Mahendra J. Chalishazar- HUF, Ahmedabad V. ITO, Ward-5(3)(1), Ahmedabad

ITA 2136/AHD/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1421 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 16-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset converted into stock in trade; Condonation of delay; Set aside
• Section: 45(2)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C FOR ITA NOS.1883/AHD/2018 & 1884 /AHD/2008 AND SMC BENCH FOR ITA NO.2136/AHD/2018, AHMEDABD BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT AND SHRI RAJPAL YADAV, JUDICIAL MEMBER SL. NOS. ITA NO(S) ASSESSMENT YEAR (S) APPEAL(S) BY APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. 1883/AHD/2018 2010-11 KETAN M.CHALISHAZAR 4, VASUPUJYA SOCIETY PT COLLEGE ROAD PALDI AHMEDABAD-380 007 PAN:ACDPC5209 N THE ITO WARD-5(3)(1) AHMEDABAD 2. 1884/AHD/2018 201-11 KETAN M. CHALISHAZAR HUF (ADDRESS AS ABOVE) PAN:AADHK3422M THE ITO WARD-5(3)(1) AHMEDABAD 3. 2136/AHD/2018 2010-11 MAHENDRA J CHALISHAZAR HUF (ADDRESS AS ABOVE) PAN:AADHM9205L THE ITO WARD-5(3)(1) AHMEDABAD ASSESSEE(S) BY : SHRI PARIN SHAH, AR REVENUE BY : SHRI L.P. JAIN, SR.DR / DATE OF HEARING 07/06/2019 / DATE OF PRONOUNCEMENT 10/06/2019 / O R D E R PER SHRI RAJPAL YADAV, JUDICIAL MEMBER : THE LD. FIRST APPELLATE AUTHORITY HAS DECIDED THE APPEALS OF SHRI KETAN M. CHALISHAZAR AND SHRI KETAN M. CHALISHAZAR HUF VIDE ORDERS DATED 03/08/2018 PASSED IN AY 2010-11, WHEREAS APPE AL OF SHRI MAHENDRA J. CHALISHAZAR HUF WAS DECIDED ON 06/09/20 18. SINCE ITA NOS.1883,1884 & 2136 /AHD/ 2018 KETAN M. CHALISHAZAR & 2 OTHERS VS. ITO ASST.YEAR 2010-11 - 2 - COMMON ISSUES ARE INVOLVED, THEREFORE WE DISPOSE OF ALL THESE APPEALS BY THIS COMMON ORDER. 2. THE ASSESSEES HAVE FILED AN APPLICATION FOR HEAR ING ALL THESE APPEALS OUT OF TURN ON THE GROUND THAT THEIR APPEAL S WERE TIME BARRED BEFORE THE LD.FIRST APPELLATE AUTHORITY BY 12 & 13 DAYS. THE LD.CIT(A) HAS NOT CONDONED THE DELAY AND DISMISSED THE APPEAL S BEING TIME BARRED. 3. CONSIDERING THE ABOVE FACTS, WE HAVE TAKEN UP TH ESE APPEALS FOR OUT OF TURN HEARING. 4. THE LD.DR DID NOT RAISE ANY OBJECTION FOR TAKING THE APPEALS FOR HEARING ITSELF. 5. AS OBSERVED EARLIER, THESE APPEALS WERE TIME BAR RED BEFORE THE LD. FIRST APPELLATE AUTHORITY BY 12 DAYS (ITA NOS.1883 AND 1884/AHD/2018) AND 13 DAYS (ITA NO.2136/AHD/2018). IN ORDER TO E XPLAIN THE DELAY, ALL APPELLANTS HAVE CONTENDED THAT AS PER RULE 45(2) OF THE IT RULES, 1962, APPEAL BEFORE THE CIT(A) REQUIRES TO BE FILED ELECT RONICALLY AND IN ORDER TO FILE IT ELECTRONICALLY IT IS TO BE VERIFIED BY A ADHAR OTP OR THROUGH DIGITAL SIGNATURE. BOTH THE ABOVE MODES REQUIRED OTP FOR VERIFICATION ON MOBILE NUMBER REGISTERED WITH UIDAI (AUTHORITY M AINTAINING AADHAR DATABASE) THE ASSESSEES HAVE MADE APPLICATION FOR UPDATION OF MOBILE NUMBER IN AADHAR DATA BASE ON 03/02/2018. THE AS SESSEES HAVE ITA NOS.1883,1884 & 2136 /AHD/ 2018 KETAN M. CHALISHAZAR & 2 OTHERS VS. ITO ASST.YEAR 2010-11 - 3 - ATTACHED RELEVANT PROOF IN THIS REGARD AS EXHIBIT-I WITH THESE APPEALS ALSO. THE UIDAI TOOK 12 DAYS TO UPDATE THE SAME AND THERE AFTER APPEALS WERE FILED BEFORE THE LD.CIT(A). FOR EXPLAINING THE DE LAY, ASSESSEE TOOK ABOVE PLEA BEFORE THE LD.FIRST APPELLATE AUTHORITY BUT LD.CIT(A) DID NOT ACCEPT THIS CONTENTION OF THE ASSESSEE AND REJECTED THE APPLICATION FOR CONDONATION OF DELAY THOUGH THE ORDERS OF LD.CIT(A) ARE SEPARATE BUT BASICALLY VERBATIM SAME EXCEPT VARIATIONS OF FIGUR ES. 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. SUB-SECTION 5 OF SECTION 253 CONT EMPLATES THAT THE TRIBUNAL MAY ADMIT AN APPEAL OR PERMIT FILING OF ME MORANDUM OF CROSS- OBJECTIONS AFTER EXPIRY OF RELEVANT PERIOD, IF IT I S SATISFIED THAT THERE WAS A SUFFICIENT CAUSE FOR NOT PRESENTING IT WITHIN THAT PERIOD. THIS EXPRESSION SUFFICIENT CAUSE EMPLOYED IN THE SECTION HAS ALSO BEEN USED IDENTICALLY IN SUB-SECTION 3 OF SECTION 249 OF INCOME TAX ACT, WHICH PROVIDES POWERS TO THE LD.COMMISSIONER TO CONDONE THE DELAY IN FILING THE APPEAL BEFORE THE COMMISSIONER. SIMILARLY, IT HAS BEEN U SED IN SECTION 5 OF INDIAN LIMITATION ACT, 1963. WHENEVER INTERPRETATI ON AND CONSTRUCTION OF THIS EXPRESSION HAS FALLEN FOR CONSIDERATION BEF ORE HONBLE HIGH COURT AS WELL AS BEFORE THE HONBLE SUPREME COURT, THEN, HONBLE COURT WERE UNANIMOUS IN THEIR CONCLUSION THAT THIS EXPRESSION IS TO BE USED LIBERALLY. WE MAY MAKE REFERENCE TO THE FOLLOWING OBSERVATIONS OF THE HONBLE SUPREME COURT FROM THE DECISION IN THE CASE OF COLL ECTOR LAND ACQUISITION VS. MST. KATIJI & OTHERS, 1987 AIR 1353 : ITA NOS.1883,1884 & 2136 /AHD/ 2018 KETAN M. CHALISHAZAR & 2 OTHERS VS. ITO ASST.YEAR 2010-11 - 4 - 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEIN G DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDONED THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. 3. 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT M EAN 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 S ENSE PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DESERVES T O 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 MA LA 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 RESPECTED N OT 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. 7. SIMILARLY, WE WOULD LIKE TO MAKE REFERENCE TO AU THORITATIVE PRONOUNCEMENT OF HONBLE SUPREME COURT IN THE CASE OF N.BALAKRISHNAN VS. M. KRISHNAMURTHY (SUPRA). IT READS AS UNDER: RULE OF LIMITATION ARE NOT MEANT TO DESTROY THE RI GHT OF PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS, BUT SEEK THEIR REMEDY PROMPTLY. THE OBJECT OF PROVIDING A LEGAL RE MEDY IS TO REPAIR THE DAMAGE CAUSED BY REASON OF LEGAL INJURY. LAW OF LIM ITATION FIXES A LIFE-SPAN FOR SUCH LEGAL REMEDY FOR THE REDRESS OF THE LEGAL INJURY SO SUFFERED. TIME IS PRECIOUS AND THE WASTED TIME WOULD NEVER REVISIT. D URING EFFLUX OF TIME NEWER CAUSES WOULD SPROUT UP NECESSITATING NEWER PERSONS TO SEEK LEGAL REMEDY BY APPROACHING THE COURTS. SO A LIFE SPAN MUST BE FIXE D FOR EACH REMEDY. UNENDING PERIOD FOR LAUNCHING THE REMEDY MAY LEAD T O UNENDING UNCERTAINTY AND CONSEQUENTIAL ANARCHY. LAW OF LIMITATION IS THU S FOUNDED ON PUBLIC ITA NOS.1883,1884 & 2136 /AHD/ 2018 KETAN M. CHALISHAZAR & 2 OTHERS VS. ITO ASST.YEAR 2010-11 - 5 - POLICY. IT IS ENSHRINED IN THE MAXIM INTEREST REIPU BLICAE UP SIT FINIS LITIUM (IT IS FOR THE GENERAL WELFARE THAT A PERIOD BE PUTT TO LI TIGATION). RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHT OF THE PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THEIR REMEDY PROMPTLY. THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. A COURT KNOWS THAT REFUSAL TO CONDONE DELAY WOULD R ESULT FORECLOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PRESUMPTI ON THAT DELAY IN APPROACHING THE COURT IS ALWAYS DELIBERATE. THIS CO URT HAS HELD THAT THE WORDS 'SUFFICIENT CAUSE' UNDER SECTION 5 OF THE LIM ITATION ACT SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE VIDE SHAKUNTALA DEVI LAIN VS. KUNTAL KUMARI [AIR 1969 SC 575] AND S TATE OF WEST BENGAL VS. THE ADMINISTRATOR, HOWRAH MUNICIPALITY [AIR 1972 SC 749]. 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 SHUT THE DOOR AGAINST HIM. IF THE EXPLANATION DOES NOT SMACK OF MALA FIDES OR IT IS NOT PUT FORTH AS PART OF A DILATORY STRATEGY THE COURT MUST SHOW UTMOST CONSIDERATION TO THE SUITOR. BUT WHEN THERE IS REAS ONABLE GROUND TO THINK THAT THE DELAY WAS OCCASIONED BY THE PARTY DELIBERATELY TO GAIN TIME THEN THE COURT SHOULD LEAN AGAINST ACCEPTANCE OF THE EXPLANATION. WHILE CONDONING DELAY THE COULD SHOULD NOT FORGET THE OPPOSITE PARTY ALTOGETH ER. IT MUST BE BORNE IN MIND THAT HE IS A LOOSER AND HE TOO WOULD HAVE INCU RRED QUIET A LARGE LITIGATION EXPENSES. IT WOULD BE A SALUTARY GUIDELI NE THAT WHEN COURTS CONDONE THE DELAY DUE TO LACHES ON THE PART OF THE APPLICAN T THE COURT SHALL COMPENSATE THE OPPOSITE PARTY FOR HIS LOSS. WE DO NOT DEEM IT NECESSARY TO RE-CITE OR RECAPITUL ATE THE PROPOSITION LAID DOWN IN OTHER DECISIONS. IT IS SUFFICE TO SAY THAT THE HONBLE COURTS ARE UNANIMOUS IN THEIR APPROACH TO PROPOUND THAT WHENEV ER THE REASONS ASSIGNED BY AN APPLICANT FOR EXPLAINING THE CONDONA TION OF DELAY, THEN SUCH REASONS ARE TO BE CONSTRUED WITH A JUSTICE ORI ENTED APPROACH. 8. IN THE LIGHT OF THE ABOVE, IF WE EXAMINE THE EXP LANATION OF ASSESSEES, THEN IT WOULD REVEAL THAT A SMALL DELAY OF 13 DAYS OCCURRED IN ITA NOS.1883,1884 & 2136 /AHD/ 2018 KETAN M. CHALISHAZAR & 2 OTHERS VS. ITO ASST.YEAR 2010-11 - 6 - THE CASE OF MAHENDRA J. CHALISHAZAR HUF AND 12 DAYS IN REST OF THE TWO APPEALS. THIS DELAY HAS OCCURRED ON ACCOUNT OF CER TAIN PROCEDURAL ASPECT. THE ASSESSEES HAVE EXPLAINED THEIR BONAFIDE. THE Y HAVE NOT MADE THEIR APPEALS TIME BARRED BY ADOPTING TACTICS AS A STRATE GY TO FIGHT LITIGATION WITH THE DEPARTMENT. IN OTHER WORDS, THERE IS NO M ALAFIDE INTENTION AT THE ENDS OF ASSESSEES NOT TO FILE APPEAL WELL IN TIME. THE LD.FIRST APPELLATE AUTHORITY OUGHT TO HAVE TAKEN A SYMPATHETIC VIEW WH ILE CONSIDERING THE APPLICATION FOR CONDONATION OF DELAY. 9. ON DUE CONSIDERATION OF ABOVE FACTS, WE ARE OF T HE VIEW THAT ASSESSEES WERE PREVENTED BY SUFFICIENT REASONS FOR NOT PRESSING THEIR APPEALS BEFORE THE LD.CIT(A) WITHIN THE TIME LIMIT. THEREFORE, WE CONDONE THE DELAY IN FILING APPEAL(S) BEFORE THE LD .CIT(A). WE SET ASIDE THE IMPUGNED ORDERS OF THE LD.FIRST APPELLATE AUTHO RITY AND RESTORE ALL THESE APPEALS TO THE FILE OF LD.CIT(A) FOR FRESH AD JUDICATION ON MERIT. 10. IN THE RESULT, ALL THE THREE APPEALS OF THE AS SESSEE(S) ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 10TH JUNE-2 019 AT AHMEDABAD. SD/- SD/- ( PRAMOD KUMAR ) ( RAJPAL YADAV ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD; DATED 10/ 06 /2019 .. ,.../ T.C. NAIR, SR. PS ITA NOS.1883,1884 & 2136 /AHD/ 2018 KETAN M. CHALISHAZAR & 2 OTHERS VS. ITO ASST.YEAR 2010-11 - 7 - / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $%$&' ( / CONCERNED CIT 4. ( ( ) / THE CIT(A) AHMEDABAD-5 5. +,-'&' , &' , % / DR, ITAT, AHMEDABAD 6. -012 / GUARD FILE. / BY ORDER, #+' //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 7.6.2019 (DICTATION-PAD 1 1-PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..10.6.2019 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.10.6.19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 10.6.19 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER