SYBIL LASRADO, MUMBAI V. ITO WD 26(1)(3), MUMBAI

ITA 2466/MUM/2011

• Counselvise Citation: 246619914 RSA 2011
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 26-04-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 29-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M MURALI
• Keywords: Principle of natural justice; Condonation of delay; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE SHIRI B. RAMAKOTAIAH, AM AND SHRI VIVEK VARM A, JM ITA NO. : 2466/MUM/2011 ASSESSMENT YEAR : 2004-05 M/S. SYBIL LASRADO 202, MADHUMAG CHS, PLOT NO.11, I.C. COLONY, BORIVALI (WEST), MUMBAI-400 103 PAN NO: AADPL 8129 N CIT(A)-28, MUMBAI (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI VIJAY MEHTA RESPONDENT BY : SHRI M. MURALI DATE OF HEARING : 26.04.2012 DATE OF PRONOUNCEMENT : 11.05.2012 ORDER VIVEK VARMA, JM : THE APPEAL ARISES FROM THE ORDER OF THE LD. CIT(A) -28, MUMBAI DATED 11.02.2011, WHEREIN THE CIT(A) HAS DISMISSED THE AP PEAL REJECTING THE PRAYER FOR CONDONATION OF DELAY IN FILING THE APPEAL, WITHOUT GOING INTO THE MERITS OF THE CASE. 2. THE ASSESSEE IS AN INDIVIDUAL, WHO WAS AN EMPLOY EE OF HONG KONG AND SHANGHAI BANK. THE BANK PROMOTED EARLY VOLUNTARY RE TIREMENT SCHEME (EVRS) AND OFFERED THE SAME TO ITS EMPLOYEES WHO WERE WILI NG TO AVAIL THE SCHEME. THE ITA NO : 2466/MUM/2011 SYBIL LASRADO 2 ASSESSEE AVAILED THE SCHEME AND IN LINE OF THE EMPL OYMENT, SHE RECEIVED THE PACKAGE AS PROMOTED AND OFFERED BY HER EMPLOYER. 3. THE ASSESSEE FILED HER RETURN OF INCOME AND CLAI MED AN EXEMPTION U/S 10(10C) OF THE ACT AT A FIGURE OF RS. 5,00,000/-. THE CASE WAS TAKEN UP FOR SCRUTINY AND IN THE ASSESSMENT PROCEEDINGS, THE A.O . BROUGHT TO THE ASSESSEES NOTICE THAT EXEMPTION COULD NOT BE GRANTED. THE AS SESSEE CHOSE TO FILE A REVISED RETURN, WHEREIN THE ASSESSEE WITHDREW HER CLAIM FOR EXEMPTION U/S 10(10C). THIS REVISED RETURN WAS REJECTED BY THE A.O. AND HE PROCEEDED ON THE ORIGINAL RETURN, WHEREIN HE ADDED BACK THE SUM OF RS. 5,00,0 00/- AND ALSO INITIATED PENALTY PROCEEDINGS. 4. THE ASSESSEE ACCEPTED THE ORDER OF ASSESSMENT AS FRAMED BY THE A.O. LATER ON THE ASSESSEE CAME TO KNOW THAT HON'BLE BOM BAY HIGH COURT IN THE CASE OF CIT VS. NAGESH DEVIDAS KULKARNI, REPORTED IN 291 ITR 407 (BOM) HELD THAT THE EXEMPTION U/S 10(10C) IS AVAILABLE TO THE ASSESSEE EVEN IF THE VRS AMOUNT EXCEEDS RS. 5,00,000/-. ON THE BASIS OF THE DECISI ON, THE ASSESSEE CHOSE TO FILE THE APPEAL BEFORE THE CIT(A), WHICH BECAME DELAYED. FINALLY, THE APPEAL WAS FILED AFTER A TOTAL DELAY OF 953 DAYS. 5. AS THE APPEAL BEFORE THE ITAT IS ON THE VIOLATI ON OF PRINCIPLES NATURAL JUSTICE AND MERITS, WE WOULD FIRST ADDRESS THE ISSU E ON THE MAINTAINABILITY ISSUE. 6. IT IS SEEN FROM THE RECORDS FILED BY THE ASSESSE E THAT THE CLAIM OF THE ASSESSEE WAS BONAFIDE, EVEN BEFORE THE A.O. IN THE RETURN, CAME TO BE KNOWN TO HER AS EARLY AS 2007, BECAUSE, IN THE APPEAL BEFORE THE ITAT, IN PENALTY ITA NO : 2466/MUM/2011 SYBIL LASRADO 3 PROCEEDINGS, SHE PLACED A COPY OF AN ORDER OF A COO RDINATE BENCH OF MUMBAI TRIBUNAL IN ITA NO. 6384/MUM/2006, DATED 28.03.2007 WHEREAS, SHE FILED THE APPEAL AGAINST THE ASSESSMENT ORDER BEFORE THE CIT( A) ON 29.09.2008, WHICH MEANS THAT THERE WAS A FURTHER DELAY OF OVER ONE AN D A HALF YEARS, WHICH IS UNEXPLAINABLE. 7. BEFORE US, THE AR APPEARING ON BEHALF OF THE ASS ESSEE SUBMITTED THAT THE ASSESSEE MADE THE PRAYER FOR CONDONATION WHEREIN SH E EXPLAINED NOT ONLY THE BONAFIDE REASONS BUT ALSO CITED A NUMBER OF DECISIO NS FROM VARIOUS COURTS. AT THE TIME OF HEARING BEFORE US, THE AR PLACED RELIAN CE ON THE DECISION OF BOMBAY HIGH COURT (NAGPUR BENCH) IN THE CASE OF BABRAO DEO RAA WANKHEDE V/S SEWA SAHAKARI SAUSTHA & ANR IN CWP NO. 1974 OF 1979, WHE RE THERE WAS A DELAY OF ABOUT 10 YEARS. THE HON'BLE JURISDICTIONAL HIGH COU RT ALLOWED THE WRIT BY HOLDING THAT GRAVE INJUSTICE WOULD BE CAUSED IF THE IMPUGNE D ORDER IS ALLOWED TO BE SUSTAINED. IT WOULD AMOUNT TO MOCKERY OF JUSTICE, I T WOULD TANTAMOUNT TO LEGALISE INJUSTICE ON TECHNICAL GROUNDS. THE HON'BLE NAGPUR BENCH ALSO REFERRED TO THE CASE OF COLLECTOR, LAND ACQUISITION, ANANTNAG AND O THERS V/S. MST. KATIJI & OTHERS REPORTED IN 1987 AIR 1353 (SC). 8. THE AR REFERRED TO THE CASE OF HON'BLE SUPREME C OURT OF INDIA IN THE CASE OF RAM NATH SAO AND OTHERS V/S GOBARDHAN SAO & OTHE RS, REPORTED IN 2002 AIR 1201 (SC). HE REFERRED TO THE CASE OF STATE OF ANDH RA PRADESH V/S. VENKATARAMANAS CHUDUVA & MURAMUMA MERCHANT, REPORTE D IN 159 ITR 59 (AP). ITA NO : 2466/MUM/2011 SYBIL LASRADO 4 9. WE HAVE GONE THROUGH THE JUDGEMENTS PLACED BEFOR E US, THOUGH ALL THE JUDGEMENTS CULL OUT THE RATIO THAT WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, THE C AUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF NON DELIBERATE DELA Y. HAVING OBSERVED THE FAMOUS LINES TAKEN FROM KATIJIS CASE, NEITHER THE ASSESSEE NOR THE AR HAS BEEN ABLE TO GIVE A WELL FOUNDED AND REASONED REPLY AS T O THE REASONS OF DELAY POST 28.03.2007 UPTO 29.09.2008. THIS DELAY STILL REMAI N UNEXPLAINABLE. SINCE THE CLAIM WAS GENUINE, WE HAVE TO OPT SUBSTANTIAL JUSTI CE OVER TECHNICAL CONSIDERATIONS, BECAUSE, THE CASE PERTAINS TO AN IN DIVIDUAL, WHO MAY OR MAY NOT BE AWARE OF LEGAL FORMALITIES AND LEGAL DATE CHART, UNLESS THE PERSON IS MADE KNOWN OF ITS ADVERSE RAMIFICATIONS. WE ALSO FIND F ROM THE FACTS, THAT ACTUALLY, THE ASSESSEE HAD CLAIMED THE EXEMPTION IN HER ORIGI NAL RETURN, WHICH WAS REJECTED BY THE ASSESSING OFFICER. THE SAME ISSUE WAS LATER ALLOWED THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. NAGESH DEV IDAS KULKARNI, REPORTED IN 291 ITR 407 (BOM). IN THE CASE AT HAND, WE HAVE SEE N THAT THE ORIGINAL CLAIM OF THE ASSESSEE BECAME GENUINE AND BONAFIDE, AND FOR W HICH THE LADY ASSESSEE ULTIMATELY BECAME ELIGIBLE FOR THE EXEMPTION U/S 10 (10C). JUSTICE DEMANDS THAT WHAT IS DUE TO THE ASSESSEE MUST BE GIVEN TO HER AN D THE LENGTH OF TIME FOR NOT FILING OF APPEAL BEFORE THE CIT(A) SHOULD NOT DEPRI VE THE ASSESSEE OF SOMETHING WHICH THE ASSESSEE GENUINELY DESERVED. ITA NO : 2466/MUM/2011 SYBIL LASRADO 5 8. IN THE LIGHT OF THESE OBSERVATIONS, WE RESTORE T HE CASE TO THE FILE TO THE CIT(A), WHO SHALL ADJUDICATE THE ISSUE OF CLAIM OF EXEMPTION U/S 10(10C) ON MERITS, AFTER AFFORDING REASONABLE OPPORTUNITY TO T HE ASSESSEE. 9. GROUND NOS. 1, 2 & 3 ARE THUS ALLOWED. GROUND N OS. 4 & 5 ARE RESTORED TO THE CIT(A) FOR ADJUDICATION OF THE ISSUE OF SECTION 10(10C) AND/OR SECTION 89, AS THE CASE MAY BE. GROUND NO. 6 IS GENERAL IN NATURE . 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 11 TH DAY OF MAY, 2012. SD/- - SD/- ( B. RAMAKOTAIAH ) ( VIVEK VARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI: 11 TH MAY, 2012. P/-* ITA NO : 2466/MUM/2011 SYBIL LASRADO 6