M/s. TRANSMED INDIA, MUMBAI V. ITO Wd. - 18(2)(2), MUMBAI

ITA 2113/MUM/2007

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48840 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 28-04-2011
• Assessment Year: 1996-1997
• Appeal Filed On: 13-03-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S C TIWARI MS NARASHA MANGAT
• Keywords: Condonation of delay
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI. BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO.2113/MUM/2007 (ASSESSMENT YEAR : 1996-97) M/S TRANSMED INDIA, C/III, MAHALAXMI INDL. ESTATE, DRAINAGE PIPE ROAD, LOWER PAREL, MUMBAI-400 013. PAN: AAEFT6956G VS. INCOME TAX OFFICER, WD. 18(2)(2), PIRAMAL CHAMBERS, LALBAUG, MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.C. TIWARI / MS NARASHA MANGAT RESPONDENT BY : SHRI D. SONGATE, D.R. PER VIJAY PAL RAO : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XV III, MUMBAI DT.4.1.2007 ARISING FROM PENALTY ORDER PASSED U/S 2 71 (1) (C) FOR THE ASSESSMENT YEAR 1996-1997. 2. THE ASSESSEE HAS RAISED VARIOUS GROUNDS IN THIS APPEAL, HOWEVER, THE ONLY ISSUE ARISES FOR RECONSIDERATION AND ADJUD ICATION IS WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED C IT (A) IS JUSTIFIED IN SUSTAINING THE ACTION OF THE ASSESSING OFFICER IN I MPOSING PENALTY U/S 271 (1)(C) OF THE INCOME TAX ACT BY DISMISSING THE APPE AL OF THE ASSESSEE BEING TIME BARRED. 3. IN THIS CASE, TWO ASSESSMENT ORDERS WERE PASSED U/S 143 (3) R.W.S 147 ON 2 ND MARCH, 2000 AND 31 ST OCTOBER, 2002. IN BOTH THE ORDERS THE ASSESSING OFFICER MADE AN ADDITION OF RS. 2,77,678/ - AND RS. 10,07,259/- RESPECTIVELY. PENALTY PROCEEDINGS WERE ALREADY INI TIATED ON BOTH THE ISSUES 2 AND THE PENALTY OF RS.3,12,450/- HAS BEEN IMPOSED B Y THE ORDER DATED 29 TH MARCH, 2005. THE ASSESSEE CHALLENGED THE LEVY OF THE PENALTY BEFORE THE LEARNED CIT (A). SINCE, THERE WAS A DELAY OF 27 DA YS IN FILING THE APPEAL BEFORE THE LEARNED CIT (A), THE APPEAL OF THE ASSES SEE WAS DISMISSED IN LIMINE AS THE CIT (A) DECLINED THE CONDONATION OF DELAY IN FILING THE APPEAL VIDE IMPUGNED ORDER. HENCE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. EARLIER VIDE ORDER DATED 1 ST APRIL, 2009 THE TRIBUNAL DISMISSED THE APPEAL OF THE ASSESSEE, HOWEVER, SUBS EQUENTLY ON THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE THE SAID ORDER HAS BEEN RECALLED BY THIS TRIBUNAL VIDE ORDER DATED 30 TH JUNE, 2010. THUS, THIS APPEAL WAS PLACED BEFORE US FOR ADJUDICATION. 4. WE HAVE HEARD THE LEARNED COUNSEL FOR THE ASSESS EE AS WELL AS THE LEARNED D.R. AND PERUSED THE RECORDS AVAILABLE AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 5. THE LEARNED COUNSEL FOR THE ASSESSEE HAS POINTED OUT THAT THE QUANTUM APPEAL OF THE ASSESSEE HAS BEEN SET ASIDE BY THIS T RIBUNAL TO THE RECORD OF THE LEARNED CIT (A) VIDE ORDER DATED 20 TH FEBRUARY, 2008 IN ITA NO:1226/2004. THEREFORE, THE LEARNED COUNSEL FOR T HE ASSESSEE HAS SUBMITTED THAT WHEN THE DISALLOWANCE / ADDITION ITS ELF HAS BEEN SET ASIDE BY THIS TRIBUNAL, THE PENALTY LEVIED ON ACCOUNT OF SAI D DISALLOWANCE / ADDITION DOES NOT SURVIVE. HE HAS ALSO POINTED OUT THAT THE ASSESSEE HAS EXPLAINED DELAY BEFORE THE LEARNED CIT (A) AS RECORDED BY THE CIT (A) IN PARAGRAPH 5 OF THE IMPUGNED ORDER. HOWEVER, THE LEARNED CIT (A) DID NOT ACCEPTED THE REASONS EXPLAINED BY THE ASSESSEE AND DISMISSED THE APPEAL OF THE ASSESSEE 3 WITHOUT GOING INTO THE MERITS OF THE CASE. ON THE OTHER HAND THE LEARNED D.R. HAS RELIED UPON THE ORDERS OF THE LOWER AUTHOR ITIES. 6. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PERU SAL OF THE MATTER ON RECORD WE FIND THAT THE ASSESSEE EXPLAINED THE REAS ONS FOR DELAY BEFORE THE LEARNED CIT (A) THAT FOR THE LAST FEW MONTHS ALL TH E PARTNERS OF THE ASSESSEE FIRM WERE OUT OF STATION DUE TO SOME BUSINESS WORK. FURTHER THE REGISTERED OFFICE OF THE ASSESSEE WAS ALSO FACING SOME LEAKAGE PROBLEM AND ON THAT ACCOUNT THE OFFICE HAD TO BE SHIFTED TO THE RESIDEN CE OF THE ASSESSEE AT CHURCH GATE, MUMBAI. THUS, IT WAS SUBMITTED THAT T HE ASSESSEE COULD NOT FILED THE APPEAL WITHIN THE TIME AND THERE WAS A DE LAY OF 27 DAYS IN FILING THE APPEAL BEFORE THE CIT (A). IT IS A SETTLED PROPOSI TION OF LAW THAT COURT SHOULD TAKE A LENIENT VIEW WHILE DECIDING THE CONDONATION OF DELAY. WHEN THE SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATION ARE OPPOSED TO EACH OTHER, THE SUBSTANTIAL JUSTICE HAS TO BE PREFERRED AND THE COU RT SHOULD TAKE JUSTICE ORIENTED APPROACH WHILE DECIDING THE APPLICATION FO R CONDONATION OF DELAY. HOWEVER, IT DOES NOT MEAN THAT THE LITIGANT HAS A FR EE LICENSE TO APPROACH THE COURT AT ITS WILL. IT IS ALWAYS A QUESTION TO BE C ONSIDERED WHETHER THE EXPLANATION IS BONAFIDE OR MERELY A DEVICE TO COVER ULTERIOR PURPOSE OR AN ATTEMPT TO SAVE LIMITATION IN AN UNDERHAND WAY. ON CE, THE EXPLANATION IS FOUND TO BE BONAFIDE, THE COURT SHOULD BE LIBERAL I N CONSTRUING SUFFICIENT CAUSE AND TO LEAN IN FAVOUR OF SUCH PARTY. IN THE CASE IN HAND WHEN THE ASSESSEE HAS EXPLAINED THE REASON FOR DELAY IN FILI NG THE APPEAL THOUGH IN VIEW OF THE LEARNED CIT (A) IT MIGHT NOT BE SUFFICI ENT BUT WHEN IT IS NOT A CASE OF MALAFIDE THEN THE DELAY IN FILING THE APPEA L SHOULD HAVE BEEN 4 CONDONED. ACCORDINGLY, WE CONDONE THE DELAY IN FIL ING THE APPEAL. FURTHER, WHEN THE QUANTUM APPEAL HAS ALREADY BEEN SET ASIDE BY THIS TRIBUNAL TO RECORD OF THE LEARNED CIT (A) TO ADJUDICATE THE ISS UE AFRESH, THEN THE PENALTY LEVIED AGAINST THE DISALLOWANCE / ADDITION WHICH AR E NO MORE IN EXISTENCE DOES NOT SURVIVE. ACCORDINGLY, WE CANCEL THE PENAL TY WITH A LIBERTY THAT THE ASSESSING OFFICER MAY TAKE APPROPRIATE STEPS AS PER THE OUTCOME OF THE SET ASIDE PROCEEDINGS BEFORE THE LEARNED CIT (A). ACCO RDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 7. IN RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT DATED ON 13 TH , MAY, 2011 SD/- SD/- (P.M. JAGTAP) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT. 13 TH MAY, 2011. OKK* COPIES OF THE ORDER FORWARDED TO : (1) THE APPELLANT (2) THE RESPONDENT (3) THE CIT CONCERNED (4) CIT(A) CONCERNED (5) DR, (6) GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES