P. Rama Krishna, Hyd, Hyderabad V. ACIT, Cir-4(1), Hyderabad

ITA 1421/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66102 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 03-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAYASAGAR
• Assessee Lawyers: P N MURTHY
• Keywords: Period of limitation; Reasonable cause; Condonation of delay
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1421/HYD/2011 ASSESSMENT YEAR: 2006-07 SHRI P. RAMA KRISHNA, APPELLANT HYDERABAD (PAN AECPP5984Q) VS. ASSTT. COMMISSIONER OF INCOME TAX, RESPONDENT CIRCLE 4(1), HYDERABAD APPELLANT BY : MR. P.N. MURTHY RESPONDENT BY : MR. DAYA SAGAR DATE OF HEARING : 23/07/2012 DATE OF PRONOUNCEMENT : 03/08/ 2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-V, HYDERABAD, DATED 14/06/2011 FOR THE ASSESSMENT YEAR 2006-07. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED HIS RETURN OF INCOME FOR THE A.Y. 2006-07 ON 07/07/2006 ADMITTING TOTAL INCOME OF RS. 3,50,000/- AND AGRICULTURAL INC OME AT RS. 42,500/-. THE ASSESSING OFFICER COMPLETED THE ASSES SMENT U/S 143(3) BY TREATING THE LOAN AMOUNT AS INCOME OF THE ASSESSEE. 3. BEFORE THE CIT(A), THE ASSESSEE FILED THE APPEAL WITH A DELAY OF 137 DAYS. THE CIT(A) REJECTING THE CONDONATION P ETITION FILED ITA NO. 1421/HYD/2011 SRI P. RAMA KRISHNA 2 BY THE ASSESSEE, DISMISSED THE APPEAL OF THE ASSESS EE FOLLOWING VARIOUS CASE LAWS INCLUDING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF VEDABAI ALIAS VAIJAYANATABAI BABURAO PATIL 253 ITR 798. 4. AGGRIEVED BY THE ORDER OF THE CIT(A) THE ASSESSE E IS IN APPEAL BEFORE US CONTENDING THAT THE LEARNED CIT(A) IS NOT JUSTIFIED IN DISMISSING THE APPEAL, THAT THE ASSESS EE PRAYER FOR CONDONATION IS NOT GENUINE SATISFACTORY AND NOT REA SONABLE. 5. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) HAS TOTALLY IGNORED THE WRITTEN SUB MISSION BEFORE HIM ON 14/06/2011 IN REGARD TO REASONS OF FACTS MEN TIONED THERE IN FOR CONDONATION OF DELAY IN SUBMITTING THE APPE AL. HE FURTHER SUBMITTED THAT THE CIT(A) HAS NOT EVEN CONSIDERED T HAT THE ASSESSEE REQUIRES, ORIGINAL DEMAND NOTICE U/S 156 O F IT ACT, 1961 TO PREFER AN APPEAL U/S 241(1)(A), WHICH WAS LOST I N THE OFFICE OF THE INSTRUCTING AUDITOR AND A DUPLICATE COPY OF THE DEMAND NOTICE U/S 156 OBTAINED ON 21/07/2009 BY THE ASSESSEE AND FILED BEFORE THE CIT(A) ON 22/07/2009 IN ORDER TO REGULARIZE THE APPEAL. 6. THE LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD AS WELL AS THE ORDERS OF THE AUTHORITIES BELOW. THE H ON'BLE, SUPREME COURT IN COLLECTOR, LAND ACQUISITION V. MST. KATIJI AND ORS. (1987) 167 1TR 471 (SC) HAS OBSERVED THAT WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OT HER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FO R THE OTHER SIDE CANNOT CLAIM TO HAVE A VESTED RIGHT IN INJUSTICE BE ING DONE BECAUSE OF A NON-DELIBERATE DELAY. THUS, CONSIDERIN G THE HARDSHIP ITA NO. 1421/HYD/2011 SRI P. RAMA KRISHNA 3 OF THE ASSESSEE, WE ARE OF THE OPINION THAT THERE E XIST SUFFICIENT REASONS FOR NOT FILING A VALID EFFECTIVE APPEAL BEF ORE THE US. IT IS APTLY SAID THAT FACTS SHOULD BE VIEWED IN A NATURAL PERSPECTIVE HAVING REGARD TO THE COMPULSION OF CIRCUMSTANCES OF A CASE WHERE IT IS POSSIBLE TO DRAW INFERENCES FROM THE FACTS AN D WHERE THERE IS NO EVIDENCE OF ANY DISHONEST OR IMPROPER MOTIVE ON THE PART OF THE ASSESSEE IT WOULD BE JUST AND EQUITABLE TO DRAW SUCH INFERENCE IN SUCH A MANNER THAT WOULD LEAD TO EQUIT Y AND JUSTICE. TOO HYPER TECHNICAL OR LEGALIZED APPROACH SHOULD BE AVOIDED IN LOOKING AT A PROVISION WHICH MUST BE EQUITABLY INTE RPRETED AND JUSTLY ADMINISTERED. IN OUR OPINION, THE REASONS AD VANCED BY THE ASSESSEE IN FILING OF THE APPEAL BELATEDLY AS EXPLA INED IN THE UPPER PART OF THIS ORDER ARE FOUND TO BE BONA-FIDE AND THE ASSESSEE HAVING REASONABLE CAUSE FOR NOT FILING THE APPEAL IN TIME. HENCE, TAKING INTO CONSIDERATION THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION TH AT THE DELAY IN FILING THIS APPEAL DESERVES TO BE CONDONED AND, ACC ORDINGLY THE DELAY IS CONDONED AND THE APPEAL IS ADMITTED TO DEC IDE THE ISSUES ON MERIT. 8. IN ITA NO. 2075/H/11 IN THE CASE OF SMT. BANU BEGUM VIDE ORDER DATED 30 TH APRIL, 2012, THE COORDINATE BENCH HELD AS FOLLOWS: 10. ON PLAIN READING OF SUB-SECTION (3) OF SECTION 249 SHALL REVEAL THAT IF THE ASSESSEE SHOWED SUFFICIENT REASO NS FOR LATE FILING OF HIS APPEALS, THEN SUCH DELAY CAN BE CONDO NED AND CONTROVERSY WOULD BE SILENCED ON MERIT. SIMILARLY, FOR THE SAKE OF EXPLANATION, IF AN ASSESSEE DID NOT HAVE SU FFICIENT FUNDS FOR COMPLYING WITH THE REQUIREMENT OF SECTION 249(4) AND HAS NOT FILED THE APPEAL WITHIN THE TIME PROVID ED UNDER SECTION 249(2), SUBSEQUENT TO EXPIRY OF LIMITATION, HE MADE COMPLIANCE OF SECTION 249(4) AND FILED THE APPEAL W ITH A PRAYER OF CONDONATION OF DELAY THEN IT WOULD BE IN DISCRETION OF THE FIRST APPELLATE AUTHORITY TO SEE WHETHER SUF FICIENT REASONS FOR LATE FILING OF APPEAL EXIST OR NOT. IF THE LEARNED CIT(A) ARRIVED AT A CONCLUSION THAT SUFFICIENT REAS ONS EXIST ITA NO. 1421/HYD/2011 SRI P. RAMA KRISHNA 4 THEN AGAIN THE CONTROVERSY WOULD BE DECIDED ON MERI T. THUS, ON CONJOINT READING OF SUB-SECTIONS (3) AND (4), IT IS INFERRED THAT DEFECT ARISES DUE TO NON-COMPLIANCE OF SECTION 249(4) IS A CURABLE ONE AND IN A GIVEN CASE IF THE TRIBUNA L IS SATISFIED THAT THERE EXIST SUFFICIENT REASONS FOR CURING SUCH DEFECTS AFTER EXPIRY OF LIMITATION, IT WOULD BE IN THE REALM OF TRIBUNAL'S DISCRETION TO RESTORE SUCH MATTERS TO TH E FILE OF THE CIT(A) FOR DECIDING THE CONTROVERSY ON MERIT BE CAUSE SUB-SECTION (1) OF SECTION 254 PROVIDES WIDE POWERS TO THE TRIBUNAL FOR PASSING SUCH ORDERS THEREON AS IT THIN KS FIT IN THE INTEREST OF JUSTICE. 9. THE COORDINATE BENCH HAS ALSO REFERRED TO THE DE CISION OF THE HONBLE FULL BENCH OF DELHI HIGH COURT IN J.T. (IND IA) EXPORTS AND ANR. VS. UNION OF INDIA AND ANR. , 262 ITR 269 (DEL)(FB) WHE REIN THE BENCH HAS DRAWN SUPPORT FROM THE DECISION OF THE HONBLE ORIS SA HIGH COURT IN THE CASE CIT VS. KALIPADA GHOSE (1987) 167 ITR 173 (ORI .) AND REPRODUCED THE RELEVANT EXTRACT OF THE ORDER WHICH IS AS FOLLO WS: 'ON THE AFORESAID ANALYSIS, IT HAS TO BE HELD THAT THE ORDER OF THE AAC DISMISSING THE APPEALS FOR NON-COMPLIANC E WITH SECTION 249(4) OF THE ACT CAME WITHIN THE AMBIT OF SECTION 250 OF THE ACT AND WAS APPEALABLE BEFORE THE TRIBUN AL UNDER SECTION 253 OF THE ACT. THE TRIBUNAL, THEREFORE, CO MMITTED NO ILLEGALITY IN ENTERTAINING THE APPEALS AND IN CO NDONING THE DELAY ON BEING SATISFIED, ON THE FACTS AND CIRCUMST ANCES OF THE CASE, THAT THERE WAS SUFFICIENT CAUSE FOR THE A SSESSEE'S FAILURE TO COMPLY WITH SECTION 249(4) OF THE ACT AN D IN REMITTING THE CASES TO THE FIRST APPELLATE FORUM FO R DISPOSAL ON MERITS. ACCORDINGLY, THE QUESTION REFERRED IS AN SWERED IN THE AFFIRMATIVE.' 10. THE HONBLE SUPREME COURT IN THE CASE OF IMPROVEMENT TRUST VS. UJAGAR SINGH. 6 SCC 786 HELD AS UNDER:- (I) WHILE CONSIDERING AN APPLICATION FOR CONDONATI ON OF DELAY NO STRAIT-JACKET FORMULA IS PRESCRIBED TO COME TO THE CONCLUSION IF SUFFICIENT AND GOOD GROUNDS HAVE BEEN MADE OUT OR N OT. EACH CASE HAS TO BE WEIGHED FROM ITS FACTS AND THE CIRCUMSTAN CES IN WHICH THE PARTY ACTS AND BEHAVES. FROM THE CONDUCT, BEHAVIOUR AND ATTITUDE OF THE APPELLANT IT CANNOT BE SAID THAT IT HAD BEEN ABSOLUTELY CALLOUS AND NEGLIGENT IN PROSECUTING THE MATTER ; ITA NO. 1421/HYD/2011 SRI P. RAMA KRISHNA 5 (II) JUSTICE CAN BE DONE ONLY WHEN THE MATTER IS FO UGHT ON MERITS AND IN ACCORDANCE WITH LAW RATHER THAN TO DISPOSE I T OF ON SUCH TECHNICALITIES AND THAT TOO AT THE THRESHOLD; (III) UNLESS MALAFIDES ARE WRIT LARGE ON THE CONDUCT OF T HE PARTY, GENERALLY AS A NORMAL RULE, DELAY SHOULD BE CONDONED . IN THE LEGAL ARENA, AN ATTEMPT SHOULD ALWAYS BE MAD E TO ALLOW THE MATTER TO BE CONTESTED ON MERITS RATHER THAN TO THR OW IT ON SUCH TECHNICALITIES. APART FROM THE ABOVE, THE APPELLANT WOULD NOT HAVE GAINED IN ANY MANNER WHATSOEVER, BY NOT FILING THE APPEAL WITHIN THE PERIOD OF LIMITATION . IT IS ALSO WORTH NOTICING THAT DELAY WAS ALSO NOT THAT HUGE, WHICH COULD NOT HAVE BEEN CONDONED, WITHOUT PUTTING THE RESPONDENTS TO HARM O R PREJUDICE. IT IS THE DUTY OF THE COURT TO SEE TO IT THAT JUSTICE SHOULD BE DONE BETWEEN THE PARTIES. 11. HAVING REGARD TO THE FACTS OF THE CASE AND KEEP ING IN VIEW THE SPIRIT OF JUDICIAL PRONOUNCEMENTS DISCUSSED ABO VE, AND CONSIDERING THE HARDSHIP OF THE ASSESSEE WE ARE OF THE OPINION THAT THERE EXISTS SUFFICIENT CAUSE FOR THE DELAY IN FILING THE APPEAL BY THE ASSESSEE BEFORE THE CIT(A) AND, THEREFORE, W E CONDONE THE DELAY OF 137 DAYS IN FILING THE APPEAL BY THE ASSES SEE BEFORE THE CIT(A). ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDE R OF THE CIT(A) AND RESTORE THE ISSUE TO THE FILE OF THE CIT (A) TO ADJUDICATE THE SAME ON MERITS AFTER PROVIDING REASO NABLE OPPORTUNITY OF THE ASSESSEE AND DECIDE THE ISSUE AF RESH IN ACCORDANCE WITH LAW. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 3 RD AUGUST, 2012. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBE R HYDERABAD, DATED: 3 RD AUGUST, 2012. KV ITA NO. 1421/HYD/2011 SRI P. RAMA KRISHNA 6 COPY TO:- 1) SHRI P. RAMAKRISHNA, C/O SHRI P.N. MURTHY, 1-8- 518/16, CHIKKADPALLY, HYDERABAD. 2) ACIT, CIRCLE 4(1), HYDERABAD 3) THE CIT (A)-V, HYDERABAD 4) THE CIT-IV, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.