Pramathi Technologies Pvt. Ltd., Hyderabad V. DCIT, Cir-16(3), Hyderabad

ITA 221/HYD/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7123 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-07-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 10-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS
• Keywords: Bonafide belief; Condonation of delay
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, A.M AND SMT. ASHA VIJAYARAGHAVAN,J.M ITA NO.221/HYD/2011 ASSESSMENT YEAR 2003-04 PRAMATHI TECHNOLOGIES LTD., HYDERABAD. ( PAN AACCP 1967 C) VS DCIT, CIR - 16(3), HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C. SUBRAHMANYAM RESPONDENT BY : SHRI V. SRINIVAS DATE OF HEARING: 02-11-2011. DATE OF PRONOUNCEMENT: 22 -11-2011. O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF THE CIT (A)-V, HYDERABAD DATED 16-12-2010 AND IT PERTAINS TO THE ASSESSMENT YEAR 2003-04. 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS WITH REGARD TO NON CONDONATION DELAY OF 472 DAYS BY THE CIT (A) AND DE TERMINING THE SAME ITA NO.221/HYD/2011- PRAMATHI TECHNOLOGIES PVT.LTD., HYD. L.L ========================== 2 IN LIMINE IN THIS CASE, THERE WAS A DELAY OF 472 DAYS IN FILING THE APPEAL BEFORE THE CIT (A). AS PER SECTION 249 OF THE INCOM E-TAX ACT, THE APPEAL IS TO BE PRESENTED BEFORE THE CIT (A) WITHIN 30 DAY S OF THE DATE OF SERVICE OF THE ASSESSMENT ORDER. HOWEVER, THE APPEA L WAS FILED BELATEDLY BY 472 DAYS. THE ASSESSEE ADVANCED THE RE ASONS BEFORE THE LOWER AUTHORITIES THAT THE ASSESSMENT ORDER UNDER S ECTION 143(3) OF THE I T ACT IN WHICH THE CIT (A) DISALLOWED SOME PROPOR TIONATE EXPENSES CLAIMED OUTSIDE INDIA FOR NON DEDUCTION OF TDS. ON THIS ISSUE, THE ASSESSEE PREFERRED AN APPEAL ON 28-4-2006 IN ITA NO .076/DC-16 (3)/CIT(A)-V/2006-07 AND THE CIT (A) GRANTED RELIEF VIDE ORDER DATED 30-7-2007. AGAIN ON THE SAME GROUND, THE ASSESSMENT WAS REOPENED UNDER SECTION 147 OF THE ACT AND THE ASSESSMENT ORD ER WAS PASSED DISALLOWING THE PROMOTION EXPENSES AND PROMOTION CH ARGES. THE ASSESSEE WAS UNDER THE BONAFIDE IMPRESSION THAT THI S ISSUE WAS ALREADY SETTLED BY THE ORDER OF THE CIT (A) AND THE MATTER IS PENDING BEFORE THE ITAT. UNDER THESE CIRCUMSTANCES, THE ASSESSEE MIS-T OOK THAT THE PRESENT IMPUGNED ORDER IS REPETITION OF THE EARLIER ORDER AND NOT FILED THE APPEAL BEFORE THE CIT (A). THE CIT (A) NOT AGR EED WITH THE REASONS ADVANCED BY THE ASSESSEE FINDING THAT THERE ARE N O GOOD AND SUFFICIENT REASONS TO ALLOW THE CLAIM OF THE ASSESSEE AND ACCO RDINGLY THE APPEAL FILED BY THE ASSESSEE WAS DISMISSED. 3. AGGRIEVED BY THE ORDER OF THE CIT (A), THE ASSE SSEE IS IN APPEAL BEFORE US. 4. THE LEARNED AUTHORIZED REPRESENTATIVE ADVANCED T HE SAME REASONS WHICH WERE ADVANCED BEFORE THE CIT (A) FOR CONDONIN G THE DELAY IN FILING THE APPEAL AND PRAYED FOR CONDONATION OF THE SAID D ELAY AND ADMIT THE ITA NO.221/HYD/2011- PRAMATHI TECHNOLOGIES PVT.LTD., HYD. L.L ========================== 3 APPEAL. IN THE SUPPORT OF HIS CONTENTIONS, HE RELI ED ON THE FOLLOWING JUDGMENTS: I) IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST. KATIJI (1987) 167 ITR 471 (SC) HELD AS FOLLOWS:- THE EXPRESSION SUFFICIENT CAUSE EMPLOYED BY THE LEGISLATURE IS ADEQUATELY ELASTIC TO ENABLE THE COU RTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUBSERVE S THE ENDS OF JUSTICE THAT BEING THE LIFE PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COURTS. IT IS COMMON KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL APPROAC H IN MATTERS INSTITUTED IN THIS COURT. AND SUCH A LIBERAL APPROACH IS ADOPTED ON PRINCIPLE AS IT IS REALIZED THAT: 1. ORDINARILY, A LITIGANT DOCS NOT STANDS TO BENEFIT B Y LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITORIO US MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND C AUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS, WHEN D ELAY IS CONDONED, THE HIGHEST THAT CAN HAPPEN IS THAT A CAU SE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIE S. 3. EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EV ERY HOURS DELAY, EVERY SECONDS DELAY? THE DOCTRINE MU ST BE APPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC MANNER. II) IN THE DECISION IN THE CASE OF KAUSHAL DIWAN VS. IN COME-TAX OFFICER (3 ITD 432) (THIRD MEMBER) WHEREIN IT HELD THAT ITA NO.221/HYD/2011- PRAMATHI TECHNOLOGIES PVT.LTD., HYD. L.L ========================== 4 EVERY DEFAULT WHATEVER MAY BE ITS NATURE WILL NOT END IN FINE OR PENALTY MERELY BECAUSE THE DEFAULT IS PUNIS HABLE WITH FINE OR PENALTY. IT IS TRITE LAW TO MENTION THAT M ERELY BECAUSE THERE IS A PROVISION FOR LEVY OF FINE, FINE MUST BE IMPOSED. SUCH IMPOSITION DEPENDS ON VARIOUS CIRCUMSTANCES A MERE BREACH OF LAW WHICH IS VENIAL IN CHARACTER WILL NOT LEAD TO T HE INFERENCE THAT THE ASSESSEE WANTONLY COMMITTED THE DEFAULT TH EREBY MAKING HIMSELF LIABLE FOR THE PENAL CONSEQUENCES. ONE HAS TO JUDGE THE MATTER BY TAKING INTO ACCOUNT THE TOTA LITY OF CIRCUMSTANCES. SO JUDGED, THE CASE WAS RIGHTLY CAL LED AS PETTY, AND THE FACTS OF THE CASE DID NOT JUSTIFY TH E LEVY OF FINE III) IN THE CASE OF SUNIL CHANDRA VOHRA VS. ACIT (2009) (32 SOT 365) WHEREIN IT HELD THAT BONA FIDE IGNORANCE OF LA W OF THE ASSESSEE IS A VALID GROUND FOR NOT IMPOSING PENALTY FOR CONCEALMENT. 5. ON THE OTHER HAND, THE LEARNED DR STRONGLY SUPPOR TED THE ORDER OF THE CIT (A) AND RELIED ON THE FOLLOWING JU DGMENTS:- I) COLLECTOR, LAND ACQUISITION VS. MST. L KATIJI (1987 ) 167 ITR 471 II) JCIT VS. SPL. RANGE-I, CHENNAI VS. TRACTORS & FARM EQUIPMENTS LTD. (104 ITR 149) (THIRD MEMBER) ITA NO.221/HYD/2011- PRAMATHI TECHNOLOGIES PVT.LTD., HYD. L.L ========================== 5 III) ORDER OF THE TRIBUNAL IN AP HOUSING BOARD, HYDERABA D (ITA NO.110/HYD/2008) DATED 14 TH MAY, 2010. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THIS C ASE, THE ASSESSEE HAS ADVANCED THE REASONS FOR DELAY IN FILING THE APPEAL AS FOLLOWS:- THE DCIT HAD, ISSUED ORDER UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 AND DISALLOWED SALES PROMOTION EXPENSES I NCURRED OUTSIDE INDIA FOR NO DEDUCTION OF TDS IN HIS ORDERS DATED 2 5-1-2006. ON THIS ISSUE WE HAVE FILED AN APPEAL BEFORE THE CIT(A)-V, HYDERABAD ON 28-4- 2006 ITA NO.076/DC-16(3)/CIT(A)-V/2006-07. THE COM MISSIONER WAS PLEASED TO GRANT RELIEF ORDER DATED 13-9-2007. AGAIN ON THE SAME GROUNDS, THE ASSESSEE IS IN RECEI PT OF ASSESSMENT ORDERS UNDER SECTION 143(3) READ WITH SECTION 147 O F THE ACT BY THE SAME AUTHORITY ON SIMILAR ISSUE BY DISALLOWING THE SALES PROMOTION EXPENSES AND PROFESSIONAL CHARGES TO THE EXTENT. THE ASSESSEE WAS UNDER THE BONAFIDE BELIEF THAT THI S ISSUE WAS ALREADY SETTLED BY THE CIT AND THE MATTER IS UNDER SUB-JUDI CE WITH HE ITAT. UNDER THESE CIRCUMSTANCES, THE INSTANT ORDER WAS MI STOOK TO BE THE REPETITION OF THE SAME AND FOR THIS REASON THE APP EAL COULD NOT BE FILED BY THE ASSESSEE WITHIN THE TIME ALLOWED. IN THE LIGHT OF THE ABOVE, THE ASSESSEE REQUESTS TH AT THE DELAY MAY KINDLY BE CONDONED AND THE APPEAL MAY BE ADMITTED. 7. WE HAVE GONE THROUGH THE ABOVE PETITI ON. IN OUR OPINION, THE REASONS ADVANCED BY THE ASSESSEE IN THE ABOVE PETIT ION CANNOT BE CONSIDERED AS GOOD AND SUFFICIENT REASONS TO CONDON E THE SAID DELAY. ITA NO.221/HYD/2011- PRAMATHI TECHNOLOGIES PVT.LTD., HYD. L.L ========================== 6 THERE SHOULD BE GOOD AND SUFFICIENT REASONS WHICH P REVENTED THE ASSESSEE TO FILE THE APPEAL IN TIME BEFORE THE CIT (A). THE ASSESSEES PETITION FOR CONDONING THE DELAY IS PLEADING ITS IN NOCENCE. IN OUR OPINION, MORE THAN INNOCENCE, THERE IS NEGLIGENCE O N THE PART OF THE ASSESSEE. THE ASSESSEE HAS NOT FILED AN APPEAL BEFORE THE LOWER AUTHORITIES IN TIME AND THE ASSESSEE WAS NOT ABLE T O PROVE BEFORE US THAT IT WAS DILIGENT AND WAS NOT GUILTY OF NEGLIGEN CE WHATSOEVER. THE SUFFICIENT CAUSE WITHIN THE CONTEMPLATION OF THE LI MITATION PROVISION MUST BE A CAUSE WHICH IS BEYOND THE CONTROL OF THE PARTY INVOKING THE AID OF THE PROVISIONS. IN THIS CASE, THE CAUSE FOR THE DE LAY IN FILING THE APPEAL, COULD HAVE BEEN AVOIDED, CANNOT BE A SUFFICIENT CAU SE WITHIN THE MEANING OF THE LIMITATION PROVISION. WHERE NEITHER NEGLIGENCE NOR INACTION OR WANT OF BONAFIDES CAN BE IMPUTED TO THE APPELLANT, A LIBERAL CONSTRUCTION OF THE PROVISION HAS TO BE MADE IN ORD ER TO ADVANCE SUBSTANTIAL JUSTICE. THE DELAY CAUSED HERE COULD H AVE BEEN AVOIDED AND IT IS NOTHING BUT NEGLIGENCE ON THE PART OF THE ASS ESSEE AND THERE IS NO REASONABLE AND JUSTIFIABLE CAUSE TO CONDONE THE DEL AY IN THIS CASE, HENCE, WE ARE NOT INCLINED TO CONDONE THE SAID DELA Y 472 DAYS. AFTER CONSIDERING THE TOTALITY OF FACTS AND THE CIRCUMSTA NCES OF THE CASE, WE FIND NO MERIT IN THE CONTENTIONS PUT FORWARD BY THE LEARNED COUNSEL FOR THE ASSESSEE. THE CASE RELIED ON BY THE ASSESSEE IN THE CASE OF SUNIL CHANDRA VOHRA (SUPRA) IS NOT ON THE ISSUE RELATING TO THE CONDONATION OF DELAY AND IT IS WITH REGARD TO DELETION OF PENALT Y IMPOSED UNDER SECTION 271(1)(C ) OF THE ACT. IN VIEW OF THE ABOVE, WE UPH OLD THE FINDINGS OF THE CIT (A) AND REJECT THE GROUNDS RAISED BY THE AS SESSEE. ITA NO.221/HYD/2011- PRAMATHI TECHNOLOGIES PVT.LTD., HYD. L.L ========================== 7 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 22-11-2011 . SD/- SD/- (SMT. ASHA VIJAYARAGHAVAN) (CHANDRA POOJARI) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DT/- 22-11-2011. COPY FORWARDED TO: 1. M/S. PRAMATHI TECHNOLOGIES PVT. LTD., 31, WHITE HOU SE, BEGUMPET, HYDERABAD. 2. DCIT, IT TOWERS, AC GUARDS, CIRCLE - 16(3), HYDERABAD. 3. CIT(A)-V, HYDERABAD. 4. CIT, AP, HYDERABAD. 5. THE D.R., ITAT, HYDERABAD. JMR*