SARA RESEARCH AND DEVELOPMENT CENTRE P.LTD, MUMBAI V. DCIT 14(3)(2), MUMBAI

ITA 3529/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9591 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 14-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 09-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARJU GORADIADR
• Keywords: Revenue expenditure; Capital expenditure

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -JBENCH MUMBAI , . . , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND C. N. PRASAD,JUDICIAL MEMBER ./I.T.A./3529/MUM/2015, /ASSESSMENT YEAR: 2011-12 M/S. SARA RESEARCH AND DEVELOPMENT CENTRE PVT.LTD. 603, SWASTIK PLAXA, CHEMBUR EAST MUMBAI-400 071. PAN:AADCS 4923 Q VS. DCIT, 14-(3)(2) [ERSTWHILE DCIT 10(2)] MUMBAI. ( /APPELLANT) ( / RESPONDENT) / REVENUE BY: MS. ARJU GORADIA-DR /ASSESSEE BY: SHRI NIRAJ SHETH / DATE OF HEARING: 13/07/2017 / DATE OF PRONOUNCEMENT: 13/09/2017 , / PER RAJENDRA A.M. - CHALLENGING THE ORDER DATED 27/02/2015 OF THE CIT(A )- 22,MUMBAI,THE ASSESSEE HAS FILED PRESENT APPEAL.ASSESSEE-COMPANY, ENGAGED IN THE BUS INESS OF RESEARCH AND DEVELOPMENT OF PHARMACEUTICALS FORMULATIONS, FILED ITS RETURN OF I NCOME ON 26/09/2011 DECLARING TOTAL INCOME AT RS.78.37 LAKHS.THE ASSESSING OFFICER(AO)COMPLETE D THE ASSESSMENT U/S.143(3)OF THE ACT, ON 28/1/2014,DETERMINING ITS INCOME AT RS.1.05 CROR ES. 2. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONIN G THE DELAY WHICH IS ACCOMPANIED BY AN AFFIDAVIT OF THE DIRECTOR OF THE COMPANY .THE DIREC TOR, IN HIS APPLICATION,DTD.4/6/15,HAS STATED THAT THE ASSESSEE-COMPANY WAS IN THE PROCESS OF SE EKING AN INFORMED OPINION TO PREFER AN APPEAL BEFORE THE TRIBUNAL THAT THERE WAS DELAY IN FILING THE APPEAL, THAT DELAY WAS NOT MALAFIDE OR INTENTIONAL.IN THE AFFIDAVIT,AT PARA-4, THE DIRECTOR HAS MADE FOLLOWING SUBMISSIONS: THE COMPANY WAS IN PROCESS OF SEEKING AN OPINION T O FILE AN APPEAL BEFORE THE ITAT AND THUS COMPLETELY OVERLOOKED THE FACT THAT THE DUE DA TE FOR FILING AN APPEAL BEFORE THE ITAT HAS LAPSED. DURING THE COURSE OF HEARING BEFORE US,THE AUTHORIS ED REPRESENTATIVE REITERATED THE SUBMISSIONS THAT WERE MADE BY THE DIRECTOR OF THE C OMPANY IN HIS APPLICATION AND AFFIDAVIT. 3. BEFORE PROCEEDING FURTHER,WE WOULD LIKE TO DEAL WIT H THE CONDONING THE DELAY IN FILING THE APPEAL.PRINCIPLES GOVERNING THE CONDONATION OF BELA TED APPEALS STIPULATE THAT IF SUFFICIENT CAUSE FOR EXPLAINING DELAY IS SHOWN,PRESIDING OFFIC ERS MAY CONDONE THE DELAY AND ADMIT THE APPEAL.THE EXPRESSION 'SUFFICIENT CAUSE' IS NOT DEF INED IN THE ACT,BUT IT MEANS A CAUSE WHICH IS BEYOND THE CONTROL OF AN ASSESSEE.FOR INVOKING THE AID OF THE SECTION,ANY CAUSE WHICH 3529/M/15 M/S. SARA RESEARCH & DEVELOPMENT CENTRE PVT.LTD. 2 PREVENTS A PERSON APPROACHING THE TRIBUNAL WITHIN T IME IS CONSIDERED SUFFICIENT CAUSE.IN DOING SO,IT IS THE TEST OF REASONABLE MAN IN NORMAL CIRCUMSTANCES WHICH HAS TO BE APPLIED.THE TEST WHETHER OR NOT A CAUSE IS SUFFICIENT IS TO SEE WHETHER IT COULD HAVE BEEN AVOIDED BY THE PARTY BY THE EXERCISE OF DUE CARE AND ATTENTION. IN OTHER WORDS, WHETHER IT IS BONA FIDE CAUSE, INASMUCH AS NOTHING SHALL BE DEEMED TO BE DONE BONA FIDE OR IN GOOD FAITH WHICH IS NOT DONE WITH DUE CARE AND ATTENTION.WHAT MAY BE SUFFICIENT CAUSE IN ONE CASE MAY BE OTHERWISE IN ANOTHER.WHAT IS OF ESSENCE IS WHETHER IT WAS AN ACT OF PRUDENT OR REASONABLE MAN.SECONDLY,A VERY STRONG CASE ON MERITS IS NOT RELEVANT FOR COND ONATION OF DELAY IN FILING THE APPEALS.IN BELATED APPEALS EXPLANATION OF DELAY FOR THE ENTIRE PERIOD IS NECESSARY.THE CAUSE PLEADED SHOULD NOT ONLY BE A PROBABLE ONE,BUT IT SHOULD BE REAL AND SUFFICIENTLY REASONABLE.IN SHORT,IN MATTERS OF DELAY IT IS NEITHER PRACTICABLE NOR DESI RABLE TO EXPLAIN MINUTE-TO-MINUTE OR HOUR-TO- HOUR DELAY,BUT DELAY HAS TO BE EXPLAINED.FINALLY,WH AT MAY BE SUFFICIENT CAUSE IN ONE CASE MAY BE OTHERWISE IN ANOTHER.WHAT IS OF ESSENCE IS W HETHER IT IS AN ACT OF PRUDENT OR REASON - ABLE MAN. HERE,WE WOULD LIKE TO REFER TO THE CASE OF MADHU DA DHA(317 ITR 458).IN THAT MATTER THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF A SSESSMENT BEFORE THE FIRST APPELLATE AUTHORITY(FAA) WAS DISMISSED. THE ASSESSEE FILED A BELATED APPEAL BEFORE THE TRIBUNAL ALONG WITH AN AFFIDAVIT EXPLAINING THE DELAY FOR FILING T HE APPEAL.THE TRIBUNAL,AFTER ELABORATELY DISCUSSING THE AFFIDAVIT FILED BY THE ASSESSEE AND TAKING INTO CONSIDERATION ALL ASPECTS,REJECTED THE APPEAL AS THE ASSESSEE HAD NOT GIVEN ANY SUFFIC IENT REASONS OR CAUSE FOR THE DELAY IN FILING THE APPEAL WITHIN THE STIPULATED TIME. ON FURTHER A PPEAL THE HONBLE MADRAS HIGH COURT HELD AS UNDER: .. IT WAS CLEAR THAT THE ASSESSEE HAD NOT EXPLAI NED THE CAUSE OF DELAY IN FILING THE APPEAL, ..THE ASSESSEE HAD NOT TAKEN A PROPER PLEA TO SHOW SUFFICIENT CAUSE GIVING EVIDENCE AND PROOF BEYOND REASONABLE DOUBT FOR THE DELAY. THERE WAS NO NEED TO INTERFERE WITH THE ORDER OF THE TRIBUNAL. NOW,IT WOULD BE USEFUL TO TAKE NOTICE OF THE FACT O F THE CASE UNDER CONSIDERATION.THE ASSESSEE-COMPANY IS A CORPORATE ENTITY AND IS HELP ED BY THE PROFESSIONALS.IT WAS REPRESENTED BEFORE THE AO AND THE FAA BY A CHARTERED ACCOUNTANT .IT HAD FILED THE APPEAL BEFORE THE FAA WITHIN THE PRESCRIBED TIME LIMIT.IT CLEARLY SHOWS T HAT THE ASSESSEE IS WELL AWARE OF THE TIME LIMIT OF FILING THE APPEAL BEFORE THE APPELLATE AUT HORITIES. IN THE CASE UNDER CONSIDERATION,THE ASSESSEE HAD GI VEN MOST VAGUE AND GENERAL REASON FOR NOT FILING THE APPEAL IN TIME. APPEAL UNDER THE ACT IS A STATUTORY RIGHT AND THE ASSESSEES /AO.S ARE SUPPOSED TO FILE THE APPEALS IN TIME.IT IS STATED I N THE AFFIDAVIT THAT IT WAS IN THE PROCESS OF SEEKING AN OPINION.IT HAS NOT BEEN REVEALED THAT WI TH WHOM THE ASSESSEE WAS SEEKING THE 3529/M/15 M/S. SARA RESEARCH & DEVELOPMENT CENTRE PVT.LTD. 3 OPINION AND WHEN THE FIRST REFERENCE WAS MADE. THE ASSESSEE HAS ENGAGED THE SERVICES OF AN EXPERIENCED CA. THERE IS NO LETTER/AFFIDAVIT OF THE CA EXPLAINING THE PROCESS OF CONSULTATION. IF WE COMPARE THE GROUNDS OF APPEAL FILED BEFORE TH E FAA AND TRIBUNAL,IT BECOMES CLEAR THAT BASICALLY SAME DEAL WITH ONLY ONE ISSUE.THE AO HAD TREATED AN EXPENDITURE UNDER THE HEAD CAPITAL EXPENDITURE,WHEREAS THE ASSESSEE HAS CLAIM ED IT TO BE REVENUE EXPENDITURE. THUS, THE CONTROVERSY WAS ABOUT CAPITAL/REVENUE EXPENDITURE. IN OUR OPINION,FOR THE SAID CONTROVERSY THE ASSESSEE HAD ALREADY MADE SUBMISSIONS BEFORE T HE FAA.THE ALLEGED OPINION HAS NOT BEEN FILED TO PROVE THAT ACTUALLY ANY REFERENCE WAS MAD E TO ANY EXPERT. SIMPLY IT IS A CASE OF TOTAL IN ACTION ON PART OF THE ASSESSEE.THEREFORE, IN OUR OPINION IT IS NOT A FIT CASE WHERE THE DELAY IN FILING THE APPEAL CAN BE CONDONED.THEREFORE, WE REJECT THE APPLICATION FILED BY THE ASSESSEE. AS WE HAVE REFUSED TO CONDONE THE DELAY,S O THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED.WE ARE NOT ADJUDICATING THE OTHER ISSUES RAISED BY IT. AS A RESULT APPEAL FILED BY THE ASSESSEE STANDS DIS MISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 1 3 TH SEPTEMBER , 2017. 13 , 2017 SD/- SD/- ( . . / C.N.PRASAD ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 13 .09.2017. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR J BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.