Agricultural Market Committee, Alampur, Hyderabad V. ADIT,(Exemptions)-1, Hyderabad

ITA 1275/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59244 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 06-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NIVEDITA BISWAS
• Assessee Lawyers: S RAMA RAO
• Keywords: Charitable institution; Condonation of delay
• Section: 143(3); 12AA; 147; 11; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NOS.1275 &1276//HYD/2011 ASSTT. YEARS: 2003-04 & 2004-05 M/S. AGRICULTURAL MARKET COMMITTEE, ALAMPUR. PAN:AABTA2586L VS ADIT (EXEMPTIONS - I) HYDERABAD. APPELLANT RESPONDENT APPELLANT BY : SRI S. RAMA RAO RESPONDENT BY : SMT. NIVEDITA BISWAS DATE OF HEARING : 01-02-2012. DATE OF PRONOUNCEMENT : -02-2012. ORDER PER CHANDRA POOJARI, A.M. THESE APPEALS PREFERRED BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS PASSED BY THE CIT (A)-IV, HYDERABAD DATED 15-2-2007 AND THEY PERTAIN TO THE ASSESSMENT YEARS 2003-04 AND 2004-05. THE ASSESSEE RAISED COMMON GROUNDS OF APPEALS FOR THESE TWO ASSESSMENT YEARS. HENCE, THESE ARE CLUBBED, HEARD TOGETHER AND DISPOSED OF BY THIS COMBINED ORDER FOR THE SAKE OF CONVENIENCE. 2. COMMON GROUNDS RAISED BY THE ASSESSEE FOR THE ASSESSMENT YEARS UNDER CONSIDERATION READ AS UNDER: - 1. THE ORDER OF THE LD. CIT (A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. ITA NOS.1275 & 1276/H/2011 M/S. AGRICULTURAL MARKET COMMITTEE, ALAMPUR. =============================== 2 2. THE LD. CIT (A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE INCO0ME OF THE APPELLANT IS EXEMPT BY VIRTUE OF THE PROVISIONS OF SECTION 11 OF THE IT ACT. 3. THE LD. CIT (A) OUGHT TO HAVE TAKEN NOTE OF THE FACT THAT THE APPELLANT IS A GOVT. INSTITUTION ESTABLISHED FOR PUBLIC CHARITABLE PURPOSES AND, THEREFORE, OUGHT TO HAVE CONSIDERED EXEMPTION U/S 11 OF THE IT ACT. 4. THE LD. CIT (A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE RECEIPT OF MARKET FEE BY THE APPELLANT DOES NOT REPRESENT JTHE INCOME OF THE APPELLANT AS THE SAME HAS TO BE UTILISED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 15 OF THE ANDHRA PRADESH (AGRICULTURAL PRODUCE & LIVESTOCK) MARKETS ACT, 1966 AND THE APPELLANT DOES NOT HAVE ANY RIGHT TO UTILISE THE PROPERTY ON ITS OWN. 5. THE LD. CIT (A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE AMOUNT IS COLLECTED IN ACCORDANCE WITH THE DIRECTIONS OF THE GOVT. AND IS TO BE SPENT ONLY ACCORDING TO THE PROVISIONS OF SECTION 15 OF THE AP (AGRICULTURAL PRODUCE & LIVESTOCK) MARKETS ACT 1966 AND THE DIRECTIONS OF THE GOVT. AUTHORITIES AND THEREFORE, THE APPELLANT HAS NO RIGHT OR OWNERSHIP OVER THE AMOUNT COLLECTED BY IT. 6. THE LD. CIT (A) OUGHT TO HAVE CONSIDERED THE EXPENDITURE INCURRED BY THE APPELLANT IN THE LIGHT OF THE PROVISIONS OF SECTION 36(1)(XII) OF THE ACT. ITA NOS.1275 & 1276/H/2011 M/S. AGRICULTURAL MARKET COMMITTEE, ALAMPUR. =============================== 3 IT IS OBSERVED THAT THERE WAS A DELAY OF 1589 DAYS IN FILING THE APPEAL FOR ASSESSMENT YEAR 2003-04 AND 1529 DAY S IN FILING THE APPEAL FOR ASSESSMENT YEAR 2004-05. THE LEARNED AUTHORISED REPRESENTATIVE EXPLAINED THE REA SONS FOR THE DELAY AS FOLLOWS:- THE PETITIONER HEREIN IS ASSESSED TO TAX BY THE ADI T (E)-I, HYDERABAD. FOR THE ASSESSMENT YEARS UNDER CONSIDERATION, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 1 47 OF THE ACT. AGGRIEVED WITH THE ORDER OF ASSESSMENT , THE PETITIONER FILED AN APPEAL BEFORE THE LD. CIT (A), HYDERABAD. THE LD. CIT (A) DISPOSED OF THE SAID A PPEAL VIDE ORDER IN APPEAL NO.336/DDIT(E)-I/CIT (A)-IV/20 06- 07 DATED 15-2-2007. THE SAID ORDER IS SERVED ON 1- 3- 2007. DURING THE RELEVANT PERIOD, THE SECRETARY WA S NOT WORKING AT ALAMPUR. FURTHER, ALL THE INCOME-TAX MA TTERS WERE ENTRUSTED TO AN ADVOCATE AT HYDERABAD AS THE SECRETARY OF THE MARKET COMMITTEE WAS NOT IN THE KNOWLEDGE OF THE INCOME-TAX MATTERS WHICH IS DUE TO THE FACT THAT THE AGRICULTURAL MARKET COMMITTEES WE RE EXEMPT FROM INCOME-TAX UNDER SECTION 10(20) OF THE IT ACT AS A CHARITABLE INSTITUTION. CONSEQUENT TO THE AMENDMENT TO THE SAID PROVISION BY INSERTION OF EXPLANATION BELOW SECTION 10(20) BY THE FINANCE ACT , 2002, THE AGRICULTURAL MARKET COMMITTEES ARE REQUIR ED TO FILE THE RETURNS OF INCOME. ALL THE AMCS IN THE STATE OF ANDHRA PRADESH APPROACHED THE COMMISSIONER AND DIRECTOR OF AGRICULTURE, HYDERABAD FOR NECESSARY INSTRUCTIONS AND GUIDANCE IN THE MATTER. THE SAID AUTHORITY ADVISED THE SECRETARIES TO CLAIM EXEMPTIO N U/S 11 OF THE IT ACT AND FOR THIS PURPOSE SEEK REGISTRA TION OF THE AMC UNDER SECTION 12AA OF THE IT ACT. ACCORDIN GLY, ITA NOS.1275 & 1276/H/2011 M/S. AGRICULTURAL MARKET COMMITTEE, ALAMPUR. =============================== 4 THE APPLICATION U/S 10A WAS FILED BEFORE THE DIT (E ) AND WAS PURSUING FOR REGISTRATION. THEREFORE, THE SECR ETARY WAS UNDER THE BONAFIDE IMPRESSION THAT ONCE THE REGISTRATION IS GRANTED, IT COULD CLAIM EXEMPTION U /S 11 OF THE IT ACT. THEREFORE, NO APPEAL WAS FILED BEFO RE THE HONBLE ITAT AGAINST THE APPELLATE ORDER OF THE LD. CIT (A) REFERRED TO ABOVE. DURING THE MONTH OF JUNE, 2 011 THE PRESENT ADVOCATE OF THE PETITIONER HAS INTIMATE D THAT THE MATTER OF REGISTRATION U/S 12AA IS TO BE PURSUE D WITH THE DIT (E) AND FOR THIS PURPOSE REQUIRED THE PETIT IONER TO MAKE AVAILABLE THE DETAILS OF THE APPLICATION FI LED IN FORM 10A ETC., FOR THIS PURPOSE WHILE VERIFYING TH E BACK RECORD OF THE AMC, ALAMPUR THE MATTER OF DISMISSED APPEAL FOR THE ASSESSMENT YEARS UNDER CONSIDERATION HAS COME TO THE KNOWLEDGE OF THE PRESENT SECRETARY. TH E SAME IS BROUGHT TO THE NOTICE OF THE ADVOCATE AND A S PER HIS ADVICE, THE APPEAL WAS FILED ON 6-7-2011. THER E IS A DELAY OF 1559 DAYS IN FILING THE APPEAL FOR THE ASSESSMENT YEAR 2003-04 AND 1529 DAYS FOR ASSESSMEN T YEAR 2004-05. THE PETITIONER HUMBLY SUBMITS THAT T HE DELAYS ARE FOR THE REASONS STATED ABOVE AND ARE NOT INTENTIONAL. THE PETITIONER, THEREFORE, PRAYS THE TRIBUNAL TO KINDLY CONDONE THE DELAYS AND PASS APPROPRIATE ORDERS FOR THE YEARS UNDER CONSIDERATION. 3. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY OPPOSED THE CONTENTIONS PUT FORWARD BY THE LEARNED COUNSEL FOR THE ASSESSEE. 4. IN THESE CASES, THERE ARE DELAYS OF 1559 DAYS IN FILING THE APPEAL FOR THE ASSESSMENT YEAR 2003-04 AND 1529 DAYS FOR ASSESSMENT YEAR 2004-05. THE ASSESSEE FILED PETITIO NS FOR CONDONING THE SAID DELAYS AND PRAYED FOR ADMITTING THESE APPEALS. WE HAVE GONE THROUGH THE REASONS ADVANCED BY THE ITA NOS.1275 & 1276/H/2011 M/S. AGRICULTURAL MARKET COMMITTEE, ALAMPUR. =============================== 5 ASSESSEE IN ITS PETITIONS. IT IS ADMITTED FACT THA T THERE IS NO HARD AND FAST RULE WHICH CAN BE LAID DOWN IN THE MA TTER OF CONDONATION OF DELAY AND COURTS SHOULD ADOPT A PRAG MATIC APPROACH AND DISCRETION ON THE FACTS OF EACH CASE K EEPING IN MIND THAT IN CONSIDERING THE EXPRESSION SUFFICIENT CAUSE THE PRINCIPLES OF ADVANCING SUBSTANTIAL JUSTICE IS OF P RIME IMPORTANCE AND THE EXPRESSION SUFFICIENT CAUSE S HOULD RECEIVE A LIBERAL CONSTRUCTION. A LIBERAL VIEW OUGHT TO BE TAKEN IN TERMS OF DELAY OF FEW DAYS. HOWEVER, WHEN THERE WAS INOR DINATE DELAY, ONE SHOULD BE VERY CAUTIOUS WHILE CONDONING THE DELAY. IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST. KATIJI (167 ITR 471) (SC) WHEREIN THE SUPREME COURT LAID DOWN T HE FOLLOWING SIX PRINCIPLES BEFORE CONDONING THE DELAY :- (I) ORDINARILY, A LITIGANT DOES NOT STAND TO BENEF IT BY LODGING AN APPEAL LATE. (II) REFUSING TO CONDONE DELAY CAN RESULT IN A MERITORIOUS MATTER BEING THROWN 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. (III) EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOURS DELAY, EVERY SECONDS DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC MANNER. IV) WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATION ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE ITA NOS.1275 & 1276/H/2011 M/S. AGRICULTURAL MARKET COMMITTEE, ALAMPUR. =============================== 6 PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON DELIBERATE DELAY. (V) 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. (VI) IT MUST BE GRASPED THAT THE JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALISE INJUSTICE ON TECHNICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 5. IN THE CASE OF VEDABAI ALIAS VAIJAYANATBAI BABUR AO PATIL (253 ITR 798) THE APEX COURT CLEARLY LAID DOW N THAT THE DISTINCTION MUST BE MADE BETWEEN A CASE WHERE D ELAY IS INORDINATE AND A CASE WHERE THE DELAY IS OF A FE W DAYS. THE LAW ASSISTS THOSE WHO ARE VIGILANT, NOT THOSE W HO SLEEP OVER THEIR RIGHTS. 6. THE DELAY CANNOT BE CONDONED SIMPLY BECAUSE THE ASSESSEES CASE IS HARD AND CALLS FOR SYMPATHY OR M ERELY OUT OF BENEVOLENCE TO THE PARTY SEEKING RELIEF. IN GRANTING THE INDULGENCE AND CONDONING THE DELAY, IT MUST BE PROVED BEYOND THE SHADOW OF DOUBT THAT THE ASSESSEE WAS DILIGENT AND WAS NOT GUILTY OF NEGLIGENCE WHATS OEVER. THE SUFFICIENT CAUSE WITHIN THE CONTEMPLATION OF TH E LIMITATION PROVISION MUST BE A CAUSE WHICH IS BEYON D THE CONTROL OF THE PARTY INVOKING THE AID OF THE PROVIS IONS. ITA NOS.1275 & 1276/H/2011 M/S. AGRICULTURAL MARKET COMMITTEE, ALAMPUR. =============================== 7 THE HONBLE SUPREME COURT IN THE CASE OF RAMLAL V. REWA COALFIELDS LIMITED AIR 1962 SC 361 HAS HELD TH AT 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, NOR INACTION, OR W ANT OF BONA FIDES CAN BE IMPUTED TO THE ASSESSEE A LIBERAL CONSTRUCTION OF THE PROVISIONS HAS TO BE MADE IN OR DER TO ADVANCE SUBSTANTIAL JUSTICE. SEEKERS OF JUSTICE MU ST COME WITH CLEAN HANDS. IN THE PRESENT CASE, THE RE ASONS ADVANCED BY THE ASSESSEE DO NOT SHOW ANY GOOD AND SUFFICIENT REASON TO CONDONE THE DELAYS. THE DELAY S ARE NOT PROPERLY EXPLAINED BY THE ASSESSEE. WE FIND NO REASON FOR CONDONING SUCH DELAYS FOR THE ASSESSMENT YEARS UNDER CONSIDERATION. THE DELAY IS NOTHING BU T NEGLIGENCE AND INACTION OF THE ASSESSEE WHICH HAVE BEEN VERY WELL AVOIDED BY THE EXERCISE OF DUE CARE AND ATTENTION. IN OUR OPINION, THERE EXISTS NO SUFFICI ENT OR GOOD REASON FOR CONDONING INORDINATE DELAYS OF MORE THAN 1500 DAYS FOR THE YEARS UNDER CONSIDERATION. IN VIE W OF THE ABOVE, WE DO NOT FIND ANY MERIT IN THE ARGUMENT S ADVANCED BY THE LEARNED COUNSEL FOR THE ASSESSEE. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10-02-2012. SD/- (ASHA VIJAYA RAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER DATED THE 10 TH FEBRUARY, 2012. ITA NOS.1275 & 1276/H/2011 M/S. AGRICULTURAL MARKET COMMITTEE, ALAMPUR. =============================== 8 COPY FORWARDED TO: 1. C/O SRI S. RAMA RAO, ADVOCATE, 3-6-643, SHRIYAS ELEGANCE, FLAT NO.102, STREET NO. 9, HIMAYATNAGAR, HYDERABAD. 2. ASSTT.DIRECTOR OF INCOME-TAX (EXEMPTIONS-I), HYDERABAD. 3. THE DIT (E), HYDERABAD 4. EHE CIT (A)-IV, HYDERABAD. 5. THE DR, ITAT, HYDERABAD JMR* ITA NOS.1275 & 1276/H/2011 M/S. AGRICULTURAL MARKET COMMITTEE, ALAMPUR. =============================== 9 ITA NOS.1275 & 1276/H/2011 M/S. AGRICULTURAL MARKET COMMITTEE, ALAMPUR. =============================== 10