M/s. MODERN PETROCHEM INDSUTRIES P. LTD., MUMBAI V. CIT(A) -XXVI, MUMBAI

ITA 1291/MUM/2007

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8434 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-01-2011
• Assessment Year: 1994-1995
• Appeal Filed On: 09-02-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Condonation of delay
• Section: 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI D.MANMOHAN (VP) AND SHRI RAJENDRA SING H(AM) ITA NO.1291/M/2007 ASSESSMENT YEAR 1994-95 M/S. MODERN PETROCHEM INDUSTRIES PVT.LTD. THE ITO WARD 6(3)(4), MUMBAI 23, SAGAR, 5 TH FLOOR, 327 NARSI NATHA STREET MUMBAI 400 009. PAN : AACCM2694P APPELLANT RESPONDENT ASSESSEE BY : SHRI JITENDRA SINGH REVENUE BY : SHRI PIYUSH JAIN O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 1.2.2005 OF CIT(A) FOR THE ASSESSMENT YEAR 1994-95. THE ASSE SSEE IN THIS APPEAL HAS RAISED DISPUTES RELATING TO ADDITION UNDER SECTION 68 OF THE INCOME-TAX ACT AND DISALLOWANCE OF SOME OF THE EXPENSES. 2. WE FIND THAT THERE HAS BEEN AN INORDINATE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL WHICH UNDER LAW IS REQUIRED TO FILE WITHIN 60 DAYS OF RECEIPT OF ORDER OF CIT(A). IN THIS CASE AS PER THE INFORMA TION GIVEN IN THE MEMORANDUM OF APPEAL, ORDER OF CIT(A) WAS RECEIVED BY THE ASSESSEE ON 1.2.2005 BUT THE APPEAL WAS FILED ONLY ON 9.2.2007. THERE HAS BEEN THUS DELAY OF 638 DAYS. THE ASSESSEE HAS FILED AN APPLICATION DATED 10.10.2010 FOR CONDONATION OF DELAY. IN THE CONDONATION APPLICATIO N THE ASSESSEE HAS MAINLY 2 HIGHLIGHTED THE FACT OF FIRE HAVING BROKEN OUT ON 5 .10.97 CAUSING HUGE DAMAGE TO PROPERTIES AS WELL AS BUSINESS. BECAUSE OF FIRE THE EMPLOYEES HAVE LEFT THE COMPANY. IT HAS ALSO BEEN MENTIONED THAT THE FATHER OF THE DIRECTOR WHO WAS ABOUT 68 YEARS OLD WAS SICK ON ACCOUNT OF PARKINSON , PARALYSIS AND THYROID. HOWEVER, DESPITE ALL THESE PROBLEMS, THE APPLICATIO N FURTHER MENTIONS THAT THE DIRECTOR HAD APPEARED BEFORE THE ITO ON 26.2.98 DUR ING ASSESSMENT PROCEEDINGS AND THE ASSESSMENT ORDER HAD BEEN PASSE D ON 22.3.98. THE APPEAL BEFORE THE CIT(A) WHICH WERE REQUIRED TO FIL E WITHIN 30 DAYS OF RECEIPT OF ORDER OF AO, HAD BEEN FILED ONLY ON 23.7.2003 AFTER A LAPS OF 4 YEARS. CIT(A) DISPOSED OFF THE APPEAL ON 1.2.2005. HOWEVER AGAIN THE ASSESSEE COULD FILE APPEAL BEFORE THE TRIBUNAL ONLY ON 9.2.2007. THE DE LAY IN FILING OF APPEAL BEFORE CIT(A) HAD BEEN EXPLAINED DUE TO FIRE, THE ILLNESS OF FATHER OF THE DIRECTOR AND DUE TO THE FACT THAT THE ASSESSEE HAD TO ATTEND TO VARIOUS GOVERNMENT AUTHORITIES IN CONNECTION WITH SETTLEMENT OF CLAIMS SUCH AS INSURANCE ETC. THE DELAY IN FILING OF APPEAL BEFORE THE TRIBUNAL HAS B EEN EXPLAINED ON THE GROUND THAT ORDER PASSED BY THE CIT(A) WAS RECEIVED BY SOM E OF ITS CLERICAL STAFF WHO HAD NOT INFORMED ABOUT THE SAME TO THE DIRECTOR. IT HAS BEEN MENTIONED THAT THE ASSESSEE CAME TO KNOW ABOUT THE EXISTENCE OF TH E ORDER PASSED BY THE CIT(A) ONLY WHEN THE ASSESSEE RECEIVED NOTICE FOR R ECOVERY OF TAX. THEREAFTER THE ASSESSEE HAD IMMEDIATELY CONSULTED THE CHARTERE D ACCOUNTANT AND APPEAL HAD BEEN FILED ON 9.2.2007. IT HAS ALSO BEEN MENTIO NED IN THE APPLICATION THAT THE FATHER OF THE DIRECTOR OF THE COMPANY BEING ILL ULTIMATELY PASSED AWAY ON 1.8.2007 AND ALL THE STAFF MEMBERS HAD LEFT THE COM PANY DUE TO FIRE DUE TO WHICH THE ASSESSEE COULD NOT FILE THE APPEAL IN TIM E. IT HAS ALSO BEEN SUBMITTED THAT THERE WAS NO MALAFIDE INTENTION IN NOT FILING THE APPEAL BEFORE THE TRIBUNAL IN TIME AND REQUEST HAS BEEN MADE FOR CONDONATION O F DELAY. THE ASSESSEE HAS ALSO FILED AN AFFIDAVIT DATED 15.2.2007 IN WHICH TH E ASSESSEE HIGHLIGHTED THE 3 FACTS OF THERE BEING FIRE ON 5.10.97, THE ILLNESS O F FATHER OF THE DIRECTOR, ILLNESS OF WIFE OF THE DIRECTOR AND THE FACT THAT THE ASSES SEE WAS REQUIRED TO ATTEND TO A GOOD NUMBER OF GOVERNMENT AND SEMI-GOVERNMENT AUT HORITIES IN FIRE RELATED MATTERS AND STAFF MEMBERS INCLUDING HIS BROTHER HAD LEFT THE COMPANY. THE ASSESSEE HAS REQUESTED FOR CONDONATION OF DELAY. RE LIANCE HAVE BEEN PLACED ON THE FOLLOWING JUDGMENTS IN THE CASE OF (I) IMPROVEM ENT TRUST VS UJAGAR SINGH, CIVIL APPEAL NO.2395 OF 2008 DATED 9.6.2010, (II) 1 67 ITR 471 (SC) COLLECTOR, LAND ACQUISITION VS KATIJI; (III) L. BALKRISHNAN VS M.KRISHNAMURTHY (1998) 7 SCC 123; (IV) 124 STC 124 (KER.) VASU & CO. VS. STA TE OF KERALA (2001). 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND OPPOSED THE CONDONATION OF DELAY ON THE GROUND THAT DELAY HAS N OT BEEN EXPLAINED SATISFACTORILY AND THERE WAS NEGLIGENCE ON THE PART OF THE ASSESSEE. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE R IVAL CONTENTIONS CAREFULLY. ADMITTEDLY THERE HAS BEEN INORDINATE DEL AY OF 638 DAYS IN FILING THE APPEAL. THE ASSESSEE HAD RECEIVED THE ORDER OF CIT( A) ON 1.2.2005 AND THE APPEAL HAD BEEN FILED ON 9.2.2007. THE APPEAL UNDE R THE PROVISIONS OF LAW IS REQUIRED TO BE FILED WITHIN THE PERIOD OF 60 DAYS F ROM THE DATE OF ORDER OF CIT(A) BY THE ASSESSEE. HOWEVER, IF THE TRIBUNAL IF SATISFIED THAT THERE WAS SUFFICIENT CAUSE FOR DELAY HAS THE POWER TO CONDONE THE DELAY AND ADMIT THE APPEAL. FROM THE CAREFUL PERUSAL OF THE CONDONATION APPLICATION EXPLAINING THE DELAY WE FIND THAT THE ASSESSEE HAS HIGHLIGHTED THE FIRE THAT HAD BROKEN OUT IN THE BUSINESS PREMISES ON 5.10.97 AND ITS CONSEQUENT IAL EFFECTS SUCH AS EMPLOYEES LEAVING THE COMPANY, ATTENDING TO VARIOUS AUTHORITIES AND COURTS. THE ASSESSEE HAS ALSO HIGHLIGHTED THE ILLNESS OF FA THER OF THE DIRECTOR WHO WAS 68 YEARS OLD. HOWEVER, DESPITE ALL THESE PROBLEMS T HE ASSESSEE HAD ADMITTEDLY 4 APPEARED BEFORE THE AO ON 26.2.98 AND THE ASSESSMEN T ORDER HAD BEEN PASSED ON 23.3.98. THIS MEANS THE ASSESSEE MUST HAVE BEEN AWARE THAT ORDER WOULD SOON BE PASSED BY THE AO WHICH MAY BE REQUIRED TO B E DISPUTED BEFORE CIT(A). BUT NO ACTION WAS TAKEN BY THE ASSESSEE TO ENSURE T HAT COPY OF ORDER WAS TAKEN AND APPEAL FILED IN TIME. THE ASSESSEE HAD BE EN FILED THE APPEAL BEFORE THE CIT(A) ONLY AFTER 4 YEARS I.E. ON 23.7.2003. CI T(A) HAS NOT CONDONED THE DELAY AND THIS ISSUE IS PENDING SEPARATELY IN THE G ROUND OF APPEAL FILED BEFORE THE TRIBUNAL AND THE SAID ISSUE CAN BE CONSIDERED B Y THE TRIBUNAL ONLY AFTER THE DELAY IN FILING OF APPEAL BEFORE THE TRIBUNAL IS CO NDONED AND THE APPEAL IS ADMITTED. 5. THE VARIOUS FACTORS SUCH AS BREAKING OF FIRE, T HE ILLNESS OF FATHER OF THE DIRECTOR, ATTENDING TO VARIOUS AUTHORITIES SUBSEQUE NT TO THE FIRE AND THE EMPLOYEES HAVING LEFT THE COMPANY ARE NOT FOUND VER Y RELEVANT FOR THE DELAY BEFORE THE TRIBUNAL BECAUSE DESPITE ALL THESE PROBL EMS THE ASSESSEE HAD APPEARED BEFORE THE AO AND HAD ALSO FILED APPEAL BE FORE THE CIT(A) ON 23.7.2003. THE ASSESSEE HAD FILED APPEAL BEFORE THE CIT(A) AFTER DELAY OF 4 YEARS AND THE CONDONATION APPLICATION HAD BEEN FILE D BEFORE HIM. THE ASSESSEE WAS THUS AWARE OF THE ISSUE OF DELAY IN FILING APPE AL BUT TOOK NO ACTION TO ENSURE THAT COPY OF ORDER OF CIT(A) WAS OBTAINED FO R FILING THE APPEAL BEFORE THE TRIBUNAL. THE ASSESSEE HAD THUS SHOWN VERY CASU AL AND NEGLIGENT APPROACH IN ATTENDING TO THIS MATTER THOUGH THE ASSESSEE AS PER ITS OWN ADMISSION WAS REGULARLY ATTENDING TO OTHER MATTERS WITH OTHER AUT HORITIES IN CONNECTION WITH CLAIMS RELATING TO THE FIRE. WE ALSO NOTICE SOME CO NTRADICTIONS. THE ASSESSEE IN THE PARA 9 OF CONDONATION APPLICATION HAS SUBMITTED THAT THE ORDER OF CIT(A) HAD BEEN RECEIVED BY SOME CLERICAL STAFF AND THE AS SESSEE WAS NOT AWARE OF THE SAME TILL NOTICE OF RECOVERY OF DEMAND HAD BEEN REC EIVED. BUT IN PARA 11, IT HAS 5 BEEN SUBMITTED THAT THE ASSESSEE COULD NOT FILE APP EAL IN TIME DUE TO FACTORS SUCH AS ILLNESS OF THE FATHER OF THE DIRECTOR, THE BREAKING OUT OF FIRE AND CONSEQUENTIAL EFFECT OF STAFF MEMBERS HAVING LEFT T HE COMPANY. WE FURTHER NOTICE THAT THE ASSESSEE HAS NOT SUBMITTED ANY EVID ENCE REGARDING RECEIPT OF ORDER OF CIT(A) BY SOME CLERICAL STAFF AND THE SAME BEING NOT HANDED OVER TO THE ASSESSEE. THE ASSESSEE HAS NOT FILED ANY AFFIDA VIT TO SUPPORT SUCH CLAIM. FURTHER THE ASSESSEE HAS MENTIONED THAT IT CAME TO KNOW ABOUT THE ORDER OF CIT(A) WHEN IT RECEIVED RECOVERY NOTICE, BUT NO DET AILS HAVE BEEN GIVEN ABOUT THE NOTICE AND DATE OF RECEIPT. NO DOUBT THERE ARE RULINGS FROM SEVERAL HIGH COURTS AND EVEN THE APEX COURT THAT CONDONATION APP LICATION SHOULD BE CONSIDERED LIBERALLY. BUT AT THE SAME TIME IT HAS A LSO BEEN MADE CLEAR BY THE COURTS THAT CONDONATION APPLICATION COULD BE REJECT ED IN CASES WHERE THE ASSESSEE HAS BEEN FOUND NEGLIGENT OR IRRESPONSIBLE AND CALLOUS IN PROSECUTING THE MATTER. CONSIDERING THE ENTIRETY OF FACTS AND C IRCUMSTANCES WE ARE OF THE VIEW THAT APPROACH OF THE ASSESSEE IN THE MATTER OF FILING OF APPEAL BEFORE THE TRIBUNAL HAS BEEN EXTREMELY IRRESPONSIBLE AND NEGLI GENT AND THAT IT IS NOT A FIT CASE FOR CONDONATION OF DELAY. WE THEREFORE REJECT THE CONDONATION APPLICATION . 6. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISSE D AS UNADMITTED. 7. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11 .02.2011. SD/- SD/- ( D. MANMOHAN) (RAJENDR A SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATE : 11.02.2011 AT :MUMBAI COPY TO : 1. THE APPELLANT 6 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR B BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ALK