Mr. N. Nachimuthu, Salem V. ITO, Salem

ITA 2840/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8098 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 02-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 30-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUPRIYA PAL
• Keywords: Charitable institution; Period of limitation
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU R.L REDDY, JUDICIAL MEMBER ./ ITA NO.:2840/MDS/2016 / ASSESSMENT YEAR : 2011-12 SHRI N. NACHIMUTHU, 49/58, POOLAKATUR, AGRAHARAM POST, PALLIPALAYAM, NAMAKKAL 638 006. PAN: ADUPN2083P V. THE INCOME TAX OFFICER, WARD-II (4), SALEM. (/ APPELLANT) (/ RESPONDENT) / APPELLANT BY : SHRI G. BASKAR, ADVOCATE / RESPONDENT BY : MS. SUPRIYA PAL, JCIT !' / DATE OF HEARING : 02.01.2017 !' / DATE OF PRONOUNCEMENT : 25.01.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER : THIS APPEAL OF THE ASSESSEE WAS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), SALEM DATED 22.08.2016. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS WITH REGARD TO DISMISSING THE APPEAL OF THE ASSESSEE BY THE CIT 2 I.T.A. NO. 2840/MDS/2016 (APPEALS) WITHOUT CONDONING THE DELAY OF 131 DAYS I N FILING THE APPEAL BEFORE HIM. 2. THE FACT OF THE CASE IS THAT, THE ASSESSEE CARRI ED THE APPEAL AGAINST THE ASSESSMENT ORDER BEFORE THE CIT (APPEAL S) BELATEDLY BY 131 DAYS. THE ASSESSEE FILED CONDONATION PETITION ACCOMPANIED WITH APPEAL STATING THAT THE ASSESSEE HIRED A CHART ERED ACCOUNTANT BY NAME SHRI MURUGANANDAM, CHARTERED ACCOUNTANT, ER ODE. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ABOVE CHARTERE D ACCOUNTANT REFUSED TO APPEAR BEFORE THE INCOME TAX OFFICER AND THE ASSESSEE HIMSELF APPEARED BEFORE THE ASSESSING OFFICER ON 24 .03.2014. THE ASSESSEE HAS ONLY STUDIED UPTO 12 TH STD AND HE WAS NOT WELL VERSED WITH THE INCOME TAX PROCEEDINGS. THE ASSESSING OF FICER ASSESSED THE TOTAL INCOME AT 90,05,564/- AS AGAINST THE RETURNED INCOME OF 2,38,150/- VIDE ASSESSMENT ORDER DATED 31.03.2014. THE ASSESSEE RECEIVED A NOTICE UNDER SECTION 221 (1) OF THE INCOME TAX ACT, 1961, (IN SHORT THE ACT) ON 18.06.2014 F ROM THE ASSESSING OFFICER TO APPEAR BEFORE HIM ON 27.06.2014, IN CONN ECTION WITH THE DEMAND OF 36,24,480/-. THEN ONLY, THE ASSESSEE CAME TO KNOW ABOUT THE SERIOUSNESS OF THE ISSUE AND THE ASSESSEE FILED THE APPEAL CHALLENGING THE ASSESSMENT ORDER. THUS THE RE WAS A DELAY 3 I.T.A. NO. 2840/MDS/2016 OF 131 DAYS IN FILING THE APPEAL BEFORE THE CIT (AP PEALS). HOWEVER THE CIT (APPEALS) OBSERVED THAT THERE IS NO GOOD AN D SUFFICIENT REASON IN FILING THE APPEAL BELATEDLY. ACCORDINGLY , HE DISMISSED THE APPEAL. AGAINST THIS, THE ASSESSEE APPEALED BEFOR E US. 3. WE HEARD BOTH THE PARTIES AND PERUSED THE MATERI AL AVAILABLE ON RECORD. THERE WAS A DELAY OF 131 DAYS IN FILING THE APPEAL BEFORE CIT (APPEALS) AGAINST THE ASSESSMENT ORDER. THE AS SESSEE FILED THE CONDONATION PETITION AS DISCUSSED IN EARLIER PA RA, STATING THAT IT IS DUE TO WRONG REPRESENTATION AND NON-AVAILABILITY OF PROPER ADVICE FROM THE ASSESSEES CHARTERED ACCOUNTANT AND THE AS SESSEE WAS NOT AWARE OF THE CORRECT PROCEEDINGS OF THE CASE. TO THIS EFFECT, THE ASSESSEE FILED CONDONATION PETITION ACCOMPANIED WIT H AFFIDAVIT DATED 20.08.2016 WHICH WAS FILED BEFORE THE CIT (AP PEALS). IN THE OPINION OF CIT (APPEALS), THERE WAS NO GOOD AND SUF FICIENT REASON FOR FILING THE APPEAL BELATEDLY BEFORE HIM. THE JURISDICTIONAL HIGH COURT CONSIDERED THE APPEAL IN THE CASE OF SHRI SRE ENIVAS CHARITABLE TRUST V DEPUTY COMMISSIONER OF INCOME TA X, (2006) 280 ITR 357 HELD THAT MIXING UP OF PAPERS WITH OTHER PA PERS ARE SUFFICIENT CAUSE FOR NOT FILING THE APPEAL IN TIME. THE MADRAS HIGH COURT FURTHER OBSERVED THAT THE EXPRESSION SUFFICI ENT CAUSE SHOULD 4 I.T.A. NO. 2840/MDS/2016 BE INTERPRETED TO ADVANCE SUBSTANTIAL JUSTICE. THE REFORE ADVANCEMENT OF SUBSTANTIAL JUSTICE IS THE PRIME FAC TOR WHILE CONSIDERING THE REASONS FOR CONDONING THE DELAY. 4. IN THIS CASE ON OUR HAND, THE ISSUE ARISES FOR C ONSIDERATION OF MERIT IS WITH REGARD TO ADDITION TOWARDS UNEXPLAINE D INVESTMENT UNDER SECTION 69 OF THE ACT. THEREFORE THE ISSUE RAISED BY THE ASSESSEE IS REQUIRED TO BE ADJUDICATED BY CIT (APPE ALS), OTHERWISE DISMISSING THE APPEAL WITHOUT CONDONING THE DELAY M AY RESULT IN MERITORIOUS MATTER BEING THROWN AT THE VERY THRESHO LD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS, WHEN DEL AY IS CONDONED, THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD B E DECIDED ON MERITS AFTER HEARING THE PARTIES. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATION ARE PITTED AGAINST EACH OTH ER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR T HE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT FOR INJUSTICE BEI NG DONE BECAUSE OF NON-DELIBERATE DELAY. 5. IN THE CASE ON OUR HAND, IT IS APPROPRIATE TO DE CIDE THE ISSUE ON MERIT AFTER CONDONING THE DELAY BY CIT (APPEALS) , AS THIS DELAY IS VERY SHORT DELAY, NOT INORDINATE DELAY AND THE REAS ON STATED BY THE ASSESSEE FOUND TO BE BONA FIDE, IS HELD BY MADRAS H IGH COURT IN 5 I.T.A. NO. 2840/MDS/2016 THE CASE OF CIT V K.S.P. SHANMUGAVEL NADAR [1985] 1 53 ITR 596 WHEREIN OBSERVED THAT THERE WAS SUFFICIENT AND REAS ONABLE CAUSE ON THE PART OF THE ASSESSEE FOR NOT FILING THE APPEAL WITHIN THE PERIOD OF LIMITATION AND THAT DELAY OF 131 DAYS CANNOT BE SAI D THAT INORDINATE DELAY. ACCORDINGLY, WE CONDONE THE DELAY OF 131 D AYS CAUSED BEFORE THE CIT (APPEALS) IN FILING THE APPEAL AND W E REMIT THE ISSUE RAISED BY THE ASSESSEE WITH REGARD TO ADDITION MADE UNDER SECTION 69 OF THE ACT, TO THE FILE OF THE CIT (APPEALS) FOR HIS DECISION IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED ON 25 TH JANUARY, 2017 AT CHENNAI. SD/- SD/- ( ) ( ) (DUVVURU R.L REDDY) (CHAN DRA POOJARI) /JUDICIAL MEMBER / ACCOUNTANT MEMBER /CHENNAI, /DATED, THE 25 TH JANUARY, 2017. JR. !'# /COPY TO: 1. ! $% /APPELLANT 2. &$% /RESPONDENT 3. '( ( )/CIT(A)-2, CHENNAI 4. '( /CIT 5. ) /DR 6. *+ /GF.