Sreemitra Townships Private Limited, Hyd, Hyderabad V. DCIT, Circle-3(2), Hyd, Hyderabad

ITA 363/HYD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5969 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-02-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 07-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: M MADHUSUDHAN
• Keywords: Bonafide belief; Reasonable cause; Condonation of delay; Capital expenditure
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.363/HYD/2015 ASSESSMENT YEAR 2006-2007 SREEMITRA TOWNSHIPS P. LTD., HYDERABAD. PAN AAHCS9552R VS. DCIT, CIRCLE 3(2) HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. M. MADHUSUDHAN FOR REVENUE : MR. B. KURMI NAIDU DATE OF HEARING : 2 2 .0 2 .2016 DATE OF PRONOUNCEMENT : 04 . 0 3 .2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y. 2006-07. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE OR DER OF THE LD. CIT(A) IN NOT CONDONING THE DELAY OF 62 MON THS AND 24 DAYS IN FILING OF THE APPEAL BEFORE HIM/HER AGAINST THE ORDER UNDER SECTION 143(3) DATED 31.12.2008 FOR THE A.Y. 2006-07 AND NOT DISPOSING OF THE APPEAL ON MER ITS. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF REAL ES TATE HAD FILED ITS RETURN OF INCOME FOR A.Y. 2006-07 ON 08.11.2006 ADMITTING INCOME OF RS.1,03,23,560. THE A.O, DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143 (3) 2 ITA.NO.363/HYD/2015 SREEMITRA TOWNSHIPS P. LTD., HYDERABAD. OF THE ACT, DISALLOWED A SUM OF RS.1,15,31,280 UNDE R SECTION 40(A)(IA) AND ASSESSED THE TOTAL INCOME AT RS.2,34,32,042. THE ASSESSMENT ORDER WAS SERVED ON THE ASSESSEE ON 03.11.2008 AND THEREAFTER, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) ON 25.03.2014 RESUL TING IN A DELAY OF 62 MONTHS AND 24 DAYS. AS REGARDS THE RE ASONS FOR THE DELAY, IT WAS EXPLAINED BY THE ASSESSEE THA T IT HAD FILED A PETITION UNDER SECTION 154 BEFORE THE A.O. ON 19.01.2009 FOR RECTIFICATION OF THE ASSESSMENT ORDE R UNDER SECTION 143(3) AND THE A.O. VIDE ORDERS DATED 23.06 .2009 ALLOWED THE PETITION WITH RESPECT TO CONTRIBUTIONS/ DONATIONS RECEIVED BY THE ASSESSEE BUT WITH REGARD TO DISALLOWANCE UNDER SECTION 40(A)(IA), THE A.O. HELD THAT THERE WERE NO MISTAKES APPARENT FROM RECORD AND THEREFORE, THE PETITION DID NOT MERIT CONSIDERATION UNDER SECTION 154 OF THE ACT. IT WAS SUBMITTED THAT THE A SSESSEE, THEREAFTER, FILED AN APPEAL BEFORE THE LD. CIT(A) A GAINST THE ORDER UNDER SECTION 154 AND THE LD. CIT(A) VIDE ORDER IN ITA.NO.0133/CIT(A)/GNT/2009-10, DATED 26.03.201 0 ALLOWED THE RELIEF TOWARDS CAPITAL EXPENDITURE OF RS.38,59,794 WHICH WAS SUBJECTED TO DISALLOWANCE UN DER SECTION 40(A)(IA), BUT UPHELD THE VIEW TAKEN BY THE A.O. IN HIS ORDER UNDER SECTION 154 THAT THE OTHER DISALLOW ANCES DID NOT CONSTITUTE MISTAKES APPARENT FROM RECORD WI THIN THE MEANING OF SECTION 154. ON FURTHER APPEAL, THE ITAT IN ITA.NO.949/HYD/2010 DATED 31.03.2013 UPHELD THE VIEW OF THE LD. CIT(A) HOLDING THAT THE ISSUE CONTA INED IN THE PETITION UNDER SECTION 154. DID NOT FALL WITHIN THE SCOPE OF SECTION 154. IT IS SUBMITTED THAT IT IS T HEREAFTER, 3 ITA.NO.363/HYD/2015 SREEMITRA TOWNSHIPS P. LTD., HYDERABAD. THAT THE ASSESSEE PREFERRED AN APPEAL UNDER SECTION 260 OF THE I.T. ACT BEFORE THE HONBLE HIGH COURT OF A. P. AND SUBSEQUENTLY, ON ADVICE OF ITS COUNSEL IN THE HIGH COURT, THE ASSESSEE HAS FILED THE APPEAL BEFORE THE CIT(A) RESULTING IN A DELAY WHICH IS NEITHER WILLFUL NOR W ANTON AND WAS BEYOND THE CONTROL OF THE ASSESSEE. THE LD . CIT(A), HOWEVER, WAS NOT SATISFIED WITH THE ABOVE R EASONS FOR CONDONATION OF DELAY AND SHE ACCORDINGLY DISMIS SED IT IN LIMINE , AGAINST WHICH, THE ASSESSEE IS IN APPEAL BEFORE US. 3. WHILE REITERATING THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE LD. CIT(A) FOR CONDONATION OF D ELAY, THE LD. COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTE NTION TO THE ORDERS OF THE LOWER AUTHORITIES ON THE ASSES SEES APPLICATION UNDER SECTION 154 TO IMPRESS UPON US TH AT THE ASSESSEE WAS PURSUING OTHER LEGAL REMEDIES UNDER A BONAFIDE BELIEF THAT THEY WERE MAINTAINABLE AND THE RE WAS NO WILLFUL NEGLECT ON THE PART OF THE ASSESSEE IN P URSUING THE APPEAL BEFORE THE LD. CIT(A). FURTHER, HE HAS A LSO PLACED RELIANCE UPON THE DECISION OF THE HONBLE SU PREME COURT IN THE CASE OF LAND ACQUISITION COLLECTOR VS. SS KATIJI AND OTHERS (1987) 167 ITR 471 WHEREIN, WHILE REFERRING TO THE PROVISIONS OF SECTION 5 OF THE LIM ITATION ACT, THE HONBLE SUPREME COURT HAS HELD THAT A LIBE RAL APPROACH HAS TO BE ADOPTED ON PRINCIPLES TO SUB-SER VE THE ENDS OF JUSTICE. HE ALSO PLACED RELIANCE UPON THE D ECISION OF THE COORDINATE BENCH OF THE ITAT AT COCHIN IN TH E CASE OF KADAKKAL EDUCATIONAL TRUST VS. ITO REPORTED IN ( 2015) 4 ITA.NO.363/HYD/2015 SREEMITRA TOWNSHIPS P. LTD., HYDERABAD. 54 TAXMANN.COM 412 (COCHIN TRIBU.) WHEREIN THERE WA S A DELAY OF 2353 DAYS ON ACCOUNT OF THE ASSESSEE THERE IN PROSECUTING THE PROCEEDINGS BONAFIDELY BEFORE A WRO NG FORUM AND THE TRIBUNAL HAS CONDONED THE DELAY AND DIRECTED FOR RECONSIDERATION ON THE MERITS OF THE C ASE THEREIN. 4. THE LD. D.R. HOWEVER, SUPPORTED THE ORDERS OF THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE IS R EQUIRED TO EXPLAIN EVERY DAYS DELAY AND SINCE THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE DELAY IN A REASONABLE MANNER, ASSESSEES APPEAL NEEDS TO BE DISMISSED. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ASSE SSEE HAS BEEN VIGILANT AND HAS BEEN PURSUING THE LEGAL REMED Y BUT UNDER A WRONG PROVISION. WE FIND THAT THE EFFORTS O F THE ASSESSEE HAVE BEEN BONAFIDE AND THE ASSESSEE HAS NO T BEEN INSOLENT, NEGLIGENT OR LETHARGIC IN PURSUING I TS LEGAL REMEDIES/APPEAL. THE HONBLE SUPREME COURT IN THE C ASE OF KATIJI AND OTHERS (CITED SUPRA) HAS HELD AS FOLL OWS : 5. MAKING A JUSTICE-ORIENTED APPROACH FROM THIS PERSPECTIVE, THERE WAS SUFFICIENT CAUSE FOR CONDONI NG THE DELAY IN THE INSTITUTION OF THE APPEAL. THE FACT TH AT IT WAS THE 'STATE' WHICH WAS SEEKING CONDONATION AND NOT A PRIVATE PARTY WAS ALTOGETHER IRRELEVANT. THE DOCTRI NE OF EQUALITY BEFORE LAW DEMANDS THAT ALL LITIGANTS INCL UDING THE STATE AS A LITIGANT, ARE ACCORDED THE SAME TREA TMENT AND THE LAW IS ADMINISTERED IN AN EVEN-HANDED MANNE R. 5 ITA.NO.363/HYD/2015 SREEMITRA TOWNSHIPS P. LTD., HYDERABAD. 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 THA T ON ACCOUNT OF AN IMPERSONAL MACHINERY (NO ONE IN CHARG E OF THE MATTER IS DIRECTLY HIT OR HURT BY THE JUDGMENT SOUGHT TO BE SUBJECTED TO APPEAL) AND THE INHERITED BUREAUCRA TIC METHODOLOGY IMBUED WITH THE NOTE-MAKING, FILE PUSHI NG, AND PASSING-ON-THE- BUCK ETHOS, DELAY ON ITS PART I S LESS DIFFICULT TO UNDERSTAND THOUGH MORE DIFFICULT TO AP PROVE. IN ANY EVENT, THE STATE WHICH REPRESENTS THE COLLECTIV E CAUSE OF THE COMMUNITY, DOES NOT DESERVE A LITIGANT NON G RATA STATUS. THE COURT, THEREFORE, HAVE TO BE INFORMED O F THE SPIRIT AND PHILOSOPHY OF THE PROVISION IN THE COURS E OF THE INTERPRETATION OF THE EXPRESSION 'SUFFICIENT CAUSE' . SO ALSO THE SAME APPROACH HAS TO BE EVIDENCED IN ITS APPLIC ATION TO MATTERS AT HAND WITH THE END IN VIEW TO DO EVEN- HANDED JUSTICE ON MERITS IN PREFERENCE TO THE APPRO ACH WHICH SCUTTLES A DECISION ON MERITS. TURNING TO THE FACTS OF THE MATTER, GIVING RISE TO THE PRESENT APPEAL, WE A RE SATISFIED THAT SUFFICIENT CAUSE EXISTS FOR THE DELA Y. THE ORDER OF THE HIGH COURT DISMISSING THE APPEAL BEFOR E IT AS TIME-BARRED IS, THEREFORE, SET ASIDE. DELAY IS COND ONED. AND THE MATTER IS REMITTED TO THE HIGH COURT. THE H IGH COURT WILL NOW DISPOSE OF THE APPEAL ON MERITS AFTE R AFFORDING REASONABLE OPPORTUNITY OF HEARING TO BOTH THE SIDES. APPEAL IS ALLOWED ACCORDINGLY. NO COSTS. 6. FURTHER, THE COORDINATE BENCH OF THE COCHIN TRIBUNAL IN THE CASE OF KADAKKAL EDUCATIONAL TRUST (CITED SUPRA) HAS ALSO TAKEN NOTE OF THE BONAFIDE PURSUIT OF THE 6 ITA.NO.363/HYD/2015 SREEMITRA TOWNSHIPS P. LTD., HYDERABAD. APPEAL BEFORE WRONG FORUM AS A REASONABLE CAUSE FOR CONDONATION OF THE DELAY. RESPECTFULLY FOLLOWING TH E ABOVE JUDGMENTS, WE ARE INCLINED TO CONDONE THE DELAY OF 62 MONTHS 24 DAYS AND REMIT THE ISSUE TO THE FILE OF T HE LD. CIT(A) FOR RECONSIDERATION ON MERITS. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 04.03.2016 SD/- SD/- (B. RAMAKOTAIAH) (SMT. P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 04 TH MARCH, 2016 VBP/- COPY TO 1. SREEMITRA TOWNSHIPS P. LTD., 302, 3 RD FLOOR, KRISHNA PLAZA, KHAIRATABAD, HYDERABAD. 2. THE DCIT, CIRCLE 3(2), HYDERABAD. 3. CIT(A) - 3, HYDERABAD. 4. CIT - 3, HYDERABAD. 5. D.R. ITAT B BENCH, HYDERABAD 6. GUARD FILE.