ICES Software Limited, Vadodara. V. The Dy.CIT., Baroda Circle-1, Vadodara.

ITA 4562/AHD/2003

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8660 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 17-03-2010
• Assessment Year: 1995-1996
• Appeal Filed On: 31-12-2003
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: M K PATEL
• Keywords: Period of limitation; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI T.K.SHARMA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER DATE OF HEARING: 17.03.10 DRAFTED ON: 17.03.10 ITA NO.4562/AHD/2003 & 4563/AHD/2003 ASSESSMENT YEAR : 1995-1996 & 1999-2000 ICES SOFTWARE LTD., 3 RD FLOOR, PUSHKAR CHAMBER, PROF. MANKERAO ROAD, DANDIA BAZAAR, VADODARA-1 VS. DY.COMM. OF INCOME TAX, BARODA CIRCLE-1, AAYKAR BHAVAN, RACE COURSE, VADODARA-7. PAN/GIR NO. : 31-618-CN-4448 (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI M.K.PATEL A.R. RESPONDENT BY: SHRI C.K.MISHRA D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE SEPARATE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-III, B ARODA DATED 09.12.2002 AND 13.02.2003 FOR THE ASSESSMENT YEAR 1995-1996 AN D 1999-2000. 2. THE GROUNDS OF THE APPEAL OF THE ASSESSEE FOR BO TH THE YEARS READS AS UNDER:- AY 1995-96 1. THE LD. ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS IN ASSESSING AMOUNT OF RS.11,18,440 AS INTEREST INCOME ACCRUED TO THE ASSESSEE COMPANY @ 18% ON RS.62,13,529 AND THE CIT( APPEALS)-III, BARODA EQUALLY ERRED IN ARRIVING IN THE CONCLUSION THAT ON PART OF AMOUNT OF RS.12,92,859 AND RS.18,40,194 INTEREST IN COME @ 18% ACCRUED AND IN CONFIRMING THE ACT OF THE ASSESSING OFFICER. AY 1999-2000 ITA NO.456 2& 4563/AHD/2003 - 2 - 1. THE LD. ASSESSING OFFICER HAS ERRED IN LAW AND O N FACTS IN REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE AND IN DETERMINING THE INCOME OF THE ASSESSEE AT RS.2,00,00,00/- AND THE L D. CIT(APPEALS) BARODA EQUALLY ERRED IN CONFIRMING THE ACT OF THE A SSESSING OFFICER WHICH IS CONTRARY TO THE FATS OF THE CASE. 3. IT IS OBSERVED THAT BOTH THE APPEALS FILED ON 31 .12.2003. THE APPEAL IN ITA NO.4562/AHD/2003 FOR AY 1995-96 IS BARRED BY LI MITATION OF 280 DAYS AND THE APPEAL IN ITA NO.4563/AHD/2003 FOR AY 1999- 2000 IS BARRED BY LIMITATION OF 226 DAYS. THE ASSESSEE HAS FILED COND ONATION APPLICATION FOR EXPLAINING THE REASONS FOR DELAY IN FILING OF THE S AID APPEALS WHICH ARE AS UNDER:- REF: CONDONATION OF DELAY IN FILING APPEAL FOR THE A.Y. 1995 - 96 WE ENCLOSE HEREWITH AN APPEAL U/S 253 (1) OF THE IN COME TAX ACT, 1961 AGAINST THE ORDER OF COMMISSIONER OF INCOME TA X (APPEALS) - III, BARODA RELATING TO A.Y.1995-96 MADE U/S 250 OF THE INCOME TAX ACT ON 9.12.2002, WHICH WAS RECEIVED BY US ON 25.1. 2003. ALTHOUGH THIS APPEAL SHOULD HAVE BEEN FILED IN THE OFFICE OF THE TRIBUNAL ON OR BEFORE 25.3.2003, BUT IT COULD NOT B E SO FILED DUE TO FOLLOWING REASON. 1. THAT LATE SHRI NAYANKUMAR VAISHNAV WAS THE ONLY WHOLE TIME WORKING DIRECTOR AND ALL THE FUNCTIONING OF THE COM PANY WAS MANAGED AND CONTROLLED BY HIM ALONE SINCE THE INCOR PORATION OF THE COMPANY. 2. THAT WE ALL OTHERS WERE ONLY A ON-BOARD DIRECT ORS TAKING NO PART IN OPERATING / ADMINISTRATIVE / FINANCING ACTI VITY OF THE COMPANY. 3. THAT SOON AFTER THE SURVEY CONDUCTED AT COMPAN Y OFFICE AT BANGALORE - NAYANKUMAR VAISHNAV SUFFERED FROM FEVER ETC FOR A PERIOD OF AROUND 6 MONTHS. THEREAFTER ON DETAILED M EDICAL EXAMINATION CANCER WAS DETECTED. 4. CANCER DIESES DISRUPTED OUR ENTIRE FAMILIES RO UTINE LIFE AND ADMITTED HIM FOR MEDICAL TREATMENT AT P.D.HINDUJA N ATIONAL ITA NO.456 2& 4563/AHD/2003 - 3 - HOSPITAL & MEDICAL RESEARCH CENTRE, MUMBAI AFTER PR OVIDING VARIOUS ALTERNATIVE MEDICAL AND OTHER TREATMENT AT HOME. SUBSEQUENTLY HE DIED ON 16.9.2002. 5. AS A RESULT OF FEVER AND THEREAFTER DETECTION OF CANCER HE WAS UNABLE TO WORK HIMSELF AND WE WERE NOT ACQUIENT WIT H SOFTWARE BUSINESS AND THEREFORE ENTIRE ACTIVITY OF THE COMPA NY WERE FREEZED. SINCE LAST 2 YEARS WORKING ACTIVITIES OF THE COMPAN Y AND OFFICE HAS BEEN CLOSED DOWN AND THE PERSON INCHARGE OF ACCOUNT S JOINED THE SERVICE AT OTHER PLACE CONSIDERING NO FUTURE SCOPE IN OUR COMPANY. 6. THAT WE WERE HAVING NO CONTROL OVER ACCOUNTS A ND OTHER ASPECTS, THERE BEING NO ACCOUNTS EMPLOYEE, ALL EARLIER MATTE RS WERE CARRIED OUT UNDER THE SUPERVISION AND CONTROL OF LATE DIREC TORS, OFFICE REMAIN CLOSED AND I AM STAYING AT MUMBAI UNAWARE AB OUT ENTIRE MATTER 7. UNDER SUCH CIRCUMSTANCES THE INFORMATION REQUI RED BY THE ASSESSING OFFICER AS WELL AS BY THE CIT (A) WAS NOT FURNISHED AND THE MATTER WAS NOT PRESENTED CORRECTLY. 8. THAT ON RECEIPT OF NOTICE FOR PENALTY PROCEEDI NGS I CAME TO KNOW ABOUT THE SERIOUSNESS AND DEFAULT COMMITTED BY OUR COMPANY. ON THE BASIS OF VERIFICATION OF VARIOUS AVAILABLE R ECORDS THE FACT IS THAT DURING A.Y. 1995-96 THE COMPANY HAS NOT EARNED INTEREST INCOME ON ADVANCES NOR ACCRUED INTEREST INCOME ON S UCH ADVANCED AMOUNTS. I THEREFORE, PRAY THAT THE DELAY IN FILLING THIS AP PEAL MAY BE CONDONED U/S 253 (5) OF THE INCOME TAX ACT, 1956 AN D THE APPEAL MAY BE ADMITTED FOR HEARING ON MERITS. 4. THE LD. D.R. VEHEMENTLY OPPOSED THE CONDONATION APPLICATION FILED BY THE ASSESSEE. HE SUBMITTED THAT IN THE CONDONATION PETITION, THE ASSESSEE HAS NOT EXPLAINED THE REASONS FOR DELAY AFTER 16.09.2002, T HE DATE OF DEATH OF SHRI NAYANKUMAR VAISHNAV. HE SUBMITTED THAT THE ORDER O F THE LD. CIT(A) AS PER FORM NO.36 FILED BY THE ASSESSEE WAS RECEIVED BY TH E ASSESSEE ON 25.01.2003 ITA NO.456 2& 4563/AHD/2003 - 4 - FOR AY 1995-96 AND ON 20.03.2003 FOR AY 1999-2000. THUS, THE APPEAL FOR AY 1995-96 WAS REQUIRED TO BE FILED BY THE ASSESSEE ON 26.03.2003 AND FOR AY 1999-2000 ON 19.05.2003. NO REASON HAS BEEN GIVEN WITH EVIDENCE TO SHOW THAT WHY THE APPEAL COULD NOT BE FILED BEFORE THE T RIBUNAL WITHIN THE PRESCRIBED TIME. THEREFORE, THE CONDONATION APPLICATIONS OF TH E ASSESSEE ARE REQUIRED TO BE DISMISSED AND APPEAL SHOULD NOT BE ADMITTED FOR HEA RING. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE UNDISPUTED FACTS ARE THAT THE IMPUGNED ORDERS O F THE LD. CIT(A) WERE RECEIVED BY THE ASSESSEE ON 25.01.2003 AND 20.03.20 03 FOR AY 1995-96 AND 1999-2000 RESPECTIVELY. THE APPEALS WERE ACCORDING LY REQUIRED TO BE FILED BEFORE THE TRIBUNAL AGAINST THE SAID ORDERS ON 26.0 3.2003 AND 19.05.2003 FOR AYS 1995-96 AND 1999-2000 RESPECTIVELY. THESE APPEA LS FILED BY THE ASSESSEE ONLY ON 23.12.2003 AND THEREFORE, THE APPEAL FOR AY 1995-96 IS BARRED BY LIMITATION BY 280 DAYS AND APPEAL FOR THE AY 1999-2 000 IS BARRED BY LIMITATION OF 226 DAYS. IN THE CONDONATION APPLICATION, THE AS SESSEE HAS ONLY STATED THAT THE MANAGING DIRECTOR OF THE COMPANY SHRI NAYANKUMA R VAISHANAV EXPIRED AFTER PROLONGED ILLNESS FROM CANCER ON 16.09.2002 A ND HAS FILED COPY OF DEATH CERTIFICATE IN SUPPORT OF THE SAME. THE ASSESSEE HA S SIMPLY STATED THAT FOR SINCE LAST TWO YEARS, THE WORKING OF THE COMPANY AND OFFI CE WAS CLOSED. BUT THE ASSESSEE HAS NOT SUPPORTED THE SAME WITH ANY EVIDEN CE. THE ASSESSEE HAS NEITHER INFORMED ABOUT THE DATE OF FILING OF RETURN OF INCOME FOR AY 2003-04 NOR IT HAS GIVEN ANY EVIDENCE SHOWING THAT THERE WE RE NO BUSINESS OPERATION CARRIED ON BY THE ASSESSEE. THEREFORE, THERE IS NO COGENT AND PLAUSIBLE REASON GIVEN BY THE ASSESSEE EXPLAINING THE DELAY IN FILIN G OF THE SAID APPEALS. THE ASSESSEE HAD NOT EXPLAINED THE CAUSE OF DELAY IN FI LING THE APPEAL, ESPECIALLY WHEN THE MANAGING DIRECTOR SHRI NAYANKUMAR VAISHANA V, WHO WAS LOOKING AFTER THE FUNCTIONING OF THE COMPANY HAD DIED BEFOR E THE RECEIPT OF THE ORDER OF THE LD. CIT(A) AGAINST WHICH THE APPEALS ARE FILED BEFORE THE TRIBUNAL. THE ITA NO.456 2& 4563/AHD/2003 - 5 - ASSESSEE HAD NEITHER GIVEN ANY PARTICULAR OR DETAIL S IN THE CONDONATION PETITION AS TO THE DATE ON WHICH THE PAPERS WERE HANDED OVER TO THE COUNSEL FOR PREPARING THE APPEAL AND ON WHAT OCCASION THE ASSES SEE ENQUIRED ABOUT THE PROGRESS IN PREPARING THE APPEAL AND FILING IT. THE ASSESSEE HAD NOT TAKEN A PROPER PLEA TO SHOW SUFFICIENT CAUSE GIVING EVIDENC E AND PROOF BEYOND REASONABLE DOUBT FOR THE DELAY 6. IT WOULD BE APPROPRIATE TO REFER TO SOME OF THE JUDICIAL PRONOUNCEMENTS ON THE ISSUE OF DELAY IN FILING THE APPEALS. IN THE CASE OF HIND DEVELOPMENT CORPN., VS. ITO (1979) 118 ITR 873, THE CALCUTTA HI GH COURT HELD THAT A TRIBUNAL CAN CONDONE THE DELAY IF THERE WAS SUFFICI ENT CAUSE FOR THE DELAY IN THE SUBMISSION OF THE APPEAL. IN THE CASE OF VEDABHAI A LIAS VIJAYANATABAI BABURAO PATIL VS. SHANTARAM BABURAO PATIL (2002) 253 ITR 79 8 (SC), WHERE IT WAS HELD THAT WHILE EXERCISING DISCRETION UNDER SECTION 5 OF THE LIMITATION ACT, 1963, TO CONDONE DELAY FOR SUFFICIENT CAUSE IN NOT FILING TH E APPEAL WITHIN THE PERIOD PRESCRIBED, COURTS SHOULD ADOPT A PRAGMATIC APPROAC H. A DISTINCTION MUST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDINATE A ND A CASE WHERE DELAY IS OF A FEW DAYS. THE COURT OBSERVED THAT WHEREAS IN THE FORMER CONSIDERATION OF PREJUDICE TO THE OTHER SIDE WILL BE RELEVANT FACTOR AND CALLS FOR A MORE CAUTIOUS APPROACH. IN THE LATTER CASE NO SUCH CONSIDERATION MAY ARISE AND SUCH A CASE DESERVES A LIBERAL APPROACH. NOW IN THE PRESENT CAS E DELAY IS NOT OF A FEW DAYS BUT OF MORE THAN SEVEN MONTHS. BESIDES, THERE IS AB SOLUTELY NO VALID EXPLANATION/REASON FOR THE DELAY. IN THE CASE OF CI T V. RAM MOHAN KABRA (2002) 257 ITR 773, THE HONBLE PUNJAB & HARYANA HI GH COURT HAS HELD AND OBSERVED THAT WHERE THE LEGISLATURE SPELLS OUT A PE RIOD OF LIMITATION AND PROVIDES FOR POWER TO CONDONE THE DELAY AS WELL, SU CH DELAY CAN ONLY BE CONDONED ONLY FOR SUFFICIENT AND GOOD REASONS SUPPO RTED BY COGENT AND PROPER EVIDENCE. IT IS A SETTLED PRINCIPLE OF LAW THAT PRO VISIONS RELATING TO THE SPECIFIED PERIOD OF LIMITATION MUST BE APPLIED WITH THEIR RIG OUR AND EFFECTIVE ITA NO.456 2& 4563/AHD/2003 - 6 - CONSEQUENCES. IN THIS CASE DELAY FOR FILING THE APP EAL LATE FOR ONLY A FEW DAYS WAS NOT CONDONED. IN THE CASE OF ASSTT. CIT V. TAGG AS INDUSTRIES DEVELOPMENT LTD. (2002) 80 ITD 21 (CAL), TRIBUNAL, CALCUTTA BEN CH, CALCUTTA, DID NOT CONDONE THE DELAY FOR FILING THE APPEAL LATE BY 13 DAYS BECAUSE THE DELAY WAS NOT DUE TO SUFFICIENT CAUSE. 7. FURTHER IN THE CASE OF MADHU DADHA VS. ASSISTANT COMMISSIONER OF INCOME-TAX [2009] 317 ITR 0458 [PATNA]. THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF ASSESSMENT BEFORE THE COMMISSI ONER (APPEALS) WAS DISMISSED. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL AFTER A DELAY OF 558 DAYS ALONG WITH AN AFFIDAVIT EXPLAINING THE DEL AY FOR FILING THE APPEAL. THE TRIBUNAL AFTER ELABORATELY DISCUSSING THE AFFIDAVIT FILED BY THE ASSESSEE AND TAKING INTO CONSIDERATION ALL ASPECTS, REJECTED THE APPEAL AS THE ASSESSEE HAD NOT GIVEN ANY SUFFICIENT REASONS OR CAUSE FOR THE DELAY IN FILING THE APPEAL WITHIN THE STIPULATED TIME. ON FURTHER APPEAL THE HON'BLE HIGH COURT HELD, DISMISSING THE APPEAL, THAT IT WAS CLEAR THAT THE ASSESSEE HAD NOT EXPLAINED THE CAUSE OF DELAY IN FILING THE APPEAL, ESPECIALLY WHEN THE AUT HORISED REPRESENTATIVE WHO WAS GIVEN CHARGE TO FILE THE APPEAL HAD DIED EXACTL Y ONE YEAR AFTER THE LAST DATE FOR FILING OF THE APPEAL. EVEN AFTER THE DEATH OF T HE AUTHORISED REPRESENTATIVE THE ASSESSEE HAD TAKEN MORE THAN SIX MONTHS TO FILE THE APPEAL. THE ASSESSEE HAD NEITHER GIVEN ANY PARTICULAR OR DETAILS IN THE AFFI DAVIT AS TO THE DATE ON WHICH THE PAPERS WERE HANDED OVER TO THE COUNSEL FOR PREP ARING THE APPEAL AND ON WHAT OCCASION THE ASSESSEE ENQUIRED ABOUT THE PROGR ESS IN PREPARING THE APPEAL AND FILING IT. THE ASSESSEE HAD NOT TAKEN A PROPER PLEA TO SHOW SUFFICIENT CAUSE GIVING EVIDENCE AND PROOF BEYOND REASONABLE DOUBT FOR THE DELAY. THERE WAS NO NEED TO INTERFERE WITH THE ORDER OF THE TRIBUNAL . ITA NO.456 2& 4563/AHD/2003 - 7 - 8. FOR THE REASONS STATED ABOVE, THE CONDONATION PE TITION FILED BY THE ASSESSEE FOR THE YEARS UNDER APPEAL ARE REJECTED AN D THE APPEALS ARE DISMISSED AS UNADMITTED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE ARE DISMI SSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 26/03/2010. SD/- SD/- ( T.K. SHARMA ) ( N.S. SAINI ) JUDICIAL MEMBER A CCOUNTANT MEMBER AHMEDABAD; DATED 26/03/2010 PARAS # COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS) 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD