S.M Overseas, Karnal, V. JCIT, Spl Range,

ITA 371/DEL/2002

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2094 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 10-11-2009
• Assessment Year: 1997-1998
• Appeal Filed On: 11-02-2002
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P C GUPTA
• Assessee Lawyers: SSH SALIL AGGARWAL; R PRA TAP MALL ADVS
• Keywords: Condonation of delay
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI DEEPAK R. SHAH AND SHRI RAJPAL YADAV I.T.A. NO. 371/DEL/2002 ASSESSMENT YEAR: 1997-98 M/S. S.M. OVERSEAS, VS. JOINT COMMISSIONER OF IT, MULTIROD HOUSE, KUNJPURA ROAD, SPECIAL RANGE, KARNAL. KARNAL. (APPELLANT) (RESPONDENT) APPELLANT BY: S/SH SALIL AGGARWAL & R. PRA TAP MALL, ADVS. RESPONDENT BY: SHRI PC GUPTA, SR. DR ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS) DATED 07.12.2001 PASSED FOR ASSESSMENT YEAR 1997-98. 2. IN GROUND NO.3, ASSESSEE HAS PLEADED THAT LEARNE D CIT(APPEALS) HAS ERRED IN NOT CONDONING THE DELAY IN FILING THE APPE AL BEFORE THE LEARNED APPELLATE AUTHORITY AND THEREBY DISMISSING THE APPE AL BEING TIME BARRED. THE APPEAL OF THE ASSESSEE WAS DECIDED BY THE ITAT VIDE ORDER DATED 23.6.2005. THE ITAT WHILE DECIDING THE APPEAL DID NOT ADJUDICA TE GROUND NO.3 RATHER ADJUDICATED THE ISSUE ON MERIT. THE ASSESSEE FILED A MISCELLANEOUS APPLICATION BEARING NO.727/DEL/06 POINTING OUT AN A PPARENT ERROR IN THE ORDER OF THE ITAT WHEREBY IT FAILED TO DISPOSE OF G ROUND NO.3 RAISED BY THE ASSESSEE. THE ITAT VIDE ITS ORDER DATED 25 TH SEPTEMBER, 2009 RECALLED ITS 2 ORDER FOR A LIMITED PURPOSE I.E. TO ADJUDICATE THE DISPUTE RAISED BY THE ASSESSEE IN GROUND NO.3. IN THE ABOVE BACKGROUND, N OW WE PROCEED TO DECIDE GROUND NO.3 OF THE ASSESSEES APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA S FILED ITS RETURN OF INCOME ON 29.1.1999. ASSESSING OFFICER HAD CHARGED INTEREST UNDER SEC. 234- B AND 234-C OF THE INCOME-TAX ACT, 1961 AMOUNTING T O RS.4,28,696 AND RS.2,02,663 RESPECTIVELY. THE ASSESSEE FILED AN APP LICATION UNDER SEC. 154 OF THE ACT FOR RECTIFICATION OF THE ORDER WHEREBY IT D ISPUTED THE CHARGING OF INTEREST UNDER SEC. 234-B AND C OF THE ACT. AGGRIEV ED WITH THIS ORDER, ASSESSEE FILED AN APPEAL ON 22.6.1999. THE APPEAL W AS DISMISSED BY THE LEARNED CIT(APPEALS) ON IST SEPTEMBER, 2000. MEANWH ILE AN ASSESSMENT UNDER SEC.143(3) OF THE ACT WAS MADE ON 16.11.1999. ACCORDING TO THE ASSESSEE, IT WAS SERVED UPON ASSESSEE ON 12.1.2000 WHEREAS ACCORDING TO THE LEARNED CIT(APPEALS) IT WAS SERVED ON ASSESSEE ON 3 .12.1999. THE ASSESSEE HAS FILED AN APPEAL AGAINST THIS ORDER PASSED UNDER SEC.143(3), ON 30 TH NOVEMBER, 2000. THERE WAS A DELAY OF ROUGHLY 10 MON THS IN FILING THE APPEAL BEFORE THE LEARNED CIT(APPEALS). THE ASSESSE E HAD FILED AN APPLICATION FOR CONDONATION OF DELAY AND IN SUPPORT OF THE APPLICATION IT HAS FILED AFFIDAVIT OF ITS ADVOCATE SHRI JK JAIN, WHO H AS DEPOSED THAT APPEAL 3 PAPERS WERE HANDED OVER TO HIM WITHIN TIME LIMIT. D UE TO CERTAIN UNAVOIDABLE CIRCUMSTANCES, HE FORGET TO FILE THE AP PEAL AND KEPT THE DOCUMENT IN THE DRAWER. AFTER A LONG TIME WHEN ASSE SSEE INQUIRED ABOUT THE STATUS OF ITS APPEAL IT WAS FOUND THAT PAPERS OF TH E ASSESSEES APPEAL WERE ENTANGLED WITH SOME OTHER FILE AND APPEAL COULD NOT BE FILED. IMMEDIATELY HE FILED THE APPEAL. 4. THE LEARNED CIT(APPEALS) REJECTED THE CONTENTION OF ASSESSEE FOR TWO REASONS. FIRSTLY, HE RECORDED A FINDING THAT THE IS SUE DISPUTED IN RECTIFICATION APPLICATION MOVED UNDER SEC. 154 OF THE ACT BEFORE THE ASSESSING OFFICER WAS THE SUBJECT MATTER OF THIS APPEAL ALSO. LEARNED FIRST APPELLATE AUTHORITY HAS AN APPREHENSION OF ASSESSEES NEGLIGENCE FOR TH E REASON THAT IT MUST HAVE THOUGHT THAT PROCEEDINGS OF SEC. 154 WOULD TAKE CAR E OF THIS ISSUE AND, THEREFORE, IT NEED NOT TO CHALLENGE THE ORDER PASSE D UNDER SEC.143(3) OF THE ACT. THE APPEAL AGAINST THE ORDER OF ASSESSING OFFI CER PASSED UNDER SEC. 154 WAS DECIDED ON IST OF SEPTEMBER 2000. ONLY THEREAFT ER ASSESSEE FELT THE NECESSITY TO CHALLENGE THE ASSESSMENT ORDER DATED 1 6.11.1999 IN THE APPEAL. THE NEXT REASON POINTED OUT BY THE LEARNED CIT(APPE ALS) IS THAT AFFIDAVIT FILED BY THE LEARNED COUNSEL FOR THE ASSESSEE IS A SELF-SERVING DOCUMENT AND IT CANNOT BE RELIED UPON. SHRI JK JAIN HAS BEEN REPRES ENTING THE ASSESSEE 4 THROUGHOUT THE ASSESSMENT PROCEEDING. HE HAS ALSO R EPRESENTED THE ASSESSEE COMPANY IN THE APPELLATE PROCEEDINGS- ALSO. IN THE OPINION OF THE LEARNED CIT(APPEALS), HAD THIS GENTLEMAN COMMITTED SUCH A B LUNDER OF FORGETTING TO FILE THE APPEAL AS CLAIMED BY THE ASSESSEE THEN HE WOULD HAVE NOT BEEN ALLOWED TO CONTINUE TO LOOK AFTER THE SAME JOB BY T HE ASSESSEE. 5. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE IMPU GNING THE ORDER OF THE LEARNED CIT(APPEALS) REITERATED HIS CONTENTION AS W ERE RAISED BEFORE THE LEARNED FIRST APPELLATE AUTHORITY. HE CONTENDED THA T THERE IS NO OCCASION FOR SHRI JK JAIN, ADVOCATE TO FILE A FALSE AFFIDAVI T. ON THE OTHER HAND, LEARNED DR RELIED UPON THE ORDER OF THE LEARNED CIT (APPEALS) AND POINTED OUT THAT IT IS NOT A DELAY OF 2-3 DAYS RATHER IT IS A SUBSTANTIAL DELAY OF MORE THAN NINE MONTHS. THE ASSESSEE IS UNABLE TO EXPLAIN THE DELAY WITH SUFFICIENT MATERIAL AND, THEREFORE, LEARNED CIT(APPEALS) HAS R IGHTLY REJECTED THE CONTENTIONS OF THE ASSESSEE. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. THE CO URTS AND THE QUASI- JUDICIAL BODIES ARE EMPOWERED TO CONDONE THE DELAY IF A LITIGANT SATISFIES THE COURT THAT THERE WERE SUFFICIENT REASONS FOR AVAILI NG THE REMEDY AFTER EXPIRY OF THE LIMITATION. SUCH REASONING SHOULD BE TO THE SATISFACTION OF THE COURT. THE EXPRESSION SUFFICIENT CAUSE OR REASON AS PROV IDED IN SUB-S(5) OF 5 SEC.253 SUB-SECTION (3) OF SEC. 249 OF THE IT ACT I S USED IN IDENTICAL POSITION IN OTHER SECTIONS OF THE IT ACT SUCH AS SS.274, 273 , ETC. THE EXPRESSION SUFFICIENT CAUSE WITHIN THE MEANING OF SEC.5 OF T HE LIMITATION ACT AS WELL AS SIMILAR OTHER PROVISIONS, THE AMBIT OF EXERCISE OF POWERS THEREUNDER HAVE BEEN SUBJECT MATTER OF CONSIDERATION BEFORE THE HON 'BLE SUPREME COURT ON VARIOUS OCCASIONS. IN THE CASE OF STATE OF WEST BEN GAL VS. THE ADMINISTRATOR, HOWRAH MUNICIPALITY AIR 1972 S.C. 74 9 THE HON'BLE SUPREME COURT WHILE CONSIDERING THE SCOPE OF EXPRES SION SUFFICIENT CAUSE FOR CONDONATION OF DELAY HAS HELD THAT THE SAID EXP RESSION SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE THE SUBSTANTI AL JUSTICE WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE IS IMPU TABLE TO PARTY. 7. IN THE CASE OF N. BALAKRISHNAN VS. M. KRISHNAMUR THY, AIR 1998 S.C. 3222, THERE WAS A DELAY OF 883 DAYS IN FILING AN AP PLICATION FOR SETTING ASIDE THE EX PARTE DECREE FOR WHICH APPLICATION FOR CONDO NATION OF DELAY WAS FILED. THE TRIAL COURT HAVING FOUND THAT SUFFICIENT CAUSE WAS MADE OUT FOR CONDONATION OF DELAY CONDONED THE DELAY. HOWEVER, T HE HON'BLE HIGH COURT REVERSED THE ORDER OF THE TRIAL COURT. HON'BLE SUPR EME COURT WHILE RESTORING THE ORDER OF THE TRIAL COURT HAS OBSERVED IN PARAS 8, 9 AND 10 AS UNDER: 9. THE APPELLANTS CONDUCT DOES NOT ON THE WHOLE W ARRANT TO CASTIGATE HIM AS AN IRRESPONSIBLE LITIGANT. WHAT HE DID IN DEFENDING THE 6 SUIT WAS NOT VERY MUCH FAR FROM WHAT A LITIGANT WOU LD BROADLY DO. OF COURSE, IT MAY BE SAID THAT HE SHOULD HAVE BEEN MOR E VIGILANT BY VISITING HIS ADVOCATE AT SHORT INTERVALS TO CHECK U P THE PROGRESS OF THE LITIGATION. BUT DURING THESE DAYS WHEN EVERYBODY IS FULLY OCCUPIED WITH HIS OWN AVOCATION OF LIFE AN OMISSION TO ADOPT SUCH EXTRA VIGILANCE NEED NOT BE USED AS GROUND TO DEPICT HIM AS A LITIGANT NOT AWARE OF HIS RESPONSIBILITIES, AND TO VISIT HIM WIT H DRASTIC CONSEQUENCES. 9. IT IS AXIOMATIC THAT CONDONATION OF DELAY IS A M ATTER OF DISCRETION OF THE COURT. SEC.5 OF THE LIMITATION AC T DOES NOT SAY THAT SUCH DISCRETION CAN BE EXERCISED ONLY IF THE DELAY IS WITHIN A CERTAIN LIMIT. LENGTH OF DELAY IS NO MATTER, ACCEPTABILITY OF THE EXPLANATION IS THE ONLY CRITERION. SOMETIMES DELAY OF THE SHORTEST RANGE MAY BE UNCONDONABLE DUE TO A WANT OF ACCEPTABLE EXPLANATIO N WHEREAS IN CERTAIN OTHER CASES, DELAY OF A VERY LONG RANGE CAN BE CONDONED AS THE EXPLANATION THEREOF IS SATISFACTORY. ONCE THE COURT ACCEPTS THE EXPLANATION AS SUFFICIENT, IT IS THE RESULT OF POSI TIVE EXERCISE OF DISCRETION AND NORMALLY THE SUPERIOR COURT SHOULD N OT DISTURB SUCH FINDING, MUCH LESS IN REVISIONAL JURISDICTION, UNLE SS THE EXERCISE OF DISCRETION WAS ON WHOLLY UNTENABLE GROUNDS OR ARBIT RARY OR PERVERSE. BUT IT IS A DIFFERENT MATTER WHEN THE FIRST COURT R EFUSES TO CONDONE THE DELAY. IN SUCH CASES, THE SUPERIOR COURT WOULD BE F REE TO CONSIDER THE CAUSE SHOWN FOR THE DELAY AFRESH AND IN ITS OWN FIN DING EVEN UNTRAMMELED BY THE CONCLUSION OF THE LOWER COURT. 10. 7 THE PRIMARY FUNCTION OF A COURT IS TO ADJUDICATE TH E DISPUTE BETWEEN THE PARTIES AND TO ADVANCE SUBSTANTIAL JUSTICE. THE TIME-LIMIT FIXED FOR APPROACHING THE COURT IN DIFFERENT SITUATIONS IS NO T BECAUSE ON THE EXPIRY OF SUCH TIME A BAD CAUSE WOULD TRANSFORM INT O A GOOD CAUSE. (EMPHASIS, ITALICIZED IN PRINT, ADDED) THE HON'BLE SUPREME COURT FURTHER OBSERVED THAT RUL ES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHTS OF THE PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS, BUT SEEK THE REMEDY PROMPTLY. THE HONBLE COURT FURTHER OBSERVED THAT R EFUSAL TO CONDONE THE DELAY WOULD RESULT IN FORECLOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PRESUMPTION THAT DELAY IN APPROA CHING THE COURT IS ALWAYS DELIBERATE. THE HON'BLE SUPREME COURT IN SLP (CIVIL NO. 12980 OF 1986, DECIDED ON 19 TH FEB., 1987, IN THE CASE OF COLLECTOR, LAND ACQUISITION & ORS. VS. MST. KATIJI & ORS. [REP ORTED AT (1987) 62 CTR (SYN) 23 (S.C) HAS LAID DOWN THE FOLLOWING GUID ELINES: 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSAL TO CONDONE DELAY CAN RESULT IN A MERITORIOU S MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDO NED THE HIGHEST THEN CAN HAPPEN IS THAT A CAUSE WOULD BE DE CIDED ON MERITS AFTER HEARING THE PARTIES. 3. EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE MADE, WHY NOT EVERY HOU RS DELAY, 8 EVERY SECONDS DELAY. THE DOCTRINE MUST BE APPLIED ON A RATIONAL COMMONSENSE PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIO NS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DE SERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON-DELIBER4ATE D ELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DE LIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESO RTING TO DELAY. IN FACT HE RUNS A SERIOUS RISK. 6. IT MUST BE GRASPED THAT JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUND S BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO SO. MAKING A JUSTICE-ORIENTED APPROACH FROM THIS PERSPE CTIVE; THERE WAS SUFFICIENT CAUSE FOR CONDONING THE DELAY IN THE INS TITUTION OF THE APPEAL. THE FACT THAT IT WAS THE STATE WHICH WAS SEEKING CONDONATION AND NOT A PRIVATE PARTY WAS ALTOGETHER IRRELEVANT. 8. KEEPING IN MIND THE ABOVE AUTHORITATIVE PRONOUNC EMENT OF THE HON'BLE SUPREME COURT, IF WE ADVERT TO THE FACTS OF THE PRESENT CASE THEN IT WOULD REVEAL THAT EXPLANATION OF THE ASSESSEE DOES NOT SMACK BONA FIDE OR DOES NOT PUT FORTH AS A DIATATORY STRATEGY. IT MUST BE REMEMBERED THAT IN EVERY CASE OF DELAY THERE CAN BE SOME LAPSE ON THE PART OF THE LITIGANT CONCERNED BUT THAT ALONE IS NOT ENOUGH TO TURN DOWN THE PLEA AND TO SHUT THE 9 DOOR AGAINST THE ASSESSEE. AS OBSERVED BY THE HON'B LE SUPREME COURT IN THE CASE OF N. BALAKRISHAN (SUPRA), THE LENGTH OF DELAY IS IMMATERIAL, IT IS ACCEPTABILITY OF THE EXPLANATION I.E. THE ONLY CRIT ERIA FOR CONDONING THE DELAY. THE DOUBT RAISED BY THE LEARNED CIT(APPEALS) ON THE AFFIDAVIT OF THE COUNSEL TO OUR MIND IS MISPLACED. NO COUNSEL WOULD LIKE TO GIVE SUCH AFFIDAVIT PUTTING HIMSELF AT THE RISK OF EXPOSING TO DISCIPLI NARY ACTION UNDER THE ADVOCATES ACT ON THE COMPLAINT OF LITIGANT. SUCH A FFIDAVIT MUST HAVE BEEN FILED IN ACCORDANCE TO THE REAL CIRCUMSTANCE AND TH AT MAY BE THE REASON THAT FAITH OF ASSESSEE CONTINUED IN HIM. IF THE ASSESSEE HAS NOT TAKEN ANY ACTION THAT DOES NOT MEAN THAT AFFIDAVIT IS FALSE ONE. THE OTHER REASON ASSIGNED BY THE LEARNED CIT(APPEALS) IS CONCERNED THAT IS NOT T HE PLEA RAISED BY THE ASSESSEE FOR EXPLAINING THE DELAY BUT IT IS THE DIS COVERY OF REASON AT THE END OF LEARNED CIT(APPEALS) ONLY. WITHOUT PREJUDICE TO THE EXPLANATION OF THE ASSESSEE, EVEN IF FOR THE SAKE OF ARGUMENT FOR A MO MENT, WE CONSIDER THAT IT OPERATED IN THE MIND OF THE ASSESSEE THAT PROCEEDIN G OF SEC. 154 WOULD TAKE CARE THE ISSUE AND IT DOES NOT REQUIRE TO RE-AGITAT ED IF IN THE APPEAL AGAINST ORDER UNDER SEC.143(3), THUS MADE IT NEGLIGENT IN P ROSECUTING THIS PROCEEDING IS CONCERNED, IN OUR OPINION, IT IS ONE MORE REASON EVEN TO CONDONE THE DELAY BECAUSE COMPLEXITY OF THE PROCEDURAL ASPECT SOME TI ME CONFUSED THE LITIGANT 10 AND HE COULD FEEL REAL HARDSHIP ONLY WHEN CERTAIN P ROCEEDINGS ATTAIN FINALITY. HON'BLE SUPREME COURT IN THE CASE OF NAND KISHORE V . STATE OF PUNJAB (1985) VOL.VI SCC PAGE 614 HAS CONDONED A DELAY OF 31 YEARS ON PROCEDURAL ASPECT. TAKING INTO CONSIDERATION ALL TH ESE ASPECTS, WE ALLOW THE GROUND OF APPEAL RAISED BY THE ASSESSEE AND CONDONE THE DELAY IN FILING THE APPEAL BEFORE THE LEARNED CIT(APPEALS). 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON .12 .2009 ( DEEPAK R. SHAH ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: /12/2009 MOHAN LAL COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR:ITAT ASSISTANT REGISTRAR