Naina Devi Merchants (P) Ltd, Kolkata V. ITO, Ward-1(2), Kolkata

ITA 127/KOL/2022

AI Insights

Naina Devi Merchants (P) Ltd. appealed against the order of the CIT(A) which was decided ex-parte as the assessee failed to appear on the scheduled dates. The delay in filing the appeal was attributed to the illness of the assessee's tax counsel and the COVID-19 pandemic. The Tribunal found the reasons for the delay sufficient and reasonable, noting that the delay was not intentional and did not serve as a tactic to avoid litigation. The Tribunal emphasized the importance of substantial justice over technical considerations and decided to restore the appeal for a decision on merits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127338 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 15-02-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 02-03-2022
• Other Referred Cases: Collector Land Acquisition Vs. Mst. Katiji & Others, N.Balakrishnan Vs. M. Krishnamurthy
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause; Condonation of delay

Judgement Text

आयकर अपील य अ धकरण, कोलकाता पीठ ‘‘सी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH: KOLKATA ी राजेश क ु मार, लेखा सद य एवं ी संजय शमा या यक सद यके सम [Before Shri Rajesh Kumar, Accountant Member & Shri Sonjoy Sarma, Judicial Member] I.T.A. No. 127/Kol/2022 Assessment Year: 2010-11 Naina Devi Merchants (P) Ltd. (PAN: AACCN 9699 K) Vs. ITO, Ward-1(2), Kolkata Appellant / (अपीलाथ ) Respondent / ( !यथ ) Date of Hearing / स ु नवाई क$ त&थ 16.02.2023 Date of Pronouncement/ आदेश उ)घोषणा क$ त&थ 17.02.2023 For the Appellant/ नधा /रती क$ ओर से Shri Siddharth Agarwal, Advocate For the Respondent/ राज व क$ ओर से G. Hukugha Sema, CIT ORDER / आदेश Per Rajesh Kumar, AM: This is the appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)”] dated 19.02.2019 for the AY 2010-11. 2. The Registry has pointed out that appeal is time-barred by 1048 days. In order to explain the delay, the assessee has filed an application for condonation of delay and also annexed an affidavit of S company. The affidavit of the assessee re 2 I.T.A. No. Assessment Year: Naina Devi Merchants (P) Ltd. also annexed an affidavit of Shri Gopal Kumar Gupta the director of . The affidavit of the assessee reads as under:- I.T.A. No. 127/Kol/2022 Assessment Year: 2010-11 Naina Devi Merchants (P) Ltd. hri Gopal Kumar Gupta the director of the assesse 3 I.T.A. No. Assessment Year: Naina Devi Merchants (P) Ltd. I.T.A. No. 127/Kol/2022 Assessment Year: 2010-11 Naina Devi Merchants (P) Ltd. 3. The ld. Counsel for the assessee submitted that the ld CIT(A) disposed off these appeals by ex-parte orders as no one appeared on the dates fixed for hearings. The counsel of the assessee submitted that assessee’s tax counsel Advocate was engaged by the assesse to attend the appeal before the ld CIT(A) who could not attend the hearing due to his being 4 I.T.A. No. Assessment Year: Naina Devi Merchants (P) Ltd. The ld. Counsel for the assessee submitted that the ld CIT(A) disposed off parte orders as no one appeared on the dates fixed for hearings. e submitted that assessee’s tax counsel Shri Advocate was engaged by the assesse to attend the appeal before the ld CIT(A) who could not attend the hearing due to his being sick and bed ridden due to I.T.A. No. 127/Kol/2022 Assessment Year: 2010-11 Naina Devi Merchants (P) Ltd. The ld. Counsel for the assessee submitted that the ld CIT(A) disposed off parte orders as no one appeared on the dates fixed for hearings. Shri Paras Kochar Advocate was engaged by the assesse to attend the appeal before the ld CIT(A) who bed ridden due to serious 5 I.T.A. No. 127/Kol/2022 Assessment Year: 2010-11 Naina Devi Merchants (P) Ltd. ailments. Thereafter after lot of efforts the assesse could get the copy of appellate order when assesse accountant saw on the departmental portal the status of appeal being disposal off and decided against the assessee. The assesse thereafter appointed the present counsel Shri Subash Aggarwal Adv on 25.02.2022 and the appeal was finally filed in the tribunal on 03.03.2022 after a delay of 1048 days. The counsel also submitted that the during the delay substantial part of period of delay is covered by the Covid pandemic. The ld AR therefore prayed that since the delay in filing the appeal is neither intentional nor deliberate, therefore the delay may kindly be condoned. 4. On the other hand, ld. D.R. contended that the assessee should be vigilant about all the issues relating to income-tax proceedings. The ld Dr argued that the delay in filing the appeal is not property explained and therefore the appeals may kindly be dismissed. 5. We have duly considered the rival contentions and gone through the record carefully. We are mindful of the provisions of sub-section 5 of Section 253 which contemplates that the Tribunal may admit an appeal or permit filing of memorandum of cross-objections after expiry of relevant period, if it is satisfied that there was a sufficient cause for not presenting it within that period. This expression "sufficient cause" employed in this Section has also been used identically in sub-Section 3 of Section 249 of the Act, which provides power to the Id. Commissioner to condone the delay in filing of the appeal before the Commissioner. Similarly, it has been used in Section 5 of the Indian Limitation Act, 1963. Whenever interpretation and consideration of this expression has fallen for consideration before the Hon'ble High Courts as well as before the Hon'ble Supreme Court then, the Hon'ble Courts were unanimous in their conclusion that this expression has to be construed liberally. We may make reference to the following observations of the Hon'ble Supreme court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353: "1. Ordinarily a litigant does not stand to benefit by lodging an appeal late. 6 I.T.A. No. 127/Kol/2022 Assessment Year: 2010-11 Naina Devi Merchants (P) Ltd. 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very 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. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner. 4. 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. 5. 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. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so." 6. Similarly, we would like to make reference to authoritative pronouncement of Hon'ble Supreme Court in the case of N.Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under: "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 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 putt 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 lain 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 tliat in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn 7 I.T.A. No. 127/Kol/2022 Assessment Year: 2010-11 Naina Devi Merchants (P) Ltd. 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 Could 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 ITA No.201, 202 and 203/Ahd/2020 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." 7. We do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Hon'ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the delay, then such reasons are to be construed with a justice oriented approach. 8. In the light of above, if we examine the facts of the present case, then it would reveal that basically the appeal has been filed after 1048 days of the ld. CIT’s order but almost two years is attributable to COVID period, i.e. 23.02.2020 upto March, 2022. This appeal has been presented before the Tribunal on 03.03.2022. If credit of number of days allowed by the Hon’ble Supreme Court in its order dated September 23, 2021 in Miscellaneous Application No. 665 of 2021 in SMW(C) No. 3 of 2020 regarding cognizance for extension of limitation, even then there is substantial delay at the part of the assessee but we are of the view that the delay is for sufficient and reasonable cause. Moreover, making the appeal time-barred has not been used by the assessee as a tactics to avoid the litigation with the Revenue because such strategy would not give any benefit to the assessee in this type of litigation. Therefore, we condone the delay and proceed to decide the appeal on merit. 9. At the outset, the Ld. Counsel for the assessee submitted that the Ld. CIT(A) has decided the appeal ex-parte as the assessee could not appear on the various occasions when the Ld. CIT(A) fixed the appeals for hearing. The Ld. Counsel submitted that the notices sent by the Ld. CIT(A) were not received by the assessee 8 I.T.A. No. 127/Kol/2022 Assessment Year: 2010-11 Naina Devi Merchants (P) Ltd. and therefore the appeal of the assessee remained unattended before the Ld. CIT(A). The ld. Counsel of the assessee prayed before the Bench that the assessee may kindly be given one more opportunity to defend its case on merit before the Ld. CIT(A) by restoring this appeal to the file of the Ld. CIT(A). 10. The Ld. D.R on the other hand strongly objected the prayers of the Ld. A.R by submitting that despite several opportunities granted the assessee did not appear and therefore the said request of the counsel of the assessee may kindly be dismissed. 11. After hearing the rival parties and perusing the material on record, we observe that the assessee’s appeal was decided ex-parte when the assessee failed to turn up on the dates fixed for hearings and now therefore in the interest of justice and fair play, the assessee deserves to be given one more opportunity to defend its case before the Ld. CIT(A) on merits. Accordingly we restore the appeal to the file of the Ld. CIT(A) with the directions to decide the same on merits after affording the assessee a reasonable opportunity of hearing to the assessee. Simultaneously we also direct the assessee to cooperate in the disposal of this appeal. 12. In the result, the appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 17 th February, 2023 Sd/- Sd/- (Sonjoy Sarma /संजय शमा ) (Rajesh Kumar/राजेश क ु मार) Judicial Member/ या यक सद य Accountant Member/लेखा सद य Dated: 17 th February, 2023 SB, Sr. PS 9 I.T.A. No. 127/Kol/2022 Assessment Year: 2010-11 Naina Devi Merchants (P) Ltd. Copy of the order forwarded to: 1. Appellant- Naina Devi Merchants (P) Ltd., C/o, Subash Agarwal & Associates, Advocates, Siddha Gibson, 1, Gibson Lane, Suite-213, 2 nd Floor, Kolkata-700069. 2. Respondent – ITO, Ward-1(2), Kolkata 3. Ld. CIT(A)-17, Kolkata (Sent through e-mail) 4. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata