M. Venkatarangaiya Foundation, Secunderabad V. DIT, Hyderabad

ITA 479/HYD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3024 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 30-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H PHANI RAJU
• Assessee Lawyers: M V ANIL KUMAR
• Keywords: Period of limitation; Reasonable cause; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMEBR ITA NO. 479/HYD/2010 ASSESSMENT YEAR 2009-2010 ITA NO. 480/HYD/2010 ASSESSMENT YEAR 2009-2010 M/S. M. VENKATARANGAIYA FOUNDATION, SECUNDERABAD VS. DIRECTOR OF INCOME-TAX (EXEMPTION), HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SHRI M.V. ANIL KUMAR RESPONDENT BY: SHRI H. PHANI RAJU O R D E R PER N.R.S. GANESAN, JM: BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AGAI NST THE INDEPENDENT ORDERS OF THE DIRECTOR OF INCOME-TAX (E XEMPTION) DATED 19.2.2010 AND 20.7.2009. THEREFORE, WE HEARD THE SAME TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON O RDER. 2. THE ASSESSEE FILED AN APPLICATION IN FORM 10G FOR G RANT OF APPROVAL U/S. 80G(5) OF THE INCOME-TAX ACT, 1961 ON 10.3.2009. THE DIRECTOR OF INCOME-TAX (EXEMPTION) CALLED FOR C ERTAIN INFORMATION INCLUDING BOOKS OF ACCOUNT AND VOUCHERS , ETC. IT APPEARS THAT THE ASSESSEE COULD NOT FILE THE SAME B EFORE THE DIRECTOR OF INCOME-TAX (EXEMPTION). THEREFORE, THE DIRECTOR OF INCOME-TAX (EXEMPTION) REJECTED THE APPLICATION OF THE ASSESSEE BY AN ORDER DATED 20.7.2009 ON THE GROUND THAT HE W AS CONSTRAINED TO PASS THE ORDER BECAUSE OF LIMITATION . SUBSEQUENTLY, THE ASSESSEE FILED ANOTHER APPLICATIO N BEFORE THE VERY SAME DIRECTOR OF INCOME-TAX (EXEMPTION) ON 30. 9.2009. THIS APPLICATION OF THE ASSESSEE WAS REJECTED BY TH E DIRECTOR OF INCOME-TAX (EXEMPTION) BY AN ORDER DATED 19.2.2010 ON THE GROUND THAT AN ORDER REJECTING THE APPLICATION OF T HE ASSESSEE ITA NOS. 479 & 480/HYD/2010 M/S. M. VENKATARANGAIYA FOUNDATION ===================== 2 WAS ALREADY PASSED ON 25.2.2009 AND THE ASSESSEE HA S ALREADY FILED AN APPEAL BEFORE THIS TRIBUNAL AND THE SAME I S PENDING. THE DIRECTOR OF INCOME-TAX (EXEMPTION) HAS FURTHER OBSERVED THAT HE HAS NO POWER TO REVIEW HIS ORDER DATED 25.2 .2009. THEREFORE, THE ASSESSEE HAS FILED TWO APPEALS ONE A GAINST THE ORDER DATED 20.7.2009 AND ANOTHER APPEAL AGAINST TH E ORDER DATED 19.2.2010. 3. LET US FIRST TAKE I.T.A. NO. 480/H/2010 DIRECTED AG AINST THE ORDER OF DIT(E) DATED 20.7.2009. THERE WAS A D ELAY OF 189 DAYS IN FILING THE APPEAL IN I.T.A. NO. 480/H/2010. THE ASSESSEE FILED AN APPLICATION TO CONDONE THE DELAY. SHRI M.V. ANIL KUMAR, THE LEARNED COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE ORDER DATED 20.7.2009 WAS RECEIVED BY THE ASSES SEE ON 24.7.2009 AND THE SAME WAS HANDED OVER TO THE ACCOU NTANT TO CONTACT THE CHARTERED ACCOUNTANT FOR TAKING FURTHER ACTION. HOWEVER, THE ACCOUNTANT HAD FORGOTTEN TO SEND THE O RDER DATED 20.7.2009 TO THE CHARTERED ACCOUNTANT FOR PREPARING THE APPEAL TO BE FILED BEFORE THIS TRIBUNAL. IN THE MEANTIME, ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE ADVICE OF CHARTERED ACCOUNTANT, ANOTHER APPLICATION WAS FILED ON 30.9.2 009 BEFORE THE DIT(E). NOW THE LEGAL EXPERTS ADVISED THE ASSE SSEE THAT THE ORIGINAL APPLICATION HAS TO BE PROSECUTED BY FILING AN APPEAL. THEREFORE, THE ASSESSEE FILED AN APPEAL BEFORE THIS TRIBUNAL WITH AN APPLICATION TO CONDONE THE DELAY. BY WAY OF ABU NDANT CAUTION, THE ASSESSEE HAS ALSO FILED AN APPEAL AGAI NST THE ORDER DATED 19.2.2010. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE THE ENTIRE DELAY OF 189 DAYS WAS BECAUSE O F FAILURE OF THE ACCOUNTANT TO HANDOVER THE PAPERS TO THE CHARTE RED ACCOUNTANT AND THE WRONG ADVICE GIVEN BY THE CHARTE RED ACCOUNTANT TO FILE ANOTHER APPLICATION BEFORE THE D IT(E) ON 30.9.2009. THEREFORE, ACCORDING TO THE LEARNED COU NSEL FOR THE ASSESSEE, THE ASSESSEE HAD SUFFICIENT CAUSE IN NOT FILING OF THE ITA NOS. 479 & 480/HYD/2010 M/S. M. VENKATARANGAIYA FOUNDATION ===================== 3 APPEAL WITHIN THE PERIOD OF LIMITATION AGAINST THE ORDER OF THE DIRECTOR OF INCOME-TAX (EXEMPTION) DATED 20.7.2009. THEREFORE, THE DELAY NEEDS TO BE CONDONED. 4. ON THE CONTRARY, SHRI H. PHANI RAJU, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSE SSEE HAS NO REASONABLE CAUSE FOR NOT FILING THE APPEAL BEFOR E THIS TRIBUNAL WITHIN THE PERIOD OF LIMITATION. REFERRIN G TO THE ORDER OF THIS TRIBUNAL IN ANDHRA PRADESH HOUSING BOARD VS . DIT (E), IN I.T.A. NO. 110/H/08 DATED 14.5.2010, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE DELA Y CANNOT BE CONDONED IN VIEW OF THE REASONS STATED BY THIS T RIBUNAL IN THAT ORDER. THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO PLACED HIS RELIANCE ON THE DECISION OF THE CHENNAI BENCH OF THE TRIBUNAL IN CIT VS. TRACTORS AND FARM EQUIPMENTS LT D. (2009) 104 ITD 149 (CHENNAI) (TM). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL ON RECORD. ADMITTEDL Y, THERE WAS A DELAY OF 189 DAYS IN FILING THE APPEAL IN I.T.A. NO. 480/H/ 2010 AGAINST THE ORDER OF THE DIRECTOR OF INCOME-TA X (EXEMPTION) DATED 20.7.2009. FROM A PERUSAL OF THE IMPUGNED ORDER DATED 20.7.2009, IT APPEARS THAT THE ASSESSEE 'S REPRESENTATIVE APPEARED ON VARIOUS OCCASIONS. HOWE VER, THEY COULD NOT PRODUCE THE BOOKS OF ACCOUNT, VOUCHERS AN D OTHER INFORMATION CALLED FOR. DUE TO LIMITATION INVOLVED IN THE MATTER, THE DIRECTOR OF INCOME-TAX (EXEMPTION) REJECTED THE APPLICATION OF THE ASSESSEE BY AN ORDER DATED 20.7.2009. THIS ORDER DATED 20.7.2009 DOES NOT REFER TO ANY OF THE EARLIER APPL ICATIONS OF THE ASSESSEE OR THE ORDER OF THE DIRECTOR OF INCOME-TAX (EXEMPTION) DATED 25.2.2009. MOREOVER, IT IS NOT THE CASE OF B OTH THE PARTIES THAT AN APPEAL WAS PENDING BEFORE THIS TRIBUNAL EAR LIER. THE ASSESSEE DUE TO WRONG ADVICE GIVEN BY THE LEGAL EXP ERTS FILED ANOTHER APPLICATION ON 30.9.2009 BEFORE THE DIRECTO R OF INCOME- ITA NOS. 479 & 480/HYD/2010 M/S. M. VENKATARANGAIYA FOUNDATION ===================== 4 TAX (EXEMPTION) FOR APPROVAL. AS RIGHTLY OBSERVED BY THE DIRECTOR OF INCOME-TAX (EXEMPTION), HE MAY NOT HAVE ANY POWER TO REVIEW HIS EARLIER ORDER I.E., ORDER DATED 20.7. 2009. HOWEVER, THE OTHER REASON STATED BY THE DIRECTOR OF INCOME-T AX (EXEMPTION) THAT AN APPEAL WAS PENDING BEFORE THIS TRIBUNAL AGAINST THE ORDER DATED 25.2.2009 IS OBVIOUSLY ERRO NEOUS. IN FACT, THE FIRST ORDER ITSELF WAS PASSED ON 20.7.200 9 AND NO EARLIER ORDER WAS PASSED BY THE DIRECTOR OF INCOME- TAX (EXEMPTION). IN OTHER WORDS, NO ORDER WAS PASSED B Y DIT(E) ON 25.2.2009. IN THOSE CIRCUMSTANCES, IN OUR OPINION, IT MAY AT BEST AMOUNTS TO PROSECUTING THE REMEDIES IN A WRONG FORUM. IN OTHER WORDS, INSTEAD OF FILING AN APPEAL BEFORE THI S TRIBUNAL AGAINST THE ORDER DATED 20.7.2009 OF THE DIRECTOR O F INCOME-TAX (EXEMPTION) THE ASSESSEE FILED ANOTHER APPLICATION BEFORE THE DIRECTOR OF INCOME-TAX (EXEMPTION) FOR APPROVAL. T HIS ACTION OF THE ASSESSEE CLEARLY SHOWS THAT THE ASSESSEE IS VIG ILANT ENOUGH IN PROSECUTING THE REMEDY, OF COURSE, BEFORE A WRON G FORUM. 6. THE QUESTION NOW ARISES FOR CONSIDERATION IS WHETHE R PROSECUTING ANOTHER APPLICATION BEFORE A WRONG FORU M WOULD BE A REASONABLE CAUSE FOR NOT FILING THE APPEAL BEFORE THIS TRIBUNAL. WE FIND THAT THE MADRAS HIGH COURT IN THE CASE OF C IT VS. K.S.P. SHANMUGAVEL NADAR AND OTHERS (1985) 153 ITR 596 HAD AN OCCASION TO CONSIDER AN IDENTICAL ISSUE. IN THE CA SE BEFORE THE MADRAS HIGH COURT, THERE WAS A DELAY OF NEARLY 21 Y EARS IN FILING THE APPEAL. THE MADRAS HIGH COURT FOUND THAT THE A SSESSEE WAS PROSECUTING THE REMEDY BEFORE THE WRONG FORUM B Y FILING APPEALS BEFORE VARIOUS AUTHORITIES. THEREFORE, THE ASSESSEE WAS DILIGENT ENOUGH FOR PROSECUTING THE REMEDY. THE MA DRAS HIGH COURT FURTHER OBSERVED THAT PROSECUTING THE REMEDY BEFORE THE WRONG FORUM WOULD AMOUNT TO SUFFICIENT CAUSE IN NOT FILING THE APPEAL WITHIN THE REASONABLE TIME. ACCORDINGLY THE DELAY OF 21 YEARS WAS CONDONED BY THE MADRAS HIGH COURT. IN TH E CASE ITA NOS. 479 & 480/HYD/2010 M/S. M. VENKATARANGAIYA FOUNDATION ===================== 5 BEFORE US ALSO THE ASSESSEE INSTEAD OF FILING AN AP PEAL BEFORE THIS TRIBUNAL AGAINST THE ORDER DATED 20.7.2009 FILED AN OTHER APPLICATION BEFORE THE DIRECTOR OF INCOME-TAX (EXEM PTION) ON 30.9.2009. THEREFORE, AS OBSERVED BY THE MADRAS HI GH COURT IN THE CASE K.S.P. SHANMUGAVEL NADAR AND OTHERS (SUPRA ) THIS WOULD AMOUNT TO PROSECUTING THE REMEDY BEFORE A WRO NG FORUM. THE ASSESSEE HAS ALSO BY WAY OF ABUNDANT CAUTION FI LED AN APPEAL BEFORE THIS TRIBUNAL AGAINST THE ORDER DATED 19.2.2010 IN I.T.A. NO. 479/H/2010. NOW, BOTH THE APPEALS ARE B EFORE US. THEREFORE, IN OUR OPINION, THERE WAS A REASONABLE C AUSE ON THE PART OF THE ASSESSEE IN NOT FILING THE APPEAL WITHI N THE PRESCRIBED TIME IN I.T.A. NO. 480/H/2010 AGAINST TH E IMPUGNED ORDER DATED 20.7.2009. 7. WE HAVE ALSO CAREFULLY GONE THROUGH THE DECISION OF THE CHENNAI BENCH OF THIS TRIBUNAL IN TRACTORS AND FARM EQUIPMENT LTD. (SUPRA). IN THE CASE BEFORE THE CHE NNAI BENCH, THE ASSESSEE COMPANY MISPLACED THE CIT(A) ORDER, TH EREFORE, THERE WAS A DELAY OF 310 DAYS. BY MAJORITY OPINION , IT WAS FOUND THAT THERE WAS NO REASONABLE CAUSE. THE CASE BEFORE US IS ENTIRELY ON DIFFERENT FOOTING. THE ASSESSEE HAN DED OVER THE ORDER TO THE ACCOUNTANT FOR TAKING FURTHER STEP THR OUGH THE CHARTERED ACCOUNTANT. MOREOVER, THE ASSESSEE FILED ANOTHER APPLICATION BEFORE THE DIT(E) ON 30.9.2009. THEREF ORE, THE DECISION OF THE CHENNAI BENCH IN TRACTORS AND FARM EQUIPMENTS LTD. (SUPRA) MAY NOT BE APPLICABLE TO TH E FACTS OF THE CASE. WE FIND THAT THE CHENNAI BENCH IN PEOPLE EDUCATION & ECONOMIC DEVELOPMENT SOCIETY (PEEDS) VS. ITO (200 6) 100 ITD 89 (CHENNAI) (TM) HAD AN OCCASION TO CONSIDER A N IDENTICAL ISSUE. THERE WAS A DELAY OF 619 DAYS IN FILING THE APPEAL. THE CHENNAI BENCH BY MAJORITY OPINION CONDONED THE DELA Y BY FOLLOWING THE JUDGEMENT IN K.P.S. SHANMUGAVEL NADAR & OTHERS. BOTH OF US ARE PARTY TO THE DECISION OF THE CHENNAI BENCH. IN ITA NOS. 479 & 480/HYD/2010 M/S. M. VENKATARANGAIYA FOUNDATION ===================== 6 VIEW OF THE DECISION IN PEOPLE EDUCATION & ECONOMIC DEVELOPMENT SOCIETY (SUPRA) THE DECISION IN TRACTOR S & FARM EQUIPMENTS LTD. (SUPRA) MAY NOT BE APPLICABLE TO TH E FACTS OF THIS CASE. 8. WE HAVE ALSO CAREFULLY GONE THROUGH THE DECISION OF THIS TRIBUNAL IN THE CASE OF A.P. HOUSING BOARD (SUPRA). IN THE CASE BEFORE THIS TRIBUNAL IN THE CASE OF A.P. HOUSING BO ARD THERE WAS A DELAY OF 1013 DAYS IN FILING THE APPEAL. THE ASS ESSEE CONTENDED BEFORE THIS TRIBUNAL THAT THE DELAY WAS C AUSED DUE TO SHIFTING OF ONE SHRI M.N. RGHUNATHAN, WHO WAS LOOKI NG AFTER THE ACCOUNTS, TO HIS PARENT DEPARTMENT ON 19.4.2009. T HE ASSESSEE ALSO CONTENDED THAT ONE SHRI RAMACHANDRA RAO WAS AP POINTED AS CHIEF ACCOUNTANT ON 1.6.2009 AND THERE WAS A COMMUNICATION GAP BETWEEN THE EMPLOYEES. THIS TRIB UNAL FOUND THAT BOTH THE REASONS DO NOT AMOUNT TO SUFFIC IENT CAUSE FOR NOT FILING THE APPEAL. THIS TRIBUNAL FOUND THA T THE ASSESSEE HAS TO FILE THE APPEAL ON OR BEFORE 14.4.2005. HOW EVER, SRI M.N. RAGHUNATHAN WAS SHIFTED TO HIS PARENT CADRE ONLY ON 19.4.2005. THEREFORE, IT WAS FOUND THAT SHIFTING O F SHRI RAGHUNATHAN TO HIS PARENT CADRE CANNOT BE A REASON FOR NOT FILING THE APPEAL BEFORE 14.4.2005. IN RESPECT OF APPOINTMENT OF SHRI RAMACHANDRA RAO THE TRIBUNAL FOUND THAT THE A. P. HOUSING BOARD BEING A LARGE SET UP, UNLIKE AN ORDIN ARY ASSESSEE, SHOULD HAVE ALL MACHINERY TO PROCEED WITH DAY TO DAY AFFAIRS IRRESPECTIVE OF CHANGE OF EMPLOYEES. THE T RIBUNAL PRIMA FACIE PROCEEDED ON THE FOOTING THAT THE ASSESSEE FILED TH E APPLICATION U/S. 5 OF THE LIMITATION ACT. IN THE C ASE BEFORE US THE FACTS ARE ENTIRELY ON DIFFERENT FOOTING. THE R EASON STATED BY THE ASSESSEE IS WRONG PROSECUTION BY WAY OF AN APPL ICATION BEFORE THE DIRECTOR OF INCOME-TAX (EXEMPTION). THE REFORE, IN OUR OPINION, THIS DECISION OF THE TRIBUNAL MAY NOT BE A PPLICABLE TO THE FACTS OF THE PRESENT CASE. ITA NOS. 479 & 480/HYD/2010 M/S. M. VENKATARANGAIYA FOUNDATION ===================== 7 9. EVEN OTHERWISE, SECTION 5 OF THE LIMITATION ACT IS NOT APPLICABLE TO THE INCOME-TAX PROCEEDINGS EITHER BEF ORE THE LOWER AUTHORITIES OR BEFORE THIS TRIBUNAL. IT IS WELL SE TTLED PRINCIPLES OF LAW THAT SECTION 5 OF THE LIMITATION ACT IS APPLICA BLE ONLY IN THE PROCEEDINGS BEFORE THE COURTS. IT IS NOT APPLICABLE BEFORE A QUASI-JUDICIAL AUTHORITY LIKE INCOME TAX APPELLATE TRIBUNAL AND OTHER EXECUTIVE AUTHORITIES. WE FIND THE JURISDICT IONAL HIGH COURT IN THE CASE OF B. SUBBA RAO VS. INSPECTING AS SISTANT COMMISSIONER OF INCOME-TAX (1987) 167 ITR 757 CONSI DERED THIS ISSUE ELABORATELY AND AFTER REFERRING TO VARIOUS JU DGEMENTS OF THE APEX COURT FOUND THAT LIMITATION ACT WOULD BE A PPLICABLE TO ONLY CIVIL COURT AND NOT TO QUASI JUDICIAL BODIES L IKE THIS TRIBUNAL, EVEN THOUGH THIS TRIBUNAL MAY BE VESTED W ITH CERTAIN SPECIFIC POWERS CONFERRED ON THE COURT ON THE CODES OF CIVIL OR CRIMINAL PROCEDURES. ACCORDINGLY, IT WAS FOUND THA T SECTION 5 OF THE LIMITATION ACT APPLIES ONLY TO THE PROCEEDINGS BEFORE THE CIVIL COURT AND NOT BEFORE THE QUASI-JUDICIAL AUTHO RITY LIKE ITAT. IN VIEW OF THIS JUDGEMENT OF THE JURISDICTIONAL HIG H COURT, PROVISIONS OF SECTION 5 OF THE LIMITATION ACT ARE N OT APPLICABLE TO THE PROCEEDINGS BEFORE THIS TRIBUNAL. THE CO-ORDIN ATE BENCH OF THIS TRIBUNAL IN THE CASE OF A.P. HOUSING BOARD OBV IOUSLY PROCEEDED ON THE BASIS OF THE PROVISIONS OF SECTION 5 OF THE LIMITATION ACT. THEREFORE, IN OUR OPINION, THIS DE CISION OF THE TRIBUNAL IN THE CASE OF A.P. HOUSING BOARD MAY NOT BE OF ANY ASSISTANCE TO THE REVENUE. AS HELD BY THE JURISDIC TIONAL HIGH COURT IN THE CASE OF B. SUBBA RAO (SUPRA) PROVISION S OF LIMITATION ACT HAS NO APPLICATION TO THE PROCEEDING S BEFORE THIS TRIBUNAL. NO DOUBT THE ASSESSEE HAS TO ESTABLISH SU FFICIENT CAUSE FOR NOT FILING THE APPEAL WITHIN THE PERIOD O F LIMITATION. HOWEVER, IT IS NOT NECESSARY FOR THE ASSESSEE TO EX PLAIN EACH AND EVERY DAY AS HELD BY THE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST. KATIJI & ORS. (1987) 167 ITR 471. WHAT WE HAVE TO SEE IS WHETHER THE ASSESSEE HAS SUF FICIENT ITA NOS. 479 & 480/HYD/2010 M/S. M. VENKATARANGAIYA FOUNDATION ===================== 8 CAUSE FOR NOT FILING THE APPEAL WITHIN THE PRESCRIB ED TIME. ONCE THIS TRIBUNAL SATISFIED THAT THERE WAS SUFFICIENT C AUSE, THE DELAY HAS TO BE CONDONED. 10. THIS TRIBUNAL HAD AN OCCASION EARLIER TO CONSIDER A N IDENTICAL ISSUE IN THE CASE OF APSRTC VS. DCIT (200 7) 13 SOT 660. IN THE CASE BEFORE THIS TRIBUNAL IN THE CASE OF APSRTC (SUPRA) THERE WAS DELAY OF 42 DAYS IN FILING THE AP PEAL. THIS TRIBUNAL AFTER ELABORATELY CONSIDERING VARIOUS JUDG EMENTS OF THE APEX COURT UNDER IDENTICAL CIRCUMSTANCES CONDONED T HE DELAY. 11. THIS TRIBUNAL AFTER REFERRING TO THE DIFFERENCE BET WEEN THE LITIGATION UNDER THE COMMON LAW AND LITIGATION UNDE R THE INCOME-TAX PROCEEDINGS FOUND THAT THE LITIGATION UN DER THE INCOME-TAX ACT IS DIFFERENT FROM THE LITIGATION UND ER COMMON LAW. IN FACT THIS TRIBUNAL OBSERVED AS FOLLOWS AT PARA 11 OF ITS ORDER: 'THE PRESENT APPEALS ARE ARISING OUT OF THE ASSESSMENT OF THE INCOME UNDER THE INCOME TAX ACT, WHICH IS A LITIGATION UNDER THE INCOME TAX ACT ARIS ING OUT OF THE RETURNS FILED BY THE ASSESSEE AS REQUIRE D UNDER THE STATUTORY PROVISIONS. THERE IS A VAST DIFFERENCE BETWEEN LITIGATION ARISING UNDER THE COMMON LAW BETWEEN PARTIES AND THE LITIGATION ARISING OUT OF THE INCOME TAX PROCEEDINGS. ONE SUC H DIFFERENCE IS THAT BY VIRTUE OF THE SOVEREIGN POWER , THE GOVERNMENT SHARES THE PROFIT/INCOME EARNED BY AN INDIVIDUAL CITIZEN BY LEVYING TAX ON INCOME. IN OTHER WORDS, GOVERNMENT IS ENTITLED TO COLLECT TAX FROM THE INDIVIDUAL CITIZEN BY VIRTUE OF THE POWER CONFERRED UNDER THE CONSTITUTION OF INDIA. WHEN SUCH A POWER IS CONFERRED ON THE GOVERNMENT, IT HAS TO BE EXERCISED STRICTLY IN TERMS OF THE PROVISIONS OF THE INCOME TAX ACT. IN OTHER WORDS, THE GOVERNME NT HAS TO COLLECT TAX ON THE INCOME AS PER THE TAXING PROVISIONS AND CANNOT DEPRIVE THE RIGHT OF THE CITI ZEN ON TECHNICAL GROUNDS. THEREFORE, IF AT ALL THERE A NY FLAW OR TECHNICAL DEFECT IN FILING THE APPEAL, AN OPPORTUNITY SHOULD HAVE BEEN GIVEN TO THE ASSESSEE TO RECTIFY THE DEFECT AND THEREAFTER THE APPEAL SHO ULD HAVE BEEN DECIDED ON MERITS. IT IS NOT THE INTENTI ON ITA NOS. 479 & 480/HYD/2010 M/S. M. VENKATARANGAIYA FOUNDATION ===================== 9 OF THE PARLIAMENT TO RECOVER TAX FROM THE INDIVIDUA L CITIZEN ON TECHNICAL GROUNDS. THUS, THE INCOME TA X PROCEEDINGS ARE DIFFERENT FROM OTHER CIVIL PROCEEDINGS. IN CIVIL PROCEEDINGS, THE LAW OF LIMITATION PLAYS AN IMPORTANT ROLE IN VIEW OF THE CONCEPT OF VESTED INTEREST. THEREFORE, WHENEVER A RIGHT IS VESTED IN ONE PARTY, IT CANNOT BE DISTURBE D UNLESS THERE IS SUFFICIENT CAUSE. IN INCOME TAX PROCEEDINGS, WE CANNOT SAY THAT AN INTEREST/RIGHT WAS VESTED IN THE GOVERNMENT MERELY BECAUSE THERE WAS A TECHNICAL DEFECT IN FILING THE APPEAL ON THE PART OF THE INDIVIDUAL CITIZEN. IN OTHER WORDS, THE CON CEPT OF VESTED INTEREST, MAY NOT BE APPLICABLE TO THE INCOME TAX PROCEEDINGS. IN THIS BACKGROUND, IF WE CONSIDER THE DELAY OF 42 DAYS IN FILING THE APPEALS , IN OUR OPINION, THE DELAY OF 42 DAYS HAS TO BE CONDONE D AND THE APPEALS HAVE TO BE DISPOSED OF ON MERITS.' 12. IN VIEW OF THE ABOVE DECISION OF THE CO-ORDINATE BE NCH OF THE TRIBUNAL TO WHICH ONE OF US, THE JUDICIAL MEMBE R, WAS THE PARTY, THE CONCEPT OF VESTED INTEREST PLAYS AN IMPO RTANT ROLE IN THE LITIGATION UNDER THE COMMON LAW. IN THE LITIGA TION UNDER INCOME-TAX ACT, WE MAY NOT BE ABLE TO SAY THAT AN I NTEREST WAS VESTED IN THE GOVERNMENT MERELY BECAUSE THERE WAS A DELAY IN FILING THE APPEAL. THE LIMITATION PROVIDED IN THE INCOME-TAX ACT IS ONLY TO GIVE FINALITY TO THE PROCEEDINGS AND NOT TO DESTROY THE APPELLATE REMEDIES PROVIDED UNDER THE INCOME-TAX AC T. THIS DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF APSRTC (SUPRA) WAS NOT BROUGHT TO THE NOTICE OF THE BENCH WHICH HEARD THE CASE OF A.P. HOUSING BOARD (SUPRA). THEREFORE, THE BENCH WHICH HEARD THE CASE OF A.P. HOUSING BOAR D (SUPRA) HAD NO OCCASION TO APPRECIATE THE DIFFERENCE BETWEE N THE LITIGATION BEFORE THE CIVIL COURT AND LITIGATION BE FORE THE INCOME- TAX AUTHORITIES. THEREFORE, IN VIEW OF THE DECISIO N OF THIS TRIBUNAL IN THE CASE OF APSRTC (SUPRA), IN OUR OPIN ION, THE DECISION IN A.P. HOUSING BOARD (SUPRA) MAY NOT BE O F ANY ASSISTANCE TO THE REVENUE. ITA NOS. 479 & 480/HYD/2010 M/S. M. VENKATARANGAIYA FOUNDATION ===================== 10 13. WE FIND THAT THE MADRAS HIGH COURT IN THE CASE OF P AY & ACCOUNTS OFFICER AND ANR. VS. ITO (2009) 316 ITR 19 7 HAD AN OCCASION TO CONSIDER AN IDENTICAL ISSUE. IN THE CAS E BEFORE THE MADRAS HIGH COURT THERE WAS A DELAY OF 708 DAYS IN FILING THE APPEAL. HOWEVER, THE ITAT WITHOUT GOING INTO THE M ERIT OF THE APPEAL DISMISSED THE APPEAL REFUSING TO CONDONE THE DELAY. ON THIS FACTUAL ASPECTS, THE MADRAS HIGH COURT OBSERVE D AS FOLLOWS: 'WE HEARD THE ARGUMENT OF THE LEARNED COUNSEL ON EITHER SIDE. THE LAW OF LIMITATION HAS BEEN ENACTED ONLY TO GIVE A FINALITY TO A PROCEEDINGS AND NOT DESTROY THE STATUTORY APPELLATE REMEDY. THE COURT CAN CONDONE THE DELAY IN SPITE OF THE FACT THE DELAY IS VERY ENORMOUS, IF THE COURT IS SATISFIED, WITH THE REASO N STATED IN THE AFFIDAVIT. AT THE SAME TIME, EVEN A SHORT SPELL OF DELAY MAY STARE AT THE APPELLANT IF THE APPELLANT IS NOT ABLE TO GIVE A COGENT ACCEPTABLE REASON FOR THE DELAY. IT IS ALSO EQUALLY WELL SETT LED THAT WHEN TECHNICALITIES AND SUBSTANTIAL JUSTICE AR E PITTED AGAINST EACH OTHER, THE COURT WILL ALWAYS LI EN IN FAVOUR OF SUBSTANTIAL JUSTICE. HENCE, WE ARE OF THE VIEW THAT THE DELAY CAN BE CONDONED AS THE APPELLANT HAS ALREADY REMITTED THE ENTIRE DEMAND.' 14. IN VIEW OF THE OBSERVATION OF THE MADRAS HIGH COURT , THE PERIOD OF LIMITATION IN FILING THE APPEAL PROVIDED U/S. 253(5) OF THE ACT WAS ONLY TO GIVE FINALITY TO THE PROCEEDING S AND NOT TO DESTROY THE APPELLATE REMEDY. WHAT WE HAVE TO SEE IS WHETHER THE ASSESSEE WAS ANY SUFFICIENT CAUSE. ONCE THIS T RIBUNAL SATISFIED THAT THERE WAS A SUFFICIENT CAUSE, THE DE LAY CAN BE CONDONED. UNDER THE CONSTITUTION, THE GOVERNMENT I S EMPOWERED TO ASSESS AND COLLECT THE TAX WHICH IS AU THORIZED BY LAW. THEREFORE, THE REVENUE HAS TO BE VERY REASONA BLE IN ASSESSING AND COLLECTING THE TAX IN ACCORDANCE WITH LAW. IN OTHER WORDS, MERELY ON TECHNICALITIES THE GOVERNMEN T CANNOT RETAIN THE CITIZENS' MONEY. AS OBSERVED BY THIS TR IBUNAL IN THE CASE OF APSRTC (SUPRA) THE CONCEPT OF VESTED INTERE ST MAY NOT ITA NOS. 479 & 480/HYD/2010 M/S. M. VENKATARANGAIYA FOUNDATION ===================== 11 BE APPLICABLE TO THE INCOME-TAX PROCEEDINGS, EVEN T HOUGH IT IS VERY MUCH APPLICABLE TO THE LITIGATION UNDER THE CO MMON LAW. 15. IN VIEW OF THE ABOVE DISCUSSION, WE FIND THAT THERE WAS SUFFICIENT CAUSE ON THE PART OF THE ASSESSEE IN NOT FILING THE APPEAL BEFORE THIS TRIBUNAL WITHIN THE PRESCRIBED P ERIOD. THEREFORE, THE DELAY HAS TO BE CONDONED. ACCORDING LY, THE DELAY OF 189 DAYS IN FILING THE APPEAL IN I.T.A. NO. 480/ H/2010 IS CONDONED AND THE APPEAL IS ADMITTED. 16. NOW COMING TO MERIT OF THE APPEAL, THE APPLICATION OF THE ASSESSEE WAS REJECTED ONLY ON THE GROUND THAT THE D IRECTOR OF INCOME-TAX (EXEMPTION) WAS CONSTRAINED TO PASS THE ORDER BECAUSE OF LIMITATION. THE LEARNED COUNSEL FOR THE ASSESSEE NOW SUBMITS THAT THE ASSESSEE IS READY AND WILLING TO F ILE ALL THE INFORMATION INCLUDING THE BOOKS OF ACCOUNT AND VOUC HERS CALLED FOR BY THE DIRECTOR OF INCOME-TAX (EXEMPTION). THE REFORE, IN OUR OPINION, ONE MORE OPPORTUNITY SHALL BE GIVEN TO THE ASSESSEE TO PRODUCE THE INFORMATION AND DETAILS CALLED FOR BY T HE DIRECTOR OF INCOME-TAX (EXEMPTION). BY GIVING ONE MORE OPPORTU NITY TO THE ASSESSEE THE INTEREST OF THE REVENUE MAY NOT BE PRE JUDICED. IN OUR OPINION, GIVING SUCH AN OPPORTUNITY WOULD DEFIN ITELY PROMOTE THE CAUSE OF JUSTICE. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE DIRECTOR OF INCOME-TAX (EXEMPTION) DAT ED 20.7.2009 AND REMAND BACK THE MATTER TO THE FILE OF THE DIREC TOR OF INCOME-TAX (EXEMPTION). THE ASSESSEE SHALL FILE AL L THE INFORMATION CALLED FOR BY THE DIRECTOR OF INCOME-TA X (EXEMPTION) FOR EXAMINATION. THE DIRECTOR OF INCOME-TAX (EXEMP TION) AFTER EXAMINING THE DETAILS THAT MAY BE FILED BY THE ASSE SSEE SHALL DECIDE THE MATTER IN ACCORDANCE WITH LAW AFTER GIVI NG REASONABLE OPPORTUNITY TO THE ASSESSEE, WITHOUT BEING INFLUENC ED BY ANY OF THE OBSERVATIONS MADE BY THIS TRIBUNAL IN THIS ORDE R. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IN I.T.A. N O. 480/H/10 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NOS. 479 & 480/HYD/2010 M/S. M. VENKATARANGAIYA FOUNDATION ===================== 12 17. NOW COMING TO I.T.A. NO. 479/H/2010. THIS APPEAL A RISES OUT OF THE ORDER OF DIT(E) DATED 19.2.2010 ON THE A PPLICATION FILED BY THE ASSESSEE ON 30.9.2009. SINCE WE HAVE REMANDED BACK THE MATER IN I.T.A. NO. 480/H/2010 ON THE APPE AL FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 20.7. 2009, IN OUR OPINION, THIS APPEAL IN I.T.A. NO. 479/H/2010 B ECOMES INFRUCTUOUS. ACCORDINGLY, THE APPEAL OF THE ASSESS EE IN I.T.A. NO. 479/H/2010 IS DISMISSED AS INFRUCTUOUS. 18. IN THE RESULT, APPEAL OF THE ASSESSEE IN I.T.A. NO. 480/H/ 2010 IS ALLOWED FOR STATISTICAL PURPOSES AND THE AP PEAL IN I.T.A. NO. 479/H/2010 IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH JULY, 2010. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (N.R.S. GANESAN) JUDICIAL MEMBER HYDERABAD, DATED 16 TH JULY, 2010 TPRAO COPY FORWARDED TO: 1. M/S. M. VENKATARANGAIYA FOUNDATION, C/O. M. ANAN DAM & CO., CHARTERED ACCOUNTANTS, 7A, SURYA TOWERS, S.P . ROAD, SECUNDERABAD-500 003. 2. DIRECTOR OF INCOME-TAX (EXEMPTION), HYDERABAD 3. DY. DIRECTOR OF INCOME-TAX (EXEMPTION), HYDERABA D 4 THE DR A BENCH, HYDERABAD