Mathew Joseph, Kottayam V. DCIT, Cen-cirle, Kottayam

ITA 524/COCH/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2516 (ITAT-COCHIN)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-03-2020
• Assessment Year: 2007-2008
• Appeal Filed On: 17-09-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Capital asset; Charitable institution; Opportunity of being heard; Period of limitation; Reasonable cause; Time period of passing order; Condonation of delay; Capital Gains
• Section: 143(3); 2(14); 80IB; 201; 13; 22; 153C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E S/ SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., J M I .T . A. NO . 523 COCH/ 2019 ASSESSMENT YEAR: 2007 - 08 SMT. JIBY MATHEW, BIJU NIVAS, KUMARANALLOOR P.O., KOTTAYAM - 686 016. [PAN:AOQPC 2947C] VS. THE DEPUTY COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE , KOTTAYAM. (ASSESSEE - APPELLANT) (REVENUE - RES PONDENT) I .T.A. NO. 524 COCH/2019 ASSESSMENT YEAR: 2007 - 08 SHRI MATHEW JOSEPH, BIJU NIVAS, KUMARANALLOOR P.O., KOTTAYAM - 686 016. [PAN:AQWPJ 6098B] VS. THE DEPUTY COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE, KOTTA YAM. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) A SSESSEE BY SHRI ANIL D. NAIR, ADV. REVENUE BY S HRI SUDHANSHU SHEKHAR JHA, CIT(DR) D ATE OF HEARING 03/03/2020 DATE OF PRONOUNCEMENT 09 / 0 3 /20 20 O R D E R PER CHANDRA POOJARI, AM: TH ESE TWO APPE AL S FILED BY DIFFERENT ASSESSEE S ARE DIRECTED AGAINST DIFFERENT ORDER S OF THE CIT (A) - II , KOCHI OF EVEN DATE 25/01/2016 AND PER TAIN TO THE ASSESSMENT YEAR 2007 - 08. I.T.A. NOS.523&524/COCH/2019 2 2. SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 3 . THE ASSESSEE S HA VE RAISED THE FOLLOWING COMMON GROUNDS EXCEPT FOR VARIATION IN FIGURES : 1 . THE ASSESSING OFFI CER ASSESSED THE CONSIDERATION ON SALE OF AGRICULTRUAL LAND AND THE AMOUNT RECEIVABLE IN KIND RS.57 .50 LAKHS TOTALING RS.1,36,66,000/ - AS INCOME OF THE ASSESSEE. THE CIT(A) CONFIRMED THE FINDING OF THE ASSESSING OFFICER IGNORING THE SUBMISSIONS OF THE ASSE SSEE. 2. THE FACT THAT THE LAND SOLD WAS RURAL AGRICULTURAL WAS IGNORED BY THE CIT(A). 4. AT THE OUTSET, WE OBSERVED THAT THERE WAS A DELAY OF 1250 DAYS IN FILING THE APPEALS BEFORE THE TRIBUNAL. THE LD. AR HAS FILED CONDONATION PETITIONS ACCOMPAN IED BY AFFIDAVITS STATING THE REASONS FOR THE DELAY IN FILING THE APPEALS BEFORE THE TRIBUNAL. WE SHALL CONSIDER THE AFFIDAVIT FILED IN THE CASE OF SHRI MATHEW JOSEPH WHICH READS AS FOLLOWS: AFFIDAVIT I, MATHEW JOSPEH, AGED 45 YEARS, S /O LATE C.M. JOSEPH, RESIDING AT BIJU NIVAS, KUMARANALLOOR P.O., KOTTAYAM DISTRICT, KERALA STATE, INDIA DO HEREBY SOLEMNLY AFFIRM AND STATE AS FOLLOWS: - I WAS A NON RESIDENT INDIAN HOLDING A US PASSPORT AND SETTLED IN UNITED STATES FOR THE PAST 15 YEARS TILL I RETURNED TO INDIA IN MAY, 2016. MY MOTHER MARIYAMMA JOSEPH AND FATHER C.M.JOSEPH WERE SETTLED IN KOTTAYAM AND WERE LOOKING AFTER THE BAR ATTACHED HOTEL IN THE NAME OF MY MOTHER. MY FATHER, ON BEHALF OF ME AND MY WIFE, HAD PURCHASED RUBBE R ESTATE SITUATED IN KAKKANAD, ERNAKULAM MEASURING 89.772 CENTS IN THE JOINT NAMES OF MYSELF AND MY WIFE DURING THE YEAR 2004 VIDE TWO DOCUMENTS. I.T.A. NOS.523&524/COCH/2019 3 CONSEQUENT TO SEARCH IN THE PREMISES OF MY PARENTS, AN AGREEMENT HAS BEEN FOUND EVIDENCING THE SALE OF THE AFORESAID 89.772 CENTS OF LAND TO NCC URBAN INFRASTRUCTURE LIMITED ON 26.07.2006 FOR A CONSIDERATION IN CASH OF RS.2 CRORES TOGETHER WITH BUILT UP AREA IN THE BUILDING TO BE CONSTRUCTED BY THE PURCHASER VALUED AT 1.15 CRORES TOTALING THE SALE CONSIDERATIO N AT RS. 3.15 CRORES. IN RESPONSE TO THE NOTICE U / S . 153C MY FATHER, THROUGH HIS CHARTERED ACCOUNTANT, HAD PREPARED AND FILED MY RETURN OF INCOME OF THE A Y 2007 - 08 DISCLOSING TOTAL INCOME RS.79,16,000 / - BEING SHORT TERM CAPITAL GAIN ON TRANSFER OF 50 % SHARE IN THE AFORESAID RUBBER ESTATE IN RESPECT OF THE CASH PART OF CONSIDERATION RECEIVED. IN THE ASSESSMENT COMPLETED ON 28 / 03 / 2013 U /S 143 ( 3) R.W.S. 153C THE CAPITAL GAINS OF RS. 1,36,66,000 / - WAS CHARGED BY TAKING THE SALE VALUE INCLUDING THE AMOUNT RECEIVABLE IN KIND AND THEREBY RAISED HUGE DEMAND. THE CIT (A) HAD CONFIRMED THE ASSESSMENT OF SHORT TERM CAPITAL GAINS OF RS. 1,36,66,000 / - IN HIS ORDER DATED 20 / 01 / 2016. ALL THESE YEARS I WAS IN U.S. AND WAS UNDER THE IMPRESSION THAT EVERYTHING WAS DO NE PROPERLY BY MY FATHER. I HAVE ONLY SIGNED THE RETURN OF INCOME AS I WAS NOT FAMILIAR WITH THE TAXATION PROVISIONS IN INDIA. MY FATHER DIED ON 10 TH DAY OF AUGUST, 2013 AFTER WHICH MY MOTHER LEFT INDIA AND JOINED US IN U.S. THE HOTEL BUSINESS AT KOTTAY AM WAS MANAGED BY THE STAFF. MEANWHILE THE INCOME TAX DEPARTMENT DEMANDED FOR THE SETTLEMENT OF THE DUES AND THE HOTEL STAFF REMITTED THE AMOUNTS IN MONTHLY INSTALLMENTS. THE SALE OF RUBBER ESTATE TOOK PLACE ON 26.07.2006. MY FATHER AT THE TIME FILING T HE RETURN AND COMPLETION OF THE ASSESSMENT IN MARCH, 2013 HAD INFORMED THE TAX CONSULTANT THAT THE LAND SOLD IS SITUATED IN THRIKKAKARA MUNICIPALITY AND HENCE THE CONSULTANT HAS NOT RAISED THE PLEA BEFORE THE ASSESSING OFFICER AND THE APPELLATE AUTHORITY T HAT THE LAND SOLD IS AGRICULTURAL AND NOT A CAPITAL ASSET ATTRACTING TAXABLE CAPITAL GAINS. MY FATHER WAS BED RIDDEN DURING THESE DAYS AND HE PASSED AWAY ON 10 - 08 - 2013. THE FACT THAT THE THRIKKAKARA MUNIC IPALITY WAS FORMED ONLY ON 30 - 1 1 - 2010 AND THRIKK AKARA PANCHAYATH WAS NOT A NOTIFIED AREA FOR URBANIZATION AT THE TIME OF TRANSFER IE ON 26 - 07 - 2006 FOR THE PURPOSE OF DEFINING ''CAPITAL ASSET' IN SECTION 2(14) WAS OVERLOOKED BY M Y FATHER AND THE TAX CONSULTANT. THE AFORESAID LAND WAS NOT TAKEN AS AN 'UR BAN LAND WITHIN THE MEANING OF SECTION 2 (EA) OF THE W T ACT, THEREFORE, NOT CHARGED TO WEALTH TAX AS PER WEALTH TAX ASSESSMENT MADE U/S 16 (3) FOR THE A Y 2006 - 07. I.T.A. NOS.523&524/COCH/2019 4 MYSELF AND MY WIFE RETURNED TO INDIA IN JULY, 2016 WOUNDING UP OUR BUSINESS IN U.S. I WAS NEW TO THE EXISTING HOTEL BUSINESS AND THE STAFF CONTINUED TO MANAGE THE BUSINESS AND ALSO PAYMENT OF THE TAX IN INSTALLMENTS. WHEN I NOTICED THE HUGE DEMAND STILL PENDING IN RESPECT OF CAPITAL GAINS ASSESSED RS, 1,36,66,0007 - FOR THE A Y 20 07 - 08 I GATHERED ALL DETAILS AND MET AN ADVOCATE AT ERNAKULAM WHO DIRECTED ME TO ADVOCATE ANIL D NAIR. HE ONLY FOUND THAT THE LAND IS SITUATED OUTSIDE THE LIMITS OF THE MUNICIPALITY AND NOT LIABLE TO INCOME TAX. IMMEDIATELY APPEALS WERE PREPARED AND FI LED. THERE IS A DELAY OF 1250 DAYS. THE NON FILING WAS NOTICED ONLY IN LAST WEEK OF AUGUST, 2019. IMMEDIATELY THE DOCUMENTS AND RECORDS WERE VERIFIED AND THE APPEAL IS FILED. THERE IS A DELAY OF 1250 DAYS WHICH WAS CAUSED DUE TO THE ABOVE FACTS AND T HERE WAS NO WILLFUL NEGLIGENCE ON MY PART. HENCE IT IS HUMBLY SUBMITTED IN THE INTEREST OF JUSTICE THAT THE DELAY OF 1250 DAYS CAUSED IN FILING THE APPEAL MAY PLEASE BE CONDONED. WHAT IS STATED ABOVE IS TRUE AND CORRECT. SD/ - MATHEW JOSEPH DEPONENT SOLEMNLY AFFIRMED AND SIGNED BEFORE ME BY THE DEP ONENT WHO IS PERSONALLY KNOWN TO ME ON THIS 27 TH DAY OF NOVEMBER, 2019 AT MY OFFICE AT KOTTAYAM. SIMILAR AFFIDAVIT FOR CONDONATION OF DELAY WAS ALSO FILED IN THE CASE OF SMT. JIBY MATHEW. 4.1 THE LD. AR REITERATED THE SUBMISSIONS MADE IN THE AFFIDAVITS BY THE ASSESSE E S REQUESTING THE BENCH TO CONDONE THE DELAY. HE SUBMITTED THAT THE ASSESSEE S H A VE SHOWN SUFFICIENT CAUSE FOR THE DELAY AND FURTHER, THE DELAY IS NOT I.T.A. NOS.523&524/COCH/2019 5 INTENTIONAL. HE DREW OUR ATTENTION TO TH E COPIES OF THE PASSPORTS AND STATED TH AT SHRI MATHEW JOSEPH WAS IN US FROM THE YEAR 2001 ONWARDS AND JIBY JOSEPH WAS IN US FROM 201 2 ONWARDS. BOTH ARE US CITIZENS AND CONTINUED THEIR CITIZENSHIP EVEN NOW. AFTER THE DEATH OF HIS FATHER, THE ASSESSEE SHIFTED HIS FAMILY TO KOTTAYAM, KERALA, IND IA IN THE YEAR 2016. THE CHILDREN WERE STUDYING IN US AND RE - LOCATED TO KOTTAYAM. THE LD. AR DREW OUR ATTENTION TO THE TRAVEL DETAILS ALONG WITH PASSPORT COPIES. IT WAS ALSO STATED THAT SHRI MATHEW JOSEPH AND SMT. JIBY MATHEW HAD BEEN TRAVELLING FROM US TO INDIA AS FOLLOWS : DETAILS OF TRAVEL DATES AS PER PASSPORT OF MATHEW JOSEPH SL. NO DATE ARVL PLACE PAGE 1. 10 - 07 - 2001 DEPARTURE KOCHI 27 2. 1 9 - 08 - 2001 ARRIVAL KOCHI 28 3. 26 - 11 - 2001 DEPARTURE MUMBAI 28 4. 23 - 07 - 2002 DEPARTURE KOCHI 28 5. 31 - 05 - 2004 ARRIVAL KOCHI 28 6. 11 - 08 - 2005 DEPARTURE KOCHI 30 7. 12 - 08 - 2004 ARRIVAL USA 24 8. 11 - 08 - 2005 ARRIVAL TVM 29 9. 24 - 07 - 2006 DEPAR TURE KOCHI 29 10. 25.07.2006 ARRIVAL USA 27 11 30 - 03 - 2010 ARRIVAL USA 29 12. 04 - 05 - 2011 ARRIVAL KOCHI 31 13. 13 - 05 - 2011 DEPARTURE KOCHI 31 14. 26 - 08 - 2012 ARRIVAL KOCHI 33 15. 08 - 09 - 2012 DEPARTURE KOCHI 33 16. 16 - 09 - 2013 DEPARTURE KOCHI 33 17. 16 - 09 - 2013 ARRIVAL USA 32 18. 30 - 08 - 2014 DEPARTURE KOCHI 3 4 19. 30 - 08 - 2014 ARRIVAL USA 3 2 20. 05 - 02 - 2014 ARRIVAL KOCHI 34 21. 25 - 02 - 2014 DEPARTURE KOCHI 34 I.T.A. NOS.523&524/COCH/2019 6 22. 12 - 07 - 2014 ARRIVAL KOCHI 34 23 11 - 02 - 2016 ARRIVAL KOCHI 34 24. 22 - 02 - 2016 DEPARTURE KOCHI 34 25. 18 - 05 - 2016 ARRIVAL KOCHI 32 26. 15 - 04 - 2017 DEPARTURE KOCHI 32 27. 26 - 10 - 2017 ARRIVAL KOCHI 36 DETAILS OF TR AVEL DATES AS PER PASSPORT OF SMT. JIBY MATHEW SL. NO DATE ARVL PLACE PAGE 1. 08 - 02 - 2013 DEPARTURE KOCHI 1 7 2. 08 - 02 - 2013 ARRIVAL USA 17 3. 16 - 09 - 2013 ARRIVAL KOCHI 16 5. 16 - 09 - 2013 DEPARTURE KOCHI 15 6. 13 - 03 - 2014 ARRIVAL USA 15 7. 30 - 08 - 2014 DEPAR TURE KOCHI 18 8. 30 - 08 - 2014 ARRIVAL USA 18 9. 18 - 05 - 2016 ARRIVAL KOCHI 17 10. 11 - 06 - 2017 ARRIVAL KOCHI 18 4.2 THE LD. AR SUBMITTED THAT THE ASSESSEE S CAME TO KNOW ABOUT THE PASSING OF THE ORDERS BY THE CIT(A) ONLY WHEN THE DEPARTMENT REQUIRED THE ASSESSEE S TO MAKE PAYMENT OF OUTSTANDING DEMAND IN THESE CASES. ON ONE OF SUCH VISITS TO KERALA, T HE Y APPROACHED EARLIER COUNSEL FOR THE ASSESSE E S, SHRI MATHEW JOSEPH, CA WHO STATED THAT HE HAD RECEIVED THE ORDERS ON 15/02/2016 . HE ALSO DREW OUR ATTENTIO N TO THE COPY OF THE ACKNOWLEDGMENT SLIP IN THE CASE OF BOTH THE ASSESSEES WHICH IS ATTACHED. I.T.A. NOS.523&524/COCH/2019 7 I.T.A. NOS.523&524/COCH/2019 8 4.2.1 T HEREAFTER, THE ORDERS OF THE CIT(A) W E RE HANDED OVER TO THE ASSESSEE S ON 05/08/2019 AND THE ASSESSEE S TOOK STEPS TO FILE THE APPEAL S BEFORE THIS TRIBUNA L , WHICH CAUSED THE DELAY OF 1250 DAYS IN FILING THE APPEALS. THE LD. AR HAS ALSO FILED THE AFFIDAVIT S FROM EARLIER COUNSEL FOR THE ASSESSEE S SHRI MATHEW JOSEPH, CA IN BOTH CASES WHICH READS AS FOLLOWS: AFFIDAVIT I, C.A. MATHEW JOSEPH, AGED 64, CHARTERED ACCOUNTANT, S/O LATE JOSEPH MICHAEL RESIDING AT 32/2432, KUNNATH LANE, PALARIVATTOM, COCHIN - 682025 DO HEREBY SOLEMNLY AFFIRM THAT: I AM A PRACTICING CHARTERED ACCOUNTANT AT COCHIN. LATE SHRI C.M. JOSEPH, B IJU NIVAS, KURMARANELLORE, KOTTAYAM REQUESTED ME TO APPEAR BEFORE THE DY. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE, KOTTAYAM FOR HIS NON RESIDENT SON MATHEW JOS EPH AND DAUGHTER - IN - LAW JIBI MATHEW FOR THE AY 2007 - 08 AND ENTRUSTED THE FILE IN DECEMBER, 2012 WITH PROPER AUTHORIZATION IN MY FAVOUR. 2. I REPRESENTED FOR BOTH OF THEM IN THE 143(3) R.W.S. 153C PROCEEDINGS. THE CONSIDERATION FOR THE SALE OF LANDED PROPERTY OBTAINED BY THE ASSESSEE, WAS PARTLY IN CASH AND PARTLY IN KI ND IN THE FORM OF BUILT UP AREA. THE ASSESSEE RETURNED ONLY THE CASH PORTION RECEIVED. THE ASSESSING OFFICER ASSESSED THE FULL AMOUNT VIDE HIS ORDER DATED 28/03/2013. 3. AT THE REQUEST OF LATE C.M. JOSEPH I FILED AN APPEAL BEFORE THE CIT (APPEALS) ON 25/ 04/2013. I WAS MADE TO UNDERSTAND BY LATE C.M. JOSEPH THAT THE LAND SOLD WAS URBAN AGRICULTURAL LAND AND HENCE COULD NOT RAISE ANY VALID ARGUMENTS BEFORE THE CIT(APPEALS). 4. MEANWHILE SRI C.M. JOSEPH DIED ON 10 TH AUGUST, 2013. THE CIT(APPEALS) DISMISS ED THE APPEAL VIDE ORDER DATED 25.01.2016. MYSELF RECEIVED THE ORDER ON 15/02/2016 AND KEPT IT IN MY FILE. AS MY UNDERSTANDING THAT THE LAND SOLD WAS URBAN AGRICULTURAL LAND NOT ELIGIBLE FOR EXEMPTION, I KEPT THE ORDER WITH ME. 5. THE ASSESSEES STAFF S RI. SABU CYRIAC.P CONTACTED ME FOR THE ORIGINAL ORDER BY THE CIT(APPEALS) ON 3 RD AUGUST 2019. I HANDED OVER BOTH THE I.T.A. NOS.523&524/COCH/2019 9 ORI GINAL ORDER DATED 25/01/2016 IN RESPECT OF ITA NO.2/CEN/KTM/2013 - 14 IN THE NAME OF JIBY MATHEW AND ITA NO. 4/CENT/KTM/2013 - 14 IN THE NAM E OF MATHEW JOSEPH ISSUED BY THE CIT(APPEALS) - II KOCHI FOR THE ASSESSMENT YEAR 2007 - 08 TO SABU CYRIAC P ON 05/08/2019. I. C.A. MATHEW JOSEPH, THE DEPONENT DO HEREBY DECLARE THAT WHAT IS STATED ABOVE IS TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND BE LIEF. SD/ - C.A. MATHEW JOSEPH DEPONENT SOLEMNLY AFFIRMED AND SIGNED BEFORE ME BY THE DEPONENT WHO IS PERSONALLY KNOWN TO ME ON THIS 16 TH DAY OF DECEMBER, 2019. 4.3 THE LD. AR RELIED ON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF SENIOR BHOSALE ESTATE (HUF) VS. ACIT IN CIVIL APPEAL N OS. 6671 - 6676 OF 2010 DATED 16 TH NOVEMBER, 2019 WHEREIN IT WAS HELD THAT CONDONATION OF DELAY OF 1754 DAYS: IF THE STAND OF THE APPLICANT IN THE AFF I DAVIT THAT HE HAD NO KNOWLEDGE ABOUT THE PASSING OF THE ORDER IS NOT EXPRESSLY REFUTED BY THE RESPONDENT, THE QUESTION OF DISBELIEVING THE STAND OF THE APPLICANT CANNOT ARISE. FOR THIS REASON, INDULGENCE SHOULD BE SHOWN TO THE APPLICANT BY CONDONING THE DELAY. 5 . ON THE OTHER HAND, THE L D. DR SUBMITTED THAT THE ASSESS E ES HAD GIVEN THE ADDRESS OF THE EARLIE R COUNSEL IN FORM NO. 35 AS THE ADDRESS TO WHICH THE NOTICE/ORDER IS TO BE SERVED. THE LD. DR ALSO SUBMITTED THAT THE CIT(A) HAD DULY SERVED THE APPEAL ORDERS TO THE ADDRESS OF THE EARLIER COUNSEL WHO HAS BEEN DULY I.T.A. NOS.523&524/COCH/2019 10 AUTHORIZED BY THE ASSESSEES. HE SUBMITT ED THAT IT IS THE DUTY OF THE ASSESSEES TO FOLLOW UP THE MATTER WITH THEIR COUNSEL. IT WAS ALSO SUBMITTED THAT THE ASSESSEES HAD ENGAGED THE COUNSEL AND T HE Y WERE ALSO AWARE OF THE D ETAILS OF HEARING ATTENDED BY THE COUNSEL BEFORE THE CIT(A). HENCE, AS A PRUDENT PERSON, THE ASSESSE E S SHOULD HAVE TAKEN DUE CARE BY ENQUIRING WITH THEIR COUNSEL. IF THE ASSESS E ES FAILED TO TAKE DUE CARE ON THE ISSUE, IT IS NOT THE FAULT OF THE DEPARTMENT AND SUCH INORDINATE DELAY SHOULD NOT BE CONDONED. FURTHER, IT WAS SUBM ITTED THAT IT IS NOT FAIR ON THE PART OF THE ASSESS E ES TO PUT THE BLAME ON THE EARLIER COUNSEL AND THE AFFIDAVITS FILED BY THE ASSESSE E S AND THE EARLIER COUNSEL ARE SELF - SERVING DOCUMENTS WHICH CANNOT BE GIVEN CREDENCE. ACCORDINGLY, THE LD. DR SUBMITTED T HAT THERE WAS NO SUFFICIENT CAUSE FOR THE INORDINATE DELAY OF 1250 DAYS AND HENCE, THE DELAY SHOULD NOT BE CONDONED. 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THERE WAS A DELAY OF 1250 DAYS IN FILING THE APPEALS BY THE ASSESSES BEFORE THE TRIBUNAL. WE HAVE TO CONSIDER WHETHER THE ASSESSEES FAILURE TO FILE THE APPEALS IN TIME IS SU PPORTED BY SUFFICIENT CAUSE SO AS TO CONDONE THE DELAY OF 1250 DAYS IN FILING THE APPEALS. THE MADRAS HIGH COURT CONSIDERED AN ISSUE IN THE CASE OF SREENIVAS CHARITABLE TRUST V. DY. CIT (280 ITR 357) AND HELD THAT MIXING UP OF PAPERS WITH OTHER PAPERS ARE SUFFICIENT CAUSE FOR NOT FILING THE APPEAL IN TIME. THE MADRAS HIGH COURT FURTHER OB SERVED THAT THE EXPRESSION 'SUFFICIENT CAUSE' SHOULD BE INTERPRETED TO ADVANCE SUBSTANTIAL JUSTICE. THEREFORE, ADVANCEMENT OF I.T.A. NOS.523&524/COCH/2019 11 SUBSTANTIAL JUSTICE IS THE PRIME FACTOR WHILE CONSIDERING THE REASONS FOR CONDONING THE DELAY. 6 .1 WHILE CONSIDERING A DELAY IN FILING THE APPEAL, THE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION V. MST . KATIJI AND ORS. (167 ITR 471) LAID DOWN SIX PRINCIPLES. FOR THE PURPOSE OF CONVENIENCE, THE PRINCIPLES LAID DOWN BY THE A PEX COURT ARE REPRODUCED HEREUNDER: (1) ORDINARILY, A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE . (2) REFUSING TO CONDONE DELAY CAN RESULT IN A MERITORIOUS MATTER BEING THROWN AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATE D. AS AGAINST THIS, WHEN DELAY IS CONDONED, THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. (3) 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HO UR'S DELAY, EVERY SECOND'S DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL, COMMONSENSE AND PRAGMATIC MANNER. (4) WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATION ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERR ED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON - DELIBERATE DELAY. (5) THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LIT IGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT, HE RUNS A SERIOUS RISK. (6) IT MUST BE GRASPED THAT THE JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALISE INJUSTICE ON TECHNICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJ USTICE AND IS EXPECTED TO DO SO. 6.2 WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATION ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE I.T.A. NOS.523&524/COCH/2019 12 CANNOT CLAIM TO HAVE VESTED RIGHT FOR INJUSTICE BEING DONE BECAUSE OF NON DELIBERATE DELAY. MOREOVER, NO COUNTER - AFFIDAVIT WAS FILED BY THE REVENUE DENYING THE REASONS ADVANCED BY THE ASSESSEE S . IT IS NOT THE CASE OF THE REVENUE THAT THE APPEAL S WERE FILED DELIBERATELY WITH DELAY . THEREFORE, WE HAVE TO PREFE R SUBSTANTIAL JUSTICE RATHER THAN TECHNICALITY IN DECIDING THE ISSUE. AS OBSERVED BY A PEX COURT, IF THE APPLICATION OF THE ASSESSEE FOR CONDONING THE DELAY IS REJECTED, IT WOULD AMOUNT TO LEGALISE INJUSTICE ON TECHNICAL GROUND WHEN THE TRIBUNAL IS CAPABLE OF REMOVING INJUSTICE AND TO DO JUSTICE. THEREFORE, THIS TRIBUNAL IS BOUND TO REMOVE THE INJUSTICE BY CONDONING THE DELAY ON TECHNICALITIES. IF THE DELAY IS NOT CONDONED, IT WOULD AMOUNT TO LEGALISING AN ILLEGAL ORDER WHICH WOULD RESULT IN UNJUST ENRICHMEN T ON THE PART OF THE STATE BY RETAINING THE TAX RELATABLE THERETO. UNDER THE SCHEME OF CONSTITUTION, THE GOVERNMENT CANNOT RETAIN EVEN A SINGLE PIE OF THE INDIVIDUAL CITIZEN AS TAX, WHEN IT IS NOT AUTHORISED BY AN AUTHORITY OF LAW. THEREFORE, IF WE REFUSE TO CONDONE THE DELAY, THAT WOULD AMOUNT TO LEGALISE AN ILLEGAL AND UNCONSTITUTIONAL ORDER PASSED BY THE LOWER AUTHORITY. THEREFORE, IN OUR OPINION, BY PREFERRING THE SUBSTANTIAL JUSTICE, THE DELAY HAS TO BE CONDONED. 6 . 3 THE NEXT QUESTION MAY ARISE WHETH ER DELAY WAS EXCESSIVE OR INORDINATE. THERE IS NO QUESTION OF ANY EXCESSIVE OR INORDINATE WHEN THE REASON STATED BY THE ASSESSEE S WAS A REASONABLE CAUSE FOR NOT FILING THE APPEAL S . WE HAVE TO SEE THE CAUSE FOR THE DELAY. WHEN THERE WAS A REASONABLE CAUSE, THE PERIOD OF DELAY MAY NOT BE RELEVANT FACTOR. IN FACT, THE MADRAS HIGH COURT IN THE CASE OF CIT V S . I.T.A. NOS.523&524/COCH/2019 13 K.S.P. SHANMUGAVEL NADAI AND ORS . (153 ITR 596) CONSIDERED THE CONDONATION OF DELAY AND HELD THAT TH ERE WAS SUFFICIENT AND REASONABLE CAUSE ON THE PART OF THE ASSESSEE FOR NOT FILING THE APPEAL WITHIN THE PERIOD OF LIMITATION. ACCORDINGLY, THE MADRAS HIGH COURT CONDONED NEARLY 21 YEARS OF DELAY IN FILING THE APPEAL. WHEN COMPARED TO 21 YEARS, 71 DAY S CANNOT BE CONSIDERED TO BE INORDINATE OR EXCESSIVE. FURTHERMORE, TH E CHENNAI TRIBUNAL BY MAJORITY OPINION IN THE CASE OF PEOPLE EDUCATION AND ECONOMIC DEVELOPMENT SOCIETY (PEEDS) V. ITO (100 ITD 87) ( CHENNAI) (TM ) CONDONED MORE THAN SIX HUNDRED DAYS DELAY. IT IS PERTINENT TO MENTION HEREIN THAT THE VIEW TAKEN BY THE PRESENT AUTHOR IN THAT CASE WAS OVERRULED BY THE THIRD MEMBER. 6 . 4 THE MADRAS HIGH COURT IN THE CASE OF SREENIVAS CHARITABLE TRUST (S UPRA) HELD THAT NO HARD AND FAST RULE CAN BE LAID DOWN IN THE MATTER OF CONDONATION OF DELAY AND THE COURT SHOULD ADOPT A PRAGMATIC APPROACH AND THE COURT SHOULD EXERCISE THEIR DISCRETION ON THE FACTS OF EACH CASE KEEPING IN MIND THAT IN CONSTRUING THE EXP RESSION 'SUFFICIENT CAUSE' THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANCE AND THE EXPRESSION 'SUFFICIENT CAUSE' SHOULD RECEIVE A LIBERAL CONSTRUCTION. THEREFORE, THIS JUDGMENT OF THE MADRAS HIGH COURT (SUPRA) CLEARLY SAYS THAT IN ORD ER TO ADVANCE SUBSTANTIAL JUSTICE WHICH IS OF PRIME IMPORTANCE, THE EXPRESSION 'SUFFICIENT CAUSE' SHOULD RECEIVE A LIBERAL CONSTRUCTION. IN THIS CASE, THE ISSUE ON MERIT REGARDING GRANTING OF DEDUCTION U/S. 80IB WA S COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE MADRAS HIGH COURT. THEREFORE, FOR THE PURPOSE OF ADVANCING SUBSTANTIAL JUSTICE WHICH IS OF I.T.A. NOS.523&524/COCH/2019 14 PRIME IMPORTANCE IN THE ADMINISTRATION OF JUSTICE, THE EXPRESSION 'SUFFICIENT CAUSE' SHOULD RECEIVE A LIBERAL CONSTRUCTION. IN OUR OPINION, THIS JUD GMENT OF THE MADRAS HIGH COURT IS ALSO SQUARELY APPLICABLE TO THE FACTS OF THIS CASE. A SIMILAR VIEW WAS TAKEN BY THE MADRAS HIGH COURT IN THE CASE OF VENKATADRI TRADERS LTD. V. CIT (2001) 168 CTR (MAD) 81 : (2001) 118 TAXMAN 622 (MAD). 6. 5 THE MUMBAI BENCH OF THIS TRIBUNAL IN THE CASE OF BAJAJ HINDUSTHAN LTD. V. JT. CIT (AT ) (277 ITR 1) HAS CONDONED THE DELAY OF 180 DAYS WHEN THE APPEAL WAS FILED A FTER THE PRONOUNCEMENT OF THE JUDGMENT OF THE A PEX COURT. FURTHERMORE, THE REVENUE HAS NOT FILED ANY COUNTER - AFFIDAVIT OPPOSING THE APPLICATION OF THE ASSESSEE FOR CONDONATION OF DELAY. THE A PEX COURT IN THE CASE OF MRS. SANDHYA RANI SARKAR VS. SMT. SUDHA RANI DEBI (AIR 1978 SC 537) HELD THAT NON - FILING OF AFFIDAVIT IN OPPOSITION TO AN APPLICATION FOR CONDONATION OF DELAY MAY BE A SUFFICIENT CAUSE FOR CONDONATION OF DELAY. IN THIS CASE, THE REVENUE HAS NOT FILED ANY COUNTER - AFFIDAVIT OPPOSING THE APPLICATIO N S OF THE ASSESSEE S , THEREFORE, AS HELD BY THE A PEX COURT, THERE IS SUFFICIENT CAUSE FOR CONDONATION OF DELAY. THE SUPREME COURT OBSERVED THAT WHEN THE DELAY WAS OF SHORT DURATION, A LIBERAL VIEW SHOULD BE TAKEN. 'IT DOES NOT MEAN THAT WHEN THE DELAY WAS F OR LONGER PERIOD, THE DELAY SHOULD NOT BE CONDONED EVEN THOUGH THERE WAS SUFFICIENT CAUSE. THE A PEX COURT DID NOT SAY THAT LONGER PERIOD OF DELAY SHOULD NOT BE CONDONED. CONDONATION OF DELAY IS THE DISCRETION OF THE COURT/TRIBUNAL. THEREFORE, IT WOULD DEPE ND UPON THE FACTS OF EACH CASE. IN OUR OPINION, WHEN THERE IS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL S WITHIN THE PERIOD OF LIMITATION, I.T.A. NOS.523&524/COCH/2019 15 THE DELAY HAS TO BE CONDONED IRRESPECTIVE OF THE DURATION/PERIOD. IN THIS CASE, THE NON - FILING OF AN AFFIDAVIT BY THE REVENUE FOR OPPOSING THE CONDONATION OF DELAY ITSELF IS SUFFICIENT FOR CONDONING THE DELAY IN FILING THE APPEALS BEFORE THE TRIBUNAL . 6 .6 IN THE JUDGMENT RENDERED BY THE SUPREME COURT IN THE CASE OF ESHA BHATTACHARJEE VS. MANAGING COMMITTEE OF RAGHUNAT HPUR NAFA ACADEMY & OTHERS (CIVIL APPEAL NOS. 8183 - 8184 OF 2013), THE SUPREME COURT HAS REFERRED TO SOME OF THE DECISIONS RENDERED BY HONBLE COURTS ON THE PRINCIPLES TO BE FOLLOWED WHILE ADJUDICATING THE ISSUE OF CONDONATION OF DELAY. FOR THE SAKE OF C ONVENIENCE, SOME OF THE JUDGMENTS ARE EXTRACTED AS FOLLOWS: A) I N COLLECTOR, LAND ACQUISITION, ANANTNAG AND ANOTHER V. MST. KATIJI AND OTHERS (SUPRA), A TWO - JUDGE BENCH OBSERVED THAT THE LEGISLATURE HAS CONFERRED POWER TO CONDONE DELAY BY ENACTING SECTION 5 OF THE INDIAN LIMITATION ACT OF 1963 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON MERITS. THE EXPRESSION SUFFICIENT CAUSE EMPLOYED BY THE LEGISLATURE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY T HE LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICE, FOR THAT IS THE LIFE - PURPOSE FOR THE EXISTENCE OF THE INSTITUTION OF COURTS. THE LEARNED JUDGES EMPHASIZED ON ADOPTION OF A LIBERAL APPROACH WHILE DEALING WITH THE APPLICATIONS FOR CONDONAT ION OF DELAY AS ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE AND REFUSAL TO CONDONE DELAY CAN RESULT IN A MERITORIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND THE CAUSE OF JUSTICE BEING DEFEATED. IT WAS STRESSED THAT T HERE SHOULD NOT BE A PEDANTIC APPROACH BUT THE DOCTRINE THAT IS TO BE KEPT IN MIND IS THAT THE MATTER HAS TO BE DEALT WITH IN A RATIONAL COMMONSENSE PRAGMATIC MANNER AND CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED OVER THE TECHNICAL CONSIDERATION S. IT WAS ALSO RULED THAT THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY OR ON ACCOUNT OF CULPABLE I.T.A. NOS.523&524/COCH/2019 16 NEGLIGENCE AND THAT THE COURTS ARE NOT SUPPOSED TO LEGALISE INJUSTICE ON TECHNICAL GROUNDS AS IT IS THE DUTY OF THE COURT TO REMOVE INJUSTICE. IN THE SAID CASE THE DIVISION BENCH OBSERVED THAT THE STATE WHICH REPRESENTS THE COLLECTIVE CAUSE OF THE COMMUNITY DOES NOT DESERVE A LITIGANT - NON GRATA STATUS AND THE COURTS ARE REQUIRED TO BE INFORMED WITH THE SPIRIT AND PHILOSOPHY OF THE PROVISION IN T HE COURSE OF INTERPRETATION OF THE EXPRESSION SUFFICIENT CAUSE. (B) IN G. RAMEGOWDA, MAJOR AND OTHERS V. SPECIAL LAND ACQUISIT ION OFFICER, BANGALORE (1988)(2 SCC 142), VENKATACHALIAH, J. (AS HIS LORDSHIP THEN WAS), SPEAKING FOR THE COURT, HAS OPINED T HU S: THE CONTOURS OF THE AREA OF DISCRETION OF THE COURTS IN THE MATTER OF CONDONATION OF DELAYS IN FILING APPEALS ARE SET OUT IN A NUMBER OF PRONOUNCEMENTS OF THIS COURT. SEE : RAMLAL, MOTILAL AND CHHOTELAL V. REWA COALFIELD LTD.(1962)(2 SCR 762); SHAKUNTA LA DEVI JAIN V. KUNTAL KUMARI(1969)(1 SCR 1006); CONCORD OF INDIA INSURANCE CO. LTD. V. NIRMALA DEVI(1979)(3 SCR 694); LALA MATA DIN V. A. NARAYANAN(1970)(2 SCR 90); COLLECTOR, LAND ACQUISITION V. KATIJI ETC. THERE IS, IT IS TRUE, NO GENERAL PRINCIPLE SAVI NG THE PARTY FROM ALL MISTAKES OF ITS COUNSEL. IF THERE IS NEGLIGENCE, DELIBERATE OR GROSS INACTION OR LACK OF BONA FIDE ON THE PART OF THE PARTY OR ITS COUNSEL THERE IS NO REASON WHY THE OPPOSITE SIDE SHOULD BE EXPOSED TO A TIME - BARRED APPEAL. EACH CASE W ILL HAVE TO BE CONSIDERED ON THE PARTICULARITIES OF ITS OWN SPECIAL FACTS. HOWEVER, THE EXPRESSION SUFFICIENT CAUSE IN SECTION 5 MUST RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE AND GENERALLY DELAYS IN PREFERRING APPEALS ARE REQUI RED TO BE CONDONED IN THE THE INTER EST OF JUSTICE WHERE NO GROSS NEGLIGENCE OR DELIBERATE INACTION OR LACK OF BONA FIDES IS IMPUTABLE TO THE PARTY SEEKING CONDONATION OF THE DELAY.. (C) IN THIS CONTEXT, WE MAY REFER WITH PROFIT TO THE AUTHORITY IN ORIENT AL AROMA CHEMICAL INDUSTRIES LIMITED V. GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION AND ANOTHER (2010)(5 SCC 459), WHERE A TWO - JUDGE BENCH OF THIS COURT HAS OBSERVED THAT THE LAW OF LIMITATION IS FOUNDED ON PUBLIC POLICY. THE LEGISLATURE DOES NOT PRESCRIBE LIMITATION WITH THE OBJECT OF DESTROYING THE RIGHTS OF THE PARTIES BUT TO ENSURE THAT THEY DO NOT RESORT TO DILATORY TACTICS AND SEEK REMEDY I.T.A. NOS.523&524/COCH/2019 17 WITHOUT DELAY. THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A PERIOD FIXED BY THE LEGISLATURE. TO PUT IT DIFFERENTLY, THE LAW OF LIMITATION PRESCRIBES A PERIOD WITHIN WHICH LEGAL REMEDY CAN BE AVAILED FOR REDRESS OF THE LEGAL INJURY. AT THE SAME TIME, THE COURTS ARE BESTOWED WITH THE POWER TO CONDONE THE DELAY, IF SUFFICIENT CAUSE IS SHOWN FOR NOT AVAILIN G THE REMEDY WITHIN THE STIPULATED TIME. THEREAFTER, THE LEARNED JUDGES PROCEEDED TO STATE THAT THIS COURT HAS JUSTIFIABLY ADVOCATED ADOPTION OF LIBERAL APPROACH IN CONDONING THE DELAY OF SHORT DURATION AND A STRICTER APPROACH WHERE THE DELAY IS INORDINATE . (D) IN IMPROVEMENT TRUST, LUDHIANA V. UJAGAR SINGH AND OTHERS(2010)(6 SCC 786), IT HAS BEEN HELD THAT WHILE CONSIDERING AN APPLICATION FOR CONDONATION OF DELAY NO STRAITJACKET FORMULA IS PRESCRIBED TO COME TO THE CONCLUSION IF SUFFIC IENT AND GOOD GROUNDS HAVE BEEN MADE OUT OR NOT. IT HAS BEEN FURTHER STATED THEREIN THAT EACH CASE HAS TO BE WEIGHED FROM ITS FACTS AND THE CIRCUMSTANCES IN WHICH THE PARTY ACTS AND BEHAVES. 6 .7 THE PRINCIPLES THAT EMANATE FROM THE ABOVE SAID DECISIONS ARE THAT, IN THE MA TTER OF CONDONATION OF DELAY IN FILING APPEALS BEYOND THE LIMITATION PERIOD, THE COURTS ARE EMPOWERED TO CONDONE THE DELAY, PROVIDED THE LITIGANT IS ABLE TO DEMONSTRATE THAT THERE WAS SUFFICIENT CAUSE IN PREFERRING APPEAL BEYOND THE LIMITATION PERIOD. T HE COURTS HAVE ALSO HELD THAT THE EXPRESSION SUFFICIENT CAUSE SHOULD RECEIVE LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE. HENCE, THE QUESTION OF CONDONATION OF D ELAY IS A FACTUAL MATTER AND THE RESULT WOULD DEPEND UPON THE FACTS OF THE CAS E AND THE CAUSE SHOWN BY THE ASSESSEE FOR THE DELAY. IT HAS ALSO BEEN OPINED THAT GENERALLY DELAYS IN PREFERRING APPEALS ARE REQUIRED TO BE CONDONED IN THE INTEREST OF JUSTICE , WHERE NO GROSS NEGLIGENCE OR DELIBERATE INACTION OR LACK OF BONA FIDES IS IMPU TABLE TO THE PARTY I.T.A. NOS.523&524/COCH/2019 18 SEEKING CONDONATION OF THE DELAY. IN VIEW OF THE FOREGOING, WE ARE OF THE VIEW THAT THE ASSESSEES HAVE SHOWN SUFFICIENT CAUSE FOR THE DELAY IN FILING THE APPEALS BEFORE THE TRIBUNAL. ACCORDINGLY, WE CONDONE THE DELAY OF 1250 DAYS AND ADMIT THE APPEALS FOR ADJUDICATION. 7 . THE ASSESSEES HAVE ALSO FILED PETITIONS FOR ADMISSION OF THE COMMON ADDITIONAL GROUND OF APPEALS. WE SHALL CONSIDER THE PETITION FOR ADMISSION OF ADDITIONAL GROUND IN THE CASE OF MATHEW JOSEPH WHICH READS AS FOLLOWS: IN THE APPEAL FILED BEFORE THE ITATT THE ASSESSEE HAS RAISED THE GROUND THAT THE LAND SOLD IS AGRICULTURAL AND HENCE EXEMPT FROM PAYMENT OF TAX. THIS GROUND WAS NOT RAISED BEFORE THE CIT(A) AS THE CONSULTANT WHO APPEARED FOR THE ASSESSEE WAS U NDER THE BELIEF THAT THE LAND SOLD WAS URBAN AGRICULTURAL LAND. THE FACT THAT THE LAND SOLD WAS RURAL AGRICULTURAL LAND WAS NOTICED BY THE ASSESSEE ONLY RECENTLY. THE NON SUBMISSION OF THIS GROUND WAS DUE TO A WRONG UNDERSTANDING OF THE FACTS BY THE ASSE SSEES FATHER WHO HANDLED THE CASE IN THE ABSENCE OF THE ASSESSEE. HENCE IT IS HUMBLY SUBMITTED THAT THE HON. ITAT MAY BE PLEASED TO PERMIT THE ASSESSEE TO RAISE THE ATTACHED GROUND AS ADDITIONAL GROUND AND TO TAKE IT ON RECORD. 7 .1 THE COMMON ADDIT IONAL GROUND OF APPEALS READS AS FOLLOWS: THE FACT THAT THE LAND SOLD WAS RURAL AGRICULTURAL LAND WAS IGNORED BY THE COMMISSIONER. 7 .2 THE LD. AR HAS ALSO FILED AFFIDAVITS IN SUPPORT OF ADMISSION OF THE COMMON ADDITIONAL GROUND AND DREW OUR ATTENTIO N TO THEM AS FOLLOWS: I, MATHEW JOSEPH, AGED 45 YEARS, S/O. LATE C M JOSEPH, RESIDING AT BIJU NIVAS, KUMARANALLOOR P.O., KOTTAYAM DISTRICT, KERALA STATE, INDIA DO HEREBY SOLEMNLY AFFIRM AND STATE AS FOLLOWS: - I.T.A. NOS.523&524/COCH/2019 19 I WAS A NON RESIDENT INDIAN HOLDING A U S PASSPORT AND SETTLED IN UNITED STATES FOR THE PAST 15 YEARS TILL I RETURNED TO INDIA IN MAY, 2016. MY MOTHER SMT. MARIYAMMA JOSEPH AND FATHER SRI.C.M. JOSEPH WERE SETTLED IN KOTTAYAM AND WERE L LOOKING AFTER THE BAR ATTACHED HOTEL IN THE NAME OF MY MOTHE R. MY FATHER, ON BEHALF OF ME AND MY WIFE, HAD PURCHASED RUBBE R ESTATE | SITUATED IN KAKKANAD, ERNAKULAM MEASURING 89.772 CENTS IN THE JOINT NAMES OF MYSELF AND MY WIFE DURING THE YEAR 2004 VIDE TWO DOCUMENTS. CONSEQUENT TO SEARCH IN THE PREMISES O F MY PARENTS, AN AGREEMENT HAS BEEN FOUND EVIDENCING THE SALE OF THE AFORESAID 89.772 CENTS OF LAND TO NCC URBAN INFRASTRUCTURE LIMITED ON 26.07.2006 FOR A CONSIDERATION IN CASH OF RS.2 CRORES TOGETHER WITH BUILT UP AREA IN THE BUILDING TO BE CONSTRUCTED B Y THE PURCHASER VALUED AT 1.15 CRORES TOTALING THE SALE CONSIDERATION AT RS. 3.15 CRORES. IN RESPONSE TO THE NOTICE U / S . 153C MY FATHER, THROUGH HIS CHARTERED ACCOUNTANT, HAD PREPARED AND FILED MY RETURN OF INCOME OF THE A Y 2007 - 08 DISCLOSING TOTAL I NCOME RS.79,16,000 / - BEING SHORT TERM CAPITAL GAIN ON TRANSFER OF 50% SHARE IN THE AFORESAID RUBBER ESTATE IN RESPECT OF THE CASH PART OF CONSIDERATION RECEIVED. IN THE ASSESSMENT COMPLETED ON 28 / 03 / 2013 U /S 143 ( 3) R.W.S. 153C THE CAPITAL GAINS OF RS. 1,36 ,66,000 / - WAS CHARGED BY TAKING THE SALE VALUE INCLUDING THE AMOUNT RECEIVABLE IN KIND AND THEREBY RAISED HUGE DEMAND. THE CIT (A) HAD CONFIRMED THE ASSESSMENT OF SHORT TERM CAPITAL GAINS OF RS. 1,36,66,000 / - IN HIS ORDER DATED 20 / 01 / 2016. ALL THESE YE ARS I WAS IN U.S. AND WAS UNDER THE IMPRESSION THAT EVERYTHING WAS DONE PROPERLY BY MY FATHER. I HAVE ONLY SIGNED THE RETURN OF INCOME AS I WAS NOT FAMILIAR WITH THE TAXATION PROVISIONS IN INDIA. MY FATHER DIED ON 10 TH DAY OF AUGUST, 2013 AFTER WHICH M Y MOTHER LEFT INDIA AND JOINED US IN U.S. THE HOTEL BUSINESS AT KOTTAYAM WAS MANAGED BY THE STAFF. MEANWHILE THE INCOME TAX DEPARTMENT DEMANDED FOR THE SETTLEMENT OF THE DUES AND THE HOTEL STAFF REMITTED THE AMOUNTS IN MONTHLY INSTALLMENTS. THE SALE OF RUBBER ESTATE TOOK PLACE ON 26.07.2006. MY FATHER AT THE TIME FILING THE RETURN AND COMPLETION OF THE ASSESSMENT IN MARCH, 2013 HAD INFORMED THE TAX CONSULTANT THAT THE LAND SOLD IS SITUATED IN THRIKKAKARA MUNICIPALITY AND HENCE THE CONSULTANT HAS NOT RAI SED THE PLEA BEFORE THE ASSESSING OFFICER AND THE APPELLATE AUTHORITY THAT THE LAND SOLD IS I.T.A. NOS.523&524/COCH/2019 20 AGRICULTURAL AND NOT A CAPITAL ASSET ATTRACTING TAXABLE CAPITAL GAINS. MY FATHER WAS BED RIDDEN DURING THESE DAYS AND HE PASSED AWAY ON 10 - 08 - 2013. THE FACT THA T THE THRIKKAKARA MUNIC IPALITY WAS FORMED ONLY ON 30 - 1 1 - 2010 AND THRIKKAKARA PANCHAYATH WAS NOT A NOTIFIED AREA FOR URBANIZATION AT THE TIME OF TRANSFER IE ON 26 - 07 - 2006 FOR THE PURPOSE OF DEFINING ''CAPITAL ASSET' IN SECTION 2(14) WAS OVERLOOKED BY M Y FA THER AND THE TAX CONSULTANT. THE AFORESAID LAND WAS NOT TAKEN AS AN 'URBAN LAND WITHIN THE MEANING OF SECTION 2 (EA) OF THE W T ACT, THEREFORE, NOT CHARGED TO WEALTH TAX AS PER WEALTH TAX ASSESSMENT MADE U/S 16 (3) FOR THE A Y 2006 - 07. MYSELF AND MY WIFE RETURNED TO INDIA IN JULY, 2016 WOUNDING UP OUR BUSINESS IN U.S. I WAS NEW TO THE EXISTING HOTEL BUSINESS AND THE STAFF CONTINUED TO MANAGE THE BUSINESS AND ALSO PAYMENT OF THE TAX IN INSTALLMENTS. WHEN I NOTICED THE HUGE DEMAND STILL PENDING IN RESPECT OF CAPITAL GAINS ASSESSED RS, 1,36,66,0007 - FOR THE A Y 2007 - 08 I GATHERED ALL DETAILS AND MET AN ADVOCATE AT ERNAKULAM WHO DIRECTED ME TO ADVOCATE ANIL D NAIR. L HE ONLY FOUND THAT THE LAND IS SITUATED OUTSIDE THE LIMITS OF THE MUNICIPALITY AND NOT LIABLE TO INCOME TAX. ON A PERUSAL OF THE PROCEEDINGS BEFORE THE 1 ST APPELLATE AUTHORITY, IT WAS NOTICED THAT THERE WAS NO SPECIFIC GROUND TAKEN TO THE EFFECT THAT THE LAND IS SITUATED OUTSIDE THE LIMITS OF THE MUNICIPALITY AND THEREFORE WAS ENTIT LED FOR EXEMPTION FROM CAPITAL GAINS TAX. THEREFORE, AN APPEAL WAS DRAWN UP AND SINCE THIS ISSUE WAS NOT AGITATED BEFORE THE APPELLATE AUTHORITY, THE ADDITIONAL GROUND IS BEING FILED IN TERMS OF THE RATIO OF THE JUDGMENT IN JUTE C ORPORATION'S CASE REPORTED IN 1991 AIR 241 (SC) AND APPROVED IN NTPC REPORTED IN (1998) 229 1TR 383. IT IS THEREFORE RESPECTFULLY PRAYED THAT THE HON'BLE TRIBUNAL BE PLEASED TO TAKE ON RECORD THE ADDITIONAL GROUND AND PASS CONSEQUENTIAL ORDERS. IF ORDERS AS PRAYED FOR ARE NOT GRANTED, THE PETITIONER WOULD BE PUT TO IRREPARABLE LOSS AND HARDSHIP. IT IS THEREFORE ACCORDINGLY PRAYED. ALL WHAT IS STATED ABOVE ARE TRUE AND CORRECT. SD/ - I.T.A. NOS.523&524/COCH/2019 21 MATHEW JOSEPH DEPONENT SOLEMNLY AFFIRMED AND SIGNED BEFORE ME BY THE DEP ONENT WHO IS PERSONALLY KNOWN TO ME ON THIS 4 TH DAY OF DECEMBER , 20 19 AT MY OFFICE AT KOTTAYAM. SIMILAR PETITION/A FFIDAVIT FOR ADMISSION OF ADDITIONAL GROUND WAS ALSO FILED IN THE CASE OF SMT. JIBY MATHEW. 7.2.1 THE LD. DR STRONGLY OPPOSED THE ADMISSION OF ADDITIONAL GROUND AND SUBMITTED THAT THERE IS NO REA SONABLE CAUSE FOR FILING THE ADDITIONAL GROUND. 7 .3 WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND WE HAVE PERUSED THE DECISIONS ON WHICH RELIANCE IS PLACED FROM BOTH THE SIDES. THE TRIBUNAL WHILE DEALING WITH THE SUBJECT - MATTER OF THE APPEAL IN EXERCISE OF ITS POWER, IT MAY ALLOW THE PARTY TO TAKE UP A NEW GROUND OF APPEAL. IN OTHER WORDS, THE TRIBUNAL HAS POWER TO PERMIT THE ASSESSEE TO RAISE A NEW GROUND OF APPEAL, NOT SET FORTH IN THE MEMORANDUM OF APPEAL, EVEN WITHOUT FORMAL AMENDMENT OF T HE GROUNDS SET FORTH IN THE MEMORANDUM OF APPEAL PROVIDED THAT A NEW GROUND DOES NOT INVOLVE A FURTHER INVESTIGATION INTO THE FACTS. THIS POWER OF TRIBUNAL IS SPELT OUT IN R. 11 OF ITAT RULES, 1963. HON'BLE PUNJAB & HARYANA HIGH COURT HAS HELD IN THE CASE OF VIJAY KUMAR JAIN VS. CIT (1975) 99 ITR 349 (P&H) THAT THE TRIBUNAL MAY ALLOW A PARTY TO PRESS A GROUND WHICH HE DOES NOT PRESS BEFORE THE FIRST APPELLATE AUTHORITY ALTHOUGH HE HAS TAKEN AND INCLUDED IN THE GROUNDS OF THE FIRST APPEAL. THE PROPOSITION OF LAW ON THE ISSUE OF ADMISSION OF ADDITIONAL OR NEW I.T.A. NOS.523&524/COCH/2019 22 GROUNDS BY FIRST APPELLATE AUTHORITY WAS LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF JUTE CORPORATION OF INDIA LTD. VS. CIT (1990) 88 CTR (SC) 66 : (1991) 187 ITR 688 (SC) AND HON'BLE SUPREME CO URT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT (229 ITR 383 ) H ELD THAT THE SAME WILL APPLY TO APPEAL BEFORE TRIBUNAL HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. MOHD. AYYUB & SONS AGENCY (1992) 197 ITR 637 (ALL) HAS HELD THAT THE POWER OF THE TRIBUNAL TO PERMIT ANY PARTY TO THE APPEAL TO RAISE THE QUESTION OF JURISDICTION, WHICH GOES TO THE ROOT OF THE MATTER AND DOES NOT INVOLVE FURTHER INVESTIGATION INTO FACTS, CANNOT BE DISPUTED ON THE PLAIN READING OF R. 11 OF THE ITAT RULES, 1963. INDEED ON SUCH A PLEA BEING TAKEN, THE TRIBUNAL IS UNDER A STATUTORY OBLIGATION NOT ONLY TO ENTERTAIN THE PLEA BUT ALSO TO DECIDE THE SAME AFTER PROVIDING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE OTHER SIDE. SIMILAR VIEWS HAVE BEEN TAKEN BY HON'BLE DEL HI HIGH COURT (I) IN THE CASE OF CIT VS. MAHALAX MI SUGAR MILLS CO. LTD. (1993) 200 ITR 275 (DEL), (II) HON'BLE BOMBAY HIGH COURT IN THE CASE OF AHMEDABAD ELECTRICITY CO. LTD. VS. CIT (1992) 106 CTR (BOM) 78 ; (1993) 199 ITR 351, 367 (BOM) AND (III) HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF MEWAR SUGAR MILLS LTD. VS. CIT (1993) 203 ITR 415 (RAJ). HON'BLE BOMBAY HIGH COURT IN THE CASE OF BABY SAMUEL VS. ASSTT, CIT (2003) 184 CTR (BOM) 140 : (2003) 262 ITR 385 (BOM) HAS HELD THAT WHEN AN ISSUE WAS NOT SPECIF ICALLY TAKEN IN THE MEMORANDUM AND GROUNDS OF APPEAL BUT MENTIONED IN THE WRITTEN SUBMISSIONS FILED BEFORE THE TRIBUNAL AND SPECIFICALLY ARGUED AT THE TIME OF THE FINAL HEARING OF THE APPEAL, THE TRIBUNAL CANNOT REFUSE TO ADJUDICATE I.T.A. NOS.523&524/COCH/2019 23 UPON THAT ISSUE ON THE MERITS OF THE GROUND THAT NO SUCH GROUND HAS BEEN TAKEN SPECIFICALLY IN THE GROUNDS OF APPEAL. HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. (SUPRA) HAS HELD : '...THE POWER OF THE TRIBUNAL IN DEALING WITH APPEALS IS THUS EXPRESSED I N THE WIDEST POSSIBLE TERMS. THE PURPOSE OF ASSESSMENT PROCEEDINGS BEFORE THE TAXING AUTHORITIES IS TO ASSESS CORRECTLY THE TAX LIABILITY OF AN ASSESSEE IN ACCORDANCE WITH LAW. IF, FOR EXAMPLE, AS A RESULT OF A JUDICIAL DECISION GIVEN WHILE THE APPEAL IS P ENDING BEFORE THE TRIBUNAL, IT IS FOUND THAT A NON - TAXABLE ITEM IS TAXED OR A PERMISSIBLE DEDUCTION IS DENIED, THERE IS NO REASON WHY THE ASSESSEE SHOULD BE PREVENTED FROM RAISING THAT QUESTION BEFORE THE TRIBUNAL FOR THE FIRST TIME, SO LONG AS THE RELEVAN T FACTS ARE ON RECORD IN RESPECT OF THE ITEM. THERE IS NO REASON TO RESTRICT THE POWER OF THE TRIBUNAL UNDER S. 254 ONLY TO DECIDE THE GROUNDS WHICH ARISE FROM THE ORDER OF THE CIT (A). BOTH THE ASSESSEE AS WELL AS THE DEPARTMENT HAVE A RIGHT TO FILE AN AP PEAL/CROSS - OBJECTIONS BEFORE THE TRIBUNAL. THE TRIBUNAL SHOULD NOT BE PREVENTED FROM CONSIDERING QUESTIONS OF LAW ARISING IN ASSESSMENT PROCEEDINGS, ALTHOUGH NOT RAISED EARLIER. THE VIEW THAT THE TRIBUNAL IS CONFINED ONLY TO ISSUES ARISING OUT OF THE APPEA L BEFORE THE CIT(A) IS TOO NARROW A VIEW TO TAKE OFF THE POWERS OF THE TRIBUNAL.' 7.4 THUS, THE SETTLED LEGAL POSITION, WHICH EMERGES FROM THE AFORESAID JUDICIAL PRONOUNCEMENTS, IS THAT THE PURPOSE OF ASSESSMENT PROCEEDING IS TO TAX/ASSESS THE TAXABLE L IABILITY/INCOME OF THE ASSESSEE CORRECTLY IN ACCORDANCE WITH LAW AND IF THE ASSESSEE IS ENTITLED TO CERTAIN RELIEF, DEDUCTION OR BENEFIT, THE ASSESSEE SHOULD NOT BE DENIED OR DEPRIVED OF IT, EVEN IF THE CLAIM PERTAINING TO THE SAME IS MADE FOR THE FIRST TI ME BEFORE THE TRIBUNAL DURING PENDENCY OF APPEAL BEFORE IT. IN THE PRESENT CASE, THE ISSUE RAISED IN ADDITIONAL GROUND IS LEGAL ISSUE WHICH GO ES TO THE ROOT OF THE MATTER AND FOR DECIDING THE LEGAL ISSUE NO NEW FACTS ARE REQUIRED TO BE CONSIDERED AS ALL TH E FACTS ARE ALREADY RECORDED IN THE ORDERS OF THE AUTHORITIES BELOW. IN VIEW OF THE MATTER, WE DO NOT FIND ANY FORCE IN THE I.T.A. NOS.523&524/COCH/2019 24 ARGUMENT OF THE LD. DR THAT THE ASSESSEE S CANNOT RAISE THE ADDITIONAL GROUND ON THE SIMPLE REASON THAT IT WAS NOT CHALLENGED BEFORE THE ASSESSING OFFICER. WE, THEREFORE, ADMIT THE ADDITIONAL GROUND AND RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AND FRESH ADJUDICATION ON THE LEGAL ISSUE RAISED BY THE ASSESSE E S. 7.5 ON MERITS, THE FACTS OF THE CASE HAVE ALREADY BEEN NARRATED IN THE AFFIDAVITS FILED BY THE L D . AR WHICH IS NOT REQUIRED TO BE REITERATED. S INCE WE HAVE ADMITTED THE APPEALS FOR ADJUDICATION, THE ADDITIONAL GROUND RAISED BY THE ASSESSE E S WHICH GOES TO THE ROOT OF MATTER WHICH WAS NOT AT ALL RA ISED BEFORE THE LOWER AUTHORITIES ON EARLIER OCCASION NEEDS TO BE REMITTED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION . THE ASSESSING OFFICER HAS TO GO THROUGH THE RELEVANT TITLE DEED , NOTIFICATION S ETC. SO AS TO DECIDE WHETHER THE LAND SO LD BY THE ASSESSE E S IS AGRICULTURAL LAND OR NOT. THUS, THE ADDITIONAL GROUND OF APPEAL S IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NOS.523&524/COCH/2019 25 9. SINCE WE HAVE REMITTED THE ADDITIONAL GROUND TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION, AT THIS STAGE, WE REFRAIN FROM GOING INTO MAIN GROUNDS. 10 . IN THE RESULT, THE APPEALS OF THE ASSESSEE S ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 09 TH MARCH , 20 20 SD/ - SD/ - (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 09 TH MARCH, 20 20 GJ COPY TO: 1 . SMT. JIBY MATHEW, BIJU NIVAS, KUMARANALLOOR P.O., KOTTAYAM - 686 016. 2. SHRI MATHEW JOSEPH, BIJU NIVAS, KUMARANALLOOR P.O., KOTTAYAM - 686 016. 3 . THE DEPUTY COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE , KOTTAYAM. 3 . THE COMMISSIONER OF INCOME - TAX (AP P EAL S) - II , KOCHI. 4 . THE COMMISSIONER OF INCOME - TAX, CENTRAL, KOCHI . 5 . D. R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T. COCHIN BENCH I.T.A. NOS.523&524/COCH/2019 26