M/s Paras Collins Distilleries (P) Limited, Hyderabad V. Asst.CIT,Circle 16(3), Hyderabad

ITA 434/HYD/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0330 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 14-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: KALYAN DAS
• Keywords: Depreciation; Condonation of delay; Reason to believe
• Section: 143(3); 194C; 148; 263

Judgement Text

ITA NO.434 OF 2014 PARAS COLLINS DISTILLERIES P LTD HYDERABAD PAGE 1 OF 12 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER & SMT.ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.434/HYD/2014 (ASSESSMENT YEAR: 2006-07) M/S. PARAS COLLINS DISTILLERIES PRIVATE LIMITED 8-2-608/2 ROAD NO.10 BANJARA HILLS, HYDERABAD 500034 PAN- AAECP 0258 J VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 16(3) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI KALYAN DAS & SHRI PAWAN KUMAR FOR REVENUE : SHRI RAJAT MITRA, DR DATE OF HEARING : 08.04.2015 DATE OF PRONOUNCEMENT : 17 .04.2015 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED A GAINST THE ORDER OF THE LD CIT (A)-V, HYDERABAD, DATED 31.10.2 013 RELATING TO A.Y 2006-07. 2. BRIEFLY STATED, THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PRODUCTION OF INDIAN MADE FOREIGN LIQUO R AND ORIGINALLY FILED ITS RETURN OF INCOME FOR A.Y 2006- 07 ON 5.1.2007 ADMITTING TOTAL INCOME OF RS.58,19,672. LATER ASSES SEE COMPANY REVISED ITS RETURN OF INCOME ON 24.3.2008 ADMITTING NIL INCOME. ITA NO.434 OF 2014 PARAS COLLINS DISTILLERIES P LTD HYDERABAD PAGE 2 OF 12 THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 147 BY ISSUE OF NOTICE U/S 148 FOR THE FOLLOWING REASONS: AS SEEN FROM DEPRECIATION SCHEDULE, DEPRECIATION OF RS.45,40,143/- WAS CLAIMED ON FIXED ASSETS OF RS.20.59 CRORES. THE COMPANY CAME INTO EXISTENCE ON 01.06.2005. PRIOR TO THIS IT WAS A PARTNERSHIP F IRM WHICH WAS TAKEN OVER BY NEW PARTNERS SRI P. THIKKA REDDY AND SRI CH. RAVI FROM OLD PARTNERS M/S KR: ASSOCIATES AND SRI M. DAYAKAR REDDY. AT THE TIME OF TAKING OVER BY THE NEW PARTNERS, THE ASSETS OF THE FIRM WERE REVALUED TO A TUNE OF RS. 17.98 CRORES AND THE SAID THE AMOUNTS WERE CREDITED TO THE ACCOUNTS OF RETIRING PARTNERS. THE FIRM HAS CLAIMED DEPRECIATION ON THE REVALUED AMOUNTS AND FROM 01.06.2005 AS THE FIRM WAS CONVERTED INTO THE COMPANY, PROPORTIONATE DEPRECIATION WAS CLAIMED IN THE CASE OF THE ASSESSING COMPANY FOR THE A. Y. 200 6- 07. AS THE DEPRECIATION IS NOT ALLOWABLE ON THE REVALUED AMOUNTS OF TILE ASSETS, I HAVE REASON TO BELIEVE THAT TILE EXCESS DEPRECIATION WAS CLAIMED B Y THE ASSESSEE COMPANY AND HENCE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE A. Y. 2006-01'. THEREAFTER, AO COMPLETED THE ASSESSMENT DETERMINING THE TOTAL INCOME AT RS.1,18,94,790 BY MAKING THE FOLLOWING ADDITIONS: (I) DEPRECIATION RESTRICTED TO RS.10,76,122 AS AGAINST THE DEPRECIATION CLAIMED BY THE ASSESSEE. (II) DISALLOWANCE OF DEPRECIATION OF RS.1,83,38,099 ON THE NEW ASSETS ADDED DURING THE YEAR. (III) DISALLOWANCE U/S 40(A) ON THE FOLLOWING ITEMS: S.NO HEAD OF ACCOUNT AMOUNT PAID (RS.) TAX DEDUCTIBLE UNDER SECTION 1 TRANSPORTATION 1,04,36,101 194C 2 CONSULTANCY 73,021 194J 3 AUDIT FEES 1,00,000 194J TOTAL 1,06,09,122 ITA NO.434 OF 2014 PARAS COLLINS DISTILLERIES P LTD HYDERABAD PAGE 3 OF 12 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE F ILED APPEAL BEFORE THE CIT (A). ASSESSEE FILED CONDONATION PETITION REQUESTING TO CONDONE THE DELAY IN FILING THE APPEAL. THE APPELLANT STATED THAT THE ORDER U/S 143 (3) RWS 147 .WAS PASSED ON 29-1-2010 AND SERVED ON THE ASSESSEE ON 31-12-2010. THE APPEAL WAS FILED ON 22-1-2013 WITH A DELAY OF 723 D AYS. THE ASSESSEE STATED THE FOLLOWING REASONS FOR DELAY IN FILING THE APPEAL: THE ABOVE COMPANY TILED APPEAL ON 22.12013 BEFORE YOUR GOODSELF AGAINST THE ASSESSMENT ORDER DATED 29.12.2010 FOR THE ABOVE ASSESSMENT YEAR. IN THE AB OVE APPEAL WE SUBMIT AS UNDER. 1. THE ASSESSEE COMPANY HAD FILED THE RETURN OF INCOME FOR THE ABOVE YEAR AND WHILE THE ASSESSING OFFICER MADE ASSESSMENT, DISALLOWED OUR CLAIMS AND DETERMINED INCOME AT RS.1L8.95 LAKHS, IN RESPECT OF WHICH DETA ILED SUBMISSIONS ARE FILED HEREWITH FOR YOUR KIND CONSIDERATION VIDE ANNEXURE 1 FOR YOUR PERUSAL AND RECORD. IN THE FACTS AND CIRCUMSTANCES STATED IN TH E ENCLOSED WRITTEN SUBMISSIONS CLAIMS MADE BY THE COMPANY ARE REQUIRED TO BE ALLOWED UNDER LAW. 2. AGAINST THE ASSESSMENT ORDER THE ASSESSEE COMPANY FILED AN APPEAL ON 22,1,2013. IT APPEARS ASSESSMENT ORDER WAS SERVED ON THE AUDITORS OFFICE ON 31,12201 0. THERE IS A DELAY IN FILING THE APPEAL AND IN THE MA TTER OF DELAY WE SUBMIT THE FOLLOWING FOR YOUR KIND CONSIDE RATION FOR CONDONATION OF DELAY. 3. THE APPELLANT COMPANY WAS ENGAGED IN THE MANUFACTUR E OF INDIAN MADE FOREIGN LIQUOR (IMFL) AND THE FACTOR Y IS LOCATED AT SHAMSHABAD RR DISTRICT. THE COMPANY HAD BEEN MANUFACTURING LIQUOR ON THE BHANDS OWNED BY M/S. SHAW WALLACE DISTILLERIES LIMITED. PERSUANT TO AGREEMENT BETWEEN THE COMPANY AND M/S. SHAW WALLACE DISTILLERIES LIMITED THE ASSESSEE COMPANY H AS TO PAY A SUM OF RS.5.19 CRORES TO THE ABOVE BRAND OWNE RS ITA NO.434 OF 2014 PARAS COLLINS DISTILLERIES P LTD HYDERABAD PAGE 4 OF 12 AS PER THE BOOKS' OF ACCOUNTS, WHEREAS THE BRAND OWNERS DETERMINED THE AMOUNT PAYABLE TO THEM AT RS. 746. 00LAKHS. SINCE THERE WAS A DISPUTE, ABOUT THE AMOUNT OF LIABILITY PAYABLE TO THE BRAND OWNERS, M/S. SHAW WALLACE DISTILLERIES LIMITED . FI LED A SUIT AGAINST THE ASSESSEE COMPANY FOR RECOVERY OF T HEIR CLAIM BEFORE THE HONBLE HIGH COURT MUMBAI VIDE ARBITRATION SUIT NO.1072 OF 2010. 4. IT MAY BE KINDLY BE NOTED IN THE ABOVE SUIT THE HON BLE HIGH COURT MUMBAI PASSED ORDERS DATED 14.09.2010 WHEREIN FOR THE RECOVERY OF THE AMOUNT PAYABLE BY T HE ASSESSEE COMPANY COURT RECEIVER WAS APPOINTED WHO TOOK THE POSSESSION OF THE FACTORY UNIT AND KEPT TH E FACTORY PREMISES UNDER LOCK. PURSUANT TO COURT ORDE RS ENTIRE MANUFACTURING ACTIVITY AND THE BUSINESS OF T HE UNIT CAME TO A GRINDING HALT. THE UNIT SINCE WAS LOCKED STAFF WORKING WITH THE ASSESSEE COMPANY LEFT THE COMPANY AS ON TODAY THE FACTORY UNIT IS UNDER LOCK AND THE UNI T IS IN THE POSSESSION OF COURT RECEIVER. COPY OF THE ORDER S OF THE HONBLE HIGH COURT ARE ENCLOSED AS ANNEXURE II FOR PERUSAL AND RECORD. 5. WHILE THE ABOVE FACTS ARE FORMING PART OF THE RECOR DS THE AO MADE ASSESSMENT ORDER ON 29.12.2010 AND THE ORDERS STATED TO HAVE BEEN SERVED ON THE AUDITORS OFFICE WHO REPRESENTED TAX MATTERS. THE OFFICE OF THE AUDI TORS SOUGHT TO COMMUNICATE THE IMPUGNED ASSESSMENT ORDER TO THE FACTORY ADDRESS AT SHAMSHABAD AND UNIT SINCE WA S CLOSED AND WAS UNDER LOCK THE ASSESSMENT ORDER WAS NOT DELIVERED TO THE ASSESSEE COMPANY. 6. IT MAY FURTHER BE NOTED THE ASSESSEE COMPANY IN THE MEANTIME MAINTAINED THE OFFICE AT ROAD NO.10, BANJA RA HILLS, HYDERABAD. THE HONBLE COMMISSIONER OF INCOM E TAX-IV HYDERABAD SERVED NOTICE ON TILE ASSESSEE COMPANY FOR REVISION 01 ASSESSMENT ORDER U/S 263 OF THE ACT AND POSTED THE CASE FOR HEARING ON 5.12.2012. T HE ASSESSEE COMPANY BASED ON THE NOTICE OF THE CILT IV HYDERABAD GOT THE INFORMATION THAT ASSESSMENT ORDER WAS ALREADY PASSED. THE COMPANY FURTHER LED TO BONA FIDE BELIEF THAT ASSESSMENT ORDER WAS MADE U/S 143(1) OF THE ACT. UPON ENQUIRY BASED ON THE REVISION NOTICE U/S 263 OF THE ACT THE COMPANY CAME TO KNOW THAT TILE ASSESSME NT ORDER WAS MADE UNDER SCRUTINY. 7. THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY MR. THIKKA REDDY IS STAYING AT YEMMIGANUR IN KUMOOL DIS TRICT AND THE FACTORY UNIT IS LOCATED AT SHAMSHABAD IN RR ITA NO.434 OF 2014 PARAS COLLINS DISTILLERIES P LTD HYDERABAD PAGE 5 OF 12 DISTRICT, THE FACTORY UNIT WAS CLOSED AND WAS UNDER LOCK AND WAS UNDER THE CUSTODY OF COURT RECEIVER. IN THE ABOVE CIRCUMSTANCES THE ENTIRE STAFF LEFT THE COMPANY AND IN THE CIRCUMSTANCES TILE ASSESSEE COMPANY COULD NOT GET T HE INFORMATION EARLIER ABOUT ASSESSMENT ORDER. IT IS O NLY, ON SERVICE OF REVISION NOTICE U/S 263 OF THE ACT IN DECEMBER 2012 THE MANAGING DIRECTOR MADE ENQUIRIES AND OBTAI NED A COPY OF THE ASSESSMENT ORDER. IT MAY BE NOTED COP Y OF THE ASSESSMENT ORDER SINCE WAS OBTAINED UPON MAKING FURTHER ENQUIRIES AS ABOVE THERE WAS A DELAY IN FIL ING THE APPEAL AND THE ASSESSEE COMPANY THEREFORE WAS PREVENTED BY SUFFICIENT CAUSE. A REFERENCE IN THIS REGARD MAY BE MADE TO TILE FOLLOWING DECISIONS REPORTED. ( 1) RASIPURAM UNION MOTOR SERVICE LTD VS CIT 30 ITR 687 (MAD)(2) MALAYALAM PLANTATIONS LTD VS CLT 36 ITR 205 (KER), AND (3) HIND DEVELOPMENT CORPORATION VS ITO 118 ITR 873 (CAL). A COPY OF THE NOTICE OF REVISION U/S 263 OF THE ACT IS ENCLOSED AS ANNEXURE III FOR PERUSAL. TH E MANAGING DIRECTOR THEREAFTER MADE CONSULTATIONS AND OBTAINED LEGAL ADVISE AND WITHOUT LOSING ANY TIME T HE COMPANY FILED THE APPEAL BEFORE THE HONBLE COMMISSIONER ON 22.1.2013. THERE WAS A DE/AY OF 723 DAYS IN FILING THE APPEAL AND THE DELAY WAS BEYOND THE CONTROL OF THE ASSESSEE COMPANY FOR BONAFIDE AND SUFFICIENT REASONS AND DELAY WAS NOT INTENTIONAL. 8. THE ASSESSEE COMPANY ON ACCOUNT OF CLOSURE OF THE FACTORY UNIT HAD BEEN SUFFERING FINANCIAL CRISIS AN D SUFFERED GENUINE HARDSHIP IN NOT FILING THE APPEAL WITHIN THE PRESCRIBED TIME. IN THE MATTER OF GENUINE HARDS HIP WE STATE THAT THE PRINCIPLES OF PURPOSIVE CONSTRUCTION SHOULD BE APPLIED FOR DETERMINING WHETHER ANY HARDSHIP HAS BEEN CAUSED TO THE ASSESSEE COMPANY. THE INGREDIENT S OF GENUINE HARDSHIP MUST BE DETERMINED BY THE DICTIONA RY MEANING THEREOF AND THE LEGAL CONSPECTUS ATTENDING THERETO. GENUINE HARDSHIP WOULD INTER ALIA MEANS A GENUINE DIFFICULTY. THE ABOVE PRINCIPLES OF LAW TIM E AND AGAIN HAVE BEEN HELD BY THE HONBLE SUPREME COURT A ND HIGH COURTS AND IT IS SUFFICE TO DRAW YOUR KIND ATT ENTION TO THE DECISION OF THE SUPREME COURT IN THE CASE OF BM MALANI VS. CIT 306 ITR 196. 9. WE FURTHER SUBMIT IN THE MATTER OF CONDONATION OF D ELAY THE AUTHORITIES HAVE TO EXERCISE THE DISCRETION JUD ICIOUSLY AND LIBERALLY, AND NOT ARBITRARILY OR WHIMSICALLY. REFERENCE MAY BE MADE IN THIS REGARD TO THE DECISIO N OF THE SUPREME COURT IN THE CASE OF RAVINDRAKUMAR DEY VS. STATE OF ORISSA AIR 197 PAGE 170 AT 176.77. KELLA ITA NO.434 OF 2014 PARAS COLLINS DISTILLERIES P LTD HYDERABAD PAGE 6 OF 12 APPALASWAMY & SONS VS. CIT 106 ITR 487 (ORI) AND VARKEY OUSEPH VS. AG ITAT 101 ITR 334 AT 338 (KER.) . 10. SIMILARLY SUFFICIENT CAUSE IN THE CONTEXT OF CONDONATION OF DELAY SHOULD RECEIVE A LIBERAL CONST RUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE. A REFERENCE M AY BE MADE IN THIS REGARD TO THE DECISION OF THE SUPREME COURT IN THE CASE OF DIRABANDHU SAHU VS. JADUMORI MANGARA J AIR 1954 PAGE 411. 11. IT MAY FURTHER BE NOTED WHERE DELAY IN FILING THE APPEAL WAS CAUSED DUE TO DISPUTES AMONG THE PARTNER S THE HONBLE MADRAS HIGH COURT CONDONED THE DELAY IN THE CASE OF SUNDAR RAVEL AND BROTHERS V. ITAT 306 ITR 3 8. 12. IN THE ABOVE FACTS AND CIRCUMSTANCES WE REQUEST YOUR GOODSELF TO CONDONE THE DELAY IN FILING THE AP PEAL AS OTHERWISE THE APPELLANT COMPANY WILL SUFFER IRREPAR ABLE LOSS AND HARDSHIP FOR WHICH ACT OF KINDNESS THE COM PANY REMAINS GRATEFUL. 4. THE FOLLOWING ARE THE RELEVANT PARAS IN THE ORDER O F THE CIT (A) WHEREIN HE HAS GIVEN REASONS FOR NOT CONDONING THE DELAY. THE CASE CITED BY THE APPELLANT IN PARA 11 OF HIS REASONS FOR CONDONATION OF DELAY THAT DUE TO THE DISPUTES AMONG THE PARTNERS, THE DELAY IN FILING TH E APPEAL WAS CONDONED BY THE MADRAS HIGH COURT IN THE CASE OF SUNDAR RAVEL & BROS. 306 ITR 411 CANNOT BE ACCEPTED FOR THE SIMPLE REASON THAT IN THAT CASE , THERE WAS ONLY A DELAY OF 25 DAYS. BUT IN THE CASE OF THE ASSESSEE, THERE WAS ABNORMAL AND INORDINATE DELAY OF 723 DAYS, WHICH BY ANY STRETCH OF IMAGINATION, CANNOT BE CONDONED. AS PER SECTION 249(2) THE APPEAL IS TO BE PRESENTED WITHIN 30 DAYS OF THE DATE OF SERVICE OF ASSESSMENT ORDER. SECTION 294(3) STATES THAT THE COMMISSIONER (APPEALS) MAY ADMIT AN APPEAL AFTER THE EXPIRATION OF THE SAID PERIOD, IF HE IS SATISFIED THAT THE ASSESS EE HAD SUFFICIENT CAUSE FOR NOT PRESENTING IT WITHIN T HAT PERIOD. IT IS, THEREFORE, IMPORTANT TO LOOK AT THE JUDGMENTS OF VARIOUS COURTS IN THE MATTER IN ORDER TO ITA NO.434 OF 2014 PARAS COLLINS DISTILLERIES P LTD HYDERABAD PAGE 7 OF 12 EXTRACT CERTAIN PRINCIPLES REGARDING WHAT WOULD CONSTITUTE A SPECIFIC CAUSE AND THE MANNER IN WHICH THE ASSESSEE IS EXPECTED TO EXPLAIN THE DELAY 6. FURTHER, THE LD CIT (A) RELIED ON THE FOLLOWING CAS ES FOR NOT CONDONING THE DELAY: (I) CIT VS. ORISSA CONCRETE AND ALLIED INDUSTRIES L TD (2003) 264 ITR 186 (CAL.), (II) HON'BLE APEX COURT IN THE CASE OF P.K.RAMCHAND RAN VS. STATE OF KERALA (AIR 1998 (S.C) 2276) (III)HON'BLE SUPREME COURT IN THE CASE OF VEDABAI A LIAS VAIJAYANATABAI BABURAO PATIL (253 ITR 798). 7. THE CIT (A) CONCLUDED AS UNDER: 5.5 HAVING CONSIDERED THE FACTS AND THE REASONS GIVEN, I AM NOT CONVINCED ABOUT THE GENUINENESS OF THE GROUNDS FOR THE DELAY. THE ASSESSMENT ORDER WAS PASSED ON 29.12.2010 AND SERVED ON THE ASSESSEE ON 31.12.2010. IT IS ALSO UNBELIEVABLE THAT HOW THERE WAS AN INORDINATE DELAY OF 723 DAYS IN FILING THE APPEA L ON 22.01.2013 WHICH OUGHT TO HAVE FILED ON OR BEFORE 30.01.2011 INSPITE OF HAVING GOOD LEGAL ADVICE. 5.6 IN VIEW OF THE ABOVE, BOTH ON FACTS AND IN LAW , I FIND IT UNCONVINCING TO ACCEPT THE ARGUMENTS OF THE APPELLANT AND CANNOT CONDONE THE ABNORMAL AND INORDINATE DELAY OF 723 DAYS IN FILING THE APPEAL. HENCE, THE GROUND OF CONDONATION OF DELAY IS DISMISSED. 6. THE OTHER GROUNDS OF APPEAL ACCORDINGLY BECOME INFRUCTUOUS AS THE APPEAL STANDS DISMISSED ON THE REJECTION OF CONDONATION OF DELAY OF ABNORMAL AND INORDINATE DELAY OF 723 DAYS. ITA NO.434 OF 2014 PARAS COLLINS DISTILLERIES P LTD HYDERABAD PAGE 8 OF 12 8. THE LD DR RELIED ON THE ORDER OF THE CIT (A). 9. THE LD COUNSEL FOR THE ASSESSEE RELIED ON THE DECIS ION IN THE CASE OF (167 ITR 471 (S.C) LAND ACQUISITION VS. KHATIJI & OTHERS. 10. WE HAVE HEARD BOTH THE PARTIES. THE HONBLE APEX C OURT IN THE CASE OF CONCORD OF INDIA INSURANCE CO. LTD. V. SMT. NIRMALA DEVI AND OTHERS, [1979] 118 ITR 507(SC) HELD THAT T HE LAW IS SETTLED THAT MISTAKE OF COUNSEL MAY IN CERTAIN CIRC UMSTANCES BE TAKEN INTO ACCOUNT IN CONDONING THE DELAY ALTHOUGH THERE IS NO GENERAL PROPOSITION THAT MISTAKE OF COUNSEL BY ITSE LF IS ALWAYS A SUFFICIENT GROUND. IT IS ALWAYS A QUESTION WHETHER THE MISTAKE WAS BONA FIDE OR WAS MERELY A DEVICE TO COVER AN UL TERIOR PURPOSE SUCH AS LACHES ON THE PART OF THE LITIGANT OR AN AT TEMPT TO SAVE LIMITATION IN AN UNDERHAND WAY. THE COURT MUST SEE WHETHER, IN SUCH CASES, THERE IS ANY TAINT OF MALA FIDES OR ELE MENT OF RECKLESSNESS OR RUSE. IF NEITHER IS PRESENT, LEGAL ADVICE HONESTLY SOUGHT AND ACTUALLY GIVEN, MUST BE TREATED AS SUFFI CIENT CAUSE WHEN AN APPLICATION UNDER S. 5 OF THE ACT IS BEING CONSIDERED. 11. FURTHER WE RELY ON THE DECISION OF THE HON'BLE SUPR EME COURT IN THE CASE OF N. BALAKRISHNAN V. M. KRISHNAM URTHY, AIR 1998 SC 3222. HERE WE WOULD ALSO LIKE TO REFER THE FINDING OF THE APEX COURT IN THE CASE OF N. BALAKRISHNAN V. M. KRI SHNAMURTHY, AIR 1998 SC 3222. THE APEX COURT HELD AS UNDER:- '11. RULES OF LIMITATION ARE NOT MEANT TO DESTROY T HE RIGHT OF PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT DILATORY TACTICS, BUT SEEK THEIR REMEDY PROMPTLY. T HE OBJECT OF ITA NO.434 OF 2014 PARAS COLLINS DISTILLERIES P LTD HYDERABAD PAGE 9 OF 12 PROVIDING A LEGAL REMEDY IS TO REPAIR THE DAMAGE CA USED BY REASON OF LEGAL INJURY. LAW OF LIMITATION FIXES A L IFE SPAN FOR SUCH LEGAL REMEDY FOR THE REDRESS OF THE LEGAL INJU RY SO SUFFERED. TIME IS PRECIOUS AND THE WASTED TIME WOUL D NEVER REVISIT. DURING EFFLUX OF TIME NEWER CAUSES WOULD S PROUT UP NECESSITATING NEWER PERSONS TO SEEK LEGAL REMEDY BY APPROACHING THE COURTS. SO A LIFE SPAN MUST BE FIXE D FOR EACH REMEDY. UNENDING PERIOD FOR LAUNDERING THE REMEDY M AY LEAD TO UNENDING UNCERTAINTY AND CONSEQUENTIAL ANARCHY. LAW OF LIMITATION IS THUS FOUNDED ON PUBLIC POLICY. IT IS ENSHRINED IN THE MAXIM INTEREST REIPUBLICAE UP SIT F INIS LITIUM ( IT IS FOR THE GENERAL WELFARE THAT A PERIOD BE PUT TO LITIGATION) . RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHT OF TH E PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THEIR REMEDY PROMPTLY. THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. 12. A COURT KNOWS THAT REFUSAL TO CONDONE DELAY WOU LD RESULT IN FORECLOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PRESUMPTION THAT DELAY IN APPROACHING THE COURT IS ALWAYS DELIBERATE. THIS COURT HAS HELD THAT THE WORDS 'SUF FICIENT CAUSE' UNDER SECTION 5 OF THE LIMITATION ACT SHOULD RECEIV E A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE V IDE SHAKUNTALA DEVI JAIN V. KUNTAL KUMARI, AIR 1969 SC 575 AND STATE OF WEST BENGAL V. THE ADMINISTRATOR, HOWAH MU NI- CAPACITY, AIR 1972 SC 749.' 12. IT ALSO BE NOTICED THAT IN THE CASE OF STATE OF WES T BENGAL VS. ADMINISTRATOR, HOWRAH MUNICIPALITY, AIR 1972 SC 749, THE SUPREME COURT HELD THAT EXPRESSION 'SUFFICIENT CAUS E' SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE THE PURPOSE OF JUSTICE PARTICULARLY WHEN THERE IS NO MOTIVE BEHIND DELAY. THIS NECESSARILY IMPLIES THAT PARTIES MUST ACT BONAFIDEL Y, EXPEDITIOUSLY AND WITH DUE CARE. A CASUAL OR A NEGL IGENT LITIGANT WHO HAS ACTED WITH UTTER IRRESPONSIBLE ATTITUDE, CA NNOT CLAIM THE ITA NO.434 OF 2014 PARAS COLLINS DISTILLERIES P LTD HYDERABAD PAGE 10 OF 12 CONDONATION OF DELAY IN LAW WHEN THE RIGHT HAS ACCR UED 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 HUMAN CONDUCT OR NORMAL CONDUCT OF A LITIGANT. IT IS NEIT HER EXPECTED NOR CAN IT BE A NORMAL CONDUCT OF A PUBLIC SERVANT OR A LITIGANT THAT THEY WOULD KEEP THE FILES UNMOVED, UNPROCESSED FOR MONTHS TOGETHER ON THEIR TABLES. 13. HOW THE POWER OF CONDONATION OF DELAY IS TO BE EXE RCISED, 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:- ( PAGES 472 ). ' THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACTING SECTION 51 OF THE LIMITATION ACT OF 196 3 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO P ARTIES 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 COURTS. IT IS COMMON KNOWLEDGE THAT THE COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL APPROACH IN MATTERS INSTITUTED IN THIS COURT. BUT THE MESSAGE DOES NOT APPEAR TO HAVE PERC OLATED DOWN TO ALL THE OTHER COURTS IN THE HIERARCHY. AND SUCH A LIBERAL APPROACH IS ADOPTED ON PRINCIPLE AS IT IS R EALIZED 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 C AUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS, WHEN DELAY IS CONDONED, THE HIGHEST THAT CAN HAPPEN IS THAT A CAU SE WOULD ITA NO.434 OF 2014 PARAS COLLINS DISTILLERIES P LTD HYDERABAD PAGE 11 OF 12 BE DECIDED ON MERITS AFTER HEARING THE PARTIES. 1. ' ANY APPEAL OR ANY APPLICATION, OTHER THAN AN APPLICATION UNDER ANY OF THE PROVISIONS OF ORDER XX I OF THE CODE OF CIVIL PROCEDURE, 1908, MAY BE ADMITTED AFTE R THE PRESCRIBED PERIOD IF THE APPELLANT OR THE APPLICANT SATISFIES THE COURT THAT HE HAD SUFFICIENT CAUSE FOR NOT PREF ERRING THE APPEAL OR MAKING 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 DOCTR INE MUST BE APPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATI C 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 O F A NON- 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 TO DELAY. IN F ACT, 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 INJUS TICE AND IS EXPECTED TO DO SO.' 14. IN THE PRESENT CASE, THE CIT (A) FAILED TO NOTE THA T PURSUANT TO THE ORDER OF THE HONBLE HIGH COURT OF BOMBAY, T HE FACTORY PREMISES WAS LOCKED AND RECEIVER WAS APPOINTED CONS EQUENT TO WHICH THE ASSESSMENT ORDER COULD NOT BE RECEIVED FO R FILING APPEAL WITHIN THE PRESCRIBED TIME, AS ENTIRE STAFF HAD LEFT THE COMPANY. ITA NO.434 OF 2014 PARAS COLLINS DISTILLERIES P LTD HYDERABAD PAGE 12 OF 12 15. WE NOTE THAT THE ITAT HAS POWER TO ADMIT APPEAL DIS MISS IN LIMINE BY CIT (A) AND DRAW SUPPORT FROM THE JUDGMEN T THE HONBLE SUPREME COURT IN THE CASE OF MELA RAM & SON S V. CIT (29 ITR 607 (S.C). 16. WE FIND THAT THERE APPEARS TO BE SUFFICIENT CAUSE FOR NOT FILING THE APPEAL WITHIN TIME IN THE PRESENT CASE A ND THEREFORE, IN THE INTEREST OF JUSTICE, WE DIRECT THE CIT (A) TO C ONDONE THE DELAY AND DECIDE THE ISSUE ON MERITS. 17. IN THE RESULT APPEAL IS ALLOWED FOR STATISTICAL PUR POSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH APRIL, 2015. S D/ - S D/ - (B. RAMAKOTAIAH) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 17 TH APRIL, 2015. VNODAN/SPS COPY TO: 1. M/S. PARAS COLLINS DISTILLERIES PRIVATE LIMITED, 8- 2-608/2 ROAD NO.10 BANJARA HILLS, HYDERABAD 500034 2. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 16(3) HYD ERABAD 3. THE CIT(A) V HYDERABAD 4. THE CIT - HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER