Charanjit Singh Sehmbi, Ludhiana V. Pr.CIT-3, Ludhiana

ITA 317/CHANDI/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7981 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-08-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 03-09-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Period of limitation; Corroborative evidences; Condonation of delay
• Section: 263; 20

Judgement Text

, ,A, IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A CHANDIGARH BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER, AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 317/CHD/2020 / ASSESSMENT YEAR: 2015-16 CHARANJIT SINGH SEHMBI 701, ROYAL SHERWOOD, OMAXE ROYAL RESIDENCY, PAKHOWAL ROAD, LUDHIANA PR. CIT-3, AAYKAR BHAWAN RISHI NAGAR, LUDHIANA ./PAN NO : APHPS 8810E /APPELLANT /RESPONDENT /ASSESSEE BY : NONE ! / REVENUE BY : SMT. C. CHANDRAKANTA, CIT ' #$ /DATE OF HEARING : 04.08.2021 %&'($ /DATE OF PRONOUNCEMENT : 27 .08.2021 (HEARING THROUGH WEBEX) /ORDER PER S. S. GODARA, J.M. : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER PASSED BY THE PR. COMMISSIONER OF INCOME TAX- 3, LUDHIANA [IN SHORT REFERRED TO AS PR.CIT-3] DATED 24-03-20 20 U/S 263(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S ACT). ITA NO. 317/CHD/2020 CHARANJIT SINGH SEHMBI V. PR. CIT, LUDHIANA 2 2. THE REGISTRY HAS POINTED OUT THAT THERE IS DELAY OF 103 DAYS IN FILING THE APPEAL BY THE ASSESSEE. THE ASSESSEE MOVED AN APPLI CATION FOR CONDONATION OF DELAY WHICH READ AS UNDER: ORDER PASSED U/S 263 OF THE INCOME TAX ACT,1961 (H ENCEFORTH 'THE ACT', FOR BREVITY) ON 24.03.2020 BY OFFICE OF PR. COMMISSIONE R OF INCOME TAX-3, LDH., WAS UPLOADED ON OFFICIAL PORTAL OF INCOME TAX DEPAR TMENT ON 24.03.2020, MENTIONING DIN AND ORDER NUMBER ITBA/REV/F/REV5/201 9- 20/1026881889(1). THOUGH THE DEPARTMENT HAD COMMUNI CATED THIS THROUGH OFFICIAL PORTAL BUT THERE WAS NO PHYSICAL COMMUNICA TION OF THE ORDER THROUGH MAIL. MOREOVER, IT IS A KNOWN FACT TO ALL THAT THER E WAS COMPLETE LOCKDOWN IN THE COUNTRY, BECAUSE OF COVID-19, W.E.F 22.03.2020. SUCH LOCKDOWN WAS FURTHER EXTENDED ON DIFFERENT DATES. UNDER SUCH CIR CUMSTANCES, THE ASSESSEE OR HIS COUNSEL COULD NOT SEE THE PORTAL AND PASSING OF SUCH ORDER REMAINED UNNOTICED BY THE ASSESSEE OR HIS COUNSEL. IT IS ALS O A WELL KNOWN FACT THAT DURING APRIL, MAY AND JUNE 2020, ALMOST EVERYBODY WAS LOCK ED AT HIS PLACE. NO COMMERCIAL ACTIVITY COULD TAKE PLACE PROPERLY. IT IS ALSO BROUGHT TO YOUR KIND NOTICE THAT ASSESSE E HAD TO VISIT TO DELHI ON 12.06.2020 TO TAKE CARE OF SISTER-IN-LAW OF HIS WIF E, WHO WAS SICK AND EVENTUALLY EXPIRED ON 30.06.2020. ON RETURNING FROM DELHI, ON 02.07.2020, THE ASSESSEE WAS ORDERED TO BE IN QUARANTINE BY THE DC OFFICE FOR 14 DAYS. THEREAFTER, ON 28.07.2020, HE AGAIN WENT TO DELHI A ND RETURNED BACK ON 31.07.2020. HE WAS AGAIN IN QUARANTINE FOR NEXT 14 DAYS. IT IS WORTH MENTIONING HERE THAT EVERYBODY PASSED THROUGH BIG M ENTAL TURMOIL DURING THIS PERIOD. TILL THE DATE OF FILING OF THIS APPEAL, NOR MALCY IS NOT RESTORED. HOWEVER, ASSESSEE, BEING A LAW ABIDING CITIZEN, ON COMING TO KNOW ABOUT THIS ORDER THROUGH HIS COUNSEL, ASKED HIM TO FILE THE AP PEAL IMMEDIATELY, DESPITE AL TYPE OF AGONY AND DESPONDENCY BEING FACED BY HIM. U NDER SUCH CIRCUMSTANCES, THOUGH THERE APPEARS TO BE APPARENT DEFAULT/DELAY/ OF 103 DAYS, IN FILING OF APPEAL, BUT PRACTICALLY SPEAKING , SUCH ORDER CAME TO NOTICE OF ASSESSEE IN THIRD WEEK OF AUGUST 2020 AND HE IMMEDI ATELY ASKED THE COUNSEL TO FILE THE APPEAL. SO, KEEPING INTO VIEW THE PECULIAR FACTS AND CIRCUM STANCES OF THE CASE, IT IS HUMBLY PRAYED BEFORE YOUR GOODSELF THAT APPARENT DE LAY OF THE ASSESSEE MAY KINDLY BE CONDONED IN THE INTEREST OF NATURAL JUSTI CE. IT HAS BEEN CONSISTENTLY HELD BY THE HONBLE APEX C OURT IN A NUMBER OF CASES THAT IN THE MATTER OF CONDONATION OF DELAY, A LIBER AL AND PRAGMATIC VIEW SHOULD BE TAKEN BY THE COURTS. FURTHER, IT IS ALSO EQUALLY WELL SETTLED THAT WHEN TECHNICALITIES AND SUBSTANTIAL JUSTICE ARE PITTED A GAINST EACH OTHER, THE COURT WILL ALWAYS LEAN IN FAVOUR OF SUBSTANTIAL JUSTICE. THE INCOME TAX ACT HAS SURELY PROVIDED A LIMIT FOR FILING THE APPEAL BEFOR E THE INCOME TAX TRIBUNAL. HOWEVER, AS PER PROVISIONS OF SECTION 253(5), THE I TAT HAS ALSO BEEN GIVEN POWERS TO CONDONE THE DELAY. IN THIS WAY, THE DISCR ETION HAS BEEN GIVEN TO ITA NO. 317/CHD/2020 CHARANJIT SINGH SEHMBI V. PR. CIT, LUDHIANA 3 ITAT TO CONDONE THE DELAY IN CASES WHERE SUFFICIENT CAUSE IS PROVED BY THE DEFAULTER. THERE CAN BE NO DENIAL TO THE FACT THAT THE MAIN RE ASON TO PUT A PERIOD OF LIMITATION TO ANY LEGAL PROCEDURE IS TO MAINTAIN TH E DISCIPLINE AND TO AVOID THE LEGAL CHAOS. HOWEVER, GIVING AUTHORITIES THE POWER TO CONDONE DELAY IS MAINLY TO AVOID UNNECESSARY HARDSHIPS TO THE SUBJECTS AND ALSO TO AVOID THE DENIAL OF JUSTICE ON ACCOUNT OF TECHNICALITY. THE INCLINATION OF THE COURTS HAVE ALWAYS BEEN IN C ONDONING SUCH DELAYS IF THE DELAYS ARE SMALL, HOWEVER, LARGER DELAYS HAVE ALWAY S BEEN SEEN WITH APPREHENSION. ONE COMMON FACTOR COMING OUT OF THE M OST OF THE JUDICIAL PRECEDENTS ARE THAT THE COURTS HAVE ALWAYS BEEN IN FAVOUR OF THE DOCTRINE THAT SUBSTANTIVE JUSTICE SHOULD NOT BE DENIED TO A SUBJE CT ON ACCOUNT OF SUCH LATCHES. ANOTHER IMPORTANT FACTOR CONSIDERED BY COU RTS IN MOST OF THE CASES IS THE RESULTANT PREJUDICE CAUSED TO THE OTHER PARTY. IN CASE NO PREJUDICE IS CAUSED TO THE OTHER PARTY, THE COURTS LEAN IN FAVOU R OF THE PARTY PRAYING FOR CONDONATION. UNDER THE INCOME TAX PROCEEDINGS, WHER E SUCH DELAYS OCCUR ON THE PART OF THE ASSESSEE, THE COURTS ARE LIBERAL SI NCE THE OTHER PARTY IS ALWAYS THE STATE, HENCE NO PERSONAL PREJUDICE IS CAUSED BY SUCH CONDONATION. 3. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DELAY OCCURRED DUE TO COVID-19 PANDEMIC SI TUATION WHICH WAS BEYOND THE CONTROL OF THE ASSESSEE. 4. IN HIS RIVAL SUBMISSIONS THE LD. DR COULD NOT CO NTROVERT THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CA SE IT IS NOTICED THAT DELAY OF 103 DAYS IN FILING THE APPEAL HAPPENED DUE TO COVID -19 PANDEMIC SITUATION. 6. CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE THEREFORE, WE CONDONE THE DELAY AND THE APPEAL IS ADMITTED. ITA NO. 317/CHD/2020 CHARANJIT SINGH SEHMBI V. PR. CIT, LUDHIANA 4 CASE FILE PERUSED, AND PROCEEDED EX-PARTE AGAINST T HE ASSESSEE. 7. IT TRANSPIRED DURING THE COURSE OF HEARING THAT THE LD. PR. CIT IN HIS REVISION ORDER UNDER CHALLENGE HAS TREATED T HE ASSESSING OFFICERS REGULAR ASSESSMENT DATED 18.09.2017 AS ER RONEOUS, CAUSING PREJUDICE TO THE INTEREST OF THE REVENUE, ON ACCOUN T OF HIS FAILURE IN NOT EXAMINING THE TAXPAYERS SALE PROMOTION EXPEN SES. LD. CIT- DR FAILS TO DISPUTE THAT THE ASSESSING OFFICER HAD VERY MUCH DISALLOWED 12% OF THE ASSESSEES SALE PROMOTION EXP ENSES AND THEREFORE, IT IS NOT AN INSTANCE OF LACK OF INQUIRY AS HAS BEEN PROJECTED IN THE REVISION UNDER CHALLENGE. IN FACT PARA 3 OF THE ASSESSMENT ORDER REVEALS THE AO DIRECTING THE ASSES SEE TO PRODUCE BILLS AND VOUCHERS RELATING TO THE IMPUGNED EXPENSE S AND ON EXAMINING THE SAME FINDING THEM AS BEING NOT COMPLE TELY VERIFIABLE. THE AO STATES THAT THE ASSESSEE WAS UNA BLE TO PRODUCE THE BILLS /VOUCHERS FOR THE EXPENSES SO DEBITED, AND HE FURTHER NOTES THAT THE ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE ANY FURTHER DOCUMENTARY EVIDENCES. FACED WITH THESE FAC TS THE AO PROCEEDS TO MAKE AN ADHOC DISALLOWANCE OF 12% OF TH E EXPENSES. IT IS ABUNDANTLY CLEAR THEREFORE THAT IT CANNOT BE SAI D TO BE A CASE OF NO INQUIRY. FURTHER NO CASE HAS BEEN MADE OUT BY THE L D.CIT OF INADEQUACY OF INQUIRY CONDUCTED BY THE AO ON THE IS SUE. ITA NO. 317/CHD/2020 CHARANJIT SINGH SEHMBI V. PR. CIT, LUDHIANA 5 8. WE REFER TO THE DECISION OF THE APEX COURT IN TH E CASE OF MALABAR INDUSTRIAL CO. LTD. VS CIT 243 ITR 83 (SC) HOLDING THAT AN ASSESSMENT MUST BE BOTH AN ERRONEOUS ONE AS WELL AS CAUSING PREJUDICE TO THE INTEREST OF THE REVENUE SIMULTANEO USLY BEFORE THE CIT SEEKS TO INVOKE HIS REVISIONARY JURISDICTION. H ONBLE DELHI HIGH COURT DECISION IN ITO V. D. G. HOUSING PROJECT S LTD. 343 ITR 329(DEL) HAS ALSO DRAWN DISTINCTION BETWEEN THE TW O LIMBS OF THE ASSESSMENT BEING AN ERRONEOUS ONE AS WELL AS CAUSIN G PREJUDICE TO THE REVENUE. 9. HAVING OBSERVED AS ABOVE THAT THE ASSESSING OFFI CER HAD DULY CONSIDERED THE ASSESSEES INABILITY TO PRODUCE ALL THE SUPPORTING EVIDENCE BEFORE MAKING THE ESTIMATED DISALLOWANCE, WE THEREFORE HOLD THAT THE LD.PR. CIT HAS ERRED IN LAW AND IN F ACTS IN EXERCISING HIS REVISIONARY JURISDICTION IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. THIS REVISIONARY ORDER UNDER CHALLENGE ST ANDS REVERSED ACCORDINGLY. THE REGULAR ASSESSMENT FOR A.Y 2018-19 IS RESTORED AS A NECESSARY COROLLARY. 10 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.08.2021. SD/- SD/- (ANNAPURNA GUPTA) (SAT BEER SINGH GODARA) ACCOUNTANT MEMBER JU DICIAL MEMBEER ITA NO. 317/CHD/2020 CHARANJIT SINGH SEHMBI V. PR. CIT, LUDHIANA 6 DATED: 24 .08.2021 GP/SR.PS &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35# / GUARD FILE &) ' / BY ORDER, ! / ASSISTANT REGISTRAR 1. DRAFT DICTATED 02.08.2021 SR.PS 2. DRAFT FIRST PLACED BEFORE AUTHOR 03.08.2021 3. APPROVED DRAFT COMES TO SR.PS/PS 4 FINAL DRAFT PLACED BEFORE AUTHOR 5. ORDER SIGNED AND PRONOUNCED ON 6 FILE SENT TO THE BENCH CLERK SR.PS 7. DATE ON WHICH FILE GOES TO THE AR 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 9. DATE OF DISPATCH OF ORDER