Assistant Commissioner of Income-tax, V. M/s. Kirloskar Brothers Pvt. Ltd., Pune

ITA 2084/PUN/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7465 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-09-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 29-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Bonafide belief; Reasonable cause; Bad and doubtful debts; Right to appeal; Condonation of delay
• Section: 143(3); 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . . . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 33/PUN/2015 / ASSESSMENT YEAR : 2005-06 KIRLOSKAR BROTHERS LIMITED, YAMUNA, SURVEY NO.98/3 TO 7, BANER, PUNE 411 045 PAN : AAACK7300E . /APPELLANT V/S ACIT, RANGE - 14, PUNE . /RESPONDENT . / ITA NO. 2005/PUN/2013 / ASSESSMENT YEAR : 2005-06 KIRLOSKAR BROTHERS LIMITED, UDYOG BHAVAN, TILAK ROAD, PUNE 411002 PAN : AAACK7300E . /APPELLANT V/S ACIT, RANGE - 11(1), PUNE 411 037 . /RESPONDENT . / ITA NO. 2084/PUN/2013 / ASSESSMENT YEAR : 2005-06 ACIT, RANGE - 11(1), PUNE 411 037 . /APPELLANT V/S M/S. KIRLOSKAR BROTHERS PVT. LTD., YAMUNA, S.NO.97-3, BANER, PUNE 411 045 PAN : AAACK7300E . /RESPONDENT ASSESSEE BY : SHRI SHARAD SHAH REVENUE BY : SHRI RAJEEV KUMAR, CIT / DATE OF HEARING : 12.09.2017 / DATE OF PRONOUNCEMENT: 20.09.2017 2 ITA NOS.33/PUN/2015, 2005 & 2084/PUN/2013 KIRLOSKAR BROTHERS LIMITED / ORDER PER D. KARUNAKARA RAO, AM : THERE ARE 3 APPEALS UNDER CONSIDERATION FOR THE AS SESSMENT YEAR 2005- 06. WHILE THE ITA NO.33/PUN/2015 RELATES TO THE RE GULAR ASSESSMENT U/S.143(3) OF THE ACT AND THE OTHER TWO APPEALS, I. E. ITA NOS. 2005 & 2084/PUN/2013 ARE CROSS APPEALS FILED BY THE ASSESS EE AND THE REVENUE AND THEY RELATE TO THE FRESH ASSESSMENT MADE U/S.143(3) R.W.S. 263 OF THE ACT. 2. BEFORE US, AT THE OUTSET, SHRI SHARAD SHAH, LD. COUNSEL FOR THE ASSESSEE TOOK UP THE APPEAL - ITA NO.33/PUN/2015 A ND SUBMITTED THAT THE APPEAL IS FILED BELATEDLY WITH THE DELAY OF 1530 DA YS AND THERE WAS A REASONABLE CAUSE IN FILING THE APPEAL WITH SUCH DEL AY. THEREFORE, HE REQUESTED FOR CONDONING THE DELAY AND ADMIT THE APP EAL. REGARDING THE REQUEST FOR CONDONATION OF DELAY, LD. COUNSEL FOR T HE ASSESSEE BROUGHT OUR ATTENTION TO THE AFFIDAVITS OF (1) SHRI SANJAY CHA NDRAKANT KIRLOSKAR, MANAGING DIRECTOR OF THE COMPANY DATED 28-11-2016 AND (2) T HAT OF SHRI UMESH SHASTRY, CHIEF FINANCIAL OFFICER OF KIRLOSKAR BROTH ERS LIMITED DATED 03-12-2014. HE READ OUT THE VARIOUS DEVELOPMENTS STARTING FROM THE PASSING OF THE REGULAR ASSESSMENT ORDER OF THE AO IN THIS CASE IN WORDS. ELABORATING THE SAME, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRESENT APPEAL HAS GENESIS IN THE ASSESSMENT ORDER PASSED BY THE AO U/S.143(3) DATED 04-05-2007. AGGRIEVED WITH THE SAID ADDITIONS, ASSESSEE FILED AN APPEAL B EFORE THE CIT(A) ON 08-06-2007. CIT(A) PASSED AN ORDER ON 02.09.2010 D ISMISSING THE APPEAL OF THE ASSESSEE. MEANWHILE, ON 01-01-2009 AND 16-10-2 009, CIT-1, PUNE ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE U/S.263 OF THE ACT. ON 29.03.2010, CIT PASSED REVISION ORDER U/S.263 OF THE ACT DIRECTING THE AO TO RE-EXAMINE THE ISSUES DISCUSSED IN HIS REVISION ORDER. FURTHER, T HE ORDER OF THE CIT(A) DATED 3 ITA NOS.33/PUN/2015, 2005 & 2084/PUN/2013 KIRLOSKAR BROTHERS LIMITED 02.09.2010 IS POSTERIOR IN TIME AND HIS FINDINGS IN PARA 3 (PAGE 6) ASSUMES SIGNIFICANCE IN THESE PROCEEDINGS. IN THIS PARA, THE CIT(A) MIS-CONSTRUED THE SAID FINDING OF THE CIT HELD THAT THE ORIGINAL ASSE SSMENT ORDER DATED 04-05-2007 STANDS SET ASIDE IN ITS ENTIRETY. ACCOR DING TO THE ASSESSEE, THE SAID MIS-CONSTRUED FINDINGS OF THE CIT(A) LED THE A SSESSEE TO NOT TO FILE ANY FURTHER APPEAL BEFORE THE TRIBUNAL IN TIME. THUS, THE ASSESSEE IS UNDER BONAFIDE BELIEF THAT, THAT THE ENTIRE ASSESSMENT WA S SET ASIDE, ADDITIONS MADE IN THE REGULAR ASSESSMENT ALSO STAND SET ASIDE. TH EREFORE, THERE IS NO GRIEVANCE TO THE ASSESSEE. THUS, THE ORDER OF THE APPEAL IS THE ROOT CAUSE OF THE REASON FOR SUCH A DELAY. RELEVANT DATES HAS GIV EN IN THE TABLE VIDE ASSESSEES WRITTEN SUBMISSIONS EXTRACTED AS UNDER : SR.NO REFERENCE TO RETURN OF INCOME / ORDERS PASSED BY THE AUTHORITIES DATE OF SUBMISSION OF RETURN / THE ORDERS PASSED. WHETHER APPEAL IS DELAYED? REMARK 1. RETURN OF INCOME FILED BY THE ASSESSEE 28.10.2005 WITHIN TIME 2. ORDER PASSED BY THE LD. ASSESSING OFFICER U/S 143(3) (REFERRED TO AS 1 ST ASSESSMENT ORDER) (RECEIVED ON 10-05-07) 04.05.2007 3. APPEAL SUBMITTED TO LD. CIT (APPEAL-1), PUNE 08.06.2007 WITHIN TIME 4 PROCEEDINGS /SHOW CAUSE NOTICE U/S 263 INITIATED / GIVEN BY THE LD. CIT - 1, PUNE 01.01.2009 & 16-10-2009 5. ORDER U/S 263 PASSED BY THE LD.CIT-1, PUNE 29.03.2010 6. ORDER PASSED BY THE LD.CIT(A) (FIRST APPEAL). (ORDER RECEIVED ON 30-09-2010) - 02.09.2010 RELEVANT PARAGRAPH OF CIT(A) IS REPRODUCED HERE BELOW. 7. ORDER PASSED BY THE LD. AO U/S 143(3) R.W.S. 263 OF THE ACT. (REFERRED TO AS 2 ND ASSESSMENT ORDER) 20.12.2010 8. APPEAL SUBMITTED TO CIT(A), ON ORDER PASSED ON 20.12.2010 31.01.2011 WITHIN TIME 9. ORDER PASSED BY THE LD.CIT(A) (ON 2 ND APPEAL) ON APPEAL FILED ON 31.01.2011. (ORDER RECEIVED BY US ON 19-09-13) 30.08.2013 10. APPEAL FILED TO HON. ITAT AGAINST THE ORDER OF CIT(A) DATED 31.08.2013 18.11.2013 NO DELAY 4 ITA NOS.33/PUN/2015, 2005 & 2084/PUN/2013 KIRLOSKAR BROTHERS LIMITED 11. AS PER OUR RECORD, DEPARTMENT HAS FILED AN APPEAL BEFORE ITAT (APPEAL NO.2084/PN/2013) 29-11-2013 12. APPEAL FILED BEFORE HON. ITAT AGAINST THE ORIGINAL CIT(A) ORDER DT. 02-09-2010 (ORDER RECEIVED ON 30-09-2010) APPEAL NO.33/PN/2015) 08-01-2015 (TIME LIMIT OF 60 DAYS EXPIRED ON 29-11-2010) YES. DELAY OF 1502 DAYS. THIS APPEAL WAS FILED BASED ON PRELIMINARY DISCUSSION AT THE TIME OF HEARING BEFORE ITAT. 3. TO SUBSTANTIATE THE CONDONATION OF THE DELAY IN FILING APPEAL, LD. COUNSEL FOR THE RELIED ON THE FOLLOWING DECISIONS : 1. COLLECTOR, LAND ACQUISITION VS. MST KATIJI & ORS 167 ITR 0471 2. MRS. PUSHPALATA OMPRAKASH BHANDARI AND VICE VER SA ITA NOS. 2008/PN/2012 AND ITA NO.372/PN/2014 ORDER DATED 18 -03-2015 3. BASAWARAJ & ANR VS. THE SPL. LAND ACQUISITION O FFICER IN CIVIL APPEAL NOS. 6974 AND 6975/2013 ORDER DATED 22-04-2013 4. M/S. HOSANNA MINISTRIES VS. THE ITO IN T.C. (APP EAL NO.3/2017 ORDER DATED 07-03-2017 5. M/S. PATANKAR WIND FARM PVT. LTD. VS. DCIT ITA NOS. 2225 & 2226/PN/2013 ORDER DATED 10-04-2015 4. SHRI RAJEEV KUMAR, LD. CIT-DR ALSO FILED WRITTEN SUBMISSIONS ADMITTEDLY STATING THAT THE ORDER OF CIT(A) INFACT IS NOT IN G OOD TASTE ON THE ASPECT OF GIVING ERRONEOUS FINDINGS IN HIS ORDER. CIT(A) EXC EEDED THE JURISDICTION IN HOLDING THAT THE ENTIRE ASSESSMENT ORDER IS SET ASI DE. IT IS IN BAD TASTE. LD. DR HOLD THAT THE ORDER OF CIT(A), DISMISSED THE ASS ESSEES APPEAL, IS ESSENTIALLY IN FAVOUR OF THE ASSESSEE. ASSESSEE SH OULD HAVE FILED APPEAL BEFORE THE TRIBUNAL. LD. CIT-DR FOR THE REVENUE IS OF THE OPINION THAT THE ANSWER LIES IN THE TRIBUNAL AND ASSESSEE SHOULD HAV E FIRST FILED THE APPEAL BEFORE THE TRIBUNAL IN TIME INSTEAD OF WAITING FOR NEARLY 4 YEARS TO FILE THE PRESENT APPEAL WITH DELAY. THEREFORE, AS PER LD.DR , THE PRESENT REQUEST FOR CONDONATION OF DELAY DOES NOT MERIT CONSIDERING AND THEREFORE, HE PLEADED FOR DISMISSAL. AS STATED IN PARA 5 OF HIS SUBMISSION, LD.CIT-DR SUBMITTED THAT 5 ITA NOS.33/PUN/2015, 2005 & 2084/PUN/2013 KIRLOSKAR BROTHERS LIMITED ASSESSEE, BEING A BIG CORPORATE HOUSE, IS ASSISTED BY EMINENT LEGAL ADVISORS AND THEREFORE, THIS KIND OF DELAY IS NOT EXPECTED F ROM THE ASSESSEE. THE REQUEST MADE BY THE ASSESSEES AUTHORISED REPRESENT ATIVE IS WITHOUT MERITS. HE ALSO RELIED ON VARIOUS DECISIONS IN HIS FAVOUR A ND THE DETAILS ARE GIVEN IN PARA 6 & 7 OF HIS WRITTEN SUBMISSIONS. HE IS OF TH E VIEW THAT THE INACTION, NEGLIGENCE, LACK OF BONAFIDE, IF IMPUTABLE TO ASSES SEE, THE DELAY CANNOT BE CONDONED AND FOR THIS PROPOSITION HE RELIED ON HON BLE SUPREME COURT JUDGMENT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST. KATIJI AND OTHERS 169 ITR 0471 (SC). COMING TO THE OTHER DECISIONS/J UDGMENTS RELIED UPON BY LD. CIT-DR, WE FIND THAT THEY ARE ON THE DIFFERENT FACTS. NONE OF THE SAID CASES INVOLVE THE MESSY ORDER OF CIT(A) AS IN THE P RESENT CASE. IN ANY CASE, ISSUE RELATING TO CONDONATION OF DELAY, RELATE TO T HE FACT BASED ONES AND IT VARY FROM CASE TO CASE. THEREFORE, THE DECISION OF COMMISSIONER IS DEPENDENT ON THE FACTS OF PRESENT CASE. 5. WE HEARD BOTH THE PARTIES ON THIS ISSUE OF CONDO NATION AND PERUSED THE FACTS WHICH ARE RELEVANT TO DECIDE THE EXISTENCE OF SUFFICIENT CAUSE IN THIS CASE ON ONE SIDE AND IF IT IS SUFFICIENT ENOUGH TO CONDONE THE DELAY IN THE LIGHT OF THE RELEVANT LEGAL PROPOSITION ON THE SUBJECT. 6(A). TO START WITH, WE SHALL EXAMINE THE SCOPE OF FUNDAMENTAL LAW ON THE ISSUE RELATING TO THE EXISTENCE OF THE SUFFICIENT CAUSE. THEREFORE, WE PERUSED THE JUDGMENTS FILED BY THE LD. COUNSEL FOR THE ASSE SSEE INVOLVING THE JUDGMENT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST KATIJI & ORS 167 ITR 0471. WE FIND THE HONBLE APEX COURT IN THIS C ASE HELD THAT THE EXPRESSION SUFFICIENT CAUSE FOR THE PURPOSE OF CONDONATION O F DELAY SHOULD BE INTERPRETED WITH A VIEW TO DO EVEN-HANDED JUSTIC E ON MERITS IN PREFERENCE TO APPROACH WHICH SCUTTLES A DECISION ON MERITS. T HE POWER TO CONDONE DELAY 6 ITA NOS.33/PUN/2015, 2005 & 2084/PUN/2013 KIRLOSKAR BROTHERS LIMITED IS CONFERRED WITH A VIEW TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO LITIGANTS BY DISPOSING OF THE CASES ON MERITS. (B). FURTHER, WE FIND THE PUNE BENCH OF THE TRIBUNA L IN THE CASE OF MRS. PUSHPALATA OMPRAKASH BHANDARI AND VICE VERSA ORDER DATED 18-03-2015 AT PARA NO.12 HELD THAT THE REVENUE DOES NOT HAVE ANY MATERIAL ON RECORD TO DOUBT THE BONAFIDES OF THE ASSESSEE IN FILING THE A PPEAL BELATEDLY. THE TRIBUNAL WHILE CONDONING THE DELAY RELIED ON THE JU DGMENTS OF HONBLE SUPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUIS ITION VS. MST KATIJI & ORS (SUPRA) AND N. BALAKRISHNAN VS. M. KRISHNAMURTHY RE PORTED IN 1998 (9) TMI 602 (SC). THE CONTENTS OF PARA NO.12 ARE RELEVANT AND THE SAME ARE EXTRACTED AS UNDER : 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE FIRST ASPECT OF THE APPEAL BEFORE US IS IN RELATION TO TH E CONDONATION OF DELAY IN FILING THE APPEAL LATE BY ABOUT 43 MONTHS. THE ASSE SSEE HAS FILED AN AFFIDAVIT ALONG WITH AN APPLICATION FOR CONDONATION OF DELAY IN FILING THE APPEAL LATE BEFORE THE TRIBUNAL. THE PERUSAL OF REASONS IN THE SAID AFFIDAVIT REFLECTS THE DELAY IN FURNISHING THE APPEAL WERE FOR REASONS WHI CH WERE BEYOND THE CONTROL OF THE ASSESSEE. THE HON'BLE SUPREME COURT IN COLLE CTOR, LAND ACQUISITION VRS. MST. KATIJI AND OTHERS (SUPRA) HELD AS UNDER:- 'WHEN TECHNICAL CONSIDERATION AND SUBSTANTIAL JUSTI CE ARE PITTED AGAINST EACH OTHER, THE COURTS ARE EXPECTED TO FURT HER THE CAUSE OF SUBSTANTIAL JUSTICE. THIS IS FOR THE REASON THAT AN OPPOSING PARTY IN A DISPUTE CANNOT HAVE A VESTED RIGHT IN INJUSTICE BEI NG DONE BECAUSE OF A NON-DELIBERATE DELAY. THEREFORE, IT FOLLOWS THAT WH ILE CONSIDERING MATTERS RELATING TO THE CONDONATION OF DELAYS A JUD ICIOUS AND LIBERAL APPROACH IS TO BE ADOPTED. IF SUFFICIENT CAUSE IS FOUND TO EXIST WHICH IS BONA FIDE AND NOT DUE TO NEGLIGENCE OF THE APPLICANT, THE DELAY NEEDS TO BE CONDONED IN SUCH WHICH SUBSER VES THE END OF JUSTICE - THAT BEING THE LIFE PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COURTS.' 10. FURTHER, THE HON'BLE SUPREME COURT IN N. BALAKR ISHNAN VS. M. KRISHNAMURTHY (SUPRA) ALSO WHILE ADJUDICATING THE I SSUE OF DELAY OBSERVED AS UNDER:- '13. IT MUST BE REMEMBERED THAT IN EVERY CASE OF DELAY, THERE CAN BE SOME LAPSE ON THE PART OF THE LITIGANT CONCERNED . THAT ALONE IS NOT ENOUGH TO TURN DOWN HIS PLEA AND TO SH UT THE DOOR AGAINST HIM. IF THE EXPLANATION DOES NOT SMACK OF M ALA FIDES OR IT IS NOT PUT FORTH AS PART OF A DILATORY STRATE GY, THE COURT MUST SHOW UTMOST CONSIDERATION TO THE SUITOR. BUT W HEN THERE 7 ITA NOS.33/PUN/2015, 2005 & 2084/PUN/2013 KIRLOSKAR BROTHERS LIMITED IS REASONABLE GROUND TO THINK THAT THE DELAY WAS OC CASIONED BY THE PARTY DELIBERATELY TO GAIN TIME, THEN THE CO URT SHOULD LEAN AGAINST ACCEPTANCE OF THE EXPLANATION. WHILE CONDONING THE DELAY, THE COURT SHOULD NOT FORGET THE OPPOSITE PAR TY ALTOGETHER. IT MUST BE BORNE IN MIND THAT HE IS A LOSER AND HE TOO WOULD HAVE INCURRED QUITE LARGE LITIGATION EXPENSES. IT WOULD BE A SALUTARY GUIDELINE THAT WHEN COURTS CONDONE THE DELAY DUE TO LACHES ON THE PART OF THE APPLICANT, THE COURT SHALL COMPENSATE T HE OPPOSITE PARTY FOR HIS LOSS.' 11. THE HON'BLE SUPREME COURT IN IMPROVEMENT TRUST, LUDHIANA VS. UJAGAR SINGH & ORS. (SUPRA) HELD AS UNDER:- '2. AFTER ALL, JUSTICE CAN BE DONE ONLY WHEN THE MA TTER IS FOUGHT ON MERITS AND IN ACCORDANCE WITH LAW RATHER THAN TO DI SPOSE IT OF ON SUCH TECHNICALITIES AND THAT TOO AT THE THRESHOLD. BOTH SIDES HAD TRIED TO ARGUE THE MATTER ON MERITS BUT WE REFRAIN OURSELVES FROM TOUCHING THE MERITS OF THE MATTER AS THAT CAN BEST BE DONE BY TH E EXECUTING COURT WHICH HAD DENIED AN OPPORTUNITY TO THE APPELLANT TO LEAD EVIDENCE AND TO PROVE THE ISSUES SO FORMULATED. 3. IN OUR OPINION, ENDS OF JUSTICE WOULD BE MET BY SETTING ASIDE THE IMPUGNED ORDERS AND MATTER IS REMITTED TO THE EXECU TING COURT TO CONSIDER AND DISPOSE OF APPELLANT'S OBJECTIONS FILE D UNDER ORDER 21 RULE 90 OF CPC ON MERITS AND IN ACCORDANCE WITH LAW , AT AN EARLY DATE. IT IS PERTINENT TO POINT OUT THAT UNLESS MALAFIDES ARE WRIT LARGE ON THE CONDUCT OF THE PARTY, GENERALLY AS A NORMAL RUL E, DELAY SHOULD BE CONDONED. IN THE LEGAL ARENA, AN ATTEMPT SHOULD ALWAYS BE MADE TO ALLOW THE MATTER TO BE CONTESTED ON MERI TS RATHER THAN TO THROW IT ON SUCH TECHNICALITIES.. . . . . . .' 12. IN THE CASE BEFORE US, THERE IS NO MATERIAL ON RECORD TO DOUBT THE BONAFIDES OF THE ASSESSEE AND THERE IS NO REASON TO DOUBT THE BONAFIDES OF REASON FOR DELAY. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, THE DELAY IN FILING THE PRESENT APPEAL BELATEDLY DESERV ED TO BE CONDONED. ACCORDINGLY, WE CONDONE THE DELAY IN FILING THE APP EAL BEFORE THE TRIBUNAL AND PROCEED TO DECIDE THE APPEAL ON MERITS AFTER HEARIN G BOTH THE PARTIES. THE ABOVE HIGHLIGHTED AREAS OF THE EXTRACTS INDICAT E THE ASPECTS TO BE EXAMINED WHILE DECIDING THE REQUEST FOR CONDONATION FAVOURABLY TO ASSESSEE. (C). FURTHER, WE FIND THE HONBLE SUPREME COURT IN ANOTHER CIVIL APPEAL NOS. 6974 & 6975/2013, VIDE THE JUDGMENT DATED 22-04-201 3, IS RELEVANT FOR AN IDENTICAL PROPOSITION FOR CONDONING THE DELAY OF 5 YEARS ON SHOWING THE SUFFICIENT CAUSE. 8 ITA NOS.33/PUN/2015, 2005 & 2084/PUN/2013 KIRLOSKAR BROTHERS LIMITED (D). FURTHER ALSO, WE FIND IN THE CASE OF M/S. HOSA NNA MINISTRIES (SUPRA) HONBLE MADRAS HIGH COURT HAS RELIED HEAVILY ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF LAND ACQUISITION VS. M ST KATIJI & ORS (SUPRA). (E). THUS, WE FIND THE PUNE BENCH OF THE TRIBUNAL I N THE CASE OF M/S. PATANKAR WIND FARM PVT. LTD. IN ITA NOS. 2225 AND 2 226/PN/2013 ORDER DATED 10-04-2015 CONDONED THE DELAY OF 2193 DAYS ON FINDI NG A REASONABLE CAUSE. IN THIS CASE, THE DELAY WAS ATTRIBUTABLE TO THE CHA RTERED ACCOUNTANT WHO WAS NOT PARTING WITH THE RELEVANT ORIGINAL DOCUMENTS/FI LES REQUIRED FOR FILING APPEAL. IN THIS CASE, ANOTHER LEGAL ADVISOR HAD TO STEP INTO HIS SHOES TO FILE AN APPEAL BEFORE THE TRIBUNAL AFTER THE DELAY OF 2193 DAYS. THEREFORE, THE QUANTUM OF DELAY SHOULD NOT BE CONFUSED WITH THE QU ALITY OF THE SUFFICIENT CAUSE THAT CONTRIBUTED TO THE DELAY IN FILING THE APPEAL. (F). ANOTHER JUDGMENT OF HONBLE SUPREME COURT IN TH E CASE OF RAM NATH SAO @ RAM NATH SAHU AND VS. GOBARDHAN SAO AND OTHER S DATED 27-02-2002 IS RELEVANT ON THE SUBJECT AND THE HONBLE APEX COU RT OBSERVED THAT IN THE ABSENCE OF ANYTHING TO SHOW THAT THE DELAY WAS MALA FIDE, INTENTIONAL OR ANY DILATORY TACTICS WAS ADOPTED, THE SAME SHOULD HAVE BEEN CONDONED . . . . . . . THE EXPRESSION SUFFICIENT CAUSE SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE WHEN NO NEGLIGENCE OR I NACTION OR WANT OF BONAFIDE IS IMPUTABLE TO A PARTY. HONBLE APEX COURT ALSO HIGHLIGHTED THE LAID DOWN PRINCIPLE THAT THE SUFFICIENT CAUSE SHOULD R ECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE WHEN NO NEGLIG ENCE OR INACTION OR WANT OF BONAFIDE IS IMPUTABLE TO A PARTY. IT WAS FURTHER OBSERVED THAT COURTS SHOULD RECALL THAT WHAT HAS BEEN SAID UMPTEEN TIMES THAT RULES OF PRO CEDURE ARE DESIGNED TO ADVANCE JUSTICE AND SHOULD BE SO INTERP RETED AND NOT TO MAKE THEM PENAL STATUTES FOR PUNISHING ERRING PARTIES . 9 ITA NOS.33/PUN/2015, 2005 & 2084/PUN/2013 KIRLOSKAR BROTHERS LIMITED FROM THE ABOVE, WE FIND THAT IT IS INESCAPABLE CONC LUSION THAT THE ADMINISTRATION OF JUSTICE ASSUMES PARAMOUNT IMPORTA NCE MORE THAN THE RULES AND PROCEDURES. 7. APPLYING THE ABOVE LEGAL PROPOSITIONS TO THE FAC TUAL MATRIX OF THE PRESENT CASE THAT CONTRIBUTED TO THE DELAY IN FILIN G OF THE APPEAL BEFORE THE TRIBUNAL, IT IS AN UNDISPUTED FACT THAT THE CIT(A), PUNE VIDE HIS ORDER DATED 02-09-2010 ERRONEOUSLY HELD THAT THE ENTIRE REGULAR ASSESSMENT STANDS SET ASIDE BY THE CIT-1 U/S.263 OF THE ACT. RELEVANT PA RA NO.3 OF THE ORDER OF CIT(A) READS AS UNDER : 3. . . . . . . . . . . . . . . . . . . . . HOWEVER, THOUGH APPARENTLY T HE LD.CIT-I, PUNE IN HIS ORDER PASSED U/S.263 HAS SET ASIDE AND RESTORED THE ENTIRE ASSES SMENT BUT HAS ASKED THE AO TO RE-EXAMINE ISSUES WHICH HAVE BE EN DISCUSSED IN THE ORDER PASSED BY HIM U/S.263 OF THE I.T. ACT. THERE FORE, BY IMPLICATION, THE AO WILL HAVE TO LIMIT HIMSELF UNDER THE ABOVE MANDATE TO THE ISSUES CONSIDERED AND RAISED BY HIM IN THE ORIGINAL ASSESSMENT AND TH E ISSUES DISCUSSED BY THE LD.CIT-1 IN THE ORDER PASSED U/S.263 OF THE I.T. AC T. THEREFORE, THE AO WHILE PASSING THE FRESH ORDER UNDER THE ABOVE MANDATE GIV EN TO HIM U/S.263 WILL HAVE TO CONTINUE WITH THE ADDITIONS MADE BY HIM IN THE ORIGINAL ASSESSMENT UNLESS THE SAME HAVE BEEN MODIFIED IN THE DIRECTION S CONTAINED U/S.263 OF THE I.T. ACT. THE AO HOWEVER, CAN CONSIDER THE OBJECTI ONS OF THE APPELLANT RAISED IN THIS APPEAL AND THE REMAND REPORT SUBMITTED BY H IM ON ISSUES WHICH ARE NOT COVERED U/S.263 IN DRAFTING THE DE NOVO ORDER. THE PRESENT APPEAL THEREFORE, IS TREATED AS DISMISSED. 8. ACCORDING TO THE LD.AR FOR THE ASSESSEE, OUT OF THE CONTENTS OF THE ABOVE PARA, THE EXPRESSIONS, CIT-1, PUNE IN HIS ORD ER PASSED U/S.263 HAS SET ASIDE AND RESTORED THE ENTIRE ASSESSMENT CONSTITUTES AN OBVIOUSLY MISLEADING FINDING OF THE CIT(A) APART FROM MANY OT HER CONFUSING EXPRESSIONS USED BY HIM IN THE ABOVE EXTRACTED PORTION OF CIT( A)S ORDER. AS A RESULT OF SUCH EXPRESSIONS, THE CIT(A) SENT WRONG IMPRESSION TO THE ASSESSEE THAT THE ENTIRE REGULAR ASSESSMENT ORDER IS SET ASIDE. THES E INCOHERENT FINDINGS SENT WRONG MESSAGE OR BELIEF TO THE ASSESSEE THEREBY THE ASSESSEE IS IN BONAFIDE BELIEF THAT NO VALID REGULAR ASSESSMENT ORDER EXIST S AT RELEVANT POINT OF TIME, 10 ITA NOS.33/PUN/2015, 2005 & 2084/PUN/2013 KIRLOSKAR BROTHERS LIMITED WHICH REQUIRES TO BE CONTESTED BEFORE THE TRIBUNAL. IT IS ALSO WORTH MENTIONING THAT THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE WITHOUT ADJUDICATING THE GROUND RAISED BY THE ASSESSEE. TH E SAID APPROACH IS NOT IN TUNE WITH THE PROVISIONS OF SECTION 250(6) OF THE A CT. IT IS A SETTLED LEGAL PROPOSITION THAT THE CIT(A) IS UNDER STATUTORY OBLI GATION THAT HIS ORDER MUST CONTAIN ADJUDICATION ON MERITS ON EACH OF THE GROUN DS RAISED BY THE ASSESSEE. AS PER THE LD. COUNSEL FOR THE ASSESSEE, THERE IS N O MALAFIDE IN NOT FILING THE APPEAL BEFORE THE TRIBUNAL IN TIME. WHAT WOULD ASS ESSEE GAIN IF APPEAL IS NOT FILED? HE SUBMITTED THAT SOON AFTER THE MATTER FIR ST CAME TO THE NOTICE OF THE ASSESSEE, WHICH HAPPENED DURING THE PROCEEDINGS BEF ORE THE TRIBUNAL ON 18-11-2013, AN APPEAL IS FILED BY THE ASSESSEE BEFO RE THE TRIBUNAL IMMEDIATELY. HE RELIED ON THE DATE OF HEARING BEFO RE THE TRIBUNAL AND THE DATE OF FILING OF APPEAL BEFORE THE TRIBUNAL. THAT SHOWS THE SERIOUSNESS OF THE ASSESSEE IN PURSUING THE ASSESSEES GRIEVANCES TO T HE BENEFIT OF THE ASSESSEE. 9. TO SUM UP, ON THE ISSUE OF CONDONATION, IT IS A SETTLED ISSUE THAT THE QUANTUM OF DELAY DOES NOT DETERMINE, IF THE DELAY I S CONDONABLE OR NOT IN A PARTICULAR CASE. WHAT IS RELEVANT IS THE EXISTENCE OF SUFFICIENT CAUSE. IN THE INSTANT CASE, ACCORDING TO THE ASSESSEES AR, IT IS THE CIT(A) WHO CREATED THE CAUSE FOR THE ENTIRE DELAY. WE HAVE ALSO TAKEN INT O ACCOUNT THE LEGAL PRINCIPLE THAT THE RIGHT OF APPEAL IS THE LEGAL RIGHT WHICH I S GRANTED TO THE ASSESSEE BY THE STATUTE. WHY SHOULD NOT ASSESSEE USE THAT RIGH T, WHICH IS A FAVOURABLE RIGHT? AO HAS NOT MADE OUT THAT IT IS A CASE OF IN ACTION, NEGLIGENCE, MALAFIDE ETC., WHEN THE SAME IS NOT USED, THERE MUST BE A RE ASONABLE CAUSE. THEREFORE, CONSIDERING THE ABOVE FACTUAL MATRIX IN THE CASE OF THE ASSESSEE, I.E. ERRONEOUS FINDING OF THE CIT(A) WITH REFERENCE TO THE REVISION ORDER OF THE CIT-1, PUNE AS WELL AS THE INTERPRETATION ON THE S COPE OF SUFFICIENT CAUSE AS 11 ITA NOS.33/PUN/2015, 2005 & 2084/PUN/2013 KIRLOSKAR BROTHERS LIMITED INTERPRETED BY THE COURTS/TRIBUNALS, WE ARE OF THE VIEW THAT THERE EXISTS A SUFFICIENT CAUSE FOR CONDONATION OF DELAY AND THE S AID CAUSE IS REASONABLE ENOUGH TO CONDONE THE DELAY. THEREFORE, THE REASON S GIVEN BY THE MANAGING DIRECTOR AND CHIEF FINANCE MANAGER OF THE COMPANY I N THEIR AFFIDAVITS ARE ACCEPTED AND THE DELAY IS ACCORDINGLY CONDONED. TH EREFORE, THE APPEAL IS ADMITTED FOR ADJUDICATION OF THE GROUNDS ON MERIT. 10. REGARDING THE ADJUDICATION OF OTHER GROUNDS RAI SED BY THE ASSESSEE ON MERITS, IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ISSUES, RAISED IN THE GROUNDS RELATES TO DISALLOWANCE U/S.1 4A AND DEDUCTION U/S.80IA(4) OF THE ACT, BAD DEBTS, WARRANTY PROVISI ON, DISALLOWANCE OF CLAIM U/S.80GGB, ARE REQUIRED TO BE REMANDED TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. JUSTIFYING THE SAME, AR SUBMITTED TH AT THE CIT(A), WHO SIMPLY IGNORED THE GROUNDS, HAS NOT ADJUDICATED THE ISSUES BY PASSING A SPEAKING ORDER IN ACCORDANCE WITH THE PROVISIONS OF SECTION 250(6) OF THE ACT. DISMISSAL OF THE APPEAL BY THE CIT(A) WITHOUT GIVEN ANY REASO N ON MERITS CONSTITUTES INVALID, UNSUSTAINABLE AND OUTSIDE THE SCOPE OF JUR ISDICTION OF CIT(A). 11. AFTER HEARING BOTH THE SIDES, ON THIS ASPECT TO O, WE FIND THERE IS POINT IN FAVOUR OF THE ASSESSEE. LD. COUNSEL DEMONSTRATE D THE FAILURE OF THE CIT(A) AND CIT(A) FAILED TO ADJUDICATE ANY OF THE GROUNDS BY THE ASSESSEE WHICH ARE EXTRACTED IN PARA 2 OF HIS ORDER. CIT(A) MERELY DI SMISSED THE APPEAL OF THE ASSESSEE FOR STATISTICAL PURPOSES RELYING HEAVILY O N THE ORDER OF THE CIT-1, PUNE U/S.263 OF THE ACT UNDER THE ERRONEOUS BELIEF THAT THE SAID ORDER HAS SET ASIDE THE ENTIRE ORDER OF THE ASSESSMENT. THEREFO RE, WE ARE OF THE OPINION THAT LD. COUNSELS REQUEST FOR REMANDING ALL THE IS SUES TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION IS REQUIRED TO BE APPROVED A ND ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. CIT(A) IS DIRECTED 12 ITA NOS.33/PUN/2015, 2005 & 2084/PUN/2013 KIRLOSKAR BROTHERS LIMITED TO GRANT REASONABLE OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE IN ACCORDANCE WITH SET PRINCIPLES OF NATURAL JUSTICE. ACCORDINGL Y, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, THE REQUEST FOR CONDONATION OF D ELAY IS ALLOWED AND APPEAL IS ADMITTED. FURTHER, ALL THE GROUNDS ARE A LLOWED FOR STATISTICAL PURPOSES. ITA NO. 2005/PUN/13 - BY ASSESSEE AND ITA NO.2084/P UN/2013 BY REVENUE : 13. THESE CROSS APPEALS FILED BY THE ASSESSEE AND T HE REVENUE ARE AGAINST THE ORDER OF THE CIT(A)-I, PUNE DATED 30-08-2013 WH ICH HAS GENESIS IN THE FRESH ASSESSMENT ORDER U/S.143 (3) R.W.S 263 OF THE ACT FOR THE A.Y. 2005-06. 14. AS DISCUSSED ABOVE, CIT-1, PUNE PASSED THE REVI SION ORDER U/S.263 OF THE ACT ON 29-03-2010. THE ISSUES RAISED IN THE AP PEAL OF THE ASSESSEE REVOLVES AROUND THE CLAIM OF DISALLOWANCE U/S. 14A AND ALSO THE ISSUES IN THE APPEAL OF THE ASSESSEE RELATES TO BAD DEBTS, PROVI SION FOR WARRANTY. 15. AS STATED BY THE LD. COUNSELS, THESE ISSUES HAS NEXUS TO THE ISSUES RAISED BY THE ASSESSEE IN ITA NO.33/PUN/2015 ABOVE, WHICH STAND ALLOWED FOR STATISTICAL PURPOSES AFTER ADMITTING THE APPEAL FIL ED BELATEDLY. CONSIDERING THE CONNECTIVITY, IN OUR OPINION, AS DISCUSSED IN THE O PEN COURT, WE FIND APPROPRIATE FOR REMANDING THESE ISSUES TOO TO THE F ILE OF THE CIT(A) FOR FRESH ADJUDICATION AND FOR WANT OF SPEAKING ORDER ON EACH OF THESE ISSUES. IT IS THE CLAIM OF THE REVENUE THAT REASONABLE OPPORTUNITY WA S NOT GRANTED TO THE AO AT THE RELEVANT POINT OF TIME (GROUND NO.5 OF REVEN UES APPEAL). THE CIT(A) IS DIRECTED TO GRANT REASONABLE OF OPPORTUNITY TO BOTH THE PARTIES AT THE TIME OF 13 ITA NOS.33/PUN/2015, 2005 & 2084/PUN/2013 KIRLOSKAR BROTHERS LIMITED RE-ADJUDICATION. ACCORDINGLY, THE GROUNDS RAISED B Y THE ASSESSEE AND THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 16. IN THE RESULT, BOTH THE CROSS APPEALS ARE ALLOW ED FOR STATISTICAL PURPOSES. 17. TO SUM UP, THE CONDONATION REQUEST IS ALLOWED A ND ITA NO.33/PUN/2015 FILED BY THE ASSESSEE IS PARTLY ALLO WED FOR STATISTICAL PURPOSES AND ITA NOS. 2005/PUN/2013 AND 2084/PUN/2013 FILED BY THE ASSESSEE AND THE REVENUE ARE ALSO ALLOWED FOR STATISTICAL PURPOS ES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF SEPTEMBER, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 20 TH SEPTEMBER, 2017. / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT (A) - I , PUNE 4. CIT - I , PUNE 5. , , A BENCH PUNE; 6. / GUARD FILE.