M/s Raasi Enterprises Limited, Hyderabad V. Dy.CIT., Circle-3(1), Hyderabad

ITA 1530/HYD/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6664 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 22-03-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 07-10-2014
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: V SIVA KUMAR
• Keywords: Depreciation; Period of limitation; Right to appeal; Condonation of delay
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH ES B , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1 530 /H YD /201 4 ASSESSMENT YEAR: 20 0 4 - 0 5 M/S. ANJANI FOODS LTD., (FORMERLY RAAS I ENTERPRISES LIMITED) HYDERABAD [PAN: A A ACR4447B ] VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 3 ( 1 ), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI V. SIVA KUMAR , AR FOR REVENUE : SHRI B . KURMI NAID U , D R DATE OF HEARING : 2 2 - 0 3 - 201 6 DATE OF PRONOUNCEMENT : 07 - 0 4 - 201 6 O R D E R PER B. RAMAKOTAIAH, A.M. : TH IS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX ( APPEALS ) - IV , HYDERABAD DATED 1 1 - 0 7 - 201 4 REFUSING TO CONDONE THE DELAY OF 592 DAYS IN FILING THE APPEAL . 2. ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AGAINST THE ORDER OF DCIT, CIRCLE - 3(1) U/S. 143(3) OF THE INCOME TAX ACT [ACT] DT. 27 - 12 - 2006 ON 18 - 09 - 2008 WITH A DELAY OF 592 DAYS. THE FACTS I.T.A. NO. 1 530 / HYD / 20 1 4 : - 2 - : AS SUBMITTED B Y ASSESSEE BEFORE THE LD. CIT(A) AS EXTRACTED IN PARA 2 ARE AS UNDER: A. WHILE COMPUTING THE TOTAL INCOME THE APPELLANT HAD TREATED LEASE RENTALS OF RS. 43,75,554/ - RECEIVED FROM DR. B.V. RAJU FOUNDATION AND VISHNU EDUCATIONAL SOCIETY AS INCOME FROM BUSI NESS AND ALSO CLAIMED DEPRECIATION ON THE BUILDINGS LEASED OUT BY IT. B. THE ASSESSING OFFICER PROPOSED TO TREAT THE RENTAL RECEIPTS AS INCOME FROM PROPERTY AND ITS AR SIGNIFIED HIS CONSENT TO THIS PROPOSAL. C. THE ASSESSING OFFICER TREATED THE INCOME AS INCOME FROM HOUSE PROPERTY. D. THE AR WHO CONCEDED THE ISSUE BEFORE THE ASSESSING OFFICER DID NOT PERCEIVE ANY GRIEVANCE ARISING TO THE APPELLANT ON ACCOUNT OF CHANGE IN THE HEAD OF INCOME UNDER WHICH THE IMPUGNED INCOME WAS TAXED AND ACCORDINGLY, HE DID NOT RAISE ANY ISSUE IN CONNECTION WITH THE ASSESSMENT. E. SUBSEQUENTLY, THE REPLIES TO PENALTY WERE ALSO SUBMITTED BY THE AR. F. DURING A REVIEW OF ITS ASSESSMENT POSITION, THE APPELLANT NOTICED THAT IT HAD CONCEDED THE ISSUE REGARDING THE HEAD OF INCOM E UNDER WHICH LEASE RENTALS WERE ASSESSABLE AND THEN SOUGHT EXPERT ADVICE. G. IT WAS ADVISED THAT THE LEASE RENTALS WERE RIGHTLY ASSESSABLE UNDER THE HEAD INCOME FROM BUSINESS AND ACCORDINGLY, THE APPELLANT FILED AN APPEAL ON 18.09.2008. 3. LD. CIT(A) HOWEVER, DID NOT CONDONE THE DELAY IN FILING THE APPEAL BY ANALYZING THE FACTS AND LEGAL POSITION AS UNDER: 4. I HAVE CONSIDERED THE FACTS ON RECORD AND THE SUBMISSIONS OF THE APPELLANT. SEC.249(3) PROVIDES THAT THE CIT(APPEALS) MAY ADMIT AN APPEAL FIL ED AFTER THE EXPIRATION OF THE LIMITATION OF THE PERIOD IF HE IS SATISFIED THAT THE APPELLANT HAD SUFFICIENT CAUSE FOR FAILURE TO DO SO. WHAT CONSTITUTES SUFFICIENT CAUSE HAS BEEN DISCUSSED IN LENGTH IN THE DECISION IN THE CASE OF JETHA DRUMS AND CONTAINER S PVT LTD 17 SOT 11 (URO) ( M UM). IN THIS CASE, THE ASSESSEE HAD RECEIVED' THE ORDER OF THE CIT(A) SOMETIME IN FEBRUARY, 1991. THE ASSESSEE HANDED OVER THE ORDER TO 'ITS CONSULTANT. THE ASSESSEE SUBMITTED THAT THE TAX CONSULTANT DID NOT E THE MATTER PROPERL Y AND TIMELY AND DID NOT FILE ANY APPEAL ON OF THE ASSESSEE AND THAT THIS FACT CAME TO BE KNOWN TO THE A SSESSEE ONLY WHEN A PROSECUTION NOTICE WAS SERVED ON HIM BY THE DEPARTMENT. AS SOON AS THE ASSESSEE CAME TO, KNOW THAT ITS TAX CONSULTANT HAD NOT FILE D THE APPEAL, BEFORE THE ITAT, THE ASSESSEE I.T.A. NO. 1 530 / HYD / 20 1 4 : - 3 - : HANDED OVER THE MATTER TO ANOTHER CHARTERED ACCOUNTANT AND WITHIN A PERIOD OF THREE MONTHS G O T TH E APPEAL FILED BEFORE THE ITAT . 5 . IT WA S ARGUED ON BEHALF OF THE REVENUE IN THE CASE OF JETHA DR UMS AND CONTAIN ERS PVT LTD THAT REVENUE HAD N O OBJECTION IN CONDONING THE DELAY IF THE ASSESSEE COULD ESTABLISH SUFFICIENT CAUSE, THAT IN ALL THE DEC I SIONS CITED BY THE ASSESSEE, THE ASSESSEES, HAD THE INTENTION TO FILE THE APPEALS AND PROCEEDINGS BUT COULD NOT FILE FOR SUFFICIENT CAUSE, THAT EMPHASIS HAD TO BE LAID ON THE EXPRESSION 'WILL I NG TO FILE APPEAL' AND, THAT ALL THE JUDICIAL PRINCIPLES AND SYMPATHETIC VIEW COULD BE EXTENDED TO THE CAU SE OF AN ASSESSEE, ONLY IF AT THE FIRST INSTANCE, THE ASSESSEE HAD THE INTENTIO N TO FILE APPEAL BEFORE THE TRIBUNAL. IT WAS FURTHER ARGUED THAT IN THE AFF I DAV I T FILED ALONG WITH THE APPEAL MEMORANDUM THE ASSESSEE H AD STATED THAT THE APPELLATE ORDER WAS HANDED OVER TO HIS ERSTWHILE TAX CONSULTANT TO PREPARE PAPERS FOR FILING SECOND AP PEAL BEFORE THE ITAT BUT THE TAX CONSULTANT DID NOT PERFORM HIS DUTY IN A RIGHTFUL MANNER, THAT WHILE THE ASSESSEE HAD PUT THE BLAME ON HIS ERSTWHILE TAX CONSULTANT IN NOT FILING THE APPEAL IN TIME, THE FACTS WERE DIFFERENT FROM WHAT WAS STATED IN THE AFFI DAVIT. THIS WAS CLEAR FROM THE FACT THAT THE ASSESSEE HAD PAID THE ADDITIONAL TAX DEMANDED BY THE ASSESSING AUTHORITY AND PAID ALL THE PENALTY AMOUNTS ALONG WITH INTEREST. IT WAS ARGUED THAT THE ASSESSEE HAD NEVER CONTEMPLATED FILING OF ANY APPEAL, THAT TH IS WAS CLEAR FROM THE FACT THAT THE ASSESSEE HAD FILED APPEALS BEFORE APPROPRIATE AUTHORITIES DURING THE RELEVANT POINT OF TIME FOR DIFFERENT MATTERS AND DIFFERENT YEARS AND THAT THE ASSESSEE WAS IN REGULAR TOUCH WITH HIS TAX CONSULTANT FOR THE VARIOUS ASS ESSMENTS, PROCEEDINGS AND APPEALS ARISING THEREFROM. IT WAS SUBMITTED THAT IT WAS NOT PROBABLE THAT THE CASE OF THIS APPEAL A L ONE SLIPPED AWAY FROM HIS MIND AND THAT IF THE ASSESSEE HAD AN INTENTION TO FILE APPEAL, THE APPEAL COULD HAVE BEEN FILED WELL IN TIME OR AT LEAST WITHOUT THIS MUCH DELAY. IT WAS SUBMITTED THAT NO APPEAL WAS FILED BECAUSE THE ASSESSEE DID NOT HAVE ANY I NTENT I ON TO FILE AN APPEAL. IT WAS SUBMITTED THAT IT WAS ONLY WHEN THE ASSESSEE WAS SERVED A NOTICE OF PROSECUTION, THAT THE ASSESSEE THOU G HT OF FILING AN APPEAL. IT WAS ARGUED THAT AS THE ASSESSEE HAD NO INTENTION TO FILE AN APPEAL AT THE FIRST INSTANCE, THERE CANNOT BE ANY SUFFICIENT CAUSE TO CONDONE THE DELAY AND THE BENEFITS OF THE DECISIONS RELIED ON BY THE ASSESSEES COUNSEL WERE NOT APPLICABLE. 6. THE ITAT HELD AS FOLLOWS: '23. IN THE LIGHT OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAD NO INTENTION TO FILE A N APPEAL BE F ORE THE TRIBUNAL WHEN HE RECEIVED THE ORDER OF THE CIT(A) . THIS IS CLEAR FROM THE CON DUCT OF THE ASSESSEE THEREAFTER. HE PAID THE ENTIRE DISPUTED TAX, PAID T HE PENALTY AMOUNTS, PAID THE INTEREST AL SO. HE CLOSED THE MATTER THERE. BUT AFTER 12 YEARS OR SO, HE WAS SERVED WITH A PROSECUTION NOTICE. THE PROSECUTION WAS ALSO COMPOUNDED. BUT THE P ROSECUTION NOTICE HURT THE ASSESSEE A L OT. IT IS AT THAT POINT OF TIME, THE ASSESSEE THOUGHT OF FILING A SECOND APPEAL BEFORE THE TRIBUNAL. THUS THE REASON WHY THE DELAY IN FILING THE APPEAL WAS SO INORDINATE. THIS I.T.A. NO. 1 530 / HYD / 20 1 4 : - 4 - : POSITION IS CLEAR FROM THE FACT THAT THE ASSESSEE HAD FILED APPEAL ONLY FOR THE ASST. YR. 1986 - 87 AND DID NOT FILE ANY APPEAL FOR THE ASST. YR. 1987 - 88. PROSECUTION NOTICE WAS SERVED ONLY FOR THE ASST. YR. 1986 - 87 . THE CHAIN OF THE A BOVE EVENTS TAKES US T O AN IR RESIS TIBLE CONCL USION THAT THE FILING OF AN APPEAL WAS FIRST THOUGHT OF BY THE ASSESSEE ONLY AFTER THE SERVICE OF THE PROSECUTION NOTICE. IT APPEARS THAT THE ASSESSEE HAD NO INTENTION TO FILE AN APPEAL AT ALL FOR ALMOST 12 - 13 YEARS. THEREFORE, THE PRINCIPLES LAID DOWN IN THE VARIO US CASE LAWS RELIED ON BY THE SENIOR COUNSEL ARE NOT APPLICABLE HERE. WE FIND THAT THE PROSECUTION NOTICE ALONE IS THE PROVOCATION FOR FILING THE APPEAL BEFORE THE TRIBUNAL AFTER A LONG PERI O D OF 13 YEARS. WE FIND THAT THIS DOES NOT CONSTITUTE A SUFFICIEN T CAUSE FOR THE DELAY CAUSED IN FILING THE APPEAL BEFORE US. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE DECLINE TO CONDONE THE DELAY AND HO L D THAT THE APPEAL IS LIABLE TO BE REJECTED IN LIMINE ON THE GROUND OF LIMITATION.' 7 . IN THE APPEL LANTS CASE, THE AR HAD MADE A CONSC IOUS DECISION, FIRSTLY, TO ACCEPT THE PROPOSED ASSESSMENT OF THE INCOME UNDER THE HEAD 'INCOME' FROM HOUSE PROPERTY', AND SECONDLY, TO NOT FILE AN APPEAL AGAINST SUCH ASSESSMENT. IN OTHER WORDS, THE APPELLANT DID NOT HAV E ANY INTENTION TO FILE AN APPEAL IN THE FIRST PLACE. 8. THE STATUTE PROVIDES THAT IN CASE OF SUFFICIENT CAUSE FOR THE DELAY IN FILING THE APPEAL, THE DELAY MAY BE CONDONED. AS NOTED IN THE DECISION IN THE CASE OF JETHA DRUMS AND CONTAINERS PVT LTD., TH ERE MUST FIRST EXIST AN INTENTION TO FILE AN APPEAL. THE ABSENCE OF SUCH AN INTENTION ITSELF CANNOT BE HELD TO CONSTITUTE THE SUFFICIENT CAUSE FOR THE DELAY IN FILING THE APPEAL. 9. I ALSO PLACE RELIANCE IN THIS REGARD ON THE DECISION IN THE CASE OF NULO N (MS) I ND I A LTD V CIT [1996] 219 ITR 736(DEL). IN THIS CASE, THE ASSESSEE HAD CLAIMED THAT DELAY IN FILING THE APPEAL HAD OCCURRED BECAUSE IT WAS NOT GIVEN PROPER LEGAL GUIDANCE. THE COURT OBSERVED THAT THE ASSESSEE HAD THE SERVICES NOT ONLY OF A CHARTERE D ACCOUNTANT BUT ALSO OF A TAX CONSULTANT WHO WAS A FORMER IRS OFFICER. THE COURT, THEREFORE, HELD THAT THE PLEA THAT THE PETITIONER COULD NOT GET PROPER LEGAL GUIDANCE CANNOT BE HELD TO BE VALID. 10. THE SITUATION IN THE APPELLANT'S CASE IS SIMILAR AN D THE PLEA THAT THE APPELLANT HAD BEEN UNABLE TO G ET CORRECT AND PROPER L E G AL ADV I CE FROM ITS AR IS NOT ACCEPTED. 11. IN VIEW OF THE ABOVE, THE DELAY IN FILING THE APPEAL IS NOT CONDONED AND THE APPEAL IS DISMISSED IN LIMINE. I.T.A. NO. 1 530 / HYD / 20 1 4 : - 5 - : 4. LD. COUNSEL SUBMITTED THAT EVEN THOUGH THE THEN COUNSEL HAS AGRE E D BEFORE THE AO, T HE ISSUE HAS COME UP SUBSEQUENTLY CONSEQUENT TO THE PENALTY PROCEEDINGS INI TIATED AGAINST ASSESSEE - COMPANY. THEREFORE THE MATTER WAS CONTESTED. H E RELIED ON THE CO - ORDINATE BENCH DECISION IN T HE CASE OF M/S. PHOENIX MILLS LTD., VS. ACIT IN ITA NO. 6240/M/2007 DT. 23 - 03 - 2010 FOR VARIOUS LEGAL PROPOSITIONS TO SUBMIT THAT ASSESSEE DESERVES CONDONATION OF DELAY. IT WAS SUBMITTED THAT ASSESSEE CAN CHALLENGE THE ADMISSION BY COUNSEL AND RELIED O N CO - ORDINATE BENCH DECISION IN THE CASE OF R.T. BALASUBRAMANIAM VS. ITO [50 ITR 513] . IT WAS FURTHER SUBMITTED THAT THERE IS ALWAYS AN INTENTION TO APPEAL AND REASONING OF THE LD. CIT(A) IS NOT CORRECT. LD. DR HOWEVER, OPPOSED THE CONTENTIONS. 5 . WE H AVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE FACTS ON RECORD. ADMITTEDLY, ASSESSEE HAS ACCEPTED THAT NO BUSINESS WAS DONE AND RENTALS ARE TO BE ASSESSED AS INCOME FROM HOUSE PROPERTY BEFORE THE AO. ONLY IN THE EVENT OF FINALISING PENALTY PROCEED INGS, ASSESSEE REALIZED THAT IT HAS TO CONTEST THE ORDER. AS POINTED OUT BY THE CIT(A) IN PARA 7 OF THE ORDER, ASSESSEES AR MADE A CONSCIOUS DECISION TO ACCEPT THE PROPOSED ASSESSMENT OF THE INCOME , FIRSTLY TO ACCEPT THE PROPOSED ASSESSMENT OF THE INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND SECONDLY, NOT TO FILE AN APPEAL AGAINST SUCH ASSESSMENT. IN OTHER WORDS, ASSESSEE DID NOT HAVE ANY INTENTION TO FILE AN APPEAL IN THE FIRST PLACE. THESE FACTS COULD NOT BE COUNTERED BEFORE US EXCEPT STATIN G THAT ASSESSEE INTEND TO PURSUE THE APPEAL. LD. COUNSEL RELIED ON THE DECISION OF THE CO - ORDINATE BENCH IN THE CASE OF M/S. PHOENIX MILLS LTD., VS. ACIT IN ITA NO. 6240/M/2007 DT. 23 - 03 - 2010 (SUPRA), WHEREIN THE FACTS ARE THAT I.T.A. NO. 1 530 / HYD / 20 1 4 : - 6 - : ASSESSEES ORDER U/S. 143 W AS ACCEPTED AND FURTHER APPEAL WAS NOT PREFERRED. SUBSEQUENTLY, WHEN THE ASSESSMENT WAS REOPENED U/S. 147, AN APPEAL WAS FILED AGAINST THAT ORDER WHICH WAS ALSO DISPOSED OFF BY THE CIT(A). DURING THOSE APPELLATE PROCEEDINGS, ASSESSEE ENGAGED NEW AR WHO H AS SCRUTINIZED THE PAPERS AND ADVISED ASSESSEE TO FILE THE APPEAL BEFORE THE CIT(A) ON THE ORDER U/S. 143(3). IN THAT, THE DELAY IN FILING THE APPEAL WAS CLEARLY DUE TO MISTAKE OF COUNSEL , WHICH WAS CONSIDERED AS SUFFICIENT CAUSE FOR CONDONATION OF DELAY. HOWEVER, T HE CO - ORDINATE BENCH HAS ANALYSED THE LAW ON THE ISSUE VERY ELABORATELY AS UNDER: 8.3 NOW WE COME TO THE MERIT OF THE CASE. IN THE CASE OF CONDO NATION OF DELAY IN FILING APPEAL THE ENTIRE CO NT ROVERSY WOULD REVOLVE ON THE SHOWING OR NOT OF SU FFICIENT CAUSE WHILE PRAYING FOR CONDONATION OF DELAY. IN OTHER WORDS, WHERE THERE IS SUFFICIENT CAUSE SHOWN AND THE APPLICATION FOR CONDONATION OF DELAY HAS BEEN MOVED BONAFIDE, THE COURT WOULD NORMALLY CONDONE THE DELAY BUT WHERE THE DELAY HAS NOT BEEN E XPLAINED AT ALL AND, IN FACT, THERE IS UNEXPLAINED AND INORDINATE DELAY COUPLED WITH NEGLIGENCE OR SHE E R CARELESSNESS, THE DISCRETION OF THE COURT IN SUCH CASES WOULD NORMALLY TILT AGAINST THE APPLICANT. THE PERIOD OF LIMITATION HAS TO BE CONSTRUED SOMEWHA T STRICTLY AND ADVANTAGES THAT ACCRUE TO NON - APPLICANT WOULD NORMALLY NOT BEEN TAKEN AWAY IN A ROUTINE MANNER OR FOR NO PLAUSIBLE CAUSE OR REASON. THE LAW OF LIMITATION IS NORMALLY TO BE CONSTRUED STRICTLY AS IT HAS THE EFFECT OF VESTING FOR ONE AND TAKING AWAY RIGHT FROM THE OTHER. TO CONDONE THE DELAYS IN A MECHANICAL OR A ROUTINE MANNER MAY AMOUNT TO JEOPARDIZING THE LEGISLATIVE INTENT BEHIND SECTION 5 OF THE LIMITATION ACT. STATUTES OF LIMITATION ARE DESIGNED TO EFFECTUATE A BENEFICENT PUBLIC PURPOSE VI Z. TO PREVENT THE TAKING AWAY FROM C NE WHAT HE HAS FOR LONG BEEN PERMITTED TO CONSIDER HIS OWN AND ON THE FAITH OF WHICH HE PLANS HIS LIFE, HABITS AND EXPENSES LONG DORMANT CLAIMS ARE OFTEN MORE OF CRUELTY THAN OF JUSTICE IN THEM. THIS PRINCIPLE IS MORE B ASED ON PUBLIC POLICY. ITS AIM BEING TO SECURE THE QUIET OF THE COMMUNITY AND TO PREVENT OPPRESSION. THESE RULES HAVE BEEN VIEWED BY SOME AS AN INFAMOUS POWER CREATED BY POSITIVE LAW TO DECREASE LITIGATION AND ENCOURAGE DISHONEST DEFENSES'. THIS MAY NOT BE WHOLLY TRUE BUT STILL THE LIMITATION VESTS A DEFINITE RIGHT IN A PARTY AFTER A LAPSE OF PERIOD PRESCRIBED UNDER LAW. IT INTERPOSES A STATUTORY BAR AFTER A CERTAIN PERIOD GIVING QUIETUS TO THE RIGHTS ARISING FROM A JUDGMENT WHICH IS SOUGHT TO BE IMPUGNED. IN OTHER WORDS, THE LAW OF LIMITATION IS THUS FOUNDED ON PUBLIC POLICY. IT IS ENSHRINED IN THE MAXIM 'INTEREST REIPUBLICAE UT SIT FINIS LITIUM' (IT IS FOR THE GENERAL WELFARE THAT A PERIOD BE PART TO LITIGATION). THE VERY S C HEME OF PROPER ADMINISTR ATION OF JUSTICE PRE - SUPPOSES EXPEDIENCY IN I.T.A. NO. 1 530 / HYD / 20 1 4 : - 7 - : DISPOSAL OF CASES AND AVOIDANCE OF FRIVOLOUS LITIGATION. WHERE THE PARTIES CHOSE TO STEEP OVER THEIR RIGHTS FOR PROLONGED PERIODS WITHOUT ANY JUST CAUSE, CAN HARDLY CLAIM EQUITY IN JUSTICE PARTICULARLY FACED WITH THE STATUTORY PROVISIONS OF SECTION 5 OF THE ACT. IN CONSTRUING ENACTMENTS WHICH PROVIDE PERIOD OF LIMITATION FOR INSTITUTION OF PROCEEDINGS, THE PURPOSE IS TO INTIMATE PEOPLE THAT AFTER LAPSE OF CERTAIN TIME FROM A CERTAIN EVENT, A PROCEEDING WILL NOT BE ENTERTAINED WHERE A STRICT GRAMMATICAL CONSTRUCTION IS NORMALLY THE SAFE GUIDE. LAW IS NOT AN EXERCISE IN LINGUISTIC DISCIPLINE BUT THE SUBSTANCE OF LEGISLATIVE INTENTION CAN ALSO NOT BE FRUSTRATED MERELY BY UNCALLED FOR EQUITY OR SYMPATHY. THE PROVISION OF LIMITATION SHOULD BE CONSTRUED STRICTLY BUT AT BEST ITS APPLICATION COULD BE LIBERALISED WHERE ACTUAL SUFFICIENT CAUSE IN ITS TRUE SENSE IS SHOWN B Y AN APPLICANT WHO HAS ACTED BON AFIDE AND WITH DUE CARE AND CAUTION. AN INTERPRETATION OR APPLICATION OF T HE STATUTORY PROVISIONS WHICH WOULD FRUSTRATE ITS VERY OBJECT NECESSARILY HAS TO BE AVOIDED. THE LAW OF PROCEDURE UNDISPUTEDLY TAKES IN ITS AMBIT AND SCOPE THE NEED TO ACT EXPEDITIOUSLY AND NOT TO DELAY THE PROGRESS OF THE LEGAL PROCEEDINGS. THE LAW OF LIM ITATION STRICTO SENSO IS NOT LAW OF PROCEDURE SIMPLICITOR BUT HAS THE EFFECT OF CREATING A LEGAL BAR IN EXERCISE OF A RIGHT WHICH OTHERWISE WOULD HAVE BEEN AVAILABLE TO A PARTY BUT FOR LAPSE OF TIME. AS ALREADY NOTICED, THE LAW OF LIMITATION IS BASED ON PU BLIC POLICY AND HELPS EFFECTIVE AND PROPER ADMINISTRATION OF JUSTICE. IT IS EXPECTED OF EVERY LITIGANT, TO ACT WITHIN THE PERIOD OF LIMITATION. IT IS ONLY BY WAY OF AN EXCEPTION AND UPON SHOWING SUFFICIENT CAUSE THAT APPEALS, IF OTHERWISE PER M IS S IBLE, COUL D BE ENTERTAINED BEYOND THE PRESCRIBED PERIOD OF LIMITATION. IT ALSO BE NOTICED THAT IN THE CASE OF STAT E OF WEST BENGAL VS. ADMINISTRA TOR, HOWRAH MUNICIPALITY, AIR 1972 SC 749, THE SUPREME COURT HELD THAT EXPRESSION 'SUFFICIENT CAUSE' SHOULD RECEIVE A LIB ERAL CONSTRUCTION SO AS TO ADVANCE THE PURPOSE OF JUSTICE PARTICULARLY WHEN THERE IS NO MOTIVE BEHIND DELAY. THIS NECESSARILY IMPLIES THAT PARTIES MUST ACT BONAFIDELY, EXPEDITIOUSLY AND WITH DUE CARE. A CASUAL OR A NEGLIGENT LITIGANT WHO HAS ACTED WITH UTT ER IRRESPONSIBLE ATTITUDE, CANNOT CLAIM THE CONDONATION OF DELAY IN LAW WHEN THE RIGHT HAS ACCRUED TO THE OTHER SIDE. THE EXPRESSION 'SUFFICIENT CAUSE' WILL ALWAYS HAVE RELEVANCY TO REASONABLENESS. THE ACTIONS WHICH CAN BE CONDONED BY THE COURT SHOULD FALL WITHIN THE REALM OF NORMAL HU M A N CONDUCT OR NORMAL CONDUCT OF A LITIGANT. IT IS NEITHER EXPECTED NOR CAN IT BE A NORMAL CONDUCT OF A PUBLIC SERVANT OR A LITIGANT THAT THEY WOULD KEEP THE FILES UNMOVED, UNPROCESSED FOR MONTHS TOGETHER ON THEIR TABLES. 8. 4 HOW THE POWER OF CONDONATION OF DELAY IS TO BE EXERCISED, HAS BEEN EXPLAINED BY THE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION V MST. KATIJI AND OTHERS - 167 ITR 471 (SC) AS UNDER: - (PAGES 472 ) THE LEGISLATURE HAS CONFERRED THE POWER TO COND ONE. DELAY BY ENACTING SECTION 51 OF THE LIMITATION ACT OF 1963 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO P ARTIES BY DISPOSING OF MATTERS ON DE MERITS '. THE EXPRESSION 'SUFFICIENT CAUSE' EMPLOYED BY THE LEGISLATURE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUB SERVES THE ENDS OF JUSTICE THAT BEING THE LIFE - PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF I.T.A. NO. 1 530 / HYD / 20 1 4 : - 8 - : COURTS. IT IS COMMON KNOWLEDGE THAT THE COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL APPROAC H IN MATTERS INSTITUTED IN THIS COURT. BUT THE MESSAGE DOES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHER COURTS IN THE HIERARCHY. AND SUCH A LIBERAL APPROACH IS ADOPTED ON PRINCIPLE AS IT IS REALIZED THAT: 1. ORDINARILY, A LITIGANT DOES NOT STAN D TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A M ERI TORIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS, WHEN DELAY IS CONDONED, THE HIGHEST THAT CAN HAPPEN IS TH AT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. 1. 'ANY APPEAL OR ANY APPLICATION, OTHER THA.I AN APPLICATION UNDER ANY OF THE PROVISIONS OF ORDER XXI OF THE CODE OF CIVIL PROCEDURE, 1908, MAY BE ADMITTED AFTER THE PRESCRIBED PERIOD IF T HE APPELLANT OR THE APPLICANT SATISFIES THE COURT THAT HE HAD SUFFICIENT CAUSE FOR NOT PREFERRING THE APPEAL OR MAKING THE APPLICATION WITHIN SUCH PERIOD. ' ( PAGE 473) 3. 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT MEAN THAT PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOUR'S DELAY, EVERY SECOND'S DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC MANNER . 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUS TICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT 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 A CCOUNT OF MALAFIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT HE RUNS SERIOUS RISK. 6. IT MUST BE GRASPED THAT THE JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNO CAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 8.5 HERE WE WOULD ALSO LIKE TO REFER THE FINDING OF THE APEX COURT IN THE CASE OF N. BALAKRISHNAN V. M. KRISHNAMURTHY, AIR 1998 SC 3222. THE APEX COURT HELD AS UNDER: - '11. RULES OF LIMITATION A RE NOT MEANT TO DESTROY THE RIGHT OF PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT DILATORY TACTICS, BUT SEEK THEIR REMEDY PROMPTLY. THE OBJECT OF PROVIDING A LEGAL REMEDY IS TO REPAIR THE DAMAGE CAUSED BY REASON OF LE A AL INJURY. LAW OF LIMIT ATION FIXES A LIFE SPAN FOR SUCH LEGAL REMEDY FOR THE REDRESS OF THE LEGAL INJURY SO SUFFERED. TIME IS PRECIOUS AND THE WASTED TIME WOULD NEVER REVISIT. DURIN G EFFLUX OF TIME NEWER CAUSES WOULD SPROUT UP NECESSITATING NEWER PERSONS TO SEEK LEGAL REMEDY BY APPROACHING THE COURTS. SO A LIFE SPAN MUST BE FIXED FOR EACH REMEDY. UNENDING PERIOD FOR LAUNDERING THE REMEDY MAY LEAD TO UNENDING UNCERTAINTY AND CONSEQUENTIAL ANARCHY. LAW OF LIMITATION IS THUS FOUNDED ON PUBLIC POLICY. IT IS ENSHRINED IN I.T.A. NO. 1 530 / HYD / 20 1 4 : - 9 - : THE MAXIM INT EREST REIPUBLICAE UP CIT FINIS LITIUM ( IT IS FOR THE GENERAL WELFARE THAT A PERIOD BE PUT TO LITIGATION). RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHT OF THE PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THEIR REMEDY PROMPTLY. THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. 12. A COURT KNOWS THAT REFUSAL TO CONDONE DELAY WOULD RESULT IN FORECLOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PRESUMP TION THAT DELAY IN APPROACHING THE COURT IS ALWAYS DELIBERATE. THIS COURT HAS HELD THAT THE WORDS 'SUFFICIENT CAUSE' UNDER SECTION 5 OF THE LIMITATION ACT SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE VIDE SHAKUNTALA DEVI JAIN V. KUNTAL KUMARI, AIR 1969 SC 575 AND STATE OF WEST BENGAL V. THE ADMINISTRATOR, HOWAH MUNI - CAPACITY, AIR 1972 SC 749. 6 . AS CAN BE SEEN FROM THE ABOVE, IT IS FOR THE ASSESSEE TO ESTABLISH THAT THERE IS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL IN TI ME. IN OUR VIEW, ASSESSEE DID NOT ESTABLISH ANY SUFFICIENT CAUSE IN PREFERRING THE APPEAL BELATEDLY. IN FACT AS POINTED OUT BY THE LD. CIT(A), ASSESSEE WAS ALSO ATTENDING TO THE OTHER MATTERS ALSO . KEEPING THESE FACTS IN MIND, W E ARE OF THE OPINION THAT ASSESSEE HA S FAILED TO ESTABLISH SUF FICIENT CAUSE. WE ARE ALSO FORTI FIED BY THE DECISION IN THE CASE OF JCIT VS. TRACTORS & FARM EQUIPMENTS LTD., [104 ITD 149] (CHENNAI) (TM) , WHEREIN IT WAS HELD THAT: A DISTINCTION MUST BE MADE BETWEEN A CASE WHERE TH E DELAY IS INORDINATE AND A CASE WHERE THE DELAY IS OF A FEW DAYS. WHERE AS IN THE FORMER CASE, THE CONSIDERATION OF PREJUDICE TO THE OTHER SIDE WILL BE A RELEVANT FACTOR, SO THE CASE CALLS FOR A MORE CAUTIOUS APPROACH, IN THE LATTER CASE, NO SUCH CONSIDER ATION MAY ARISE AND SUCH A CASE DESERVES A LIBERAL APPROACH. NO HARD AND FAST RULE CAN BE LAID DOWN IN THIS REGARD. THE COURT HAS TO EXERCISE THE DISCRETION ON THE FACTS OF EACH CASE, KEEPING IN MIND THAT IN CONSIDERING THE EXPRESSION 'SUFFICIENT CAUSE, T HE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANCE. [PARA 5] THE LAW ASSISTS THOSE WHO ARE VIGILANT, NOT THOSE WHO SLEEP OVER THEIR RIGHTS. THIS PRINCIPLE IS EMBODIED IN THE DICTUM: VIGILANTIBUS NON DORMIENTIBUS JURA SUBVENIUNT. [PARA 6 ] THE DELAY CANNOT BE CONDONED SIMPLY BECAUSE THE APPELLANTS CASE IS HARD AND CALLS FOR SYMPATHY OR MERELY OUT OF BENEVOLENCE TO THE PARTY SEEKING RELI EF. IN GRANTING THE INDULGENCE IN CONDONING THE DELAY, IT MUST BE PROVED BEYOND THE SHADOW DOUBT THAT THE APPELLANT WAS DILIGENT AND I.T.A. NO. 1 530 / HYD / 20 1 4 : - 10 - : WAS NOT GUILTY OF NEGLIGENCE, WHATSOEVER. THE SUFFICIENT CAUSE WITHIN THE CONTEMPLATION OF THE LIMITATION PROVISION MUST BE A CAUSE WHICH IS BEYOND THE CONTROL OF THE PARTY INVOKING THE AID OF PROVISIONS. THE CAUSE FOR THE DE LAY IN FILING THE APPEAL, WHICH BY DUE CARE AND ATTENTION, COULD HAVE BEEN AVOIDED, CANNOT BE A SUFFICIENT CAUSE WITHIN THE MEANING OF THE LIMITATION PROVISION. WHERE NO NEGLIGENCE, OR INACTION, OR WANT OF BONA FIDES CAN BE IMPUTED TO THE APPELLAN T, A LIBERAL CONSTRUCTION OF THE PROVISIONS HAS TO BE MADE IN ORDER TO ADVANCE SUBSTANTIAL JUSTICE. SEEKERS OF JUSTICE MUST COME WITH CLEAN HANDS. IN THE INSTANT CASE, THE ASSESSEE JUSTIFIED THE DELAY ONLY WITH REFERENCE TO THE AFFIDAVIT OF ITS DIRECTOR. IN THE SAID AFFIDAVIT IT WAS STATED THAT THE COMMISSIONER (APPEAL)S ORDER WAS MISPLACED AND FORGOTTEN. IT WAS FOUND WHILE SORTING OUT THE UNWANTED PAPERS AND THEREAFTER STEPS WERE TAKEN FOR THE PREPARATION OF THE APPEAL AND CONSEQUENTLY THE DELAY WAS CA USED. THAT CLEARLY SHOWED THAT THE DELAY WAS DUE TO THE NEGLIGENCE AND INACTION ON THE PART OF THE ASSESSEE. THE ASSESSEE COULD HAVE VERY WELL AVOIDED THE DELAY BY THE EXERCISE OF DUE CARE AND ATTENTION. THERE EXISTED NO SUFFICIENT AND GOOD REASON FOR T HE DELAY OF 310 DAYS. THEREFORE, REASON ADDUCED BY THE ACCOUNTANT MEMBER WERE TO BE CONCURRED WITH. [PARA 8] . SINCE, THIRD MEMBER DECISION IS EQUIVALENT TO SPECIAL BENCH DECISION, WE ARE BOUND BY THE PRINCIPLES LAID DOWN IN THE ABOVE CASE. LD. CIT(A) A LSO HAS FOLLOWED THE CO - ORDINATE BENCH DECISION WHEREIN ON MORE OR LESS SIMILAR FACTS CONDONATION WAS NOT GRANTED. IN THE FACTS OF THE CASE, AS ASSESSEE HAS NOT ESTABLISHED THE SUFFICIENT CAUSE AND HAS ACCEPTED THE ASSESSMENT ORDER IMMEDIATELY AND IN FACT CONSENTED BEFORE TH E AO ALSO, WHO PASSED THE ORDER ACCORDINGLY . IF ASSESSEE IS AGGRIEVED ON PENALTY PROCEEDINGS THE SAME CAN BE PURSUED AS PER LAW. W E ARE OF THE OPINION THAT CIT(A) IS JUSTIFIED IN REFUSING THE CONDONATION. EVEN THOUGH THE LD. COUNSEL R ELIED ON THE CO - ORDINATE BENCH DECISION IN THE CASE OF R.T. BALASUBRAMANIAM VS. ITO [50 ITR 513] (SUPRA) ON THE RIGHT OF APPEAL WHERE ARS AGREEMENT FOR IMPUGNED ADDITION WAS BASED ON MISAPPREHENSION OF FACTS AND MISTAKE IN BELIEF, IN THIS CASE, IT IS NOT ESTABLISHED THAT THERE WAS ANY MISAPPREHENSION OF FACTS OR MISTAKE IN BELIEF. IT IS A FACT THAT ASSESSEE HAS RECEIVED I.T.A. NO. 1 530 / HYD / 20 1 4 : - 11 - : LEASE RENTALS. THE ONLY ISSUE IS WHETHER THE INCOME IS TO BE ASSESSED UNDER HOUSE PROPERTY OR UNDER THE HEAD BUSINESS. THE AR ACCEP TED THAT LEASE RENTALS ARE TO BE ASSESSED UNDER THE HEAD HOUSE PROPERTY. WE ARE NOT APPRISED THAT THERE IS MISREPRESENTATION OF THE FACTS IN THE CASE. BE THAT AS IT MAY, WE ARE NOT CONSIDERING THE RIGHT OF ASSESSEE IN CONTESTING THE ORDER , BUT THE ISSU E IS PRIMARILY OF CONDONATION OF DELAY . AS ASSESSEE HAS NOT ESTABLISHED THAT THERE IS A SUFFICIENT CAUSE FOR CONDONING THE DELAY, WE APPROVE THE ORDER OF THE CIT(A) AND REJECT ASSESSEES CONTENTIONS. 7 . IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH APRIL, 2016 SD/ - SD/ - (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 07 TH APRIL , 2016 TNMM I.T.A. NO. 1 530 / HYD / 20 1 4 : - 12 - : COPY TO : 1. M/S . ANJANI FOODS LTD., (FORMERLY RAASI ENTERPRISES LIMITED), PLOT NO. 153, SITA NILAYAM, DWARAKAPURI COLONY, PUNJAGUTTA, HYDERABAD. 2 . DY. COMMISSIONER OF INCOME TAX, CIRCLE - 3(1) , I.T. TOWERS, A.C. GUARDS, HYDERABAD. 3 . CIT(APPEALS) - IV , HYDERABAD. 4 . CIT - III , HYDERABAD. 5 . D.R. ITAT, HYDERABAD. 6 . GUARD FILE.