FERANI HOTELS PVT. LTD., MUMBAI V. DCIT - CC- 4 (1), MUMBAI

ITA 2022/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3902 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 05-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: THERIAN OOMENDR
• Keywords: Business income; Charitable institution; Deemed to accrue or arise in india; Reasonable cause; Difference of opinion; Condonation of delay; Rule 8D
• Section: 14A; 13; 22

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI PAVANKUMAR GADALE ( JM) I.T.A. NO. 2022/MUM/2019 (ASSESSMENT YEAR 2013-14) I.T.A. NO. 2023/MUM/2019 (ASSESSMENT YEAR 2014-15 ) FERANI HOTELS PVT. LTD. CONSTRUCTION HOUSE-B 2 ND FLOOR, 623, LINKING ROAD, KHAR-WEST MUMBAI-400 052. PAN : AAACF0693B VS. DCIT, CENTRAL CIRCLE-4(1) ROOM NO. 1906 19 TH FLOOR AIR INDIA BUILDING NARIMAN POINT MUMBAI-400 021. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI SANJAY SAWANT DEPARTMENT BY SHRI HEMANT KUMAR CHIMANLAL-CIT-DR & SHRI THERIAN OOMEN-DR DATE OF HEARING 09.07.2021 DATE OF PRONOUNCEMENT 04.10.2021 O R D E R PER SHAMIM YAHYA (AM) :- THESE ARE ASSESSEES APPEALS DIRECTED AGAINST THE O RDER OF LEARNED CIT(A) DATED 6.12.2017 FOR A.Y. 2013-14 & 2014-15. SINCE I SSUES ARE IDENTICAL IN BOTH THE YEARS. WE REFER GROUNDS IN A.Y. 2013-14. 2. THE GROUNDS OF APPEAL FOR A.Y. 2013-14 READ AS U NDER : 1. (A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) ERRED IN UPHOLDING THAT A.O. HAS RIGHTL Y ASSESSED DEEMED INCOME FROM UNSOLD UNITS/FLATS WHICH IS CLOSING STOCK OF THE APPELLANT AS PER PROVISIONS OF SECTIONS 22 AND 23 OF THE ACT, AND CON FIRMED ADDITION OF RS. 12,70,41,7807- UNDER THE HEAD 'INCOME FROM HOUSE PRO PERTY'. 1.(B) ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND AS WELL AS IN LAW, THE LEARNED CIT(A) ERRED IN NOT FOLLOWING THE JU RISDICTIONAL HON'BLE INCOME-TAX APPELLATE TRIBUNAL JUDGMENT IN THE CASE OF M/S. C.R. DEVELOPMENTS PVT. LTD. V/S JCIT-8(1)(OSD), MUMBAI (IT A NO. 42777 MUM/2012) WHICH WAS RELIED ON HON'BLE SUPREME COURT DECISION IN THE CASE OF CHENNAI PROPERTIES & INVESTMENTS LIMITED V/S CIT ( 2015) 373 ITR 673 (SC). FERANI HOTELS PVT. LTD. 2 3. BRIEF FACTS ARE THAT THE ASSESSEE FILED ITS RETU RN OF INCOME ON 30.09.2013 DECLARING A TOTAL INCOME OF RS. NIL, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAS EARNED DIVIDE ND INCOME OF RS 43,97,077/-. IT WAS FURTHER OBSERVED BY THE AO THAT THE ASSESSEE WAS MAINTAINING A COMMON POOL OF FUNDS AS WELL AS ACCOU NTS FOR ALL ITS ACTIVITIES. HE, THEREFORE, ASKED THE ASSESSEE AS TO WHY THE PRO VISIONS OF SEC. 14A R.W. RULE 8D MAY NOT BE APPLIED AND AFTER CONSIDERING THE REP LY OF THE ASSESSEE MADE A DISALLOWANCE OF RS. 34,83,905/- U/S. 14A R.W.R. 8D( 2)(III). FURTHER, IN DUE CONSIDERATION OF THE FACTS OF THE CASE, THE AO ADDE D A SUM OF RS. 18,14,88,257/- UNDER THE HEAD 'INCOME FROM HOUSE PR OPERTY' AS PER PROVISION OF SECTION 22 OF THE ACT BY ESTIMATING DEEMED RENT ON UNSOLD FLATS/ APARTMENTS OF ASSESSEE'S VARIOUS PROJECTS. THEREAFTER ALLOWING OF RS 12,70,41,780/- WAS ADDED AS 'INCOME FROM HOUSE PROPERTY'. FURTHER, THE AO RECOMPUTED THE CLAIM OF DEDUCTION U/S 80IB(10) ALLOWABLE TO THE ASSESSEE AFTER EXCLUDING THE INTEREST INCOME OF RS 8,37,772/-. 4. APROPOS THE ISSUE OF INCOME FROM HOUSE PROPERTY :- UPON ASSESSEES APPEAL LEARNED CIT(A) CONFIRMED THE ASSESSING OFFICERS ACTION AS UNDER :- 7.3 I HAVE CONSIDERED THE FACTS OF THE CASE, SUBMISSI ONS AND CONTENTIONS OF THE ASSESSEE, AS ALSO THE ORDER OF THE AO. IN THE CASE OF ANSAL HOUSING FINANCE & LEASING CO. LTD. (2013) 354 ITR 180, THE HO N'BLE DELHI HIGH COURT HAD DECIDED AN IDENTICAL ISSUE. THE RELEVANT PORTION OF THE JUDGEMENT IS REPRODUCED AS UNDER:- '13. IN THE PRESENT CASE, THE ASSESSEE IS ENGAGED I N BUILDING ACTIVITIES. IT ARGUES THAT FLATS ARE HELD AS PART OF ITS INVENT ORY OF STOCK-IN-TRADE, AND ARE NOT LET OUT. THE FURTHER ARGUMENT IS THAT U NLIKE IN THE OTHER INSTANCES, WHERE SUCH BUILDERS LET OUT FLATS, HERE THERE IS NO LETTING OUT AND THAT DEEMED INCOME - WHICH IS THE BASIS FOR ASS ESSMENT UNDER THE ALV METHOD, SHOULD NOT BE ATTRIBUTED. THIS COURT IS OF THE OPINION THAT THE ARGUMENT, THOUGH ATTRACTIVE CANNOT BE ACCEPTED. AS REPEATEDLY HELD, IN EAST INDIA, HOUSING & LAND DEVELOPMENT TRUST'S C ASE (SUPRA) SULTAN BROS'S CASE (SUPRA) AND KARAN PURA DEVELOPMENT CO. LTD. 'S CASE (SUPRA) THE LEVY OF INCOME TAX IN THE CASE OF ONE H OLDING HOUSE PROPERTY IS PREMISED NOT ON WHETHER THE ASSESSEE CARRIES ON BUSINESS, AS LANDLORD, BUT ON THE OWNERSHIP. THE INCIDENCE OF CH ARGE IS BECAUSE OF THE FACT OF OWNERSHIP. UNDOUBTEDLY, THE DECISION IN VIKRAM COTTON MILLS LTD.' CASE (SUPRA) INDICATES THAT IN EVERY CASE, TH E COURT HAS TO DISCERN FERANI HOTELS PVT. LTD. 3 THE INTENTION OF THE ASSESSEE; IN THIS CASE THE INTENTION OF THE ASSESSEE WAS TO HOLD THE PROPERTIES TILL THEY WERE SOLD. THE CAPACITY OF BEING AN OWNER WAS NOT DIMINISHED ONE WHIT, BECAUSE THE ASSE SSEE CARRIED ON BUSINESS OF DEVELOPING, BUILDING AND SELLING FLATS IN HOUSING ESTATES. THE ARGUMENT THAT INCOME TAX IS LEVIED NOT ON THE A CTUAL RECEIPT (WHICH NEVER AROSE IN THIS CASE) BUT ON A NOTIONAL BASIS, I.E. ALV AND THAT IT IS THEREFORE NOT SANCTIONED BY LAW, IN THE OPINION OF THE COURT IS MERITLESS. ALV IS A METHOD TO ARRIVE AT A FIGURE ON THE BASIS OF WHICH THE IMPOST IS TO BE EFFECTUATED. THE EXISTENCE OF AN ARTIFICIAL M ETHOD ITSELF WOULD NOT MEAN THAT LEVY IS IMPERMISSIBLE. PARLIAMENT HAS RES ORTED TO SEVERAL OTHER PRESUMPTIVE METHODS, FOR THE PURPOSE OF CALCU LATION OF INCOME AND COLLECTION OF TAX. FURTHERMORE, APPLICATION OF ALV TO DETERMINE THE TAX IS REGARDLESS OF WHETHER ACTUAL INCOME IS RECEIVED; IT IS PREMISED ON WHAT CONSTITUTES A REASONABLE LETTING VALUE, IF THE PROP ERTY WERE TO BE LEASED OUT IN THE MARKETPLACE. IF THE ASSESSEE'S CONTENTIO N WERE TO BE ACCEPTED, THE LEVY OF INCOME TAX ON UNOCCUPIED HOUSES AND FLA TS WOULD BE IMPERMISSIBLE - WHICH IS CLEARLY NOT THE CASE. 14. AS FAR AS THE ALTERNATIVE ARGUMENT THAT THE ASSESSEE ITSELF IS OC CUPIER, BECAUSE IT HOLDS THE PROPERTY TILL IT IS SOLD, IS CONCERNED, T HE COURT DOES NOT FIND ANY MERIT IN THIS SUBMISSION. WHILE THERE CAN BE NO QUARREL WITH THE PROPOSITION THAT 'OCCUPATION' CAN BE SYNONYMOUS WIT H PHYSICAL POSSESSION, IN .LAW, WHEN PARLIAMENT INTENDED A PRO PERTY OCCUPIED BY ONE WHO IS CARRYING ON BUSINESS, TO BE EXEMPTED FRO M THE LEVY OF INCOME TAX WAS THAT SUCH PROPERTY SHOULD BE USED FOR THE P URPOSE OF BUSINESS. THE INTENTION OF THE LAWMAKERS, IN OTHER WORDS, WAS THAT OCCUPATION OF ONE'S OWN PROPERTY, IN THE COURSE OF BUSINESS, AND FOR THE PURPOSE OF BUSINESS, I.E. AN ACTIVE USE OF THE PROPERTY, (INST EAD OF MERE PASSIVE POSSESSION) QUALIFIES AS 'OWN' OCCUPATION FOR BUSIN ESS PURPOSE. THIS CONTENTION IS, THEREFORE, REJECTED. THUS, THIS QUES TION IS ANSWERED IN FAVOUR OF THE REVENUE, AND AGAINST THE ASSESSEE.' 7.4. IT WOULD BE SEEN FROM THE ABOVE THAT AS IN THE P RESENT CASE, THE ASSESSEE IN THE CASE DECIDED BY THE HON'BLE DELHI HIGH COURT A LSO WAS ENGAGED IN THE BUSINESS OF CONSTRUCTION AND CERTAIN FLATS WERE HELD AS PART OF ITS INVENTORY OF STOCK-IN-TRADE. IN THE SAID CASE ALSO, THE ASSESSEE'S INTENTION WAS TO HOLD THE PROPERTIES TILL THEY ARE SOLD. FURTHER, IN THAT CASE, IT WAS ALSO CONTENDED BEFORE THE HON'BLE HIGH COURT THAT THE ASSESSEE ITSELF WA S OCCUPIER, BECAUSE IT WOULD HOLD THE PROPERTY TILL IT WAS SOLD. HOWEVER, THE HON'BLE COURT REJECTED ALL THE CONTENTIONS OF THE ASSESSEE AND UPH ELD THE ACTION OF THE AO IN ASSESSING DEEMED INCOME FROM THE UNSOLD FLATS. TH E FACTS AND CONTENTIONS OF THE ASSESSEE IN THE PRESENT CASE ARE IDENTICAL AND, THEREFORE, THE DECISION OF HON'BLE DELHI HIGH COURT IN THE ABOVE-MENTIONED CAS E IS SQUARELY APPLICABLE TO THIS CASE. 7.5. IT IS IMPORTANT TO NOTE HERE THAT WHILE DECIDING TH E ISSUE RAISED IN THE CASE OF CHENNAI PROPERTIES & INVESTMENTS LTD., THE HON 'BLE SUPREME COURT HAS ALSO DISCUSSED ABOUT THE JUDGMENT OF THE SAME COU RT IN THE CASE OF EAST INDIA HOUSING AND LAND DEVELOPMENT TRUST LTD., AS UN DER :- 'WITH THIS BACKGROUND, WE FIRST REFER TO THE JUDGME NT OF THIS COURT IN EAST INDIA HOUSING & LAND DEVELOPMENT TRUST LTD.'S CASE (SUPRA) WHICH FERANI HOTELS PVT. LTD. 4 HAS BEEN RELIED UPON BY THE HIGH COURT. THAT WAS A CASE WHERE THE COMPANY WAS INCORPORATED WITH THE OBJECT OF BUYING AND DEVELOPING LANDED PROPERTIES AND PROMOTING AND DEVELOPING MARK ETS. THUS, THE MAIN OBJECTIVE OF THE COMPANY WAS TO DEVELOP THE LA NDED PROPERTIES INTO MARKETS. IT SO HAPPENED THAT SOME SHOPS AND STALLS, WHICH WERE DEVELOPED BY IT, HAD BEEN RENTED OUT AND INCOME WAS DERIVED FROM THE RENTING OF THE SAID SHOPS AND STALLS. IN THOSE FACT S, THE QUESTION AROSE FOR CONSIDERATION WAS WHETHER THE RENTAL INCOME THA T IS RECEIVED WAS TO BE TREATED AS INCOME FROM THE HOUSE PROPERTY OR THE INCOME FROM THE BUSINESS. THIS COURT WHILE HOLDING THAT THE INCOME SHALL BE TREATED AS INCOME FROM THE HOUSE PROPERTY, RESTED ITS DECISION IN THE CONTEXT OF THE MAIN OBJECTIVE OF THE COMPANY AND TOOK NOTE OF THE FACT THAT LETTING OUT OF THE PROPERTY WAS NOT THE OBJECT OF THE COMPANY A T ALL. THE COURT WAS THEREFORE, OF THE OPINION THAT THE CHARACTER OF THA T INCOME WHICH WAS FROM THE HOUSE PROPERTY HAD NOT ALTERED BECAUSE IT WAS RECEIVED BY THE COMPANY FORMED WITH THE OBJECT OF DEVELOPING AND SE TTING UP PROPERTIES. 7.6. IN THE JUDGMENT IN THE CASE OF CHENNAI PROPERT IES & INVESTMENTS LTD., THE HON'BLE SUPREME COURT HAS ALSO DISCUSSED THE LAW LAID DOWN BY IT IN THE CASE OF KARANPURA DEVELOPMENT CO. LTD. VS. CIT, WEST BENGAL. THE RELEVANT PORTION OF THE JUDGMENT IS REPRODUCED AS UNDER:- ' BEFORE WE REFER TO THE CONSTITUTION BENCH JUDGMENT IN THE CASE OF SULTAN BROTHERS (P.) LTD. (SUPRA), WE WOULD BE WELL ADVISED TO DISCUSS THE LAW LAID DOWN AUTHORITATIVELY AND SUCCINCTLY BY THIS COURT IN 'KARANPURA DEVELOPMENT CO. LTD. V. CIT[19621 44 ITR 362 (SC). THAT WAS ALSO A CASE WHERE THE COMPANY, WHICH WAS THE AS SESSEE, WAS FORMED WITH THE OBJECT, INTER ALIA, OF ACQUIRING AN D DISPOSING OF THE UNDERGROUND COAL MINING RIGHTS IN CERTAIN COAL FIEL DS AND IT HAD RESTRICTED ITS ACTIVITIES TO ACQUIRING COAL MINING LEASES OVER LARGE AREAS, DEVELOPING THEM AS COAL FIELDS AND THEN SUB-LEASING THEM TO COLLIERIES AND OTHER COMPANIES. THUS, IN THE SAID CASE, THE LE ASING OUT OF THE COAL FIELDS TO THE COLLIERIES AND OTHER COMPANIES WAS TH E BUSINESS OF THE ASSESSEE. THE INCOME WHICH WAS RECEIVED FROM LETTIN G OUT OF THOSE MINING LEASES WAS SHOWN AS BUSINESS INCOME. DEPARTM ENT TOOK THE POSITION THAT IT IS TO BE TREATED AS INCOME FROM TH E HOUSE PROPERTY, IT WOULD BE THUS, CLEAR THAT IN SIMILAR CIRCUMSTANCES, IDENTICAL ISSUE AROSE BEFORE THE COURT. THIS COURT FIRST DISCUSSED THE SC HEME OF THE INCOME TAX ACT AND PARTICULARLY SIX HEADS UNDER WHICH INCO ME CAN BE CATEGORISED/CLASSIFIED. IT WAS POINTED OUT THAT BEF ORE INCOME, PROFITS OR GAINS CAN BE BROUGHT TO COMPUTATION, THEY HAVE TO B E ASSIGNED TO ONE OR THE OTHER HEAD. THESE HEADS ARE IN A SENSE EXCLUSIVE OF ONE ANOTHER AND INCOME WHICH FALLS WITHIN ONE HEAD CANNOT BE ASSIGN ED TO, OR TAXED UNDER, ANOTHER HEAD. THEREAFTER, THE COURT POINTED OUT THAT THE DECIDING FACTOR IS NOT THE OWNERSHIP OF LAND OR LEASES BUT T HE NATURE OF THE ACTIVITY OF THE ASSESSEE AND THE NATURE OF THE OPERATIONS IN RELATION TO THEM. IT WAS HIGHLIGHTED AND STRESSED THAT THE OBJ ECTS OF THE COMPANY MUST ALSO BE KEPT IN VIEW TO INTERPRET THE ACTIVITI ES. IN SUPPORT OF THE AFORESAID PROPOSITION, NUMBER OF JUDGMENTS OF OTHER JURISDICTIONS, I.E. PRIVY COUNSEL, HOUSE OF LORDS IN ENGLAND AND US COU RTS WERE TAKEN FERANI HOTELS PVT. LTD. 5 NOTE OF. THE POSITION IN LAW, ULTIMATELY, IS SUMMED UP IN THE FOLLOWING WORDS: 'AS HAS BEEN ALREADY POINTED OUT IN CONNECTION WITH THE OTHER TWO CASES WHERE THERE IS A LETTING OUT OF PREMISES AND COLLEC TION OF RENTS THE ASSESSMENT ON PROPERTY BASIS MAY BE CORRECT BUT NOT SO, WHERE THE LETTING OR SUB-LETTING IS PART OF A TRADING OPERATI ON. THE DIVING LINE IS DIFFICULT TO FIND; BUT IN THE CASE OF A COMPANY WIT H ITS PROFESSED OBJECTS AND THE MANNER OF ITS ACTIVITIES AND THE NATURE OF ITS DEALINGS WITH ITS. : PROPERTY, IT IS POSSIBLE TO SAY ON WHICH SIDE THE O PERATIONS FALL AND TO WHAT HEAD THE INCOME IS TO BE ASSIGNED.' 7.7. AFTER APPLYING THE AFORESAID PRINCIPLE TO THE FA CTS, WHICH WERE THERE BEFORE THE COURT, IT CAME TO THE CONCLUSION THAT INCOME HAD TO BE TREATED AS INCOME FROM BUSINESS AND NOT AS INCOME FROM HOUSE P ROPERTY. WE ARE OF THE OPINION THAT THE AFORESAID JUDGMENT IN KARANPURA DEVEL OPMENT CO. LTD.'S CASE (SUPRA) SQUAREIY APPLIES TO THE FACTS OF THE PRE SENT CASE. 7.8. IT IS ALSO RELEVANT TO REFER TO THE CONCLUDING PART OF THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIE S & INVESTMENTS LTD. THE RELEVANT PORTION OF THE JUDGEMENT IS REPRODUCED AS UNDER :- 'NO DOUBT IN SULTAN BROTHERS (P.) LTD.'S CASE (SUPR A), CONSTITUTION BENCH JUDGMENT OF THIS COURT HAS CLARIFIED THAT MERELY AN ENTRY IN THE OBJECT CLAUSE SHOWING A PARTICULAR OBJECT WOULD NOT BE THE DETERMINATIVE FACTOR TO ARRIVE AT AN CONCLUSION WHETHER THE INCOME IS TO BE TREATED AS INCOME FROM BUSINESS AND SUCH A QUESTION WOULD DEPEND UPON THE CIRCUMSTANCES OF EACH CASE, VIZ., WHETHER A PARTICU LAR BUSINESS IS LETTING OR NOT. THIS IS SO STATED IN THE FOLLOWING WORDS: 'WE THINK EACH CASE HAS TO BE LOOKED AT FROM A BUSI NESSMAN'S POINT OF VIEW TO FIND OUT WHETHER THE LETTING WAS THE DOING OF A BUSINESS OR THE EXPLOITATION OF HIS PROPERTY BY AN OWNER. WE DO NOT FURTHER THINK THAT A THING CAN BY ITS VERY NATURE BE A COMMERCIAL ASSET. A COMMERCIAL ASSET IS ONLY AN ASSET USED IN A BUSINESS AND NOTHING ELS E, AND BUSINESS MAY BE CARRIED ON WITH PRACTICALLY ALL THINGS. THEREFOR E, IT IS NOT POSSIBLE TO SAY THAT A PARTICULAR ACTIVITY IS BUSINESS BECAUSE IT IS CONCERNED WITH AN ASSET WITH WHICH TRADE IS COMMONLY CARRIED ON. W E FIND NOTHING IN THE CASES REFERRED, TO SUPPORT THE PROPOSITION THAT CERTAIN ASSETS ARE COMMERCIAL ASSETS IN THEIR VERY NATURE.' 7.9. IT WOULD BE SEEN FROM THE ABOVE THAT THE HON'BLE SU PREME COURT HAS HELD THAT FOR DECIDING THE ISSUE WHETHER INCOME FROM A PROPERTY IS TO BE ASSESSED AS BUSINESS INCOME OR INCOME FROM HOUSE PR OPERTY, THE DECIDING FACTOR IS THE NATURE OF THE ACTIVITY OF THE ASSESSEE AN D THE NATURE OF THE OPERATIONS IN RELATION TO THE PROPERTY. IN THE CASE OF EAST INDIA HOUSING AND LAND DEVELOPMENT TRUST LTD., THE ASSESSEE-COMPANY WAS INCORPORATED WITH THE OBJECT OF BUYING AND DEVELOPING LANDED PROPERTIE S AND PROMOTING AND DEVELOPING MARKETS. ACCORDINGLY, THE RENTAL INCOME F ROM SOME SHOPS AND STALLS DEVELOPED AND RENTED OUT BY THE ASSESSEE WAS HE LD TO BE ASSESSABLE AS INCOME FROM HOUSE PROPERTY. WHILE HOLDING SO, THE HO N'BLE COURT TOOK NOTE OF FERANI HOTELS PVT. LTD. 6 THE FACT THAT LETTING OUT OF THE PROPERTY WAS NOT THE OBJE CT OF THE ASSESSEE. SIMILARLY IN THE CASE OF KARANPURA DEVELOPMENT CO. L TD. V. CIT, THE ASSESSEE WAS ENGAGED IN THE ACTIVITY OF ACQUIRING COAL MINING LEASES OVER LARGE AREAS, DEVELOPING THEM AS COAL FIELDS AND THEN SUB-LEASING THEM TO COLLIERIES AND OTHER COMPANIES. THEREFORE, THE HON'BLE COURT HELD THA T THE INCOME RECEIVED FROM LETTING OUT OF MINING LEASES SHOULD BE TREATED AS INCOME FROM BUSINESS. FURTHER, IN THE CASE OF CHENNAI PROPERTIES & INVESTME NTS LTD. ALSO, IT WAS HELD THAT RENTAL INCOME RECEIVED FROM LETTING OUT OF PR OPERTIES SHOULD BE TREATED AS BUSINESS INCOME, OBSERVING THAT LETTING OUT OF THE PROPERTIES WAS THE BUSINESS OF THE ASSESSEE. THUS, IT IS CLEAR FROM THE JUDGEMENTS OF THE HON'BLE SUPREME COURT DISCUSSED ABOVE THAT INCOME EARN ED FROM LETTING OUT OF PROPERTY WILL BE ASSESSED AS INCOME FROM BUSINES S, ONLY IF THE ASSESSEE IS ENGAGED IN THE BUSINESS OF LETTING OUT OF PROPERTIES . IN THE PRESENT CASE, THE APPELLANT HAS NEVER TAKEN A STAND THAT IT IS ENGAGED IN TH E BUSINESS OF LETTING OUT OF PROPERTIES. A STATED ABOVE, IT IS CLEAR FROM THE STATEMENT OF FACTS FILED ALONG WITH FORM NO.35 AND WRITTEN SUBMISSIONS FILED BY THE APPELLANT DURING ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS THAT IT IS ENGAGED IN THE BUSINESS OF CONSTRUCTION OF PROPERTIES AND SALE THERE OF. IN FACT, IN THE SUBMISSIONS, THE APPELLANT HAS ALSO ADMITTED THAT IT WAS NEVER ITS INTENTION TO EARN INCOME BY LETTING OUT THE PREMISES. THEREFORE, THE RATIO OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF EAST INDIA HOUSING AND LAND DEVELOPMENT TRUST LTD. IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. FURTHER, THE FACTS IN THE PRESENT CASE ARE IDENTICA L TO THE FACTS IN THE CASE OF ANSAL HOUSING FINANCE & LEASING CO. LTD. DEC IDED BY THE HON'BLE DELHI HIGH COURT, AND, THEREFORE, THE SAID DECISION I S ALSO SQUARELY APPLICABLE TO THE PRESENT CASE. 7.10 IN VIEW OF THE DISCUSSION IN THE FOREGOING PARA GRAPHS, I HOLD THAT THE AO HAS RIGHTLY ASSESSED DEEMED INCOME FROM THE UNSOLD U NITS IN THE HANDS OF THE APPELLANT AS PER THE PROVISIONS OF SEC.22 AND 23 OF THE ACT. IT MAY BE MENTIONED HERE THAT BEFORE ME, THE APPELLANT HAS NOT OB JECTED TO THE AO'S WORKING OF ANNUAL LETTING VALUE AND COMPUTATION OF INCO ME FROM HOUSE PROPERTY. ACCORDINGLY, THE ADDITION OF RS. 12,70,41, 780/- MADE BY THE AO AFTER ADOPTING THE DEEMED RENTAL INCOME TO BE OF RS 18 ,14,88,257/- IS UPHELD AND THE GROUND OF APPEAL TAKEN BY THE APPELLAN T IS REJECTED. ACCORDINGLY, GROUND NOS. 3(A), (B) & (C) OF THE APPE AL OF THE ASSESSEE ARE DISMISSED. 5. AGAINST THE ABOVE ORDER ASSESSEE IS IN APPEAL BE FORE US. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. FERANI HOTELS PVT. LTD. 7 6. AT THE OUTSET IT IS NOTED THAT THERE IS DELAY OF 383 DAYS FOR FILING THE APPEAL BEFORE THE ITAT. AS REGARDS THE ISSUE OF CON DONATION OF THERE IS AN AFFIDAVIT BY A PERSON KNOWN KATHUBHAI NANUBHAI GAND HI STATING TO BE A CA AND AUDITOR OF THE COMPANY CLAIMING TO BE COUNSEL O F THE ASSESSEE THAT THE DELAY WAS ATTRIBUTABLE DUE TO HIS WRONG ADVICE. THE SAME READS AS UNDER :- 3. THAT FOR ASSESSMENT YEARS 2013 - 14 & 2014-15, THE APPELLANT-COMPANY HAD PREFERRED AN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AGAINST THE ORDERS PASSED BY THE ASSESSING OFFICER, MUMBAI. 4. THAT, THE ORDER IN RESPECT OF THE ABOVE SAID APPEA L BEFORE THE CIT(A) WAS PASSED ON 06.12.2017 RECEIVED BY THE APPELLANT-COMP ANY ON 17.01.2018. 5. THAT THE SAID APPEAL BEFORE THE HON'BLE ITAT FOR A Y 2013-14 & 2014-15 HAD TO BE FILED WITHIN 60 DAYS FROM THE DATE OF RECEIP T OF THE ORDER OF THE CIT(A), I.E., ON OR BEFORE 16.03.2018. HOWEVER, THE SAME HAD BEEN FILED BY APPELLANT-COMPANY ON 05.04.2019. 6. THUS THERE WAS A DELAY OF 383 DAYS IN FILING OF APPEAL BEFORE THE HONORABLE INCOME TAX APPELLATE TRIBUNAL. 7. THAT AN APPEAL HAD NOT BEEN FILED WITHIN STIPULATE D TIME DUE TO MY ADVISE TO THE APPELLANT COMPANY THAT NO FRUITFUL PURPOSE WOULD BE SERVED BY FILING AN APPEAL BEFORE HON'BLE TRIBUNAL SINCE THE HON'BLE HIGH COURT AND JURISDICTIONAL TRIBUNAL WAS AGAINST THE APPELLANT. 8. THAT NOW APPELLANT RECEIVED THE TRIBUNAL ORDER IN I TA NO. 6332/MUM/ 2016 DATED 21 ST DECEMBER 2018 ON 18 TH MARCH, 2019 WHEREIN IDENTICAL ISSUE WAS IN THE FAVOUR OF THE APPELLANT. THEREFORE, I HAVE IMMEDIATELY ADVISED TO FILE APPEAL AND PREPARE THE APPEAL MEMO AND FILED TH E APPEAL ON 4 TH APRIL, 2019. 9. THAT I UNDERSTAND THAT RELYING UPON A CONSULTANT IS A BONAFIDE CAUSE UPON THE APPELLANT AND THE APPELLANT SHOULD NOT SUFFER B ECAUSE OF MY ADVISE. 10. THAT THE APPELLANT HAS A GOOD CASE ON MERITS. 11. THAT THE DELAY IN FILING THE APPEAL MAY KINDLY BE CONDONED AND THE ISSUE INVOLVED MAY BE DECIDED ON MERITS OF THE CASE. 12. THAT I WOULD HUMBLY SUBMIT THAT NO MALA FIDE INTENTI ON OR DELIBERATE ATTEMPT IS INVOLVED IN DELAYING THE FILING OF APPEAL. 7. THERE IS A FURTHER SUBMISSION OF THE DIRECTOR OF THE COMPANY AS UNDER :- FERANI HOTELS PVT. LTD. 8 THE APPELLANT ONCE AGAIN SUBMIT, AT THE COST OF REPE TITION, THAT THE APPELLANT RECEIVED CIT (A)'S ORDER ON 17 TH JANUARY, 2018 AND APPEAL SHOULD HAVE BEEN FILED WITHIN 60 DAYS FROM RECEIPT OF THE SA ID ORDER I.E. ON OR BEFORE 16 TH MARCH, 2018. HOWEVER, THE APPEAL HAD BEEN FILED ON 4 TH APRIL, 2019. THEREFORE, THERE IS DELAY OF ABOUT 380 DAYS. THE APPE LLANT HUMBLY SUBMITS THAT THERE WAS NO CLARITY ON THE ISSUE AND OPINION/ADVI CE RECEIVED TO THE APPELLANT WHICH WILL REVEAL FROM AFFIDAVIT OF THE AUDI TOR FILED HEREWITH. MORE PARTICULARLY THE HON'BLE DELHI HIGH COURT HAD DECIDE D AN IDENTICAL ISSUE AGAINST THE APPELLANT IN THE CASE OF ANSAL HOUSING FINA NCE & LEASING CO. LTD. 354 ITR 180. FOLLOWING THE SAID DECISION EVEN I TAT MUMBAI ALSO HELD AGAINST THE APPELLANT'S SISTER CONCERN. THE COPY OF I TAT ORDER IN ITA NO. 5248/MUM/2016 AND ITA NO. 5249/MUM/2016 IS ATTACHED H EREWITH. THEREFORE, IT WAS ADVISED THAT NO FRUITFUL PURPOSE WO ULD BE SERVED BY FILING AN APPEAL BEFORE HON'BLE TRIBUNAL SINCE THE HON'BLE HI GH COURT AND JURISDICTIONAL TRIBUNAL WAS AGAINST THE APPELLANT. BUT THEREAFTER APPELLANT RECEIVED THE TRIBUNAL ORDER IN ITA NO. 6332/MUM/2016 DATED 21 ST DECEMBER 2018 ON 18 TH MARCH, 2019 WHEREIN IDENTICAL ISSUE WAS IN THE FAVOR OF THE APPELLANT. THE APPELLANT IMMEDIATELY THEREAFTER PREP ARE THE APPEAL MEMO AND FILED THE APPEAL ON 4 TH APRIL, 2019. EVEN THE APPELLANT'S SISTER CONCERN VIZ. PALM GROVE BEACH HOTELS PVT. LTD. FILED M.A. BE ARING NUMBER 97/MUM/2019 WHICH WAS DISMISSED AS UNADMITTED DUE TO BARRED BY LIMITATION VIDE ITAT ORDER DATED 05.04.2019. THE COPY OF THE SAID ITAT ORDER IS ATTACHED HEREWITH FOR YOUR PERUSAL & INFORMATION. TH E APPELLANT FURTHER SUBMIT THAT THERE IS NOT ANY APPEAL FILED BEFORE BOMBAY HIGH COURT IN THIS MATTER BY THE SAID PALM GROVE BEACH HOTEL PVT. LTD. THE APPELLANT FURTHER SUBMITS THAT THE DELAY IN FILING OF APPEAL IS DUE TO THE BONA FIDE AND GENUINE BELIEF AND NO MALA FIDES INTE NTIONS WERE INVOLVED IN FILING THE APPEAL LATE AND THE APPELLANT DOES NOT STAND TO BENEFIT BY FILING THE APPEAL LATE. THE APPELLANT HUMBLY SUBMITS TO TAKE A LIBERAL APPROACH WHERE DELAY HAS ; OCCURRED FOR 'BONA FIDE REASONS' ON THE PART OF THE A PPELLANT, OTHERWISE A REFUSAL TO CONDONED THE DELAY CAN RESULT IN A MERITORI OUS MATTER BEING THROWN OUT AT THE THRESHOLD, WHICH MAY LEAD TO MISCARRIAG E OF JUSTICE. THE JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOV ING INJUSTICE. THE APPELLANT RELY ON THE HON'BLE SUPREME COURT CELE BRATED DECISION IN THE CASE COLLECTOR, LAND ACQUISITION VS MST. KATIJI & ORS. (1987) 167 ITR 471 WHEREIN IT WAS OPINED THAT WHEN TECHNICAL CONSIDERATI ONS AND SUBSTANTIAL JUSTICE ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBS TANTIAL JUSTICE DESERVES TO BE PREFERRED. THE APPELLANT ALSO RELY ON HON'BLE BOMBAY HIGH COURT DECISION IN ARTIS TREE PVT. LTD. VS. CBDT & ORS. (2015) 369 ITR 691, WHEREI N IT WAS HELD THAT IF THE ACCEPTABLE EXPLANATION IS OFFERED AND A CASE OF GE NUINE HARDSHIP, DELAY HAS TO BE CONDONED. THE APPELLANT FURTHER RELY ON THE HON'BLE MADHYA PRADE SH HIGH COURT IN MAHAVEER PRASAD JAIN VS. CIT (1988) 172 ITR 331, WH EREIN IT WAS HELD THAT FERANI HOTELS PVT. LTD. 9 APPLICANT CANNOT BE MADE TO SUFFER FOR THE NEGLIGENCE OF HIS COUNSEL BY FOLLOWING THE DECISION OF HON'BLE APEX COURT IN RAF IQ VS. MUNSILAL (AIR 1981 (SC) 1400). IDENTICALLY, JURISDICTIONAL TRIBUNAL IN THE CASE OF Y. P. TRIVEDI VS. JCIT (ITA NO. 5994/M/2010, ORDER DATED 11.07.2012), IT WAS HELD THAT THE ASSESSEE SHOULD NOT SUFFER AND A BONA-FIDE MISTAKE HA S TO BE CONDONED. THE APPELLANT FURTHER RELY ON FOLLOWING JURISDICTIONA L TRIBUNAL DECISIONS FOR CONDONATION DELAY OF FILING OF APPEAL: I) ANANDKUMAR JAIN VS. ITO, WARD 18(2)(20, MUMBAI. (ITA NO. 4192/MUM/2012; ORDER DATED 20.08.2019), II) M/S LAHOTI OVERSEAS LTD. VS DCIT ASR / 2015- 4 (2), MUMBAI. (ITA NO. 3786/MUM 72012; ORDER DATED 18.03.2016) III) PHOENIX MILLS LTD. VS. ASST. CIT, CIRCLE 7(1), MUMBAI (ITA NO. 6240/M/ 2007 ORDER DATED 23.3.2020). THE APPELLANT WOULD LIKE TO FURTHER RELY ON FOLLOWING DECISIONS FOR CONDONATION DELAY OF FILING OF APPEAL: 1) COLLECTOR, LAND ACQUISITION VS MST. KATIJI & ORS. (1 987)167ITR471(SC) 2) CONCORD OF INDIA INSURANCE CO. LTD. VS SMT. NIRM ALA DEVI [1979] 118 ITR 507 (SC) 3) VIJAY VISHIN MEGHANI VS DY. CIT & ANR. [2017] 39 8 ITR 250( BOM) 4) MERCEDES BENZ EDUCATION ACADEMY VS. ITO. WARD-11( 1), PUNE. ITA NO. 745/PUN/2015; ORDER DATED 17.05.2019 5) M/S BHAGWATI COLONIZERS PVT. LTD. VS. THE ITO, W ARD-1(4), MANSA. ITA NO. 169, ORDER DATED 22.10.2019 THE APPELLANT HUMBLY PRAYS THAT, BASED ON THE TOTALITY OF THE FACTS & CIRCUMSTANCES STATED HEREIN ABOVE AND IN MEMORANDUM O F CONDONATION OF DELAY AND AFFIDAVITS FILED AND VARIOUS CASE LAWS REL IED UPON, THE TRIBUNAL MAY TAKE A LIBERAL APPROACH AND FURTHER PRAYS TO CONDON D ELAY OF FILING OF APPEAL. 8. PER CONTRA LEARNED DEPARTMENTAL REPRESENTATIVE O BJECTED TO CONDONATION OF DELAY. HE SUBMITTED AS UNDER :- 2) ISSUE BEFORE HON'BLE BENCH WAS FIRSTLY 'CONDONATI ON OF DELAY' AND SUBSEQUENTLY ON MERITS ON ACCOUNT OF ANNUAL LETTING V ALUE OF UNSOLD FLATS AS INCOME FROM HOUSE PROPERTY. 3) THIS IS TO SUBMIT BEFORE YOUR HONOUR THAT FOR CONDO NATION OF DELAY - APPELLANT SHOULD DEMONSTRATE 'SUFFICIENT CAUSE', WHICH HAS BEEN NOW WELL CATALOGUED IN CATENA OF JUDGMENTS. ABOVE ALL SUFFICIE NT CAUSE SHOULD BE FERANI HOTELS PVT. LTD. 10 BACKED BY COMING BEFORE HON'BLE ITAT WITH CLEAN SLAT E, STATING ALL FACTS ON RECORD AS THEY EXISTED. 4) APPELLANT HAS AFFIRMED AS DEPONENT IN AFFIDAVIT ON RECORD THAT APPEAL BEFORE THE ITA T COULD NOT BE FILED WITHIN THE STIPULAT ED TIME AS THERE WAS NO CLARITY ON THE ISSUE WHETHER THE ANNUAL LETTING VALUE OF UNSOLD FLATS', HOWEVER, IT MAY KINDLY BE NOTED THAT C.R. DEVELOPMEN TS PVT. LTD. ITA NO.4277/M/2012 ORDER DATED 13.05.2015 FOR AY 2009-1 0 WAS ALREADY AVAILABLE TO APPELLANT TO TAKE SUPPORT TO FILE APPEAL B EFORE HON'BLE ITAT. IT MAY KINDLY BE NOTED THAT AS PER REPRESENTATION MADE ON 25.03.2021 BEFORE HON'BLE BENCH, NO APPEAL IS FILED BEFORE HON'BLE HC . 5) AN AFFIDAVIT WAS FILED ON RECORD BY APPELLANT ON 0 2.03.2020, FROM WHICH PARA 6 AND 7 REPRODUCED BELOW FOR READY REFERENCE: - 6. THAT, THE APPEAL BEFORE THE ITA T COULD NOT BE FILED WITHIN THE STIPULATED TIME AS THERE WAS NO CLARITY ON THE ISSU E WHETHER THE ANNUAL LETTING VALUE OF UNSOLD FLATS (WHICH IS THE CLOSING STOCK OF CONSTRUCTION COMPANIES/BUILDERS) IS TAXABLE OR NOT AND THERE WER E DIFFERENCE OF OPINIONS AND DECISIONS. IN THE SAID CIRCUMSTANCES T HERE WAS DELAY IN TAKING DECISION TO FILE THE APPEAL. 7. THAT, IN THE PRECEDING ASSESSMENT YEAR I.E. A. Y ., 2012-13, THE ISSUE INVOLVED WAS IDENTICAL TO THE PRESENT ASSESSMENT YE AR AND THE APPEAL WAS FILED BY THE APPELLANT-COMPANY AGAINST A SIMILA R ORDER OF THE CIT(A) WITHIN THE PRESCRIBED TIME LIMIT. THE HON'BL E ITA T BY ITS ORDER DATED 21.12.2018 IN ITA NO. 6332/MUM/20 16 ALLOWED THE APPEAL OF THE APPELLANT-COMPANY IN FAVOUR OF THE APPELLANT-CO MPANY. IN AFFIDAVIT, APPELLANT HAS QUOTED ORDER IN ITS OWN CA SE, WHEREIN RELIEF HAS BEEN GRANTED BY HON'BLE ITAT, MUMBAI. FURTHER, APPELLANT HAS ALSO SENT AN EMAIL ON 24.03.202 1 AT 6.30 PM AFTER OFFICE HOURS, TO HON'BLE BENCH COPY MARKED TO CIT DR' S OFFICIAL EMAIL ID, WHEREIN FOLLOWING ORDERS OF HON'BLE ITAT MUMBAI HAV E BEEN ENCLOSED. FERANI HOTELS PVT. LTD. 11 COPIES OF DECISION ARE ATTACHED WITH EMAIL FOR KIND P ERUSAL FROM ABOVE ORDERS AND SEQUENCE, FOLLOWING FACTS EMER GE - A) ORDERS IN CASE OF PALM GROVE BEACH HOTELS PVT. L TD. AND MAKEWAVES SEA RESORTS PVT. LTD.AT SR.NO. 1 AND 2 IN FAVOUR OF REVE NUE WERE AVAILABLE AT THE TIME OF PASSING OF SUBSEQUENT ORDERS AT SR.NO.3 AND 4 ; HOWEVER, THEY WERE NOT BOUGHT TO KIND ATTENTION OF RESPECTIVE BENCHES BEFORE ORDERS WERE PASSED IN CASES MENTIONED AT SR. NO. 3 AND 4. B) IN FACT, ORDERS WHICH WERE IN FAVOUR OF REVENUE WERE SUBMITTED BEFORE HON'BLE BENCH VIDE EMAIL DATED 24.04.2021, WELL AFT ER OFFICE HOURS AT 6.30 PM FOR HEARING ON 25.03.2021. C) BE THAT AS MAY BE, SIRS, THIS HAS CREATED A PIQUAN T SITUATION. AT THIS JUNCTURE, IT WOULD BE WORTHWHILE TO LOOK AT RATIO LAID D OWN IN CASE OF COMMISSIONER OF INCOME TAX VS. THANA ELECTRICITY SUPPLY LTD. 206 ITR 727. A P ORTION OF HEADNOTE IS REPRODUCED AS BELOW FOR A READY REFERENCE - 'PRECEDENTHIGH COURT DECISIONBINDING NATURESINGLE JUDGE IS BOUND BY DECISION OF SINGLE JUDGE OR DIVISION BENCH OF SAME HIGH COURT DIVISION BENCH BY DIVISION BENCH OR FULL COURT DECISIONS AND INCASE OF DIFFERENCE OF OPINION, QUESTION SHOULD BE REFERRED TO LARGER BENCH ' FERANI HOTELS PVT. LTD. 12 THE ABOVE PRINCIPLE ELUCIDATED IN PARA 17 OF THE DE CISION IS EXPLAINED AS FOLLOWS IN HELD PORTION OF DECISION: - 'A SINGLE JUDGE OF A HIGH COURT IS BOUND BY THE DECIS ION OF ANOTHER SINGLE JUDGE OR A DIVISION BENCH OF THE SAME HIGH CO URT. IT WOULD BE JUDICIAL IMPROPRIETY TO IGNORE THAT DECISION. JUDICIA L COMITY DEMANDS THAT A BINDING DECISION TO WHICH HIS ATTENTION HAD BEE N DRAWN SHOULD NEITHER BE IGNORED NOR OVERLOOKED. IF HE DOES NOT F IND HIMSELF IN AGREEMENT WITH THE SAME, THE PROPER PROCEDURE IS TO REF ER THE BINDING ] DECISION AND DIRECT THE PAPER S T O BE PLACED BEFOR E THE CHIEF JUSTICE TO ENABLE HIM TO CONSTITUTE A LARGER BENCH TO EXAMINE THE QUESTION. A DIVISION BENCH OF A HIGH COURT SHOULD FOLLOW THE DECI SION OF ANOTHER DIVISION BENCH OF EQUAL STRENGTH OR A FULL BENCH OF THE SAME HIGH COURT. IF ONE DIVISION BENCH DIFFERS WITH ANOTHER DIV ISION BENCH OF THE SAME HIGH COURT. IT SHOULD REFER THE CASE TO A LARGER BENCH. WHERE THERE ARE CONFLICTING DECISIONS OF COURTS OF CO-ORDINA TE JURISDICTION, THE LATER DECISION IS TO BE PREFERRED IF REACHED AFTER F ULL CONSIDERATION OF THE EARLIER DECISION. FOOD CORPORATION OF INDIA VS. YADAV ENGINEER & CONT RACT OR AIR 1982 SC 1302 RELIED ON' ABOVE CLEARLY LAYS DOWN RATIO THAT IF THERE ARE CONFL ICTING DECISIONS AVAILABLE, THEY SHOULD BE INVARIABLY FOLLOWED BY BENCHES OF SIM ILAR STRENGTH. IF THERE IS A DIFFERENCE OF OPINION, IT SHOULD BE REFERRED TO A L ARGER BENCH. FURTHER, IN CASE OF CONFLICTING DECISIONS LATER DECISION BE PRE FERRED 'IF' (EMPHASIS ADDED BY UNDERSIGNED) IT IS REACHED AFTER CONSIDERING EAR LIER DECISIONS. APPELLANT FAILED TO BRING TO CONFLICTING DECISIONS TO NO TICE OF HON'BLE BENCHES OVER A PERIOD OF TIME. HENCE, IT IS HUMBLY PRAYED TH AT FOLLOWING JURISDICTIONAL HC'S DECISION IN CASE OF THANA ELECTRICITY, MATTER S HOULD BE REFERRED TO A LARGE BENCH FOR DELIBERATION, (THAT TOO PRESUMING CO NDONATION OF DELAY IS ALLOWED) 6) THE FOLLOWING CASE LAWS IN FAVOUR OF REVENUE ON ISSUE OF CONDONATION AND ON MERITS REGARDING ANNUAL LETTING VALUE OF UNSOLD FL ATS AS INCOME FROM HOUSE PROPERTY ARE ENCLOSED FOR KIND PERUSAL. FERANI HOTELS PVT. LTD. 13 9. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS ON THIS ISSUE OF CONDONATION OF DELAY. AS EVIDENT THERE IS DELAY OF 383 DAYS IN FILING THIS APPEAL BEFORE THE ITAT. AS REGARDS REASONABLE CAUSE FOR DE LAY IT IS SUBMITTED THAT IN ASSESSEES SAID COUNSELS OPINION AND IN ASSESSEES OPINION THAT SINCE THE ISSUE WAS AGAINST THE ASSESSEE BY IN HON'BLE HIGH COURT A ND HON'BLE JURISDICTIONAL TRIBUNAL IT WAS EARLIER DECIDED THAT SO NO FRUITFUL PURPOSE WAS SERVED BY FILING FERANI HOTELS PVT. LTD. 14 AN APPEAL. HOWEVER, THE ASSESSEE CONTENDS THAT ON 1 8.3.2019 ASSESSEE RECEIVED A DECISION OF ITAT WHICH WAS IN FAVOUR OF THE ASSESSEE AND HENCE ASSESSEE FILED APPEAL BEFORE ITAT ON 4.4.2019. IT M AY ALSO BE NOTED THAT ADVICE TO THIS EFFECT IS SAID TO HAVE BEEN BY THE AUDITOR AND NOT BY THE TAX CONSULTANT/ADVOCATE WHO HAS APPEARED BEFORE LEARNED CIT(A) AND ITAT AND IN OTHER GROUP CASES OF THE ASSESSEE. 10. HOWEVER, LEARNED DEPARTMENTAL REPRESENTATIVE IN REJOINDER HAS POINTED OUT THAT THIS IS TOTALLY AN AFTERTHOUGHT AND IT IS A MISLEADING STATEMENT THAT THE APPEAL BEFORE THE ITAT COULD NOT BE FILED WITHI N STIPULATED TIME AS THERE WAS NO CLARITY ON THE ISSUE OF THE ANNUAL LETTING V ALUE OF UNSOLD FLATS. LEARNED DEPARTMENTAL REPRESENTATIVE POINTED OUT THAT DECISI ON IN C.R. DEVELOPMENTS PVT. LTD. (ITA NO. 4277/MUM/2012 VIDE ORDER DATED 1 3.5.2015 FOR A.Y. 2009- 10) WAS ALREADY AVAILABLE TO THE ASSESSEE TO TAKE S UPPORT TO FILE APPEAL BEFORE THE ITAT. HOWEVER, CIT-DR HAS POINTED OUT THAT THER E WERE BOTH DECISIONS IN FAVOUR OF THE ASSESSEE AND AGAINST THE ASSESSEE IN ASSESSEES OWN GROUP CASES AND ARGUED BY SAME ASSESSEES COUNSEL. HENCE, SUBMI SSION OF DR IS THAT THE ASSESSEE HAS TAKEN CONSCIOUS DECISION NOT TO FILE A PPEAL BEFORE THE ITAT AND THEREAFTER HAS CHANGED THE VIEW AND FILED AN APPEAL AFTER A DELAY OF 383 DAYS. HENCE IT IS THE REVENUES PLEA THAT THE DELAY IS NO T AT ALL EXPLAINED. 11. WE NOTE THAT IN FACT THERE WAS CONSIDERABLE DEL AY IN FILING THE APPEAL. FACTS ON RECORD CLEARLY INDICATE THAT THE ASSESSEE HAS CONSCIOUSLY DECIDED NOT TO FILE THE APPEAL. UNDOUBTEDLY THERE WAS DELAY OF 383 DAYS IN FILING THE APPEAL BEFORE THE ITAT. THE REASON NOT TO FILE THE APPEAL WITHIN STIPULATED TIME IS THAT THE ONLY DECISION OF HON'BLE DELHI HIGH COURT IN TH E CASE OF ANSAL HOUSING FINANCE & LEASING CO. LTD. (SUPRA) WAS AVAILABLE AN D THAT WAS AGAINST THE ASSESSEE. THE ASSESSEES PLEADING THAT DECIDED TO FILE THE APPEAL ONLY AFTER RECEIPT OF PARTICULAR ITAT ORDER IS NOT CONVINCING AS IT WAS NOT THE FIRST CASE IN WHICH THE ITAT HAS DECIDED THE ISSUE IN FAVOUR OF T HE ASSESSEE. THERE WERE ALREADY OTHER ITAT DECISIONS WHICH WERE IN FAVOUR O F THE ASSESSEE. HOWEVER, ASSESSEE HAS CONSCIOUSLY DECIDED NOT TO FILE THE AP PEAL. AS THERE WERE FERANI HOTELS PVT. LTD. 15 CONFLICTING DECISION OF THE TRIBUNAL AND ONLY DECIS ION ON THE SPECIFIC ISSUE WAS OF HON'BLE DELHI HIGH COURT AND IT WAS AGAINST THE ASSESSEE. NOW CONSCIOUS DECISION NOT TO FILE THE APPEAL BY NO STRETCH OF IM AGINATION CAN BE SAID TO BE A MATTER OF TECHNICAL CONSIDERATION. THUS THE ASSESSE E HAD DECIDED NOT TO FILE THE APPEAL AS THE ONLY HIGH COURT DECISION WHICH WAS AV AILABLE ON THE SPECIFIC ISSUE WAS THAT OF HON'BLE DELHI HIGH COURT AND THAT WAS AGAINST THE ASSESSEE. THEN AFTER DELAY OF 383 DAYS WHEN THE ASSESSEE CHAN GES ITS MIND TO TAKE A CHANCE BEFORE THE TRIBUNAL, BY NO STRETCH OF IMAGIN ATION IT CAN BE SAID TO BE REASONABLE CAUSE. ON SIMILAR ISSUE HON'BLE THIRD ME MBER DECISION OF ITAT CHENNAI IN TRACTORS & FARM LTD. (104 ITD 149) HAS C ONSIDERED BY HON'BLE APEX COURT DECISION ON THIS ISSUE AND HELD AS UNDER :- 4. THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY RE LIED ON THE DECISION OF THE APEX COURT RENDERED IN THE CASE OF MST. KATIJI (SUPRA ), WHEREIN IT WAS HELD THAT WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTH ER SIDE CANNOT CLAIM TO HAVE A VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DELAY. IN THIS CASE AN APPEAL PREFERR ED BY THE STATE OF JAMMU & KASHMIR ARISING OUT OF A DECISION ENHANCING COMPENS ATION IN RESPECT OF ACQUISITION OF LANDS FOR A PUBLIC PURPOSE TO THE EXT ENT OF NEARLY 14 LAKHS RUPEES BY MAKING AN UPWARD REVISION OF THE ORDER OF 800 PE R CENT WHICH ALSO RAISED IMPORTANT QUESTIONS AS REGARDS PRINCIPLES OF VALUATION WAS DISMISSED AS TIME BARRED BEING 4 DAYS BEYOND TIME BY REJECTING AN APPLI CATION FOR CONDONATION OF DELAY. HENCE THE COLLECTOR OF LAND ACQUISITION FILED APPEAL BY SPECIAL LEAVE BEFORE THE APEX COURT. THE HON'BLE SUPREME COURT HEL D THAT THERE IS NO WARRANT FOR ACCORDING A STEP-MOTHERLY TREATMENT WHEN THE STATE IS THE APPLICANT PRAYING FOR CONDONATION OF DELAY. IN FACT EX PERIENCE SHOWS THAT ON ACCOUNT OF AN IMPERSONAL MACHINERY AND THE INHERITED BUREAUCRATIC METHODOLOGY IMBUED WITH THE NOTE-MAKING, FILE-PUSHING , AND PASSING-ON-THE- BUCK ETHOS, DELAY ON ITS PART IS LESS DIFFICULT TO UNDE RSTAND THOUGH MORE DIFFICULT TO APPROVE. IN ANY EVENT, THE STATE WHICH REP RESENTS THE COLLECTIVE CAUSE OF THE COMMUNITY, DOES NOT DESERVE LITIGANT NON -GRATA STATUS. THE COURTS, THEREFORE, HAVE TO BE INFORMED OF THE SPIRIT AND PHILOS OPHY OF THE PROVISION IN THE COURSE OF THE INTERPRETATION OF THE EXPRESSION 'SU FFICIENT CAUSE'. SO ALSO THE SAME APPROACH HAS TO BE EVIDENCED IN ITS APPLICATION TO MATTERS AT HAND WITH THE END IN VIEW TO DO EVEN-HANDED JUSTICE ON MERITS IN PREFERENCE TO THE APPROACH WHICH SETTLES A DECISION ON MERITS. ON FACTS IT WAS FOUND THAT THERE EXISTED SUFFICIENT CAUSE FOR THE DELAY. THEREFORE, TH E ORDER OF THE HIGH COURT DISMISSING THE APPEAL BEFORE IT AS TIME BARRED WAS SE T ASIDE AND THE DELAY OF 4 DAYS WAS CONDONED. 5. IN THE CASE OF SREENIVAS CHAR ITABLE TRUST (SUPRA) THE ASSESSEE WAS A CHARITABLE TRUST. THE COPY OF THE ORDER SERVED ON THE ASSESSEE WAS MISPLACED AND THEREAFTER IT WAS FOUND AND SENT TO T HE COUNSEL FOR PREPARING THE APPEAL AND THEN THE APPEAL WAS PREPAR ED AND FILED BEFORE THE TRIBUNAL AND IN THAT PROCESS THE DELAY OF 38 DAYS OCC URRED. THE DELAY OF 38 FERANI HOTELS PVT. LTD. 16 DAYS WAS CONDONED BY THE APEX COURT IN VIEW OF THE DE CISION OF THE APEX COURT RENDERED IN THE CASE OF VEDABAI ALIAS VAIJAYANATBAI BABURAO PATIL (SUPRA). IN THIS CASE IT WAS HELD THAT IN EXERCISING DISCRETION UN DER SECTION 5 OF THE LIMITATION ACT THE COURTS SHOULD ADOPT A PRAGMATIC APPR OACH. A DISTINCTION MUST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDI NATE AND A CASE WHERE THE DELAY IS OF A FEW DAYS. WHEREAS IN THE FORMER CAS E THE CONSIDERATION OF PREJUDICE TO THE OTHER SIDE WILL BE A RELEVANT FACTOR SO THE CASE CALLS FOR A MORE CAUTIOUS APPROACH BUT IN THE LATTER CASE NO SUCH CONSID ERATION MAY ARISE AND SUCH A CASE DESERVES A LIBERAL APPROACH. NO HARD AN D FAST RULE CAN BE LAID DOWN IN THIS REGARD. THE COURT HAS TO EXERCISE THE DIS CRETION ON THE FACTS OF EACH CASE KEEPING IN MIND THAT IN CONSIDERING THE EXPR ESSION 'SUFFICIENT CAUSE', THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANCE. 6. IT IS PERTINENT TO NOTE THAT IN THE CASE OF MST. KATIJ I (SUPRA) THE DELAY WAS ONLY FOUR DAYS. IN THE CASE OF VEDABAI ALIAS VAI JAYANATABAI BABURAO PATIL (SUPRA) THERE WAS A DELAY OF SEVEN DAYS IN FILING THE APPEAL. IN THIS CASE THE APEX COURT CLEARLY LAID DOWN THAT A DISTINCTION MUST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDINATE AND A CASE WHERE THE D ELAY IS OF A FEW DAYS. THE LAW ASSISTS THOSE WHO ARE VIGILANT, NOT THOSE WHO SLEE P OVER THEIR RIGHTS. THIS PRINCIPLE IS EMBODIED IN THE DICTUM: VIGILANTIBUS NON DORMIENTIBUS JURA SUBVENIUNT. 7. THE DELAY CANNOT BE CONDONED SIMPLY BECAUSE THE AP PELLANT'S CASE IS HARD AND CALLS FOR SYMPATHY OR MERELY OUT OF BENEVOLENCE TO THE PARTY SEEKING RELIEF. IN GRANTING THE INDULGENCE AND CONDONING THE DELAY IT MUST BE PROVED BEYOND THE SHADOW OF DOUBT THAT THE APPELLANT WAS DILIG ENT AND WAS NOT GUILTY OF NEGLIGENCE WHATSOEVER. THE SUFFICIENT CAUS E WITHIN THE CONTEMPLATION OF THE LIMITATION PROVISION MUST BE A CA USE WHICH IS BEYOND THE CONTROL OF THE PARTY INVOKING THE AID OF THE PROVIS IONS. THE HON'BLE SUPREME COURT IN THE CASE OF RAMLAL V. REWA COALFIEL DS LTD. AIR 1962 SC 361 HAS HELD THAT THE CAUSE FOR THE DELAY IN FILING TH E APPEAL WHICH BY DUE CARE AND ATTENTION COULD HAVE BEEN AVOIDED CANNOT BE A SUFFICIENT CAUSE WITHIN THE MEANING OF THE LIMITATION PROVISION. WHERE N O NEGLIGENCE, NOR INACTION, OR WANT OF BONA FIDES CAN BE IMPUTED TO THE APPELLANT A LIBERAL CONSTRUCTION OF THE PROVISIONS HAS TO BE MADE IN ORDE R TO ADVANCE SUBSTANTIAL JUSTICE. SEEKERS OF JUSTICE MUST COME WITH CLEAN HAND S. 8. IN THE PRESENT CASE I FIND THAT THE ASSESSEE JUSTIFI ED THE DELAY ONLY WITH REFERENCE TO THE AFFIDAVIT OF SHRI M.L.S. RAO, DIRECTOR OF THE COMPANY. IN THE SAID AFFIDAVIT MR. RAO STATED THAT THE COMMISSIONER (APP EALS)'S ORDER WAS MISPLACED AND FORGOTTEN. IT WAS FOUND WHILE SORTING OUT THE UNWANTED PAPERS. THEREAFTER STEPS WERE TAKEN FOR THE PREPARATIO N OF THE APPEAL. CONSEQUENTLY THE DELAY WAS CAUSED. THIS CLEARLY SHO WS THAT THE DELAY WAS DUE TO THE NEGLIGENCE AND INACTION ON THE PART OF THE A SSESSEE. THE ASSESSEE COULD HAVE VERY WELL AVOIDED THE DELAY BY THE EXERC ISE OF DUE CARE AND ATTENTION. IN MY OPINION THERE EXISTS NO SUFFICIENT AND GOOD REASON FOR THE DELAY OF 310 DAYS. 12. EXAMINING THE PRESENT CASE ON THE TOUCHSTONE OF THE ABOVE SAID DECISION, WE FIND THAT THE RATIO FROM THE ABOVE SAI D DECISION IS FULLY FERANI HOTELS PVT. LTD. 17 APPLICABLE HEREINABOVE. THE ABOVE SAID DECISION ALS O DRAWS SUPPORT FROM HON'BLE SUPREME COURT DECISIONS. AS ALREADY EXAMINE D BY US REASONABLE CAUSE FOR THE DELAY ATTRIBUTED BY THE ASSESSEE HAS NOT BEEN FOUND BY US TO BE ACCEPTABLE. HENCE, WE DECLINE TO CONDON THE DELA Y IN FILING THE APPEAL. HENCE, THE APPEAL IS DISMISSED IN LIMINE. 13. AS THE APPEAL HAS BEEN DISMISSED IN LIMINE ON A CCOUNT OF NON- CONDONATION OF DELAY, MERITS OF APPEAL ARE NOT BEIN G ADJUDICATED. 14. IN THE RESULT, THESE APPEALS BY THE ASSESSEE ST AND DISMISSED. PRONOUNCED IN THE OPEN COURT ON 4.10.2021. SD/- SD/- (PAVANKUMAR GADALE) (SHAM IM YAHYA) JUDICIAL MEMBER ACCO UNTANT MEMBER MUMBAI; DATED : 4/10/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI