VISHWANTH K ACHARYA, MUMBAI V. ASST CIT 16(1), MUMBAI

ITA 4195/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8361 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 17-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Period of limitation; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH J,MUM BAI BEFORE SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.4195/MUM/2016 FOR (ASSESSMENT YEAR : 2012-13 ) MR. VISHWANATH K. ACHARYA A-1601, RUSTOMJEE ELANZA CHS LTD. MALAD-W, OFF NEW LINK ROAD, MUMBAI-400064 PAN: AAGPA0144D VS. ACIT WARD- 16(1), 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI-400020. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B. N. RAO (AR) REVENUE BY : SHRI SAMBIT MISHRA (DR) DATE OF HEARING : 14.02.2017 DATE OF PRONOUNCEMENT : 24.02.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JM: 1. THIS APPEAL BY ASSESSEE U/S 253 OF THE INCOME TAX A CT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-4, MUMBAI DATED 05.04.2016 FOR ASSESSMENT YEAR (AY) 2012-13. THE ASSESSEE HAS RAISED THE FOLLOWING GROU NDS OF APPEAL: 1. THE LD. C.I.T. APPEALS ERRED IN DISMISSING THE APPE AL CITING THE REASON ADVANCED FOR CONDONATION OF DELAY AS UNTENABLE. HE OUGHT TO HAVE CONSIDERED THE FACTS SUBMITTED BEFORE HIM IN THE INTEREST OF N ATURAL JUSTICE. 2. THE FACTS LEADING TO FILE THE PRESENT APPEAL ARE TH AT THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) CHALLENGING THE VARIOUS ADDITIONS AND DI SALLOWANCE MADE BY ASSESSING OFFICER (AO) IN ASSESSMENT ORDER UNDER SECTION 143( 3) DATED 27.02.2015. THE ASSESSEE FILED THE APPEAL BEYOND THE PRESCRIBED PER IOD OF TIME. THERE WAS DELAY OF 265 DAYS IN FILING APPEAL BEFORE LD CIT(A). THE DEL AY WAS NOT CONDONED BY LD CIT(A), CONSEQUENTLY THE APPEAL WAS NOT ADMITTED. THUS, AGGRIEVED BY THE ORDER OF LD. CIT(A), THE PRESENT APPEAL IS FILED BEFORE THE TRIBUNAL. 2 ITA NO. 4195 /M/2016 MR. VISHW ANATH K. ACHARYA. 3. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE (AR ) OF THE ASSESSEE AND THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AN D PERUSED THE ORDER OF LD. CIT(A). THE LD. AR OF THE ASSESSEE ARGUED THAT THE ASSESSMENT ORDER DATED 27.02.2015 WAS COLLECTED DIRECTLY BY THE REPRESENTATIVE OF PRE VIOUS CHARTERED ACCOUNTANT (C.A.) FROM OFFICE OF AO ON 09.03.2015. THE PREVIOUS C.A. DID NOT INFORM THE ASSESSEE NOR ADVISE THE ASSESSEE TO FILE THE APPEAL BEFORE THE F IRST APPELLATE AUTHORITY (FAA) AND THAT THE ASSESSEE WAS NOT AWARE ABOUT THE TECHNICAL ITIES OF FILING APPEAL WITHIN THE PRESCRIBED PERIOD OF LIMITATION. THE ASSESSEE CAM E TO KNOW ABOUT THE ASSESSMENT ORDER FOR AY 2012-13 ONLY WHEN THE AO DURING THE AS SESSMENT PROCEEDING FOR AY 2013-14, THE AO ENQUIRED ABOUT THE ASSESSMENT ORDE R OF PREVIOUS YEAR. THE ASSESSEE THEREAFTER, CONTACTED HIS PREVIOUS C.A. AND COLLECT ED THE ORDER FROM PREVIOUS C.A. AND THEREAFTER, THE APPEAL WAS FILED BEFORE THE LD. CIT (A). THUS, THE DELAY OCCURRED IN FILING APPEAL BEFORE THE FAA. THE LD. AR OF THE ASS ESSEE FURTHER ARGUED THAT THE DELAY WAS NEITHER INTENTIONAL NOR DELIBERATE BUT DUE TO T HE CIRCUMSTANCES BEYOND HIS CONTROL. THE LD. AR OF THE ASSESSEE FURTHER ARGUED THAT THE ASSESSEE HAS GOOD CASE ON MERIT IS LIKELY TO SUCCEED, IF THE CASE OF ASSESSEE IS HEARD AND THE CASE IS DECIDED ON MERIT. ON THE OTHER HAND, LD. DR FOR THE REVENUE STRONGLY OPP OSED THE GROUND OF APPEAL RAISED BEFORE US. LD. DR FURTHER ARGUED THAT ASSESSEE WAS REQUIRED TO EXPLAIN THE DELAY OF EACH AND EVERY DAY. THE ASSESSEE WAS FAILED TO EXPL AINED THE DELAY BEFORE THE LD. CIT(A). THUS, LD. CIT(A) HAS REJECTED THE CONTENTIO N OF ASSESSEE FOR CONDONING THE DELAY IN FILING THE APPEAL.. THE LD. DR FOR THE REV ENUE FURTHER ARGUED THAT DESPITE THE DIRECTION OF THE COURT, THE ASSESSEE IS NOT FILE HI S OWN AFFIDAVIT OR AFFIDAVIT OF C.A. WHO REPRESENTED THE ASSESSEE BEFORE THE AO OR WHO H AD ALLEGEDLY COLLECTED THE ORDER DIRECTLY FROM THE OFFICE OF AO. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND FURTHER GONE THROUGH THE ORDER OF LD. CIT(A). THE ASSESSMENT ORDER U/S 143(3 ) WAS PASSED ON 27.02.2015 AND THE APPEAL BEFORE THE LD. CIT(A) WAS FILED ONLY ON 30.12.2015. THUS, APPARENTLY THE APPEAL WAS NOT WITHIN THE PRESCRIBED PERIOD OF LIMI TATION. THE FIRST APPELLATE AUTHORITY ASKED THE ASSESSEE TO EXPLAIN THE DELAY. THE ASSESSEE FILED HIS REPLY VIDE CLARIFICATION LETTER DATED 18.11.2016. IN THE REPLY , THE ASSESSEE CONTENDED THAT THE ASSESSMENT ORDER WAS COLLECTED BY HIS PREVIOUS REPR ESENTATIVE ON 09.03.2015. HIS REPRESENTATIVE DID NOT INFORM HIM NOR ADVISE HIM TO FILE THE APPEAL. THE ASSESSEE WAS 3 ITA NO. 4195 /M/2016 MR. VISHW ANATH K. ACHARYA. NOT WELL-VERSED WITH THE TAX LAW. THE ASSESSEE CAME TO KNOW ABOUT THE ASSESSMENT ORDER FOR AY 2012-13 DURING THE ASSESSMENT PROCEEDI NG FOR AY 2013-14, WHEN THE AO ENQUIRED ABOUT THE ORDER FOR PREVIOUS AY. THE CO NTENTION OF ASSESSEE WAS NOT ACCEPTED BY LD. CIT(A) HOLDING THAT IT WAS A RESPON SIBILITY OF THE ASSESSEE TO FILE THE APPEAL WITHIN THE PRESCRIBED PERIOD OF LIMITATION. THE ASSESSEE HAS NOT MADE ANY EFFORT TO FILE THE APPEAL WITHIN TIME. THE ASSESSEE HAS NOT FILED ANY EVIDENCE THAT THERE WAS DISPUTE BETWEEN HIM AND HIS PREVIOUS C.A. THE A SSESSEE HAS NOT TAKEN ANY ACTION AGAINST THE PREVIOUS CA NOR SUCH EVIDENCE AS TO WHE THER ANY LEGAL ACTION IS TAKEN AGAINST THE C.A. , WAS PLACED ON RECORD AND DISMISS ED THE APPEAL. DURING THE HEARING OF THIS APPEAL, WE ENQUIRED FROM THE AR AS TO WHY THE AFFIDAVIT OF ASSESSEE OR THE C.A. IS NOT FILE BEFORE THE TRIBUNAL. THE LD. AR OF THE ASSESSEE FAIRLY CONCEDED THAT DUE TO SOCIAL RELATION WITH THE C.A., THE ASSESSEE HAS NOT MADE ANY COMPLAINT OR ASKED HIM TO GIVE AFFIDAVIT AGAINST HIS NEGLIGENT ACT. 5. WE ARE CONSCIOUS THAT THE LAW OF LIMITATION IS SUBS TANTIVE LAW AND IT HAS DEFINED CONSEQUENCES ON THE RIGHT AND OBLIGATION OF THE PAR TIES. THE PROVISIONS AND THE PRINCIPLE CONTAINED IN THE LAW OF LIMITATION SHOULD BE ADHERED BY THE PARTIES IN ITS STRICT SENSE AS PROVIDED UNDER DIFFERENT PROVISIONS OF LIMITATION ACT. THE HONBLE APEX COURT IN B. MADHURI GOUD V. B. DAMODAR REDDY ( 2012) 12 SCC 693 WHILE DISCUSSING THE SCOPE OF SECTION 5 OF LIMITATION ACT (FOR CONDONATION OF DELAY IN FILING OF APPEAL) SET THE FOLLOWING PRINCIPLES, WHICH MAY BROADLY BE KEPT IN KIND WHILE DECIDING THE APPLICATION FOR CONDONATION OF DELAY: I) THERE SHOULD BE A LIBERAL, PRAGMATIC, JUSTICE-ORIEN TED, NON- PEDANTIC APPROACH WHILE DEALING WITH AN APPLICATION FOR CONDONATION O F DELAY, FOR THE COURTS ARE NOT SUPPOSED TO LEGALIZE INJUSTICE BUT ARE OBLIGED TO REMOVE INJUSTICE. II) THE TERMS 'SUFFICIENT CAUSE' SHOULD BE UNDERSTOOD I N THEIR PROPER SPIRIT, PHILOSOPHY AND PURPOSE REGARD BEING HAD TO THE FACT THAT THESE TERMS ARE BASICALLY ELASTIC AND ARE TO BE APPLIED IN PROPER P ERSPECTIVE TO THE OBTAINING FACT- SITUATION. III) SUBSTANTIAL JUSTICE BEING PARAMOUNT AND PIVOTAL TH E TECHNICAL CONSIDERATIONS SHOULD NOT BE GIVEN UNDUE AND UNCALLED FOR EMPHASIS . IV) NO PRESUMPTION CAN BE ATTACHED TO DELIBERATE CAUSA TION OF DELAY BUT, GROSS NEGLIGENCE ON THE PART OF THE COUNSEL OR LITIGANT I S TO BE TAKEN NOTE OF. V) LACK OF BONA FIDES IMPUTABLE TO A PARTY SEEKING CON DONATION OF DELAY IS A SIGNIFICANT AND RELEVANT FACT. VI) VI) IT IS TO BE KEPT IN MIND THAT ADHERENCE TO STRI CT PROOF SHOULD NOT AFFECT PUBLIC JUSTICE AND CAUSE PUBLIC MISCHIEF BECAUSE THE COURT S ARE REQUIRED TO BE VIGILANT SO THAT IN THE ULTIMATE EVENTUATE THERE IS NO REAL FAILURE OF JUSTICE. 4 ITA NO. 4195 /M/2016 MR. VISHW ANATH K. ACHARYA. VII) THE CONCEPT OF LIBERAL APPROACH HAS TO ENCAPSULE TH E CONCEPTION OF REASONABLENESS AND IT CANNOT BE ALLOWED A TOTALLY U NFETTERED FREE PLAY. VIII) THERE IS A DISTINCTION BETWEEN INORDINATE DELAY AND A DELAY OF SHORT DURATION OR FEW DAYS, FOR TO THE FORMER DOCTRINE OF PREJUDICE I S ATTRACTED WHEREAS TO THE LATTER IT MAY NOT BE ATTRACTED, THAT, APART, THE FI RST ONE WARRANTS STRICT APPROACH WHEREAS THE SECOND CALLS FOR A LIBERAL DEL INEATION. IX) THE CONDUCT, BEHAVIOUR AND ATTITUDE OF A PARTY RELA TING TO ITS INACTION OR NEGLIGENCE ARE RELEVANT FACTORS TO BE TAKEN INTO CO NSIDERATION. IT IS SO AS THE FUNDAMENTAL PRINCIPLE IS THAT THE COURTS ARE REQUIR ED TO WEIGH THE SCALE OF BALANCE OF JUSTICE IN RESPECT OF BOTH PARTIES AND T HE SAID PRINCIPLE CANNOT BE GIVEN A TOTAL GO BY IN THE NAME OF LIBERAL APPROACH . X) IF THE EXPLANATION OFFERED IS CONCOCTED OR THE GROU NDS URGED IN THE APPLICATION ARE FANCIFUL, THE COURTS SHOULD BE VIGILANT NOT TO EXPOSE THE OTHER SIDE UNNECESSARILY TO FACE SUCH A LITIGATION. XI) IT IS TO BE BORNE IN MIND THAT NO ONE GETS AWAY WI TH FRAUD, MISREPRESENTATION OR INTERPOLATION BY TAKING RECOURSE TO THE TECHNICALIT IES OF LAW OF LIMITATION, XII) THE ENTIRE GAMUT OF FACTS ARE TO BE CAREFULLY SCRUT INIZED AND THE APPROACH SHOULD BE BASED ON THE PARADIGM OF JUDICIAL DISCRET ION WHICH IS FOUNDED ON OBJECTIVE REASONING AND NOT ON INDIVIDUAL PERCEPTIO N, XIII) THE STATE OR A PUBLIC BODY OR AN ENTITY REPRESENTIN G A COLLECTIVE CAUSE SHOULD BE GIVEN SOME ACCEPTABLE LATITUDE. FURTHER, THE HONBLE APEX COURT LAID DOWN MORE GUID ELINES OF DELAY SUCH AS: A) AN APPLICATION FOR CONDONATION OF DELAY SHOULD B E DRAFTED WITH CAREFUL CONCERN AND NOT IN A HALF HAZARD MANNER HARBOURING THE NOTION THAT THE COURTS ARE REQUIRED TO CONDONE DELAY ON THE BEDROCK OF THE PRINCIPLE THAT ADJUDICATION OF A LIS ON MERITS IS SEMINAL TO JUSTICE DISPENSATI ON SYSTEM. B) AN APPLICATION FOR CON DONATION OF DELAY SHOULD NOT HE DEALT WITH IN A ROUTINE MANNER ON THE BASE OF INDIVIDUAL PHILOSOPHY WHICH I S BASICALLY SUBJECTIVE. C) THOUGH NO PRECISE FORMULA CAN BE LAID DOWN REGAR D BEING HAD TO THE CONCEPT OF JUDICIAL DISCRETION, YET A CONSCIOUS EFFORT FOR ACHIEVING CONSISTENCY AND COLLEGIALITY OF THE ADJUDICATORY SYSTEM SHOULD BE M ADE AS THAT IS THE ULTIMATE INSTITUTIONAL MOTTO. . D) THE INCREASING TENDENCY TO PERCEIVE DELAY AS A N ON- SERIOUS MATTER AND, HENCE, LACKADAISICAL PROPENSITY CAN BE EXHIBITED IN A NON-CHALLANT MANNER REQUIRES TO BE CURBED, OF COURSE, WITHIN LEGAL PARA METERS. 6. FROM THE LEGAL POSITION REFERRED ABOVE, WE MAY CONC LUDE THAT THERE SHOULD BE PEDANTIC APPROACH AND THE DOCTRINE THAT IS TO BE KE PT IN MIND THAT THE APPEAL HAS TO BE DEAL WITH RATIONAL COMMON SENSE AND THE CAUSE OF SU BSTANTIAL JUSTICE MUST BE KEPT IN MIND. WE ARE ALSO AWARE THAT THE SUBSTANTIAL JUSTIC E MUST BE PREFERRED OVER THE TECHNICAL CONSIDERATION. WE MAY ALSO OBSERVED THAT THE APPELLANT/ASSESSEE IS NOT GOING TO GAIN IN APPROACHING THE COURT AFTER EXPIRY OF PERIOD OF LIMITATION, RATHER THERE IS ALWAYS A CHANCE THAT HIS APPEAL MAY BE DISMISSED, FOR NOT EXPLAINING THE CAUSE OF DELAY IN FILING THE APPEAL. WE, INSTEAD OF MAKING A NY COMMENT OVER THE REASON FOR CONDONATION OF DELAY AND NOT FILING AFFIDAVIT OR NO T TAKING ANY LEGAL ACTION AGAINST THE 5 ITA NO. 4195 /M/2016 MR. VISHW ANATH K. ACHARYA. REPRESENTATIVE, WHO HAS ALLEGEDLY NEITHER INFORMED THE ASSESSEE NOR HANDED OVER THE COPY OF ASSESSMENT ORDER. HOWEVER, KEEPING IN VIEW THE PRINCIPLE OF NATURAL JUSTICE AND TO PROVIDE THE ASSESSEE AN OPPORTUNITY OF HEARI NG ON MERIT, WE DEEM IT APPROPRIATE TO ACCEPT THE APPEAL OF ASSESSEE. WE FU RTHER ORDER TO CONDONE THE DELAY IN FILING THE APPEAL BEFORE THE LD. CIT(A). 7. WITH THESE OBSERVATIONS, THE LD. CIT(A) IS ALLOWED. THE LD CIT(A) IS DIRECTED TO DECIDE THE APPEAL OF ASSESSEE ON MERIT IN ACCORDANC E WITH LAW. NEEDLESS TO SAY THAT ASSESSEE SHALL BE GIVEN SUFFICIENT OPPORTUNITY BEFO RE PASSING THE ORDER OF MERIT. THE ASSESSEE HAS ALSO DIRECTED TO FULLY CO-OPERATE WITH LD. CIT(A) AND PROVIDE ALL NECESSARY INFORMATION AND DOCUMENTS AND NOT TO SEEK ADJOURNMENT WITHOUT ANY VALID REASONS. IN THE RESULT, APPEAL OF T HE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH FEBRUARY, 2017. SD/- SD/- (D.KARUNAKARA RAO) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 24/02/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/