M/s. Venkat Pharma Limited, Hyderabad V. ACIT, Circle-3(3), Hyderabad

ITA 1561/HYD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74665 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-08-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 13-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: A V RAGHURAM
• Keywords: Reasonable cause; Condonation of delay
• Section: 80HHC; 80IB

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 NOS. 1561 & 1562/HYD/2010 ASSESSMENT YEARS: 2002-03 & 2003-04 M/S VENKAT PHARMA LTD., HYDERABAD. PAN AAACV9019M VS. ASST. COMMISSIONER OF INCOME- TAX, CIRCLE 3(3), HYDERABAD. APPELLANT RESPONDENT ASSESSEE BY: SRI A.V. RAGHURAM REVENUE BY: SRI SOLGY JOSE T. KOTTARAM DATE OF HEARING: 05/03/2014 DATE OF PRONOUNCEMENT: 05/03/2014 O R D E R PER CHANDRA POOJARI, AM: BOTH THESE APPEALS PREFERRED BY THE ASSESSEE ARE DI RECTED AGAINST THE SEPARATE ORDERS OF THE CIT(A)-IV, HYDER ABAD DATED 27/08/2010 FOR THE ASSESSMENT YEARS 2002-03 AND 200 3-04. 2. IN AY 2002-03, THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL.: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS AND UNSUSTAINABL E IN LAW. 2. THE LEARNED CIT(A) ERRED IN SUSTAINING THE ACTIO N OF THE ASSESSING OFFICER IN NOT CONSIDERING THE FOREIGN EX CHANGE EARNINGS AMOUNTING TO RS. 1,66,91,239/- FOR THE PUR POSE OF DEDUCTION U/S 80HHC OF THE IT ACT ON THE ALLEGED GR OUND THAT THE SAME WAS NOT RECEIVED WITHIN THE TIME PRESCRIBE D UNDER THE ACT. 3. THE LEARNED CIT(A) ERRED IN SUSTAINING THE ACTI ON OF THE ASSESSING OFFICER NOT GRANTING THE DEDUCTION CLAIME D BY THE APPELLANT UNDER THE PROVISIONS OF SECTION 80IB OF T HE ACT. 3. IN AY 2003-04, THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL: 2 ITA NOS. 1561 & 1562/H/ 2010 M/S VENKAT PHARMA LTD. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS AND UNSUSTAINABL E IN LAW. 2. THE LEARNED CIT(A) ERRED IN SUSTAINING THE ACTIO N OF THE ASSESSING OFFICER NOT GRANTING THE DEDUCTION CLAIME D BY THE APPELLANT UNDER THE PROVISIONS OF SECTION 80IB OF T HE ACT. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE DEDUCT ION U/S 80IB OUGHT TO HAVE BEEN ALLOWED ON THE GROSS TOTAL INCOM E BUT NOT ON THE RESIDUAL INCOME (BALANCE AFTER ALLOWING 80HH C DEDUCTION) 3. THE LEARNED CIT(A) ERRED IN SUSTAINING THE ORDER OF THE ASSESSING OFFICER WHO HAD NOT PROPERLY CALCULATED T HE 80HHC DEDUCTION. THE CIT(A) FAILED TO APPRECIATE THAT THE EXPENDITURE LIKE COMMISSION PAYMENTS ETC., OUTSIDE INDIA HAVING BEEN DEDUCTED FROM NUMERATOR IN THE FORMULAE OUGHT TO HA VE BEEN DEDUCTED FROM THE TOTAL TURNOVER (DENOMINATOR) ALSO . 4. ON PERUSAL OF RECORD WE FIND THAT, THERE WAS A D ELAY OF 30 DAYS IN FILING THESE APPEALS BEFORE US. TO THIS EFFECT, THE ASSESSEE FILED AN AFFIDAVIT AFFIRMING THE REASONS FOR DELAY IN FILING THESE APPEALS, WHICH ARE AS UNDER: THE ORDER PASSED OF THE CIT(A) WAS RECEIVED BY THE APPELLANTS ACCOUNTANT IN THE OFFICE ON 14/09/2010 AND THE APPE AL IN THE NORMAL COURSE SHOULD HAVE BEEN FILED ON OR BEFORE 1 3/11/10. HOWEVER, THE APPEAL IS FILED ON 13/12/2010 WITH A D ELAY OF 30 DAYS. THE ACCOUNTANT WAS TO BRING THE ORDER TO THE NOTICE OF THE MANAGEMENT BUT AS IT WAS TIME FOR AUDIT AND FILING RETURNS FOR AY 2010-11 AND AS THE ACCOUNTANT WAS VERY BUSY WITH THE AUDIT WORK, HE KEPT THE ORDER IN HIS DESK AND FORGOT TO B RING THAT TO THE NOTICE OF THE MANAGEMENT. AFTER THE COMPLIANCE WITH THE DEADLINES OF FILING THE RETURN THE ACCOUNTANT WHEN ON LEAVE FOR COUPLE OF DAYS. THEREAFTER, WHILE ATTENDING SOME OF INCOME TAX IN THE DEPARTMENT, WHEN THE DEMAND FOR THE AYS 2002 -03 AND 2003-04 WAS RAISED, THE ACCOUNTANT RECOLLECTED THAT THE HE HAS RECEIVED APPELLATE ORDER AND AN APPEAL SHOULD HAVE BEEN FILED. IMMEDIATELY THE MANAGEMENT WAS INFORMED WHO TOOK UP THE MATTER WITH THE OFFICE OF ITS COUNSEL AND GOT THE A PPEALS FILED ON 13/12/2010, BY THEN THERE WAS ALREADY A DELAY OF 30 DAYS IN FILING THESE APPEALS. 5. REFERRING TO THE ABOVE FACTS, THE LEARNED AR OF THE ASSESSEE PRAYED TO CONDONE THE DELAY OF 30 DAYS IN FILING TH E APPEALS AND ADMIT THE SAME FOR ADJUDICATION. 3 ITA NOS. 1561 & 1562/H/ 2010 M/S VENKAT PHARMA LTD. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD. IT WAS STATED IN THE AFFIDAVIT BECAUSE OF ITS ACCOUNTANT, THE DELAY OF 30 DAYS OCCURRED IN FILING THESE APPEALS BEFORE THE TRIBUNA L, BUT, THERE WAS NO LETTER OR CONFIRMATION FILED FROM THE SO CALLED ACC OUNTANT THAT THE DELAY HAS OCCURRED DUE TO HIM. THE ASSESSEE FAILED TO CONVINCE THE BENCH FOR THE DELAY IN FILING THESE APPEALS BELATED LY BY WAY OF PROPER EXPLANATION/EVIDENCE, THE LAW ASSISTS THOSE WHO ARE VIGILANT, NOT THOSE WHO SLEEP OVER THEIR RIGHTS. THE DELAY CANNOT BE CONDONED SIMPLY BECAUSE THE ASSESSEES CASE IS HARD AND CALL S FOR SYMPATHY OR MERELY OUT OF BENEVOLENCE TO THE PARTY SEEKING RELI EF. IN GRANTING THE INDULGENCE AND CONDONING THE DELAY, IT MUST BE PROV ED BEYOND THE SHADOW OF DOUBT THAT THE ASSESSEE WAS DILIGENT AND WAS NOT GUILTY OF NEGLIGENCE, WHATSOEVER. THE SUFFICIENT CAUSE WITHIN THE CONTEMPLATION OF THE LIMITATION PROVISION MUST BE A CAUSE WHICH I S BEYOND THE CONTROL OF THE PARTY INVOKING THE AID OF THE PROVIS IONS. THE CAUSE FOR THE DELAY IN FILING THE APPEAL, WHICH BY DUE CARE A ND ATTENTION, COULD HAVE BEEN AVOIDED, CANNOT BE A SUFFICIENT CAUSE WIT HIN THE MEANING OF THE LIMITATION PROVISION. WHERE NO NEGLIGENCE, O R INACTION, OR WANT OF BONA FIDES CAN BE IMPUTED TO THE ASSESSEE, A LIB ERAL CONSTRUCTION OF THE PROVISIONS HAS TO BE MADE IN ORDER TO ADVANC E SUBSTANTIAL JUSTICE. SEEKERS OF JUSTICE MUST COME WITH CLEAN HA NDS. IN THE PRESENT CASE, AS STATED IN THE AFFIDAVIT, THE REASONS ADVAN CED BY THE ASSESSEE ARE NOT SUPPORTED BY ANY COGENT EVIDENCE A ND HENCE, WE DECLINE TO CONDONE THE DELAY IN FILING THE AFORESAI D APPEALS OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE WAS NOT AB LE TO ESTABLISH THAT IT HAS PREVENTED BY A REASONABLE CAUSE IN FILI NG THESE APPEALS BELATEDLY. 6.1 THE PROVISIONS RELATING TO PRESCRIPTION OF LIMI TATION IN EVERY STATUTE MUST NOT BE CONSTRUED SO LIBERALLY THAT WOU LD HAVE EFFECTED OF TAKING AWAY THE BENEFIT ACCRUING TO THE OTHER PARTY IN A MECHANICAL MANNER. WHERE THE LEGISLATURE STIPULATED A PERIOD O F LIMITATION AND PROVIDES FOR POWER TO CONDONE THE DELAY AS WELL, TH EN, SUCH DELAY CAN 4 ITA NOS. 1561 & 1562/H/ 2010 M/S VENKAT PHARMA LTD. BE CONDONED ONLY FOR SUFFICIENT AND GOOD REASONS SU PPORTED BY COGENT AND PROPER EVIDENCE. IN THE PRESENT CASE, TH E ASSESSEE PLEADED THAT ONE ACCOUNTANT MISPLACED THE ORDERS AN D EVEN THE ASSESSEE FAILED TO MENTION THE NAME OF THE ACCOUNTA NT. THE CALLOUS ATTITUDE OF THE SHOWS THE ASSESSEE IS NOT VERY SERI OUS IN PURSUING ITS APPEALS. IN THIS CONNECTION, WE REFER TO THE JUDGME NT OF THE HONBLE SUPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUIS ITION VS. MST. KATIJI AND OTHERS, 167 ITR 471 (SC), WHEREIN THE HO NBLE SUPREME COURT HAS LAID DOWN THE FOLLOWING PRINCIPLES: 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 AT THE VERY THRESHOLD AND CAUSE OF JUS TICE BEING DEFEATED. AS AGAINST THIS, WHEN DELAY IS CONDONED, THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. 3) EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT MEA N THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOU RS DELAY, EVERY SECONDS DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC MANNER. 4) WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TION ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE O F A NON- DELIBERATE DELAY. 5)THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESO RTING TO DELAY. IN FACT, HE RUNS A SERIOUS RISK. 6) IT MUST BE GRASPED THAT THE JUDICIARY IS RESPECT ED NOT ON ACCOUNT OF ITS POWER TO LEGALISE INJUSTICE ON TECHN ICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 6.2 WHEN A SUBSTANTIAL JUSTICE AND TECHNICAL CONSID ERATION ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HA VE VESTED RIGHT FOR INJUSTICE BEING DONE BECAUSE OF NON-DELIBERATE DELA Y. IN THE PRESENT CASE, THE ASSESSEE IS NOT VIGILANT AND ALSO NOT EXP LAINED THE REASONS FOR DELAY IN FILING THE APPEALS WITH SUFFICIENT AND GOOD REASONS AS WELL AS NOT SHOWN THE DELAY WAS DUE TO BEYOND THE CONTRO L OF THE 5 ITA NOS. 1561 & 1562/H/ 2010 M/S VENKAT PHARMA LTD. ASSESSEE. IN OUR OPINION, THE DELAY COULD HAVE BEEN AVOIDED BY DUE CARE AND ATTENTION OF THE ASSESSEE. 6.3 IN VIEW OF THE ABOVE DISCUSSION, WE ARE NOT IN CLINED TO CONDONE THE SAID DELAY IN FILING THESE APPEALS AND ACCORDIN GLY THESE APPEALS ARE UN-ADMITTED. SINCE WE HAVE NOT ADMITTED THE APP EALS BY REJECTING THE CONDONATION OF DELAY IN FILING THESE APPEALS, D ECIDING THE GROUNDS RAISED BY THE ASSESSEE IN BOTH THE APPEALS ON MERIT S, DOES NOT ARISE. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 05/03/2014. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 05/03/2014. KV COPY FORWARDED TO: 1. M/S VENKAT PHARMA LTD., C/O SHRI A.V. RAGHU RAM, ADVOCATE, FLAT NO. 610, 6 TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD 500 001. 2. ACIT, CIRCLE 3(3), IT TOWERS, AC GUARDS, HYDERABAD 3. CIT(A)-IV, HYDERABAD 4. CIT-III, HYDERABAD. 5. THE DR, ITAT, HYDERABAD