Suyojit Infrastructure Pvt. Ltd., Nashik V. Income-tax Officer,

ITA 180/PUN/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1723 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 09-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Period of limitation; Reasonable cause; Condonation of delay; Bonafide mistake
• Section: 143(3); 153A; 27; 132

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE ! ' , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM ITA NOS.177 TO 181/PN/2016 ASSESSMENT YEARS : 2005-06 TO 2009-10 SUYOJIT INFRASTRUCTURE PVT. LTD., F-1/2, FIRST FLOOR, SUYOJIT HEIGHTS, SHARANPUR ROAD, OPP. RAJIV GANDHI BHAVAN, NASHIK 422 002. PAN: AAFCS1381N .. APPELLANT VS. THE INCOME TAX OFFICER, CENTRAL 1, NASHIK. ... RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / DEPARTMENT BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 16.06.2016 / DATE OF PRONOUNCEMENT: 16.06.2016 % / ORDER PER VIKAS AWASTHY, JM : THESE SET OF FIVE APPEALS HAVE BEEN FILED BY THE AS SESSEE IMPUGNING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)- 13, PUNE DATED 10.11.2015 COMMON FOR THE ASSESSMENT YEARS 2005-06, 2006-07, 2 007-08, 2008-09 AND 2009-10. SINCE THE ISSUE INVOLVED IN ALL THE APPEALS IS COMM ON AND ALL THE APPEALS ARE ARISING FROM THE SINGLE ORDER OF THE FIRST APPELLAT E AUTHORITY, THE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED BY THI S COMMON ORDER. 2 ITA NOS.177 TO 181/PN/2016 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RE CORDS ARE: A SEARCH OPERATION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS CONDUCTED ON SUYOJIT GROUP OF CASES ON 17.09.2010. A NOTICE UNDER SECTION 153A WAS ISSUED TO THE ASSESSEE ON 10.01.20 12 FOR THE IMPUGNED ASSESSMENT YEARS. IN RESPONSE TO NOTICE, THE ASSES SEE FILED RETURN OF INCOME ON 30.05.2012 FOR ALL THE IMPUGNED ASSESSMENT YEARS. THE ASSESSMENT WAS FINALIZED UNDER SECTION 143(3) R.W.S. 153A BY THE ASSESSING O FFICER. ON THE BASIS OF RETURNS FILED BY THE ASSESSEE AND THE ASSESSMENTS MADE THER EON, THE ASSESSING OFFICER ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 27 1(1)(C) FOR CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE DETAILS OF THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT I N THE IMPUGNED ASSESSMENT YEARS ARE AS UNDER :- A Y AMOUNT ON WHICH PENALTY LEVIED (RS.) AMOUNT OF PENALTY (RS.) 2005-06 35,110 12,844 2006-07 8,50,000 2,86,110 2007-08 14,99,990 4,70,472 2008-09 2,00,054 67,337 2009-10 13,460 4,529 3. AGGRIEVED BY THE PENALTY ORDERS IN THE RESPECTIV E ASSESSMENT YEARS, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE APPEA LS WERE FILED WITH A DELAY OF 33 DAYS. THE CIT(A) AFTER CONSIDERING THE REASONS GIV EN FOR CONDONATION OF DELAY REJECTED THE SAME AND DISMISSED THE APPEALS OF THE ASSESSEE BEING BARRED BY LIMITATION. AGAINST THE ORDER OF THE CIT(A), THE A SSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 4. SHRI PRAMOD SHINGTE APPEARING ON BEHALF OF THE A SSESSEE SUBMITTED THAT THE CIT(A) DISBELIEVED THE REASONS FURNISHED BY THE ASS ESSEE FOR CONDONATION OF DELAY IN FILING OF THE APPEALS. THE DIRECTOR OF THE ASSE SSEE COMPANY, SHRI ANANT KESHAV RAJEGAONKAR WAS ELECTED AS A PRESIDENT OF CREDAI, M AHARASHTRA (CONFEDERATION OF REAL ESTATE DEVELOPERS ASSOCIATION OF INDIA) FO R THE PERIOD 2013-15. SHRI 3 ITA NOS.177 TO 181/PN/2016 RAJEGAONKAR HAD TO TRAVEL ABROAD (MOSCOW) TO ATTEND 13TH NATCON OF CREDAI. IN ADDITION TO HIS BUSINESS RESPONSIBILITIES, SHRI RAJEGAONKAR WAS DISCHARGING HIS NEWLY ASSUMED RESPONSIBILITY AS PRESIDENT OF CREDAI , MAHARASHTRA. SHRI RAJEGAONKAR DUE TO HIS PREOCCUPATION WITH ADDITIONA L RESPONSIBILITY COULD NOT FILE APPEAL AGAINST THE ASSESSMENT ORDERS WITHIN THE PER IOD OF LIMITATION. ON REALIZING THE MISTAKE, THE APPEALS WERE FILED WITH A DELAY OF 33 DAYS AND APPLICATION FOR CONDONATION OF DELAY CITING REASONS FOR DELAY WAS A LSO FILED. THE LD. AR SUBMITTED THAT THERE WAS NO WILLFUL OR DELIBERATE INTENTION O F FILING THE APPEALS AFTER THE PRESCRIBED PERIOD OF LIMITATION. IT WAS A BONAFIDE MISTAKE. THE LD. AR SUBMITTED THAT THE CIT(A) HAS NOT TOUCHED UPON THE MERITS OF THE CASE AND HAS DISMISSED THE APPEALS OF THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEARS MERELY ON THE GROUND OF DELAY IN FILING OF THE APPEALS. ON MERITS, THE ASSESSEE HAS PRIMAFACIE GOODS CASE IN ITS FAVOUR, THEREFORE, AN OPPORTUNITY MAY B E GRANTED TO THE ASSESSEE TO PRESENT THE APPEALS ON MERITS. 5. ON THE OTHER HAND, SHRI HITENDRA NINAWE REPRESEN TING THE DEPARTMENT VEHEMENTLY SUPPORTED THE ORDER OF THE CIT(A). THE LD. DR SUBMITTED THAT THE ASSESSEE COULD NOT SHOW SUFFICIENT CAUSE FOR DELAY IN FILING OF THE APPEALS. THE DIRECTOR OF THE ASSESSEE COMPANY HAD RETURNED FROM MOSCOW ON 02.08.2013 WHEREAS THE LIMITATION FOR FILING OF THE APPEAL EXP IRED ON 28.08.2013 THAT IS MUCH AFTER HIS RETURNING FROM MOSCOW. THERE WAS SUFFICI ENT TIME FOR FILING OF APPEAL AFTER HIS RETURNING FROM MOSCOW. THE LD. DR PRAYED FOR R EJECTING THE APPEALS OF THE ASSESSEE AND UPHOLDING THE ORDER OF THE CIT(A). 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE RIVAL PARTIES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IT IS AN UNDI SPUTED FACT THAT THE APPEALS WERE FILED BEFORE THE CIT(A) WITH THE DELAY OF 33 DAYS. DURING THE FIRST APPELLATE PROCEEDINGS, THE APPEALS OF THE ASSESSEE WERE DISMI SSED BY THE CIT(A) ON THE GROUND OF LIMITATION ALONE. THE CIT(A) HAS NOT TOU CHED UPON THE MERITS OF THE CASE. 4 ITA NOS.177 TO 181/PN/2016 THE ASSESSEE HAD FILED AN APPLICATION CITING REASON S FOR DELAY IN FILING OF THE APPEALS AND SEEKING CONDONATION OF DELAY. HOWEVER, THE CIT(A) WAS NOT CONVINCED WITH THE REASONS AND REJECTED THE SAME. 7. ITS A WELL SETTLED LAW THAT CONDONATION OF DELA Y SHOULD BE THE RULE AND REFUSAL AN EXCEPTION. AT THE SAME TIME, IT IS ALSO SETTLED POSITION OF LAW THAT FOR SEEKING CONDONATION OF DELAY SUFFICIENT CAUSE HAS TO BE EXP LAINED RESULTING IN DELAY IN FILING OF THE APPEAL. IN CASE OF INORDINATE DELAY IF THE APPELLANT/PETITIONER FAILS TO SHOW THE REASONABLE CAUSE FOR FILING OF THE APPEAL BEYOND TH E PERIOD OF LIMITATION, THE APPEAL IS LIABLE TO BE DISMISSED. 8. IT IS AXIOMATIC THAT CONDONATION OF DELAY IS A M ATTER OF DISCRETION OF THE COURT. THE LENGTH OF DELAY IS NOT THE ISSUE, ACCEPTABILITY OF THE EXPLANATION IS THE ONLY CRITERIA. SOMETIMES DELAY OF THE SHORTEST RANGE MA Y BE UNCONDONABLE DUE TO WANT OF ACCEPTABLE EXPLANATION WHEREAS IN CERTAIN CASES WHERE THE DELAY IS SUBSTANTIAL IT CAN BE CONDONED IF SUFFICIENT CAUSE IS SHOWN. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF RAM NATH SAO @ RAM NATH SAHU AND OTH ERS VS. GOBARDHAN SAO AND OTHERS REPORTED AS 2002 (3) SCC 195 HAS HELD TH AT THERE CANNOT BE A STRAIGHTJACKET FORMULA FOR REJECTING AND ACCEPTING EXPLANATION FURNISHED FOR THE DELAY CAUSED. ACCEPTANCE OF EXPLANATION FURNISHED SHOULD BE THE RULE AND REFUSAL AN EXCEPTION, MORE SO WHEN NO NEGLIGENCE AND INACTI ON OR WANT OF BONAFIDE CAN BE IMPUTED TO THE DEFAULTING PARTY. REFUSAL TO CONDON E THE DELAY BY TAKING A PEDANTIC AND HYPER TECHNICAL VIEW OF THE MATTER, THE EXPLANA TION FURNISHED SHOULD NOT BE REJECTED WHEN STAKES ARE HIGH AND/OR ARGUABLE POINT S OF FACTS AND LAW ARE INVOLVED. WHILE CONSIDERING THE MATTER, THE COURTS HAVE TO ST RIKE A BALANCE BETWEEN RESULTANT EFFECT OF THE ORDER IT IS GOING TO PASS UPON THE PA RTIES EITHER WAY. THE RELEVANT EXTRACT OF THE OBSERVATIONS MADE BY THE HONBLE APE X COURT IN THE AFORESAID CASE ARE AS UNDER :- 5 ITA NOS.177 TO 181/PN/2016 THUS IT BECOMES PLAIN THAT THE EXPRESSION 'SUFFICI ENT CAUSE' WITHIN THE MEANING OF SECTION 5 OF THE ACT OR ORDER 22 RULE 9 OF THE CODE OR ANY OTHER SIMILAR PROVISION SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVA NCE SUBSTANTIAL JUSTICE WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE IS IMPU TABLE TO A PARTY. IN A PARTICULAR CASE WHETHER EXPLANATION FURNISHED WOULD CONSTITUTE 'SUFFICIENT CAUSE' OR NOT WILL BE DEPENDANT UPON FACTS OF EACH CASE. THERE CANNOT BE A STRAITJACKET FORMULA FOR ACCEPTING OR REJECTING EXPLANATION FURNISHED FOR TH E DELAY CAUSED IN TAKING STEPS. BUT ONE THING IS CLEAR THAT THE COURTS SHOULD NOT P ROCEED WITH THE TENDENCY OF FINDING FAULT WITH THE CAUSE SHOWN AND REJECT THE PETITION BY A SLIPSHOD ORDER IN OVER JUBILATION OF DISPOSAL DRIVE. ACCEPTANCE OF EXPLANA TION FURNISHED SHOULD BE THE RULE AND REFUSAL AN EXCEPTION MORE SO WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE CAN BE IMPUTED TO THE DEFAULTING PARTY. ON THE OTHER HAND, WHILE CONSIDERING THE MATTER THE COURTS SHOULD NOT LOSE SIGHT OF THE FACT THAT BY NOT TAKING STEPS WITHIN THE TIME PRESCRIBED A VALUABLE RIGHT HAS ACCRUED TO THE OTHER PARTY WHICH SHOULD NOT BE LIGHTLY DEFEATED BY CONDONING DELAY IN A ROUTINE LI KE MANNER. HOWEVER, BY TAKING A PEDANTIC AND HYPER TECHNICAL VIEW OF THE MATTER THE EXPLANATION FURNISHED SHOULD NOT BE REJECTED WHEN STAKES ARE HIGH AND/OR ARGUABL E POINTS OF FACTS AND LAW ARE INVOLVED IN THE CASE, CAUSING ENORMOUS LOSS AND IRR EPARABLE INJURY TO THE PARTY AGAINST WHOM THE LIS TERMINATES EITHER BY DEFAULT O R INACTION AND DEFEATING VALUABLE RIGHT OF SUCH A PARTY TO HAVE THE DECISION ON MERIT . WHILE CONSIDERING THE MATTER, COURTS HAVE TO STRIKE A BALANCE BETWEEN RESULTANT E FFECT OF THE ORDER IT IS GOING TO PASS UPON THE PARTIES EITHER WAY. 9. THE HONBLE SUPREME COURT OF INDIA IN THE CASE O F COLLECTOR, LAND ACQUISITION VS. MST. KATIJI REPORTED AS 167 ITR 471 (SC) HAS OBSERVED THAT LIBERAL APPROACH SHOULD BE ADOPTED WHILE DEALING WITH THE A PPLICATIONS/PETITIONS FOR CONDONING DELAY. THE HONBLE APEX COURT HELD :- THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACTING SECTION 51 OF THE LIMITATION ACT OF 1963 IN ORDER TO ENABLE TH E COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON DE MERITS '. THE EXPRESSION ' SUFFICIENT CAUSE ' EMPLOYED BY THE LEGISLATURE IS ADEQUATELY ELASTIC T O ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUB-SERVES THE END S OF JUSTICE THAT BEING THE LIFE PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COUR TS. IT IS COMMON KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL AP PROACH IN MATTERS INSTITUTED IN THIS COURT. BUT THE MESSAGE DOES NOT APPEAR TO HAVE PERC OLATED DOWN TO ALL THE OTHER COURTS IN THE HIERARCHY. AND SUCH A LIBERAL APPROACH IS ADOPTED ON PRINCIP LE AS IT IS REALIZED THAT : 1. ORDINARILY, A LITIGANT DOES NOT STAND TO BENE FIT 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 THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. 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 SENS E AND PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERV ES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON DELIBERATE DELAY. 6 ITA NOS.177 TO 181/PN/2016 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 SERIOUS RISK. 6. IT MUST BE GRASPED THAT THE JUDICIARY IS RESPECT ED NOT 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. 10. THUS, IN VIEW OF THE LAW LAID DOWN BY THE HONB LE SUPREME COURT OF INDIA, WE ACCEPT THE EXPLANATION FURNISHED BY THE ASSESSEE CA USING DELAY IN FILING OF THE APPEALS AND CONDONE THE DELAY OF 33 DAYS IN FILING OF THE APPEALS BEFORE THE CIT(A). ALL THE APPEALS OF THE ASSESSEE ARE REMITTED BACK T O THE FILE OF CIT(A) FOR DECIDING THE ISSUES RAISED THEREIN ON MERITS, IN ACCORDANCE WITH LAW. 11. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AFTER THE HEARIN G ON THURSDAY, THE 16 TH DAY OF JUNE, 2016. SD/- SD/- ( R.K. PANDA ) ( VIKAS AWASTHY ) / ACCOUNTANT MEMBER # / JUDICIAL MEMBER PUNE ; DATED : 16 TH JUNE, 2016. %&'#()!*!+( / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-13, PUNE; 4) THE CIT-13, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %, / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE