Ideal Wovenplast Pvt. Ltd., Surat V. Principal Commissioner of Income Tax-1, Surat

ITA 357/SRT/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1971 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-05-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 17-05-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AASHISH POPHARE
• Assessee Lawyers: RASESH SHAH
• Keywords: Revision of order; Opportunity of being heard; Period of limitation; Corroborative evidences; Condonation of delay
• Section: 263; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 357/SRT/2023 (Assessment Year: 2017-18) (Physical Hearing) Ideal Wovenplast Private Limited, 503, Empore State Building, Near Udhna Darwaja, Ring Road, Surat – 395002, Gujarat Vs. The PCIT – 1, Surat èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AADCI3212N (Appellant) (Respondent) Appellant by Shri Rasesh Shah, CA Respondent by Shri Aashish Pophare, CIT-DR Date of Hearing 16/05/2024 Date of Pronouncement 30/05/2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal emanates from the order dated 27.03.2022 passed under section 263 of the Income-tax Act, 1961 (in short, ‘the Act’) by the Learned Principal Commissioner of Income Tax- 1, [in short, ‘the Ld. PCIT’] for the assessment year (AY) 2017-18. 2. The grounds of appeal raised by the assessee are as under: “1. On the facts and in circumstances of the case as well as on the subject, the learned Pr. CIT has erred in passing u/s 263 without providing reasonable opportunity of being heard to the assessee. 2. Even otherwise on the facts and in circumstances of the case as well as on law on the subject, the learned Pr. CIT has erred in passing the order u/s 263 by invoking of Section 263 of the Act, although the assessment order passed u/s 143(3) of the I.T. Act, 1961 was neither erroneous nor prejudicial to the interest of the revenue. 2 ITA No.357/SRT/2024 Ideal Wovenplast Pvt. Ltd. 3. It is therefore prayed that above order passed by Pr. CIT u/s 263 may please be quashed or modified as your honours deem it proper. 4. Appellant craves leave to add, alter or delete any ground(s) either before in the course of hearing of the appeal.” 3. The appeal filed by the assessee is delayed by 357 days. The assessee has filed an affidavit for condonation of delay in filing of appeal before this Tribunal. In the affidavit, it is stated that the assessee has received the order passed u/s 263 on 27.03.2022. It was required to file appeal before the Hon'ble ITAT within the 60 days i.e. on or before 26.05.2022. The appeal was however filed belatedly i.e. on18.05.2023. It is stated that the Chartered Accountant (CA), Shri Varun Agarwal, was not aware of the provisions of direct appeal before Hon'ble ITAT against the order u/s 263 of the Act. The order u/s 263 of the Act was passed on the ground that the Assessing Officer did not make any proper inquiry in respect of unsecure loans of Rs.2,99,50,000/- received from 5 parties to establish genuineness of the transaction. Therefore, the assessment order was set-aside with a direction to Assessing Officer to pass fresh assessment order. Subsequently, the Assessing Officer passed the order u/s 143(3) r.w.s. 263 on 23.03.2023, making addition of Rs.2,99,50,000/-. It is stated that the assessee was shocked by the addition and consulted with Shri Rasesh Shah & Co., CAs who are dealing with the appellate matters. Shri Rasesh Shah & Co., CAs advised him to file the appeal not only against the fresh order passed by Assessing Officer u/s 143(3) r.w.s. 263 before the Ld. CIT(A) but also they advised to file belated appeal against the order passed by PCIT u/s 263 on 27.03.2022 3 ITA No.357/SRT/2024 Ideal Wovenplast Pvt. Ltd. before ITAT. He accordingly filed appeal before Ld. CIT(A) on 28.04.2023 and also filed appeal belatedly before the Hon'ble ITAT on 18.05.2023. 4. The Learned Authorized Representative (Ld. AR) of the assessee submitted that assessee has explained that there was sufficient cause/reason in filing appeal late. Hence, the delay may be condoned in the interest of justice. 5. On the other hand, Learned Commissioner of Income Tax - Departmental Representative (Ld. CIT-DR) for the Revenue strongly opposed the request for condonation of delay. The Ld. CIT-DR submitted that the reasons given by the assessee would not constitute “sufficient cause” within the meaning of section 253(3) of the Act. 6. We have heard both parties on this preliminary issue of condonation of delay. We find that here was a delay of 357 days in filing appeal before the ITAT. The simple and bland statement in the affidavit that CA, Shri Varun Agarwal was not aware of the provisions of direct appeal to ITAT against the order u/s 263 of the Act is unbelievable. How would a practicing CA not know about appealable order and the proper appellate forum for filing appeal arising from orders passed by different income-tax authorities? No supporting evidence in the form of confirmation letter or affidavit of Shri Varun Agarwal has been enclosed to substantiate its claim. It is clear that assessee waited for the fresh order u/s 143(3) r.w.s. 263 of the Act and when it found that no relief was granted on the issue of unsecured loans, he has 4 ITA No.357/SRT/2024 Ideal Wovenplast Pvt. Ltd. filed appeal before both Ld. CIT(A) and the ITAT. The reasons given by the assessee are therefore general, self-serving and not convincing. 7. It is settled law that condonation of delay should not be granted only on the ground that ordinarily a litigant does not stand to benefit by lodging an appeal late. We find in that various decisions, namely, (i) P. K. Ramachandran vs State of Kerala & Anr. (1997) 7 SCC 556, (ii) Pundik Jalam Patil vs. Executive Engineers, Jalgaon Medium Project, (2008) 17 SCC 448 and (iii) Basawaraj and Anr vs. Special Land Acquisition Officer, (2013) 14 SCC 81, (iv) Pathapati Subba Reddy (dies) By L. Rs. & Ors. Vs The Special Deputy Collector (LA), SLP(C) No.31248 of 2018 (SC), dated 08.04.2024, it has been held that condonation of delay should not be granted only on the ground that ordinarily a litigant does not stand to benefit by lodging an appeal late. The reason given by the assessee in the present case is not adequate or enough and also looks bonafide on its part. 8. The Hon'ble Supreme Court in the case of Basawaraj (supra) held that it is a settled legal position that Article 14 of the Constitution is not meant to perpetuate the wrong decisions made in other cases. The said provision does not envisage negative equality but has only a positive aspect. The Hon'ble Court summarized the law on the subject issue by stating that where a case has been presented in the Court beyond limitation of time, the applicant has to explain as to what was the “sufficient cause” which means an adequate and enough reason, which prevented him to approach the Court within the limitation. In case a party is found to be negligent, or for want of bonafide on 5 ITA No.357/SRT/2024 Ideal Wovenplast Pvt. Ltd. his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay. 9. We find that in a recent decision pronounced on 28.04.2024, in the case of Pathapati Subba Reddy (dies) & Ors. vs. The Special Deputy Collector (LA), in SLP (Civil) No. 31248 of 2018 (SC), the Hon'ble Supreme Court referred to and discussed various decisions of Hon'ble Supreme Court namely (i) Bhag Mal (Alias) Ram Bux & Ors vs. Munshi (Dead) by LRs & Ors (2007) 11 SCC 285 (SC), (ii) Collector, Land Acquisition vs. Mst. Katiji (supra) (iii) Ramlal, Motilal and Chhotelal vs. Rewa Coalfields Ltd. (1962) 2 SCR 762, (iv) Maqbul Ahmad and Ors vs. Onkar Pratap Narain Singh and Ors, AIR 1935 PC 85 (v) Brijesh Kumar and Ors vs. State of Haryana and Ors. 2014 (4) SCALE 50 (vi) Lanka Venkateswarlu vs. State of Andhra Pradesh & Ors, (2011) 4 SCC 363 (vii) State of Jharkhand & Ors vs. Ashok Kumar Chokhani & Ors. AIR 2009 SC 1927 (viii) Basawaraj and Anr. (supra) and held as under: “7. The law of limitation is founded on public policy. It is enshrined in the legal maxim “interest reipublicae ut sit finis litium” i.e. it is for the general welfare that a period of limitation be put to litigation. The object is to put an end to every legal remedy and to have a fixed period of life for every litigation as it is futile to keep any litigation or dispute pending indefinitely. Even public policy requires that there should be an end to the litigation otherwise it would be a dichotomy if the litigation is made immortal vis-a-vis the litigating parties i.e. human beings, who are mortals.” 10. It has also discussed the case of Collector, Land Acquisition vs. Mst. Katiji (supra) relied upon by Ld. AR, and held that the phrases “liberal approach”, “justice-oriented approach” and “cause of advancement of 6 ITA No.357/SRT/2024 Ideal Wovenplast Pvt. Ltd. substantial justice” cannot be employed to defeat the law of limitation. For ready reference of equality, the same is reproduced hereunder: “16. ................In Collector, Land Acquisition, Anantnag and Ors. vs. Katiji and Ors.2, this Court in advocating the liberal approach in condoning the delay for ‘sufficient cause’ held that ordinarily a litigant does not stand to benefit by lodging an appeal late; it is not necessary to explain every day’s delay in filing the appeal; and since sometimes refusal to condone delay may result in throwing out a meritorious matter, it is necessary in the interest of justice that cause of substantial justice should be allowed to prevail upon technical considerations and if the delay is not deliberate, it ought to be condoned. Notwithstanding the above, howsoever, liberal approach is adopted in condoning the delay, existence of ‘sufficient cause’ for not filing the appeal in time, is a condition precedent for exercising the discretionary power to condone the delay. The phrases ‘liberal approach’, ‘justice- (1987) 2 SCC 107 = AIR 1987 SC 1353 oriented approach’ and cause for the advancement of ‘substantial justice’ cannot be employed to defeat the law of limitation so as to allow stale matters or as a matter of fact dead matters to be revived and re-opened by taking aid of Section 5 of the Limitation Act.” 11. After discussion on various cases in its order, the Hon'ble Supreme Court at Para 26, has summed up the law laid down by it as under: “26. On a harmonious consideration of the provisions of the law, as aforesaid, and the law laid down by this Court, it is evident that: (i) Law of limitation is based upon public policy that there should be an end to litigation by forfeiting the right to remedy rather than the right itself; (ii) A right or the remedy that has not been exercised or availed of for a long time must come to an end or cease to exist after a fixed period of time; (iii) The provisions of the Limitation Act have to be construed differently, such as Section 3 has to be construed in a strict sense whereas Section 5 has to be construed liberally; (iv) In order to advance substantial justice, though liberal approach, justice- oriented approach or cause of substantial justice may be kept in mind but the same cannot be used to defeat the substantial law of limitation contained in Section 3 of the Limitation Act; (v) Courts are empowered to exercise discretion to condone the delay if sufficient cause had been explained, but that exercise of power is discretionary in nature and may not be exercised even if sufficient cause is established for various factors such as, where there is inordinate delay, negligence and want of due diligence; 7 ITA No.357/SRT/2024 Ideal Wovenplast Pvt. Ltd. (vi) Merely some persons obtained relief in similar matter, it does not mean that others are also entitled to the same benefit if the court is not satisfied with the cause shown for the delay in filing the appeal; (vii) Merits of the case are not required to be considered in condoning the delay; and (viii) Delay condonation application has to be decided on the parameters laid down for condoning the delay and condoning the delay for the reason that the conditions have been imposed, tantamounts to disregarding the statutory provision.” The Hon'ble Supreme Court refused to interfere with the decision of the Hon'ble High Court refusing to condone the delay in filing the appeal. 12. The facts and circumstances of the present case are similar. The assessee has filed the appeal after a delay of 357 days. In assessee’s case, the order u/s 263 of the Act was passed on 27.03.2022. In normal situation, the assessee would have got 60 days i.e. on or before 18.05.2023. The explanation given by the assessee in this regard is not at all acceptable. In the affidavit, the assessee submitted that CA, Shri Varun Agarwal was not aware of the direct appeal to ITAT against the order passed u/s 263 of the Act. Such explanation is not believable and acceptable. Such assertion in only a feeble attempt to explain away the inordinate delay in filing the appeal. It is also stated that CA, Shri Varun Agarwal who was not aware of the direct taxes to file appeal before ITAT. Subsequently, the he consulted another CA, Shri Rasesh Shah & Co., who advised him to file belated appeal against the order passed u/s 263. The assessee has not given any written confirmation or affidavit of Shri Varun Agarwal, CA to support his claim. It is thus crystal clear that assessee was grossly negligent, inactive and casual in filing of appeal. 8 ITA No.357/SRT/2024 Ideal Wovenplast Pvt. Ltd. Such negligent, casual and lackadaisical approach to file appeal cannot constitute “sufficient cause” within the meaning of section 253(5) of the Act. 13. In view of the above facts and respectfully following the authoritative precedents cited supra, we refuse to condone the delay, as requested by the assessee. Since, delay has not been condoned; it becomes academic in nature to discuss the merit of the case. Hence, the other grounds are not discussed. 14. In the result, appeal filed by the assessee in dismissed. Order pronounced on 30/05/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 30/05/2024 SAMANTA Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat