C.V.Ramana, Hyderabad V. ACIT, Hyderabad

ITA 232/HYD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3377 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-04-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 15-02-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA
• Assessee Lawyers: D V ANJANEYALU
• Keywords: Principle of natural justice
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.232/HYD/2010 A.Y. 2005-06 SHRI C.V. RAMANA, PRO. DURA FABS, HYDERABAD. (PAN AATPC 4009 L) VS ACIT, CIRCLE 6(1), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI D.V. ANJANEYALU RESPONDENT BY: SHRI K.V.N. CHARYA, DR O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER PASSED BY THE CIT(A) IV, HYDERABAD DATED 29 .8.2008 AND PERTAINS TO THE ASSESSMENT YEAR 2005-06 . 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE CIT(A) IS ERRONEOUS IN LAW CON TRARY TO FACTS AND AGAINST THE PRINCIPLES OF EQUITY AND NATURAL JUSTICE. 2. THE LEARNED APPELLATE AUTHORITY FAILED TO INTER PRET THE PROVISIONS OF SECTION 40(A) (IA) LEGALLY IN PROPER PERSPECTIVE BUT ONLY B ASED ON THE AMENDED PROVISIONS OF FINANCE ACT 2008. 3. THE ASSESSEE CONTEND THAT THE PROVISION OF SEC .40(A) (IA) IS APPLICABLE ONLY WHEN THE AMOUNT IS PAYABLE BUT NOT TO THE AM OUNTS WHICH WERE ACTUALLY AND ALREADY PAID AS THE WORDING PROVIDED IN THE SAID SECTION. HEREIN THIS CASE, THE EXPENDITURE WAS ALREADY INCURRED AND ACTU ALLY PAID. THIS WAS SUPPORTED BY THE DECISION OF THE JURISDICTIONAL INC OME TAX APPELLATE TRIBUNAL IN THE CASE OF : I) M/S TEJA CONSTRUCTIONS, HYDERABAD IN ITA NO.308/HYD /2009 DT. 23.10.2009. II) III) 123 TTJ 888 (JAIPUR) IN THE CASE OF JAIPUR VIDYUT V ITRAN NIGAM LTD. VS. DCIT. 2 2 THEREFORE THE ADDITION IS BAD IN LAW AND SHALL BE D ELETED. 4. THE ASSESSEE CRAVE TO SUBMIT THAT ALL THE FACTS , CONTENTIONS AND CASE LAWS MENTIONED IN THE STATEMENT OF FACTS ACCOMPANIED THE SE GROUNDS, SHALL BE DEALT WITH AT PAR. 3. THERE WAS A DELAY OF 464 DAYS IN FILING THIS APP EAL. THE AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE IMPUGNED ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT ON 26.12.2007. THE SAME WAS RECEIVED BY THE ASSESSEE O N 28.12.2007. AGAINST WHICH THE ASSESSEE HAS FILED AN AP PEAL BEFORE THE CIT(A) ON 25.1.2008. THE CIT(A) DISPOSED OFF THE SAME VIDE ITS ORDER DATED 29.8.2008 IN ITA NO.252/ACIT-6(1)/CIT(A)-IV/2 007-08. THE SAME WAS RECEIVED BY THE ASSESSEE ON 9.9.2009. CONSEQUENT TO THIS THE ASSESSING OFFICER PASSED GIVING EFFECT TO THE ORDER ON 31.10.2008. THE SAME WAS RECEIVED BY THE ASSESSEE ON 4.11.2008. AGA INST THIS, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE CIT(A) ON 1.12.2 008. ON THIS, THE CIT(A) PASSED HIS ORDER IN ITA NO.0185/DCIT/6(1)/C IT(A)-IV/2008- 09 ON 24.8.2009. THE SAME WAS RECEIVED BY THE ASSESSEE O N 12.9.2009. AGAINST THIS, THE ASSESSEE HAS FILED AN AP PEAL ON 12.10.2009 BEFORE ITAT. THE TRIBUNAL HAS PASSED THE O RDER AGAINST THIS IN ITA NO.1038/HYD/2009 ON 5.2.2010 BY HOLDING THAT THE APPEAL IS NOT MAINTAINABLE. CONSEQUENT TO THIS THE ASSESSEE FILED TH E PRESENT APPEAL AGAINST THE CIT(A) ORDER DATED 29.8.2008 I.E. THE O RIGINAL ORDER OF THE CIT(A). THE AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS FILED BELATED APPEAL AGAINST THE ORIGINAL ORDER OF THE CIT(A) ON BONA FIDE BELIEF AND MISTAKEN IMPRESSION OF LAW ARRIVED ON THE ADVISE OF THE AUDITOR, THAT THE ISSUE OF APPLICABILITY OF PROVISIO NS OF SECTION 40(A) (IA) WAS RAISED TWICE IN THE ORIGINAL APPEAL BEFORE THE CIT (A) AND ALSO IN THE APPEAL AGAINST CONSEQUENTIAL ORDER HENCE IT DID NOT PR EFER THE APPEAL AGAINST THE ORIGINAL APPELLATE ORDER. THERE WAS NO WILLFUL OR GROSS NEGLIGENCE ON ITS PART IN NOT PREFERRING AGAINST THE Q UANTUM APPEAL ORDER. NON FILING OF APPEAL AGAINST THE QUANTUM APP EAL WAS IN THE 3 3 NATURE OF MISTAKEN IMPRESSION OF LAW AND IT CONSTITUTES REASONABLE FOR NOT FILING THE APPEAL IN TIME. FURTHER, IT COULD NO T BE BENEFITED ANYTHING BY NOT FILING APPEAL AND IN FACT IT WAS TO DETRIMENT AL TO ITS INTEREST. HE PRAYED FOR CONDONING THE DELAY IN FILING THE APPEAL. HE SUBMITTED THAT THE ISSUE IN DISPUTE I.E., APPLICABILITY OF PROVISION O F SEC.40(A) (IA) WAS DECIDED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE HY DERABAD BENCH VIDE ORDER DATED 23.10.2009 IN THE CASE OF M/S TEJA C ONSTRUCTIONS IN ITA NO.308/HYD/2009 AND ALSO BY THE ORDER OF THE JAIPUR T RIBUNAL BENCH IN THE CASE OF VIDYUT VITRAN NIGAM LTD. VS. DCIT (123 TT J 888). HENCE HE PRAYED TO CONDONE THE DELAY. FURTHER, THE ASSESSEES COUN SEL FILED AN AFFIDAVIT DATED NIL WHEREIN HE STATED THAT ON HIS ADV ISE THE ASSESSEE FILED THE APPEAL ON 1.12.2008 BEFORE CIT(A) AGAINST THE CONSEQUENTIAL ORDER CONTESTING THE PROVISIONS OF SEC.40(A) (IA) INS TEAD OF FILING APPEAL BEFORE THE ITAT AGAINST THE ORIGINAL CIT(A) ORDER A S HE WAS OF THE OPINION THAT THERE WAS NO NEED TO FILE APPEAL BEFORE CIT(A) ON 29.8.2008 SINCE FILING APPEAL AGAINST CONSEQUENTIAL ORDE R WHICH SERVES THE PURPOSE. HE SUBMITTED THAT ITSELF CONSTITUTE A MISTA KEN IMPRESSION OF LAW AND ON THIS REASON THE ASSESSEE CANNOT BE MADE TO SUFFER AND HE HAS ADVISED TO FILE THIS APPEAL AFTER RECEIPT OF THE O RDER OF THE TRIBUNAL DATED 5.2.2010 PASSED AGAINST THE CONSEQUENTIAL ORDER OF THE CIT(A) AND THE SAME WAS FILED ON 15.2.2010. 4. THE DEPARTMENTAL REPRESENTATIVE STRONGLY OPPOSED THE ARGUMENTS OF THE ASSESSEES COUNSEL. HE SUBMITTED THAT THE C IT(A) HAS ALLOWED THE APPEAL AS SUCH THERE CANNOT BE ANY GRIEVANCE TO THE ASSESSEE AND ASSESSEE HAS DECIDED NOT TO FILE ANY APPEAL AGA INST THIS ORDER AND MORESO, NO APPEAL LIES AGAINST THE IMPUGNED ORDER OF THE CIT(A) WHEN THE APPEAL IS ALLOWED BY THE CIT(A). HE RELIED ON THE ORDER IN THE CASE OF JCIT VS. TRACTORS & FARM EQUIPMENTS LTD., (104 ITD 149) (3 RD MEMBER) AND IN THE CASE OF M. LOGANATHAN VS. GOVT. OF INDIA REPRESENTED BY CIT & OTHERS (302 ITR 139) ( MAD. HC). 4 4 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. WE HAVE CAREFULLY GONE THROUGH THE REASONS ADVANCED BY THE ASSESSEES COUNSEL. WE HAVE ALSO GONE THROU GH VARIOUS CASE LAWS CITED BY THE PARTIES. IN THE PRESENT CA SE, MAIN PLEA OF THE ASSESSEES COUNSEL IS THAT THE DELAY WAS CAUSED ON ACCOUNT O F THE WRONG ADVICE OF ONE MR. ANJANEYALU, CHARTERED ACCOUNT ANT S/O MADHUSUDANAN. HE HAS FILED AN AFFIDAVIT HAVING NO DA TE STATING THAT HE HAS ADVISED THE ASSESSEES COUNSEL THAT THERE IS NO NECESSITY F OR FILING AN APPEAL AGAINST THE ORIGINAL CIT(A) ORDER DATED 29 .8.2008 (IMPUGNED ORDER). HE FELT THE NECESSITY OF FILING THE APPEAL ONL Y ON RECEIPT OF THE TRIBUNAL ORDER DATED 5.2.2010 WITH REFERENCE TO TH E CONSEQUENTIAL ORDER OF CIT(A) DATED 24.8.2009. THIS PLEA OF THE A SSESSEE IS DEVOID OF MERITS. ACCORDING TO THE LEARNED COUNSEL, THE DELAY IS CONDONABLE. WE WENT THROUGH MINUTELY THE CONTENTS OF THE AFFIDAVIT F ILED BY THE LEARNED COUNSEL FOR THE ASSESSEE. WE DO NOT FIND ANY WHERE IN T HE AFFIDAVIT, AS TO WHEN HE HAS ADVICED THE ASSESSEE NOT TO FILE THE APP EAL AGAINST THE IMPUGNED ORDER. THERE IS NO MENTIONING WHEN THE ASSE SSEE APPROACHED HIM FOR ADVICE AND WHAT ARE THE MATERIALS HE HAS SEEN AND WHAT MISTAKEN ADVICE GIVEN BY HIM TO THE ASSESSEE AND WHEN DI D HE HAS ADVISED THE ASSESSEE. THE MAIN DEPOSITION OF SHRI D.V. ANJANEYULU, CHARTERED ACCOUNTANT IS THAT HE HAS GIVEN WRONG ADVISE T O THE ASSESSEE. HE MADE A DEPOSITION IN THE APPEAL IS THAT THE ISSUE BE FORE THE CIT(A) IS W.R.T. APPLICABILITY OF PROVISIONS OF SEC.40(A) (IA). A CCORDING TO HIM, HE ADVISED THE ASSESSEE TO CONTEST THE SAME GROUNDS BEFORE THE ASSESSING OFFICER DURING THE CONSEQUENTIAL PROCEEDINGS AS HE WAS O PINED THAT THE ASSESSING OFFICER WILL ISSUE NOTICE BEFORE COMPLETION OF ASSESSM ENT IN CONSEQUENT TO THE APPELLATE ORDER. WITHOUT ISSUING AN Y NOTICE, THE ASSESSING OFFICER SIMPLY PASSED THE CONSEQUENTIAL ORDER FOLLO WING THE DIRECTION OF THE CIT(A). HOWEVER, HE HAS NOT SPELT AN YTHING AS TO HOW THE ASSESSEE IS ENTITLED TO FILE AN APPEAL AGAINST CIT(A) IMPUGNED ORDER 5 5 WHEN THE APPEAL OF THE ASSESSEE IS STILL ALLOWED BY CIT(A ). BY GOING THROUGH THE IMPUGNED CIT(A) ORDER, WE ARE OF THE OP INION THAT EVEN A LAYMEN CANNOT HAVE ANY MISAPPREHENSION ABOUT IT. IT IS CLEARLY STATED IN THE SAID ORDER DIRECTING THE ASSESSING OFFICER TO VERI FY THE AMOUNTS PERTAINING TO THE MONTH OF MARCH 2005 AND EXCLUDE THE SAME FROM THE APPLICABILITY OF PROVISIONS OF SEC.40(A) (IA). THEREFOR E ANY LEGAL ADVICE GIVEN TO THE ASSESSEE ASSUMING IT TO BE TRUE WAS EXHIBITI NG OR WAS FULL OF INCOMPREHENSIVE INDIFFERENCE AS STATED IN CONCORD OF IND IA INSURANCE CO. LTD. VS. VS SMT. NIRMALA DEVI & OTHERS (1979) (118 ITR 507) (SC) AND FOR THAT REASON ALSO LEGAL ADVICE IF ANY, GIVEN COU LD NOT CONSTITUTE SUFFICIENT CAUSE FOR EXCUSING THE INORDINATE DELAY OF 46 4 DAYS IN FILING THE APPEAL. THE DELAY IN FILING THE APPEAL THEREFO RE COULD NOT BE CONDONED AND APPEAL OF THE ASSESSEE IS TO BE DISMISSED AS TIM E BARRED. FURTHER, IN OUR OPINION THERE IS NO SUFFICIENT CAUSE SHO WN BY THE ASSESSEE TO ARRIVE AT SUCH A SATISFACTION SO AS TO CONDONE THE INORDINATE DELAY OF 464 DAYS. THE EXPLANATION FILED BY THE ASSESSE E FOR THE DELAY AND ON PERUSAL OF THE AVERMENTS MADE IN THE AFFIDAVIT FILED BY SHRI D.V. ANJANEYULU, CA SHOW THAT THE TYPE OF ADVICE THAT THE ASSESSEE CLAIM TO HAVE RECEIVED AND THE LEARNED CA AVERSE TO HAVE GIVEN WOULD NOT BE COMING FORTH FROM A LEARNED COUNSEL, WHO CAN GIVE TYPE OF REASONS GIVEN IN THE AFFIDAVIT LEADING TO THE DELAY, WHICH IS UNDER CONSIDERATION FOR CONDONATION. A CAREFUL PERUSAL OF THE CIT(A) ORDER DA TED 29.8.2008 SHOWS THAT THE ASSESSEE COULD NOT HAVE GOT THE TYPE OF RE LIEF THAT IT CLAIMS TO BE BELIEVED, IT WOULD RECEIVE FROM THE ASSESSING OFFICER AT THE DIRECTION OF THE CIT(A). THEREFORE, THE VERY PREMISE S ON WHICH THE EXPLANATION FOR THE DELAY STARTS, TO OUR MIND, ARE IN CONGRUOUS WITH THE FACTS OF THE CASE. AT THE VERY MATERIAL TIME, WHEN AFT ER THE ORDER OF THE CIT(A), WHEN GIVING EFFECT TO ORDER PASSED BY THE ASSESSIN G OFFICER, THE TYPE OF BELIEF THAT THE ASSESSEE CLAIM THEY CARRIED WOULD HAVE DEFINITELY BEEN SHATTERED AND THE LEARNED COUNSEL, WOULD NOT HAV E CONTINUED TO ADVISE THE ASSESSEE NOT TO CHALLENGE THE ORIGINAL ORDER O F THE CIT(A) 6 6 DATED 29.8.2008. AFTER THE TRIBUNAL ORDER DATED 5. 2.2010, DISMISSING THE APPEAL OF THE ASSESSEE AGAINST THE ORDER OF THE CIT (A) DATED 24.8.2009 WAS RECEIVED BY THE ASSESSEE, THE ASSESSEE REALIZE D THE GRAVE POSITION IN WHICH THE ASSESSEE HAD COME TO BE TRAPP ED ON ACCOUNT OF GROSS NEGLIGENCE LEADING TO LATCHES. THEREFORE , CONSIDERING THE EXPLANATIONS OF THE ASSESSEE ON THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE ALONG WITH THE GUIDELINES LAID DO WN BY THE HONBLE SUPREME COURT IN THE CASE OF CONCORD INDIA INSU RANCE CO. LTD., VS. SMT. NIRMALA DEVI (118 ITR 507) (SC) FOR CONDONAT ION OF DELAY IN SUCH MATTERS, IT IS CLEAR THAT THE DELAY WAS NOT DUE TO SU FFICIENT CAUSE. IN VIEW OF THIS WE DECLINE TO ENTERTAIN THE APPEAL OF THE ASSESSEE AND THE SAME IS DISMISSED AS TIME BARRED. SINCE WE HAVE NOT ADMITTED THE APPEAL OF THE ASSESSEE, THERE IS NO NEED TO GO INTO THE OTHER GROUNDS RAISED ON THE MERIT REGARDING APPLICABILITY OF PROVISI ONS OF SEC. 40(A) (IA). 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DI SMISSED AS TIME BARRED. ORDER PRONOUNCED IN THE OPEN COURT : 23. 4.2010 SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED THE 23 RD APRIL, 2010 COPY FORWARDED TO: 1. SHRI C.V. RAMANA, C/O M/S ANJANEYULU & CO., CAS, 3 0, BHAGYALAKSHMI NAGAR, GANDHI NAGAR, HYDERABAD. 2. THE ACIT, CIRCLE 6(1), HYDERABAD 3. CIT(A)- IV, HYDERABAD. 4. CIT, HYDERABAD 5. THE D.R., ITAT, HYDERABAD. NP 7 7