HIREN MOHANLAL SHAH, MUMBAI V. ITO 17(2)(2), MUMBAI

ITA 1861/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8371 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 29-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATI
• Assessee Lawyers: GOVIND JAVERI AR S
• Keywords: Depreciation; Reasonable cause; Condonation of delay; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H, BENCH MUM BAI BEFORE SHRI G. MANJUNATHA, ACCOUNTANT MEMBER & SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.1861/MUM/2019 ( ASSESSMENT YEAR: 2010-11 ) HIREN MOHANLAL SHAH 371, SUKH NIWAS CASTLE BHANDARKAR ROAD, MATUNGA (C.R), MUMBAI-400 019 VS. ITO-17(2)(2) ROOM NO.122 PIRAMAL CHAMBERS MUMBAI-400 012 PAN/GIR NO. A A UPS0624G APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI VIJAY MEHTA & SHRI GOVIND JAVERI, ARS REVENUE BY SHRI R.BHOOPATI, DR DATE OF HEARING 05/03 /2020 DATE OF PRONOUNCEME NT 20/05 /2020 / O R D E R PER G.MANJUNATHA (A.M) : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)32, MUMBAI, DATED 25/09/2018 AND IT PERTAINS TO ASSESSMENT YEAR 2010-11 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN UPHOLDING THE ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE I NCOME TAX ACT, 1961, WHICH IS ILLEGAL AND BAD IN LAW. 2. THE LEARNED CIT (A) HAS ERRED IN LAW AND IN FACTS IN DISMISSING THE APPEAL BY HOLDING THAT THE APPEAL DID NOT DESERVE A NY MERIT CONSIDERATION. 3. THE LEARNED CIT (A) HAS ERRED IN LAW AND IN FAC TS IN CONFIRMING THE DISALLOWANCE OF RS.2,22,628/-, BEING PROPORTIONATE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S. 36((I)(III) OF THE ACT. ITA NO.1861/MUM/2019 HIREN MOHANLAL SHAH 2 4. THE LEARNED CIT (A) HAS ERRED IN LAW AND IN FAC TS IN CONFIRMING THE DISALLOWANCE OF RS.25,146/- MADE BY THE ASSESSING O FFICER, BEING 20% OF THE FOLLOWING EXPENDITURE : A) CAR INSURANCE AND PETROL EXPENSE : RS.41,9697- B) DEPRECIATION ON MOTOR CAR : RS. 13,7107- C) DEPRECIATION ON COMPUTER : RS. 3,8977- D) TELEPHONE EXPENSES : RS. 66,156/- 5. THE LEARNED CIT (A) HAS ERRED IN LAW AND IN FACT S IN UPHOLDING THE FOLLOWING DISALLOWANCES MADE BY THE ASSESSING OFFIC ER A) DEPRECIATION ON FIXED ASSETS: RS. 56,709/- B) FINANCIAL EXPENSES : RS. 8,67,453/- 6 THE ORDER PASSED BY THE CIT(A) IS BAD IN LAW AND WITHOUT JURISDICTION. 7. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AME ND, MODIFY AND/OR DELETE ALL OR ANY OF THE ABOVE GROUNDS. 3. AT THE TIME OF HEARING, THE LD. AR FOR THE ASSES SEE SUBMITTED THAT THERE IS A DELAY OF 68 DAYS IN FILING APPEAL B EFORE THE TRIBUNAL, FOR WHICH NECESSARY APPLICATION FOR CONDONATION OF DELAY ALONG WITH AFFIDAVIT OF THE APPELLANT HAS BEEN FILED EXPLAININ G THE REASONS FOR DELAY IN FILING APPEAL. THE LD. AR, FURTHER SUBMITT ED THAT AS PER THE AFFIDAVIT OF THE ASSESSEE, THE DELAY IN FILING APPE AL BEFORE THE TRIBUNAL IS NEITHER, DELIBERATE NOR WITH A INTENTIO N TO DELAY, THE PROCEEDINGS BEFORE THE AUTHORITIES, BUT SOLELY ON T HE REASON OF ILL- HEALTH OF THE FATHER OF ASSESSEE SHRI MOHANLAL M.SH AH, WHO IS A SENIOR CITIZEN LOOKS AFTER THE ENTIRE FINANCE, BANK ING, ACCOUNTS AND TAX RELATED MATTERS WAS HOSPITALIZED FOR CERTAIN A ILMENTS AND HENCE, HE IS UNABLE TO FILE THE APPEAL WITHIN THE TIME PRE SCRIBED UNDER THE ACT. THE LD. AR, FURTHER SUBMITTED THAT THEREAFTER, SHRI MOHANLAL M.SHAH, TOOK NECESSARY STEPS AND FILED THE CAPTIONE D APPEALS, WHICH CAUSED DELAY OF 68 DAYS. HE, FURTHER SUBMIT TED THAT BY ADMITTING THE CAPTIONED APPEAL, NO PREJUDICE WILL C AUSED TO THE REVENUE, BECAUSE THE LD.CIT(A) HAS DECIDED THE ISSU E EX-PARTE WITHOUT HEARING THE ASSESSEE ON VARIOUS ADDITIONS M ADE BY THE LD. ITA NO.1861/MUM/2019 HIREN MOHANLAL SHAH 3 AO. THEREFORE, THE DELAY IN FILING APPEAL MAY BE CO NDONED AND THE APPEAL BY THE ASSESSEE MAY BE DECIDED ON MERITS. 4. THE LD. DR, ON THE OTHER HAND STRONGLY OPPOSED C ONDONATION APPLICATION FILED BY THE ASSESSEE AND SUBMITTED THA T THE FACTS BROUGHT OUT BY THE LD.CIT(A) CLEARLY PROVES THE FAC T THAT THE ASSESSEE IS A HABITUAL NON CO-OPERATIVE TO THE PROC EEDINGS, WHICH IS EVIDENT FROM THE FACT THAT DESPITE NUMBER OF OPPORT UNITIES WERE GIVEN TO THE ASSESSEE, HE DID NOT APPEAR BEFORE THE LD.CI T(A) AND SAID LAPSE IS CONTINUED BEFORE THE TRIBUNAL. THEREFORE, THERE IS NO MERIT IN THE REASONS GIVEN BY THE ASSESSEE FOR DELAY IN FILI NG APPEAL AND HENCE, THE DELAY IN FILING APPEAL SHOULD NOT BE CO NDONED. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. THE TRIBUNAL HAS INHERENT POWERS TO CONDONE THE DELAY I N FILING OF APPEAL AFTER THE EXPIRE OF THE RELEVANT PERIOD REFE RRED TO IN SUB SECTION(3) OR SUB SECTION (4) OF SECTION 253 OF THE I.T.ACT, 1961, IF, IT IS SATISFIED THAT THERE WAS SUFFICIENT CAUSE FOR NO T PRESENTING THE APPEAL WITHIN THAT PERIOD. THE WORDS SUFFICIENT CAU SE HAS NOT BEEN DEFINED UNDER THE ACT, BUT VARIOUS COURTS HAVE INTE RPRETED TO MEAN THAT THERE SHOULD BE SOME REASONS BEYOND THE CONTRO L OF THE ASSESSEE, WHICH PREVENTED TO FILE APPEAL WITHIN THE TIME PRESCRIBED UNDER THE ACT. AS PER THE INTERPRETATION OF THE VAR IOUS COURTS, CERTAIN REASONS WOULD COME UNDER THE DEFINITION OF REASONAB LE CAUSE LIKE ILL- HEALTH OF THE CONCERNED PERSONS, WHO IS AGGRIEVED O R HIS COUNSEL IS ONE OF THE REASONS FOR CONDONE, THE DELAY IN FILING APPEAL. FURTHER, THE LEGISLATURE HAS CONFERRED POWER TO CONDONE DELA Y BY ENACTING SECTION 5 OF THE LIMITATION ACT, 1963, IN ORDER TO ENABLE THE COURTS TO ITA NO.1861/MUM/2019 HIREN MOHANLAL SHAH 4 DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OFF MATTERS ON MERITS. AT THE SAME TIME, THE COURTS HAS ALSO HELD THAT EVERY DAYS OF DELAYS MUST BE EXPLAINED BY THE PERSON. IN THIS LEGAL BAC K GROUND, IF YOU EXAMINE THE FACTS OF THE PRESENT CASE, WE FIND THAT THE ASSESSEE HAS GIVEN REASONS FOR NOT FILING APPEAL WITHIN THE TIME ALLOWED UNDER THE ACT, AS PER WHICH THE FATHER OF THE ASSESSEE, SHRI MOHANLAL M.SHAH, AGED 65 YEARS, WHO LOOK AFTER THE TAX MATTERS OF THE ASSESSEE WAS ADMITTED TO HOSPITAL FROM 26/12/2018 TO 29/12/2018 FOR SPINAL PROBLEM DUE TO WHICH, HE COULD NOT ATTEND THE CASE FOR FILING APPEAL BEFORE THE TRIBUNAL. HOWEVER, IMMEDIATELY AFTER REC OVERY FROM HIS ILLNESS, HE HAS FILED APPEAL, WHICH RESULTED IN DEL AY OF 68 DAYS IN FILING APPEAL BEFORE THE TRIBUNAL. IF YOU GO THROUG H, THE REASONS GIVEN BY THE ASSESSEE ALONG WITH NECESSARY SUPPORTI NG EVIDENCES FILED TO JUSTIFY THE REASONS GIVEN FOR SUCH DELAY, WE FIND THAT THE REASONS GIVEN BY THE ASSESSEE FOR NOT FILING APPEAL WITHIN THE TIME ALLOWED UNDER THE ACT COMES UNDER THE AMBIT OF REAS ONABLE CAUSE, AS PROVIDED UNDER THE ACT AND AS INTERPRETED BY TH E VARIOUS COURTS. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THERE IS A REASONABLE CAUSE FOR NOT FILING APPEAL WITHIN THE TIME ALLOWED UNDER THE ACT, WHICH IS SUFFICIENT TO CONDONE THE DELAY IN FILING OF APPEAL. WE, FURTHER NOTED THAT THE HONBLE SUPREME COURT, IN TH E CASE OF COLLECTOR OF LAND ACQUISITION VS MST.KATIJI & ORS. 167 ITR 471 HAS VERY CATEGORICALLY HELD THAT WHEN, SUBSTANTIAL JUST ICE AND TECHNICAL CONSIDERATION ARE PITTED AGAINST EACH OTHER, THE C AUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER AS IDE CANNOT CLAIM TO HAVE A VESTED RIGHT INJUSTICE BEING DONE, BECAUSE O F A NON- DELIBERATE DELAY. THE HONBLE SUPREME COURT, IN THE CASE OF N. BALAKRISHNAN V. M.RAMAMURTHY (1998) 7 SCC 123, HAS HELD THAT A COURT KNOWS THAT REFUSAL TO CONDONE DELAY WOULD RES ULT IN FORECLOSING ITA NO.1861/MUM/2019 HIREN MOHANLAL SHAH 5 A SUITOR FORM PUTTING FORTH HIS CAUSE. THERE IS NO PRESUMPTION THAT DELAYS IN APPROACHING THE COURT IS ALWAYS DELIBERAT E. FROM THE RATIOS LAID DOWN BY THE HONBLE SUPREME COURT IN ABOVE CAS E, IT IS VERY CLEAR THAT WHEN, THE ASSESSEE HAS GIVEN SUFFICIENT REASONS FOR NOT FILING APPEAL WITH PLAUSIBLE EXPLANATION, THEN TH E DELAY IN FILING APPEAL CAN BE CONDONED, IF THE OTHER SIDE CANNOT CL AIM TO HAVE A VESTED RIGHT INJUSTICE BEING DONE, BECAUSE OF A NON DELIBERATE DELAY. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THIS IS A FIT CASE FOR CONDONATION OF DELAY IN FILING OF APPEAL AND HENCE, WE CONDONE THE DELAY IN FILING OF APPEAL AND ADMIT THE APPEAL FOR HEARING. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. AFTER HEARING BOTH THE SIDES, WE FIND THAT ALTHOUGH, THE LD.CIT(A) HAS DISCUSSED THE ISSUES ON MERITS, BUT HAS DISPOSED-OF F APPEAL FILED BY THE ASSESSEE FOR NON APPEARANCE OF THE ASSESSEE AS ON THE DATE OF HEARING DESPITE NUMBER OF OPPORTUNITIES GIVEN ON V ARIOUS OCCASIONS, WITHOUT HEARING THE ASSESSEE. IT IS A SETTLED POSIT ION OF LAW THAT IT IS THE OBLIGATION OF THE PERSON, WHO FILED APPEAL TO G O BEFORE THE AUTHORITY AND FILE NECESSARY DETAILS TO JUSTIFY ITS CASE. AT THE SAME TIME, IF THE ASSESSEE COULD NOT ATTEND THE HEARING FOR SOME REASONS, IT IS THE DUTY OF THE AUTHORITIES TO DISPOSE OF THE APPEALS ON MERITS, ON THE BASIS OF MATERIAL AVAILABLE ON RECORD INSTEAD O F DISMISSING THE APPEAL ON TECHNICAL GROUNDS FOR NON PROSECUTION OF APPEAL BY THE ASSESSEE. IN THIS CASE, ALTHOUGH, THE LD.CIT(A) HAS DISCUSSED THE ISSUE ON MERITS RAISED BEFORE HIM, BUT SUCH FINDING S HAS BEEN RECORDED BEHIND THE BACK OF THE ASSESSEE WITHOUT CO NFRONTING THE REASONS GIVEN BY THE LD. AO FOR MAKING VARIOUS ADDI TIONS. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE I SSUE NEEDS TO GO ITA NO.1861/MUM/2019 HIREN MOHANLAL SHAH 6 BACK TO THE FILE OF THE LD.CIT(A) TO GIVE ONE MORE OPPORTUNITY OF HEARING TO THE ASSESSEE TO ADVANCE ITS ARGUMENTS. H ENCE, WE SET ASIDE THE APPEAL TO THE FILE OF THE LD.CIT(A) TO DE CIDE AFRESH IN ACCORDANCE WITH LAW. NEEDLESS TO SAY, THE ASSESSEE SHALL GO BEFORE THE LD.CIT(A) AND FILE NECESSARY EVIDENCES TO JUSTI FY ITS CASE WITHOUT SEEKING ANY ADJOURNMENTS. IN CASE, THE ASSESEE SEEK S ADJOURNMENTS WITHOUT ANY VALID REASONS, THEN THE AP PELLATE AUTHORITY IS FREE TO DISPOSE OF APPEAL IN ACCORDANCE WITH LAW . 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20/05/2 020 SD/- (RAVISH SOOD) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 20/05/2020 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//