Madhur Sharma, Dehradun V. ITO Ward 1(5), Dehradun

ITA 2091/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1357 (ITAT-DEHRADUN)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 08-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Set aside
• Section: 271B; 44AB

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL [DEHRADUN BENCH] BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO 2091 / D EL/ 2019 A Y 2013 - 14 APPELLANT RESPONDENT MADHUR SHARMA 45 A MOTI BAZAR DEHRADUN PAN : - AVKPS2143R VS. THE INCOME TAX OFFICER WARD - 1 (5) DEHRADUN ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: - 28/02/2020 DATE OF ORDER: - 1 3 / 0 5 / 2 0 2 0 O R D E R PER PRASHANT MAHARISHI, A.M.: 01 THIS APPEAL IS FILED BY THE ASSESSEE , AN INDIVIDUAL FOR ASSESSMENT YEAR 2013 - 14 AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), THERE ARE NO DATED 21/12/2018 WHEREIN THE PENALTY LEVIED UNDER SECTION 271B OF THE INCOME TAX ACT BY THE LEARNED ASSESSING OFFICER AS PER ORDER DATED 2 8/9/2016 LEVYING PENALTY OF 140425/ - WAS CONFIRMED. 2 02 BRIEF FACTS OF THE CASE OF THE ASSESSEE IS THAT RETURN OF INCOME WAS FILED ON 18/6/2014 DECLARING TOTAL INCOME OF 3 10275/ . THE INCOME WAS DENIED BY THE ASSESSEE FROM SALE OF INDIAN MADE FOREIGN LI QUOR. THE ASSESSMENT UNDER SECTION 143 (THREE) OF THE ACT WAS COMPLETED AT THE RETURNED INCOME ON 16/3/2016. IT WAS NOTED THAT ASSESSEE HAS SHOWN THE TOTAL SALES OF RUPEES TO 8085083/ . AS THE TURNOVER OF THE ASSESSEE WAS FOUND TO BE MORE THAN 1 CRORE AN D ASSESSEE WAS LIABLE TO GET THE BOOKS OF ACCOUNTS AUDITED UNDER THE PROVISIONS OF SECTION 44AB OF THE INCOME TAX ACT , AND TO FURNISH SUCH REPORT ON OR BEFORE THE SPECIFIED DATE, WHICH ASSESSEE FAILED TO COMPLY WITH BUT FURNISH ED THE REPORT DURING THE COU RSE OF ASSESSMENT PROCEEDINGS. AS PER THE AUDIT REPORT IT WAS FOUND THAT THE BOOKS OF ACCOUNTS AUDITED BY THE ACCOUNTANT ON 18/6/2014 ONLY. THUS THE AO WAS OF THE VIEW THAT ASSESSEE HAS NOT COMPLIED WITH THE PROVISIONS OF SECTION 44AB OF THE INCOME TAX ACT AND THEREFORE IS LIABLE FOR PENALTY UNDER SECTION 271B OF THE INCOME TAX ACT. THE AO ISSUED THE NOTICE TO THE ASSESSEE ON 16/3/2016 WHICH REMAIN ON COMPLIED WITH AND THEREFORE THE SECOND NOTICE WAS ISSUED. THE ASSESSEE ALSO DID NOT COMPLY THAT NOTICE AND THEREFORE THE LEARNED ASSESSING OFFICER FOUND THAT AS THE TOTAL TURNOVER OF THE ASSESSEE IS 2 8085083 / - , HE LEVIED THE PENALTY OF RS. 1 40425/ . THE ORDER UNDER SECTION 271B WAS PASSED ON 28/9/2016. THE ASSESSEE WAS AGGRIEVED WITH THE ORDER OF THE LEAR NED ASSESSING OFFICER PREFERRED AN APPEAL BEFORE THE LEARNED CIT A WHO DISMISSED 3 THE APPEAL OF THE ASSESSEE HOLDING THAT THAT THE PENALTY WAS LEVIED BY THE LEARNED ASSESSING OFFICER BY ORDER DATED 28/9/2016 AGAINST WHICH THE APPEAL WAS FILED BEFORE HIM O N 30/3/2018. ALONG WITH APPEAL MEMO A COPY OF THE ORDER WHICH WAS A CERTIFIED COPY OF 10 ON 1/3/2018 WAS ATTACHED. WHEN THE HEARING TOOK PLACE THE OF ASSESSEE FILED A WRITTEN SUBMISSION ALONG WITH ANOTHER COPY OF THE SAME ORDER DATED 28/9/2016 WHICH WAS A NONCERTIFIED COPY. THEREFORE HE FINDS THAT THERE ARE TWO DIFFERENT VERSIONS OF THE IMPUGNED PENALTY ORDER IS WHICH ARE OF SAME CONTENT BUT ONE COPIES ALLEGEDLY CERTIFIED ON THE BASIS OF WHICH THE PRESENT APPEAL HAS BEEN FILED. HE THEN PROCEEDED TO EXAMINE ITNS - 51 AND FOUND THAT THE AO HAS CLEARLY STATED THAT ORDER WAS SERVED ON ASSESSEE ON 29/9/2016 , WHICH SHOWS AND EXPLAINS WHY THE APPELLANT WAS HAVING A NONCERTIFIED COPY OF THE IMPUGNED ORDER WHICH HAS BEEN FILED DURING THE COURSE OF HEARING ON 19/12/20 18. THE ASSESSEE WAS ALSO ASKED TO EXPLAIN THE DELAY IN FILING OF THE APPEAL. THE ASSESSEE FILED AN AFFIDAVIT STATING THAT THERE WAS AN ACCIDENT HAPPENED TO HIM IN 2013 IN WHICH HE ALONG WITH HIS WIFE WERE INJURED. HOWEVER THE LEARNED CIT A DISREGARDED T HE EXPLANATION OF THE ASSESSEE AND HELD THAT THE ASSESSEE HAS NOT APPRECIATED THE LEGAL REQUIREMENTS OF EXPLAINING THE DELAY IN FILING OF THE APPEAL AS HIS STORY OF OBTAINING CERTIFIED COPY IN FILING THE APPEAL IS NOT BORNE OUT FROM THE RECORD FURNISHED WH ERE HE HIMSELF ON HIS OWN POSITION HAS FILED A NONCERTIFIED COPY OF THE IMPUGNED ORDER 4 UNDER SECTION 271B OF THE INCOME TAX ACT DATED 28/9/2016 AND THIS FACT HAS CORROBORATED FROM ITN S - 51 WHEREIN THE AO IS ALSO STATING THE DATE OF SERVICE OF THE ORDER AS 29/9/2016. THE AFFIDAVIT FILED ALSO DOES NOT IN ANYWAY RESCUE THE APPELLANT FROM THE FACT THAT APPEAL IS IN ACTUALITY MORE THAN 15 MONTHS LATE. THEREFORE HE HELD THAT APPEAL IS NOT MAINTAINABLE AND IS BEYOND THE TIME. ACCORDINGLY HE DISMISSED THE APPEAL IN LIMINE. AGGRIEVED BY THIS ASSESSEE IS IN APPEAL BEFORE US. 03 THE LEARNED AUTHORISED REPRESENTATIVE APPEARING ON BEHALF OF ASSESSEE SUBMITTED THAT THE LEARNED CIT A IS UPHELD THE PENALTY WITHOUT CONSIDERING THE APPEAL OF THE ASSESSEE ON MERITS. HE FURTHER SUBMITTED THAT THERE WAS NO MEN THREE ON PART OF THE ASSESSEE AND ASSESSEE COULD NOT FILE AUDIT REPORT IN TIME DUE TO UNAVOIDABLE BONA FIDE REASONS AS THE ASSESSEE MET WITH AN ACCIDENT IN WHICH HE WAS SERIOUSLY INJURED AND WAS UNDER MEDICAL TREATMENT. HE T HEREFORE SUBMITTED THAT THE LEARNED CIT A SHOULD HAVE CONSIDERED THE DELAY IN FILING OF THE APPEAL AND SHOULD HAVE DECIDED THE APPEAL ON THE MERITS OF THE CASE. 04 THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT A AND SUBMITTED THAT ASSESSEE COULD NOT EXPLAIN THE DELAY IN FILING OF THE APPEAL OF MORE THAN 15 MONTHS AND THEREFORE THE LEARNED CIT A HAS NOT GONE DOWN THE DELAY. HE THEREFORE SUPPORTED THE ORDER OF THE LEARNED CIT A. 5 05 WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. ADMITTEDLY THE ASSESSEE HAS FAILED TO GET HIS ACCOUNTS AUDITED AND FURNISHED BEFORE THE ASSESSING OFFICER BEFORE THE PRESCRIBED DUE DATE. HOWEVER DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE SUBMITTED THE TAX AUDIT REPORT AND INCOME OF THE ASSESSEE WAS ASSESSED AT THE SAME FIGURE ON WHICH THE RETURN OF INCOME WAS FILED. HOWEVER WITH RESPECT TO THE PENALTY BEFORE THE ASSESSING OFFICER, ASSESSEE DID NOT EXPLAIN ANYTHING. BEFORE THE LEARNED CIT A ASSESSEE FILED DETAILED EXPLANATION ABOUT THE DELAY IN FILING OF THE APPEAL. THE FACT REMAINED THAT THE ASSESSEE MET WITH AN ACCIDENT ALONG WITH HIS WIFE AND WAS FOR A CONSIDERABLE TIME UNDER THE MEDICAL OBSERVATION. THIS FACT HAS NOT BEEN DENIED. THE LEARNED CIT A DID NOT CONDONE THE DELAY ACCORDING TO HIM IT IS FOR 15 MONTHS. MERELY BECAUSE IN AFFIDAVIT IS FILED BY ASSESSEE, ACCORDING TO HIM IT DID NOT EXPLAIN THE DELAY OF 15 MONTHS. HON SC IN COLLECTOR LAND ACQUISITION, ... VS MST. KAT IJI & ORS ON 19 FEBRUARY, 1987 1987 AIR 1353, 1987 SCR (2) 387 HAS HELD THAT 'ANY APPEAL OR ANY APPLICATION, OTHER THAN AN APPLICATION UNDER ANY OF THE PROVISIONS OF ORDER XXI OF THE CODE OF CIVIL PROCEDURE, 1908. MAY BE ADMITTED AFTER THE PRESCRIBED PERIOD IF THE APPELLANT OR THE APPLICANT SATISFIES THE COURT THAT HE HAD SUFFICIENT CAUSE FOR NOT PREFERRING THE APPEAL OR MAKING THE APPLICATION WITHIN SUCH PERIOD.' 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITORIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING 6 DEFEATED. AS AGAINST THIS WHEN DELAY IS CON - DONED THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTE R HEARING THE PARTIES. 3. 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOUR'S DELAY, EVERY SECOND'S DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL COMMON SENSE PRAGMATIC MANNER. 4. WHEN SUBST ANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON - DELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT HE RUNS A SERIOUS RISK. 6. IT MUST BE GRASPED THAT JUDICIARY IS RESPEC TED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. MAKING A JUSTICE - ORIENTED APPROACH FROM THIS PERSPECTIVE, THERE WAS SUFFICIENT CAUSE FOR CONDONING THE DELA Y IN THE INSTITUTION OF THE APPEAL. THE FACT THAT IT WAS THE 'STATE' WHICH WAS SEEKING CONDONATION AND NOT A PRIVATE PARTY WAS ALTOGETHER IRRELEVANT. THE DOCTRINE OF EQUALITY BEFORE LAW DEMANDS THAT ALL LITIGANTS, INCLUDING THE STATE AS A LITI - GANT, ARE A CCORDED THE SAME TREATMENT AND THE LAW IS ADMIN - ISTERED IN AN EVEN HANDED MANNER. THERE IS NO WARRANT FOR ACCORDING A STEPMOTHERLY TREATMENT WHEN THE 'STATE' IS THE APPLICANT PRAYING FOR CONDONATION OF DELAY. IN FACT EXPERI - ENCE SHOWS THAT ON ACCOUNT OF AN IMPERSONAL MACHINARY (NO ONE IN CHARGE OF THE MATTER IS DIRECTLY HIT OR HURT BY THE JUDGMENT SOUGHT TO BE SUBJECTED TO APPEAL) AND THE INHERITED BUREAUCRATIC METHODOLOGY IMBUED WITH THE NOTE - MAK - ING, FILE PUSHING, AND PASSING - ON - THE - BUCK ETHOS, DELAY O N ITS PART IS LESS DIFFICULT TO UNDERSTAND THOUGH MORE DIFFI - CULT TO APPROVE. IN ANY EVENT, THE STATE WHICH REPRESENTS THE COLLECTIVE CAUSE OF THE COMMUNITY, DOES NOT DESERVE A LITIGANT - NON - GRATA STATUS. THE COURTS THEREFORE HAVE TO BE INFORMED WITH THE S PIRIT AND PHILOSOPHY OF THE PROVISION IN THE COURSE OF THE INTERPRETATION OF THE EXPRESSION 'SUFFI - CIENT 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 MERTIS I N PREFERENCE TO THE APPROACH WHICH SCUTTLES A DECISION ON MERITS. 7 TURNING TO THE FACTS OF THE MATTER GIVING RISE TO THE PRESENT APPEAL, WE ARE SATISFIED THAT SUFFICIENT CAUSE EXISTS FOR THE DELAY. THE ORDER OF THE HIGH COURT DISMISSING THE APPEAL BEFORE IT AS TIME BARRED, IS THEREFORE. SET ASIDE. DELAY IS CONDONED. AND THE MATTER IS REMITTED TO THE HIGH COURT. THE HIGH COURT WILL NOW DISPOSE OF THE APPEAL ON MERITS AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO BOTH THE SIDES. APPEAL IS ALLOWED ACCORD INGLY. NO COSTS. 06 THEREFORE, LOOKING AT THE GUIDANCE PROVIDED BY THE HONOURABLE SUPREME COURT, IT IS IMPORTANT THAT APPELLATE AUTHORITIES SHOULD NOT HAVE ADOPTED A PEDANTIC APPROACH TO THE DELAY IN FILING OF THE APPEAL. THEY SHOULD BE LIBERAL AND DECIDE T HE ISSUE ON THE MERITS, AS NATURALLY NOBODY GAINS BY APPROACHING AUTHORITIES BELATEDLY. IN VIEW OF THIS WE SET ASIDE THE APPEAL OF THE ASSESSEE BACK TO THE FILE OF THE OFFICE OF THE LEARNED CIT A WITH A DIRECTION TO DECIDE THE ISSUE AFRESH ON THE MERITS OF THE CASE. 07 IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE OPEN COURT ON 1 3 / 0 5 / 2 0 2 0 - S D / - - S D / - (SUDHANSHU SRIVASTAVA) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 / 0 5 / 2 0 2 0 COPY FORWARDED TO 1 . APPELLANTS; 2 . RESPONDENTS; 8 3 . CIT; 4 . CIT (APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR ITAT ,