BIREN DHIRAJLAL SHAH, GANDHINAGAR V. The ITO Ward-1, GANDHINAGAR

ITA 192/AHD/2021

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8089 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-02-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 10-08-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FORTHEASSESSEEBEFOREUSSUBMITTEDTHATTHE

Judgement Text

आयकरअपीलीयअधिकरण , अहमदाबादनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, ‘’D’’BENCH,AHMEDABAD BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And SHRITRSENTHILKUMAR,JUDICIALMEMBER आयकरअपीलसं./ITANos.192-193/AHD/2021 धििाधरणवरध / Asstt.Year:2011-12 ShriBirenDhirajlalShah, PlotNo.441-1,Sector-22, Nr.PoliceChowkey, Gandhinagar. PAN:ACSPS5653F Vs. IncomeTaxOfficer, Ward-1, Gandhinagar. (Applicant)(Respondent) Assesseeby:ShriChetanAgarwal,AR Revenueby:MsNeejuGupta,Sr.DR सुिवाईकीतारीख/DateofHearing:13/02/2024 घोरणाकीतारीख /DateofPronouncement:28/03/2024 आदेश/ORDER PERWASEEMAHMED,ACCOUNTANTMEMBER: ThecaptionedtwoappealhavebeenfiledattheinstanceoftheAssessee againsttheseparateordersoftheLearnedCommissionerofIncomeTax(Appeals), Ahmedabad,arisinginthematterofassessmentorderpassedunders.143(3)of theIncomeTaxAct,1961(here-in-afterreferredtoas"theAct")relevanttothe AssessmentYear2011-12. 2.Theassesseehasraisedfollowinggroundsofappeal: ITAno.192-193/AHD/2021 A.Y.2011-12 2 1.TheLd.AOhaserredbymakingorderu/s.69,astherearenoinvestmentsbythe assessee. 2.Duetobankruptcyofassessee,theassesseehasnotmadeanyfollowupbefore anyauthorityunderincometaxoffice. 3.Wemayallowedtoaddoralterormodifythegroundofappeal. 3.Attheoutset,wenotethattherewasadelayof1607daysinfilingthe appealbytheassessee.Therewerecondonationpetitionandaffidavitsfiledby theassessee.Thereasonsspecifiedthereinforthedelaywasillhealthand bankruptcyeventuallyrunningawayfromthesocietyandpolicewhichhascreated lotofstressupontheassessee.Theassesseehasalsofiledtheaffidavitsvide dated23 rd July2021and23 rd January2024insupportofhiscontentions.The assesseehasalsofiledmedicalbills,reports,prescriptions,andother correspondencerelatingtohisillhealthandchequebouncingcasefiledbeforethe MagistrateCourtuponhimtojustifythedelayandseekcondonation. 4.InviewofabovetheLd.ARfortheassesseebeforeussubmittedthatthe delayinfilingtheappealoccurredduetounavoidablesituations.Therefore,the delayinfilingtheappealshouldbecondoned. 5.OntheotherhandLd.Sr.D.R.submittedthatthedelayisinordinateand thereforevehementlyopposedtocondonesuchahugedelayandreliedupon MadrasHighCourtJudgmentinthecaseofRoyalStitches(P.)Ltd.Vs.DCIT reportedin[2023]156taxmann.com361(Madras)whereinitisheldthatwhere assesseehadnotgiven‘sufficientcause’forcondoninghugedelayof1072daysin filingappeal,delaycouldnotbecondoned. 6.Wehaveperusedtherecordsandheardtherivalsubmissionsofboththe sides.Therewasadelayof1607daysinfilingtheappealbytheassesseebefore us.Certainly,thedelayissignificant.Butlengthofthedelaybecomesinsignificant iftherewassufficientcauseforsuchdelaywhichpreventedtheassesseeinfiling ITAno.192-193/AHD/2021 A.Y.2011-12 3 theappeal.Assuchweneedtoconsiderthecauseforthedelayandnotthe lengthofthedelay.Accordinglyinourconsideredviewwhentherewasa reasonablecause,theperiodofdelaymaynotberelevantfactor.TheHon’ble MadrasHighCourtinthecaseofCITv.K.S.P.ShanmugavelNadaiandOrs reportedin153ITR596heldasunder: “Sinceinthiscasetheassesseehadbeenprosecutingotherremedies,thetimetakenby thoseproceedingsshouldnaturallybetakenwhiledeterminingthequestionwhetherthe assesseehadsufficientcausefornotpresentingtheappealintime.Therefore,therevenue wasnotrightinsubmittingthattheappealfiledundersection17wasanappealagainst theoriginalorderofassessmentundertheAct,whichwaspassedabout20yearsago,asit wasevidentthattheappealwasagainstanorderofrejectionofreliefbytheassessing authority.Thus,thoughtheTribunal'sviewthattherewasnoquestionoflimitationinsuch cases,wasnotcorrectyettheAACwasrightincondoningthedelayandentertainingthe appeal.” 6.1FromtheabovewenotethattheHon’bleMadrasHighCourtwaspleasedto condonethedelayfor20yearsapproximatelybyholdingthattherewassufficient andreasonablecauseonthepartoftheassesseefornotfilingtheappealwithin theperiodoflimitation.Thus,thedelayintheinstantcaseisjustof1607number ofdayswhichcannotbeconsideredtobeinordinateorexcessiveincomparisonto thedelayof7330daysapproximately. 6.2Thenextcontroversyariseswhatisthesufficientcause,ithasnotbeen definedanywhereundertheActbutreferstoanoccasionwhichisbeyondthe controlofanormalperson.Whatisbeyondthecontrolofaperson,thetestof reasonableapproachundernormalcircumstancesshouldbeapplied.Assuchno hardandfastrulecanbeappliedtofigureouttheweathertherewassufficient causeforthedelay.Itdependsuponcase-to-casebasis.However,theHon’ble Courtsintheseriesofjudgementshaveheldthatwhilecondoningthedelaythe expressionofsufficientcauseshouldbeconstruedforadvancingsubstantial justicetothepartyconcerned.Forevaluatingsufficiencyofcauseandthen,for decidingcondonationofdelay,followingprincipleslaiddownbyHon'bleApex CourtinthecaseofMst.Katiji(167ITR471)shouldbekeptinmind: (i)Ordinarily,alitigantdoesnotstandtobenefitbylodginganappeallate. ITAno.192-193/AHD/2021 A.Y.2011-12 4 (ii)Refusingtocondonedelaycanresultinameritoriousmatterbeingthrownoutat theverythresholdandcauseofjusticebeingdefeated.Asagainstthiswhen delayiscondonedthehighestthatcanhappenisthatacausewouldbedecided onmeritsafterhearingtheparties. (iii)"Everyday'sdelaymustbeexplained"doesnotmeanthatapedanticapproach shouldbetaken.Whynoteveryhour'sdelay,everysecond'sdelay?Thedoctrine mustbeappliedinarationalcommon-sensepragmaticmanner. (iv)Whensubstantialjusticeandtechnicalconsiderationsarepittedagainsteach other,causeofsubstantialjusticedeservestobepreferredfortheotherside cannotclaimtohavevestedrightininjusticebeingdonebecauseofanon- deliberatedelay. (v)Thereisnopresumptionthatdelayisoccasioneddeliberately,oronaccountof culpablenegligence,oronaccountofmalafides.Alitigantdoesnotstandto benefitbyresortingtodelay.Infact,herunsaseriousrisk. (vi)Itmustbegraspedthatjudiciaryisrespectednotonaccountofitspowerto legalizeinjusticeontechnicalgroundsbutbecauseitiscapableofremoving injusticeandisexpectedtodoso. 6.3FromtheabovejudgmentoftheHon’bleApexCourt,wenotethatthe substantialjusticedeservestobepreferredratherthandecidingthematteronthe basisoftechnicaldefect. 6.4.ItistritelawthatwhereacasehasbeenpresentedintheCourtbeyond limitation,thepetitionerhastoexplaintheCourtastowhatwasthe"sufficient cause"whichmeansanadequateandenoughreasonwhichpreventedhimto approachtheCourtwithinlimitationasheldbyHon’bleSupremeCourtinthe followingcases: (a)Basawarajv.LandAcquisitionOfficer,(2013)14SCC81: "9.Sufficientcauseisthecauseforwhichthedefendantcouldnotbeblamedfor hisabsence.Themeaningoftheword"sufficient"is"adequate"or"enough", inasmuchasmaybenecessarytoanswerthepurposeintended.Therefore,the word"sufficient"embracesnomorethanthatwhichprovidesaplatitude,which whentheactdonesufficestoaccomplishthepurposeintendedinthefactsand circumstancesexistinginacase,dulyexaminedfromtheviewpointofa reasonablestandardofacautiousman.Inthiscontext,"sufficientcause"means thatthepartyshouldnothaveactedinanegligentmannerortherewasawantof bonafideonitspartinviewofthefactsandcircumstancesofacaseoritcannot beallegedthatthepartyhas"notacteddiligently"or"remainedinactive". However,thefactsandcircumstancesofeachcasemustaffordsufficientground toenablethecourtconcernedtoexercisediscretionforthereasonthatwhenever ITAno.192-193/AHD/2021 A.Y.2011-12 5 thecourtexercisesdiscretion,ithastobeexercisedjudiciously.Theapplicant mustsatisfythecourtthathewaspreventedbyany"sufficientcause"from prosecutinghiscase,andunlessasatisfactoryexplanationisfurnished,thecourt shouldnotallowtheapplicationforcondonationofdelay.Thecourthasto examinewhetherthemistakeisbonafideorwasmerelyadevicetocoveran ulteriorpurpose.(SeeManindraLandandBuildingCorpn.Ltd.v.Bhutnath Banerjee(AIR1964SC1336MataDinv.A.Narayanan[(1969)2SCC770), Parimalv.Veena[(2011)3SCC545]andMonibenDevrajShahv.MunicipalCorpn. ofBrihanMumbai(2012)5-SCC157].)” (b)AjayDabrev.PyareRam2023SCCOnlineSC92: ‘13.ThisCourtinthecaseofBasawarajv.SpecialLandAcquisitionOfficerwhile rejectinganapplicationforcondonationofdelayforlackofsufficientcausehas concludedinParagraph15asfollows: "15.Thelawontheissuecanbesummarisedtotheeffectthatwherea casehasbeenpresentedinthecourtbeyondlimitation,theapplicanthas toexplainthecourtastowhatwasthe"sufficientcause"whichmeansan adequateandenoughreasonwhichpreventedhimtoapproachthecourt withinlimitation.Incaseapartyisfoundtobenegligent,orforwantof bonafideonhispartinthefactsandcircumstancesofthecase,orfound tohavenotacteddiligentlyorremainedinactive,therecannotbea justifiedgroundtocondonethedelay.Nocourtcouldbejustifiedin condoningsuchaninordinatedelaybyimposinganyconditionwhatsoever. Theapplicationistobedecidedonlywithintheparameterslaiddownby thisCourtinregardtothecondonationofdelay.Incasetherewasno sufficientcausetopreventalitiganttoapproachthecourtontime condoningthedelaywithoutanyjustification,puttinganycondition whatsoever,amountstopassinganorderinviolationofthestatutory provisionsandittantamountstoshowingutterdisregardtothe legislature." 14.Therefore,weareoftheconsideredopinionthattheHighCourtdidnot commitanymistakeindismissingthedelaycondonationapplicationofthepresent appellant. 6.5.Thus,itiscrystalclearfromtheabovelegalpropositionthatthediscretionto condonethedelayhastobeexercisedjudiciouslybasedonfactsand circumstancesofeachcase. 6.6WealsonotethattheHon’bleGujaratHighCourtinthecaseofVareli textileindustryversusCITreportedin154Taxman33hasheldasunder: Itisequallywell-settledthatwhereacauseisconsciouslyabandoned(asinthepresent case)thepartyseekingcondonationhastoshowbycogentevidencesufficientcausein supportofitsclaimofcondonation.Theonusisgreater.Oneofthepropositionsofsettled legalpositionistoensurethatameritoriouscaseisnotthrownoutonthegroundof limitation.Therefore,itisnecessarytoexamine,atleastprimafacie,whethertheassessee hasorhasnotacaseonmerits. ITAno.192-193/AHD/2021 A.Y.2011-12 6 6.7Fromtheabove,itistranspiredthatameritoriouscaseoftheassessee shouldnotbethrownawayduetonegligenceoronaccountoftechnicallapses. 6.8Inthelightoftheabovestateddiscussion,weproceedtoevaluatewhether thedelayinthepresentcaseneedstobecondonedinthegivenfactsand circumstances.Fromthemedicaldetailsfiledbytheassessee,wefindthatthe assesseewashavingoneortheothermedicalissuesrightfromthefinancialyears 2008-09to2019-20whichmaynotbeofseriousconcern,buttheill-healthofthe assesseecannotberuledout.Likewise,theassesseeintheaffidavithasalso submittedthathewasunderalotoffinancialstressandwasdeclaredasan insolvent.Furthermore,hewasrunningawayfromthepoliceandsociety.There wasalsoacaseagainsttheassesseeofchequebouncingasevidentfromthe detailsavailableonrecord.Ifweaggregateallthesefactors,thefactthatthe assesseewashavingastressfullifecannotberuledoutandassesseewasnotin soundmindtotakecorrectdecisionsonlegalproceedings. 6.9Besidestheabove,wenotethatallthecreditsintheformofchequeand cashdepositsinthebankaccountoftheassesseehasbeenaddedtothetotal incomeoftheassessee.TheAOhasdonesointheabsenceofanycooperation fromthesideoftheassesseedespitetheassesseebeingaffordedseveral opportunities.However,whatwefindisthisthatthereisnodiscussioninthe assessmentorderasfaraswithdrawnfromthebanksisconcerned.Thus,itis transpiredthatallthecreditsappearinginthebankhasbeentreatedasincomeof theassesseethoughtheassesseeduringtheassessmentproceedingsvideletter dated22January2014hassubmitteddetailswiththerequesttotaxtheincome undertheprovisionsofsection44AFoftheAct.Assuch,thereplysubmittedby theassesseevideletterdated22January2014wasrejectedbytheAOstating thatthedetailedfurnishedwasincompletebuthowwasitincomplete,theorderof theAOissilent.Itisthesettledlawthatonlythecreditsidesofthebankdonot ITAno.192-193/AHD/2021 A.Y.2011-12 7 representtheincome.TheHon’bleHIGHCOURTOFGUJARATinthecaseof PrincipalCommissionerofIncome-taxv.ShitalbenSaurabhVorareportedin133 taxmann.com441hasheldasunder: 9.2Wefurthernotethat,theRevenuehasnotbroughtanythingonrecordsuggestingthat theassesseehadsomuchoftheincomeascomputedbytheAO.AssuchtheAOwas undertheobligationtobringonrecordtodemonstratethattheassesseehasmadesome investmentorincurredsomeexpensesoutofsuchincome.Butthereisnosuch informationavailablewiththeRevenue.Indeed,theassesseehascertainlyhasviolated theprovisionsoflawbynotmaintainingthebooksofaccount,furnishingincometax return,providingsufficientdetailsbutthatdoesnotleadtoreachtheconclusionthatthe amountdepositedinthebankrepresentstheundisclosedincomeoftheassessee.Assuch, thedepositsinthebankcannotbetreatedasincomeonstandalonebasiswithout consideringthewithdrawal.Thusintheabsenceofanyinformationdemonstratingthatthe withdrawalfromthebankhasbeenutilizedbytheassesseeeitherintheformofsome investmentorthesamehasbeenincurredasanexpense,thedepositscannotbetreated asincomeinthegivenfactsandcircumstances.Thus,inourconsideredviewinsucha situationtheonlyoptionavailabletocomputetheincomeonsomereasonableestimate. 6.10TheaboveviewoftheHon’bleGujaratHighCourtwassubsequently affirmedbytheHon’bleSupremeCourtreportedin133taxmann.com442. 6.11Inviewoftheaboveweareoftheopinionthatitisthefitcasewherethe delayhastobecondonedirrespectiveoftheduration/periodofthedelay.Inthis case,thenon-filingofanaffidavitbytheRevenueforopposingthecondonationof delayitselfissufficientforcondoningthedelayof1607numberofdays.Wealso notethatthereisnoallegationfromtheRevenuethattheappealwasnotfiledby theassesseewithinthetimedeliberately.Therefore,weareinclinedtoprefer substantialjusticeratherthantechnicalityindecidingtheissue.Wealsofindthat ifwerejecttheapplicationoftheassesseeforcondoningthedelaythenitwould amounttolegaliseinjusticeontechnicalgroundwhereastheTribunaliscapableof removinginjusticeandtodojustice.Thus,wecondonethedelayof1607daysin filingtheappealandproceedtoheartheappealonmeritfortheadjudication. Now,weproceedtoadjudicatethematteronmerit: ITAno.192-193/AHD/2021 A.Y.2011-12 8 7.TheonlyissueraisedbyassesseeinthisappealisthatlearnedCIT-Aerred inconfirmingtheorderoftheAObysustainingtheadditionof₹54,23,290.00 undersection69oftheAct. 8.Attheoutset,itwasnoticedthattheorderpassedbytheld.CIT-Aandthe AOisex-parte.Furthermore,therewasalsodelayinfilingtheappealbeforethe ITATwhichhasbeencondonedintheprecedingparagraphaftergivingdetailed reasons.Thesamereasoningcanalsobeappliedfornon-appearanceofthe assesseebeforetherevenueauthoritieswhilerestoringtheissuetothefileofthe AOforfreshadjudicationaspertheprovisionsoflaw.Itisalsodirectedtothe assesseetoextendthefullco-operationduringtheassessmentproceedings. Hence,thegroundofappealfiledbytheassesseeisallowedforthestatistical purposes. 8.1Intheresult,theappealoftheassesseeisallowedforstatisticalpurposes. ComingITA193/AHD/2021forAY2011-12,anappealbytheasseesee. 9.TheonlyissueraisedbytheassesseeisthatthelandedCIT-Aerredin confirmingthepenaltyleviedbytheAOforRs.24,57,460undertheprovisionsof section271(1)(c)oftheAct. 10.Thepresentappealrelatingtothepenaltypreferredbytheassesseewas filedlateby1607days.However,thedelayinthequantumappealforthe identicalnumberofdayshasalreadybeencondonedwithdetailedreasoning discussedintheprecedingparagraphbearingnumber6ofthisorder.Therefore, thesamereasoningsarealsoadoptedforcondoningthedelayinfilingtheappeal bytheassessee.Thus,weproceedtoadjudicatetheissueraisedbytheassessee onmerit. ITAno.192-193/AHD/2021 A.Y.2011-12 9 11.Attheoutset,wenotethatthequantumadditionagainstwhichthepenalty undersection271(1)(c)oftheActwasimposedbytherevenueauthorities,such quantumadditionhasalreadybeensetasidetothefileoftheAOinITANo. 192/AHD/2021videparagraphnumber8ofthisorderforfreshadjudicationas pertheprovisionsoflaw.Accordingly,thepenaltyleviedinthecaseonhandis notsustainableandliabletobedeleted.TheAOisatthelibertytoproceedwith thepenaltyundersection271(1)(c)oftheActinpursuancetotheoutcomeofthe quantummatterdiscussedaboveandaspertheprovisionsoflaw.However,the penaltyimposedinthepresentcaseisnotsustainable.Hencethegroundof appealoftheassesseeisallowed. 11.1Intheresult,theappealfiledbytheassesseeisallowed. 12.Inthecombinedresult,theappealfiledbytheassesseeinITANo. 192/AHD/2021isallowedforthestatisticalpurposeswhereastheappealfiled bytheassesseeinITANo.193/AHD/2021isallowed. OrderpronouncedintheCourton28/03/2024atAhmedabad. Sd/-Sd/- (TRSENTHILKUMAR)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated28/03/2024 Manish