M/s Deepthi Insulated Cables P.Ltd, Cochin V. ACIT, Ernakulam

ITA 441/COCH/2010

• Counselvise Citation: 44121914 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2011
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2003-2004
• Appeal Filed On: 19-07-2010
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: MATHEW JOSEPH
• Keywords: Period of limitation; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANES AN, JM I.T.A NOS. 441 & 442/COCH/2010 ASSESSMENT YEARS: 2003-04 & 2004-05 M/S. DEEPTHI INSULATED CABLE (P) LTD., 245, PANAMPILLY NAGAR, KOCHI-682 036. [PAN: AAACD 8273D] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, ERNAKULAM. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI MATHEW JOSEPH, CA REVENUE BY MS. S. VIJAYAPRABHA, DR DATE OF HEARING 27/10/2011 DATE OF PRONOUNCEMENT 31/10/2011 O R D E R BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AG AINST TWO INDEPENDENT ORDERS OF THE CIT(A)-I, KOCHI DATED 19.2.2010 PERTA INING TO THE ASSESSMENT YEARS 2003- 04 AND 2004-05. SINCE COMMON ISSUES ARE ARISING FO R CONSIDERATION IN BOTH THE APPEALS, THE SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. THERE IS A DELAY OF 57 DAYS IN FILING BOTH THE A PPEALS BEFORE THIS TRIBUNAL. THE ASSESSEE HAS FILED AN APPLICATION TO CONDONE THE DE LAY. THEREFORE, SHRI MATHEW JOSEPH, THE LD. CHARTERED ACCOUNTANT-REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THERE WAS DELAY IN FILING THE APPEALS AS THE ASSESSEE-COMPANY WAS CLOSED DOWN DUE TO LOCK OUT. THEREFORE, BY MISTAKE, THE COPY OF THE ORDER WAS NO T HANDED OVER TO THE TAX CONSULTANT FOR FILING THE APPEALS AND THE COMPANY HAS NOT DONE ANY BUSINESS DUE TO LOCK OUT. THEREFORE, THE LD. CHARTERED ACCOUNTANT-REPRESENTATIVE FOR THE ASSESSEE PRAYED THAT THE DELAY MAY I.T.A. NOS. 441 & 442 /COCH/2010 2 BE CONDONED. ON THE CONTRARY, MS. S. VIJAYAPRABHA, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THERE WAS NO REASONABLE CAUSE FOR TH E ASSESSEE FOR NOT FILING THE APPEALS WITH THE PERIOD OF LIMITATION. 3. RIVAL SUBMISSIONS ARE CONSIDERED AND PERUSED THE MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE-COMPANY IS CLOSED DOWN DU E TO LOCK OUT. WHEN THE ASSESSEE- COMPANY WAS CLOSED DOWN, THIS TRIBUNAL IS OF THE O PINION THAT THERE WAS REASONABLE CAUSE ON THE PART OF THE ASSESSEE FOR NOT FILING T HE APPEALS WITHIN THE PERIOD OF LIMITATION. ACCORDINGLY, THE DELAY OF 57 DAYS IN FILING THE APP EALS IS CONDONED AND BOTH THE APPEALS ARE ADMITTED. 4. COMING TO THE MERIT OF THE APPEALS, SHRI MATHEW JOSEPH, THE LD. CHARTERED ACCOUNTANT-REPRESENTATIVE FOR THE ASSESSEE SUBMITTE D THAT THERE WAS DELAY OF 38 MONTHS IN FILING THE APPEALS BEFORE THE CIT(A) FOR THE ASS ESSMENT YEAR 2002-03. SIMILARLY, THERE WAS A DELAY OF 28 MONTHS IN FILING THE APPEAL FOR T HE ASSESSMENT YEAR 2004-05. THE LD. CHARTERED ACCOUNTANT-REPRESENTATIVE FOR THE ASSESSE E SUBMITTED THAT DUE TO LABOUR STRIKE, THE COMPANY DECLARED LOCK OUT SINCE 22 ND SEPTEMBER, 2005. THEREFORE, THE COMPANY CLOSED DOWN AND IT WAS NOT DOING ANY BUSINESS. THE LD. CHARTERED ACCOUNTANT- REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT FINA NCE MANAGER WHO USE TO HANDLE THE TAX MATTER, LEFT THE SERVICE DUE TO LOCK OUT. SINC E THE LABOUR PROBLEM COULD NOT BE SOLVED, THERE WAS NO CHANCE TO RE-OPEN THE COMPANY. AS SUC H, THE LD. CHARTERED ACCOUNTANT- REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED T HAT THE DELAY IN FILING BOTH THE APPEALS BEFORE THIS TRIBUNAL WAS BEYOND THE CONTROL OF THE ASSESSEE. THE LD. REPRESENTATIVE FURTHER SUBMITTED THAT THE MANAGING DIRECTOR OF THE COMPANY EXPIRED DURING THE PENDENCY OF THE PROCEEDINGS. THEREFORE, THE DELAY IN FILING THE APPEAL MAY BE CONDONED AND OPPORTUNITY MAY BE GIVEN TO PRESENT ITS CASE BE FORE THE CIT(A). THE LD. CHARTERED ACCOUNTANT- REPRESENTATIVE PLACED RELIANCE ON THE J UDGMENT OF THE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST. KATIJI , 167 ITR 471 (SC). THE LD. CHARTERED ACCOUNTANT-REPRESENTATIVE ALSO PLACED REL IANCE ON THE JUDGMENT OF THE APEX COURT IN THE CASE OF N.BALAKRSIHNAN VS. M.KRISHNAMURTHY (1998) 7 SCC 123. THE LD. I.T.A. NOS. 441 & 442 /COCH/2010 3 CHARTERED ACCOUNTANT-REPRESENTATIVE ALSO PLACED REL IANCE ON THE JUDGMENT OF THE APEX COURT IN THE CASE OF G.RAMEGOWDA MAJOR VS. SPECIAL LAND ACQUISITION OFFI CER , AIR 1988 SC 897. THE LD. CHARTERED ACCOUNTANT-REPRESENTATIV E ALSO PLACED RELIANCE ON THE JUDGMENT OF THE MADRAS HIGH COURT IN THE CASE OF ALACRITY HOUSING LTD. VS. ACIT (2010) 327 ITR 139 (MAD.) . 5. ON THE CONTRARY, MS. S. VIJAYAPRABHA, THE LD. DE PARTMENTAL REPRESENTATIVE SUBMITTED THAT THERE WAS NO REASONABLE CAUSE ON THE PART OF THE ASSESSEE FOR NOT FILING THE APPEALS BEFORE THE CIT(A) WITHIN THE PERIOD OF LIMI TATION. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT AFTER THE EXPIRY OF T HE PERIOD OF LIMITATION, THE ASSESSEE HAS TO EXPLAIN EACH AND EVERY DAY IN NOT FILING THE APP EALS. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT DUE TO LABOUR UNREST, THE ASSESSEE-COMPANY WAS LOCKED OUT. HOWEVER, THIS CANNOT BE CONSIDERED AS REASONABLE CA USE FOR NOT FILING THE APPEALS BEFORE THE CIT(A). THEREFORE, THE CIT(A) HAS RIGHTLY REJE CTED THE PRAYER OF THE ASSESSEE FOR CONDONATION. 6. THE SUBMISSIONS OF BOTH THE SIDES WERE HEARD ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE-COMPANY WAS CLOSED DOWN D UE TO LABOUR STRIKE. THE CIT(A) REJECTED THE CLAIM OF THE ASSES SEE ON THE GROUND THAT EVEN DURING THE LOCK OUT THE ASSESSEE-COMPANY PARTICIPATED IN THE A SSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER. WHEN THE ASSESSEE-COMPANY WAS CL OSED DOWN DUE TO LABOUR STRIKE, AND THE FINANCE MANAGER LEFT SERVICE, NO ONE COULD EXPECT THAT THE ASSESSEE-COMPANY TO TAKE STEPS TO FILE THE APPEALS BEFORE THE FIRST APP ELLATE AUTHORITY AGAINST THE ORDER OF THE ASSESSMENT. NO DOUBT, THE ASSESSEE HAS TO EXPLAIN SATISFACTORILY THE REASON FOR NOT FILING THE APPEALS BEFORE THE CIT(A). THIS TRIBUNAL IS OF THE OPINION THAT THE CLOSING DOWN OF BUSINESS DUE TO LABOUR STRIKE IS A REASONABLE CAUSE ON THE PART OF THE ASSESSEE FOR NOT FILING THE APPEALS BEFORE THE TRIBUNAL. THE APEX CO URT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST. KATIJI (SUPRA) HAD AN OCCASION TO CONSIDER THE ISSUE OF LI MITATION. AFTER CONSIDERING THE BACKGROUND ON WHICH THE PROVI SIONS OF LIMITATION WAS INCORPORATED, THE APEX COURT OBSERVED THAT WHEN SUBSTANTIAL JUSTI CE AND TECHNICAL CONSIDERATIONS ARE I.T.A. NOS. 441 & 442 /COCH/2010 4 PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED FOR THE REASON THAT THE OTHER SIDE CANNOT CLAIM TO HAVE VES TED RIGHT IN INJUSTICE BEING DONE BECAUSE OF NON-DELIBERATE DELAY. IN THE CASE BEFO RE US, THE ASSESSEE-COMPANY WAS CLOSED DOWN DUE TO LABOUR STRIKE. UNDER THE CIRCUM STANCES, THE REVENUE CANNOT TAKE ADVANTAGE OF THE SITUATION IN WHICH THE ASSESSEE WA S PLACED TO REJECT THE CLAIM OF THE ASSESSEE. THE LAW OF LIMITATION DOES NOT MEAN TO D ESTROY THE RIGHTS OF THE PARTIES. NO DOUBT, THE LAW OF LIMITATION IS TO BRING OUT THE FI NALITY TO THE LEGAL PROCEEDINGS. HOWEVER, WHENEVER THERE WAS A REASONABLE CAUSE AND THE ASSES SEE WAS PREVENTED FROM SUFFICIENT CAUSE FOR NOT FILING THE APPEALS BEFORE THE TRIBUNA L, IT NEEDS TO BE CONDONED AND THE APPEALS HAVE TO BE ADJUDICATED ON MERIT. CONDONING THE DELAY IN FILING THE APPEALS BEFORE THE CIT(A) AND ADJUDICATING THE APPEALS ON MERIT MA Y NOT PREJUDICE THE INTERESTS OF THE REVENUE IN ANY MANNER. THIS TRIBUNAL IS OF THE OPIN ION THAT ADJUDICATION OF THE APPEALS ON MERIT WOULD DEFINITELY PROMOTE THE CAUSE OF JUST ICE. RESPECTFULLY FOLLOWING THE JUDGMENT OF APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST. KATIJI (SUPRA), THE DELAY IN FILING BOTH THE APPEALS IS CONDONED. ACCORDINGLY, THE ORDERS OF THE CIT(A) ARE SET ASIDE AND THE APPEALS RESTORED TO THE FILE OF THE CIT(A). THE CIT(A) IS DIRECTED TO DISPOSE OF THE APPEALS ON MERIT IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE A RE ALLOWED. SD/- (N.R.S.GANESAN) JUDICIAL MEMBER PLACE: ERNAKULAM DATED: 31ST OCTOBER, 2011 GJ COPY TO: 1. M/S. DEEPTHI INSULATED CABLE (P) LTD., 245, PAN AMPILLY NAGAR, KOCHI-682 036. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTR AL CIRCLE-1. ERNAKULAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, KOCH I. I.T.A. NOS. 441 & 442 /COCH/2010 5 4. THE COMMISSIONER OF INCOME-TAX CENTRAL, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE .