KRISHNAN RAMCHANDRAN, PUNE V. ITO 26(1)(4), MUMBAI

ITA 1251/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71794 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 20-11-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 10-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIM KUMAR
• Assessee Lawyers: D Y PANDIT
• Keywords: Bonafide belief; Period of limitation
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NOS. 1250, 1251, 1252/MUM/2011 ASSESSMENT YEARS: 2002-03, 2003-04 & 2004-05 SHRI KRISHNAN RAMACHANDRAN C/O. MR. D.Y. PANDIT ADV 1187/10, KRUPA, SHIVAJINAGAR PUNE-411 055 PAN :AAFPK 2182 C VS. INCOME TAX OFFICER-26(2)(1) MUMBAI- 400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.Y. PANDIT RESPONDENT BY : SHRI ASHIM KUMAR DATE OF HEARING : 20.11.2013 DATE OF PRONOUNCEMENT : 27.11.2013 O R D E R PER BENCH THESE THREE APPEALS FILED BY THE ASSESSEE ARE DIRE CTED AGAINST THE SEPARATE ORDERS OF THE LD.CIT(A) -28, MUMBAI COMMONLY DATED 01.09.2010 CONFIRMING THE PENALTY OF RS.9,792/- RS.22,832/- AND RS.14,421/- L EVIED BY THE AO U/S 271 (1)(C) OF THE INCOME TAX ACT FOR THE ASSESSMENT YEARS 2002-03 , 2003-04 & 2004-05 RESPECTIVELY. 2. AT THE OUTSET, IT IS NOTED THAT THERE IS A DELAY OF 76 DAYS IN FILING THESE APPEALS. THE ASSESSEE HAS FILED PETITIONS FOR CONDO NATION OF DELAY AND THE LD.AR OF THE ASSESSEE HAS EXPLAINED THE REASONS FOR NOT FILI NG THE APPEALS WITHIN THE TIME PERIOD OF LIMITATION STATING THAT THE ASSESSEE COUL D NOT REACH THE CHARTERED ACCOUNTANT IN TIME AND ALSO THE ASSESSEE WAS NOT AW ARE OF THE TIME FACTOR IN FILING THE APPEAL. THE LD.AR OF THE ASSESSEE HAS FURTHER D RAWN OUR ATTENTION THAT THE TRIBUNAL, IN SIMILAR MATTERS OF BPCL EMPLOYEES HAS CONDONED THE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL. AFTER CONSIDERING THE R ELEVANT RECORD, FACTS AND ITA NOS. 1250, 1251, 1252/MUM/2011 SHRI KRISHNAN RAMACHANDRAN ASSESSMENT YEARS: 2002-03, 2003-04 & 2004-05 2 CIRCUMSTANCES OF THE CASE AS WELL AS THE REASONS EX PLAINED BY THE LD.AR, WE FIND THAT THE ASSESSEE HAS SUFFICIENT REASONS FOR NOT FI LING OF THE APPEALS WITHIN TIME. IT IS A SETTLED LAW THAT WHILE CONDONING THE DELAY, THE C OURT SHOULD TAKE A LENIENT VIEW. IT IS ALWAYS A QUESTION WHETHER THE EXPLANATION AND RE ASONS FOR DELAY IS BONA FIDE OR MERELY A DEVISE TO COVER AN ULTERIOR PURPOSE SUCH A S LACHES ON THE PART OF THE LITIGANT OR AN ATTEMPT TO SAVE LIMITATION IN AS UNDERHAND WA Y. WHEN IT IS FOUND ON RECORD THAT THE PARTY HAS NOT ACTED IN MALA FIDE BUT THE R EASONS EXPLAINED ARE FACTUALLY CORRECT, THEN COURT SHOULD BE LIBERAL IN CONSTRUING THE SUFFICIENT CAUSE AND SHOULD LEAN IN FAVOUR OF SUCH PARTY. WHENEVER SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATION ARE OPPOSED TO EACH OTHER, CAUSE OF S UBSTANTIAL JUSTICE HAS TO BE PREFERRED. JUSTICE ORIENTED APPROACH HAS TO BE TAKE N BY A COURT WHILE DECIDING THE MATTER FOR CONDONATION OF DELAY. HOWEVER, THIS DOES NOT MEAN THAT A LITIGANT GETS FREE LICENSE TO APPROACH THE COURT AT HIS WILL. IN VIEW OF THIS LEGAL AND FACTUAL POSITION, WE CONDONE THE DELAY OF 76 DAYS IN FILING THESE APPEALS BEFORE THE TRIBUNAL AND TAKE UP THE MATTER FOR ADJUDICATION. 3. BRIEFLY STATED, THE ASSESSEE, AN INDIVIDUAL WAS A SALARIED EMPLOYEE OF BHARAT PETROLEUM CORPORATION LTD. (BPCL). DURING THE ASSES SMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD RECEIVED LEASE RENTS WHICH WERE NOT DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME AND THE SAME WERE ADDED TO THE TOTAL INCOME OF THE ASSESSEE TREATING THE SAME AS INCOME FROM HOUS E PROPERTY. CONSEQUENTLY, THE AO LEVIED THE IMPUGNED PENALTIES OF RS.9,792/- RS.2 2,832/- AND RS.14,421/- UNDER SECTION 271(1)(C) OF THE ACT, RESPECTIVELY FOR THE AYS 2002-03, 2003-04 & 2004-05. ON APPEAL, THE LD.CIT(A) SUMMARILY DISMISSED THE AP PEALS IN LIMINE AS THE APPEALS WERE FILED DELAY BY 21 MONTHS BY REJECTING THE APPL ICATION FILED BEFORE HIM FOR CONDONATION OF DELAY. AGGRIEVED BY THE IMPUGNED ORD ERS, THE ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US, THE LD.AR HAS STATED THAT THE EMPLOYE R M/S BPCL AND EMPLOYEES UNION, DURING WAGE NEGOTIATION, PREPARED SCHEME SO AS TO ENCOURAGE EMPLOYEES TO HAVE THEIR OWN HOUSES. UNDER THE SAID SCHEME, BPCL HAS PROVIDED LOAN TO THE EMPLOYEES FOR CONSTRUCTING THEIR OWN HOUSE OR TO BU Y PREMISES WITH AN OPTION THAT THE EMPLOYEE HAS TO RECEIVE HOUSE RENT ALLOWANCE OR TO RECEIVE LEASE RENT, IF HE HAS ITA NOS. 1250, 1251, 1252/MUM/2011 SHRI KRISHNAN RAMACHANDRAN ASSESSMENT YEARS: 2002-03, 2003-04 & 2004-05 3 SELF OWNED PREMISES. AFTER THE END OF THE YEAR BPCL HAS CALCULATED THE VALUE OF PERQUISITE IN RESPECT OF LEASE RENT PAID TO THE EMP LOYEES AS PER THE PROVISIONS OF INCOME TAX ACT AND ADDED THE SAID SUM IN THE SALARY CERTIFICATE. THE ASSESSEE LIKE OTHER EMPLOYEES THEREFORE, HAS BELIEVED THAT BPCL H AS PROPERLY COMPUTED HIS INCOME AND ACCORDINGLY FILED INCOME OF RETURN ON BA SIS OF SALARY CERTIFICATE. WHEN THE AO HAS ISSUED THE NOTICE U/S 148 OF THE INCOME TAX ACT, IN RESPONSE THE ASSESSEE HAS FILED THE RETURN OF INCOME BY SHOWING THE INCOME FROM HOUSE PROPERTY AS ADVISED BY THE TAX CONSULTANT. ACCORDINGLY, THE ASSESSEE WAS OF THE BONAFIDE BELIEF THAT THE MATTER WAS THEN CLOSED. SINCE THE A SSESSEE WAS NOT AWARE OF ANY PROCEDURE IN RESPECT OF INCOME TAX ACT HE APPROACHE D THE UNION LEADERS TO RESOLVE THE ISSUE. THE UNION LEADER HAD SEVERAL DISCUSSIONS WITH BPCL AND ALSO WITH INCOME TAX DEPARTMENT. THESE NEGOTIATIONS FAILED AND ALL T HESE EMPLOYEES WERE FINALLY TOLD TO INDIVIDUALLY HANDLE THE MATTER BY UNION LEADER. THEREAFTER THE EMPLOYEES CONSULTED TAX EXPERTS/C.A. ON THEIR OWN, WHO ADVISE D THE EMPLOYEES INCLUDING THE ASSESSEE TO FILE AN APPEAL BEFORE THE LD.CIT(A). AC CORDINGLY, ASSESSEE FILED THE APPEAL TO THE LD.CIT(A) WHICH WAS DELAYED BY 21 MON THS. WHEN THESE REASONS ARE EXPLAINED BEFORE THE THE LD.CIT(A), THE LD.CIT(A) O UGHT NOT TO HAVE REJECTED THE APPLICATION FOR CONDONATION OF DELAY. ON MERITS, TH E LD.AR HAS STATED THAT THE CASE OF THE ASSESSEE IS COVERED IN HIS FAVOUR BY VARIOUS DECISIONS OF THE TRIBUNAL AND CONTENTED THAT THE IMPUGNED PENALTIES ARE TO BE DEL ETED. ON THE OTHER HAND, THE LD.DR HAS RELIED ON THE ORDERS OF THE AO AND THE LD .CIT(A) IN SUPPORT OF THE CASE OF THE REVENUE. 4. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MA TERIAL ON RECORD. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS EXPLAINED T HE REASON FOR THE DELAY IN FILING THE APPEALS BEFORE THE LD.CIT(A) AND THE CIT(A) WIT HOUT CONSIDERING THE EXPLANATION OF THE ASSESSEE, DISMISSED THE APPEAL. WE FIND THAT THERE IS A GENUINE REASON FOR THE ASSESSEE IN NOT FILING THE APPEALS IN TIME, THEREFO RE, WE CONDONE THE DELAY BY TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES OF T HE CASE AND ALSO THE ASSESSEE BEING A SMALL EMPLOYEE. GENERALLY, WHEN THE LD.CIT( A) HAS NOT DECIDED THE ISSUE ON MERITS, THE APPEAL IS RESTORED TO THE FILE OF THE L D.CIT(A) TO DECIDE THE SAME ON MERITS. IN THIS CASE WE FIND THAT THE ISSUE INVOLVE D IS COVERED BY THE DECISIONS OF CO- ITA NOS. 1250, 1251, 1252/MUM/2011 SHRI KRISHNAN RAMACHANDRAN ASSESSMENT YEARS: 2002-03, 2003-04 & 2004-05 4 ORDINATE BENCHES OF THE TRIBUNAL AND TAKING INTO CO NSIDERATION THE POSITION OF THE ASSESSEE, NO PURPOSE IS GOING TO SERVE, IF THE ISSU E IS RESTORED TO THE FILE OF THE CIT(A), WHICH HAS ALREADY BEEN COVERED AS MENTIONED ABOVE. THEREFORE, WE PROCEED TO DECIDE THE ISSUE ON MERITS. 5. IT IS PERTINENT TO MENTION THAT THE ISSUE OF LEV Y OF PENALTY U/S 271(1) (C) IN THE CASE OF THE PRESENT ASSESSEE IS COVERED BY VARI OUS DECISIONS OF THE TRIBUNAL INCLUDING THE ONE IN THE CASE OF MR. RAVINDRA LAXMA N SATHE VS. ITO IN ITA NO. 2828/MUM/2008 FOR THE A.Y. 2001-02 WHICH HAS BEEN F OLLOWED BY THE TRIBUNAL IN THE CASE OF KIRAN BHAGWANT MHATRE IN ITA NOS. 6811 & 68 12/MUM/2010 FOR THE AYS 2002-03 & 2003-04 ON SIMILAR FACTS PERTAINING TO TH E EMPLOYEES OF BPCL. FOLLOWING THE SAID ORDERS OF THE TRIBUNAL, CONSIDERING THE SI MILAR FACTS, WE SET ASIDE THE ORDERS OF THE LD.CIT(A) AND DELETE THE IMPUGNED PENALTIES OF RS.9,792/- RS.22,832/- AND RS.14,421/- LEVIED/CONFIRMED UNDER SECTION 271(1)(C ) OF THE ACT, RESPECTIVELY FOR THE AYS 2002-03, 2003-04 & 2004-05. 6. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF NOVEMBER, 2013. SD/- SD/- (D. KARUNAKARA RAO) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 27.11.2013. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR I BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.