Atul Bioscience Ltd., Valsad V. The Deputy Commissioner of Income Tax, Valsad Circle, Valsad

ITA 3016/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2146 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 17-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P K PANDA
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Period of limitation; Reasonable cause; Condonation of delay
• Section: 273B

Judgement Text

ATUL BIOSCIENCE LTD. V. DCIT-VALSAD /I.T.A. NO.3016/AHD/2016/A.Y.:10-11 PAGE 1 OF 9 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT . . , . . , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . /. I.T.A NO.3016/AHD/2016/SRT / ASSESSMENT YEAR :2010-11 ATUL BIOSCIENCE LIMITED, D-1, DOWN COLONY ATUL, VALSAD PAN:AACCA 0331 P V S . DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE VALSAD APPELLANT /RESPONDENT /ASSESSEE BY SHRI MEHUL K PATEL, ADVOCATE /REVENUE BY SHRI B. P. K. PANDA, SR. D.R. / DATE OF HEARING: 27.06.2018 /PRONOUNCEMENT ON 06 .07.2018 /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-VALSAD (IN SHORT THE CIT (A)) DATED 02.09.2016 PERTAINING TO ASSESSMENT YEAR 2010-11. 2. GROUND NO. 1 STATES THAT LD. CIT (A) GROSSLY ERRED IN DISMISSING THE APPEAL AS NONEST BY NOT CONDONING THE DELAY IN FILING OF APPEAL. 3. SUCCINCTLY, FACTS AS CULLED OUT FROM THE ORDERS OF LOWER AUTHORITIES ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF SYNTHETICS ORGANIC CHEMICALS. THE ASSESSMENT IN THIS CASE WAS MADE ON 25.03.2015 AND THE APPEAL HAS BEEN FILED ATUL BIOSCIENCE LTD. V. DCIT-VALSAD /I.T.A. NO.3016/AHD/2016/A.Y.:10-11 PAGE 2 OF 9 ON 14.05.2015. THE APPELLANT HIMSELF ADMITTED DELAY OF 15 DAYS IN FILING OF APPEAL. IT WAS CLAIMED BEFORE THE CIT (A) THAT DURING MARCH 2015, MR. AJAY JAIN AND MR. DEEPAK SAINI, WHO WERE LOOKING AFTER THE ACCOUNTS MET WITH AN ACCIDENT AND FRACTURED BONES. THEREFORE, THEY WERE NOT ABLE TO ATTAINED OFFICE FOR ABOUT 10 DAYS MADE DUE TO PRESSURE OF CLOSURE OF FINANCIAL YEAR, THEY COULD NOT PREPARE FOR THE DETAILS OF THE APPEALS. THEREFORE, THE DELAY OF 15 DAYS WAS OCCURRED IN FILING OF APPEAL, WHICH WAS NOT INTENTIONAL, HENCE, SAME MAY BE CONDONED. HOWEVER, LD. CIT (A) VIEWED THAT THE ASSESSEE HAS NOT FILED SUPPORTING DOCUMENTS OF MEDICAL CERTIFICATE ALONG WITH APPLICATION. THEREFORE, DELAY IN FILING OF APPEAL WAS NOT CONDONED. 4. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT DELAY WAS CAUSED DUE TO ACCIDENT OF TWO STAFF MEMBERS WHO WERE LOOKING AFTER THE APPEAL PAPERS OF THE ASSESSEE. ACCIDENT RESULTED IN FRACTURE DUE TO WHICH EMPLOYEES WENT ON LEAVE FOR FEW DAYS. FURTHER, THERE WAS PRESSURE OF CLOSING OF FINANCIAL YEAR AND AUDIT ACTIVITY, BECAUSE OF THESE FACTS THE DETAILS FOR FILING OF APPEAL COULD NOT BE COMPLIED WITHIN STATUTORY TIME LIMIT. THEREFORE, DELAY IN FILING OF APPEAL ABOUT 15 DAYS WAS REQUESTED TO BE ATUL BIOSCIENCE LTD. V. DCIT-VALSAD /I.T.A. NO.3016/AHD/2016/A.Y.:10-11 PAGE 3 OF 9 CONDONED. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUPPORTED HIS VIEW BY PLACING RELIANCE IN THE CASE OF COLLECTOR, LAND ACQUISITION, V. MST. KATIJI & OF RS.[1987] 167 ITR 471 (SC)/ [1987] 2SCC 107. 5. AU CONTRAIRE, THE LD. DR SUBMITTED THAT THERE WAS NO REASONABLE CAUSE FOR DELAY IN FILING OF APPEAL. HOWEVER, THE LD. SR. DR DID NOT SERIOUSLY OPPOSED FOR SMALL DELAY. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE ARE OF THE VIEW THAT IT IS SETTLED LAW THAT THE COURTS ARE QUASI- JUDICIAL BODIES AND ARE EMPOWERED TO CONDONE THE DELAY IF THE LITIGANT SATISFIES THE COURT THAT THERE WERE SUFFICIENT REASONS FOR THE AVAILING THE REMEDY AFTER THE EXPIRY OF THE LIMITATION. SUCH A REASONING SHOULD BE TO THE SATISFACTION OF THE COURT. THE EXPRESSION SUFFICIENT CAUSE OR REASON AS PROVIDED IN SUBSECTION (5) OF SECTION 253, SUBSECTION (3) OF SECTION 249 OF THE INCOME TAX ACT 1961 IS USED IN IDENTICAL TERMS IN THE LIMITATION ACT AND THE CPC. SUCH EXPRESSION HAS ALSO BEEN USED IN UNDER SECTION 273B OF THE ACT, 1961. THE EXPRESSION SUFFICIENT CAUSE WITHIN THE MEANING OF SECTION 5 OF LIMITATION ACT AS WELL AS A SIMILAR OTHER PROVISIONS AND THE AMBIT OF EXERCISE OF POWERS THEREUNDER HAVE BEEN SUBJECT MATTER OF CONSIDERATION BEFORE THE HONOURABLE APEX COURT ON VARIOUS OCCASIONS. IN THE CASE OF THE ATUL BIOSCIENCE LTD. V. DCIT-VALSAD /I.T.A. NO.3016/AHD/2016/A.Y.:10-11 PAGE 4 OF 9 STATE OF WEST BENGAL VS. ADMINISTRATOR, HOWRAH MUNICIPALITY, AIR 1972 SC 749 , THE HON`BLE SUPREME COURT, WHILE CONSIDERING THE SCOPE OF THE EXPRESSION OF SUFFICIENT CAUSE FOR CONDONATION OF DELAY, HAS HELD THAT THE SAID EXPRESSION SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONAFIDE IS IMPUTABLE TO THE PARTY. IN THE CASE OF N. BALAKRISHNAN VS. M. KRISHNAMURTHY AIR (1998) 7 SC 124, (SC) THERE WAS A DELAY OF 883 DAYS IN FILING OF APPLICATION IN SETTING ASIDE THE EX-PARTE DECREE FOR WHICH APPLICATION FOR CONDONATION OF DELAY WAS FILED. THE TRIAL COURT HAVING FOUND THAT SUFFICIENT CAUSE WAS MADE OUT FOR CONDONATION OF DELAY CONDONED THE DELAY. THE HON`BLE SUPREME COURT WHILE RESTORING THE ORDER OF THE TRIAL COURT HAS OF OBSERVED THAT CONDONATION OF DELAY IS MATTER OF DISCRETION OF THE COURT. SECTION 5 OF LIMITATION ACT SAYS THAT DISCRETION CAN BE EXERCISED ONLY IF THE DELAY IS WITHIN REASONABLE LIMIT. LENGTH OF DELAY IS NO MATTER; ACCEPTABILITY OF THE EXPLANATION IS THE ONLY CRITERION. .. THERE IS NO PRESUMPTION THAT DELAY IN APPROACHING THE COURT IS ALWAYS DELIBERATE. THE WORDS SUFFICIENT CAUSE UNDER SECTION 5 OF THE LIMITATION ACT SHOULD RECEIVE A LIBERAL CONSTRUCTION TO ADVANCE SUBSTANTIAL JUSTICE. THE HON`BLE SUPREME COURT FURTHER OBSERVED ATUL BIOSCIENCE LTD. V. DCIT-VALSAD /I.T.A. NO.3016/AHD/2016/A.Y.:10-11 PAGE 5 OF 9 THAT RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHTS OF THE PARTIES. THEY ARE MEANT TO SEE THAT THE PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THE REMEDY PROMPTLY. THE HON`BLE APEX COURT FURTHER OBSERVED THAT THE REFUSAL TO CONDONE THE DELAY WOULD RESULT IN FORECLOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PRESUMPTION THAT THE DELAY IN APPROACHING THE COURT IS ALWAYS DELIBERATE. THE HON`BLE SUPREME COURT IN SLP CIVIL NO. 12980 OF 1986, DECIDED ON 19 TH FEBRUARY 1987, IN THE CASE OF COLLECTOR, LAND ACQUISITION, V. MST. KATIJI [1987] 167 ITR 471 (SC) : 1987 AIR 1353 HAS OBSERVED AS UNDER: THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACTING SECTION 51 OF THE INDIAN LIMITATION ACT OF 1963 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON MERITS. THE EXPRESSION SUFFICIENT CAUSE EMPLOYED BY THE LEGISLATURE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANING- FULL MANNER WHICH SUB-SERVES THE ENDS OF JUSTICETHAT BEING THE LIFE-PURPOSE FOR THE EXISTENCE OF THE INSTITUTION OF COURTS. IT IS COMMON KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL APPROACH IN MATTERS INSTITUTED IN THIS COURT. BUT THE MESSAGE DOES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHER COURTS IN THE HIERARCHY. AND SUCH A LIBERAL APPROACH IS ADOPTED ON PRINCIPLE AS IT IS REALIZED THAT:- ANY APPEAL OR ANY APPLICATION, OTHER THAN AN APPLICATION UNDER ANY OF THE PROVISIONS OF ORDER XXI OF THE CODE OF CIVIL PROCEDURE, 1908 MAY BE ADMITTED AFTER THE PRESCRIBED PERIOD IF THE APPELLANT OR THE APPLICANT SATISFIES THE COURT THAT HE HAD SUFFICIENT CAUSE FOR NOT PREFERRING THE APPEAL OR MAKING THE APPLICATION WITHIN SUCH PERIOD. 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. ATUL BIOSCIENCE LTD. V. DCIT-VALSAD /I.T.A. NO.3016/AHD/2016/A.Y.:10-11 PAGE 6 OF 9 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITORIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDONED THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. 3. EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOURS DELAY, EVERY SECONDS DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL COMMON SENSE PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON- DELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED0.00 DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT HE RUNS A SERIOUS RISK. 6. IT MUST BE GRASPED THAT JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. MAKING A JUSTICE-ORIENTED APPROACH FROM THIS PERSPECTIVE, THERE WAS SUFFICIENT CAUSE FOR CONDONING THE DELAY IN THE INSTITUTION OF THE APPEAL. THE FACT THAT IT WAS THE STATE WHICH WAS SEEKING CONDONATION AND NOT A PRIVATE PARTY WAS ALTOGETHER IRRELEVANT. THE DOCTRINE OF EQUALITY BEFORE LAW DEMANDS THAT ALL LITIGANTS, INCLUDING THE STATE AS A LITIGANT, ARE ACCORDED THE SAME TREATMENT AND THE LAW IS ADMINISTERED IN AN EVEN HANDED MANNER. THERE IS NO WARRANT FOR ACCORDING A STEP MOTHERLY TREATMENT WHEN THE STATE IS THE APPLICANT PRAYING FOR CONDONATION OF DELAY. IN FACT EXPERIENCE SHOWS THAT ON ACCOUNT OF AN IMPERSONAL MACHINERY (NO ONE IN CHARGE OF THE MATTER IS DIRECTLY HIT OR HURT BY THE JUDGMENT SOUGHT TO BE SUBJECTED TO APPEAL) AND THE INHERITED BUREAUCRATIC METHODOLOGY IMBUED WITH THE NOTE-MAKING, FILE PUSHING, AND PASSING-ON-THE-BUCK ETHOS, DELAY ON ITS PART IS LESS DIFFICULT TO UNDERSTAND THOUGH MORE DIFFICULT TO APPROVE. IN ANY EVENT, THE STATE WHICH REPRESENTS THE COLLECTIVE CAUSE OF THE COMMUNITY, DOES NOT ATUL BIOSCIENCE LTD. V. DCIT-VALSAD /I.T.A. NO.3016/AHD/2016/A.Y.:10-11 PAGE 7 OF 9 DESERVE A LITIGANT-NON-GRATA STATUS. THE COURTS THEREFORE HAVE TO BE INFORMED WITH THE SPIRIT AND PHILOSOPHY OF THE PROVISION IN THE COURSE OF THE INTERPRETATION OF THE EXPRESSION SUFFICIENT CAUSE. SO ALSO THE SAME APPROACH HAS TO BE EVIDENCED IN ITS APPLICATION TO MATTERS AT HAND WITH THE END IN VIEW TO DO EVEN HANDED JUSTICE ON MERITS IN PREFERENCE TO THE APPROACH WHICH SCUTTLES A DECISION ON MERITS. TURNING TO THE FACTS OF THE MATTER GIVING RISE TO THE PRESENT APPEAL, WE ARE SATISFIED THAT SUFFICIENT CAUSE EXISTS FOR THE DELAY. THE ORDER OF THE HIGH COURT DISMISSING THE APPEAL BEFORE IT AS TIME BARRED, IS THEREFORE, SET ASIDE. DELAY IS CONDONED. AND THE MATTER IS REMITTED TO THE HIGH COURT. THE HIGH COURT WILL NOW DISPOSE OF THE APPEAL ON MERITS AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO BOTH THE SIDES. APPEAL IS ALLOWED ACCORDINGLY. NO COSTS. 7. IN THE LIGHT OF ABOVE CITED JUDGEMENTS, IF WE EXAMINED THE FACTS OF THE PRESENT CASE, WE FIND THAT THE CHARTERED ACCOUNTANTS WHO WERE LOOKING AFTER THE APPEAL PAPERS OF THE ASSESSEE MET WITH AN ACCIDENT HENCE, THEY COULD NOT ATTEND THE OFFICE FOR ABOUT 10 DAYS. MOREOVER, THERE WAS PRESSURE OF WORK DURING TO CLOSING OF FINANCIAL YEAR AND AUDIT WORK. THUS, A SMALL DELAY OF ABOUT 15 DAYS WAS OCCURRED IN FILING OF APPEAL OCCURRED, WHICH WAS NOT INTENTIONAL. THUS, THE ASSESSEE HAS FILED THIS APPEAL ON 14.05.2015 BEFORE THE CIT (A). HOWEVER, THIS EXPLANATION AS OFFERED BY THE ASSESSEE, WAS NOT FOUND ACCEPTABLE BY THE CIT (A), AS ACCORDING TO THE CIT (A), THIS WAS NOT SUPPORTED BY DOCUMENTARY EVIDENCE. HOWEVER, THE ASSESSEE HAS FILED COPY OF EMAIL EVIDENCING SUCH CLAIM MADE BEFORE LD. CIT (A). HOWEVER, WE ARE OF THE VIEW THAT ATUL BIOSCIENCE LTD. V. DCIT-VALSAD /I.T.A. NO.3016/AHD/2016/A.Y.:10-11 PAGE 8 OF 9 NONE SHOULD BE DEPRIVED OF AN ADJUDICATION ON MERITS, UNLESS THE COURT OF LAW OR THE TRIBUNAL/APPELLATE AUTHORITY FINDS THAT THE LITIGANT HAS DELIBERATELY AND INTENTIONALLY DELAYED IN FILING OF APPEAL, THAT HE IS CARELESS, NEGLIGENT AND HIS CONDUCT IS LACKING BONA-FIDES . IN THE CASE IN HANDS, THERE WAS DELAY ON THE PART OF AUTHORIZED REPRESENTATIVE AS THE PERSON LOOKING AFTER WERE MET WITH AN ACCIDENT. HENCE, IT COULD NOT BE REGARDED AS NEGLIGENCE OR OF LACKING OF BONA-FIDES. WE MY FIND SUPPORT FROM THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF JAYVANT SINGH VAGHELA V. ITO [2013] 40 TAXMANN.COM 491 (GUJ) WHEREIN IT WAS HELD THAT IT IS CARDINAL PRINCIPLE OF LAW THAT NORMALLY BY AND LARGE THE APPEALS ARE REQUIRED TO BE DECIDED ON THE MERITS RATHER THAN DISMISSING THE SAME ON TECHNICAL GROUND LIKE DELAY ETC. UNLESS THERE IS GROSS NEGLIGENCE ON THE PART OF THE ASSESSEE AND/OR THERE WAS ANY MALAFIDE INTENTION ON THE PART OF THE ASSESSEE IN NOT PREFERRING THE APPEAL WITHIN THE PERIOD OF LIMITATION AND/OR IN FILING THE APPEALS BELATEDLY. THE CIT (A) OBSERVED THAT CONTENTION OF THE ASSESSEE IS GENERAL. WE ARE UNABLE TO SUBSCRIBE THIS VIEW OF CIT (A). AS THE REASONS ADVANCED BY THE ASSESSEE ARE BONA FIDE. HENCE, THERE APPEARS NO MALAFIDE INTENTION OF THE ASSESSEE IN NOT FILING OF APPEAL IN TIME. FURTHER THE HON`BLE JURISDICTIONAL HIGH ATUL BIOSCIENCE LTD. V. DCIT-VALSAD /I.T.A. NO.3016/AHD/2016/A.Y.:10-11 PAGE 9 OF 9 COURT IN ABOVE CASE (SUPRA) HAS LAID DOWN THE CARDINAL PRINCIPLE OF LAW THAT NORMALLY BY AND LARGE THE APPEALS ARE REQUIRED TO BE DECIDED ON THE MERITS RATHER THAN DISMISSING THE SAME ON TECHNICAL GROUND LIKE DELAY ETC., THEREFORE, THE DECISION RELIED ON BY THE CIT (A) RATHER SUPPORTS THE CAUSE OF THE ASSESSEE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT CIT (A) WAS NOT JUSTIFIED IN REFUSING TO CONDONE THE DELAY OF 15 DAYS IN FILING OF APPEAL, HENCE, WE CONDONE THE DELAY IN FILING OF APPEAL AND REMIT BACK THE APPEAL TO CIT(A) TO BE DECIDE ON MERITS. 8. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 9. THE ORDER PRONOUNCED IN THE OPEN COURT ON 06.07.2018 SD/- SD/- ( . . /C.M. GARG) ( . . /O.P.MEENA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER DATED: 06 JULY, 2018 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) THE CIT(A)4. / PR. CIT 5. , / D.R.(ITAT) 6. / GUARD FILE ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT