
• Assessee Lawyers: M V ANIL KUMAR
• Keywords: Principle of natural justice; Condonation of delay; Revised return
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1168/HYD/2012 ASSESSMENT YEAR : 2007-08 PERFECT KNITTERS LTD., APPELLANT HYDERABAD. (PAN AABCP4066H) VS. DY. COMMISSIONER OF INCOME-TAX, RESPOND ENT CIRCLE 16(3), HYDERABAD APPELLANT BY : SHRI M.V. ANIL KUMAR RESPONDENT BY : SHRI V.V. RAMANA RAO DATE OF HEARING : 26/11/2012 DATE OF PRONOUNCEMENT : 27 /11/2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-V, HYDERABAD, DATED 08/05/2012 FOR THE ASSESSMENT YEAR 2007-08. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSE SSEE COMPANY FILED ITS RETURN OF INCOME FOR THE AY 2007-08 ON 31 /10/2007 ADMITTING A LOSS OF RS. 6,15,95,240/- UNDER THE NOR MAL PROVISIONS AND RS. 1,39,70,100/- UNDER PROVISIONS OF SECTION 1 15JB OF THE ACT. THEREAFTER, THE ASSESSEE COMPANY FILED REVISED RETURN OF INCOME ON 31/01/2008 ADMITTING A TOTAL LOSS OF RS. 6,41,51,190/- UNDER NORMAL PROVISIONS AND RS. 1,95,72,760/- UNDER THE PROVISIONS OF SECTION 115JB OF THE ACT. ASSESSMENT UNDER SECTION ITA NO. 1168/HYD/12 PERFECT KNITTLES LTD. 2 143(3) OF THE ACT WAS COMPLETED DETERMINING THE TOT AL LOSS OF THE ASSESSEE COMPANY AT RS. 5,48,53,396/- BY DISALLOWIN G COMMISSION PAID TO FOREIGN AGENTS AMOUNTING TO RS. 92,97,794/- AND BOOK PROFITS OF RS. 1,95,72,760/- U/S 115JB OF THE ACT. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE C ARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). 4. IT IS SEEN FROM THE ASSESSMENT ORDER ALONG WITH DEMAND NOTICE WAS SERVED ON THE ASSESSEE ON 24/12/2009 AND THE APPEAL HAD BENE FILED ON 01/02/2010. THERE WAS A DELAY IN FILING OF APPEAL BY 8 DAYS. ALONG WITH FORM NO. 35, THE ASSES SEE HAD FILED A PETITION FOR CONDONATION OF DELAY WHEREIN THE ASS ESSEE STATED AS UNDER: 1. I AM WELL AWARE OF THE FACTS OF THE CASE. 2. THE ASSESSMENT ORDER OF DCIT, CIRCLE 16(3), DATE D 18 TH DECEMBER, 2009 WAS SERVED ON 24 TH DECEMBER, 2009 AND WAS RECEIVED BY OUR ASSISTANT GENERAL MANAGER (FINA NCE) IN PERSON. 3. THE ORDER WAS MISPLACED AND DUE TO FESTIVAL HOLI DAY AND POLITICAL UNREST, WE COULD NOT TRACE THE ORDER BEFO RE THE DUE DATE FOR FILING THE APPEAL. 4. THE DUE DATE FOR FILING THE APPEAL IS 23/01/2009 , WHICH FALLS ON SATURDAY, HENCE THE DUE DATE IS 25 TH JANUARY, 2010. 5. THE ORDER WAS TRACED ON 29 JANUARY 2010 AND SENT TO OUR TAX CONSULTANTS, M. ANANDAM & CO., CHARTERED ACCOUN TANTS, IMMEDIATELY THE APPEAL WAS PREPARED AND SIGNED 30/01/2010. HOWEVER, THE APPEAL WILL BE FILED ON 01 /0/2010 DUE TO HOLIDAYS. 6. I PRAY THAT THE DELAY OF 7 DAYS MAY KINDLY BE CO NDONED. 5. THE CIT(A) FOLLOWING THE DECISIONS OF THE HONBL E SUPREME COURT IN THE CASE OF P.K. RAMACHANDRAN VS. STATE O F KERALA, AIR 1998 (SC) 2276, AND THE HONBLE P&H HIGH COURT IN T HE CASE OF RAM MOHAN KABRA, 257 ITR 773, HELD THAT THE SAID DE CISIONS IMPLY THAT TIME LIMIT SHOULD NOT BE TAKEN LIGHTLY A ND THE SAME SHOULD NOT BE DISREGARDED BY CONSTRUING CONDONATION AS A MATTER ITA NO. 1168/HYD/12 PERFECT KNITTLES LTD. 3 OF ROUTINE. THE CIT(A) FURTHER OBSERVED THAT WHILE INTERPRETING THE TERM SUFFICIENT CAUSE, THE HONBLE SUPREME CO URT IN CASE OF VEDABAI ALIAS VAIJAYANTABAI BABURAO PATIL, 253 ITR 798 OBSERVED THAT WHEN THE COURT HAS TO EXERCISE ITS DISCRETION ON THE FACTS OF EACH CASE KEEPING IN MIND THAT IN CONSTRUING THE EX PRESSION SUFFICIENT CAUSE THE PRINCIPLE OF ADVANCING SUBST ANTIAL JUSTICE IS OF PRIME IMPORTANCE. 6. THE CIT(A) FINALLY HELD THAT THE PRESENT CASE IS NOT A CASE WHERE THERE WAS A GENUINE REASON FOR DELAY IN FILIN G OF APPEAL AND MISPLACEMENT OF IMPORTANT DOCUMENTS BY A RESPONSIBL E PERSON BEING ASST. GENERAL MANAGER (FINANCE) WOULD NOT AMO UNT TO SUFFICIENT CAUSE FOR DELAY AND, HENCE, THE CIT(A) R EJECTED THE APPLICATION FOR CONDONATION OF DELAY. 7. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 8. THE PRIMARY CONTENTION OF THE ASSESSEE IN THE GR OUNDS OF APPEAL IS THAT THE CIT(A) ERRED IN LAW AND FACTS OF THE CASE IN NOT CONDONING THE DELAY AND GIVING AN OPPORTUNITY OF FU RTHER HEARING ON PRINCIPLES OF NATURAL JUSTICE. 9. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDE RS OF THE AUTHORITIES BELOW. WE FIND THAT IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST. KATIJI (167 ITR 471 (SC), IT I S SETTLED POSITION OF LAW, THAT IN THE MATTERS OF CONDONATION OF DELAY , THE COURT HAS TO EXERCISE THE DISCRETION ON THE FACTS OF EACH CAS E, KEEPING IN MIND THAT THE REASONABLENESS OF THE CAUSE ADVANCED BY THE APPELLANT. IN PRINCIPLE, ADVANCING SUBSTANTIAL JUST ICE IS OF PRIME IMPORTANCE. IT IS ALSO NOTED IN THE CASE OF COLLECT OR LAND ITA NO. 1168/HYD/12 PERFECT KNITTLES LTD. 4 ACQUISITION VS. MST. KATIJI (167 ITR 471 (SC) THAT THE DELAY WAS ONLY 4 DAYS. IN THE CASE OF VEDABAI ALIA VAIJAYANT ABHAI BABURAO PATIL BS. SHANTARAM BABURAO PATIL (253 ITR 798) (SC ) THE DELAY OF 7 DAYS WAS CONSIDERED. IN THIS CASE, THE HONBLE A PEX COURT CLEARLY LAID DOWN THAT A DISTINCTION MUST BE MADE B ETWEEN A CASE WHERE THE DELAY IS INORDINATE AND A CASE WHERE THE DELAY IS OF A FEW DAYS. THE LAW ASSISTS THOSE WHO ARE VIGILANT A ND NOT THOSE WHO SLEEP OVER THEIR RIGHTS. THIS PRINCIPLE IS EMB ODIED IN THE DICTUM VIGILANT BUS NON DORMIENTIBUS JURA SUBSVENIUNT . THE DELAY CANNOT BE CONDONED, IF THE ASSESSEES CASE IS HARD AND CALLS FOR SYMPATHY OR MERELY OUT OF BENEVOLENCE TO THE PARTY SEEKING RELIEF. IN GRANTING THE INDULGENCE AND CONDONING T HE DELAY, IT MUST BE PROVED BEYOND THE SHADOW OF DOUBT THAT THE REVENUE WAS DILIGENT AND WAS NOT GUILTY OF NEGLIGENCE WHATSOEVE R. THE SUFFICIENT CAUSE WITHIN THE CONTEMPLATION OF THE LI MITATION PROVISION MUST BE A CAUSE WHICH IS BEYOND THE CONTR OL OF THE PARTY INVOKING THE AID OF THE PROVISIONS. IN THE C ASE OF RAMLAL V. REWA COALFIELDS LTD. (AIR 1962 SC 361), THE HONBLE APEX COURT HAS HELD THAT THE CAUSE FOR THE DELAY IN FILING THE APPEAL, WHICH BY DUE CARE AND ATTENTION, COULD HAVE BEEN AVOIDED, CANNOT BE A SUFFICIENT CAUSE WITHIN THE MEANING OF THE LIMITATI ON PROVISION. WHERE NO NEGLIGENCE, OR INACTION OR WANT OF BONA FI DES CAN BE IMPUTED TO THE ASSESSEE, A LIBERAL CONSTRUCTION OF THE LIMITATION PROVISIONS HAS TO BE MADE IN ORDER TO ADVANCE SUBST ANTIAL JUSTICE. SEEKERS OF JUSTICE MUST COME WITH CLEAN HANDS. IN THE FACTS OF THE PRESENT CASE, WE FIND THAT THERE WAS A REASONAB LE CAUSE FOR THE DELAY. 10. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN IN T HE SAID CASES AND CONSIDERING THE FACT THAT THE DELAY IS OF ONLY 8 DAYS AS ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, WHO APPEARED BEFORE US, THE DELAY IS NOT EVEN FOR 8 DAYS, BUT, O NLY FOR 6 DAYS ITA NO. 1168/HYD/12 PERFECT KNITTLES LTD. 5 AFTER CALCULATING THE HOLIDAYS IN BETWEEN AND ALSO SINCE THE DELAY IS NOT INORDINATE, WE DEEM IT FIT AND PROPER TO REM IT THE ISSUE TO THE FILE OF THE CIT(A) WITH A DIRECTION TO CONDONE THE DELAY OF 8 DAYS AND ADMIT THE APPEAL, THEREAFTER, ADJUDICATE T HE SAME ON MERITS IN ACCORDANCE WITH LAW AFTER PROVIDING REASO NABLE OPPORTUNITY OF HEARING TO THE ASSESSEE TO REPRESENT ITS CASE. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 27/11/2012. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGH AVAN) ACCOUNTANT MEMBER JUDICIAL MEMBE R HYDERABAD, DATED: 27 TH NOVEMBER, 2012. KV COPY TO:- 1) PERFECT KNITTLERS LTD., C/O. M. ANANDAM & CO., C.AS., 7A, SURYA TOWERS, S.D. ROAD, SECUNDERABAD 3. 2) DCIT, CIRCLE 16(3), HYDERABAD 1) THE CIT (A)-V, HYDERABAD 2) THE CIT-IV, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD.