Sparks Software Advisory Pvt. Ltd., Kolkata V. ITO, Ward 7(3) , Kolkata

ITA 332/KOL/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0467 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-09-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 01-06-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus Share capital; Condonation of delay; Rule 8D
• Section: 68; 14A; 250

Judgement Text

। आयकर अपीलीय अिधकरण ᭠यायपीठ, कोलकाता । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJPAL YADAV, HON’BLE VICE PRESIDENT & SHRI MANISH BORAD, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 332/Kol/2022 Assessment Year: 2012-13 Sparks Software Advisory Pvt. Ltd. 80/2, Pathuria Ghat Street 1 st Floor Kolkata - 70006 PAN : AAPCS3961A Vs Commissioner of Income Tax (Appeals)-18 अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) Assessee by : None Revenue by : Shri P.P. Barman, Addl. CIT, D/R सुनवाई कᳱ तारीख/Date of Hearing : 27/09/2022 घोषणा कᳱ तारीख/Date of Pronouncement: 18/10/2022 आदेश/O R D E R PER SHRI RAJPAL YADAV, VICE PRESIDENT: The present appeal is directed at the instance of the assessee against the order of the learned Commissioner of Appeals - (18), Kolkata (hereinafter the “ld. CIT(A)”) dt. 27/06/2018, passed u/s 250 of the Income Tax Act, 1961 (“the Act’), for Assessment Year 2012-13. 2. The assessee has taken four grounds of appeal out that that Ground No. 1 & 4 are general in nature and do not call for recording of any finding. 3. In Ground No. 2, the assessee has pleaded that the ld. CIT(A) has erred in confirming the addition of Rs.90,29,78,500/- which was added by the Assessing Officer with the aid of Section 68 of the Act being bogus share capital raised by the assessee. In Ground No. 3, the assessee has challenged the addition of Rs.24,987/- which has been added by the Assessing Officer u/s 14A r.w. Rule 8D(iii) of the Income Tax Rules, 1962 (‘Rules’). 4. The Registry has pointed out that the appeal is time barred by 745 days. It was presented on 02/06/2022 i.e., almost four years after the order of the ld. CIT(A). The I.T.A. No. 332/Kol/2022 Assessment Year: 2012-13 Sparks Software Advisory Pvt. Ltd. 2 assessee has filed an affidavit of Shri Shashi Kant Agarwal, alleged Director of the assessee company along with the application for condonation of delay. 5. In response to the notice of hearing, no one has come present on behalf of the assessee. The notice was issued through registered post and the postal authority has returned the notice with a remark “addressee left and no intimation”. In the Form No. 36, a Mobile bearing no. 8910536235 has been mentioned. The Bench Clerk had called on this number to ascertain as to whether any responsible person would be willing to represent the assessee or not. However, in response to such phone call, a casual reply came from the respondent. It is pertinent to note that the assessee has filed its return of income on 28/09/2012 declaring Nil income. The assessee has received fresh share capital as well as premium. In response to the showcause notice of the Assessing Officer, no one appeared before the Assessing Officer. Similarly, proceedings before the ld. CIT(A) remained uncomplied. Rather the ld. CIT(A) has dismissed the appeal in one paragraph. 6. The application for condonation of delay filed before the Tribunal reads as under:- “I, SHASHI KANT AGARWAL, Son of Shiv Ratan Agarwal, aged about 30 years, residing at 2 Kali Krishna Tagore Street, Kolkata- 700006 do hereby solemnly affirm & declare as under:- 1) That I am one of the Directors in M/s. Sparks Software Advisory Pvt. Ltd. 2) That the order u/s.250 of the Income Tax Act, 1961, dated 27.06.2018 for the AY 2012-13, passed by the CIT(A)-3/ Kolkata was received by our office assistant on 19.03.2020. However, he didn't bring it to the knowledge of the management and proceeded on leave. 3) That it is a fact that there is a delay of 803 days, out of which covid-19 scenario has been for 740 days for which an application under Section 5 of the Limitation Act has been filed along with memorandum of appeal. 4) That in a situation as uncertain as the Covid- 19 period, approx. 740 days was beyond our control due to panic, unavailability of staff and unnatural pandemic situation. My prayers that as the ITAT Appeal has not been filed in due time, I humbly request your good self to condone the delay due to the above unavoidable and unforeseeable circumstances. 5) That due to the reason mentioned hereinabove, the appeal against the order dated 27.06.2018 u/s.250 of the Income Tax Act, 1961 couldn't be filed in time. I.T.A. No. 332/Kol/2022 Assessment Year: 2012-13 Sparks Software Advisory Pvt. Ltd. 3 6) That I had no intention to jeopardize the interest of the revenue by delaying the filing of the appeal. 7) That the above statements are true to the best of my knowledge and belief.” 7. Sub-section 5 of Section 253 contemplates that the Tribunal may admit an appeal or permit filing of memorandum of cross-objections after expiry of relevant period, if it is satisfied that there was a sufficient cause for not presenting it within that period. This expression “sufficient cause” employed in this Section has also been used identically in sub-Section 3 of Section 249 of the Act, which provides power to the ld. Commissioner to condone the delay in filing of the appeal before the Commissioner. Similarly, it has been used in Section 5 of the Indian Limitation Act, 1963. Whenever interpretation and consideration of this expression has fallen for consideration before the Hon’ble High Courts as well as before the Hon’ble Supreme Court then, the Hon’ble Courts were unanimous in their conclusion that this expression has to be construed liberally. We may make reference to the following observations of the Hon'ble Supreme court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353: "1. Ordinarily a litigant does not stand to benefit by lodging an appeal late. 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 day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's 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 occasioned 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. I.T.A. No. 332/Kol/2022 Assessment Year: 2012-13 Sparks Software Advisory Pvt. Ltd. 4 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." 8. Similarly, we would like to make reference to authoritative pronouncement of Hon'ble 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 right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing 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 precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy 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 result 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 "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. 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 fides 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 reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance 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 ITA No.201, 202 and 203/Ahd/2020 salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss." I.T.A. No. 332/Kol/2022 Assessment Year: 2012-13 Sparks Software Advisory Pvt. Ltd. 5 9. We do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Hon'ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the delay, then such reasons are to be construed with a justice oriented approach. 10. In light of the above, let us examine the facts of the present case. A perusal of the application for condonation of delay would indicate that it has not been filed u/s 253(5) of the Act. Rather it has been filed u/s 5 of the Indian Limitation Act, 1963. The purpose of making reference about this aspect is only to demonstrate that the approach of the assessee is very casual. No one appeared before the Assessing Officer or the ld. CIT(A) for prosecuting the litigation. The appeal has been filed in a very casual manner. In the affidavit, only explanation at the end of the assessee is that such delay was attributable to the Covid period. However, it is pertinent to note that the impugned order was passed on 27/06/2018 and the Covid pandemic struck the country in the last week of March, 2020. Before that, one and a half years have already expired. On the strength of our experience as a Judicial Officer in the Tribunal for the last 21 years, we could decipher that it is a paper company, which is only litigating for the sake of litigation. There is no explanation at the end of the assessee as to why it filed the appeal belatedly and, therefore, we do not condone the delay in filing of the appeal for almost more than one year. It is dismissed being time barred. 11. In the result, appeal of the assessee is dismissed. Order pronounced in the Court on 18 th October, 2022 at Kolkata. Sd/- Sd/- (MANISH BORAD) (RAJPALYADAV) ACCOUNTANT MEMBER VICE PRESIDENT Kolkata, Dated 18/10/2022 *SC SrPs I.T.A. No. 332/Kol/2022 Assessment Year: 2012-13 Sparks Software Advisory Pvt. Ltd. 6 आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent 3. संबंिधत आयकर आयुᲦ / Concerned Pr. CIT 4. आयकर आयुᲦ)अपील (/ The CIT(A)- 5. िवभागीय ᮧितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाडᭅ फाईल /Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata