Deccan Aviation Ltd, Bangalore V. ACIT, Bangalore

ITA 1217/BANG/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51249 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-08-2011
• Assessment Year: 2008-2009
• Appeal Filed On: 10-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G V GOPALA RAO CIT IDR
• Assessee Lawyers: K R PRADEEP
• Keywords: Bonafide belief; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NOS.1217 TO 1221/BANG/2010 ASSESSMENT YEAR : 2008-09 (1.4.07 TO 30.6.07 1.7.07 TO 31.7.07 1.8.07 TO 31.8.07 1.1.08 TO 29.2.08 1.3.08 TO 31.3.08) M/S. DECCAN AVIATION LTD. (NOW KNOWN AS KINGFISHER AIRLINES LTD.,) CUNNINGHAM ROAD, VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 16(1), BANGALORE 560 052. PAN : AAACD5301J : BANGALORE. APPELLANT RESPONDENT : APPELLANT BY : SHRI K.R. PRADEEP, C.A. RESPONDENT BY : SHRI G.V. GOPALA RAO, CIT-I(DR) DATE OF HEARING : 11.08.2011 DATE OF PRONOUNCEMENT : 26.08.2011 O R D E R PER BENCH THESE APPEALS ARE BY THE ASSESSEE COMPANY AGGRIEV ED BY THE ORDER OF THE CIT(APPEALS)-V, BANGALORE DATED 23.8.2010 FO R THE ASSESSMENT YEAR 2008-09. ITA NOS.1217 TO 1221/BANG/10 PAGE 2 OF 4 2. THE ASSESSEE COMPANY HAS RAISED VARIOUS COMMON G ROUNDS OF APPEAL IN THESE APPEALS. THE PRELIMINARY COMMON I SSUE IS THAT THAT THE LD. CIT(APPEALS) ERRED IN SUMMARILY DISMISSING THE APPEALS WITHOUT CONSIDERING THE CONDONATION PETITION FILED BY THE A SSESSEE AND ERRED IN COMING TO THE CONCLUSION THAT THE ASSESSEE HAS NOT GIVEN ANY SUFFICIENT CAUSE FOR THE DELAY IN FILING THE APPEALS. 3. THE APPELLANT SUBMITTED BEFORE THE LD. CIT(A) TH AT THE ASSESSEE HAD RECEIVED A SPATE OF ORDERS THROUGH ITS REPRESEN TATIVE SRI SAMIRA RAO, C.A. WHO HAD APPEARED AND ACCEPTED THESE ORDER S UNDER A BONAFIDE BELIEF THAT ALL THESE ORDERS WERE AS PER L AW. THE ASSESSEE WAS ALSO UNDER THE BELIEF FOR HAVING COOPERATED WITH TH E DEPARTMENT AND PAID THE TAXES. THEREFORE IT WAS A SHOCK AND DISMA Y TO RECEIVE THE ORDER U/S. 221(1) IMPOSING PENALTY OF RS.26 CRORES. ON APPEAL BEFORE THE FIRST APPELLATE AUTHORITY THE LD. CIT(APPEALS) CAME TO A CONCLUSION THAT THE APPELLANT HAD NOT GIVEN ANY SUFFICIENT CAU SE FOR DELAY IN FILING THESE APPEALS AND THEREFORE DISMISSED THE APPEALS. 4. NOW THE APPELLANT IS ON APPEAL BEFORE US. WE F IND FROM THE RECORDS THAT THE APPELLANT HAS FILED THE APPEALS WI TH A DELAY OF 7 DAYS FOR WHICH THE CONDONATION PETITION IS FILED. THE R EASONS FOR DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL IS STATED TO BE AS U NDER: SINCE THE CHAIRMAN AND MANAGING DIRECTOR/DIRECTO RS WERE TRAVELLING, THERE WAS DELAY IN GETTING THE APP EALS PAPERS SIGNED. THE APPELLANT PRAYS THAT THE APPEAL MAY BE ADMITTED AFTER CONDONING THE DELAY OF 7 DAYS IN FILING THE APPEAL IN THE INTERESTS OF RENDERING SUBSTANTIVE JUSTICE. ITA NOS.1217 TO 1221/BANG/10 PAGE 3 OF 4 5. LD. AR SUBMITTED BEFORE US THAT THE APPELLANT HA D COOPERATED WITH THE REVENUE AND HAVE PROMPTLY PAID TAX UNDER THE BO NAFIDE BELIEF THAT THE PENALTY WAS NOT LEVIABLE. IT WAS RATHER SHOCKING FOR THE APPELLANT TO RECEIVE ORDERS U/S. 221 IMPOSING PENALTY OF RS.26 C RORES. THE ASSESSEE WAS IN THE BUSINESS OF PROVIDING LOW COST AIRLINES FACILITY IN THE COUNTRY WITH A VIEW TO MAKE THE FLYING AFFORDABLE TO COMMON MAN. AFTER ITS ENTRY IN THE MARKET, THE INDUSTRY WAS EXPERIENCING A PHENOMENAL GROWTH AND BUSINESS WAS GETTING MORE COMPLICATED. THE AIRLINES BUSINE SS OF THE ASSESSEE WAS CAPITAL INTENSIVE AND REQUIRED COMPLEX HUMAN RESOUR CE MANAGEMENT. IN SUCH ENVIRONMENT CERTAIN LEGAL MATTERS OF THE COMPA NY COULD NOT BE PERUSED. THE MANAGING DIRECTOR AND THE DIRECTORS O F THE COMPANY HAD TO FREQUENTLY TRAVEL IN ORDER TO KEEP THE APPELLANT CO MPANY AFLOAT IN THE MARKET. LD.AR FURTHER SUBMITTED THAT THE APPELLANT COMPANY IS FACING ACUTE FINANCIAL CRUNCH AND IT WOULD BE OF GREAT HARDSHIP TO COUGH UP HUGE FUNDS FOR UNJUST REASONS. LD. AR HUMBLY PRAYED THAT KEEPI NG IN VIEW OF THESE CIRCUMSTANCES, CONDONATION OF DELAY MAY BE GRANTED FOR FILING THESE APPEALS BEFORE THE TRIBUNAL AS WELL AS BEFORE THE L D. CIT(A). 6. LD. DR VEHEMENTLY OPPOSED TO THE PLEA OF THE LD. AR AND SUPPORTED THE ORDER OF THE REVENUE AND PRAYED THAT DELAY MAY NOT BE CONDONED AND APPEALS FILED BY THE ASSESSEE MAY BE D ISMISSED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BY LOOKING AT THE NATURE OF BUSINESS O F THE ASSESSEE WE FIND STRENGTH IN THE SUBMISSION OF LD. AR. THE COMPLEX ITIES INVOLVED IN THE BUSINESS COUPLED WITH HIGH TURNOVER OF COST AND REV ENUE AND HIGH LEVEL HUMAN RESOURCES MANAGEMENT LEADS TO A DIFFICULT BUS INESS ENVIRONMENT. ITA NOS.1217 TO 1221/BANG/10 PAGE 4 OF 4 FROM THE SUBMISSIONS OF THE LD.AR MENTIONED SUPRA W E ARE OF THE CONSIDERED OPINION THAT THE DELAY IN FILING THE APP EALS BY THE ASSESSEE REQUIRES TO BE CONDONED. IT IS ORDERED ACCORDINGLY . HAVING CONDONED THE DELAY WE HEREBY REMIT THESE APPEALS BACK TO THE FIL E OF LD.CIT(A) TO DECIDE THE OTHER ISSUES RAISED IN THE APPEALS AS PER MERIT AND IN ACCORDANCE WITH LAW. 8. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE A LLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 26/8/11. SD/- SD/- ( GEORGE GEORGE K. ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 26 TH AUGUST, 2011. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.