M/s Internet Componet Management Group Private Limited , Bangalore V. The Deputy Commissioner of Income Tax Circle-3(1)(1), Bangalore

ITA 3273/BANG/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3737 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-02-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 07-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI
• Assessee Lawyers: V SRINIVASAN
• Keywords: Unexplained investment
• Section: 143(3); 142(1); 250; 201; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES C BENCH: BANGALORE BEFORE SHRI A.K. GARODIA , ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 3273 /BANG/2018 (ASSESSMENT YEAR: 201 0 - 11 ) M/S. INTERNET COMPONENT MANAGEMENT GROUP PVT. LTD., NO.66/1, MAGADI MAIN ROAD, RANANATHAPURA, KAMAKSHIPALYA, OPP. TO SAFAL DAILY FRESH, BANGALORE - 560 079 .APPELLANT PAN AAACI 7483C VS. DY. COM MISSIONER OF INCOME TAX, CIRCLE 3(1)(1), BANGALORE. RESPONDENT. ASSESSEE BY: SHRI V. SRINIVASAN, ADVOCATE. REVENUE BY: S MT. R. PREMI, JCIT (D.R) DATE OF HEARING : 26.02 .20 20 DATE OF PRONOUNCEMENT : 27 .02 .20 20 O R D E R PER SHRI PAVAN KUMAR GADALE, JM : THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 3 , BANGALORE PASSED U/S 1 43(3) AND U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT) . 2 ITA NO. 3273/BANG/2018 2. AT THE TIME OF HEARING, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS RAISED THE GROUNDS OF APPEAL THAT THE CIT (APPEALS) HAS NOT CONDONED THE DELAY IN FIL ING THE APPEAL . 3. THE BRIEF FACTS OF THE CASE ARE T HAT THE ASSESSEE IS ENGAGED IN SOFTWARE CONSULTANCY AND CORPORATE TRAINING AND FILED THE RETURN OF INCOME ON 14.10.2010 WITH LOSS OF RS.5,40,052 AND THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE UNDER SECTION 143(2) AND 142(1) OF THE ACT WERE IS SUED. IN COMPLIANCE, THE LEARNED AUTHORIZED REPRESENTATIVE HAS APPEARED FROM TIME TO TIME AND SUBMITTED THE DETAILS. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE COMPANY HAS MADE INVESTMENT S IN MUTUAL FUNDS AND THERE IS A DIFFERENCE IN VALUE OF INVESTME NTS AND DISCLOSURE S IN THE BALANCE SHEET, HENCE MADE ADDITION AS UNEXPLAINED INVESTMENT S. SIMILARLY AO FOU ND, THERE ARE OUTSTANDING LIABILITIES OF RS.1 , 10,30,585 / - AND THE DETAILS WERE CALLED FOR ALONG WITH CONFIRMATIONS. SINCE THE ASSESSEE COULD NOT SUBMIT THE DETAILS, THE ASSESSING OFFICER MADE DISALLOWANCE AND ASSESSED THE TOTAL INCOME OF RS.1,10,90,533 / - AND PASSED ORDER UNDER SECTION 143(3) OF THE ACT DT.18.03.2013. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED AN APPEAL WITH THE CIT (APPEALS). THE ASSESSEE HAS FILED CONDO NATION PETITI ON BEFORE THE CIT (APPEALS) AS THERE IS DELAY IN FILING THE APPEAL AND REASONS WERE EXPLAINED IN THE AFFIDAVIT. BUT THE CIT (APPEALS) FOUND THAT THERE IS NO PRIMA FACIE CAUSE FOR CONDONING THE DELAY 3 ITA NO. 3273/BANG/2018 OF 331 DAYS IN FILI NG THE APPEAL AND DISMISSED THE APPEAL WITHOUT CONDONING THE DELAY. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE DELAY IN FILING THE APPEAL BEFORE THE CIT ( APPEALS) WAS NOT INTENTIONAL AS THE ACCOUNTANT OF THE ASSESSEE TOOK THE ASSESSMENT ORDER AND KEPT WITH HIM AND THESE FACTS WERE BROUGHT ON RECORD AT PAGE 3 OF THE CIT(APPEALS) ORDER AND PRAYED FOR AN OPPORTUNITY TO SUBSTANTIATE T HE CASE WITH EV IDENCES ON MERITS AND CONDO NATION OF DELAY IN FILIN G THE APPEAL. CONTRA, THE LD. DR SUPPORTED THE ORDERS OF CIT ( APPEALS). 5. WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE MATRIX OF THE DISPUTED ISSUE AS ENVISAGED BY THE LEARNED AUTHORIZED REPRESENTATIVE IS IN RESPECT OF CONDO NATION OF DELAY IN FILING THE APPEAL BEFORE THE CIT(APPEALS). THE C ONTENTION OF THE LEARNED AUTHORIZED REPRESENTATIVE THAT THERE IS NO WANTON ACT ON THE PART OF THE ASSESSEE FOR THE DELAY BUT DUE TO THE CIRCUMSTANCES BEYOND THE CONTROL OF THE ASSESSEE . FURTHER UPON, GARNISH ORDER ISSUED BY THE ASSESSING OFFICER TO THE BAN K ACCOUNT, THE ASSESSEE COME TO KNOW AB OUT THE ASSESSMENT ORDER AND LAPSE OF DUTIES OF THE A CCOUNTANT, AND THE ASSESSEE HAS NO INTENTION TO DELAY IN FILLING THE APPEAL BUT TO CONTEST ON THE DISALLOWANCES BY THE ASSESSING OFFICER. THE LEARNED AUTHORIZED RE PRESENTATIVE SUPPORTED HIS ARGUMENT S WITH JUDICIAL DECISIONS. WE FOUND THAT THE CIT(APPEALS) HAS NOT CONDONED THE DELAY AS 4 ITA NO. 3273/BANG/2018 THERE IS NO S UFFICIENT CAUSE WAS EXPLAINED AND THE DELAY OF 331 DAYS IN FILING THE APPEAL BEFORE THE CIT(APP EALS) IS NOT DISPUTED. WE ARE OF T HE OPINION THAT THE DELAY IN FILING THE APPEAL BEFORE THE CIT(APPEALS) SUPPORTED WITH THE REASONS EXPLAINED IN THE AFFIDAVIT CAN BE ACCEPTED. FURTHER THE LITIGANT WILL NOT GAIN BY DELAYING THE FILING OF APPEAL. WE SUPPORT OUR VIEW, RELYING ON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST KATIJI & OTHERS ( 167 ITR 471 ) (SC) AND OBSERVATIONS AS UNDER : THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACTING S. 5 OF THE LIMITATIO N 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 MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICE THAT BEING THE LIFE - PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COURTS. 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 C HARGE OF THE MATTER IS DIRECTLY HIT OR HURT BY THE JUDGMENT SOUGHT TO BE SUBJECTED TO APPEAL) AND THE INHERENT BUREAUCRATIC METHODOLOGY IMBUED WITH THE NOTE - MAKING, FILE - PUSHING, AND PASSING - ON - THE - BUCK ETHOS, DELAY ON ITS PART IS LESS DIFFICULT TO UNDERS TAND THOUGH MORE DIFFICULT TO APPROVE. IN ANY EVENT, THE STATE WHICH REPRESENTS THE COLLECTIVE CAUSE OF THE COMMUNITY DOES NOT DESERVE A LITIGANT NON GRATA STATUS. THE COURTS, THEREFORE, HAVE TO BE INFORMED OF 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. 5 ITA NO. 3273/BANG/2018 WE CONSIDERING THE OBSERVATIONS OF JUDICIAL DECISION AND SUBMISSIONS OF THE ASSESSEE BEFORE THE CIT(APPEALS) ARE OF THE OPINI ON THAT THE DELAY IN FILING THE APPEAL BEFORE THE CIT (APP EALS) IS SUPPORTED WITH SUFFICIENT CAUSE AND P RAGMATIC APPROACH SHOULD BE CONSIDERED FOR CONDO NATION OF DELAY. ACCORDINGLY, WE CONDONE THE DELAY OF 331 DAYS IN FILING THE APPEAL BEFORE THE CIT (APPEALS) AND RESTORE THE ENTIRE DISPUTED ISSUE S TO THE FILE OF CIT (APPEALS) TO ADMIT THE APPEAL AND ADJUD ICATE ON MERITS AND PROVIDE ADEQUATE OPPORTUNITY OF HEARING TO THE ASSE SSEE AND , THE ASSESSEE SHALL CO - OPERATE IN SUBMITTING THE INFORMATION FOR EARLY DISPOSAL OF THE APPEAL AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE FOR STATISTICAL PURPOSES. 6. S INCE WE HAVE CONDONED THE DELAY IN FILING THE APPEAL BEFORE THE CIT(APPEALS) AND REMITTED THE MATTER TO THE FILE OF CIT(APPEALS) FOR FRESH ADJUDICATION, OTHER GROUNDS OF APPEAL ARE NOT ADJUD ICATED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. S D / - S D / - ( A.K. GARODIA ) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 7 .02. 20 20 . *REDDY GP 6 ITA NO. 3273/BANG/2018 COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE