Parabati Agro-Farms Pvt.Ltd., Hyderabad, Hyderabad V. DCIT, Central Circle-9, Hyd, Hyderabad

ITA 1439/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2485 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 15-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 24-10-2016
• Court: TRIBUNAL
• Department Lawyers: U MINICHANDRAN
• Assessee Lawyers: K C DEVADAS
• Keywords: Condonation of delay
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ITA NO. A.Y APPELLANT RESPONDENT 1437/HYD/2016 2008-09 M/S GOMATI AGRO - FARMS PVT LTD, HYDERABAD. PAN- AABCG3988R DCIT, CENTRAL CIRCLE (8), HYDERABAD 1438/HYD/2016 2008-09 M/S KANCHENJUNGA GREENLANDS PVT. LTD. HYDERABAD. PAN AABCK5813H DCIT, CENTRAL CIRCLE (8), HYDERABAD 1439/HYD/2016 2008-09 M/S PARBATI AGRO FARMS PVT. LTD. HYDERABD, PAN-AACCP1719L DCIT, CENTRAL CIRCLE (9), HYDERABAD 1440/HYD/2016 2008-09 M/S NALLAMALA AGRO FARMS PVT. LTD. HYDERABAD. PAN AABCN2520Q DCIT, CENTRAL CIRCLE (8), HYDERABAD ASSESSEE BY : SHRI K.C. DEVADAS REVENUE BY : SMT. U. MINICHANDRAN DATE OF HEARING : 15-05-2017 DATE OF PRONOUNCEMENT : 19-05-2017 ORDER PER D. MANMOHAN, VICE PRESIDENT: THESE APPEALS ARE DIRECTED AGAINST THE ORDERS DATED 31-12-2014 AND ALL OF THEM PERTAIN TO THE A.Y 2008- 2 ITA NOS. 1437, 1438, 1439 & 1440 /HYD/2016 09; THOUGH THE NAMES OF THE ASSESSEES ARE DIFFERENT , THE COMMON FEATURE IN ALL THESE CASES IS THAT THERE IS DELAY OF 580 DAYS IN FILING THE APPEALS, WHEREIN THE APPEALS ARE STATED TO HAVE BEEN FILED BELATEDLY AFTER NOTICING THE JUDGMENT OF ITAT, E BENCH, MUMBAI IN THE CASE OF SHIVALIK VENTURE PVT. LTD. VS DCIT, CIRCLE-8 (IN IT A NO. 2008/MUM/2012/2009-10 VIDE ORDER DATED 19-08-2015) IN CONNECTION WITH COMPUTATION OF BOOK PROFITS U/S 115 JB OF THE IT ACT. THOUGH AFFIDAVITS ARE FILED IN EACH CA SE BY DIFFERENT ASSESSEES, IN THEIR CAPACITY AS DIRECTORS OF THE SAID COMPANY, THE REASON GIVEN IN EACH OF THE AFFID AVIT IS VERBATIM IDENTICAL AND HENCE WE REPRODUCE THE REASO NS GIVEN IN THE CASE OF M/S PARABATI AGRO FARMS PVT. L TD: 2. THE COMPANY HAS NO MANAGING DIRECTOR. 3. THIS AFFIDAVIT IS BEING FILED TO EXPLAIN THE DEL AY OF 580 DAYS IN FILING THE APPEAL TO THE INCOME-TAX APPELLA TE TRIBUNAL FOR THE A.Y 2008-09. THE ORDER OF THE CIT (A) WAS SERVED ON 23- 10-2016. THERE IS A DELAY OF 580 DAYS IN FILING TH E APPEAL. 4. ON OF THE GROUNDS RAISED IN THE APPEAL RELATES T O CLAIM OF EXEMPTION U/S 47(IV) OF THE IT ACT WHILE COMPUTING THE BOOK PROFITS U/S 115JB OF THE IT ACT. THE APPELLANT HAD TRANSFERRED CERTAIN AGRICULTURAL LANDS TO ITS SUBSIDIARY COMPAN Y AND TRANSFER WAS EXEMPT U/S 47(IV) OF THE IT ACT. 5. THE AFORESAID GROUND WAS NOT RAISED BEFORE THE T RIBUNAL BY WAY OF FILING AN APPEAL. 6. SOMETIME, IN THE MONTH OF SEPTEMBER, 2016, MR. V IJAYA PRASAD, OUR CHARTERED ACCOUNTANT BROUGHT TO OUR NOT ICE THAT THERE IS A DECISION OF THE TRIBUNAL, MUMBAI BENCH I N THE CASE OF SHIVALIK VENTURES LTD. VS. DCIT. THIS JUDGEMENT TH E TRIBUNAL SUPPORTS OUR PLEA AND THEREFORE, ON THE BASIS OF TH IS, AN APPEAL WAS FILED ON 24-10-2016 WITH A DELAY OF 580 DAYS. 7. THEREFORE, IT IS REQUESTED THAT THE DELAY MAY KI NDLY BE CONDONED. ON THE CONTRARY A MERITORIOUS APPEAL WON T BE REJECTED WITHOUT HEARING THE PARTIES ON MERITS WHIC H IS SUPPORTED BY THE AFORESAID ITAT DECISION. 8. THUS, WE WERE PREVENTED BY SUFFICIENT AND REASON ABLE CAUSE IN FILING THE APPEALS BELATEDLY. 3 ITA NOS. 1437, 1438, 1439 & 1440 /HYD/2016 2. AT THE TIME OF HEARING, LD. COUNSEL SUBMITTED THAT THE IMPUGNED ORDERS WERE COMMUNICATED TO THE ASSESSEES HEREIN ON 23-01-2015, BUT THE ASSESSEES ARE OF THE OPINION THAT THERE IS NO NEED TO FILE APPEALS. IN FACT THE TAX LIABILITY U/S 115JB OF THE IT ACT, AS RETUR NED BY THE ASSESEES, WAS ACCEPTED BY THE COMMISSIONER OF INCOM E TAX (APPEALS) AND THEREFORE IT WAS FELT THAT THERE IS N O NEED TO FILE AN APPEAL. SUBSEQUENTLY, IN THE LIGHT OF THE DECISION OF THE ITAT MUMBAI BENCH IN THE CASE OF SHIVALIK VENTU RES LTD. VS. DCIT (SUPRA) , SHRI VIJAYA PRASAD CHARTERED ACCOUNTANT WAS OF THE OPINION THAT APPEALS NEED BE FILED IN ALL THESE CASES AND ACCORDINGLY A DECISION WAS TAKE N BY ALL THE ASSESSEES TO FILE APPEALS, WITHOUT FURTHER DELA Y. HE STRONGLY RELIED UPON THE DECISION OF THE HONBLE SU PREME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS MST. KATIJI AND OTHERS IN 167 ITR 471 (SC) WHICH IN TURN WAS FOLLOWED BY THE ITAT MUMBAI BENCH IN THE CASE OF TH E PHOENIX MILLS LTD. (ITA 6240/M/2007, DATED 23-03-20 10) WHEREIN BENCH HELD THAT THE RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHT OF THE PARTIES. WHEN SUB STANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGA INST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, AND IN THAT CONTEST THE EXPLANATION HAS TO BE CONSIDERED IN A RATIONAL, COMMON SENSE AND PRAGMATI C MANNER. 3. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT THE RE IS DISTINCTION BETWEEN INORDINATE DELAY AND A DELAY OF SHORT DURATION; IF THERE IS INORDINATE DELAY, IT WARRANTS STRICT APPROACH SINCE DOCTRINE OF PREJUDICE IS ATTRACTED I N CASES OF 4 ITA NOS. 1437, 1438, 1439 & 1440 /HYD/2016 INORDINATE DELAY APART FROM THE FACT THAT THE RIGHT S OF THE OTHER PARTY IS AFFECTED. ON ACCOUNT OF GROSS NEGLI GENCE OF THE PARTY, THE OTHER PARTY SHOULD NOT SUFFER IN SUC H CASES AND THE VERACITY OF THE EXPLANATION HAS TO BE CONSI DERED BY TAKING INTO CONSIDERATION THE REASONS STATED IN THE AFFIDAVIT; IF THERE ARE NO REASONS EVEN FOR A PART OF THE PERIOD, THE AUTHORITIES CONCERNED WITH CONDONATION OF DELAY ARE ENTITLED TO TAKE A STRICT APPROACH. THE LD. DR RELIED UPON THE DECISION OF THE ITAT CHANDIGARH IN THE CAS E OF BADDI BAROTIWALA NALAGARH DEVELOPMENT AUTHORITY VS CIT, SHIMLA (66 TAXMAN.COM 83) WHEREIN THE BENCH REFERRE D TO THE DECISION OF APEX COURT IN THE CASE OF OFFICERS OF THE CHIEF POST MASTER GENERAL VS LIVING MEDIA INDIA LTD . [2012] 348 (SC) TO STATE THAT IF THE PERSONS CONCER NED HAD NOT TAKEN A SWIFT DECISION IN PROSECUTING THE MATTE R, BY TAKING APPROPRIATE STEPS, DELAY NEED NOT BE CONDON ED. IN THE SAID CASE, THE DEPARTMENT COULD NOT EVEN GIVE EXPLANATION FOR NOT APPLYING FOR CERTIFIED COPY AND THERE WAS DELAY AT EVERY STAGE WITHOUT MENTIONING AS TO W HY SUCH DELAY HAD OCCURRED. LD. DR ALSO RELIED UPON B Y THE DECISION OF THE APEX COURT IN THE CASE OF VEDABAI V . SHANTARAM BABURAO PATIL [2002]253 ITR 798/122 TAXMA N 114(SC), WHEREIN IT WAS OBSERVED THAT THOUGH THE PR INCIPLE OF ADVANCING SUBSTANTIAL JUSTICE DESERVES TO BE GIV EN PRIME IMPORTANCE A DISTINCTION MUST BE MADE BETWEEN CASES WHERE THERE IS INORDINATE DELAY AND A CASE WHERE TH ERE IS A DELAY OF FEW DAYS; THE ACTION OF THE PARTIES SHOULD REFLECT THEIR ANXIETY TO MINIMIZE THE DELAY AS OTHERWISE SU CH DELAY CANNOT BE CONDONED. COURTS NEED NOT ENQUIRE INTO B ELATED AND STALE CLAIMS ON THE GROUNDS OF EQUITY. DELAY D EFEATS 5 ITA NOS. 1437, 1438, 1439 & 1440 /HYD/2016 EQUITY LAW COMES TO THE ASSISTANCE OF VIGILANT AND NOT TO THE SLEEPY (SEE 17 SCC 448). 4. WE HAVE NOTICED THAT THE ORDERS OF THE FIRST APP ELLATE AUTHORITY WERE SERVED ON THE ASSESSEES ON 23-01-201 5 WHEREAS THE APPEALS WERE FILED ON 24-10-2016. THERE WAS A VAGUE EXPLANATION THAT SOMETIME IN THE MONTH OF SEPTEMBER 2016 MR VIJAYA PRASAD, CHARTERED ACCOUNTA NT BROUGHT TO THEIR NOTICE THAT THERE IS A DECISION OF THE TRIBUNAL WHICH SUPPORTS THEIR PLEA AND ON THAT BASI S AN APPEAL WAS FILED ON 24-10-2016 WITH A DELAY OF 580 DAYS. THE AFFIDAVITS WERE DATED 30-12-2016, WHEREAS THE A PPEALS WERE FILED ON 24-10-2016. AS COULD BE NOTICED ON T HE VERIFICATION COLUMN OF FORM-36, THE RESPECTIVE DIRE CTORS OF EACH COMPANY SIGNED THE GROUNDS OF APPEAL ON 19 TH DAY OF SEPTEMBER 2016, WHICH WOULD BE AN INDICATOR THAT TH E ASSESSEES HEREIN HAD TAKEN A DECISION, IN PRINCIPLE , THAT AN APPEAL HAS TO BE PREFERRED BEFORE THE TRIBUNAL WITH OUT FURTHER DELAY AND IN FACT THE INSTITUTION FEE WAS PAID ON 17-09-2016 WHICH ITSELF INDICATE THAT THE ASSESSEES HEREIN HAVE TAKEN A DECISION IN PRINCIPLE THAT THESE ARE F IT CASES FOR FILING AN APPEAL. 5. A DECISION OF THE ITAT MUMBAI BENCH WAS RENDERED IN 2015 AND EVEN ACCORDING TO THE ASSESSEES, A CHARTER ED ACCOUNTANT ADVISED ASSESSEES TO FILE AN APPEAL, IN THE MONTH OF SEPTEMBER 2016. DESPITE OBTAINING SIGNATU RES OF ALL THE DIRECTORS AND PAYMENT OF CHALLAN, THERE WAS FURTHER SUBSTANTIAL DELAY OF MORE THAN ONE MONTH IN FILING THE APPEALS; IN FACT THE APPEALS WERE FILED ON 24-10-20 16. FOR THE PERIOD OF MORE THAN ONE MONTH, NO EXPLANATION W AS 6 ITA NOS. 1437, 1438, 1439 & 1440 /HYD/2016 RENDERED. IT IS NOT IN DISPUTE THAT IN THE MATTER O F CONDONATION OF DELAY PEDANTIC APPROACH SHOULD BE AV OIDED BUT, AT THE SAME TIME DELAY OF MORE THAN ONE MONTH CANNOT BE CONDONED WITHOUT ANY EXPLANATION, PARTICULARLY W HEN THERE WAS SUBSTANTIAL DELAY OF MORE THAN 580 DAYS B Y THE TIME THE ASSESSEES HAVE TAKEN A DECISION TO PREFER APPEALS. AT LEAST FROM THE DATE OF TAKING A DECISION TO PREF ER APPEALS, THE ASSESSEES SHOULD HAVE ACTED SWIFTLY AN D WITHOUT FURTHER DELAY APPEALS SHOULD HAVE BEEN FILE D BUT THE VERY FACT THAT THE PARTIES HEREIN HAVE TAKEN TH EIR OWN SWEET TIME OF MORE THAN 30 DAYS WITHOUT ANY REASON WHICH CAN ONLY BE ATTRIBUTED TO THE GROSS NEGLIGENCE ON T HE PART OF THE ASSESSEES. 6. RIGHT OF FILING AN APPEAL IS A STATUTORY RIGHT AND HENCE IT IS THE DUTY OF AN ASSESSEE TO FILE AN APP EAL WITHIN THE TIME STIPULATED AND ANY TIME TAKEN BEYOND THAT HAS TO BE PROPERLY EXPLAINED. IN THESE CASES, THERE WAS N O REASON GIVEN BY THE PARTIES. THE COURTS HAVE TIME AND AGA IN BROUGHT OUT A DISTINCTION BETWEEN A SHORT DELAY OF ONE WEEK OR TWO WEEKS AND ABNORMAL DELAY OF MORE THAN O NE YEAR BY CAUTIONING THAT STRICT APPROACH IS WARRANT ED WHEN THE DELAY IS SUBSTANTIAL. IN THESE CASES, THERE WA S A DELAY OF MORE THAN ONE MONTH EVEN FROM THE DATE ON WHICH ASSESSEES HAVE TAKEN A DECISION TO PREFER APPEALS A ND IN SUCH CASES, THE EXPLANATION HAS TO BE STRICTLY CONS TRUED, WHEREAS IN ALL THESE CASES NO EXPLANATION WAS FORTH COMING UNDER THESE CIRCUMSTANCES, WE ARE OF THE FIRM VIEW THAT THE DELAY IN FILING THE APPEALS IS NOT SUPPORTED BY SUF FICIENT 7 ITA NOS. 1437, 1438, 1439 & 1440 /HYD/2016 CAUSE AND THEREFORE THEY DESERVE TO BE DISMISSED A S UNADMITTED AS THEY ARE BARRED BY LIMITATION. 7. IN THE RESULT THE APPEALS ARE DISMISSED AS UNADMITTED. PRONOUNCED IN THE OPEN COURT ON 19 TH MAY, 2017. SD/- S D/- (D.S. SUNDER SINGH) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT HYDERABAD, DATED: 19 TH MAY, 2017. KRK 1 GOMATI AGRO FARMS PVT. LTD. FORTUNE MONRCH MALL, 3 RD FLOOR, FLAT NO. 306, PLOT NO. 707-709, ROAD NO. 36, JUBILEE HILL S, HYDERABD. 2 KANCHENJUNGA GREENLANDS PVT. LTD. FORTUNE MONRCH MAL L, 3 RD FLOOR, FLAT NO. 306, PLOT NO. 707-709, ROAD NO. 36, J UBILEE HILLS, HYDERABD. 3 PARABATI AGRO FARMS PVT. LTD. FORTUNE MONRCH MALL, 3 RD FLOOR, FLAT NO. 306, PLOT NO. 707-709, ROAD NO. 36, JUBILEE HILLS, HYDERABD. 4 NALLAMALA AGRO FARMS PVT. LTD. FORTUNE MONRCH MALL, 3 RD FLOOR, FLAT NO. 306, PLOT NO. 707-709, ROAD NO. 36, JUBILEE HILLS, HYDERABD. 5 DYCIT, CENTRAL CIRCLE-(8), HYDERABAD. 6 DYCIT, CENTRAL CIRCLE-(9), HYDERABAD. 7 CIT (A)-12, HYDERABAD. 8 CIT, (CENTRAL), HYDERABAD. 9 THE DR, ITAT HYDERABAD 10 GUARD FILE