HEMANT KUMAR GUPTA, MUMBAI V. ASST CIT WD 20(1), MUMBAI

ITA 3268/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2065 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2007-2008
• Appeal Filed On: 07-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K MOHANDA S
• Keywords: Reasonable cause; Condonation of delay
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI BEFORE SHRI JASON P. BOAZ (AM) AND SHRI. AMIT SHUKL A (JM) ITA NO.3268 - 3269/MUM/2014 ASSESSMENT YEAR: 2007-08 & 2008-09 SHRI. HEMANT KUMAR GUPTA SHERE PUNJAB COLONY, D 702, HILTON TOWER, ANDHERI (E), MUMBAI- 400054. PAN : A AACH2029K VS. THE CIT(A)-12, AAYAKAR BHAVAN, M.K.ROAD, NEW MARINE LINES, MUMBAI- 400020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. HARIDAS BHATT RESPONDENT BY : SHRI. K. MOHAN DAS DATE OF HEARING: 09/12/2015 DATE OF PRONOUNCEMENT: 11/12/2015 O R D E R PER JASON P. BOAZ, AM THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGA INST THE ORDER OF THE CIT(APPEALS)-32, MUMBAI DT. 18/10/2013 FOR ASST. YE AR 2007-08 AND OF THE CIT(APPEALS)-31, MUMBAI DT. 27/01/2014 FOR A SST. YEAR 2008- 09. 2. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER:- 2.1 FOR ASSESSMENT YEAR 2007-08, THE ASSESSEE FI LED HIS RETURN OF INCOME ON 24/04/2009 DECLARING INCOME OF RS. 1,74,6 8,919/-, WHEREIN THE ADMITTED TAXES PAYABLE OF RS. 60,40,39 8/- WAS ADMITTEDLY NOT PAID BY THE ASSESSEE ALONG WITH THE RETURN OF I NCOME. THE ASSESSMENT WAS CONCLUDED U/S 143(3) OF THE INCOME T AX ACT, 1961(IN SHORT THE ACT) VIDE ORDER DT. 30/12/2010, WHEREIN THE INCOME OF THE ASSESSED WAS DETERMINED AT RS. 3,37,82,030/-. 2 ITA NO.3268 - 3269/MUM/2014 ASSESSMENT YEAR: 2007-08 & 2008-09 2.2 FOR ASSESSMENT YEAR 2008-09, THE ASSESSEE FIL ED HIS RETURN OF INCOME ON 30/09/2009 DECLARING INCOME OF RS. 2,17,6 2,204/-, WHEREIN THE ADMITTED TAXES PAYABLE OF RS. 64,28,159 /- WAS ADMITTEDLY NOT PAID BY THE ASSESSEE ALONG WITH THE RETURN OF I NCOME. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT AND THE CASE WA S TAKEN UP FOR SCRUTINY. THE ASSESSMENT WAS CONCLUDED U/S 143(3) O F THE ACT VIDE ORDER DT. 29/12/2010 WHEREIN, THE INCOME OF THE ASS ESSEE WAS DETERMINED AT RS. 4,10,97,960/- 2.3 AGGRIEVED BY THE ORDERS OF ASSESSMENT FOR BOTH ASSESSMENT YEARS 2007-08 AND 2008-09, THE ASSESSEE PREFERRED APPEALS , BEFORE THE CIT(APPEALS)-31 AND CIT(A)-32 MUMBAI, RESPECTIVELY. THE RESPECTIVE LD. CIT(A) OBSERVING FROM COL: 9 IN FORM 35 THAT TH E ASSESSEE HAD NOT PAID ADMITTED TAXES ON THE RETURNED INCOME, DID NOT ADMIT THESE APPEALS FOR ADJUDICATION IN ACCORDANCE OF THE PROVI SIONS OF SECTION 249(4) OF THE ACT AND ACCORDINGLY DISMISSED THE ASS ESSEES APPEALS FOR BOTH ASSESSMENT YEARS. ASSESSEES APPEAL IN ITA NO. 3268/MUM/2014 FOR ASST . YEAR 2007-08 ORDER ON PETITION FOR CONDONATION OF DELAY IN FILIN G THE APPEAL 3.1 THE ORDER OF THE CIT (APPEALS)-32, MUMBAI, DT . 18/10/2013 FOR ASST. YEAR 2007-08 WAS ADMITTEDLY RECEIVED BY THE A SSESSEE ON 29/10/2013. IN THESE CIRCUMSTANCES, THE ASSESSEE OU GHT TO HAVE FILED THE APPEAL BEFORE THE TRIBUNAL ON OR BEFORE 28/12/2 013. THE APPEAL WAS FILED ONLY ON 07/05/2014, THEREBY LEADING TO A DELAY OF 130 DAYS IN FILING THE APPEAL. 3.2 BEFORE THE TRIBUNAL, THE ASSESSEE HAS FILED A P ETITION SEEKING CONDONATION OF DELAY ACCOMPANIED BY AN AFFIDAVIT DT . 15/10/2015, SUBMITTING THEREIN THAT IN THAT PERIOD HE WAS SUFFE RING SEVERE 3 ITA NO.3268 - 3269/MUM/2014 ASSESSMENT YEAR: 2007-08 & 2008-09 FINANCIAL PROBLEMS WHICH GOT AGGRAVATED DUE TO DISM ISSAL OF HIS APPEALS FOR NONPAYMENT OF ADMITTED TAXES FOLLOWED B Y ATTACHMENT OF HIS BANK ACCOUNT BY THE REVENUE. IT IS SUBMITTED T HAT THIS RESULTED IN HIS BEING ADVISED MEDICATION AND BED REST DUE TO ST RESS RELATED AILMENTS AND THAT IN VIEW OF THIS HE COULD NOT ATT END TO MATTERS RELATING TO FILING OF APPEAL. IN THIS REGARD, THE ASSESSEE HAS FILED A MEDICAL CERTIFICATE DT. 10/04/2014 WHICH STATES THA T FROM THE PERIOD 05/11/2013 TO JUNE 2014, THE ASSESSEE WAS UNDER TRE ATMENT AS HE WAS SUFFERING FROM ACUTE CHROMIC NEUROSIS AND DEPRE SSION. THE LD AR OF THE ASSESSEE PLEADED THAT THE AFORESAID REASONS PUT FORTH BY THE ASSESSEE CONSTITUTE REASONABLE CAUSE FOR THE DELAY IN FILING THE APPEAL FOR ASST. YEAR 2007-08 AND THEREFORE, PRAYED THAT T HE SAID DELAY BE CONDONED. 3.3 PER CONTRA, THE LD DR OPPOSED THE CONDONATION O F DELAY IN FILING THE APPEAL. 3.4.1 WE HAVE HEARD BOTH PARTIES AND PERUSED AND CA REFULLY CONSIDERED THE MATERIAL ON RECORD. ADMITTEDLY, THER E WAS A DELAY OF 130 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL. THE HONBLE APEX COURT IN THE CASE OF COLLECTOR LAND ACQUISITION (16 7 ITR 471)(SC), WHILE LAYING DOWN THE PRINCIPLES FOR CONSIDERING TH E MATTERS OF CONDONATION OF DELAY IN FILLING APPEALS HAS STATED THAT SUBSTANTIAL JUSTICE SHOULD PREVAIL OVER TECHNICAL CONSIDERATION S. THE HONBLE COURT ALSO EXPLAINED THAT EVERYDAYS DELAY MUST BE EXPLA INED, DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE TAKEN. THE DOCTRINE MUST BE APPLIED IN A NATURAL, COMMON SENSE AND PRAGMATIC MA NNER. 3.4.2 TAKING INTO ACCOUNT THE FACTS AND CIRCUMSTAN CES OF THE CASE, ON THE ISSUE OF THE DELAY OF 130 DAYS IN FILING THIS A PPEAL, WE ARE OF THE VIEW THAT IF THE SAID DELAY IS CONDONED, THERE SHA LL BE NO LOSS TO 4 ITA NO.3268 - 3269/MUM/2014 ASSESSMENT YEAR: 2007-08 & 2008-09 REVENUE, AS LEGITIMATE TAXES PAYABLE BY THE ASSESS EE TO REVENUE, IN ACCORDANCE WITH LAW ALONE WILL BE COLLECTED. MOREO VER, IT IS HARD TO BELIEVE THAT AN ASSESSEE IN WHOSE CASE TAXES PAYA BLE ARE APPROX TO RS. 96,68,405/- WOULD WANTONLY FILE THE APPEALS BEL ATEDLY, THEREBY JEOPARDIZING HIS OWN CASE. IN THIS VIEW OF THE MATT ER, WE ARE OF THE CONSIDERED OPINION THAT THIS A FIT CASE FOR CONDONI NG THE DELAY IN FILING THIS APPEAL FOR ASST. YEAR 2007-08 AND THEREFORE IN THE INTEREST OF EQUITY AND JUSTICE CONDONE THE SAID DELAY. ORDER FOR ASST. YEAR 2007-08 4.1 FOR ASST. YEAR 2007-08, BRIEFLY STATED THE FA CTS ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 24/04/2009 D ECLARING INCOME OF RS. 1,74,68,919/-. THE ASSESSING OFFICER (AO) DETE RMINED THE ASSESSEES INCOME IN THE ORDER OF ASSESSMENT AT RS. 3,37,82,034/-. ON APPEAL, THE LD. CIT(A) OBSERVED THAT THERE WAS A FA ILURE ON THE PART OF THE ASSESSEE TO PAY THE ADMITTED TAXES OF RS. 60, 40,398/- ON THE INCOME DECLARED BY THE ASSESSED IN THE RETURN OF I NCOME. THE LD. CIT(A) PROCEEDED TO DISMISS THE ASSESSEES APPEAL AS NOT MAINTAINABLE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 249(4) OF THE ACT. IT IS IN THIS CONTEXT THAT THE ASSESSEES APPEAL HAS COME UP BEFORE US. 4.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD, INCLUDING THE JUDICIAL PRONOUNCEMENT CITED BEFORE US. ADMITTEDLY, THE ASSESSEE FILED HIS RETURN OF INCOME FOR ASST. YEAR 2007- 08 DECLARING TOTAL OF RS. 1,74,68,919/- ON WHICH TH E ADMITTED TAXES PAYABLE AMOUNTING TO RS. 60,40,398/- WAS ADMITTEDLY NOT PAID BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME. PURSUANT TO THE ORDER OF ASSESSMENT WHEREIN THE ASSESSEES INCOME WAS DETERM INED AT RS. 3,37,82,030/-, THE ASSESSEE PREFERRED AN APPEAL BE FORE THE LD. CIT(A) 5 ITA NO.3268 - 3269/MUM/2014 ASSESSMENT YEAR: 2007-08 & 2008-09 AGAIN WITHOUT PAYMENT OF TAX DUE ON INCOME RETURNED WHICH WAS NOT ADMITTED AND DISMISSED AS NON-MAINTAINABLE IN ACCOR DANCE WITH THE PROVISIONS OF SECTION 249(4)OF THE ACT. AFTER THE D ISMISSAL OF THE APPEAL BY THE LD. CIT(A), THE ASSESSED MADE GOOD THE DEFIC IENCY BY DEPOSITING TAXES DUE ON RETURNED INCOME IN INSTALLMENTS, (I.E. AMOUNTING TO RS. 73,00,000/-), THE EVIDENCE IN RESPECT OF WHICH HAS BEEN PLACED ON RECORD. THE ASSESSEE IN THIS APPEAL NOW PRAYS FOR R ESTORATION OF THE APPEAL TO THE FILE OF THE LD. CIT(A) FOR ADJUDICATI ON ON MERITS ON THE GROUNDS THAT THE AMOUNT OF ADMITTED TAX ON RETURNED INCOME HAS NOW BEEN PAID. 4.3 IT WOULD BE RELEVANT TO PERUSE THE PROVISIONS O F SECTION 249(4) OF THE ACT, IN THE CONTEXT OF WHICH THE IMPUGNED ORDER HAS BEEN PASSED, WHICH IS AS UNDER:- 249(4) NO APPEAL UNDER THIS CHAPTER SHALL BE ADMIT TED UNLESS AT THE TIME OF FILING OF THE APPEAL (A) WHERE A RETURN HAS BEEN FILED BY THE ASSESSEE, THE ASSESSEE HAS PAID THE TAX DUE ON THE INCOME RETURNED BY HIM; OR (B) WHERE NO RETURN HAS BEEN FILED BY THE ASSESSEE, THE ASSESSEE HAS PAID AN AMOUNT EQUAL TO THE AMOUNT OF ADVANCE TAX W HICH WAS PAYABLE BY HIM: PROVIDED THAT, ON AN APPLICATION MADE BY THE APPELLANT IN TH IS BEHALF, THE COMMISSIONER (APPEALS) MAY, FOR ANY GOO D AND SUFFICIENT REASON TO BE RECORDED IN WRITING, EXEMPT HIM FROM T HE OPERATION OF THE PROVISIONS OF THAT CLAUSE. 4.4 THE OBJECTIVE AND PURPOSE OF SECTION 249(4) O F THE ACT IS TO ENSURE THE PAYMENT OF ADMITTED TAXES ON RETURNED IN COME BEFORE ADMISSION OF THE APPEAL. IN THE CASE ON HAND, WE FI ND THAT THE ASSESSEE HAS PAID THE ADMITTED TAXES ON RETURNED IN COME THOUGH IT IS AFTER THE DISPOSAL OF HIS APPEAL BY THE LD. CIT(A). ON PAYMENT OF THE 6 ITA NO.3268 - 3269/MUM/2014 ASSESSMENT YEAR: 2007-08 & 2008-09 ADMITTED TAXES ON RETURNED INCOME, THE DEFECT IN TH E ASSESSEES APPEAL, DUE TO NON-COMPLIANCE OF A DIRECTORY REQUIR EMENT OF PAYING SUCH ADMITTED TAXES, OF RS. 60,40,398/- BEFORE THE FILING OF THE APPEAL, IS REMOVED. IN THESE FACTUAL CIRCUMSTANCES, WE SET ASIDE THE IMPUGNED ORDER FOR ASST. YEAR 2007-08 AND RESTORE THE MATTER TO THE FILE OF THE LD. CIT(A) FOR DISPOSED OF THE APPEAL ON MERITS. IN COMING TO THIS FINDING, WE PLACE RELIANCE ON THE DECISION OF THE C O-ORDINATE BENCH OF ITAT-MUMBAI IN THE CASE OF BHUMIRAJ CONSTRUCTION VS . ADDL CIT (2011) 131 ITD 406. 4.5 IN THE RESULT, THE ASSESSES APPEAL FOR ASST. YE AR 2007-08 IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. ASSESSEES APPEAL FOR ASST. YEAR 2008-09 IN ITA NO. 3269/MUM/2014 5. THE FACTS AND CIRCUMSTANCES OF THE CASE ON HAND IN RESPECT OF ASST. YEAR 2008-09 ARE SIMILAR TO THAT OF ASST. YEAR 2007 -08. FOR ASST. YEAR 2008-09, THE DETAILS ON RECORD, SHOW THAT THE ASSE SSEE HAS PAID THE ADMITTED TAXES ON THE RETUNED INCOME (I.E. RS. 78,0 0,000/- IS TOTALLY PAID IN INSTALLMENTS) AFTER THE DISPOSAL OF HIS AP PEAL BY THE LD CIT(A). ON PAYMENT OF THE ADMITTED TAXES ON RETUNED INCOME, THE DEFECT IN THE ASSESSEES APPEAL, DUE TO NON-COMPLIANCE OF A DIREC TORY REQUIREMENT OF PAYING SUCH ADMITTED TAXES OF RS. 64,82,160/- BEFOR E FILING THE APPEAL, IS REMOVED. IN THESE FACTUAL CIRCUMSTANCES, WE SET ASIDE THE IMPUGNED ORDER FOR ASST. YEAR 2008-09 AND RESTORE T HE MATTER TO THE FILE OF THE LD. CIT(A) FOR DISPOSAL OF THE APPEAL O N MERITS. IN COMING TO THIS FINDING, WE PLACE RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF THE ITAT-MUMBAI IN THE CASE OF BHUMIRAJ CONSTRUC TIONS (SUPRA). 6. IN THE RESULT, THE ASSESSES APPEAL FOR ASST. YE AR 2008-09 IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. 7 ITA NO.3268 - 3269/MUM/2014 ASSESSMENT YEAR: 2007-08 & 2008-09 ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 11TH , 2015 SD/- SD/- ( AMIT SHUKLA ) (JASON P.BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 11.12.2015 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !' % , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI PRAMILA