Swarup Kumar Saha , Kolkata V. ITO, Ward - 50(2), Kolkata , Kolkata

ITA 366/KOL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5870 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 07-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PROVASH ROY
• Assessee Lawyers: K M ROY
• Keywords: Reasonable cause; Condonation of delay
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA SMC BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER) ITA NO. 366/KOL/2018 ASSESSMENT YEAR: 2010-11 SWARUP KUMAR SAHA......................APPELLANT 40C/1, JESSORE ROAD BARASAT KOLKATA 700 124 [PAN : ALGPS 1418 K] INCOME TAX OFFICER, WARD 50(2), KOLKATA..............RESPONDENT APPEARANCES BY: SHRI K.M. ROY, FCA, APPEARED ON BEHALF OF THE ASSESSEE. SHRI PROVASH ROY, JCIT, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JUNE 28 TH , 2018 DATE OF PRONOUNCING THE ORDER : JULY 20 TH , 2018 ORDER PER J. SUDHAKAR REDDY, AM :- THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-15, KOLKATA, (HEREINAFTER THE LD. CIT(A)), DT. 07/12/2017, PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT), RELATING TO ASSESSMENT YEAR 2010-11. 2. WE FIND THAT THE LD. CIT(A), IN THIS CASE DISMISSED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT THE DELAY OF 540 DAYS IN FILING OF THE APPEAL IS NOT EXPLAINED. THE ASSESSEE SUBMITTED THAT HE WAS NOT PROPERLY ADVISED BY THE TAX PRACTITIONER, SHRI AMAL KRISHNA MONDAL, WHO HAD RECEIVED THE ORDER. THE LD. CIT(A) WAS OF THE VIEW THAT REASON CANNOT BE CONSIDERED A REASONABLE CAUSE FOR CONDONATION OF DELAY. 3. THE LD. COUNSEL FOR THE ASSESSEE, SHRI K.M. ROY, RELIED ON NUMBER OF CASE-LAWS AND SUBMITTED THAT THE LD. CIT(A), SHOULD HAVE CONDONED THE DELAY AND ADJUDICATED THE APPEAL ON MERITS FOR REASON THAT, THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE FROM FILING OF THE APPEAL IN TIME AS THE ASSESSEE WAS NOT PROPERLY ADVISED IN THE MATTER. THE LD. D/R, RELIED ON THE ORDER OF THE LD. CIT(A). 4. AFTER HEARING RIVAL CONTENTIONS, PERUSING THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE-LAW CITED, I HOLD AS FOLLOWS:- 2 ITA NO. 366/KOL/2018 ASSESSMENT YEAR: 2010-11 SWARUP KUMAR SAHA THE B BENCH OF THE TRIBUNAL IN THE CASE OF DEVENDRA KUMAR VERMA VS. ITO-1, KASHIPUR IN ITA NO: 614/DEL/2013; AY : - 2007-08, ORDER DT. 19 TH NOVEMBER, 2014 , HELD AS FOLLOWS:- THE DELHI A BENCH OF THE ITAT IN ITA NO. 363/D/2013 IN THE CASE OF ANIL KUMAR VERMA VS. ITO ORDER DATED 29.11.2013 CONDONED THE DELAY BY OBSERVING AS FOLLOWS :- '6.2 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH SIDES AND HAVE PERUSED THE RECORD OF THE CASE. 6.3 THE CONDONATION OF DELAY DEPENDS UPON THE SUFFICIENCY OF REASONS SEEKING CONDONATION. IN THE PRESENT CASE, THE ASSESSEE IN ITS CONDONATION PETITION HAD POINTED OUT THAT IT WAS ON ACCOUNT OF LEGAL ADVICE THAT HE DID NOT PURSUE THE MATTER, ANY FURTHER, AFTER THE ASSESSMENT ORDER WAS PASSED. SUBSEQUENTLY ON THE BASIS OF LEGAL ADVICE, THE ASSESSEE FILED A PETITION U/S 154. AGAIN HE GOT A LEGAL ADVICE THAT THE APPEAL IS TO BE PREFERRED AND, THEREFORE, HE FILED THE APPEAL. 7. IN OUR OPINION, THE ASSESSEE CANNOT BE TREATED AS A LITIGANT WHO WAS NOT INTERESTED IN PURSUING THE LEGAL REMEDY AGAINST THE ASSESSMENT ORDER. IT WAS ONLY ON ACCOUNT OF WRONG LEGAL ADVICE THAT THE ASSESSEE DID NOT PURSUE THE APPEAL. FILING OF PETITION U/S 154 AND THEREAFTER APPEAL BEFORE LD. CIT(A) CLEARLY VINDICATES THE ASSESSEE'S CLAIM THAT HE WAS ACTING ON LEGAL ADVICE. THE ASSESSEE WAS A BANK EMPLOYEE AND NOT A LEGAL EXPERT TO KNOW THE NICETIES OF HIS LEGAL RIGHTS. THE HON'BLE SUPREME COURT IN THE CASE OF MST. KATTIJI & OTHRS. (SUPRA) HAS HELD AS UNDER :- 'THE LEGISLATURE HAS CONFERRED POWER TO CONDONE DELAY BY ENACTING SECTION 5 OF THE LIMITATION ACT, 196 , IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON MERITS. THE EXPRESSION 'SUFFICIENT CAUSE' IN SECTION 5 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. A JUSTIFIABLY LIBERAL APPROACH HAS TO BE ADOPTED ON PRINCIPLE. 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT IMPLY A PEDANTIC APPROACH. THE DOCTRINE MUST BE APPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC MANNER. 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. ' WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE A VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DELAY.' 7.1 IN OUR OPINION, THIS DECISION IS SQUARELY APPLICABLE IN THE PRESENT SET OF FACTS AND THE DELAY IN FILING THE APPEAL BEFORE LD. CIT(A) SHOULD HAVE BEEN CONDONED. 8. LD. DR HAS RELIED ON VARIOUS DECISIONS WHICH ARE DISCUSSED HEREUNDER : MADHU DADHA VS. ASSTT. CIT, CHENNAI. IN THIS CASE THERE WAS A DELAY OF 558 DAYS IN FILING THE APPEAL. TRIBUNAL REJECTED THE APPEAL HOLDING THAT ASSESSEE WAS NOT GIVEN SUFFICIENT REASONS FOR DELAY. IN PARA 8 & 9 THE HON'BLE MADRAS HIGH COURT HAS OBSERVED AS UNDER :- 8. 'FROM A READING OF THE ABOVE, IT IS CLEAR THAT THE APPELLANT HAS NOT EXPLAINED THE CAUSE OF DELAY IN FILING THE APPEAL, ESPECIALLY WHEN AUTHORIZED REPRESENTATIVE VIZ. REPRESENTATIVE WHO WAS GIVEN CHARGE TO FILE THE APPEAL HAD DIED EXACTLY ONE YEAR AFTER THE LAST DATE OF FILING OF THE APPEAL. WHEN THAT BE SO, IT IS PERTINENT TO POINT OUT THAT ACTUALLY THE FILING OF THE APPEAL WAS NOT DONE AND EVEN AFTER THE DEATH OF ASHOK KUMBAT, THE ASSESSEE HAD TAKEN MORE THAN SIX MONTHS IN FILING THE PRESENT APPEAL. THE ASSESSEE HAD NEITHER GIVEN ANY PARTICULAR OR DETAILS IN THE AFFIDAVIT AS ON WHICH DATE THE PAPERS WERE HANDED OVER TO THE COUNSEL FOR PREPARING THE APPEAL AND ON WHAT OCCASION THE ASSESSEE ENQUIRED ABOUT THE PROGRESS IN PREPARING THE APPEAL AND FILING THE SAME.' THUS, UNDER SUCH CIRCUMSTANCES, THE HON'BLE HIGH COURT HELD THAT THERE WAS NO SUFFICIENT REASON OR CAUSE TO INTERFERE WITH THE ORDER OF THE TRIBUNAL. THIS DECISION IS NOT AT ALL APPLICABLE IN THE PRESENT SET OFF FACTS. SHREE BALAJI WOOLLEN MILLS VS. ASSTT . CIT. IN THIS CASE THERE WAS A DELAY OF 902 DAYS. 3 ITA NO. 366/KOL/2018 ASSESSMENT YEAR: 2010-11 SWARUP KUMAR SAHA 2. 'THESE APPEALS EARLIER DISPOSED OF VIDE ORDER DATED 2.6.2011, WERE RECALLED VIDE ORDER DATED 28.9.2012 IN MA NOS. 273 & 274/D/2011. THE QUANTUM APPEAL FILED BY THE ASSESSEE IN ITA NO. 1238/D/2011 IS DELAYED BY 902 DAYS. THOUGH THE ASSESSEE MENTIONED IN GROUND NO. 3 IN THE APPEAL THAT THERE WAS REASONABLE CAUSE FOR DELAY IN FILING THE APPEAL, NOT EVEN A WHISPER HAS BEEN MADE IN THE DOCUMENTS ANNEXED WITH THE APPEAL AS TO WHAT WAS THE REASONABLE CAUSE NOR ANY APPLICATION FOR CONDONATION OF DELAY OF 902 DAYS IN FILING THE APPEAL HAS BEEN SUBMITTED EVER SINCE APPEAL WAS FILED ON 10.3.2011.NONE APPEARED BEFORE US ON BEHALF OF THE ASSESSEE EVEN WHEN DATE OF HEARING WAS SPECIFICALLY INFORMED TO THE LD. AR ON BEHALF OF THE ASSESSEE WHEN HE APPEARED ON 22.11.2012. A IS EVIDENT FROM THE AFORESAID FACTS, QUANTUM APPEAL FILED BY THE ASSESSEE WHEN HE APPEARED ON 22.11.2012. AS IS EVIDENT FROM THE AFORESAID FACTS, QUANTUM APPEAL FILED BY THE ASSESSEE IS DELAYED BY 902 DAYS WHILE NO REQUEST HAS BEEN MADE BY THE ASSESSEE FOR CONDONATION OF DELAY IN FILING THE APPEAL. IN THESE CIRCUMSTANCES, THERE BEING NO SUFFICIENT CAUSE FOR DELAY IN FILING THE APPEAL, THE APPEAL CANNOT BE ADMITTED. REGARDING 'SUFFICIENT CAUSE', IN THE CASE OF GOPAL FILMS VS. CIT (1999) 237 ITR 655 / 105 TAXMAN 364 (KAR.) IT WAS HELD BY THE HON'BLE COURT THAT 'WHENEVER A PARTY WANTS DELAY TO BE CONDONED, HE SHOULD SHOW SUFFICIENT CAUSE. IF NO CAUSE IS SHOWN AT ALL, THE ONLY CONCLUSION THAT CAN BE REACHED IS THAT THE DELAY CANNOT BE CONDONED, PARTICULARLY WHEN LACK OF BONA FIDES IS EVIDENT.' SINCE ASSESSEE DID NOT GIVE ANY REASONABLE CAUSE NOR ANY APPLICATION FOR CONDONATION OF DELAY, THEREFORE, TRIBUNAL DID NOT CONDONE THE DELAY. THIS DECISION IS ALSO NOT APPLICABLE TO THE FACTS OF THE CASE IN-AS-MUCH AS ASSESSEE ITSELF HAD TAKEN A GROUND BEFORE LD. CIT(A) FOR CONDONATION OF DELAY AND HAD FILED THE PETITION FOR CONDONATION OF DELAY AGRICULTURAL MARKET COMMITTEE VS. ADIT (EXEMPTIONS-1), HYDERABAD. IN THIS CASE THERE WAS A DELAY OF 1500 DAYS IN FILING APPEALS. THE TRIBUNAL WHILE REFUSING TO CONDONE THE DELAY, INTER-ALIA, OBSERVED AS UNDER :- 'THE DELAY CANNOT BE CONDONED SIMPLY BECAUSE THE ASSESSEE'S CASE IS HARD AND CALLS FOR SYMPATHY OR MERELY OUT OF BENEVOLENCE TO THE PARTY SEEKING RELIEF. IN GRANTING THE INDULGENCE AND CONDONING THE DELAY, IT MUST BE PROVED BEYOND THE SHADOW OF DOUBT THAT THE ASSESSEE WAS DILIGENT AND WAS NOT GUILTY OF NEGLIGENCE WHATSOEVER. THE SUFFICIENT CAUSE WITHIN THE CONTEMPLATION OF THE LIMITATION PROVISION MUST BE A CAUSE WHICH IS BEYOND THE CONTROL OF THE PARTY INVOKING THE AID OF THE PROVISIONS. THE SUPREME COURT IN THE CASE OF RAMLAL VS. REWA COALFIELDS LTD . AIR 1962 SC 361 HAS HELD THAT THE CAUSE FOR THE DELAY IN FILING THE APPEAL WHICH BY DUE CARE AND ATTENTION COULD HAVE BEEN AVOIDED, CANNOT BE A SUFFICIENT CAUSE WITHIN THE MEANING OF THE LIMITATION PROVISION. WHERE NO NEGLIGENCE, NOR INACTION, OR WANT OF BONAFIDES CAN BE IMPUTED TO THE ASSESSEE A LIBERAL CONSTRUCTION OF THE PROVISIONS HAS TO BE MADE IN ORDER TO ADVANCE SUBSTANTIAL JUSTICE. SEEKERS OF JUSTICE MUST COME WITH CLEAN HANDS. IN THE PRESENT CASE, THE REASONS ADVANCED BY THE ASSESSEE DO NOT SHOW ANY GOOD AND SUFFICIENT REASON TO CONDONE THE DELAYS. THE DELAYS ARE NOT PROPERLY EXPLAINED BY THE ASSESSEE. THERE IS NO REASON FOR CONDONING SUCH DELAYS FOR THE ASSESSMENT YEARS UNDER CONSIDERATION. THE DELAY IS NOTHING BUT NEGLIGENCE AND INACTION OF THE ASSESSEEE WHICH COULD HAVE BEEN VERY WELL AVOIDED BY THE EXERCISE OF DUE CARE AND ATTENTION. THERE EXISTS NO SUFFICIENT OR GOOD REASON FOR CONDONING INORDINATE DELAYS OF MORE THAN 1500 DAYS FOR THE YEARS UNDER CONSIDERATION (PARA 6)'. THIS DECISION ALSO IS OF NO ASSISTANCE TO REVENUE BECAUSE HERE ALSO THE ASSESSEE WAS FOUND TO BE NEGLIGENT AND FAILED TO PROVE THAT HE WAS DILIGENT AND WAS NOT GUILTY OF NEGLIGENCE WHATSOEVER. IN THE PRESENT CASE, HOWEVER, AS NOTED EARLIER, ASSESSEE HAD POINTED OUT THAT ON ACCOUNT OF WRONG LEGAL ADVICE IT DID NOT FILE APPEAL BEFORE LD. CIT(A). THE ASSESSEE'S ACTION OF FILING 154 PETITIONS BEFORE AO INDICATES ASSESSEE'S PLEA THAT HE WAS NOT NEGLIGENT. 9. IN VIEW OF ABOVE DISCUSSION, WE CONDONE THE DELAY IN FILING THE APPEAL BEFORE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE FOR DECIDING THE APPEAL DENOVO ON MERITS.' 4.1. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VIJAY VISHIN MEGHANI VS. THE DEPUTY COMMISSIONER OF INCOME TAX BEING I. T. APPEAL NOS. 493 & 508 OF 2015, JUDGMENT DT. 19 TH SEPTEMBER, 2017, AT PARA 21 & 22 HELD AS FOLLOWS:- 21. WE FIND FROM PARAGRAPH 13 OF THE ORDER, BUT FOR THIS RELEVANT FACTORS AND TESTS, EVERYTHING ELSE HAS BEEN BROUGHT INTO THE ADJUDICATION BY THE TRIBUNAL. THE TRIBUNAL THOUGH AWARE OF THESE PRINCIPLES BUT POSSIBLY CARRIED AWAY BY THE FACT THAT THE DELAY OF 2984 DAYS IS INCAPABLE OF CONDONATION. THAT IS NOT HOW A MATTER OF 4 ITA NO. 366/KOL/2018 ASSESSMENT YEAR: 2010-11 SWARUP KUMAR SAHA THIS NATURE SHOULD BE APPROACHED. IN THE PROCESS THE TRIBUNAL WENT ABOUT BLAMING THE ASSESSEE AND THE PROFESSIONALS AND EQUALLY THE DEPARTMENT. TO OUR MIND, THEREFORE, THE TRIBUNAL'S ORDER DOES NOT MEET THE REQUIREMENT SET OUT IN LAW. THE TRIBUNAL HAS COMPLETELY MISDIRECTED ITSELF AND HAS TAKEN INTO ACCOUNT FACTORS, TESTS AND CONSIDERATIONS WHICH HAVE NO BEARING OR NEXUS WITH THE ISSUE AT HAND. THE TRIBUNAL, THEREFORE, HAS ERRED IN LAW AND ON FACTS IN REFUSING TO CONDONE THE DELAY. THE EXPLANATION PLACED ON AFFIDAVIT WAS NOT CONTESTED NOR WE FIND THAT FROM SUCH EXPLANATION CAN WE ARRIVE AT THE CONCLUSION THAT THE ASSESSEE WAS AT FAULT, HE INTENTIONALLY AND DELIBERATELY DELAYED THE MATTER AND HAS NO BONA FIDE OR REASONABLE EXPLANATION FOR THE DELAY IN FILING THE PROCEEDINGS. THE POSITION IS QUITE OTHERWISE. 22. IN THE LIGHT OF THE ABOVE DISCUSSION, WE ALLOW BOTH THE APPEALS. WE CONDONE THE DELAY OF 2984 DAYS IN FILING THE APPEALS BUT ON THE CONDITION OF PAYMENT OF COSTS, QUANTIFIED TOTALLY AT RS.50,000/. MEANING THEREBY, RS.25,000/ PLUS RS.25,000/ IN BOTH APPEALS. THE COSTS TO BE PAID IN ONE SET TO THE RESPONDENTS WITHIN A PERIOD OF EIGHT WEEKS FROM TODAY. ON PROOF OF PAYMENT OF COSTS, THE TRIBUNAL SHALL RESTORE THE APPEALS OF THE ASSESSEE TO ITS FILE FOR ADJUDICATION AND DISPOSAL ON MERITS. WE CLARIFY THAT ALL CONTENTIONS AS FAR AS MERITS OF THE CLAIM ARE KEPT OPEN. WE HAVE NOT EXPRESSED ANY OPINION ON THE SAME. 5. APPLYING THE PROPOSITIONS OF LAW LAID DOWN IN THESE CASE-LAW TO THE FACTS OF THE CASE ON HAND, WE ARE CONVINCED THAT THE ASSESSEE HAS BEEN PREVENTED BY SUFFICIENT CAUSE FROM FILING OF THIS APPEAL IN TIME. BOTH THE ASSESSEE AND THE TAX CONSULTANT HAVE FILED AFFIDAVITS GIVING THE FACTS. HENCE, WE CONDONE THE DELAY IN FILING OF THE APPEAL BEFORE THE LD. CIT(A). WHILE DOING SO IN TERMS OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VIJAY VISHIN MEGHANI VS. THE DEPUTY COMMISSIONER OF INCOME TAX (SUPRA) , WE DIRECT THE ASSESSEE TO PAY COSTS OF RS.10,000/- TO THE REVENUE. WE RESTORE THIS MATTER TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION ON MERITS AS HE HAS NOT ADJUDICATED THE ISSUE ON MERITS. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. KOLKATA, THE 20 TH DAY OF JULY, 2018. SD/- [ J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER DATED : 20.07.2018 {SC SPS} 5 ITA NO. 366/KOL/2018 ASSESSMENT YEAR: 2010-11 SWARUP KUMAR SAHA COPY OF THE ORDER FORWARDED TO: 1. SWARUP KUMAR SAHA 40C/1, JESSORE ROAD BARASAT KOLKATA 700 124 2. INCOME TAX OFFICER, WARD 50(2), KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES