VJIL Consulting Ltd., Hyd, Hyderabad V. ITO, Ward-15(3), Hyd, Hyderabad

ITA 1309/HYD/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6333 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 21-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 19-11-2015
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Condonation of delay
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1309/HYD/2015 ASSESSMENT YEAR: 2010-11 M/S. VJIL CONSULTING LIMITED, HYDERABAD [PAN: AACCV8176F] VS INCOME TAX OFFICER, WARD-15(3), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P. MURALI MOHAN RAO, AR FOR REVENUE : SHRI M. SITARAM, DR DATE OF HEARING : 22-06-2016 DATE OF PRONOUNCEMENT : 15-07-2016 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-8, HYDERABAD, DATED 29-09-2015 DISMISSING THE APPEAL AS NOT MAINTAINABLE BY REFUSING TO CONDONE THE DELAY IN PREFERRING THE APPEAL. 2. BRIEFLY STATED, ASSESSEE-COMPANY IS IN THE BUSINESS OF PROVIDING SOFTWARE SERVICES TO UK AND USA. CONSEQUE NT TO SURVEY OPERATIONS CONDUCTED IN ORDER TO EXAMINE COMPLIANCE W ITH TDS PROVISIONS, ASSESSING OFFICER (AO) PASSED AN ORDER U/S. 201(1) & 201(1A) OF THE INCOME TAX ACT [ACT] ON 05-03-2012, DE TERMINING CERTAIN AMOUNTS, WHICH ARE REMITTED WITHOUT DEDUCTION OF TAX AND CONSEQUENT LIABILITY OF THE TDS AMOUNT AND INTEREST THERE ON. EVEN THOUGH THE SAID ORDER WAS STATED TO HAVE BEEN SERVED ON ASSESSEE, IT DID NOT PREFER APPEAL IMMEDIATELY WITHIN THE STATUTOR Y TIME I.T.A. NO. 1309/HYD/2015 M/S. VJIL CONSULTING LIMITED :- 2 -: PERMITTED. HOWEVER, ASSESSEE FILED AN APPEAL IN FOR M NO. 35 BEFORE THE LD. CIT(A) ALONG WITH AN AFFIDAVIT REQUESTI NG FOR CONDONATION OF DELAY OF 749 (SEVEN HUNDRED AND FORTY NINE) DAYS ON 23-04-2014. LD. CIT(A) DID NOT ACCEPT THE EXPLANATI ON GIVEN BY ASSESSEE WHICH HE CONSIDERED THEM AS VAGUE AND FLIM SY. HE ALSO NOTED VIDE PARA 5 THAT APPELLANTS CASE WAS POSTED FOR H EARING ON VARIOUS OCCASIONS AND THERE IS NO COMPLIANCE FROM AS SESSEE. CONSIDERING THE FACTS AND CIRCUMSTANCES, THE APPEAL WA S DISMISSED. ASSESSEE PREFERRED THE PRESENT APPEAL SEE KING MAINLY RESTORATION OF APPEAL TO THE CIT(A) BY CONDONING THE DELAY IN FILING THE APPEAL BEFORE HIM. THE MAIN GROUND OF ASSESSEE FROM GROUND NO. 2 TO 5 IS THE PRAYER THAT THE ORDER OF CIT(A) MAY BE SET ASIDE AND APPEAL MAY BE RESTORED TO THE FILE OF LD. CIT(A) F OR FRESH ADJUDICATION ON MERITS OF THE CASE. 3. LD. COUNSEL FILING A FRESH AFFIDAVIT BY THE M.D., EXPLAINED THAT THE ORDER OF AO WAS RECEIVED BY THE THEN ACCOUNTANT WHE N M.D., WAS NOT IN STATION AND SUBSEQUENTLY, HE HAS NOT ATTENDED TH E OFFICE DUE TO ILL-HEALTH OF HIS FATHER FOR MORE THAN TWO YEARS . SINCE HE HAS NOT INFORMED THE RECEIPT OF THE ORDER, NOBODY NOTIC ED THE SERVICE OF THE ORDER. IT WAS FURTHER SUBMITTED THAT IT HA S COME TO THE NOTICE ONLY AFTER ATTACHMENT OF THE BANK ACCOUNT OF THE COMPANY AND CONSEQUENTLY, THEY REALIZED THAT THE APPEAL WAS TO BE PREFERRED TO CIT(A). IT HAS FURTHER SUBMITTED THAT ON AP POINTMENT OF NEW ACCOUNTANT, THE ORDER WAS TRACED AND THE APPEAL COULD BE FILED ON 23-04-2014 WITH THE DELAY OF 749 (SEVEN HUND RED AND FORTY NINE) DAYS. IT WAS SUBMITTED THAT LD. CIT(A) HAS NOT CONSIDERED THE ABOVE EXPLANATION AND REFUSED CONDONATI ON WHICH SHOULD HAVE BEEN CONSIDERED BY HIM. LD. COUNSEL RE LIED ON THE PRINCIPLES LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF I.T.A. NO. 1309/HYD/2015 M/S. VJIL CONSULTING LIMITED :- 3 -: COLLECTOR, LAND ACQUISITION VS. MST. KATIJI & ORS [167 ITR 471] FOR CONDONING THE DELAY. 4. LD. DR HOWEVER, SUBMITTED THAT THE ORDER OF CIT(A) IS ACCORDING TO THE FACTS AND PRINCIPLES OF LAW. HE RELI ED ON THE CASE OF PRASHANT PROJECTS LTD., VS. DCIT [145 ITD 202] (MUM -TRIB) AND THE CASE OF ACIT VS. VIMAL MEHRA [55 SOT 67] (DEL). 5. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE CASE LAW PLACED ON RECORD. THERE ARE EQUALLY GOOD NUMBE RS OF CASES ALLOWING THE CONDONATION AND ALSO REJECTING THE CONDO NATION OF DELAY IN FILING THE APPEALS. EACH CASE STANDS ON ITS OWN ON FACTS. HON'BLE SUPREME COURT IN THE CASE OF COLLECTOR, LAND A CQUISITION VS. MST. KATIJI & ORS [167 ITR 471] (SUPRA) HAS CONSI DERED THAT: THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACTING SECTION 51 OF THE INDIAN LIMITATION ACT OF 1963 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON 'MERITS'. THE EXPRESSION 'SUFFICIENT CAUSE' EMPLOYE D BY THE LEGISLATURE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY TH E LAW IN A MEANING-FUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICE-THAT BEI NG THE LIFE-PURPOSE FOR THE EXISTENCE OF THE INSTITUTION OF COURTS. IT IS C OMMON KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL APPROAC H IN MATTERS INSTITUTED IN THIS COURT. BUT THE MESSAGE DOES NOT APPEAR TO H AVE PERCOLATED DOWN TO ALL THE OTHER COURTS IN THE HIERARCHY. AND SUCH A L IBERAL APPROACH IS ADOPTED ON PRINCIPLE AS IT IS REALIZED THAT:- 'ANY APPEAL OR ANY APPLICATION, OTHER THAN AN APPLI CATION UNDER ANY OF THE PROVISIONS OF ORDER XXI OF THE CODE OF CIVIL PROCED URE, 1908. MAY BE ADMITTED AFTER THE PRESCRIBED PERIOD IF THE APPELLANT OR THE APPLICANT SATISFIES THE COURT THAT HE HAD SUFFICIENT CAUSE FOR NOT PREFERRING THE APPEAL OR MAKING THE APPLICATION WITHIN SUCH PERIOD.' 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTI CE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDONED THE HIGHEST THA T CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. I.T.A. NO. 1309/HYD/2015 M/S. VJIL CONSULTING LIMITED :- 4 -: 3. 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT M EAN 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 C OMMON SENSE PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DE SERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGH T 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 MA LA 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 N OT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUNDS BU T BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. MAKING A JUSTICE-ORIENTED APPROACH FROM THIS PERSPE CTIVE, THERE WAS SUFFICIENT CAUSE FOR CONDONING THE DELAY IN THE INS TITUTION OF THE APPEAL. THE FACT THAT IT WAS THE 'STATE' WHICH WAS SEEKING CONDONATION AND NOT A PRIVATE PARTY WAS ALTOGETHER IRRELEVANT. THE DOCTRI NE OF EQUALITY BEFORE LAW DEMANDS THAT ALL LITIGANTS, INCLUDING THE STATE AS A LITI-GANT, ARE ACCORDED THE SAME TREATMENT AND THE LAW IS ADMIN-ISTERED IN AN EVEN HANDED MANNER. THERE IS NO WARRANT FOR ACCORDING A STEPMOT HERLY TREATMENT WHEN THE 'STATE' IS THE APPLICANT PRAYING FOR CONDONATIO N OF DELAY. IN FACT EXPERI- ENCE SHOWS THAT ON ACCOUNT OF AN IMPERSONAL MACHINA RY (NO ONE IN CHARGE OF THE MATTER IS DIRECTLY HIT OR HURT BY THE JUDGME NT SOUGHT TO BE SUBJECTED TO APPEAL) AND THE INHERITED BUREAUCRATIC METHODOLO GY IMBUED WITH THE NOTE-MAK-ING, FILE PUSHING, AND PASSING-ON-THE-BUCK ETHOS, DELAY ON ITS PART IS LESS DIFFICULT TO UNDERSTAND THOUGH MORE DI FFI- CULT TO APPROVE. IN ANY EVENT, THE STATE WHICH REPRESENTS THE COLLECTIV E CAUSE OF THE COMMUNITY, DOES NOT DESERVE A LITIGANT-NON-GRATA ST ATUS. THE COURTS THEREFORE HAVE TO BE INFORMED WITH THE SPIRIT AND P HILOSOPHY OF THE PROVISION IN THE COURSE OF THE INTERPRETATION OF TH E EXPRESSION 'SUFFI-CIENT CAUSE'. SO ALSO THE SAME APPROACH HAS TO BE EVIDENC ED IN ITS APPLICATION TO MATTERS AT HAND WITH THE END IN VIEW TO DO EVEN HANDED JUSTICE ON MERTIS IN PREFERENCE TO THE APPROACH WHICH SCUTTLES A DECISION ON MERITS. TURNING TO THE FACTS OF THE MATTER GIVING RISE TO T HE PRESENT APPEAL, WE ARE SATISFIED THAT SUFFICIENT CAUSE EXISTS FOR THE DELA Y. THE ORDER OF THE HIGH COURT DISMISSING THE APPEAL BEFORE IT AS TIME BARRE D, IS THEREFORE SET ASIDE. DELAY IS CONDONED. RESPECTFULLY FOLLOWING THE PRINCIPLES LAID DOWN IN T HE ABOVE SAID CASE, I AM OF THE OPINION THAT THE DELAY AS EXPLAINED B Y THE M.D., SHOULD HAVE BEEN CONSIDERED BY THE LD. CIT(A) IN ITS CORRECT I.T.A. NO. 1309/HYD/2015 M/S. VJIL CONSULTING LIMITED :- 5 -: PERSPECTIVE. SINCE THERE IS NO OPPORTUNITY, EVEN TO E XPLAIN THE SAID AFFIDAVIT FILED BEFORE THE CIT(A), AS THE APPEAL WAS DISMISSED EX- PARTE, I AM OF THE VIEW THAT ASSESSEES AFFIDAVIT AND E XPLANATION SHOULD BE CONSIDERED AFRESH BY THE LD. CIT(A) IN ORD ER TO COME TO A DECISION AFTER GIVING DUE OPPORTUNITY TO ASSESSEE. IN ORDER TO ENABLE THE CIT(A) TO RE-EXAMINE THE ISSUE, I HEREBY SET ASIDE THE ORDER OF CIT(A) DT. 29-09-2015 AND RESTORE THE APPEAL TO THE FILE OF THE CIT(A) FOR FRESH CONSIDERATION. NEEDLESS TO SAY THAT A SSESSEE SHOULD BE GIVEN DUE OPPORTUNITY AND LD. CIT(A) SHOUL D CONSIDER THE PETITION FOR CONDONATION ON ITS MERITS. IT IS ALSO NO TICED THAT AO HAS RAISED VARIOUS DEMANDS. IF SOME OF THE DEMAND S ARE ADMITTED BY ASSESSEE, THEN WHETHER APPEAL CAN BE MAINTAI NED UNDER THE PROVISIONS OF SECTION 249(4) OF THE ACT SHOUL D ALSO BE CONSIDERED BY THE LD. CIT(A). WITH THESE OBSERVATION S, THE ORDER OF CIT(A) IS SET ASIDE AND THE APPEAL FILED IN FORM NO. 35 BEFORE HIM WAS RESTORED FOR FRESH CONSIDERATION. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JULY, 2016 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 15 TH JULY, 2016 TNMM I.T.A. NO. 1309/HYD/2015 M/S. VJIL CONSULTING LIMITED :- 6 -: COPY TO : 1. M/S. VJIL CONSULTING LIMITED, HYDERABAD. C/O. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3 , 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-15(3), HYDERABAD. 3. COMMISSIONER OF INCOME TAX(APPEALS)-8, HYDERABAD , 4. THE COMMISSIONER OF INCOME TAX (TDS), HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.