Anant Keshav Rajegaonkar, Nashik V. Income-tax Officer,

ITA 182/PUN/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1566 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 09-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Keywords: Condonation of delay
• Section: 32

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . , # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NOS.182 & 183/PN/2016 % % / ASSESSMENT YEARS : 2006-07 & 2007-08 ANANT KESHAV RAJEGAONKAR, G-3, CROWN COMMERCIAL COMPLEX, SHARANPUR ROAD, OPP. RAJIV GANDHI BHAVAN, NASHIK 422 002 PAN NO.ACPPR9345E . / APPELLANT V/S ITO, CENTRAL-I, NASHIK . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : SHRI ANIL CHAWARE / ORDER PER R.K.PANDA, AM : THE ABOVE 2 APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DATED 10-11-2015 OF THE CIT(A)-13, PU NE RELATING TO THE ASSESSMENT YEARS 2006-07 & 2007-08. 2. GROUNDS RAISED BY THE ASSESSEE IN ITA NO.182/PN/201 6 ARE AS UNDER : 1. ON THE BASIS OF THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND AS PER LAW, THE CIT(A)-13, PUNE, IS NOT JUSTIFIED IN N OT CONDONING THE DELAY IN FILING OF THE APPEAL. / DATE OF HEARING :12.07.2016 / DATE OF PRONOUNCEMENT:14.07.2016 2 ITA NOS.182 & 183/PN/2016 2. ON THE BASIS OF THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE CIT(A)-13, PUNE, IS NOT JUSTIFIED IN C ONFIRMING THE PENALTY U/S.271(1)(C) OF THE ACT OF RS.2,40,849/- LEVIED BY A O ON THE DIFFERENCE IN THE INCOME SHOWN IN THE RETURN OF INCOME FILED U/ S.139 AND THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE ISSUED U/ S.153A OF THE ACT. 3. THE APPELLANT CRAVES FOR ADDITION TO, DELETION, A LTERATION, MODIFICATION, CHANGE ANY OF THE ABOVE GROUNDS OF APP EALS. IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE IN ITA NO.183/PN/2016 WHEREIN PENALTY OF RS.1,30,555/- HAS BEEN CONFIRMED. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND IS A MEMBER OF SUYOJIT GROUP. A SEARCH U/S.1 32 OF THE I.T. ACT WAS CONDUCTED AT THE SUYOJIT GROUP OF CA SES ON 17-09- 2010. THE ASSESSEE IN RESPONSE TO NOTICE U/S.153A FILED H IS RETURN OF INCOME ON 30-05-2012 DECLARING TOTAL INCOME OF RS.10,27,53 1/- INCLUDING ADDITIONAL INCOME OF RS.7 LAKHS. IT MAY BE PERTINEN T TO NOTE HERE THAT THE ASSESSEE HAD FILED HIS ORIGINAL RETURN O F INCOME ON 20-09-2007 SHOWING TOTAL INCOME OF RS.3,26,530/-. THE AO COMPLETED THE ASSESSMENT U/S.143(3) R.W.S.153A OF THE I.T. ACT ON 20-03-2013 DETERMINING THE TOTAL INCOME OF RS.29,27,530/- WHEREIN HE HAS MADE ADDITION OF RS.19 LAKHS ON ACCOUNT OF UNEXP LAINED RECEIPTS. 4. SIMILARLY FOR A.Y. 2007-08 THE AO COMPLETED THE ASSESSM ENT U/S.143(3) R.W.S.153A ON 20-03-2013 DETERMINING THE TOTAL INCOME AT RS.2,09,58,610/- AS AGAINST RETURNED INCOME OF RS.7,58,610 /- FILED IN RESPONSE TO NOTICE U/S.153A WHEREIN ADDITION OF RS.2,02,00,000/- WAS MADE ON ACCOUNT OF UNEXPLAINED RECEIPTS. 3 ITA NOS.182 & 183/PN/2016 5. THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A) WHO DELETE D THE ADDITION ON ACCOUNT OF UNEXPLAINED RECEIPTS. THE AO THERE AFTER INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT WITH RE SPECT TO THE ADDITIONAL INCOME DECLARED IN THE RETURN FILED IN RESPONS E TO NOTICE U/S.153A. REJECTING THE VARIOUS EXPLANATION GIVEN B Y THE ASSESSEE THE AO LEVIED PENALTY OF RS.2,40,849/- FOR A.Y. 20 06-07 AND RS.1,30,555/- FOR A.Y. 2007-08. 6. THE ASSESSEE FILED APPEALS BEFORE THE CIT(A) AGAINST T HE ORDERS PASSED BY THE AO U/S.143(3) R.W.S. 153A. HOWEVER, THERE W AS A DELAY OF 31 DAYS IN FILING OF THE APPEALS FOR BOTH THE YEARS . IT WAS EXPLAINED THAT THE ASSESSEE WAS ELECTED AS THE PRESIDEN T OF CREDAI, MAHARASHTRA FOR THE PERIOD 2013 TO 2015 FOR WHICH HE WA S REQUIRED TO TRAVEL FREQUENTLY TO VARIOUS CITIES TO CARRY OUT THE DUTIES AND RESPONSIBILITIES. HE HAD TO ATTEND THE 13 TH NATCON OF CREDAI WHICH WAS HELD AT MASCOW AND RETURNED TO INDIA ON 02-0 8-2013. THE ORDERS WERE RECEIVED BY HIM ON 03-08-2013. SINCE H E WAS UNABLE TO DEVOTE TIME FOR HIS TAX MATTERS, THE APPEALS W ERE FILED ON 01-10-2013 WITH A DELAY OF ABOUT 20 DAYS. IT WAS ACCOR DINGLY REQUESTED TO CONDONE THE DELAY IN FILING OF THE APPEALS. 7. HOWEVER, THE CIT(A) WAS NOT SATISFIED WITH THE ABOVE EXPLANATION. ACCORDING TO HIM, THE ASSESSEE HAS NOT FURNIS HED SUFFICIENT CAUSE TO EXPLAIN THE DELAY IN FILING OF THE APPEAL. RELYING ON VARIOUS DECISIONS HE HELD THAT THE DELAY IN FILING OF THE A PPEALS BY THE ASSESSEE CANNOT BE CONDONED. HE ACCORDINGLY DISMIS SED THE APPEALS FILED BY THE ASSESSEE BEING BARRED BY LIMITATION. AG AINST THE ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 4 ITA NOS.182 & 183/PN/2016 8. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET REFERR ED TO THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CAS E OF SUYOJIT INFRASTRUCTURE PVT. LTD. VS. ITO VIDE ITA NOS. 17 7 TO 181/PN/2016 ORDER DATED 16-06-2016 AND SUBMITTED THA T UNDER IDENTICAL CIRCUMSTANCES IN THE CASE OF GROUP CONCERN THE TRIBUNAL HAS RESTORED THE ISSUE BACK TO THE FILE OF THE CIT(A) WITH A DIRECTION TO CONDONE THE DELAY AND DECIDE THE ISSUE ON MERIT. HE ACCORDINGLY SUBMITTED THAT SIMILAR DIRECTION MAY BE GIVEN TO THE CIT(A) TO DECIDE THE ISSUE ON MERIT AFTER CONDONING THE DELAY. 9. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND TH E VARIOUS DECISIONS CITED BEFORE US. THERE IS NO DISPUTE TO THE FACT THAT THE APPEALS IN THE INSTANT CASE HAVE BEEN FILED BEFORE THE CI T(A) WITH A DELAY OF 33 DAYS. THE LD.CIT(A) DISMISSED THE APPEALS ON TH E GROUND THAT THESE APPEALS ARE BARRED BY LIMITATION AND T HE ASSESSEE HAS NOT EXPLAINED SUFFICIENT REASONS TO EXPLAIN SUCH DELAY I N FILING OF THE APPEALS. WE FIND IDENTICAL ISSUE HAD COME UP BEFORE TH E COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SUYOJIT INFRASTRUCTURE PVT. LTD. (SUPRA) AND THE TRIBUNAL AFTER CO NSIDERING THE SUBMISSIONS MADE BY BOTH THE SIDES RESTORED THE ISS UE BACK TO THE FILE OF THE CIT(A) WITH A DIRECTION TO CONDONE THE DELAY AND DECIDE THE APPEALS ON MERIT. THE RELEVANT OBSERVATION OF THE TRIBUNAL AT PARA 6 ONWARDS READ AS UNDER : 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE RIVAL PAR TIES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IT IS AN UNDISPUTED FACT THAT THE APPEALS WERE FILED BEFORE THE CIT(A) WITH THE DE LAY OF 33 DAYS. DURING THE FIRST APPELLATE PROCEEDINGS, THE APPEALS OF THE ASSESSEE WERE 5 ITA NOS.182 & 183/PN/2016 DISMISSED BY THE CIT(A) ON THE GROUND OF LIMITATION AL ONE. THE CIT(A) HAS NOT TOUCHED UPON THE MERITS OF THE CASE. THE ASSESSEE HAD FILED AN APPLICATION CITING REASONS FOR DELAY IN FILING OF THE APPEALS AND SEEKING CONDONATION OF DELAY. HOWEVER, THE CIT(A) WAS NOT CO NVINCED WITH THE REASONS AND REJECTED THE SAME. 7. ITS A WELL SETTLED LAW THAT CONDONATION OF DELAY SHOULD BE THE RULE AND REFUSAL AN EXCEPTION. AT THE SAME TIME, IT IS ALSO SETT LED POSITION OF LAW THAT FOR SEEKING CONDONATION OF DELAY SUFFICIENT CAUSE HAS TO BE EXPLAINED RESULTING IN DELAY IN FILING OF THE APPEAL . IN CASE OF INORDINATE DELAY IF THE APPELLANT/PETITIONER FAILS TO SHOW THE R EASONABLE CAUSE FOR FILING OF THE APPEAL BEYOND THE PERIOD OF LIMITATIO N, THE APPEAL IS LIABLE TO BE DISMISSED. 8. IT IS AXIOMATIC THAT CONDONATION OF DELAY IS A MAT TER OF DISCRETION OF THE COURT. THE LENGTH OF DELAY IS NOT THE ISSUE, ACCE PTABILITY OF THE EXPLANATION IS THE ONLY CRITERIA. SOMETIMES DELAY OF THE SHORTEST RANGE MAY BE UNCONDONABLE DUE TO WANT OF ACCEPTABLE EXPLA NATION WHEREAS IN CERTAIN CASES WHERE THE DELAY IS SUBSTANTIAL IT CAN BE C ONDONED IF SUFFICIENT CAUSE IS SHOWN. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF RAM NATH SAO @ RAM NATH SAHU AND OTHERS VS. GO BARDHAN SAO AND OTHERS REPORTED AS 2002 (3) SCC 195 HAS HELD THAT THERE CANNOT BE A STRAIGHTJACKET FORMULA FOR REJECTING AND ACCEPTING EXPLANATION FURNISHED FOR THE DELAY CAUSED. ACCEPTANCE OF EXPLANA TION FURNISHED SHOULD BE THE RULE AND REFUSAL AN EXCEPTION, MORE SO W HEN NO NEGLIGENCE AND INACTION OR WANT OF BONAFIDE CAN BE IMPUTED TO THE DEFAULTING PARTY. REFUSAL TO CONDONE THE DELAY BY TA KING A PEDANTIC AND HYPER TECHNICAL VIEW OF THE MATTER, THE EXPLANATION FURNISHED SHOULD NOT BE REJECTED WHEN STAKES ARE HIGH AND/OR ARGUABLE POINTS OF FACTS AND LAW ARE INVOLVED. WHILE CONSIDERING THE MATTER, THE COURTS HAVE TO STRIKE A BALANCE BETWEEN RESULTANT EFFECT OF THE ORDE R IT IS GOING TO PASS UPON THE PARTIES EITHER WAY. THE RELEVANT EXTRACT OF THE OBSERVATIONS MADE BY THE HONBLE APEX COURT IN THE AFORESAID CASE ARE AS UNDER :- THUS IT BECOMES PLAIN THAT THE EXPRESSION 'SUFFICIENT C AUSE' 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 ADVANCE SUBSTANTIAL JUSTICE WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE IS IMPUT ABLE TO A PARTY. IN A PARTICULAR CASE WHETHER EXPLANATION FURN ISHED 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 THE DELAY CAU SED IN TAKING STEPS. BUT ONE THING IS CLEAR THAT THE COURTS SHOULD NOT PROCEED WITH THE TENDENCY OF FINDING FAULT WITH THE CAUSE SHO WN AND REJECT THE PETITION BY A SLIPSHOD ORDER IN OVER JUBIL ATION OF DISPOSAL DRIVE. ACCEPTANCE OF EXPLANATION FURNISHED SHO ULD BE THE RULE AND REFUSAL AN EXCEPTION MORE SO WHEN NO NEG LIGENCE OR INACTION OR WANT OF BONA FIDE CAN BE IMPUTED TO THE DEFAULTING PARTY. ON THE OTHER HAND, WHILE CONSIDERING THE MATT ER THE COURTS SHOULD NOT LOSE SIGHT OF THE FACT THAT BY NOT TAKING ST EPS WITHIN THE TIME PRESCRIBED A VALUABLE RIGHT HAS ACCRUED TO T HE OTHER PARTY WHICH SHOULD NOT BE LIGHTLY DEFEATED BY CONDON ING DELAY IN A ROUTINE LIKE MANNER. HOWEVER, BY TAKING A PEDANTI C AND HYPER TECHNICAL VIEW OF THE MATTER THE EXPLANATION FURNISH ED SHOULD NOT BE REJECTED WHEN STAKES ARE HIGH AND/OR ARGUABLE POINTS OF FACTS AND LAW ARE INVOLVED IN THE CASE, CAUSING ENORMO US LOSS AND 6 ITA NOS.182 & 183/PN/2016 IRREPARABLE INJURY TO THE PARTY AGAINST WHOM THE LIS TERMINATES EITHER BY DEFAULT OR INACTION AND DEFEATING VALUABL E RIGHT OF SUCH A PARTY TO HAVE THE DECISION ON MERIT. WHILE CONSIDER ING THE MATTER, COURTS HAVE TO STRIKE A BALANCE BETWEEN RESULT ANT EFFECT OF THE ORDER IT IS GOING TO PASS UPON THE PARTIES EITHE R WAY. 9. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST. KATIJI REPORTED AS 167 ITR 471 (SC ) HAS OBSERVED THAT LIBERAL APPROACH SHOULD BE ADOPTED WHILE DEALIN G WITH THE APPLICATIONS/PETITIONS FOR CONDONING DELAY. THE HONB LE APEX COURT HELD :- THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE D ELAY BY ENACTING SECTION 51 OF THE LIMITATION ACT OF 1963 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES B Y DISPOSING OF MATTERS ON DE MERITS '. THE EXPRESSION ' SUFFICIENT C AUSE ' EMPLOYED BY THE LEGISLATURE IS ADEQUATELY ELASTIC TO E NABLE 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 COURTS. IT IS COMMON KN OWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL APPROACH IN MATTERS INSTITUTED IN THIS COURT. BUT THE MESSAGE DOES NO T APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHER COURTS IN T HE HIERARCHY. AND SUCH A LIBERAL APPROACH IS ADOPTED ON PRINCIPLE A S IT IS REALIZED THAT : 1. ORDINARILY, A LITIGANT DOES NOT STAND TO BENEFIT B Y LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITORI OUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF J USTICE 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 ME AN 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 CONSIDERATION S ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JU STICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CL AIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON DELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DEL IBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO D ELAY. IN FACT, HE RUNS SERIOUS RISK. 6. IT MUST BE GRASPED THAT THE JUDICIARY IS RESPECTED N OT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNIC AL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 7 ITA NOS.182 & 183/PN/2016 10. THUS, IN VIEW OF THE LAW LAID DOWN BY THE HONBL E SUPREME COURT OF INDIA, WE ACCEPT THE EXPLANATION FURNISHED BY THE ASSE SSEE CAUSING 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 TO THE FILE OF CIT(A) FOR DECIDING TH E ISSUES RAISED THEREIN ON MERITS, IN ACCORDANCE WITH LAW. 11. FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL, WE RESTORE THE ISSUE BACK TO THE FILE OF THE CIT(A ) WITH A DIRECTION TO CONDONE THE DELAY AND DECIDE THE APPEALS ON MERIT. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14-07-2016. SD/- SD/- ( SUSHMA CHOWLA ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; DATED : 14 TH JULY , 2016. LRH'K ' (*+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % ( ) - THE CIT(A)-13, PUNE 4. % S / THE PR.CIT (CENTRAL), NAGPUR 5. ( ++, , , , IQ.KS / DR, ITAT, A PUNE; 6. 0 / GUARD FILE. / BY ORDER , // ( + //TRUE COPY // 23 + , / SR. PRIVATE SECRETARY ,, IQ.KS / ITAT, PUNE