RUPAM J. PAREKH, MUMBAI V. ACIT 12(1), MUMBAI

ITA 2134/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7954 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 17-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Keywords: Condonation of delay
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI N.V.VASUDEVAN(J.M) & SHRI B.RAMAKOTAIA H (A.M) ITA NO.2134/MUM/2010(A.Y. 2006-07) MRS. RUPAM J. PAREKH, FORTUNE BUILDING, 3 RD FLOOR, 568, L.J ROAD, FIVE GARDEN, MATUNGA (E), MUMBAI 19. PAN:AADPP 5451H (APPELLANT) VS. THE ACIT 12(1), AAYKAR BHAVAN, MK ROAD, MUMBAI 20. (RESPONDENT) APPELLANT BY : SHRI RAJIV KHANDELWAL RESPONDENT BY : SHRI JITENDRA YADAV ORDER PER N.V.VASUDEVAN, J.M, THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 9/2/2010 OF CIT(A) 23 MUMBAI RELATING TO ASSESSMENT YEAR 2006-0 7. 2. THE ASSESSEE IS AN INDIVIDUAL. HE DOES SPECULAT ING TRADING IN SHARES AND COMMODITIES. FOR A.Y 2006-07 HE FILED A RETUR N OF INCOME DECLARING TOTAL INCOME AT RS. 1,72,21,170/-. THE ASSESSMENT WAS COMPLETED BY THE AO UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) BY AN ORDER DATED 31/12/2008 DETERMINING THE TOTAL INCOME AT RS . 2,58,46,440/-. IN RESPECT OF THE VARIOUS ADDITIONS MADE BY THE AO IN THE ASSESSMENT PROCEEDINGS THE ASSESSEE WAS AGGRIEVED AND HE PREFE RRED AN APPEAL BEFORE THE CIT(A). THE ASSESSEE HAD FILED THE APPEAL BEFO RE THE CIT(A) ON 2/2/2009 WITHIN THE TIME CONTEMPLATED IN LAW. AS PER THE PR OVISIONS OF SECTION 249(4)(A) OF THE ACT IT IS A CONDITION PRECEDENT FO R AN APPEAL BY THE ASSESSEE TO BE ADMITTED BY THE CIT(A), THAT THE ASSESSEE SH OULD PAY TAX DUE ON THE ITA NO.2134/MUM/2010 ) 2 INCOME RETURNED BY HIM. THE ADMITTED POSITION IN T HIS REGARD IS THAT THE ASSESSEE WAS BOUND TO PAY SELF ASSESSMENT TAX OF RS . 76,42,431/- AS PER THE RETURN OF INCOME INCLUDING INTEREST UNDER SECTION 2 34A,234B AND 234C OF THE ACT. THE ASSESSEE PAID A SUM OF RS. 91,74,850/ - AS PER THE FOLLOWING DETAILS. DATE AMOUNT(RS.) CHHEQE NO. BANK SOURCE ADVANCE TAX SELF ASSESSMENT TAX 20/02/2009 16/04/2009 30/6/2009 50,000 18,05,000 32,00,000 41,69,850 91,74,850 241188 247729 HDFC BANK FORT HDFC BANK FORT HDFC BANK,FORT HSFFIN.SER.PVT. LTD. -DO- -DO- 3. IT WAS THE PLEA OF THE ASSESSEE BEFORE CIT(A) TH AT THE ASSESSEE DID NOT HAVE REQUISITE FUNDS TO PAY THE SELF ASSESSMENT TAX AND THAT HE HAD TO TAKE A LOAN AGREEGATING TO RS. 88,70,000/- FROM HSM FINANC E SERVICE PVT. LTD. IN THIS REGARD THE ASSESSEE ALSO SUBMITTED THAT THE L AST DATE OF PAYMENT OF SELF ASSESSMENT TAX BY THE ASSESSEE WAS 30/6/2009. THE DUE DATE FOR FILING THE APPEAL BEFORE CIT(A) WAS 2/2/2009. THE ASSESSEE H AD FILED APPEAL ON 2/2/2009 WITHOUT PAYING ADMITTED TAX ON THE RETURNE D INCOME ON 30/6/2009. THEREFORE, THERE WAS A DELAY OF 148 DAY S IN MAKING THE PAYMENT OF THE TAX DUE ON THE INCOME RETURNED BY TH E ASSESSEE. IT WAS THE PLEA OF THE ASSESSEE THAT THE FAILURE TO COMPLY WIT H THE PROVISIONS OF SECTION 249(4) OF THE ACT IS A CURABLE DEFECT AND IF TRIBUN AL IS SATISFIED THAT THERE EXIST SUFFICIENT REASONS FOR CURING SUCH DEFECTS, T HEN EVEN AFTER EXPIRY OF LIMITATION THE TRIBUNAL IN ITS DISCRETION CAN RESTO RE SUCH MATTERS TO THE FILE OF CIT(A) FOR DECIDING THE CONTROVERSY ON MERITS. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THERE WAS SUFFICIEN T CAUSE IN THE CASE OF THE ASSESSEE NAMELY FINANCIAL HARDSHIP. THE CIT(A) HO WEVER DID NOT CONSIDER THE PLEA OF THE ASSESSEE ON THE ABOVE LINES BUT DIS MISSED THE APPEAL OF THE ITA NO.2134/MUM/2010 ) 3 ASSESSEE AS UNADMITTED FOR VIOLATION OF THE PROVIS IONS OF SECTION 249(4)(A) OF THE ACT. 3. AGGRIEVED BY THE ORDER OF THE CIT(A) THE ASSESSE E IS IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. IN THE CAS E OF J.K.CHATURVEDI VS. JCIT (2004) 3 SOT 456 (AHMD) IT HAS BEEN HELD A S FOLLOWS: A PLAIN READING OF SECTION 249(3) SHALL REVEAL THA T IF THE ASSESSEE SHOWED SUFFICIENT REASONS FOR LATE FILING OF HIS AP PEALS, THEN SUCH DELAY CAN BE CONDONED AND CONTROVERSY WOULD BE SILENCED O N MERIT. SIMILARLY, FOR SAKE OF EXPLANATION, IF AN ASSESSEE DID NOT HAVE SUFFICIENT FUNDS FOR COMPLYING WITH THE REQUIREMENT OF SECTION 249(4) AND HAS NOT FILED THE APPEAL WITHIN THE TIME PROVIDED UNDER SECTION 249(2) AND SUBSEQUENT TO EXPIRY OF LIMITATION, HE MAKES COMPLI ANCE OF SECTION 249(4) AND FILES THE APPEAL WITH A PRAYER FOR CONDO NATION OF DELAY, THEN IT WOULD BE IN DISCRETION OF FIRST APPELLATE AUTHOR ITY TO SEE WHETHER SUFFICIENT REASONS FOR LATE FILING OF APPEAL EXISTE D OR NOT. IF THE COMMISSIONER (APPEALS) AND ARRIVED AT A CONCLUSION THAT SUFFICIENT REASONS EXIST THEN AGAIN THE CONTROVERSY WOULD BE D ECIDED ON MERITS. THUS, ON A CONJOINT READING OF SUB-SECTIONS (3) AND (4) OF SECTION 249, IT IS INFERRED THAT DEFECT WHICH ARISES DUE TO NON- COMPLIANCE OF SECTION 249(4) IS A CURABLE ONE AND IN A GIVE CASE, IF THE TRIBUNAL IS SATISFIED THAT THERE EXIST SUFFICIENT REASONS FOR CURING SUCH DEFECTS AFTER THE EXPIRY OF LIMITATION, IT WOULD BE IN THE REALM OF T HE TRIBUNALS DISCRETION TO RESTORE SUCH MATTERS TO THE FILE OF T HE COMMISSIONER (APPEALS) FOR DECIDING THE CONTROVERSY ON MERIT BEC AUSE SECTION 254(1) PROVIDES WIDE POWERS TO THE TRIBUNAL. 5. IN THE PRESENT CASE WE ARE SATISFIED THAT THE RE WAS SUFFICIENT CAUSE FOR THE ASSESSEE NOT TO PAY THE TAX DUE ON INCOME RETUR NED DUE TO FINANCIAL DIFFICULTIES. IN THESE CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL REFERRED TO ABOVE WE SET ASIDE THE ORDER O F THE CIT(A) AND DIRECT THE CIT(A) TO ADMIT THE APPEAL BY THE ASSESSEE AND DECI DE THE GROUNDS RAISED BY THE ASSESSEE ON MERITS. ITA NO.2134/MUM/2010 ) 4 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 25 TH DAY OF MARCH, 2011. SD/- SD/- (B.RAMAKOTAIAH) (N.V.VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED. MARCH, 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3 . THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.RD BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM. ITA NO.2134/MUM/2010 ) 5 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 21/3/2011 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 23/3/2011 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER