M/s. S.B.Beverages, Cuttack V. ITO, Ward-2(1), Cuttack, Cuttack

ITA 372/CTK/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86433 (ITAT-CUTTACK)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 24-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SASWAT ACHARYA
• Keywords: Principle of natural justice; Reasonable cause; Condonation of delay
• Section: 143(3); 142(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK BEFORE SHRI P. K. BABNSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 372 / CTK /2014 (ASST. YEAR : 200 9 - 1 0 ) M/S. S.B. BEVERAGES, VIDYA SARANI, MAHATAB ROAD, CUTTACK . VS. ITO , WARD - 2(1), CUTTACK . PAN NO. AAWFS 9648 G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SASWAT ACHARYA AR. DEPARTMENT BY : SHRI ANIL SHARMA - D.R. DATE OF HEARING : 06 / 0 2 /2015 . DATE OF PRONOUNCEMENT : 0 4 / 0 3 /201 5 . O R D E R PER D.T. GARASIA , J .M THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT (A), BERHAMPUR DATED 0 2/0 7 /201 4 FOR THE A.Y. 2009 - 10 . 2. THE FOLLOWING GROUNDS ARE RAISED IN THE APPEAL : 1) FOR THAT THE SUMMARY REJECTION ORDER PASSED BY THE LD. CIT(A), WITHOUT ADMITTING THE APPEAL IS BEREFT OF ANY MERIT AND AS SUCH LIABLE TO BE QUASHED IN LIMINE. 2 2) FOR THAT WHILE PASSING THE DISMISSAL ORDER, THE LD. CIT(A) HAS NOT HEARD THE APPELLANT E ITHER IN PERSON OR THROUGH ANY AUTHORIZED REPRESENTATIVE IN GROSS VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. 3) FOR THAT IT IS SETTLED LAW FORMULATED BY THE HON'BLE APEX COURT THAT 'THE PRIMARY FUNCTION OF A COURT IS TO ADJUDICATE THE DISPUTE BETWEEN THE PARTIES AND TO ADVANCE SUBSTANTIAL JUSTICE. THE TIME - LIMIT FIXED FOR APPROACHING THE COURT IN DIFFERENT SITUATIONS IS NOT BECAUSE ON THE EXPIRY OF SUCH TIME A BAD CAUSE WOULD TRANSFORM INFO A GOOD CAUSE. RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RI GHTS OF PARRIES. THEY ARE MEANT TO SEE THAT PARTIES DO N OT RESORT TO DILATORY TACTICS, B U T SEE K THEIR REMEDY FOR THE REDRESS OF THE LEGAL INJURY SO SUFFERED. THE LAW OF L IMITATION IS T HUS FOUNDED ON PUB LI C POLICY'. 4) FOR THAT JUDICIARY IS RESPECTED FOR ADMINISTERING THE JUSTICE IN DISPOSING THE A PP EAL IN A MERITORIOUS MANNER RATHER THAN DISMISSING THE SA ME ON MERE TECHNICALITIES. IF THE REFUSAL TO CONDONE THE DELAY RESULTS IN GRAVE MISCARRIAGE OF JUSTICE, IT WOULD BE A G R OUN D TO CONDONE THE D ELAY. 5) FOR THAT DISMISSAL ORDER OF THE FORUM BELOW IS AGAINST THE DECISION OF THE JURISDICTIONAL HIGH COURT INCLUDING THAT OF THE HON'BLE APEX COURT AND AS SUCH THE REJECTION ORDER IS LIABLE TO BE RECALLED AND THE MATTER REQUIRES ITS DISPOSAL ON MERIT AFTER HEARI NG THE COUNSEL BY THE LD. CIT(A). 6) FOR THAT THE LD. C1T(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.46,0007 - MADE BY THE LD. AO ON ACCOUNT OF SALARY TO STAFF WHICH HAVE BEEN PAID TO CASUAL IN VOUCHERS FOR LIFTING MATERIALS FROM OSBC TO THE GOD OWN OF THE APPELLANT. 7) FOR THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF 10% CARRIAGE INWARD. 8) FOR THAT THE LD.CIT(A) IS NOT JUSTIFIED IN DISALLOWING TCS TO THE TUNE OF RS.3,00,967/ - STANDING IN THE NAMES OF THE PARTNER BUT ON THE OTHER HAND, HE HAS TAKEN THE CORRESPONDING GROSS RECEIPTS AS INCOME OF THE FIRM. 9) FOR THAT THE APPELLANT CRAVES LEAVE TO SUBMIT FURTHER GROUNDS OF APPEAL, OR AMEND THE PRESENT GROUNDS, A T THE TIME OF HEARING . 3 3. SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM DERIVES INCOME FROM BUSINESS IN INDIAN MADE FOREIGN LIQUOR . DURING THE YEAR UNDER CONSIDERATION , THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 03/10/2009. IN THIS CASE, ASSESSEE WAS ISSUED NOTICE U/S. 14 3( 2 ) & 142(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT', FOR SHORT) . THE ASSESSEE DID NOT COMPLY WITH THE SAME, THEREFORE THE ASSESSING OFFICER HAS PASSED THE ORDER U/S. 143(3) /144 OF THE ACT ON A TOTAL INCOME OF RS. 3,04,360/ - . THE ASSESSEE WAS ISSUED WITH A DEMAND NOTICE ON 01/12/2011. APPEAL SHOULD HAVE BEEN FILED BY THE ASSESSEE ON 31/ 1 2/201 1 WHERE I N THE SAME WAS FILED ON 10/05/2012 WITH DELAY OF MORE THAN 04 MONTHS. THE LD. CIT(A) DID NOT CONDONE THE DELAY AND THE APPEAL WAS DISMISSED AS NOT ADMITTED . 4 . DURING THE COURSE OF HEARING , LEARNED AR SUBMITTED THAT THE ASSESSEE IS IN BUSINESS OF INDIAN MADE FOREIGN LIQUOR. THE ASSESSEE HAD RECEIVED THE ASSESSMENT ORDER ON 01/04/2011, THE APPEAL SHOULD HAVE BEEN FILED WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF THE SAID ORDER THAT WAS EXPIRED ON 30/12/2 011. THE MANAGING PARTNER SHRI SATYAJIT MOHANTY, AFTER RECEIPT OF THE ASSESSMENT ORDER HANDED OVER TO ONE OF HIS STAFF MEMBER FOR APPROACH THE TAX CONSULTANT TO FILE THE APPEAL. THE STAFF CONCERNED SIMPLY FORGOTTEN THE MATTER AND COULD COME TO KNOW OF THE FACT WHEN THE ASSESSING OFFICER REM INDED TELEPHONICALLY TO 4 PAY THE TAX. AFTER THAT, ASSESSEE HAS SEARCHED OUT THE FILE AND DUE TO THIS REASON THERE WAS DELAY OF 131 DAYS BEHIND THE SCHEDULE DATE. THEREFORE , ASSESSEE HAS PRAYED FOR CONDONATION OF DELAY AND APPEAL SHOULD BE DECIDED ON MERIT. 5. ON THE OTHER HAND, LEARNED DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 6. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD . W E FIND THAT THE ASSESSEE SHOULD HAVE FILED THE APPEAL WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF THE ORDER , BUT HE COULD NOT FILE THE APPEAL ON THE GROUND THAT AFTER RECEIPT OF THE ASSESSMENT ORDER, THE CASE WAS HANDED OVER TO ONE OF HIS STAFF SRI AMIYA KUMA R MOHANTY TO APPROACH THE TAX CONSULTANT TO FILE THE APPEAL. THE STAFF CONCERNED SIMPLY FORGOTTEN TO FILE THE APPEAL. WHEN THE ASSESSING OFFICER HAS INFORMED TELEPHONICALLY TO PAY THE TAX, THE ASSESSEE FIRM HAS DISCOVERED THE CONCERNED FILE. THEREAFTER, APPEAL WAS FILED BEFORE THE LD. CIT(A) BY DELAY OF 131 DAYS , WHICH WAS DISMISSED ON THE GROUND OF DELAY . WE FIND THAT THE ASSESSEE HAD REASONABLE CAUSE FOR NOT FILING THE APPEAL IN TIME , THEREFORE WE CONDONE THE DELAY AND DIRECT THE LD. CIT(A) TO DECIDE THE APPEAL ON MERIT. T HE HONBLE SUPREME COURT IN THE CASE OF N. BALAKRISHNAN VS. 5 KRISHNAMURTHY REPORTED IN (1998) 7 SCC 123 HELD THAT THE PRIMARY FUNCTION OF A COURT IS TO ADJUDICATE THE DISPUTE BETWEEN THE PARTIES AND TO ADVANCE SUBSTANTIAL JU STICE . THE RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHTS OF THE PARTIES BUT TO SEE THAT THE PARTIES DO NOT RESORT TO DILATORY TACTICS AND SEEK REMEDY FOR REDRESSAL OF THEIR LEGAL IN J URY. THE COURT FURTHER HELD THAT THE TIME LIMIT FIXED FOR APPROACHING THE COURT IN DIFFERENT SITUATIONS IS NOT TO ALLOW, ON THE EXPIRY OF SUCH TIME , A BAD CAUSE TO TRANSFORM INTO A GOOD ONE . THUS, IT WAS LAID DOWN THAT THE LAW OF LIMITATION WAS FOUNDED WAS F OUNDED ON PUBLIC POLICY . WE FIND THAT WHEN THE SUBSTANTIAL JUSTIC E AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, THE FORMER SHOULD BE GIVEN A PREFERENCE OVER THE LATTER . WE FIND THAT DELAY IN FILING THIS APPEAL WAS NOT MALAFIDE AS THE ASSESSEE HAD REASONABLE CAUSE FOR DELAY IN FILING THE APPEAL . T HEREFORE , WE CONDONE THE DELAY AND DIRECT THE LD. CIT(A) TO DECIDE THE APPEAL ON MERIT. 7. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. ( ORDER PRONOUNCED IN PURSUANCE OF RULE 34(4) OF ITAT RULES, 1963 BY PUTTING ON NOTICE BOARD OF THE BENCH AT CUTTACK S D / - S D / - (P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 0 4 / 0 3 / 201 5 . VR/ - 6 COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE LD. CIT 4 . THE CIT(A) 5 . THE D.R 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., CUTTACK.