M/s. DD Resorts Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 2082/DEL/2012

• Counselvise Citation: 208220114 RSA 2012
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SUDHA KUMAR
• Assessee Lawyers: MANOHAR LAL; MANISH KR
• Keywords: Opportunity of being heard; Principle of natural justice; Right to appeal; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO.-2082/DEL/2012 (ASSESSMENT YEAR-2008-09) M/S D D RESORTS PVT. LTD., VS DCIT, 12, RING ROAD, LAJPAT NAGAR, CENTRAL CIRCLE-12, RO OM NO-330, PART-IV, NEW DELHI-110024. 3 RD FLOOR, ARA CENTRE, JHANDEWALA EXTN., NEW DELHI-110055. P AN-AAACD4557E (APPELLANT) (RESPONDENT) APPELLANT BY: SH. MANOHAR LAL, ADV. & SH. MANISH KR. CA RESPONDENT BY: DR. SUDHA KUMAR, CIT DR ORDER PER DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER DATED 14.03.2012 OF CIT(A)XXXI, NEW DELHI PERTAINING TO 2009-10 ASSESS MENT YEAR ON THE FOLLOWING GROUNDS:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) IS CORRECT IN DISMISSING THE APPEAL QUOTING THE PROVISIONS OF SECTION 249(4) OF THE ACT, WHEREAS, THE TAXES REQUI RED TO BE DEPOSITED AT THE TIME OF FILING OF THE RETURN WERE PAID BEFOR E HEARING OF THE APPEAL? 2. WHETHER THE TAXES REQUIRED TO BE PAID AND THOSE HAVE BEEN PAID BEFORE HEARING OF THE APPEAL STILL DEPRIVES THE ASS ESSEE OF NATURAL JUSTICE AND RIGHT OF APPEAL AT A VERY PRIMITIVE STA GE? 3. THE APPELLANT CRAVES LEAVE FOR ADDITION, MODIFIC ATION, ALTERATION, AMENDMENT OF ANY OF THE GROUNDS OF APPE AL. 2. THE HEARING IN THE PRESENT CASE TOOK PLACE ON DI FFERENT DATES AS INITIALLY TIME WAS SOUGHT BY THE LD. CIT DR TO GO THROUGH THE ORDE R RELIED UPON BY THE ASSESSEE IN ITS FAVOUR CANVASSING FOR SETTING ASIDE THE IMPU GNED ORDER AND A DIRECTION TO THE CIT(A) TO DECIDE THE APPEAL ON MERIT. THEREAFTER O N CONCLUSION OF THE HEARING AND I.T.A .NO.-2082/DEL/2012 2 AT THE TIME OF DICTATION IT WAS NOTICED THAT POWER OF ATTORNEYS IN DIFFERENT DATES (TOTALING THREE IN ALL) ARE AVAILABLE ON RECORD IN FAVOUR OF DIFFERENT PERSONS INCLUDING AND APART FROM THE COUNSELS PRESENT. THE APPEAL ACCORDINGLY WAS FIXED FOR CLARIFICATION AND THE ASSESSEE FILED A LETTER D ATED 11.10.2013 THROUGH THE COUNSEL VIDE LETTER DATED 11.11.2013 THAT THE POWER OF ATTO RNEY IN FAVOUR OF THE TWO COUNSELS ORIGINALLY NAMED BE ACTED UPON. SINCE ON THE SAID DATE THE CIT DR WAS ON LEAVE THE HEARING CONCLUDED THEREAFTER WHEN BOT H THE PARTIES REPEATED THEIR STAND WHICH WE PROPOSE TO NOW DISCUSS. 3. ON THE DATE OF HEARING LD. AR INVITED ATTENTION TO THE IMPUGNED ORDER TO SHOW THAT THE APPEAL WAS HELD TO BE NON-MAINTAINABI LITY IN TERMS OF 249(4) OF THE INCOME TAX ACT BY THE CIT(A) ON ACCOUNT OF THE FACT THAT ON THE DATE OF FILING OF THE APPEAL, THE TAX PAYABLE ON THE TOTAL INCOME REM AINED UNPAID AS SUCH THE APPEAL WAS DISMISSED IN LIMINE. LD. AR FILED WRITTEN SUBM ISSIONS BEFORE THE BENCH AND RELIED ON THE ORDER OF THE DELHI BENCH IN THE CASE OF RAKESH KUMAR GARG VS DCIT (2009-10 ASSESSMENT YEAR) (PLACED AT PAPER BOOK PA GE 15-28). ON THE BASIS OF THE SAME, IT WAS SUBMITTED THAT A CO-ORDINATE BENCH VID E ITS ORDER DATED 31.08.2012 HAS DECIDED AN IDENTICAL ISSUE IN FAVOUR OF THE A SSESSEE THEREBY DIRECTING THE CIT(A) TO DECIDE THE APPEAL OF THE ASSESSEE ON MERI T AS ON THE DATE OF PASSING OF THE IMPUGNED ORDER, THE TAX DUE WAS FULLY PAID. IN THE FACTS OF THE PRESENT CASE ALSO IT WAS SUBMITTED THAT THE TAX DUE WAS PAID BEFORE T HE PASSING OF THE ORDER. REFERRING TO THE ORDER IN THE CASE OF THE RAKESH KU MAR GARG, IT WAS SUBMITTED THAT THE TRIBUNAL HAD RELIED UPON J.K.CHATURVEDI VS ACIT (2004) 82 TTJ 284/3SOT AND THEREIN JUDGEMENT OF THE HONBLE MADRAS HIGH CO URT IN THE CASE OF S.ALAGARSWAMY VS ITO [2008] 296 ITR 0043(MAD.) HAD BEEN TAKEN INTO CONSIDERATION AND ALSO THE JUDGEMENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF D. KOMALAKSHI VS DCIT 209 CTR (KAR.) 70. 3.1. LD. CIT DR MADE AN ORAL REQUEST SEEKING TIME T O GO THROUGH THE SAID ORDER. ACCORDINGLY THE HEARING WAS ADJOURNED. I.T.A .NO.-2082/DEL/2012 3 3.2. ON THE NEXT DATE OF HEARING THE LD. AR INVITI NG ATTENTION TO THE IMPUGNED ORDER SUBMITTED THAT IN THE APPEAL INSTITUTED ON 25 .01.2011 THE ASSESSEE HAD DEPOSITED RS.92,06,279/- ON DIFFERENT DATES FROM 30 .04.2011 TO 29.07.2011 AS PER PAGE 7 OF THE IMPUGNED ORDER EXPLAINING THE FACTS T HAT ON ACCOUNT OF THE GENUINE FINANCIAL HARDSHIP, THE TAX COULD NOT BE DEPOSITED IN TIME. IT WAS SUBMITTED THAT INFACT THERE WAS A REFUND ALSO DUE TO THE ASSESSEE. ACCORDINGLY IT WAS HIS SUBMISSION THAT BY THE TIME THE CIT(A) DECIDED THE APPEAL TAX DUE WAS FULLY PAID AND THE DATES ON WHICH THE SAME WAS PAID IS EVIDENT FROM THE ORDER ITSELF AND ONLY ON THE MERE TECHNICALITY THAT IT WAS NOT PAID AT TH E TIME OF FILING THE APPEAL IT HAS BEEN DISMISSED IN LIMINE IGNORING THE FACT THAT AT THE TIME OF ADJUDICATION THE TAX DUE STOOD FULLY PAID. 4. LD. CIT DR PLACES RELIANCE UPON THE IMPUGNED ORD ER HOWEVER THE STATEMENT THAT ON THE DATE OF PASSING OF THE ORDER NO AMOUNT OF TAX DUE REMAINED OUTSTANDING WAS NOT REBUTTED BY HER. IT IS SEEN THAT THE COMMI SSIONER TAKING NOTE OF THE FACT THAT THE TAX PAID ON THE RETURNED INCOME FELL SHORT BY RS.74,56,781/- ON THE DATE OF FILING OF THE APPEAL DISMISSED THE APPEAL IN LIMINE . RELIANCE WAS PLACED UPON THE JUDGEMENTS OF THE MADRAS HIGH COURT AND KARNATKA HI GH COURT IN THE CASE OF THE S.ALAGARSWAMY VS ITO [2008] 296 ITR 43 (MAD.) AND D .KOMALAKSHI VS DCIT [2007] 209 CTR (KAR.) 70 WHEREIN IT HAS BEEN HELD T HAT THE MANDATORY PROVISION DO NOT ALLOW HIM ANY DISCRETION. IN THE CIRCUMSTAN CES IT WAS SUBMITTED BY THE LD. CIT DR THAT THE ORDER OF THE CIT(A) CONSIDERING THE LEGAL POSITION WAS DULY SUPPORTED. THE LAW IT WAS ARGUED DOES NOT ALLOW TH E CIT(A) TO CONSIDER THE ARGUMENT OF THE LIQUIDITY PROBLEM FACED IF ANY BY T HE ASSESSEE-APPELLANT. IT WAS ALSO SUBMITTED THAT THE CIT(A) ALTHOUGH HAS HELD TH AT LIQUIDITY POSITION WAS ALSO NOT SUBSTANTIATED BY ANY EVIDENCE. IT WAS FURTHER ARGUED THAT SEIZURE OF THE BANK ACCOUNT AS A FACTOR IN NOT DEPOSITING TAX IN TIME C ANNOT BE ACCEPTED. RELYING ON THE REQUIREMENTS OF SECTION 249(4) IT WAS SUBMITTED THAT THE MANDATORY PROVISION USING THE WORD SHALL DOES NOT EMPOWER THE CIT(A) WITH ANY DISCRETION I.T.A .NO.-2082/DEL/2012 4 TO WAIVE THE REQUIREMENT. THE DECISIONS SOUGHT TO BE RELIED UPON IT WAS ARGUED WERE DISTINGUISHABLE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS OF THE CASE AT HAND HAVE BEEN DW ELT AT LENGTH IN THE EARLIER PART OF THIS ORDER AS SUCH NEED NOT BE REPEATED. THE ASSES SEE IN THE PRESENT PROCEEDINGS HAS HEAVILY RELIED UPON THE DECISION OF THE CO-ORDI NATE BENCH RENDERED ON 31.08.2012 IN ITA NO.-2080/DEL/2012 IN THE CASE OF RAKESH KUMAR GARG VS DCIT AND ANOTHER DECISIONS IN THE CASE OF J.K.CHATURVEDI VS ACIT [2004] 82 TTJ 284 WHICH HAS BEEN EXTRACTED IN THE ORDER OF THE DELHI BENCHES IN THE CASE OF RAKESH KUMAR GARG. SINCE IN THE PRESENT PROCEEDINGS ALSO HEAVY RELIANCE IS PLACED THEREON THE RELEVANT PORTION OF THE ORDER IS EXTRAC TED HEREUNDER: '9. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS. FROM THE PERUSAL OF RECORD AND ON CONSIDERATION OF RESPECTIVE ARGUME NTS, FOLLOWING POINTS HAVE EMERGED OUT FOR OUR ADJUDICATION. (1) WHETHER THE TRIBUNAL HAS POWERS UNDER SECTION 2 54(1) TO GIVE A FINDING THAT AN APPEAL FILED IN VIOLATION OF SECTIO N 249(4) WOULD BE TERMED AS DEFECTIVE' ONE AND THE MOMENT THE DEFECT IS CURED BY MAKING PAYMENT OF AGREED TAX, THE APPEAL CAN BE DECIDED ON MERIT SUBJECT TO LIMITATION PROVIDED IN SECTION 249(2) AND ITS CONDO NATION THEREOF AS PER SECTION 249(3). (2) WHETHER NON-AVAILABILITY OF FUNDS FOR MAKING PA YMENT OF AGREED TAXES WITH THE ASSESSEE COULD BE CONSIDERED AS A RE ASONABLE CAUSE FOR FILING DEFECTIVE APPEALS IN VIOLATION OF SECTION 249(4) OF THE ACT. (3) WHETHER SUFFICIENT REASON EXISTS FOR CURING THI S DEFECT AFTER EXPIRY OF LIMITATION PROVIDED IN SECTION 249(2) OF THE ACT. 10. IT IS UNDISPUTED PROPOSITION OF LAW THAT APPEAL IS A CONTINUATION OF THE ORIGINAL PROCEEDINGS AND RIGHT OF APPEAL IS NOT AN INHERENT RIGHT BUT IT IS A STATUTORY RIGHT. IT IS OPEN TO THE LEGISLATURE TO GIVE OR NOT TO GIVE A RIGHT APPEAL AGAINST DECISIONS MADE BY AUTHO RITIES. THE RIGHT OF APPEAL WHEREVER CONFERRED BY STATUTE HAS TO BE EXER CISED STRICTLY IN CONFORMITY WITH THE STATUTORY PROVISIONS, WHICH CRE ATE IT. IF THE STATUTE PUT ANY RESTRICTION THEN, SUCH RIGHT WOULD BE AVAIL ABLE ALONG WITH SUCH RESTRICTIONS. IT IS ALSO NOT DISPUTED BEFORE US THAT ASSESSEE HAD MADE THE PAYMENT OF AGREED TAX DURING THE PENDENCY OF THESE APPEALS. BEFORE EMBARKING UPON THE JURISDICTION OF THE TRIBU NAL WHETHER THESE APPEALS CAN BE RESTORED BACK TO THE CIT(A) OR NOT. IT IS SALUTARY TO TAKE NOTE OF SUB-SECTIONS (3) AND (4) OF SECTION 24 9 AND SUB-SECTION (1) I.T.A .NO.-2082/DEL/2012 5 OF SECTION 254 BECAUSE THESE PROVISIONS HAVE DIRECT BEARING ON THE CONTROVERSY: SECTION 249(3) : ' THE CIT(A) MAY ADMIT AN APPEAL A FTER THE EXPIRATION OF THE SAID PERIOD IF HE IS SATISFIED TH AT THE APPELLANT HAD SUFFICIENT CAUSE FOR NOT PRESENTING IT WITHIN THAT PERIOD.' SECTION 249(4): NO APPEAL UNDER THIS CHAPTER SHALL BE ADMITTED UNLESS AT THE TIME OF FILING OF THE APPEAL- (A) 'WHERE A RETURN HAS BEEN FILED BY THE ASSESSEE, THE ASSESSEE HAS PAID THE TAX DUE ON THE INCOME RETURNED BY HIM; OR (B) WHERE NO RETURN HAS BEEN FILED BY THE ASSESSEE, THE ASSESSEE HAS PAID AN AMOUNT EQUAL TO THE AMOUNT OF ADVANCE TAX W HICH WAS PAYABLE BY HIM. PROVIDED THAT, IN A CASE FILING UNDER CLAUSE (B) AN D ON AN APPLICATION MADE BY THE APPELLANT IN THIS BEHALF, THE CIT(A) MAY, FOR ANY GOOD AND SUFFICIENT REASON TO BE RECORDED IN WRITING, EX EMPT HIM FROM THE OPERATION OF THE PROVISIONS OF THAT CLAUSE. ' SECTION 254(1) ORDERS OF APPELLATE TRIBUNAL: 'THE A PPELLATE TRIBUNAL MAY, AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN OPPORTUNITY OF BEING HEARD, PASS SUCH ORDERS THEREON AS IT THINKS FIT.' 11. FOR CONSIDERING THE POWERS OF TRIBUNAL CONTEMPL ATED IN SUB- SECTION (1) OF SECTION 254, IT WOULD BE IMPERATIVE FOR US TO REFER THE JUDGMENT OF THE HON'BLE SUPREME COURT RENDERED IN THE CASE OF HUKUMCHAND MILLS LTD. V . CIT[1967] 63 ITR 232. THEREIN THE HON'BLE SUPREME COURT HAD CONSIDERED THE AMBIT AND SCOPE OF EXPRESSION' PASS SUCH ORDERS THEREIN AS IT THINKS F IT', USED IN SECTION 33(4) OF I T ACT, 1922, WHICH IS ANALOGOUS TO SECTI ON 254(1) OF 1961 ACT, THE HON'BLE SUPREME COURT MADE FOLLOWING OBSER VATION. ' THE WORD 'THEREON' OF COURSE, RESTRICTS THE JURIS DICTION OF THE TRIBUNAL TO THE SUBJECT-MATTER OF THE APPEAL. THE W ORDS PASS SUCH ORDERS AS THE TRIBUNAL THINKS FIT' INCLUDE ALL THE POWERS (EXCEPT POSSIBLY THE POWER OF ENHANCEMENT) WHICH ARE CONFER RED UPON THE AAC BY SECTION 31 OF THE ACT. CONSEQUENTLY THE TRIB UNAL HAS AUTHORITY UNDER THIS SECTION TO DIRECT THE AAC OR THE ITO TO HOLD A FURTHER ENQUIRY AND DISPOSE OF THE CASE ON THE BASIS OF SUC H ENQUIRY' ..... (P.237) 12. THEN AGAIN THIS EXPRESSION FELL FOR CONSIDERAT ION BEFORE THE HON'BLE SUPREME COURT IN THE CASE OF CIT V . ASSAM TRAVELS SHIPPING SERVICE [1993} 199 ITR 1. IN THIS CASE, ASSESSEE FI LED THE RETURN LATE FOR ASSESSMENT YEARS 1963- 64 AND 1964-65, THUS VIOLATED SECTION 271(1) (A) (2) OF THE ACT. THE LEARNED ASSESSING OFFICER LEVIED TH E PENALTY. HOWEVER, WHILE CALCULATING THE PENALTY, HE WORKED OUT THE AMOUNT AT A VERY LOWER FIGURE. HE LEVIED THE PENALT Y AT RS.6,494 AND I.T.A .NO.-2082/DEL/2012 6 RS. 70,118 FOR ASSESSMENT YEARS 1963-64 AND 1964-65 RESPECTIVELY AS AGAINST THE AMOUNT OF RS. 65,700 AND RS 93,564. THE ASSESSEE CHALLENGED THIS LEVY OF PENALTY BEFORE THE CIT(A) T HE LEARNED CIT(A) QUASHED THE PENALTY ON THE GROUND THAT THE ASSESSIN G OFFICER LEVIED THE PENALTY CONTRARY TO THE PROVISIONS OF SECTION 2 71 (1). THE MATTER FURTHER TRAVELED TO THE TRIBUNAL. THE TRIBUNAL HAS ALSO DISMISSED THE APPEAL OF THE DEPARTMENT BY CONFIRMING THE ORDER OF THE CIT(A) ON THE GROUND THAT TRIBUNAL HAS NO POWER TO ENHANCE TH E PENALTY. IN SUCH A SITUATION, IT CAN DO NOTHING EXCEPT AFFIRMING THE ORDER OF THE CIT(A) ULTIMATELY . THE MATTER WENT UP BEFORE THE HON'BLE SUPREME COURT . THE HON'BLE SUPREME COURT HAS OBSERVED AS UNDER WHILE E LABORATING THE SCOPE OF EXPRESSION 'PASS SUCH ORDERS THEREON AS IT THINKS FIT'. 'THE EXPRESSION 'AS IT THINKS FIT' IS WIDE ENOUGH TO INC LUDING THE POWER OF REMAND TO THE AUTHORITY COMPETENT TO MAKE THE RE QUISITE ORDER IN ACCORDANCE WITH LAW IN SUCH A CASE EVEN THOUGH THE TRIBUNAL ITSELF COULD NOT HAVE MADE THE ORDER ENHANCING THE AMOUNT OF PENALTY. THE POWER OF THE AAC UNDER SECTION 251 (1)(B) INCLUDES THE POWER EVEN IF THE ENHANCE THE PENALTY SUBJECT TO THE REQUIREMENT OF SUB-SECTION (2) OF SECTION 251 OF A REASONABLE OPPORTUNITY OF SHOWING CAUSE AGAINST SUCH ENHANCEMENT BEING GIVEN TO THE APPELLANT ASSES SED . THIS COULD HAVE BEEN DONE IN THE ASSESSEE'S APPEAL ITSELF FILED IN THE PRESENT C ASE. THE POWER OF THE TRIBUNAL TO MAKE AN ORDER OF REMAN D IN SUCH A SITUATION IS WELL-SETTLED IN HUKUMCHAND MILLS LTD. V . CIT[1967) 63 ITR 232(SC)' (P 6). 13. ON PLAIN READING OF SUB-SECTION (3) OF SECTION 249 SHALL REVEAL THAT IF THE ASSESSEE SHOWED SUFFICIENT REASONS FOR LATE FILING OF HIS APPEALS, THEN SUCH DELAY CAB BE CONDONED AND CONTROVERSY WOU LD BE SILENCED ON MERIT. SIMILARLY, FOR SAKE OF EXPLANATION, IF AN ASSESSEE DID NOT HAVE SUFFICIENT FUNDS FOR COMPLYING THE REQUIREMENT OF S ECTION 249(4) AND HAS NOT FILED THE APPEAL WITHIN THE TIE PROVIDE D UNDER SECTION 249(2). SUBSEQUENT TO EXPIRY OF LIMITATION HE MADE COMPLIANCE OF SECTION 249(4) AND FILED THE APPEAL WITH A PRAYER OF CONDONATION OF DELAY THEN IT WOULD BE IN DISCRETION OF THE FIRST A PPELLATE AUTHORITY TO SEE WHETHER SUFFICIENT REASONS FOR LATE FILING OF APPEAL EXIST OR NOT. IF THE LEARNED CIT(A ) ARRIVED AT A CONCLUSION THAT SUFFICIENT REASONS EXIST THEN AGAIN THE CONTROVERSY WOULD BE DECIDED O N MERIT. THUS, ON CONJOINT READING OF SUB-SECTION (3) AND (4), IT IS INFERRED THAT DEFECT ARISES DUE TO NON-COMPLIANCE OF SECTION 249(4) IS A CURABLE ON AND IN A GIVEN CASE IF THE TRIBUNAL IS SATISFIED THAT THER E EXIT SUFFICIENT REASONS FOR CURING SUCH DEFECTS AFTER EXPIRY OF LIM ITATION, IT WOULD BE IN THE REALM OF TRIBUNAL'S DISCRETION TO RESTORE SU CH MATTERS TO THE FILE OF THE CIT(A) FOR DECIDING THE CONTROVERSY ON MERIT BECAUSE SUB- I.T.A .NO.-2082/DEL/2012 7 SECTION (1) OF SECTION 254 PROVIDES WIDE POWERS TO THE TRIBUNAL FOR PASSING SUCH ORDERS THEREON AS IT THINKS FIT IN THE INTEREST OF JUSTICE. 14. ON PERUSAL OF RECORD, WE FIND THAT THE ASSESSE E HAD DISCHARGED THE HUGE TAX LIABILITY OF MORE THAN RS. 75 LAKHS IN INSTALLMENTS. THUS, IT WOULD BE TOTALLY UNFAIR FOR NOT PROVIDING AN OPPORT UNITY TO HIM FOR DISPUTING THE ADDITIONS MADE BY THE ASSESSING OFFIC ER ON MERIT. THE HON'BLE FULL BENCH OF DELHI HIGH COURT IN J T(INDIA ) EXPORTS V . UNION OF INDIA[2003] 262 ITR 269, WHILE ELABORATING THE P RINCIPLE OF NATURAL JUSTICE ALONG WITH THE LEGAL JUSTICE HAS OB SERVED AS UNDER: .. NATURAL JUSTICE IS ANOTHER NAME FOR COMMONSEN SE JUSTICE. RULES OF NATURAL JUSTICE ARE NOT CODIFIED CANONS. B UT THEY ARE PRINCIPLES INGRAINED INTO THE CONSCIENCE OF MAN NAT URAL JUSTICE IS THE ADMINISTRATION OF JUSTICE IN A COMMONSENSE LIBERAL WAY. JUSTICE IS BASED SUBSTANTIALLY ON NATURAL IDEALS AND HUMAN VAL UES. THE ADMINISTRATION OF JUSTICE IS TO BE FREED FROM THE N ARROW AND RESTRICTED CONSIDERATIONS WHICH ARE USUALLY ASSOCIATED WITH A FORMULATED LAW INVOLVING LINGUISTIC TECHNICALITIES AND GRAMMATICAL NICETIES. ITS IS THE SUBSTANCE OF JUSTICE WHICH HAS TO DETERMINE ITS FOR M. THE EXPRESSION 'NATURAL JUSTICE AND LEGAL JUSTICE' DO NO PRESENT A WATER-TIGHT CLASSIFICATION. IT IS THE SUBSTANCE O F JUSTICE WHICH IS TO BE SECURED BY BOTH, AND WHENEVER LEGAL JUSTICE FAILS T O ACHIEVE THIS SOLEMN PURPOSE, NATURAL JUSTICE IS CALLED IN AID OF LEGAL JUSTICE. NATURAL JUSTICE RELIEVES LEGAL JUSTICE FROM UNNECES SARY TECHNICALLY , GRAMMATICAL PEDANTRY OR LOGICAL PREVARICATION. IT S SUPPLIES THE OMISSIONS OF A FORMULATED LAW. THE ADHERENCE TO PRINCIPAL OF NATURAL JUSTICE AS RE COGNIZED BY ALL CIVILIZED STATES IS OF SUPREME IMPORTANCE WHEN A QUASI-JUDICIAL BODY EMBARKS ON DETERMINING DISPUTES BETWEEN THE PARTIES . '(P. 271) 15. FROM THE JUDGMENT OF HON'BLE DELHI HIGH COURT, IT IS CLEAR THAT WHENEVER LEGAL JUSTICE FAILS TO ACHIEVE THE SOLEMN PURPOSE OF SECURING JUSTICE THEN NATURAL JUSTICE IS CALLED IN AID OF LE GAL JUSTICE. FROM THE DETAILS SUBMITTED BY THE ASSESSEE IN THE PAPER BOOK AS EXTRACTED BY US, IT REVEALS THAT ASSESSEE KEPT ON MAKING THE PAYMENT OF TAX ALONG WITH INTEREST IN INSTALLMENTS. HAD THE ASSESSEE WAS HAVI NG SUFFICIENT FUND WITH HIM, THEN NO PRUDENT BUSINESSMAN WOULD ALLOW T O SWELL THE LIABILITY OF INTEREST IN SUCH A WAY. FOR EXAMPLE, THE TOTAL TAX REQUIRED TO BE PAID BY THE ASSESSEE IN ASSESSMENT YEAR 1991- 92 ON THE AGREED RETURN WITH INTEREST WAS RS.17,30,273. AGAINST IT, BY THE END OF THE DECEMBER, 1997, ASSESSEE HAS PAID RS.26,09,843. THU S, IT CLEARLY INDICATES THAT ASSESSEE WAS NOT HAVING SUFFICIENT F UNDS AT THE RELEVANT TIME FOR COMPLIANCE OF SECTION 249(4), WHICH RENDER ED THE APPEALS OF THE ASSESSEE AS DEFECTIVE ONE. IN THE INTEREST OF JUSTICE, WE ARE O F THE I.T.A .NO.-2082/DEL/2012 8 OPINION THAT THESE APPEALS DESERVE TO BE ALLOWED BY SETTING ASIDE THE IMPUGNED ORDER OF THE CIT(A) AND RESTORING THE SAME BEFORE THE LEARNED FIRST APPELLATE AUTHORITY FOR ADJUDICATION ON MERIT. 16. THE NEXT ISSUE FOR OUR ADJUDICATION IS WHETHE R SUFFICIENT, REASONS EXIST FOR CURING DEFECT AFTER EXPIRY OF LIMITATION PROVIDED UNDER SECTION 249(2) OF THE ACT. SINCE, WE HAVE HELD IN THE UPPE R PART OF THE ORDER THAT APPEAL FILED IN VIOLATION OF SECTION 249(4) WO ULD BE TERMED AS A DEFECTIVE ONE AND THE MOMENT DEFECT IS CURED THEN T HOSE CAN BE DISPOSED OF ON MERIT SUBJECT TO LIMITATION. THE COU RTS AND THE QUASI- JUDICIAL BODIES ARE EMPOWERED TO CONDONE THE DELAY IF A LITIGANT SATISFIES THE COURT THAT THERE WERE SUFFICIENT REAS ONS FOR AVAILING THE REMEDY AFTER EXPIRY OF LIMITATION. SUCH REASONING S HOULD BE TO THE SATISFACTION OF THE COURT. THE EXPRESSION 'SUFFICIE NT CAUSE OR REASON', AS PROVIDED IN SUB-SECTION (3) OF SECTION 249 OF TH E ACT, IS USED IN IDENTICAL POSITION IN A NUMBER OF STATUTES AND THE HON'BLE SUPREME COURT AS WELL AS THE HON'BLE HIGH COURTS HAVE TIME AND AGAIN HELD THAT EXPRESSION SUFFICIENT CAUSE FOR CONDONATION OF A DELAY SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUB STANTIAL JUSTICE WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE IS IMPUTABLE TO A PARTY BECAUSE THE JUDICIARY IS EXPECTED NOT ON ACCO UNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. A. LIT IGATION DOES NOT STAND TO BENEFIT BY RESTORING THE DELAY OR BREACHIN G ANY PROVISIONS OF A STATUTE. THE HON'BLE SUPREME COURT IN COLLECTOR L AND ACQUISITION V . MST. KATIJI [1987] 167 ITR 471 HAS OBSERVED THAT WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGA INST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERR ED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE A VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DELAY. THIS, CONSIDERING THE HARDSHI P OF THE ASSESSEE, WE ARE OF THE OPINION THAT THERE EXIST SUFFICIENT R EASONS FOR NOT FILING A VALID EFFECTIVE APPEAL BEFORE THE CIT(A). IT IS APT LY SAID THAT FACTS SHOULD BE VIEWED IN NATURAL PERSPECTIVE HAVING REGA RD TO THE COMPULSION OF CIRCUMSTANCES OF A CASE WHERE IT IS POSSIBLE TO DRAW INFERENCES FROM THE FACTS AND WHERE THERE IS NO EVIDENCE OF ANY DISHONEST OR IMPROPER MOTIVE ON THE PART OF THE ASSESSEE IT WOULD BE JUST AND EQUITABLE TO DRAW SUCH INFERENCE IN SUCH A MANNER THAT WOULD LEAD TO EQUITY AND JUSTICE . TOO HYPERTECHNICAL OR LEGALIZED APPROACH SHOULD BE AVOI DED IN LOOKING AT A PROVISION WHICH MUST BE EQUITABLY INTERPRETED AND J USTLY ADMINISTERED. HENCE, TAKING INTO CONSIDERATION THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE OPINION THA T THESE APPEALS DESERVE TO BE ALLOWED AND ACCORDINGLY, ALLOWED. WE SET ASIDE THE I.T.A .NO.-2082/DEL/2012 9 ORDER OF THE LEARNED CIT(A) AND RESTORE THE MATTERS BEFORE HIS FOR DECIDING THE CONTROVERSY ON MERIT. 5.1. A PERUSAL OF THE SAID ORDER DATED 31.08.2012 O F THE DELHI BENCH IN THE CASE OF RAKESH KUMAR GARG WHEREIN ONE OF US (LD. ACCOUN TANT MEMBER IS A PARTY) IT IS SEEN HAS ALSO CONSIDERED THE FOLLOWING TWO JUDGEMEN TS OF THE HONBLE KARNATAKA AND MADRAS HIGH COURT AMONGST ORDERS OF THE TRIBUNA L ON WHICH HEAVY RELIANCE HAS BEEN PLACED BY THE REVENUE:- 1. D.KOMALAKSHI VS DCIT REPORTED IN 162 TAXMAN 16 (KAR.); 2. S.ALAGARSWAMY VS. ITO REPORTED IN (2008) 296 ITR 00 43 (MAD.) 5.2. ACCORDINGLY IT IS SEEN THAT THE SAID DECISIONS HAVE ALREADY BEEN TAKEN INTO CONSIDERATION THEREIN AS SUCH IN THE ABSENCE OF ANY DISTINGUISHING FACT OR CIRCUMSTANCE THE VIEW TAKEN BY A CO-ORDINATE BENCH WHERE ONE OF US (LD. ACCOUNTANT MEMBER) WAS A PARTY HAS TO BE FOLLOWED I N JUDICIAL PROPRIETY. IN THE FACTS OF THE PRESENT CASE ADMITTEDLY AT THE TIME OF FILING OF THE APPEAL BEFORE THE CIT(A) THE TAX DUE ON THE INCOME RETURNED WAS NOT P AID. THE OBJECTIVE OF SECTION 249(4) IS TO ENSURE PAYMENT OF TAX ON INCOME RETURN ED BEFORE THE ADMISSION OF THE APPEAL. IN THE CIRCUMSTANCES THE CIT(A) CANNOT BE FAULTED WITH IN NOT TREATING THE APPEAL AS ADMITTED. HOWEVER CONSIDERING THE JUDICI AL PRECEDENT AND THE FACT THAT THE TAX ON THE RETURNED INCOME WAS PAID BEFORE THE PASSING OF THE ORDER THUS ON A CONSIDERATION OF THE DECISION RELIED UPON WE ARE OF THE VIEW THAT IF THE APPEAL IS FILED WITHOUT PAYMENT OF TAX ON RETURNED INCOME BUT SUBSEQUENTLY THE REQUIRED AMOUNT OF TAX IS PAID, THE APPEAL SHOULD BE TREATED AS ADMITTED ON PAYMENT OF TAX AND TAKEN UP FOR HEARING ON MERITS. THE PAYMENT OF TAX AFTER THE FILLING OF APPEAL BEFORE IT IS TAKEN UP FOR DISPOSAL, WOULD BE SUFFIC IENT TO VALIDATE THE DEFECTIVE APPEAL. IT IS SEEN THAT THE CO-ORDINATE BENCHES HA VE TAKEN THE VIEW THAT THE REQUIREMENT OF THE PAYMENT OF PRESCRIBED TAX AT THE STAGE OF FILING OF THE APPEAL BEFORE THE FIRST APPELLATE IS ONLY DIRECTORY AND NO T MANDATORY. THE RELIANCE PLACED UPON THE JUDGEMENT OF THE HONBLE MADRAS HIG H COURT IN THE CASE OF I.T.A .NO.-2082/DEL/2012 10 S.ALAGARSWAMY VS ITO IN SUPPORT OF THE IMPUGNED ORD ER DOES NOT HELP THE REVENUE. NO DOUBT THE PAYMENT OF TAX DUE ON THE I NCOME RETURNED BY THE ASSESSEE BEFORE FILING OF AN APPEAL AGAINST THE ASS ESSMENT ORDER IS A CONDITION PRECEDENT AND AS PER THE HONBLE HIGH COURT AS SUCH NON-COMPLIANCE RENDERED THE APPEAL NON-MAINTAINABLE AS PER SECTION 249(4) OF TH E ACT. THERE IS NO DISPUTE WITH THE SAID PROPOSITION HOWEVER IN THE FACTS OF THE PR ESENT CASE MADE OUT BY THE ASSESSEE THAT THE REQUIRED TAX HAD BEEN PAID BEFORE THE HEARING OF THE APPEAL BY THE COMMISSIONER IS A FACT WHICH IS DISTINGUISHABLE AND THE LEGAL POSITION QUA THE FACT HAS BEEN CONSIDERED BY THE CO-ORDINATE BENCHES. 6. IN VIEW OF THE DETAILED REASON GIVEN HEREINABOVE , THE ORDER OF THE CIT(A) IS SET ASIDE AND THE ISSUE IS RESTORED BACK TO THE FIL E OF THE CIT(A) WITH THE DIRECTION TO DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIV ING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 03 RD JANUARY, 2014. SD/- SD/- (T.S.KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 03/01/2014 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI