Rajeev Arora, Agra V. Addl. C.I.T., Range-I, Agra

ITA 414/AGR/2010

• Counselvise Citation: 41420314 RSA 2010
• Duration Of Justice: 1 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-05-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 04-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUHAIL AKHTAR
• Assessee Lawyers: TARUN KANT
• Keywords: Business expenditure; Period of limitation; Condonation of delay
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 414/AGRA/2010 ASSTT. YEAR : 2007-08 RAJEEV ARORA, VS. ADDL. C.I.T., PROP. ARORA CARPETS, RANGE-I, AGRA. OPP. TRIDENT HOTEL, FATEHABAD ROAD, AGRA. (PAN : ACYPA 0585 A) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TARUN KANT, ADVOCATE. RESPONDENT BY : SHRI SUHAIL AKHTAR, JR. D.R. DATE OF HEARING : 17.05.2012 DATE OF PRONOUNCEMENT OF ORDER : 25.05.2012 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-I, AGRA DATED 30.03.2010 FOR THE ASSESSMENT YEAR 2007- 08, CHALLENGING THE ADDITION OF RS.3,00,000/- ON ACCOUNT OF ESTIMATE OF PROFIT A ND DISALLOWANCE OF EXPENSES OF RS.1,00,000/- OUT OF GENERATOR / COMMISSION EXPENSE S. 2. BRIEFLY, THE FACTS OF THE CASE ARE HAT THE ASSES SEE FILED RETURN OF INCOME AT RS.54,98,630/- AND ASSESSMENT U/S. 143(3) WAS PASSE D. THE AO MADE ADDITION OF RS.9,02,590/- ON ACCOUNT OF NON-BUSINESS EXPENDITUR E. FURTHER ADDITION WAS MADE ITA NO. 414/AGRA/2010 2 OF RS.1,56,400/- BEING 10% DISALLOWANCE MADE FOR NO N-VERIFIABLE AND NON- BUSINESS EXPENSES OUT OF GENERATOR AND COMMISSION E TC. OTHER SMALL EXPENSES WERE ALSO DISALLOWED. IN APPEAL BEFORE THE LD. CIT( A), AS REGARDS ADDITION OF RS.9,02,590/-, THE DISALLOWANCE WAS RESTRICTED TO R S.3,00,000/- AND ASSESSEE WAS GRANTED RELIEF IN A SUM OF RS.6,02,590/-. OUT OF DI SALLOWANCE OF RS.1,56,400/- ON ACCOUNT OF GENERATOR AND COMMISSION EXPENSES, THE A DDITION WAS RESTRICTED TO RS.1,00,000/- AND THE ASSESSEE WAS GRANTED RELIEF O F RS.56,000/-. FURTHER DISALLOWANCES OF EXPENSES WERE NOT PRESSED BEFORE T HE LD. CIT(A) AND, THEREFORE, THE SAME WERE CONFIRMED AS NOT PRESSED. 3. THE ASSESSEE IN COLUMN NO.9 OF THE APPEAL PAPERS MENTIONED 23.04.2010 AS THE DATE OF COMMUNICATION OF THE ORDER APPEALED AGA INST. HOWEVER, THE APPEAL HAS BEEN FILED IN THE OFFICE OF THE TRIBUNAL ON 04.10.2 010. IT WAS, THEREFORE, NOTED THAT THE APPEAL IS TIME BARRED BY 103 DAYS. THE ASSESSEE FILED APPLICATION FOR CONDONATION OF DELAY, IN WHICH IT WAS STATED THAT T HE TRIBUNAL FEE WAS ALREADY DEPOSITED ON 05.05.2010 AND THE APPEAL WAS TO BE FI LED BEFORE THE TRIBUNAL ON OR BEFORE 22.06.2010, BUT IT WAS FILED WITH A DELAY OF 104 DAYS. IT IS STATED THAT IT CAME TO THE NOTICE OF THE ASSESSEE ON 21.09.2010 THAT TH E ASSESSEE FORGOT TO FILE THE PRESENT APPEAL, WHICH IS SUPPORTED BY THE NOTICE OF THE DEPARTMENT DATED 20.09.2010, WHICH IS FILED IN APPEAL PAPERS. IT IS, THEREFORE, PRAYED THAT THE DELAY ITA NO. 414/AGRA/2010 3 MAY BE CONDONED. ON THE SAME LINES, AFFIDAVIT OF TH E ASSESSEE WAS FILED. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, RELYING UPON T HE AVERMENTS CONTAINED IN THE APPLICATION FOR CONDONATION OF DELAY, SUBMITTED THA T THE DELAY MAY BE CONDONED IN FILING THE APPEAL BEYOND THE PERIOD OF LIMITATION. 4. ON THE OTHER HAND, THE LD. DR STRONGLY OBJECTED TO THE SUBMISSIONS OF THE ASSESSEE AND SUBMITTED THAT NO SUFFICIENT/REASONABL E CAUSE EXISTS IN FAVOUR OF THE ASSESSEE FOR CONDONATION OF DELAY. IT IS A CASE OF GROSS NEGLIGENCE IN NOT FILING THE APPEAL WITHIN THE PERIOD OF LIMITATION. THE LD. DR SUBMITTED THAT SINCE NO SUFFICIENT CAUSE IS SHOWN IN THE APPLICATION FOR CONDONING THE DELAY AND THE FACTS CLEARLY PROVE THAT THE DELAY WAS DUE TO NEGLIGENCE AND INAC TION ON THE PART OF THE ASSESSEE, THEREFORE, THE DELAY SHOULD NOT BE CONDONED. THE LD . DR RELIED UPON THE ORDER OF ITAT, CHENNAI IN THE CASE OF JCIT VS. TRACTORS AND FARMS EQUIPMENTS LTD., 104 ITD 149 (CHENNAI) (THIRD MEMBER), IN WHICH ON SIMIL AR FACTS, THE TRIBUNAL HELD THAT THE DELAY WAS DUE TO NEGLIGENCE AND INACTION O N THE PART OF THE ASSESSEE AND DELAY WAS NOT CONDONED AND THE APPEAL OF THE ASSESS EE WAS DISMISSED BEING TIME BARRED. 5. WE HAVE HEARD BOTH THE PARTIES ON THE POINT OF L IMITATION AND PERUSED THE MATERIAL ON RECORD AND CONSIDERED THE RIVAL SUBMISS IONS. WE ARE NOT INCLINED TO ITA NO. 414/AGRA/2010 4 CONDONE THE DELAY IN FILING THE APPEAL BEYOND THE P ERIOD OF LIMITATION. THE ASSESSEE STATED IN THE APPLICATION FOR CONDONATION OF DELAY THAT IT CAME TO HIS NOTICE ON 21.09.2010 THAT THE ASSESSEE FORGOT TO FILE THE APP EAL AND IN SUPPORT OF THE SAME NOTICE OF THE DEPARTMENT DATED 20.09.2010 HAS BEEN RELIED UPON. THE STATEMENT GIVEN IN THE APPLICATION IS DEVOID OF MERIT AND IS INCORRECT ALSO. THE APPEAL UNDER CONSIDERATION PERTAINS TO THE ASSESSMENT YEAR 2007- 08 AND THE NOTICE DATED 20.09.2010 REFERRED BY THE LD. COUNSEL FOR THE ASSE SSEE IS NOTICE U/S. 143(2) FOR THE SUBSEQUENT ASSESSMENT YEAR 2009-10. THIS NOTICE IS, THEREFORE, NOT RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL AND IT IS NOT EXPLAINE D HOW THE NOTICE OF THE DEPARTMENT DATED 20.09.2010 IS RELEVANT TO THE ISSU E UNDER CONTROVERSY. THEREFORE, NO RELIANCE CAN BE PLACED ON SUCH A NOTICE. FURTHER , THE ASSESSEE STATED THAT HE FORGOT TO FILE THE APPEAL, WHICH IS ALSO INCORRECT BECAUSE IT APPEARS FROM THE DELAY CONDONATION APPLICATION THAT THE ASSESSEE PAID TRIB UNAL FEE ON 05.05.2010 AND GOT PREPARED THE APPEAL, BUT THE ASSESSEE FORGOT TO FIL E THE APPEAL IN THE OFFICE OF THE TRIBUNAL. HOWEVER, THE APPEAL PAPERS FILED IN THE O FFICE OF THE TRIBUNAL CLEARLY SHOW THAT THE VERIFICATION OF THE GROUNDS OF APPEAL HAS BEEN SIGNED BY THE ASSESSEE ON 02.10.2010. THEREFORE, THERE IS NO QUESTION OF F ORGETTING TO FILE THE APPEAL BEFORE THE TRIBUNAL. WHEN THE APPEAL ITSELF WAS NOT PREPARED FROM 23.04.2010 TO 02.10.2010, THERE IS NO QUESTION OF ASSESSEE TO FOR GET TO FILE THE APPEAL BEFORE THE TRIBUNAL WITHIN TIME. SUCH AN EXPLANATION OF THE AS SESSEE IS NOT ACCEPTABLE AT ALL. ITA NO. 414/AGRA/2010 5 THE EXPLANATION OF THE ASSESSEE DOES NOT DISCLOSE A NY SUFFICIENT CAUSE FOR CONDONATION OF DELAY IN FILING THE APPEAL. THE EXPL ANATION OF THE ASSESSEE CLEARLY SHOWS THAT THE DELAY WAS DUE TO NEGLIGENCE AND INAC TION ON THE PART OF THE ASSESSEE. THE ASSESSEE COULD HAVE VERY WELL AVOIDED THE DELAY BY EXERCISE OF DUE CARE AND ATTENTION. THEREFORE, THERE EXISTS NO SUFFICIENT CA USE AND GOOD REASONS FOR DELAY OF 103 DAYS IN FILING THE APPEAL. IDENTICAL ISSUE WAS CONSIDERED BY ITAT, CHENNAI BENCH IN THE CASE OF JCIT VS. TRACTORS AND FARMS EQ UIPMENTS LTD. (SUPRA), IN WHICH THE APPEAL OF THE ASSESSEE WAS DISMISSED BEIN G TIME BARRED BY HOLDING AS UNDER : THE DELAY CANNOT BE CONDONED SIMPLY BECAUSE THE AP PELLANTS CASE IS HARD AND CALLS FOR SYMPATHY OR MERELY OUT O F BENEVOLENCE TO THE PARTY SEEKING RELIEF. IN GRANTING THE INDULGENC E AND CONDONING THE DELAY, IT MUST BE PROVED BEYOND THE SHADOW OF DOUBT THAT THE APPELLANT WAS DILIGENT AND WAS NOT GUILTY OF NEGLIG ENCE, WHATSOEVER. THE SUFFICIENT CAUSE WITHIN THE CONTEMPLATION OF TH E LIMITATION PROVISION MUST BE A CAUSE WHICH IS BEYOND THE CONTR OL OF THE PARTY INVOKING THE AID OF THE PROVISIONS. THE CAUSE FOR T HE 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 OR INACTION, OR WANT OF BONA FIDES CAN BE IMPUTED TO THE APPELLANT, A LIBERAL CONSTRUCTION OF THE PROVISIONS HAS TO BE MADE IN ORDER TO ADVANCE SUBSTANTIAL JUST ICE. SEEKERS OF JUSTICE MUST COME WITH CLEAN HANDS. IN THE INSTANT CASE, THE ASSESSEE JUSTIFIED THE DE LAY ONLY WITH REFERENCE TO THE AFFIDAVIT OF ITS DIRECTOR. IN THE SAID AFFIDAVIT IT WAS STATED THAT THE COMMISSIONER (APPEALS)S ORDER WAS MISPLACED AND FORGOTTEN. IT WAS FOUND WHILE SORTING OUT THE UNWAN TED PAPERS AND THEREAFTER STEPS WERE TAKEN FOR THE PREPARATION OF THE APPEAL AND CONSEQUENTLY THE DELAY WAS CAUSE. THAT CLEARLY SHOW ED THAT THE DELAY WAS DUE TO THE NEGLIGENCE AND INACTION ON THE PART OF THE ASSESSEE. ITA NO. 414/AGRA/2010 6 THE ASSESSEE COULD HAVE VERY WELL AVOIDED THE DELAY BY THE EXERCISE OF DUE CARE AND ATTENTION. THERE EXISTED NO SUFFICIENT AND GOOD REASON FOR THE DELAY OF 310 DAYS. THEREFORE, REASONINGS AD DUCED BY THE ACCOUNTANT MEMBER WERE TO BE CONCURRED WITH. 5.1 IT IS WELL SETTLED PROPOSITION OF LAW THAT THE DECISION OF THIRD MEMBER CASE IS LIKE A DECISION OF SPECIAL BENCH. THEREFORE, ABOVE DECISION IS BINDING ON THE DIVISION BENCH OF TRIBUNAL. IN THIS CASE ALSO THE O RDER OF THE CIT(A) WAS STATED TO BE MISPLACED AND FORGOTTEN. THE TRIBUNAL DID NOT CO NDONE THE DELAY AND DISMISSED THE APPEAL OF THE ASSESSEE FOR WANT OF SUFFICIENT A ND GOOD REASON FOR DELAY. 5.2 IT WOULD BE APPROPRIATE TO REFER TO SOME OF THE JUDICIAL PRONOUNCEMENTS ON THE ISSUE OF DELAY IN FILING THE APPEALS. IN THE CA SE OF HIND DEVELOPMENT CORPN. VS. ITO, 118 ITR 873, THE CALCUTTA HIGH COURT HELD THAT A TRIBUNAL CAN CONDONE THE DELAY IF THERE WAS SUFFICIENT CAUSE FOR THE DEL AY IN THE SUBMISSION OF THE APPEAL. IN THE CASE OF VEDABAI ALIA VIJAYANATABAI BABURAO P ATIL VS. SHANTARAM BABURAO PATIL, 253 ITR 798 (SC), WHERE IT WAS HELD THAT WHI LE EXERCISING DISCRETION UNDER SECTION 5 OF THE LIMITATION ACT, 1963, TO CONDONE D ELAY FOR SUFFICIENT CAUSE IN NOT FILING THE APPEAL WITHIN THE PERIOD PRESCRIBED, COU RTS SHOULD ADOPT A PRAGMATIC APPROACH. A DISTINCTION MUST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDINATE AND A CASE WHERE THE DELAY IS OF A FEW DAYS. THE CO URT OBSERVED THAT WHEREAS IN THE FORMER, CONSIDERATION OF PREJUDICE TO THE OTHER SIDE WILL BE A RELEVANT FACTOR AND ITA NO. 414/AGRA/2010 7 CALLS FOR A MORE CAUTIOUS APPROACH. IN THE LATTER C ASE NO SUCH CONSIDERATION MAY ARISE AND SUCH A CASE DESERVES A LIBERAL APPROACH. NOW, IN THE PRESENT CASE DELAY IS NOT OF A FEW DAYS BUT OF 103 DAYS. BESIDES, THERE I S ABSOLUTELY NO VALID EXPLANATION/REASON FOR THE DELAY. IN THE CASE OF CI T VS. RAM MOHAN KABRA, 257 ITR 773, THE HONBLE PUNJAB & HARYANA HIGH COURT HA S OBSERVED THAT WHERE THE LEGISLATURE SPELLS OUT A PERIOD OF LIMITATION AND P ROVIDES FOR POWER TO CONDONE THE DELAY AS WELL AS, SUCH DELAY CAN ONLY BE CONDONED O NLY FOR SUFFICIENT AND GOOD REASONS SUPPORTED BY COGENT AND PROPER EVIDENCE. IT IS A SETTLED PRINCIPLE OF LAW THAT PROVISIONS RELATING TO THE SPECIFIED PERIOD OF LIMITATION MUST BE APPLIED WITH THEIR RIGOUR AND EFFECTIVE CONSEQUENCES. IN THIS CA SE DELAY FOR FILING THE APPEAL LATE FOR ONLY A FEW DAYS WAS NOT CONDONED. IN THE CASE O F ASSTT. CIT VS. TAGGAS INDUSTRIES DEVELOPMENT LTD., 80 ITD 21 (CAL.), TRIB UNAL, CALCUTTA BENCH, CALCUTTA DID NOT CONDONE THE DELAY FOR FILING THE APPEAL LAT E BY 13 DAYS BECAUSE THE DELAY WAS NOT DUE TO SUFFICIENT CAUSE. THUS, RELYING ON T HE ABOVE JUDGMENTS, WE HOLD THAT ASSESSEE FAILED TO EXPLAIN DELAY IN FILING THE APPE AL WAS DUE TO SUFFICIENT CAUSE. 5.3. CONSIDERING THE ABOVE DISCUSSION, WE HOLD THAT THE ASSESSEE FAILED TO EXPLAIN ANY SUFFICIENT AND GOOD REASON FOR CONDONATION OF D ELAY AND NO COGENT AND PROPER EVIDENCES HAVE BEEN FILED IN SUPPORT OF THE SAME. T HUS, RELYING UPON THE ABOVE JUDGMENT, WE HOLD THAT THE ASSESSEE FAILED TO EXPLA IN THAT THE DELAY IN FILING THE ITA NO. 414/AGRA/2010 8 APPEAL WAS DUE TO SUFFICIENT CAUSE. THEREFORE, THE APPEAL OF THE ASSESSEE IS LIABLE TO BE DISMISSED AS TIME BARRED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED AS TIME BARRED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY