SATYAM SHIVAM SUNDARAM CO.OP. HSG. SOCIETY LTD, MUMBAI V. ITO 21(2)(2), MUMBAI

ITA 424/MUM/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 4560 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 23-09-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 18-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Keywords: Period of limitation; Reasonable cause; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I, MUMBAI BEFORE SHRI A.L. GEHLOT, A.M. AND SMT. ASHA VIJAYAR AGHAVAN, J.M. ITA NOS. 424 & 425/M/2010 ASSESSMENT YEARS: 2003-04 & 2004-05 M/S SATYAM SHIVAM SUNDARAM CO-OP HSG. SOC. LTD., APPELLANT 2A, MEZZANINE FLOOR, SUNDARAM, SION CIRCLE, MUMBAI 400 022 (PAN AAAAS2608D) VS. INCOME TAX OFFICER 21(2)(2), RESPONDENT AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020. APPELLANT BY : MR. SANJAY PARIKH RESPONDENT BY : MR. S.K. SINGH ORDER PER A.L. GEHLOT, A.M.: BOTH THESE APPEALS FILED BY THE SAME ASSESSEE ARE DIRECTED AGAINST A COMMON ORDER OF CIT(A) 32, MUMBAI FO R THE ASSESSMENT YEARS 2003-04 & 2004-05. SINCE IDENTICAL ISSUE IS I NVOLVED IN BOTH THE APPEALS, THEY WERE HEARD TOGETHER AND, THEREFORE, A COMMON ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. 2. A COMMON GROUND RAISED IN BOTH THE APPEALS IS TH AT THE CIT(A) ERRED IN NOT CONDONING THE DELAY IN FILING THE APPE ALS AND DISMISSED THE APPEALS IN-LIMINE. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS A HOUSING COOPERATIVE SOCIETY AND THE ASSESSEE FILED APPEALS BEFORE THE CIT(A) LATE BY 3 DAYS FOR AY 2004-05 AND 567 DAYS DELAY FO R AY 2003-04. THE CIT(A) DID NOT CONDONE THE DELAY IN BOTH THE APPEAL S FILED BY THE ASSESSEE AND DISMISSED THE SAME IN-LIMINE. ITA NOS. 424 & 425/M/2010 M/S SATYAM SHIVAM SUNDARAM COOPERATIVE HSG. SOC. LT D. 2 4. THE LEARNED AR SUBMITTED THAT THE ASSESSEE IS A HOUSING COOPERATIVE SOCIETY AND THE ASSESSEES ACTIVITIES A RE ADMINISTERED BY ELECTED/NOMINATED PERSONS. WHEN THE ASSESSMENT WAS COMPLETED FOR AY 2004-05, IT WAS ADVISED THAT THE ASSESSEE SHOULD FILE APPEAL AGAINST THE ORDER OF AO ON CERTAIN ISSUES. THE ASSE SSEE DECIDED TO FILE APPEAL FOR BOTH THE YEARS I.E. 2003-04 AND 2004-05 AND THE SAME WERE SUBMITTED TOGETHER BEFORE THE CIT(A). SO, THE DELAY FOR AY 2003-04 WAS THAT THE ASSESSEE WAS ADVISED TO FILE APPEAL ON LY WHEN ASSESSMENT FOR AY 2004-05 WAS COMPLETED. THE 3 DAYS DELAY FOR FILING APPEAL FOR AY 2004-05 HAS BEEN EXPLAINED BY THE ASS ESSEE THAT IT IS A NEGLIGIBLE DELAY. THE LEARNED AR SUBMITTED THAT T HE POSITION OF THE ASSESSEE TO FILE APPEAL WAS A BONAFIDE DECISION AND IN THE INTEREST OF JUSTICE, THE CIT(A) OUGHT TO HAVE CONDONED THE DELA Y. 5. THE LEARNED DR ON THE OTHER HAND OBJECTED TO THE LEARNED ARS CONTENTION AND SUBMITTED THAT IN AY 2003-04 THERE W AS A CONSIDERABLE DELAY OF 565 DAYS FOR WHICH NO SATISFA CTORY REASONS WERE ADVANCED BY THE ASSESSEE FOR CONDONATION. 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. IN THE CASE OF CONDONATION OF D ELAY IN FILING APPEAL THE ENTIRE CONTROVERSY WOULD REVOLVE ON THE SHOWING OR NOT OF SUFFICIENT CAUSE WHILE PRAYING FOR CONDONATION OF D ELAY. IN OTHER WORDS, WHERE THERE IS SUFFICIENT CAUSE SHOWN AND TH E APPLICATION FOR CONDONATION OF DELAY HAS BEEN MOVED BONAFIDE, THE C OURT WOULD NORMALLY CONDONE THE DELAY BUT WHERE THE DELAY HAS NOT BEEN EXPLAINED AT ALL AND, IN FACT, THERE IS UNEXPLAINED AND INORDINATE DELAY COUPLED WITH NEGLIGENCE OR SHEER CARELESSNESS , THE DISCRETION OF THE COURT IN SUCH CASES WOULD NORMALLY TILT AGAINST THE APPLICANT. THE PERIOD OF LIMITATION HAS TO BE CONSTRUED SOMEWHAT S TRICTLY AND ADVANTAGES THAT ACCRUE TO NON-APPLICANT WOULD NORMA LLY NOT BEEN TAKEN AWAY IN A ROUTINE MANNER OR FOR NO PLAUSIBLE CAUSE OR REASON. ITA NOS. 424 & 425/M/2010 M/S SATYAM SHIVAM SUNDARAM COOPERATIVE HSG. SOC. LT D. 3 THE LAW OF LIMITATION IS NORMALLY TO BE CONSTRUED S TRICTLY AS IT HAS THE EFFECT OF VESTING FOR ONE AND TAKING AWAY RIGHT FRO M THE OTHER. TO CONDONE THE DELAYS IN A MECHANICAL OR A ROUTINE MAN NER MAY AMOUNT TO JEOPARDIZING THE LEGISLATIVE INTENT BEHIND SECTI ON 5 OF THE LIMITATION ACT. STATUTES OF LIMITATION ARE DESIGNED TO EFFECTUATE A BENEFICENT PUBLIC PURPOSE VIZ. TO PREVENT THE TAKIN G AWAY FROM ONE WHAT HE HAS FOR LONG BEEN PERMITTED TO CONSIDER HIS OWN AND ON THE FAITH OF WHICH HE PLANS HIS LIFE, HABITS AND EXPENS ES. LONG DORMANT CLAIMS ARE OFTEN MORE OF CRUELTY THAN OF JUSTICE IN THEM. THIS PRINCIPLE IS MORE BASED ON PUBLIC POLICY. ITS AIM BEING TO SE CURE THE QUIET OF THE COMMUNITY AND TO PREVENT OPPRESSION. THESE RULES HA VE BEEN VIEWED BY SOME AS AN INFAMOUS POWER CREATED BY POSITIVE LA W TO DECREASE LITIGATION AND ENCOURAGE DISHONEST DEFENCES. THIS MAY NOT BE WHOLLY TRUE BUT STILL THE LIMITATION VESTS A DEFINITE RIGH T IN A PARTY AFTER A LAPSE OF PERIOD PRESCRIBED UNDER LAW. IT INTERPOSES A STATUTORY BAR AFTER A CERTAIN PERIOD GIVING QUIETUS TO THE RIGHTS ARISING FROM A JUDGMENT WHICH IS SOUGHT TO BE IMPUGNED. IN OTHER W ORDS, THE LAW OF LIMITATION IS THUS FOUNDED ON PUBLIC POLICY. IT IS ENSHRINED IN THE MAXIM INTEREST REIPUBLICAE UT SIT FINIS LITIUM (I T IS FOR THE GENERAL WELFARE THAT A PERIOD BE PART TO LITIGATION). THE V ERY SCHEME OF PROPER ADMINISTRATION OF JUSTICE PRE-SUPPOSES EXPEDIENCY I N DISPOSAL OF CASES AND AVOIDANCE OF FRIVOLOUS LITIGATION. WHERE THE PA RTIES CHOSE TO SLEEP OVER THEIR RIGHTS FOR PROLONGED PERIODS WITHOUT ANY JUST CAUSE, CAN HARDLY CLAIM EQUITY IN JUSTICE PARTICULARLY FACED W ITH THE STATUTORY PROVISIONS OF SECTION 5 OF THE ACT. IN CONSTRUING E NACTMENTS WHICH PROVIDE PERIOD OF LIMITATION FOR INSTITUTION OF PRO CEEDINGS, THE PURPOSE IS TO INTIMATE PEOPLE THAT AFTER LAPSE OF CERTAIN T IME FROM A CERTAIN EVENT, A PROCEEDING WILL NOT BE ENTERTAINED WHERE A STRICT GRAMMATICAL CONSTRUCTION IS NORMALLY THE SAFE GUIDE. LAW IS NOT AN EXERCISE IN LINGUISTIC DISCIPLINE BUT THE SUBSTANCE OF LEGISLAT IVE INTENTION CAN ALSO NOT BE FRUSTRATED MERELY BY UNCALLED FOR EQUITY OR SYMPATHY. THE PROVISION OF LIMITATION SHOULD BE CONSTRUED STRICTL Y BUT AT BEST ITS APPLICATION COULD BE LIBERALISED WHERE ACTUAL SUFFI CIENT CAUSE IN ITS ITA NOS. 424 & 425/M/2010 M/S SATYAM SHIVAM SUNDARAM COOPERATIVE HSG. SOC. LT D. 4 TRUE SENSE IS SHOWN BY AN APPLICANT WHO HAS ACTED B ONA FIDE AND WITH DUE CARE AND CAUTION. AN INTERPRETATION OR APPLICAT ION OF THE STATUTORY PROVISIONS WHICH WOULD FRUSTRATE ITS VERY OBJECT NE CESSARILY HAS TO BE AVOIDED. THE LAW OF PROCEDURE UNDISPUTEDLY TAKES IN ITS AMBIT AND SCOPE THE NEED TO ACT EXPEDITIOUSLY AND NOT TO DELA Y THE PROGRESS OF THE LEGAL PROCEEDINGS. THE LAW OF LIMITATION STRICT O SENSO IS NOT LAW OF PROCEDURE SIMPLICITOR BUT HAS THE EFFECT OF CREATIN G A LEGAL BAR IN EXERCISE OF A RIGHT WHICH OTHERWISE WOULD HAVE BEEN AVAILABLE TO A PARTY BUT FOR LAPSE OF TIME. AS ALREADY NOTICED, TH E LAW OF LIMITATION IS BASED ON PUBLIC POLICY AND HELPS EFFECTIVE AND PROP ER ADMINISTRATION OF JUSTICE. IT IS EXPECTED OF EVERY LITIGANT, TO AC T WITHIN THE PERIOD OF LIMITATION. IT IS ONLY BY WAY OF AN EXCEPTION AND U PON SHOWING SUFFICIENT CAUSE THAT APPEALS, IF OTHERWISE PERMISS IBLE, COULD BE ENTERTAINED BEYOND THE PRESCRIBED PERIOD OF LIMITAT ION. IT ALSO BE NOTICED THAT IN THE CASE OF STATE OF WEST BENGAL VS . ADMINISTRATOR, HOWRAH MUNICIPALITY, AIR 1972 SC 749, THE SUPREME C OURT HELD THAT EXPRESSION SUFFICIENT CAUSE SHOULD RECEIVE A LIBE RAL CONSTRUCTION SO AS TO ADVANCE THE PURPOSE OF JUSTICE PARTICULARLY W HEN THERE IS NO MOTIVE BEHIND DELAY. THIS NECESSARILY IMPLIES THAT PARTIES MUST ACT BONAFIDELY, EXPEDITIOUSLY AND WITH DUE CARE. A CASU AL OR A NEGLIGENT LITIGANT WHO HAS ACTED WITH UTTER IRRESPONSIBLE ATT ITUDE, CANNOT CLAIM THE CONDONATION OF DELAY IN LAW WHEN THE RIGHT HAS ACCRUED TO THE OTHER SIDE. THE EXPRESSION SUFFICIENT CAUSE WILL ALWAYS HAVE RELEVANCY TO REASONABLENESS. THE ACTIONS WHICH CAN BE CONDONED BY THE COURT SHOULD FALL WITHIN THE REALM OF NORMAL HU MAN CONDUCT OR NORMAL CONDUCT OF A LITIGANT. IT IS NEITHER EXPECTE D NOR CAN IT BE A NORMAL CONDUCT OF A PUBLIC SERVANT OR A LITIGANT TH AT THEY WOULD KEEP THE FILES UNMOVED, UNPROCESSED FOR MONTHS TOGETHER ON THEIR TABLES. 6.2 HOW THE POWER OF CONDO NATION OF DELAY IS TO BE EXERCISED, HAS BEEN EXPLAINED BY THE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION V MST. KATIJI AND OTHERS 167 ITR 471 (SC) AS UNDER:- ITA NOS. 424 & 425/M/2010 M/S SATYAM SHIVAM SUNDARAM COOPERATIVE HSG. SOC. LT D. 5 ( PAGES 472 ) THE LEGISLATURE HAS CONFERRED THE PO WER TO CONDONE DELAY BY ENACTING SECTION 51 OF THE LIMITAT ION ACT OF 1963 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIA L JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON DE MERITS '. THE EXPRESSION SUFFICIENT CAUSE ' EMPLOYED BY THE LEGISLATURE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUB SERVES THE ENDS OF JUSTICE THAT BE ING THE LIFE- PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COUR TS. IT IS COMMON KNOWLEDGE THAT THE COURT HAS BEEN MAKING A JUSTIFIA BLY LIBERAL APPROACH IN MATTERS INSTITUTED IN THIS COURT. BUT T HE MESSAGE DOES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHER COURTS IN THE HIERARCHY. AND SUCH A LIBERAL APPROACH IS ADOPTED ON PRINCIPLE AS IT IS REALIZED THAT: 1. ORDINARILY, A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS, WHEN DELAY IS CONDONED, THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. 1. ' ANY APPEAL OR ANY APPLICATION, OTHER THAN AN A PPLICATION UNDER ANY OF THE PROVISIONS OF ORDER XXI OF THE COD E OF CIVIL PROCEDURE, 1908, MAY BE ADMITTED AFTER THE PRESCRIB ED PERIOD IF THE APPELLANT OR THE APPLICANT SATISFIES THE COURT THAT HE HAD SUFFICIENT CAUSE FOR NOT PREFERRING THE APPEAL OR M AKING THE APPLICATION WITHIN SUCH PERIOD.' ( PAGE 473) 3. ' EVERY DAY'S DELAY MUST BE EXPLAINE D DOES NOT MEAN THAT PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOUR'S DELAY, EVERY SECOND'S DELAY? THE DOCTRINE MU ST BE APPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A N ON-DELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALAFIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING T O DELAY. IN FACT, HE RUNS SERIOUS RISK. 6. IT MUST BE GRASPED THAT THE JUDICIARY IS RESPECT ED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHN ICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 6.3 IN THE LIGHT OF THE ABOVE DISCUSSION AND CO NSIDERING TO MAKE JUSTICE ORIENTED APPROACH, WE ARE OF THE VIEW THAT IN CASE OF ITA NOS. 424 & 425/M/2010 M/S SATYAM SHIVAM SUNDARAM COOPERATIVE HSG. SOC. LT D. 6 BONAFIDE REASONS FOR THE DELAY, WHICH AMOUNT TO REA SONABLE CAUSE AND IF THERE IS REASONABLE CAUSE, THAT ITSELF, IS SUFFI CIENT FOR CONDONING THE DELAY IN THE INSTITUTION OF APPEAL FILED BY THE ASS ESSEE BEFORE THE CIT(A). APART FROM THE ABOVE, CONSIDERING THE STATU S AND ACTIVITIES OF THE ASSESSEE, THE CIT(A) OUGHT TO HAVE CONDONED THE DELAY IN THE INTEREST OF JUSTICE. WE, THEREFORE, DIRECT THE CIT( A) TO CONDONE THE DELAY IN BOTH THE ASSESSMENT YEARS AND DECIDE THE A PPEALS ON MERIT, AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING T O THE ASSESSEE. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF SEPTEMBER, 2010. SD/- SD/- (ASHA VIJAYARAGHAVAN) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 TH SEPTEMBER, 2010 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, I BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI. KV