Terra Ferra Sponge Iron Pvt. Ltd., Panaji V. Dy. Commissioner of Income Tax, Panaji., Panaji

ITA 291/PAN/2014

• Counselvise Citation: 29124114 RSA 2014
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 25-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B BARTHAKUR
• Assessee Lawyers: SRINIVAS NAYAK
• Keywords: Condonation of delay
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 290 & 291/PNJ/2014 : (ASST. YEAR : 2009 - 10) M/S. TERRA FERRA SPONGE IRON PVT. LTD., ALFRAN PLAZA, L43 - 44, 4 TH FLOOR, M.G. ROAD, PANAJI, GOA (APPELLANT) PAN : AACCT9947K VS. DY. COMMISSIONER OF INCOME TAX, PANAJI, GOA (RESPONDENT) ASSESSEE BY : SRINIVAS NAYAK, CA REVENUE BY : B. BARTHAKUR, DR DATE OF HEARING : 16/12/2014 DATE OF PRONOUNCEMENT : 19 /12/2014 O R D E R PER P.K. BANSAL 1. BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE RESPECTIVE ORDERS OF CIT(A) , BANGALORE DT. 23.6.2014 AND 29.1.2013. BOTH THESE APPEALS HAVE BEEN FILED IN THE TRIBUNAL ON 25.8.2014. THERE HAS BEEN DELAY OF 513 DAYS IN RESPECT OF APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DT. 29.1.2013. APPLICATION FOR CONDONATION OF DELAY WAS FILED ALONGWITH THE AFFIDAV IT OF THE DIRECTOR OF THE ASSESSEE. THE ASSESSEE EXPLAINED THAT THE ASSESSMENT WAS COMPLETED FOR A.Y 2009 - 10 ON 27.12.2011 AGAINST WHICH APPEAL WAS FILED BEFORE CIT(A) ON 16.1.2012. AT THE TIME OF FILING OF THE APPEAL THE ASSESSEE HAS NOT PAID THE TAX DU E AS PER THE RETURN OF INCOME BUT THE ASSESSEE PAID ALL THE TAXES BEFORE DISPOSAL OF THE APPEAL. CIT(A) DISMISSED THE 2 ITA NOS. 290 & 291/PNJ/2014 (A.Y : 2009 - 10) APPEAL IN VIEW OF PROVISIONS OF SEC. 249(4)(A) AGAINST WHICH APPEAL WAS FILED BEFORE THE TRIBUNAL BEING ITA NO. 290/PNJ/2014 WHICH IS WIT HIN TIME. 2. THE C.A OF THE ASSESSEE DEALING WITH THE MATTER ADVISED THE ASSESSEE TO FILE AN APPLICATION FOR RECTIFICATION U/S 154 BEFORE CIT(A) FOR RECALLING OF THE ORDER. ACCORDINGLY, AN APPLICATION DT. 20.3.2014 WAS FILED BEFORE CIT(A) STATING THERE IN THAT SINCE THE ASSESSEE HAS PAID ALL THE TAXES DUE AS PER THE RETURN, THEREFORE ASSESSEE BE GIVEN AN OPPORTUNITY AND THE ORDER BE RECALLED. CIT(A) REJECTED THE APPLICATION U/S 154. IN THE MEANTIME, THE C.A WHO WAS DEALING WITH THE MATTER ADVISED THE A SSESSEE THAT THE PROVISIONS OF SEC. 249(4)(A) DOES NOT APPLY IN RESPECT OF APPEAL FILED BEFORE THE TRIBUNAL IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. PAWAN KUMAR LADDHA, 324 ITR 324 (SC) WHICH WAS READ BY HIM SUBSEQUENTLY AND IMMEDIATELY THE C.A INTIMATED TO HIS CLIENT ON 18.8.2014 FOR FILING AN APPEAL BEFORE THE TRIBUNAL AND ACCORDINGLY THE APPEAL WAS FILED BEFORE THE TRIBUNAL ON 25.8.2014. IN THIS REGARD, OUR ATTENTION WAS DRAWN TOWARDS THE AFFIDAVIT FILED BY THE DIRECTO R OF THE ASSESSEE AS WELL AS O F THE C.A. 3. THE LD. DR ON THE OTHER HAND CONTENDED THAT IT IS NOT A CASE OF CONDONATION OF DELAY. DELAY IS MORE THAN ONE YEAR. ASSESSEE SHOULD HAVE IMMEDIATELY FILED AN APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF CIT(A ). 4. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. IN OUR OPINION, IT IS A FIT CASE FOR CONDONATION OF DELAY. WE NOTED THAT THE ASSESSEE HAS RELIED ON THE ADVICE OF THE COUNSEL. SINCE THE COUNSEL OF THE ASSESSEE ADVISED THE ASSESSE E TO FILE APPLICATION U/S 154 BEFORE CIT(A), ACCORDINGLY ASSESSEE, WITHIN THE PERMISSIBLE TIME, FILED AN APPLICATION U/S 154 BEFORE CIT(A) WHICH WAS ULTIMATELY DISMISSED BY THE CIT(A) VIDE ORDER DT. 23.6.2014. IN OUR OPINION, A PERSON OF ORDINARY PRUDENCE WILL NATURALLY WAIT FOR THE OUTCOME OF 3 ITA NOS. 290 & 291/PNJ/2014 (A.Y : 2009 - 10) THE MISCELLANEOUS APPLICATION INSTEAD OF GOING FOR MULTIPLICITY OF PROCEEDINGS. WE NOTED THAT THE ASSESSEE HAS FILED THE APPEAL ON 25.8.2014 I.E. WITHIN 60 DAYS FROM THE DATE OF RECEIPT OF THE ORDER PASSED BY THE CI T(A) U/S 154 EVEN THOUGH THE APPEAL FOR WHICH CONDONATION OF DELAY IS SOUGHT DOES NOT RELATE TO THE ORDER PASSED ON 23.6.2014. WE ALSO FIND SUBSTANCE IN THE AFFIDAVIT OF THE C.A IN WHICH HE HAS MENTIONED THAT HE WAS UNDER THE IMPRESSION THAT THE PROVISION S OF SEC. 249(4)(A) DEBARS AN ASSESSEE FROM FILING AN APPEAL IN CASE TAX DUE AS PER THE RETURN IS NOT PAID. PRIOR TO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. PAWAN KUMAR LADDHA, 324 ITR 324 (SC) ( SUPRA ) THE COURTS WERE TAKING DIFFERENT VIEW ON WHETHER THIS PROVISION IS APPLICABLE IN RESPECT OF AN APPEAL FILED BEFORE THE TRIBUNAL. THE CHENNAI BENCH OF THIS TRIBUNAL VIDE ITS ORDER DATED AUGUST, 1998 IN THE CASE OF V. BHASKARAN HAS TAKEN THE VIEW THAT PR OVISIONS OF SEC. 249(4)(A) WILL APPLY EVEN IN RESPECT OF AN APPEAL FILED BEFORE THE TRIBUNAL. NOW, SINCE THE ISSUE IS SETTLED BY THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. PAWAN KUMAR LADDHA, 324 ITR 324 (SC) ( SUPRA ) THAT PROVISIONS OF SEC. 249(4)(A) CANNOT BE READ INTO SEC. 253(1)(B), THEREFORE, WE ARE OF THE VIEW THAT THE COUNSEL OF THE ASSESSEE MAY HAVE UNDER BONA FIDE BELIEF ADVISED THE ASSESSEE NOT TO FILE APPEAL BEFORE THE TRIBUNAL BUT TO MOVE AN APPLICATION U/S 154 BEFORE THE C IT(A). WE NOTED THAT AS SOON AS THE ORDER OF THE CIT(A) U/S 154 WAS RECEIVED BY THE ASSESSEE, THE ASSESSEE HAS FILED APPEAL BEFORE THIS TRIBUNAL, BOTH AGAINST THE ORDER OF CIT(A) DT. 29.1.2013 AS WELL AS ORDER DT. 23.6.2014 . 5. EVEN OTHERWISE ALSO, IN OUR OPINION, INSTANCES WHERE DELAY WAS CAUSED DUE TO THE WRONG ADVICE OR BECAUSE THE ASSESSEE WAS BONA FIDE PURSUING A REMEDY WHICH DID NOT LIE ARE HELD TO BE SUFFICIENT CAUSE FOR CONDONATI O N OF DELAY. THE HON'BLE SUPREME COURT, WE NOTED, HAS CLEARLY LAID DOWN IN THE CASE OF COLLECTOR OF LAND ACQUISITION VS. MST. KATIJI AND OTHERS , 167 ITR 471 THAT COURTS SHOULD HAVE A PRAGMATIC APPROACH WHILE CONDONING THE DELAY. IN THE CASE 4 ITA NOS. 290 & 291/PNJ/2014 (A.Y : 2009 - 10) OF BALAKRISHNAN VS. M. KRISHNAMURTHY , 7 SCC 123 EVEN THE DELAY OF 883 D AYS WAS CONDONED. THE HON'BLE SUPREME COURT IN THE CASE OF RAFIQ & ANR. VS. MUNSHIKAK & ANR. , AIR 1981 SC 1400 HAS OBSERVED THAT WE CANNOT BE A PARTY TO AN INNOCENT PARTY SUFFERING INJUSTICE MERELY BECAUSE HIS CHOSEN ADVOCATE DEFAULTED . IN OUR OPINION, RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHTS OF THE PARTIES, RATHER THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF SUBHASH MALIK V S. CIT, 325 ITR 243 HAS HELD AS UNDER : RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHTS OF THE PARTIES, RATHER THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. AS FAR AS POSSIBLE THE COURTS DISCRET ION SHOULD BE EXERCISED IN FAVOUR OF THE HEARING AND NOT TO SHUT OUT HEARING. THE SUPREME COURT IN THE CASE OF WEST BENGAL V. ADMINISTRATOR, HOWRAH MUNICIPALITIES [1972] AIR 1972 SC 749 HAS HELD THAT IF A PARTY HAD ACTED IN A PARTICULAR MANNER ON WRONG ADVICE GIVEN BY HIS LOCAL ADVISOR HE CANNOT BE HELD GUILTY OF NEGLIGENCE SO AS TO DISENTITLE THE PARTY TO PLEAD SUFFICIENT CAUSE UNDER SECTION 5 OF THE LIMITATION ACT, 1963. IT ALSO HELD THAT THE WORDS SUFFICIENT CAUSE SHOULD RECEIVE A LIBERAL CONSTRUCTI ON SO AS TO ADVANCE SUBSTANTIAL JUSTICE AND NO NEGLIGENCE OR INACTION FOR WANT OF BONA FIDES IS IMPUTABLE TO A PARTY. WE, ACCORDINGLY CONDONE THE DELAY AND ADMIT ITA NO. 291/PNJ/2014 ALSO. ITA NO. 290/PNJ/2014 : 6. IN THIS APPEAL WE NOTED THAT THE ASSESSEE HAS CHALLENGED THE ACTION OF CIT(A) OF NOT RECALLING THE ORDER DT. 29.1.2013 BY DISMISSING THE APPLICATION OF THE ASSESSEE. AFTER HEARING THE RIVAL SUBMISSIONS WE NOTED THAT U/S 249(4)(A) NO APPEAL UNDER THIS CHAPTER SHALL BE ADMITTED UNLESS AT T HE TIME OF FILING THE APPEAL, WHERE RETURN HAS BEEN FILED BY THE ASSESSEE, THE ASSESSEE HAS PAID THE TAX DUE ON THE INCOME RETURNED BY HIM. IN THIS CASE, WE NOTED THAT THE ASSESSEE HAS NOT PAID THE ENTIRE TAX AS PER THE INCOME RETURNED BEFORE FILING OF TH E APPEAL. IN VIEW OF THE CLEAR - CUT PROVISIONS OF SEC. 249(4)(A), IN OUR OPINION, NO MISTAKE 5 ITA NOS. 290 & 291/PNJ/2014 (A.Y : 2009 - 10) APPARENT ON RECORD HAS OCCURRED IN THE ORDER OF CIT(A) DT. 29.1.2013 BY NOT ADMITTING THE APPEAL FILED BY THE ASSESSEE. WE, THEREFORE, DISMISS THE APPEAL FILED BY THE ASSESSEE. ITA NO. 291/PNJ/2014 : 7. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE NOTED THAT CIT(A) HAS NOT DECIDED THE APPEAL ON MERITS BUT HAS SIMPLY DISMISSED THE APPEAL AS THE ASSESSEE DID NOT COMPLY WITH THE CONDITION A S HAS BEEN LAID DOWN U/S 249(4)(A). THIS IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS NOT PAID THE TAX, AS HAS BEEN DUE AS PER THE RETURN FILED BY THE ASSESSEE, BEFORE FILING OF THE APPEAL BEFORE CIT(A) EVEN THOUGH THE ASSESSEE HAD PAID THE TAX BEFORE THE DISPOSAL OF THE APPEAL BY THE CIT(A). THE PROVISIONS OF SEC. 249(4)(A) ARE VERY CLEAR THAT ADMISSION OF THE APPEAL IS SUBJECT TO THE PAYMENT OF TAX DUE ON THE INCOME RETURN BEFORE FILING OF THE APPEAL BY THE ASSESSEE. WE, THEREFORE, DO NOT FIND ANY ILLEG ALITY OR INFIRMITY IN THE ORDER OF CIT(A) SO FAR AS THE ISSUE OF ADMISSION OF THE APPEAL BY THE CIT(A) IS CONCERNED. 8. SO FAR AS THE ISSUE REGARDING THE PROVISIONS OF SEC. 2 ( 22 ) ( E ) IS CONCERNED, WE NOTED THAT THE CIT(A) HAS NOT DISPOSED OFF THE APPEAL ON MERIT AS HE HAS NOT ADMITTED THE APPEAL IN VIEW OF THE PROVISIONS OF SEC. 249(4)(A). SINCE WE HAVE ALREADY ADMITTED THE APPEAL AS PROVISIONS OF SEC. 249(4)(A) ARE NOT APPLICABLE TO THIS TRIBUNAL IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. PAWAN KUMAR LADDHA, 324 ITR 324 (SC) ( SUPRA ) WE, THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY TO BOTH THE PARTIES RESTORE THIS ISSUE TO THE FILE OF CIT(A) AND DIRECT THE CIT(A) TO RE - DECIDE THE APPEAL OF THE ASSESSEE DEALING WITH ALL THE GROUNDS TAKEN BY THE ASSESSEE ON MERIT IN ACCORDANCE WITH LAW AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE. 6 ITA NOS. 290 & 291/PNJ/2014 (A.Y : 2009 - 10) 9. IN THE RESULT, ITA NO. 290/PNJ/2014 STANDS DISMISSED WHILE ITA NO. 291/PNJ/2014 STANDS ALLOWED FOR STATISTICAL PURPOSE. 10. ORDER PRONOUNCED IN THE OPEN COURT ON 1 9 /12/2014. S D / - (D.T.GARASIA) JUDICIAL MEMBER S D / - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI DATED : 1 9 /12/2014 *SSL* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER