Shri Jaswantbhai D. Patel, Ahmedabad V. The Income tax Officer, Ward-5(1)(2), Ahmedabad

ITA 300/AHD/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2860 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 03-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NO.300/AHD/2017 / ASSTT. YEAR: 2011-2012 SHRI JASWANTBHAI D. PATEL A/2/501, ANMOL TOWER OPP: TELEPHONE EXCHANGE NARANPURA AHMEDABAD. PAN : ACOPP 8505 F VS. ITO, WARD - 5(1)(2) AHMEDABAD. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SHRI TUSHAR HEMANI WITH SHRI P.B. PARMAR, AR REVENUE BY : SMT.SMITI SAMANT, SR.DR / DATE OF HEARING : 26/10/2018 / DATE OF PRONOUNCEMENT: 01/11/2018 +,/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-5, AHMEDABAD DATED 18.11.2016 PASSED FOR THE ASSTT.YEA R 2011-12. 2. IN THIS APPEAL, THE ASSESSEE HAS AGGRIEVED BY AC TION OF THE LD.CIT(A) IN NOT CONDONING THE DELAY IN FILING APPEAL BEFORE THE LD.CIT(A), AND THEREBY NOT ADJUDICATING THE ISSUE OF ADDITION MADE IN THE HAND S OF THE ASSESSEE BY THE LD.AO ON PROTECTIVE BASIS. 3. IT IS NOTICED FROM THE ORDER OF THE AO THAT ASSE SSMENT IN THE CASE OF THE ASSESSEE WAS FINALIZED AND AN ADDITIONAL OF RS.3,26 ,00,000/- WAS MADE IN THE ITA NO.300/AHD/2017 2 HANDS OF THE ASSESSEE ON PROTECTIVE BASIS. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE IT WAS AN ADDITION BA SED ON PROTECTIVE BASIS, THE ASSESSEE DID NOT FEEL NECESSARY TO FILE APPEAL BEFO RE THE LD.CIT(A). SUBSEQUENTLY, A PENALTY NOTICE WAS SERVED UPON THE ASSESSEE, AND HE CONSULTED TAX CONSULTANT, WHEREIN IT REVEALED THAT PERSON IN WHOSE HANDS SUBSTANTIVE ADDITION WAS MADE, THEY HAVE ALREADY FI LED APPEAL, HENCE, AN ADVICE WAS GIVEN TO THE ASSESSEE FOR FILING AN APPE AL BEFORE THE LD.CIT(A). IN PROCESS OF SEEKING ADVICE FROM THE CONSULTANT AND S UBSEQUENT FILING, APPEAL HAS BECOME TIME BARRED BY FOUR AND HALF MONTHS WHIC H IS NOT INTENTIONAL NOR DELIBERATE. THE ASSESSEE EXPLAINED THE DELAY IN FI LING APPEAL WITH THE ABOVE CIRCUMSTANCES. THE LD.CIT(A) DID NOT CONDONE THE D ELAY BY OBSERVING AS UNDER: 3.2 THE APPELLANT HAS TAKEN THE PLEA FOR THE DELAY ON THE ABOVE REASON IS NOT VERIFIABLE FROM THE RECORDS IN ABSENC E OF ANY EVIDENCES SUBMITTED ALONG WITH THE APPEAL AND DURING THE APPE LLATE PROCEEDINGS. THEREFORE, THE DELAY MADE IN FILING THE APPEAL DOES NOT DESERVES TO BE CONDONED, AND HENCE APPELLANTS REQUEST FOR CONDONA TION IS NOT ENTERTAINED AND REJECTED. ON THE OTHER HAND, THE LD.DR SUPPORTED ORDER OF THE LD.CIT(A). 4. WE HAVE CONSIDERED SUBMISSIONS OF BOTH THE PARTI ES AND GONE THROUGH THE RECORD. THE EXPRESSION SUFFICIENT CAUSE EMPLOYED IN SUB-SECTI ON 3 OF SECTION 249 OF INCOME TAX ACT, PROVIDES POWERS T O THE LD.COMMISSIONER TO CONDONE THE DELAY IN FILING THE APPEAL BEFORE THE COMMISSIONER. WE MAY MAKE REFERENCE TO THE FOLLOW ING OBSERVATIONS OF THE HONBLE SUPREME COURT FROM THE DECISION IN T HE CASE OF COLLECTOR LAND ACQUISITION VS. MST. KATIJI & OTHERS, 1987 AIR 1353: ITA NO.300/AHD/2017 3 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDONED TH E HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERI TS AFTER HEARING THE PARTIES. 3. 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT M EAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOU R'S DELAY, EVERY SECOND'S DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL COMMON SENSE PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DE SERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE V ESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DE LAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING T O DELAY. IN FACT HE RUNS A SERIOUS RISK. 6. IT MUST BE GRASPED THAT JUDICIARY IS RESPECTED N OT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUND S BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 5. SIMILARLY, WE WOULD LIKE TO MAKE REFERENCE TO AU THORITATIVE PRONOUNCEMENT OF HONBLE SUPREME COURT IN THE CASE OF N.BALAKRISHNAN VS. M. KRISHNAMURTHY (SUPRA). IT READS AS UNDER: RULE OF LIMITATION ARE NOT MEANT TO DESTROY THE RI GHT OF PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS, BUT SEEK THEIR REMEDY PROMPTLY. THE OBJECT OF PROVI DING A LEGAL REMEDY IS TO REPAIR THE DAMAGE CAUSED BY REASON OF LEGAL INJURY. LAW OF LIMITATION FIXES A LIFE-SPAN FOR SUCH LEGAL REMEDY FOR THE REDRESS OF THE LEGAL INJURY SO SUFFERED. TIME IS PR ECIOUS AND THE ITA NO.300/AHD/2017 4 WASTED TIME WOULD NEVER REVISIT. DURING EFFLUX OF T IME NEWER CAUSES WOULD SPROUT UP NECESSITATING NEWER PERSONS TO SEEK LEGAL REMEDY BY APPROACHING THE COURTS. SO A LIFE SPAN MU ST BE FIXED FOR EACH REMEDY. UNENDING PERIOD FOR LAUNCHING THE REME DY MAY LEAD TO UNENDING UNCERTAINTY AND CONSEQUENTIAL ANARCHY. LAW OF LIMITATION IS THUS FOUNDED ON PUBLIC POLICY. IT IS ENSHRINED IN THE MAXIM INTEREST REIPUBLICAE UP SIT FINIS LITIUM (IT IS FOR THE GENERAL WELFARE THAT A PERIOD BE PUTT TO LITIGATION). RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHT OF THE PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THEIR REMEDY PROMPTLY. THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. A COURT KNOWS THAT REFUSAL TO CONDONE DELAY WOULD R ESULT FORECLOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PRESUMPTION THAT DELAY IN APPROACHING THE COURT IS ALWAYS DELIBERATE. THIS COURT HAS HELD THAT THE WORDS 'SUF FICIENT CAUSE' UNDER SECTION 5 OF THE LIMITATION ACT SHOULD RECEIV E A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE V IDE SHAKUNTALA DEVI LAIN VS. KUNTAL KUMARI [AIR 1969 SC 575] AND S TATE OF WEST BENGAL VS. THE ADMINISTRATOR, HOWRAH MUNICIPALITY [ AIR 1972 SC 749]. IT MUST BE REMEMBERED THAT IN EVERY CASE O F DELAY THERE CAN BE SOME LAPSE ON THE PART OF THE LITIGANT CONCE RNED. THAT ALONE IS NOT ENOUGH TO TURN DOWN HIS PLEA AND TO SHUT THE DOOR AGAINST HIM. IF THE EXPLANATION DOES NOT SMACK OF MALA FIDE S OR IT IS NOT PUT FORTH AS PART OF A DILATORY STRATEGY THE COURT MUST SHOW UTMOST CONSIDERATION TO THE SUITOR. BUT WHEN THERE IS REAS ONABLE GROUND TO THINK THAT THE DELAY WAS OCCASIONED BY THE PARTY DELIBERATELY TO GAIN TIME THEN THE COURT SHOULD LEAN AGAINST ACCEPT ANCE OF THE EXPLANATION. WHILE CONDONING DELAY THE COULD SHOULD NOT FORGET THE OPPOSITE PARTY ALTOGETHER. IT MUST BE BORNE IN MIND THAT HE IS A LOOSER AND HE TOO WOULD HAVE INCURRED QUIET A LARGE LITIGATION EXPENSES. IT WOULD BE A SALUTARY GUIDELINE THAT WHE N COURTS CONDONE THE DELAY DUE TO LACHES ON THE PART OF THE APPLICANT THE COURT SHALL COMPENSATE THE OPPOSITE PARTY FOR HIS L OSS. 6. WE DO NOT DEEM IT NECESSARY TO RE-CITE OR RECAPI TULATE THE PROPOSITION LAID DOWN IN OTHER DECISIONS. IT IS SU FFICE TO SAY THAT THE ITA NO.300/AHD/2017 5 HONBLE COURTS ARE UNANIMOUS IN THEIR APPROACH TO P ROPOUND THAT WHENEVER THE REASONS ASSIGNED BY AN APPLICANT FOR E XPLAINING THE CONDONATION OF DELAY, THEN SUCH REASONS ARE TO BE C ONSTRUED WITH A JUSTICE ORIENTED APPROACH. 7. IN THE LIGHT OF THE ABOVE, LET US EXAMINE THE FA CTS OF THE PRESENT CASE. THE FACT IS THAT ADDITION WAS MADE IN HANDS OF THE ASSESSEE ON PROTECTIVE BASIS, WHILE THE BENEFICIARY IN WHOSE HA ND SUBSTANTIAL ADDITIONAL HAS MADE PREFERRED APPEAL BEFORE THE LD.CIT(A), AND THEREFORE, CONVENTIONAL WISDOM THAT CLICKS IN THE MINDS OF AN ASSESSEE IS T HAT NO APPEAL IS REQUIRED TO BE FILED BY HIM. IT WAS ONLY WHEN NOTICE UNDER SEC TION 271(1)(C) WAS ISSUED, THE ASSESSEE ACTED SINCERELY AND APPROACHED TAX CON SULTANT AT ONCE FOR HIS ADVICE FOR FURTHER COURSE OF ACTION. ON THE ADVICE OF THE CONSULTANT, THE ASSESSEE DID FILE AN APPEAL BEFORE THE LD.CIT(A) BU T IN THE PROCESS, NATURALLY SOME TIME HAS BEEN CONSUMED, WHICH CANNOT BE CONSTR UED PEDANTICALLY AS NOT SUFFICIENT CAUSE TO DENY A SUBSTANTIAL RIGHT OF THE ASSESSEE. TO OUR MIND, IF THE ASSESSEE HAS ADOPTED ANY STRATEGY TO DELAY FILI NG APPEAL, HE WOULD NOT GET ANYTHING. IN OTHER WORDS, BY ADOPTING A ST RATEGY TO DELAY FILING OF THE APPEAL IS CONCERNED, THAT WOULD ONLY HARM AS SESSEE. THUS, HE WOULD NOT GET ANY BENEFIT BY ADOPTING A DELAY TACTI C WHILE FIGHTING LITIGATION WITH THE DEPARTMENT. IT HAS HAPPENED DU E TO BONAFIDE BELIEF. THEREFORE, CONSIDERING THE ABOVE ASPECTS, WE ARE SA TISFIED THAT THE ASSESSEE HAS BEEN PREVENTED BY SUFFICIENT REASONS F OR NOT FILING APPEAL IN TIME, THEREFORE, WE CONDONE THE DELAY IN FILING APP EAL BEFORE THE LD.CIT(A). WE SET ASIDE THE ORDER OF THE LD.CIT(A) AND RESTORE THE ITA NO.300/AHD/2017 6 APPEAL BACK TO HIS FILE WITH DIRECTION TO DECIDE TH E SAME ON MERIT AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE IN ACCORDANCE WITH LAW. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 1 ST NOVEMBER, 2018 AT AHMEDABAD. S D / - (AMARJIT SINGH) ACCOUNTANT MEMBER S D / - (RAJPAL YADAV) JUDICIAL MEMBER