Smt. Shakuntla Thukral, Ludhiana V. ITO, Ludhiana

ITA 429/CHANDI/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0111 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-03-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 17-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Bonafide belief; Period of limitation; Condonation of delay
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 429/CHD/2013 ASSESSMENT YEAR: 2005-06 SMT. SHAKUNTLA THUKRAL, VS. THE ITO, WARD-II(3) M/S NEERAJ KNITWEARS, LUDHIANA LUDHIANA PAN NO.ABLPT5291Q (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIR SEHGAL RESPONDENT BY : SH. S.K.MITTAL DATE OF HEARING : 21.03.2016 DATE OF PRONOUNCEMENT : 12.04.2016. ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-I, LUDHIANA DATED 06.06.2011 IN CONFIRMING THE PENALTY OF RS. 11,13,430/- LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FOR THE ASSESSMENT YEAR 2009-10. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING T OTAL INCOME AT RS. 2,80,161/- ON 31.10.2005. THE ASSESSING OFFICER FR AMED THE ASSESSMENT U/S 143(3) OF THE ACT ON 27.12.2007 DETERMINING THE TOT AL INCOME AT RS. 58,67,550/-, WHICH INCLUDED THE FOLLOWING MAJOR ADDITIONS:- 2 I) ADDITION ON ACCOUNT OF SUPPRESSED CLOSING STOCK R S. 28,73,740/- II) ADDITION ON ACCOUNT OF WASTAGE DECLARED - RS. 15,9 0,540/- III) ADDITION ON ACCOUNT OF JOB WORK DONE - RS. 5,20,88 9/- IV) ADDITION ON ACCOUNT OF UNACCOUNTED SALES MADE RS . 3,27,335/- V) DISALLOWANCE OF INTEREST PAID TO FAMILY MEMBERS R S. 61,974/- THE ASSESSING OFFICER NOTED THAT IN THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT, IT WAS OBSERVED THAT ASSESSEE HAD FURNI SHED INACCURATE PARTICULARS OF HER INCOME. IN THAT VIEW OF THE MAT TER, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. A SHOW CAUSE NOTICE U/S 271(1)(C) WAS ISSUED TO THE ASSESS EE ON 28.12.2007. THE ASSESSING OFFICER ALSO NOTED THAT THE CIT(A) VIDE HIS ORDER DATED 24.2.2010 CONFIRMED THE ADDITION MADE UNDER THE HEA DS CLOSING STOCK AND JOB WORK EARNED AT 28,73,640/- AND RS. 5,20,889/-. AGAIN A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE ON 21.6.2010. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE SUBMITTED A DETAILED REPLY. TH E ASSESSING OFFICER AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSES SEE, CAME TO THE CONCLUSION THAT IN THE INSTANT CASE, THE ASSESSEE H AD FURNISHED INACCURATE PARTICULARS OF INCOME. ACCORDINGLY, THE ASSESSING O FFICER IMPOSED A PENALTY OF RS. 11,13,430/- U/S 271(1)(C) OF THE ACT . 3. ON APPEAL, THE CIT(A) CONFIRMED THE PENALTY FOR THE REASONS STATED IN PARAS 5 TO 8 OF THE IMPUGNED ORDER AND, HENCE, T HE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. IT IS OBSERVED THAT THERE IS A DELAY OF 613 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL. THE LD. CIT(A) PASSED THE IMPU GNED ORDER ON 6.6.2011. AS PER THE ASSESSEE, THE DATE OF COMMUNIC ATION OF THE ORDER 3 APPEALED AGAINST IS 14 TH JUNE, 2011. ADMITTEDLY, THE ASSESSEE HAD RECEIVED THE IMPUGNED ORDER ON 14.6.2011 AS PER FOR M NO. 36 [SEE RULE 47(1)]. HOWEVER, THE MEMORANDUM OF APPEAL WAS RECEI VED BY THE REGISTRY OF THIS BENCH ON 17.4.2013. AS PER THE PROVISIONS OF THE LAW, THE ASSESSEE WAS REQUIRED TO FILE THE APPEAL BEFORE TH E TRIBUNAL WITHIN 60 DAYS FROM THE DATE OF COMMUNICATION OF THE ORDER. THUS, THE APPEAL IS TIME BARRED BY 613 DAYS. WHEN THE REGISTRY OF THIS TRIBUNAL POINTED OUT TO THE ASSESSEE THAT THERE IS A DELAY OF 613 DAYS I N FILING THE APPEAL BEFORE THE TRIBUNAL, THE ASSESSEE SUBMITTED AN APPLICATIO N FOR CONDONATION OF DELAY STATING AS UNDER:- SUB: REASON FOR DELAY. IT IS SUBMITTED THAT WE HAVE RECEIVED THE DEFECT ME MO THAT THE APPEAL IS LATE BY 613 DAYS. IN THIS REGARD, IT IS S UBMITTED THAT ORDER, DATED 6.6.2011 OF THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS) WAS RECEIVED BY THE ASSESSES ON 14.06.201 1 AND, AS SUCH, THE APPEAL BEFORE THE HON'BLE BENCH WAS DUE TO BE F ILED WITHIN 60 DAYS I.E. ON OR BEFORE 15.08.2011, BUT THE APPEAL C OULD NOT BE FILED WITHIN THE STIPULATED TIME AS PER DETAILED FACTS GI VEN IN THE ENCLOSED AFFIDAVIT AND THE ACTUAL DELAY IN FILING THE APPEAL IS OF 579 DAYS, INSTEAD OF 613 DAYS AS UNDER:- AUGUST, 2011 16 DAYS 1 ST SEPTEMBER 2011 TO 30 TH SEPTEMBER, 2012 365 DAYS OCTOBER, 2012 31 DAYS NOVEMBER, 2012 30 DAYS DECEMBER, 2012 31 DAYS JANUARY, 2013 31 DAYS FEBRUARY,2013 28 DAYS MARCH, 2013 31 DAYS APRIL, 2013 16 DAYS TOTAL 5 79 DAYS 4 THAT IN VIEW OF THE DETAILED FACTS WITH REGARD TO T HE REASONS OF DELAY, IT IS SUBMITTED THAT DELAY OF 579 DAYS WAS O N ACCOUNT OF BONAFIDE REASONS AND, AS SUCH, THE SAME MAY BE COND ONED AND OBLIGED. THANKING YOU, YOURS FAITHFULLY, SD- AUTHORIZED SIGNATORY IN SUPPORT OF THE ABOVE APPLICATION AN AFFIDAVIT FO RM SHRI AMIT BHALLA, ADVOCATE WAS ALSO SUBMITTED, WHICH READS AS UNDER:- AFFIDAVIT I, AMIT BHALLA S/O SH. VINOD BHALLA R/O 5697/1, R AGHUBIR PARK, HAIBOWAL, LUDHIANA HEREBY SOLEMNLY STATE AND AFFIRM AS UNDER: - 1 . THAT I AM A PRACTICING ADVOCATE FOR THE PAST FE W YEARS AND WORKING WITH M/S V.V. BHALLA & CO. CHARTERED ACCOUN TANTS, 64-E, RISHI NAGAR, LUDHIANA AND I AM ONLY DEALING WITH TA X CASES AND HAVE BEEN APPEARING BEFORE VARIOUS INCOME TAX AUTHO RITIES. 2. THAT I HAD APPEARED BEFORE THE WORTHY COMMISSION ER OF INCOME TAX (APPEALS)-1, LUDHIANA IN THE CASE OF SMT . SHAKUNTLA THUKRAL, C/O M/S NEERAJ KNITWEARS AND VIDE ORDER DA TED 06.06.2011, THE APPEAL OF THE ASSESSEE WAS DISMISSE D BY THE CIT (A)-L, LUDHIANA. 3. THAT THE SAID ORDER OF DISMISSING THE APPEAL OF ASSESSEE U/S 271 (1)(C) FOR ASSTT. YEAR 2005-2006 WAS GIVEN TO M E FOR FILING THE APPEAL BEFORE THE HON'BLE INCOME TAX APPELLATE TRIB UNAL, CHANDIGARH BENCH, CHANDIGARH AND THE SAID ORDER GOT MISPLACED BY ME SINCE THE SAME HAD BEEN PLACED IN SOME OTHER FIL E INADVERTENTLY. 4. THAT DUE TO THE ABOVE SAID FACTS, THE APPEAL COU LD NOT BE FILED IN THE ABOVE SAID CASE IN TIME, AND THE ASSESSEE WA S UNDER THE BONAFIDE BELIEF THAT SHE HAVING HANDED OVER THE PAP ER TO ME, THE APPEAL MUST HAVE BEEN FILED. 5 5. THAT THE ORDER OF THE HON'BLE BENCH OF ITAT WAS RECEIVED BY ME IN THE MONTH OF APRIL 2013 WITH REGARD TO QUANTU M APPEAL OF THE ASSESSES AND THEN IT CAME TO MY KNOWLEDGE ABOUT THE APPEAL U/S 271 (1) ( C) FOR THE SAME YEAR, WHICH COULD NOT BE FILE D. 6. THAT WITH GREAT EFFORTS, WE WERE ABLE TO TRACE T HE ORDER OF THE LD.CIT (A) CONFIRMING THE LEVY OF PENALTY U/S 271 ( 1) (C ) VIDE ORDER, DATED 06.06.2011 AND THEN, IMMEDIATELY THERE AFTER, THE APPEAL WAS PREPARED AND FILED BEFORE THE HON'BLE BE NCH. 7. THAT THE APPEAL WAS DUE TO BE FILED ON OR BEFORE 15.08.2011, BUT THE SAME WAS FILED ON 17.04.2013 AND, THUS, THE RE IS DELAY OF 579 DAYS AS UNDER.- AUGUST, 2011 16 DAYS 1ST SEPTEMBER 2011 TO 30TH SEPTEMBER, 2012 365 DAYS OCTOBER, 2012 31 DAYS NOVEMBER, 2012 30 DAYS DECEMBER, 2012 31 DAYS JANUARY, 2013 31 DAYS FEBRUARY, 2013 28 DAYS MORCH, 2013 31 DAYS APRIL, 2013 16 DAYS TOTAL 579 DAYS 8. THAT THE DEFAULT OF FILING THE APPEAL LATE IS ON MY PART AND IT IS HIGHLY REGRETTED, BUT IT WAS ONLY ON ACCOUNT OF ABOVE SAID FACTUAL FACTS AND CIRCUMSTANCES AS NARRATED ABOVE . SD/- DEPONENT VERIFICATION:- THAT THE CONTENTS OF THE ABOVE AFFIDAVIT ARE TRUE T O THE BEST OF MY KNOWLEDGE AND BELIEF AND NOTHING IS CONCEALED TH EREIN SD/- DEPONENT. 6 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PURSUED THE MATERIALS AVAILABLE ON RECORD. AT THE VERY OUTSET, WE MAY OBSERVE HERE THAT THE ASSESSEE HAS WRONGLY CALCULATED THE PERIOD OF DELAY IN FILING THE APPEAL. IN OUR OPINION, THE APPEAL IS LATE BY 613 D AYS. IT APPEARS THAT THE ASSESSEE HAS CALCULATED THE DAYS FROM 1.9.2011 TO 30.09.3012 AS 365 DAYS, WHICH IS FACTUALLY INCORRECT. THE EXACT CALCU LATION OF DAYS ARE AS UNDER:- DATE OF COMMUNICATION ORDER DATED 14.6.2011 MONTH DAYS JUNE 2011 16 JULY, 2011 31 AUG., 2011 31 SEPT., 2011 30 OCT., 2011 31 NOV., 2011 30 DEC., 2011 31 JANUARY 2012 31 FEB. 2012 29 MARCH 2012 31 APRIL, 2012 30 MAY, 2012 31 JUNE 2012 30 JULY, 2012 31 AUGUST, 2012 31 SEPT, 2012 30 OCT., 2012 31 NOV., 2012 30 7 DEC., 2012 31 JANUARY, 2013 31 FEBRUARY 2013 28 MARCH 2013 31 APRIL 2013 17 TOTAL 673 LESS 60 TOTAL DAYS 613 IN FACT, THE TOTAL DAYS FROM 1.9.2011 TO 30.9.2012 INCLUDING 29 DAYS OF FEBRUARY 2012 (LEAP YEAR) COMES TO 396 DAYS AND NOT 365 DAYS. THEREFORE, THE CALCULATION OF DELAY IN FILING THE APPEAL AS UR GED BY THE ASSESSEE IS MISLEADING AND FACTUALLY INCORRECT. THEREFORE, FACT OF THE MATTER IS THAT THE INSTANT APPEAL HAS BEEN FILED BY THE ASSESSEE A FTER DELAY OF ABOUT 613 DAYS. NOW THE QUESTION IS AS TO WHETHER THE ASSESSE E WAS PREVENTED BY SUFFICIENT CAUSE FROM FILING THE APPEAL BEFORE THE TRIBUNAL IN TIME? AS PER THE AFFIDAVIT SUBMITTED BY SHRI AMIT BHALLA, AD VOCATE, IT IS STATED THAT IN PARA 3 THAT THE IMPUGNED ORDER WAS GIVEN TO HIM FOR FILING THE APPEAL BEFORE THE TRIBUNAL AND THE SAID ORDER WAS MISPLA CED BY HIM SINCE THE SAME HAS BEEN PLACED SOME OTHER FILE INADVERTENTLY. SECONDLY, SHRI BHALLA STATES THAT ORDER OF THE TRIBUNAL PASSED IN QUANTUM APPEAL OF THE ASSESSEE WAS RECEIVED IN THE MONTH OF APRIL 2013 AND THEN HE CAME TO KNOW ABOUT THE APPEAL U/S 271(1)(C) FOR THE SAME YEAR, WHICH COULD NOT BE FILED. THEREAFTER, THE INSTANT APPEAL WAS FIELD BEFORE THE TRIBUNAL. IN THE INSTANT CASE, THE ASSESSEE WAS REQUIRED TO SHOW THAT SHE H AD SUFFICIENT CAUSE FOR NOT PREFERRING THE APPEAL WITHIN THE PERIOD OF LIMITATION. IT IS WELL SETTLED LAW THAT IN ESSENCE, THE PHRASE SUFFICIENT CAUSE IS NOT A QUESTION OF PRINCIPLE, BUT IS A QUESTION OF FACT. HENCE, WHE THER TO CONDONE THE DELAY, OR NOT DEPENDS UPON THE FACTS AND CIRCUMSTAN CES OF EACH CASE AS 8 SUFFICIENT CAUSE FOR CONDONATION OF DELAY DEPENDS ONLY ON THE FACT PLACED BY THE APPLICANT BEFORE THE AUTHORITY CONCER NED. THUS, IT IS CLEAR THAT IT IS REQUIRED TO BE TAKEN IN THE FACTS OF IND IVIDUAL CASE WHETHER THE SAID CIRCUMSTANCES CONSTITUTE A SUFFICIENT CAUSE F OR CONDONING THE DELAY. THUS, THE PHRASE SUFFICIENT CAUSE IS TO BE DETERM INED UPON THE FACTS OF EACH PARTICULAR CASE AND NO HARD AND FAST RULE CAN BE LAID DOWN. IN NUMBER OF CASES, THE COURTS HAVE HELD THAT NEGLIGENCE OF A N AGENT OF A PARTY IS THE NEGLIGENCE OF THE PARTY HIMSELF AND THEREFORE, CANN OT BE FURNISH SUFFICIENT CAUSE FOR DELAY. IN THE INSTANT CASE, THE COUNSEL OF THE ASSESSEE SHRI AMIT BHALLA, ADVOCATE HAS STATED THAT THE IMPUGNED ORDER WAS GIVEN TO HIM FOR FILING THE APPEAL BEFORE THE TRIBUNAL AND SUCH ORDE R GOT MISPLACED BY HIM SINCE THE SAME HAD BEEN PLACED IN SOME OTHER FILE INADVERTENTLY. THUS, THE ASSESSEE WANTS TO DEMONSTRATE THAT THE APPEAL W AS FILED BEFORE THE TRIBUNAL BEYOND TIME OWING TO FORGETFULNESS OF THE ASSESSEES COUNSEL SHRI AMIT BHALLA. AS PER PARA 3 OF THE AFFIDAVIT, THE IMPUGNED ORDER WAS GIVEN TO SHRI BHALLA FOR FILING THE APPEAL IN THE M ONTH OF JUNE 2011 ITSELF. THE PERIOD OF LIMITATION EXPIRED ON AUGUST 13, 2011 AND THE APPEAL WAS NOT PRESENTED TILL 16 TH APRIL, 2013. ADMITTEDLY, THERE IS A DELAY OF 613 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL. AS PER THE AFFIDAVIT OF SHRI AMIT BHALLA, ON RECEIPT OF ORDER OF THE TRIBUNAL PA SSED IN QUANTUM APPEAL IN THE MONTH OF APRIL, 2013, IT CAME TO HIS KNOWLED GE THAT NO APPEAL AGAINST THE IMPUGNED ORDER HAS BEEN FILED. 6. IN OUR OPINION, AN APPEAL PRESENTED BEYOND TIME OWING TO FORGETFULNESS OF THE ASSESSEES COUNSEL CANNOT BE H ELD AS A SUFFICIENT REASON FOR CONDONATION OF DELAY. IN THE CASE OF M T. DILAN V. RAM BHAROSEY, AI.II 1925 OUDH 374(1)(L), IT HAS BEEN HE LD THAT AN APPEAL PRESENTED BEYOND TIME BY APPELLANT ON ACCOUNT OF FO RGETFULNESS OF THE 9 APPELLANTS COUNSEL, IS NOT A SUFFICIENT REASON FOR EXCUSING DELAY UNDER S. 5 OF THE LIMITATION ACT. IN THE INSTANT CASE, THERE IS AN INORDINATE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL. WE HAVE ALRE ADY OBSERVED HERE-IN- ABOVE THAT THE ASSESSEE COULD NOT BROUGHT ON RECORD ANY EVIDENCE OR REASONS TO DEMONSTRATE THAT SHE WAS PREVENTED BY IN EVITABLE CIRCUMSTANCES OR THERE WAS A SUFFICIENT CAUSE FOR NOT FILING THE APPEAL IN TIME, WHICH IS LATE BY 613 DAYS. IT IS A SETTLED PRINCIPLE OF LAW THAT PROVISIONS RELATING TO SPECIFIED PERIOD OF LIMITATION MUST BE APPLIED WITH THEIR RIGOUR AND EFFECTIVE CONSEQUENCES. IN THE INSTANT CASE, WE ARE NOT SATISFIED THAT THERE HAD BEEN DILIGENCE ON THE PART OF THE ASSESSEE AND SHE WAS GUILTY OF NEGLIGENCE WHATSOEVER. IN OUR OPINION, PARTY GUILTY OF NEGLIGENCE CANNOT ASK FOR CONDONATION OF DELAY OF ABOUT 613 DAYS IN F ILING THE APPEAL BEFORE THE TRIBUNAL. THUS, CONSIDERING THE ENTIRE FACTS AN D CIRCUMSTANCES OF THE PRESENT CASE, WE ARE OF THE OPINION THAT IT IS NOT A FIT CASE WHERE INORDINATE DELAY OF 613 DAYS IN FILING THE APPEAL S HOULD BE CONDONED. ACCORDINGLY, WE DECLINE TO CONDONE THE DELAY IN FI LING THE APPEAL AND, AS SUCH, THE APPEAL IS DISMISSED. AT THIS STAGE, WE MA Y ALSO ADD HERE THAT WE DO NOT THINK IT NECESSARY TO DISCUSS THE MERITS OF THE CASE. 7. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.04.2016 SD/- SD/- (ANNAPURNA GUPTA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED 12 TH APRIL, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR