M/s. Hindustan Construction Co., Bhavnagar V. The Jt. CIT, Circle-1, Bhavnagar

ITA 2206/AHD/2014

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3912 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 04-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH PATHAK
• Keywords: Retrospective amendment; Reasonable cause; Condonation of delay
• Section: 143(3); 194C; 139

Judgement Text

, ,L ,L,L ,L- -- -,E ,E,E ,E- -- -LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD L LL LK KK KOZJH OZJH OZJH OZJH OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA EK/KQFERK JKW; EK/KQFERK JKW; EK/KQFERK JKW; EK/KQFERK JKW;] ] ] ] U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SMT MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO.2206/AHD/2014 ( / ASSESSMENT YEAR : 2008-09) M/S. HINDUSTAN CONSTRUCTION CO., 101, SHANTINIKETAN, TALAJA ROAD, BHAVNAGAR. / VS. JCIT, CIRCLE-1, BHAVNAGAR. ./ ./ PAN/GIR NO. : AACFH 2503 H ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MANISH SHAH, A.R. / RESPONDENT BY : SHRI OM PRAKASH PATHAK, SR. D.R. / DATE OF HEARING 09/07/2018 !'# / DATE OF PRONOUNCEMENT 03/10/2018 $% / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)XX, AHMEDABAD[CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-XX /46/13-14 DATED 26.06.2014 ARISING IN THE MATTER OF ASSESSMENT ORDE R PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961(HERE-IN-AFTER REFERRED TO AS 'THE ACT') DATED 28.12.2010 RELEVANT TO ASSESSMENT YEAR (AY) 2008-09. - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE A RE AS UNDER:- 1. THE CIT(APPEALS) ERRED IN NOT CONDONING THE DELAY IN FILING OF APPEAL AND IN THE PROCESS, DID NOT APPRECIATE THE REASONS GIVEN BY THE APPELLANT. 2. THE CIT (APPEALS) ERRED IN DISMISSING THE APPEAL OF THE APPELLANT AND EFFECTIVELY UPHELD THE DISALLOWANCE OF ADDITION OF RS.11,02,023/-, RS.50,000/- AND RS.14,45,460/- FOR LATE DEPOSIT OF TDS U/S40(A)(IA). THE APPELLANT RESERVES ITS RIGHT TO ADD, AMEND, ALT ER OR MODIFY ANY OF THE GROUNDS STATED HEREINABOVE EITHER BEFORE OR AT THE TIME OF HEARING. 3. THE FIRST ISSUE RAISED BY THE ASSESSEE IN THIS A PPEAL IS THAT LD CIT(A) ERRED IN NOT CONDONING THE DELAY ON ACCOUNT OF LATE FILING OF APPEAL. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A FIRM AND ENGAGED IN THE CONSTRUCTION BUSINESS. THE ASSESSMENT WAS FRAME D U/S 143(3) OF THE ACT VIDE ORDER DATED 28 TH DECEMBER 2010. THE COPY OF THE ORDER WAS DULY SERVED UPON THE ASSESSEE DATED 28 TH DECEMBER, 2010. IN THE ASSESSMENT, VARIOUS EXPENSES DISALLOWED BY THE AO A ND ACCORDINGLY, THE ADDITIONS WERE MADE TO THE TOTAL INCOME OF THE ASSE SSEE. THE ASSESSEE AS PER THE PROVISIONS OF SECTION 249 OF THE ACT WAS TO FILE APPEAL WITHIN THE 30 DAYS I.E. ON OR BEFORE 27 TH JANUARY, 2011. BUT THE ASSESSEE HAS FILED THE APPEAL ON 15 TH APRIL, 2013 THUS, THERE WAS A DELAY OF 2 YEARS AND 75 DAYS IN THE APPEAL FILED BEFORE THE LD CIT(A). THE ASSES SEE BEFORE THE LD CIT(A) FILED AN AFFIDAVIT JUSTIFYING THE REASONS FO R THE DELAY AND ACCORDINGLY, PRAYED FOR THE CONDONATION. THE RELEVA NT EXTRACT OF THE AFFIDAVIT ARE AS REPRODUCED BELOW: - 3 - 'GAJENDRABHAI FARMER AGED 69 YEARS, AT PRESENT RESI DING AT PLOT NO. D.-170, KALIYABID, BHAVNAGAR, SOLEMNLY AFFIRM AND S TATE AS FOLLOWS: I AM THE PARTNER OF HINDUSTAN CONSTRUCTION COMPAN Y AND AM MAKING THIS AFFIDAVIT IN THE CAPACITY OF THE PARTNE R, HANDING THE LEGAL WORKS OF THE PARTNERSHIP INCLUDING FOLLOWING UP OF THE FILLING OF APPEALS FOR INCOME TAX PURPOSES. THE ASSESSMENT ORDER U/S. 143(3) FOR ASST. YEAR 20 08-09 WAS RECEIVED ON 29.12.2010 AND THE TIME LIMIT FOR FILIN G OF APPEAL TO THE HON'BLE C.I.T. (APPEALS) WAS EXPIRING ON 28.01.2011 THE APPEAL IS BEING FILED BELATEDLY NOW ON 12.04.2013. THE REASON FOR THE DELAY OF 2 YEARS AND 75 DAYS IS AS FOLLOWS: AT THE TIME WHEN THE ASSESSMENT PROCEEDINGS WERE GO ING ON THERE WAS MY CONTINUOUS INVOLVEMENT IN THE MEDIAL I SSUE OF MY SON MAYUR, WHO ALSO HAPPENED TO BE OTHER PARTNER OF HIN DUSTAN CONSTRUCTION COMPANY VIZ. ASSESSES. HE WAS DETECTE D WITH SEVER MEDICAL PROBLEMS FUR WHICH HE WAS ULTIMATELY REQUIR ED TO BE OPERATED AND THE MEDICAL PROBLEMS CAN BE APPRECIATED BETTER BY THE ANNEXED COPIES TO THIS AFFIDAVIT OF HIS MEDICAL REPORTS. HI S MEDICAL PROBLEMS STARTED FROM JANUARY 2010 AND WENT ON TILL THE END OF NOVEMBER 2010. THEREAFTER, MY WIFE SMT. SHANTABEN G. PAR MAR SUFFE RED CARDIAC ISSUES FOR WHICH SHE WAS REQUIRED TO BE TREATED FROM JANUA RY 2011 TILL MAY 2012. THE COPIES OF HER MEDICAL REPORTS EVIDENCING HER CARDIC TREATMENT ARE BEING ANNEXED TO THIS AFFIDAVIT SO THAT WHATEVE R IS STATED HEREIN CAN BE APPRECIATED. THEREAFTER, I MYSELF ALSO SUFFERED A FRACTURE AS WELL AS OTHER MEDICAL ISSUES FOR WHICH 1 WAS TREATED AND HO SPITALIZED FROM OCTOBER 2012 TILL NOVEMBER 2012. THE REPORTS OF TRE ATMENT GIVEN TO ME ARE ENCLOSED HEREWITH FOR READY REFERENCE. WHAT I AM TRYING TO STATE BY PUTTING ALL THESE EVID ENCES IS THAT IT IS BECAUSE OF SUCH PRE-OCCUPATION MENTALLY THAT INA DVERTENTLY I MISSED OUT ON FILING TO APPEAL BEFORE THE HON'BLE C.I.T. (APPE ALS) FOR ASST. YEAR 2008-09 AND ONLY CAME TO KNOW ABOUT SUCH LAPSE ON M Y PART WHEN WE RECEIVED A NOTICE OF HEARING FOR ASST. YEAR 2008-09 FROM C.I.T. (APPEALS) ON 20.03.2013, COPY OF WHICH IS ATTACHED HEREWITH. IN FACT, BECAUSE OF THE NOTICE WE TRIED TO LOCATE [HE FILE B UT REALIZED THAT THE NOTICE BY MISTAKE HAD MENTIONED THAT IT IS AN APPEA L AGAINST THE ORDER U/S. 143(3) FOR ASST. YEAR 2008-09, WHICH IS FIXED FOR HEARING. THIS REALIZATION WAS BECAUSE OF THE FACT THAT WHEN WE SE ARCHED FOR THE - 4 - APPEAL FILE -WE CAME TO KNOW THAT PURELY DUE TO OVE RSIGHT AND INADVERTENCE WE HAD MISSED OUT ON FILLING THE APPEA L AGAINST 143(3) ORDER OF THE ASSESSING OFFICER FOR THE ASST. YEAR 2 008-09. OUR BONA FIDES CAN BE CLEARLY SEEN FROM THE FACT THAT WE HAVE FILE D AN APPEAL FOR ASST. YEAR 2009-10 AGAINST 143(3) ORDER WHICH IS ALMOST H AVING THE IDENTICAL QUANTUM OF ADDITION AND THERE IS NOT REASON WHY WE WOULD NOT FILE AN APPEAL FOR ASST. YEAR 2008-09. IT IS BECAUSE OF THE ABOVE MENTIONED SITUATION, WHI CH WAS CREATED ON AND AROUND THE TIME WHEN THE ORDER WAS RECEIVED THAT IT MUST HAVE COMPLETELY SKIPPED OUT OF OUR ATTENTION THAT THE AP PEAL IS NOT FILED AGAINST 143(3) ORDER FOR ASST. YEAR 2008-09 WHILE W E WERE UNDER AN IMPRESSION THAT THE SAID APPEAL HAD BEEN FILED AT O UR END. I HUMBLY PRAY THAT THIS AFFIDAVIT DEMONSTRATING T HE REASON WHY THERE HAS BEEN A DELAY MAY KINDLY BE APPRECIATED IN THE RIGHT SPIRIT AND IN THE INTEREST OF JUSTICE, THE DELAY MAY KINDLY BE CONDONED AS THERE IS NO MALA FIDE INTENTION IN FILING THE APPEAL BELATED LY AS CAN BE SEEN BY OVERALL NARRATION OF THE FACTS AND CIRCUMSTANCES HE REIN ABOVE. 4.1 HOWEVER, THE LD CIT(A) DISREGARDED THE CONTENTI ON OF THE ASSESSEE AND DISMISSED THE CONDONATION PETITION BY OBSERVING AS UNDER: THE APPELLANT HAS CLAIMED THAT INITIALLY AT THE TI ME WHEN THE ASSESSMENT I PROCEEDINGS WERE GOING ON THERE WAS A CONTINUOUS INVOLVEMENT IN THE MEDICAL ISSUE OF HIS SON MAYUR W HO ALSO HAPPENED TO BE THE OTHER PARTNER OF THE APPELLANT FIRM. HIS ME DICAL PROBLEM STARTED FROM JANUARY, 2010 AND WENT ON TILL END OF NOVEMBE R, 2010. SUBSEQUENTLY, HIS WIFE SMT. SHANTABEN G.PARRNAR HAD THE CARDIAC ISSUE FOR WHICH SHE WAS REQUIRED TO BE TREATED FROM JANUARY, 2011 TO MAY, 2012. THE MEDICAL REPORTS OF HER CARDIAC TREAT MENT WERE ALSO ANNEXED. SUBSEQUENTLY, SHRI GAJENDRA HIMSELF CL AIMED TO HAVE SUFFERED FRACTURE AS WELL AS OTHER MEDICAL ISSUES F OR WHICH HE WAS TREATED AND HOSPITALIZED FROM OCTOBER, 2012 TO NOVE MBER, 2012. HE ENCLOSED CERTAIN MEDICAL REPORTS. BECAUSE OF THE PR EOCCUPANCY IN MEDICAL ISSUES HE MISSED OUT TO FILE THE APPEAL BEF ORE THE HON'BLE CIT(A) AND KNEW ABOUT SUCH LAPSE ON RECEIPT OF THE NOTICE FOR HEARING ISSUED BY THIS OFFICE IN RESPECT OF PENALTY APPELLA TE PROCEEDINGS IN APPELLANT'S OWN CASE AGAINST THE PENALTY ORDER PASS ED BY THE A.O ON 20.3.2013. - 5 - 3.1. THE SUBMISSIONS OF THE APPELLANT HAVE BEEN PERUSED AND IT IS NOTICED THAT: (1) FROM THE ASSESSMENT ORDER, IT WAS OBSERVED THAT IN COMPLIANCE TO THE VARIOUS NOTICES SHRI SAMIR DAVE, ITP ATTENDED T HE OFFICE OF THE A.O. WHO DISCUSSED THE CASE AND FILED THE REQUISITE INFORMATION TO THE A.O. IN THE ASSESSMENT PROCEEDINGS. SO THERE DO ES NOT APPEAR ANY INVOLVEMENT OF BOTH THE PARTNERS IN THE ASSESSM ENT PROCEEDINGS OR IN ANY INCOME-TAX MATTERS BEFORE ANY AUTHORITY W HICH COULD ADVERSELY AFFECT OR CAUSE LATE FILING OF THE APPEAL . (2) IT HAS BEEN NOTICED THAT IN THE APPELLANT'S OWN CAS E FOR A.Y. 2008-09, THE PENALTY ORDER HAS BEEN PASSED BY THE A.O. 27.6. 2011 AND DURING THOSE PENALTY PROCEEDINGS THE APPELLANT VIDE ITS LE TTER DTD. 30.5.2011 HAS MADE THE SUBMISSION BEFORE THE A.O. THEREAFTER AGAINST THE PENALTY ORDER THE APPEAL HAS ALSO BEEN FILED ON 15. 7.2011. SO IT IS APPARENT THAT THE PENALTY PROCEEDINGS WERE DULY ATT ENDED BY THE APPELLANT AND APPEAL WAS ALSO FILED AGAINST THE SAM E IN TIME HENCE AS PER THE APPELLANT'S REASONS OF ILLNESS DURING TH E AFORESAID PERIOD WHEN THE PENALTY PROCEEDINGS WERE DULY ATTENDED AND APPEAL AGAINST THE PENALTY ORDER WAS FILED IN TIME THEN T HERE WAS NO REASON FOR NOT TO FILE THE APPEAL OF THE ASSESSMENT ORDER U/S. 143(3) OF THE ACT IN TIME. SO, MEDICAL REASONS AS PLEADED COULD NOT BE THE REASON FOR NOT FILING THE PRESENT APPEAL IN TIME. (3) THE ASSESSMENT U/S. 143(3) HAS BEEN COMPLETED IN TH IS CASE ON 28.12.2010 AND ILL HEALTH OF SHRI MAYUR PARMAR STAT ED TO BE BETWEEN JANUARY, 2010 TO NOVEMBER, 2010 HENCE HIS I LL HEALTH COULD NOT BE THE GROUND FOR DELAY AS THE APPEAL WAS TO BE FILED IN THE MONTH OF JANUARY, 2011. HOWEVER, IT WAS SUBMITTED T HAT THERE WAS SOME MEDICAL PROBLEM OF SMT. SHANTABEN G. PARMAR FR OM JANUARY, 2011 TO MAY, 2012. BUT FROM THE COPIES OF HER MEDIC AL REPORTS SUBMITTED IT IS FOUND THAT THE DOCTOR'S PRESCRIPTIO N FOR THE TREATMENT STARTED FROM 31.1.2011 WHILE THE TIME LIMIT OF FILI NG OF APPEAL IN THIS CASE WAS 27.1.2011 WHICH WAS PRIOR TO THE STARTING OF THE TREATMENT OF SMT. SHANTA G. PARMAR. HENCE AGAIN THE ILL HEALT H OF SMT. SHANTABEN G. PARMAR COULD NOT BE A GROUND FOR DELAY IN FILING THE PRESENT APPEAL. MOREOVER, THE SUBSEQUENT ILLNESS OF SHRIVIJENDRA G. PARMAR FROM OCTOBER, 2012 TO NOVEMBER, 2012 WAS NOT A VALID REASON IN SUBMISSION OF THE APPEAL BELATEDLY. BECAU SE AS PER APPELLANT'S OWN CONTENTION FROM MAY, 2012 TO OCTOBE R, 2012 THERE - 6 - WERE NO SUCH MEDICAL REASONS WHICH COULD OCCUPY THE APPELLANT AND DELAYED THE FILING OF APPEAL. EVEN OTHERWISE ALSO A PPELLANT'S OWN VERSION THERE WERE NO REASONS AFTER OCTOBER, 2012 A ND THEREAFTER THE APPEAL COULD HAVE BEEN FILED AT THE EARLIEST POINT OF TIME BUT THE SAME HAS BEEN FILED ONLY ON 15.4.2013 EVEN AFTER 6 MONTHS DELAY FROM THE WELLNESS FROM THE ILLNESSES OF THE FAMILY MEMBERS. IN VIEW OF THE ABOVE DISCUSSION, THE MEDICAL REASON S AS CONTENDED COULD NOT BE THE REASONABLE CAUSE IN SUBMISSION OF THE AP PEAL FOR SUCH AN INORDINATE DELAY. FURTHER THE CASE LAWS RELIED UPON BY THE APPELLANT ARE NOT IDENTICAL TO THE FACTS OF THE CASE. THE DECISIO NS WERE GIVEN BY THE VARIOUS COURTS CONSIDERING THE FACTS OF THAT SPECIF IC CASE AFTER CONSIDERING REASONS OF DELAY IN EACH OF THEM. I N VIEW OF THE ABOVE, THE REQUEST FOR CONDONATION OF DELAY MADE BY THE AP PELLANT IS NOT ACCEPTED AND THE DELAY IS NOT CONDONED. THEREFORE, THE APPEAL IS NOT MAINTAINABLE AND HENCE DISMISSED. 3.2 IN THIS REGARD THE DECISION OF THE HONBLE MUMB AI TRIBUNAL IN THE CASE OF PRASHANT PROJECTS LTD. VS. DCIT (2013) 37 TAXMANN.COM 137 IS SIGNIFICANT WHICH IS IN FAVOUR OF THE REVENU E HOLDING THAT BY ADOPTING A LIBERAL VIEW IN CONDONING DELAY IN ONE O F THE GUIDING PRINCIPLES IN THE REALM OF BELATED APPEALS, BUT LIB ERAL APPROACH CANNOT BE EQUATED WITH A LICENSE TO THE APPEALS AT WILL DI S-REGARDING THE TIME LIMITS FIXED BY THE STATUTES: THE BEHAVIOR OF THE ASSESSEE COULD BE TERMED AS PER SONIFIED INACTION AND NEGLIGENCE WHICH WOULD NOT CONSTITUTE REASONABLE CAUSE. FURTHER, HONBLE APEX COURT IN THE CASE OF VEDABAI ALIAS VAIJAYANATABAI BABURAO PATIL VS. SHANTARAM BABURAO PATIL, 253 ITR 798, IT WAS HELD AS FOLLOWS: IN EXERCISING DISCRETION UNDER SECTION 5 OF THE L IMITATION ACT, THE COURT SHOULD ADOPT A PRAGMATIC APPROACH. A DIST INCTION MUST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDINAT E AND A CASE WHERE THE DELAY IS OF A FEW DAYS. WHEREAS IN THE FO RMER CASE THE CONSIDERATION OF PREJUDICE TO THE OTHER SIDE WILL B E A RELEVANT FACTOR SO THE CASE CALLS FOR A MORE CAUTIOUS APPROA CH BUT IN THE LATTER CASE NO SUCH CONSIDERATION MAY ARISED AND SU CH CASE DESERVES A LIBERAL APPROACH. - 7 - FURTHER, ITAT, CHENNAI IN THE CASE OF JCIT VS. TRAC TORS & FARM EQUIPMENTS LTD. IT WAS HELD AS UNDER:- THE DELAY CANNOT BE CONDONED SIMPLY BECAUSE THE AP PELLANTS CASE IS HARD AND CALLS FOR SYMPATHY OR MERELY OUT O F BENEVOLENCE TO THE PARTY SEEKING RELIEF. IN GRANTING THE INDULG ENCE AND CONDONING THE DELAY IT MUST BE PROVED BEYOND THE SH ADOW OF DOUBT THAT THE APPELLANT WAS DILIGENT AND WAS NOT G UILTY OF NEGLIGENCE WHATSOEVER. THE SUFFICIENT CAUSE WITHIN THE CONTEMPLATION OF THE LIMITATION PROVISION MUST BE A CAUSE WHICH IS BEYOND THE CONTROL OF THE PARTY INVOKING THE AID OF THE PROVISIONS. THE HON 'BLE SUPREME COURT IN THE CASE OF RAMLAL V. REWA COALFIELDS LTD. AIR 1962 SC 361 HAS HELD THAT THE CAUSE FOR THE DELAY IN FILING THE APPEAL WHICH BY DUE CAR E AND ATTENTION COULD HAVE BEEN AVOID CANNOT BE A SUFFICIENT CAUSE WITHIN THE MEANING OF THE LIMITATION PROVISION. WHERE NO NEGLIGENCE, NOR INACTION, OR WANT OF BONA FIDES CAN BE IMPUTED TO T HE APPELLANT A LIBERAL CONSTRUCTION OF THE PROVISIONS HAS TO BE MA DE IN ORDER TO ADVANCE SUBSTANTIAL JUSTICE. SEEKERS OF JUSTICE MUS T COME WITH CLEAR HANDS. 3.3 IN VIEW OF THE ABOVE DISCUSSION AND DECISIONS, THE REQUEST FOR CONDONATION OF DELAY IS LIABLE TO BE REJECTED. ACCO RDINGLY, THE APPEAL OF APPELLANT IS NOT MAINTAINABLE IN VIEW OF THE PROVIS IONS OF SECTION 249(2) OF THE I.T. ACT. 4.2 BEING AGGRIEVED BY THE ORDER OF LD CIT(A) ASSES SEE IS IN SECOND APPEAL BEFORE US. 5. THE LD AR BEFORE US FILED THE PAPER BOOK WHICH I S RUNNING FROM PAGES 1-112 AND SUBMITTED THAT THE DELAY IN FILING THE APPEAL BEFORE THE LD CIT(A) OCCURRED DUE TO THE ILLNESS OF THE FAMILY MEMBERS. THE LD AR IN SUPPORT OF HIS CLAIM FILED THE MEDICAL DETAILS, WHICH ARE AVAILABLE IN THE PAPER BOOK. ACCORDINGLY, THE LD AR PRAYED TO CO NDONE THE DELAY OCCURRED IN FILING THE APPEAL BEFORE THE LD CIT(A). - 8 - 6. ON THE OTHER HAND, LD DR VEHEMENTLY SUPPORTED TH E ORDERS OF AUTHORITIES BELOW. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIALS AVAILABLE ON RECORD AND ALSO CONSIDERED THE JUDGMENTS RELIED BY THE LD CIT(A) AND THE JUDGMENTS FILED BY THE LD COUNSEL FOR THE ASSES SEE BEFORE US. THE PROVISIONS OF SECTION 249(3) EMPOWERS THE LD CIT(A) TO ADMIT THE APPEAL EVEN AFTER THE EXPIRY OF THE TIME SPECIFIED U/S 249(2) OF THE ACT. HE SPECIFIED THAT THE APPELLANT HAD SUFFICIENT CAUS E FOR NOT PRESENTING THE APPEAL WITHIN THE TIME AS SPECIFIED. 7.1 IN THE PRESENT CASE, THE ASSESSEE EXPLAINED THE REASONS FOR NOT FILING THE APPEAL WITHIN TIME BUT LD CIT(A) DISREGARDED TH EM AS DISCUSSED IN PRECEDING PARAGRAPH. 7.2 AS SUPERIOR AUTHORITY TO LD CIT(A) WE DEAL WITH THE FINDING OF LD CIT(A) INDIVIDUALLY AS UNDER: I. IN OUR VIEW, THE INFERENCE DRAWN BY THE LD CIT(A) I S THAT THERE WAS NO INVOLVEMENT OF THE PARTNERS OF THE FIRM IN T HE TAX PROCEEDINGS AS IT WAS ATTENDED BY SHRI SAMIR DAVE, ITP BEFORE THE AO DOES NOT APPEAR TO BE CORRECT. IT IS BECAUSE SHRI DAVE IS ITP AND REPRESENTED ON BEHALF OF THE ASSESSEE IN TH E ASSESSMENT PROCEEDINGS AFTER TAKING DUE AUTHORIZATION. BUT ALL THE NECESSARY INFORMATION REQUIRED IN THE ASSESSMENT PR OCEEDINGS SHALL BE SUPPLIED BY THE FIRM AND WITHOUT THE SAME THE ASSESSMENT CANNOT BE COMPLETED IN EFFECTIVE MANNER. HERE THE ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT SO IT I S TRANSPIRED THAT ALL THE NECESSARY DETAILS WERE FURNISHED DURIN G THE - 9 - PROCEEDINGS. SIMILARLY THE FIRM WILL AUTHORIZE THE CONSULTANT FOR FILING THE APPEAL BEFORE THE LD. CIT-A WHICH IS NOT POSSIBLE WITHOUT THE INVOLVEMENT OF THE PARTNERS. II. SIMILARLY, WE NOTE THAT THERE WERE MEDICAL REPORTS FOR THE ILLNESS OF THE FAMILY MEMBERS AS EXPLAINED BY THE A SSESSEE WHICH CANNOT BE IGNORED. THE LD CIT(A) HAS NOT POIN TED OUT ANY DEFECT IN SUCH MEDICAL REPORTS. III. WE ALSO NOTE THAT THE PENALTY APPEAL FOR THE IMPUGN ED ASSESSMENT YEARS WAS DULY FILED BY THE ASSESSEE ON TIME. SIMILARLY, THE APPEAL PERTAINING TO THE ASSESSMENT YEAR 2009-10 WAS FILED BY THE ASSESSEE WITHIN THE SPECIFIED TIME AS PROVIDED U/S 249(2) OF THE ACT. IF THE ASSESSEE BEING NEGLIG ENT THEN OTHER APPEALS SHOULD NOT HAVE BEEN FILED ON TIME. THE FIN DING OF THE LD. CIT(A) THAT THE OTHER APPEALS WERE ON TIME BUT THE DELAY IN THE INSTANT APPEAL REFLECTS THAT THE NEGLIGENT APPR OACH OF THE ASSESSEE DOES NOT APPEAR TO BE CORRECT. RATHER, IN OUR VIEW IT SUPPORTS THE CASE OF THE ASSESSEE FOR LATE FILING O F APPEAL. WE ALSO NOTE THAT ONCE THE ADDITION HAS BEEN MADE IN T HE ASSESSMENT AND THE ASSESSEE DISAGREES FOR THE SAME THEN THERE IS NO OPTION FOR THE ASSESSEE EXCEPT TO CARRY THE MATT ER ON HIGHER FORUM. 7.3 FURTHER, IF WE STRICTLY LOOK AT THE MEDICAL REP ORTS OF ALL THE PERSONS, IT IS CLEAR THAT THERE WAS TIME GAP BETWEEN THE TRE ATMENT OF ONE PERSON AND OTHER PERSON. THUS, AS PER THE LD CIT(A) THE AP PEAL SHOULD HAVE BEEN FILED BY THE ASSESSEE DURING SUCH AVAILABLE TI ME WHEN THERE WAS NO MEDICAL EMERGENCY/TREATMENT OF THE FAMILY MEMBERS A S DISCUSSED ABOVE. IN THIS REGARD, WE NOTE THAT THE LD CIT(A) WRONGLY ASSUMED THE FACTS. IT IS BECAUSE THE ARGUMENT OF THE ASSESSEE IS THAT IT MISSED TO FILE THE APPEAL INADVERTENTLY/DUE TO OVERSIGHT ON ACCOUNT OF MEDICA L PROBLEMS AS - 10 - DISCUSSED ABOVE. MEANING THEREBY, THE ASSESSEE OMIT TED TO FILE THE APPEAL AND CAME TO KNOW ABOUT THIS FACT ON RECEIPT OF NOTI CE FOR PENALTY PROCEEDINGS DATED 20 TH MARCH, 2013. 7.4 THUS, THE FINDING OF LD CIT(A) THAT THE ASSESSE E SHOULD HAVE FILED THE APPEAL DURING THE INTERVENING TIME AVAILABLE IN THE MEDICAL TREATMENT DOES NOT APPEAR TO BE CORRECT. 7.5 IN OUR VIEW, HAD THE ASSESSEE BEEN AWARE OF THE FACT FOR NON-FILING OF THE APPEAL HE SHOULD HAVE FILED THE APPEAL WITHI N THE AVAILABLE TIME AS EVIDENT FROM HIS CONDUCT I.E. FILING THE PENALTY AP PEAL WITHIN THE TIME AND APPEAL PERTAINING TO THE ASSESSMENT YEAR 2009-10. 7.6 WE ALSO FIND SUPPORT FROM THE JUDGMENT OF HONB LE SUPREME COURT IN THE CASE OF N. BALAKRISHNAN VS. MR. KRISHN AMURTHY IN (1998) 7 SCC 123 WHEREIN IT WAS HELD AS UNDER: IN ABSENCE OF ANYTHING SHOWING MALA FIDE OR DELIBE RATE DELAY AS A DILATORY TACTILE, COURT SHOULD NORMALLY CONDONE THE DELAY HOWEVER, WHILE DOING SO COURT SHOULD ALSO KEEP IN MIND THE C ONSEQUENT LITIGATION EXPENSES TO BE INCURRED BY THE OPPOSITE PARTY AND S HOULD COMPENSATE HIM ACCORDINGLY WHERE A COURT CONDONES DELAY IN P OSITIVE EXERCISE OF DISCRETION, SUPERIOR COURT AND MORE PARTICULARLY TH E REVISIONAL COURT SHOULD NOT NORMALLY DISTURB THE SAME BUT WHERE RE QUEST FOR CONDONATION OF DELAY IS REFUSED, IT WOULD BE OPEN T O THE SUPERIOR COURT TO COME TO ITS OWN FINDING ON THE BASIS OF EXPLORAT ION FOR THE DELAY GIVEN BY THE PARTY DELAY ON 7.7 WE FURTHER HOLD THAT THE CASE LAW RELIED BY THE LD CIT(A) ARE FACTUALLY DIFFERENT WITH THE FACTS OF THE PRESENT C ASE. IN VIEW OF ABOVE, WE - 11 - HOLD THAT THERE WAS NO MALA FIDE/DELIBERATE ACT ON THE PART OF THE ASSESSEE WHICH COULD ATTRIBUTE FOR DELAY IN THE FILING OF AP PEAL. THUS, WE CONDONE THE DELAY IN FILING THE APPEAL BY THE ASSESSEE BEFO RE THE LD CIT(A). 8. THE NEXT ISSUE RAISED BY THE ASSESSEE IN THIS AP PEAL IS THAT LD CIT(A) ERRED IN CONFIRMING THE ORDER OF AO BY SUSTA INING THE DISALLOWANCE OF RS.11,02,023/-, RS.50,000 AND 14,45 ,460/- ON ACCOUNT OF LATE DEPOSIT OF TDS U/S 40(A)(IA) OF THE ACT. 9. THE ASSESSEE DURING THE YEAR HAS INCURRED EXPENS ES AS DETAILED UNDER: SR. NO. PARTICULARS AMOUNT 1. LABOUR CONTRACTORS 11,02,023/- 2. LABOUR CONTRACTORS 50,000/- 3. LABOUR CONTRACTORS 14,45,460/- 9.1 THE ASSESSEE IN SUPPORT OF AFORESAID EXPENSES F AILED TO MAKE THE PAYMENT OF TDS DEDUCTED WITHIN THE TIME LIMIT SPECI FIED UNDER THE ACT. THEREFORE, THE AO DISALLOWED THE SAME AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 10. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD C IT(A). THE ASSESSEE BEFORE THE LD CIT(A) SUBMITTED THAT IT HAS DEDUCTED THE TDS AND DEPOSITED THE SAME BEFORE THE DUE DATE OF FILIN G OF INCOME TAX RETURN AS SPECIFIED U/S 139(1) OF THE ACT. - 12 - 10.1 ACCORDINGLY, THE ASSESSEE SUBMITTED THAT NO DI SALLOWANCE ON ACCOUNT OF NON-DEDUCTION OF TDS CAN BE MADE U/S 40( A)(IA) OF THE ACT. HOWEVER, THE LD CIT(A) DISREGARDED THE CONTENTION O F THE ASSESSEE AND CONFIRMED THE ORDER OF THE AO BY OBSERVING AS UNDER : 5.3. I HAVE CAREFULLY CONSIDERED THE FACTS OF TH E CASE AND SUBMISSION MADE BY THE APPELLANT. (1) THE AO HAS MADE THE DISALLOWANCE OF RS.11,02,023/- FOR THE REASON THAT THE APPELLANT HAS NOT MADE THE PAYMENT OF THE TDS AMOUNT WITHIN SPECIFIED TIME AND ACCORDINGLY INVOKI NG THE PROVISIONS OF SECTION 40(A)(IA) THE CLAIM MADE IN R ESPECT OF SUCH TDS WAS DISALLOWED. THE DETAILS OF THE NAME OF THE SUB- CONTRACTOR, DATE ON WHICH TDS DEDUCTED, DATE OF DEP OSIT OF TDS IN GOVERNMENT ACCOUNT AND AMOUNT AT PAGE-3 OF THE A SSESSMENT ORDER. IT HAS BEEN NOTICED THAT AS PER THE AMENDMEN T TO SECTION 40(A)(IA) AND DECISION OF VARIOUS COURTS RELIED UPO N BY THE APPELLANT AS THE TDS AMOUNT COULD BE DEPOSITED BEFO RE THE DUE DATE OF FILING OF THE RETURN OF INCOME U/S. 139(1) OF I.T, ACT. IT HAS BEEN NOTICED THAT ALL THE TDS PAYMENT HAVE BEEN MAD E BY THE APPELLANT ON 8.9.2008 WHICH IS BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME IN THE APPELLANT'S CASE. HENCE THE RE IS NO VIOLATION OF THE PROVISIONS OF LAW IN VIEW OF THE D ECISIONS CITED AS ABOVE BY THE APPELLANT AND THEREFORE NO DISALLOWANC E IS CALLED FOR. (2) THE AO HAS MADE THE DISALLOWANCE OF RS.50,000/- FOR THE REASON THAT THE ACCOUNT OF THE SUB-CONTRACTOR NAMELY BAKAB HAI BANJARA WAS CREDITED ON 31.2.2008 BUT THE TDS HAS BEEN DEDU CTED ON 31.3.2008 AND PAID BELATEDLY ON 8.9.2008. SINCE, AS PER THE PROVISIONS OF SECTION 194C THE TDS SHOULD HAVE BEEN MADE ON THE DATE OF CREDIT/PAYMENT WHICHEVER IS EARLIER AND IN THIS CASE THE AMOUNT WAS CREDITED IN THE PARTY'S LEDGER ACCOU NT ON 31.1.2008 BUT THE SAME HAS BEEN MADE ON 31.3.2008 T HEREFORE THERE WAS THE CLEAR CUT VIOLATION OF THE PROVISIONS OF SECTION 194C AND THUS THE DISALLOWANCE MADE BY THE A.O. U/S .40(A)(IA) WAS CORRECT AND JUSTIFIED. HENCE THE SAME IS CONFIR MED. (3) LIKEWISE, IN RESPECT OF CERTAIN SUB-CONTRACTORS THE PAYMENTS WERE MADE DURING THE YEAR UNDER CONSIDERATION ON VA RIOUS DATES BUT THE AMOUNT WAS CREDITED IN THEIR LEDGER ACCOUNT ON 31.3.2008 AND THE TDS WAS ALSO MADE ON 31.3.2008. DETAILS OF SUCH - 13 - DEDUCTIONS ARE GIVEN IN PARAO OF THE ASSESSMENT ORD ER. ONCE AGAIN IT IS REITERATED THAT THE TDS AS PER THE PROV ISIONS OF SECTION 194C OUGHT TO HAVE BEEN MADE ON THE DATE OF CREDIT OR THE DATE OF DEPOSIT WHICHEVER IS EARLIER. SINCE IN THIS CASE THE PAYMENTS HAVE BEEN MADE ON VARIOUS DATES IN THE YEA R UNDER CONSIDERATION BUT TDS HAVE BEEN MADE ON LAST DAY OF THE ACCOUNTING YEAR WHICH IS GROSS VIOLATION OF THE PRO VISIONS OF SECTION 194C OF THE I.T. ACT FOR WHICH THE A.O. HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 40(A)(IA) OF THE IT ACT AND DISALLOWANCE OF RS.14,45,460/- WAS MADE WHICH IS JU STIFIED. 10.2 BEING AGGRIEVED BY THE ORDER OF LD CIT(A) THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 11. THE LD AR BEFORE US SUBMITTED THAT THE TDS WAS DEPOSITED BEFORE THE DUE DATE OF FILING OF INCOME TAX RETURN AS SPEC IFIED U/S 139 OF THE ACT THEREFORE, NO DISALLOWANCE CAN BE MADE ON ACCOUNT O F NON-DEDUCTION OF TDS U/S 40(A)(IA) OF THE ACT. 12. ON THE OTHER HAND, THE LD DR VEHEMENTLY SUPPORT ED THE ORDER OF AUTHORITIES BELOW. 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS SETTLED LAW THAT NO DISA LLOWANCE CAN BE MADE ON ACCOUNT OF NON-DEDUCTION OF TDS U/S 40(A)(IA) OF TH E ACT IF THE SAME IS DEPOSITED ON OR BEFORE THE DUE DATE OF THE FILING O F INCOME TAX RETURN. IN THIS REGARD, WE FIND GUIDANCE AND SUPPORT FROM THE JUDGMENT OF HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. BMS PRODUCT S PVT. LTD. REPORTED IN 44 TAXMANN.COM 206 WHEREIN, IT WAS HELD AS UNDER : - 14 - 7. THE SECOND QUESTION PERTAINS TO ADDITION MADE UNDE R SECTION 40(A)(IA) OF THE ACT BY THE ASSESSEE TO THE SUB-CON TRACTORS FOR THE PERIOD FROM APRIL 2004 TO FEBRUARY 2005 ON WHICH TDS HAS B EEN PAID ON 24TH MAY 2005. THIS ISSUE HAS ALREADY BEEN ADDRESSED BY THIS COURT IN THE CASE OF CIT V. GUJARAT NARMADA VALLEY FERTILIZERS C O. LTD. [2013] 35 TAXMANN.COM 638/217 TAXMAN 114 (GUJ.) AND IN TAX APPEAL NO. 412/2013 & ALLIED APPEALS, WHEREIN, IT IS HELD THAT AMENDMENT IN SECTION 40 (A)(IA) OF THE INCOME-TAX ACT BY THE FIN ANCE ACT OF 2010 HAS RETROSPECTIVE EFFECT. REFERENCE ALSO NEEDS TO BE MA DE TO A DECISION OF THIS COURT IN TAX APPEAL NO. 706/2010 DECIDED ON 18 TH JULY 2011. SINCE THE ISSUE IS ALREADY ANSWERED, THE PRESENT TA X APPEAL REQUIRES NO FURTHER CONSIDERATION. 13.1 FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSEE HAS MADE SUFFICIENT COMPLIANCE BY DEPOSITING THE AMOUNT OF T DS WITHIN THE DUE DATE OF FILING INCOME TAX RETURN AS SPECIFIED U/S 1 39(1) OF THE ACT. HENCE, RESPECTFULLY FOLLOWING THE JUDGMENT AS DISCU SSED AFORESAID WE ARE INCLINED TO REVERSE THE ORDER OF LOWER AUTHORIT IES. THUS, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED. THIS ORDER PRONOUNCED IN OPEN COURT ON 03/10/2018 SD/- SD/- E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 03/10/2018 PRITI YADAV, SR.PS - 15 - !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-XX, AHMEDABAD. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD. 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 25/07/2018 (DICTATION-PAD 6 PA GES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 18/09/2018 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 01/10/2018 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. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 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