M/s. V.S.B. Investments P. Ltd., Haryana V. ACIT, Faridabad

ITA 5320/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2798 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 05-06-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 10-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Assessee Lawyers: SOMI AGARWAL; RAKESH GUPTA SHRI DEEPESH GARG
• Keywords: Business income; Period of limitation; Agreed addition; Ignorance of law
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES G : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA.NO.5320 & 5321/DEL./2016 ASSESSMENT YEARS 2005-2006 & 2008-2009 M/S. V.S.B. INVESTMENTS P. LTD., B-400, 3 RD FLOOR, NEHRU GROUND, NIT, FARIDABAD. HARYANA. PAN AABCV7492B VS THE ACIT, CIRCLE-II, C.G. COMPLEX, N.H. IV, FARIDABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI RAKESH GUPTA, SHRI DEEPESH GARG AND SHRI SOMI AGARWAL ADVOCATES FOR REVENUE : SHRI KAUSHLENDRA TIWARI, SR. D.R. DATE OF HEARING : 21.03.2018 DATE OF PRONOUNCEMENT : 22.03.2018 ORDER PER BHAVNESH SAINI, J.M. BOTH THE APPEALS BY THE SAME ASSESSEE-COMPANY ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF THE LD. CI T(A), FARIDABAD, DATED 2 ND AUGUST, 2016, FOR THE A.YS. 2005-2006 AND 2008-2009, DISMISSING BOTH THE APPEALS OF THE ASSES SEE- COMPANY IN LIMINE HOLDING THEM TO BE TIME BARRED. 2 ITA.NO.5320 & 5321/DEL./2016 M/S. V.S.B. INVESTMENTS P. LTD., FARIDABAD, HARYANA . 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT FOR A. Y. 2005- 2006, THE A.O. PASSED THE ASSESSMENT ORDER ON 27 TH NOVEMBER, 2007. THE A.O. CONSIDERED THE ISSUE OF LOSS NOT ALL OWABLE UNDER SECTION 94(7) OF THE I.T. ACT IN A SUM OF RS.8,59,8 97/-. THE ASSESSEE-COMPANY HIMSELF CALCULATED THE SAME DISALL OWANCE AND SURRENDERED THIS AMOUNT, SUBJECT TO NO PENALTY. SIMILARLY, IN A.Y. 2008-2009, THE A.O. PASSED THE ASSESSMENT O RDER ON 31 ST DECEMBER, 2010 AND SIMILARLY, THE ASSESSEE-COMPANY SURRENDERED THE AMOUNT OF RS.4,92,372/- UNDER SECTI ON 94(7) OF THE I.T. ACT, SUBJECT TO NO PENALTY. IT IS, THE REFORE, CLEAR THAT THE ASSESSEE-COMPANY ON THIS ADDITION AGREED BEFORE THE A.O. IN BOTH THE ASSESSMENT YEARS. THE ASSESSEE-COMPANY DID NOT FILE APPEALS BEFORE THE LD. CIT(A) BECAUSE IT WAS A N AGREED ADDITION. THE ASSESSEE-COMPANY, LATER ON, FOR A.Y. 2005-2006, FILED AN APPEAL AGAINST THE ASSESSMENT ORDER BEFORE THE LD. CIT(A) ON 22 ND JANUARY, 2016 AND FOR A.Y. 2008-2009 FILED AN APPEAL BEFORE THE LD. CIT(A) ON 06 TH APRIL, 2015. 3 ITA.NO.5320 & 5321/DEL./2016 M/S. V.S.B. INVESTMENTS P. LTD., FARIDABAD, HARYANA . 2.1. THE LD. CIT(A), NOTED THAT BOTH THE APPEALS A RE DELAYED BY MORE THAN 08 YEARS AND 04 YEARS RESPECTI VELY. THE LD. CIT(A) NOTED IN THE APPELLATE ORDER THAT DISALL OWANCE UNDER SECTION 94(7) WAS MADE VIDE ASSESSMENT ORDERS DATED 27.11.2007 AND 31.12.2010, THE A.O. LEVIED THE PENA LTY VIDE ORDER DATED 30 TH MAY, 2008 FOR THE A.Y. 2005-2006. THE LD. CIT(A) VIDE ORDER DATED 10 TH JULY, 2009 DELETED THE PENALTY. THE TRIBUNAL VIDE ORDER DATED 11 TH JUNE, 2010 REVERSED THE ORDER OF THE LD. CIT(A) AND UPHELD THE PENALTY. 2.2. THE ASSESSEE-COMPANY FILED APPEAL BEFORE THE HONBLE PUNJAB & HARYANA HIGH COURT WHICH WERE DISM ISSED VIDE ORDER DATED 29 TH MARCH, 2011 AND SLP OF THE ASSESSEE- COMPANY HAS BEEN DISMISSED ON 10 TH OCTOBER, 2011. FOR A.Y. 2008-2009, SIMILARLY, ASSESSEE-COMPANY FILED RECTIF ICATION APPLICATION UNDER SECTION 154 WHICH WERE REJECTED V IDE ORDER DATED 13 TH JUNE, 2011. THE LD. CIT(A) DISMISSED THE APPEAL OF ASSESSEE-COMPANY AGAINST 154 ORDER VIDE ORDER DATED 11 TH JUNE, 2016. THE ASSESSEE-COMPANY WITHDRAW THE APPEA L FROM 4 ITA.NO.5320 & 5321/DEL./2016 M/S. V.S.B. INVESTMENTS P. LTD., FARIDABAD, HARYANA . THE TRIBUNAL. THE APPEAL OF ASSESSEE-COMPANY AGAINS T PENALTY IN THIS YEAR WAS PENDING BEFORE THE TRIBUNAL. 2.3. IN THE BACKGROUND OF THESE FACTS, LD. CIT(A) NOTED THAT THERE IS NO SUFFICIENT CAUSE FOR DELAY IN FILI NG THE APPEALS. THE ASSESSEE-COMPANY CONTENDED BEFORE THE LD. CIT(A ) THAT ADDITION HAS BEEN WRONGLY MADE BY THE A.O. THE LD. CIT(A) HOWEVER, DID NOT ACCEPT THE CONTENTION OF ASSESSEE- COMPANY AND NOTED THAT THERE WAS SUFFICIENT OPPORTUNITIES A VAILABLE TO ASSESSEE-COMPANY TO FILE APPEAL. THE ASSESSEE-COMPA NY FAILED TO PROVE ANY SUFFICIENT CAUSE. THEREFORE, BOTH THE APPEALS WERE DISMISSED IN LIMINE AS THE ASSESSEE-COMPANY HAS NOT BEEN ABLE TO PROVIDE ANY SUFFICIENT REASON FOR DELAY IN FILIN G THE APPEALS. BOTH THE APPEALS WERE ACCORDINGLY DISMISSED HOLDING THEM TO BE TIME BARRED. 3. LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ENTIRE DELAY HAS BEEN OCCURRED DUE TO IGNORANCE OF LAW BY THE CHARTERED ACCOUNTANT. BUT, WHEN APPEALS WERE FILED IN 2016, SHRI J.P. GULATI, ADVOCATE, (WHO ENGAGED IN THE CRI MINAL 5 ITA.NO.5320 & 5321/DEL./2016 M/S. V.S.B. INVESTMENTS P. LTD., FARIDABAD, HARYANA . PROCEEDINGS IN JANUARY, 2016), ADVISED THAT THE AMO UNT IN QUESTION IS NOT TAXABLE AS BUSINESS INCOME. IT IS, THEREFORE, SUBMITTED THAT FOR SUBSTANTIAL CAUSE OF JUSTICE, DE LAY IN FILING BOTH THE APPEALS BEFORE THE LD. CIT(A) MAY BE CONDO NED. 4. THE LD. D.R. ON THE OTHER HAND, STRONGLY RELIED UPON THE IMPUGNED ORDERS AND SUBMITTED THAT THERE IS NO CAUSE DISCLOSED BEFORE THE LD. CIT(A) FOR CONDONATION OF DELAY. THEREFORE, BOTH THE APPEALS HAVE BEEN CORRECTLY DIS MISSED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT AS REGARDS DISALLOWANCE UNDER SECTION 94(7) OF THE I.T. ACT IN BOTH THE YEARS, THE ASSESSEE-COMPANY ITSELF CALC ULATED THE DISALLOWANCE AND SURRENDERED THE AMOUNT IN QUESTION , SUBJECT TO NO PENALTY. THUS, THE ASSESSEE-COMPANY AGREED FO R BOTH THE ADDITIONS, WHICH WERE NOT CORRECTLY CHALLENGED BEFO RE THE LD. CIT(A). IT IS WELL SETTLED LAW THAT NO APPEAL LIES ON AGREED ADDITIONS. WE, RELY UPON THE DECISION OF HONBLE BO MBAY HIGH COURT IN THE CASE OF JIVATLAL PURTAPSHI VS. COMMISS IONER OF 6 ITA.NO.5320 & 5321/DEL./2016 M/S. V.S.B. INVESTMENTS P. LTD., FARIDABAD, HARYANA . INCOME TAX, BOMBAY, 65 ITR 261 (BOM.), DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. VAMADEVAN BHANU 330 ITR 559 (KERALA) AND DECISION OF PUNJAB & HARYANA H IGH COURT IN THE CASE OF BANTA SINGH KARTAR SINGH VS. COMMISS IONER OF INCOME TAX, PATIALA 125 ITR 239 (P & H). SINCE THE ASSESSEE- COMPANY AGREED FOR THESE ADDITIONS BEFORE A.O, THER EFORE, THERE IS NO QUESTION OF FILING ANY APPEAL BEFORE THE LD. CIT(A) AND THE ASSESSEE-COMPANY CORRECTLY DID NOT FILE ANY APPEAL BEFORE THE LD. CIT(A) ON THIS ISSUE. THE ASSESSEE-COMPANY AFTE R 08 AND 04 YEARS RESPECTIVELY, FILED APPEALS BEFORE THE LD. CI T(A) CHALLENGING BOTH THESE ADDITIONS WITHOUT ANY JUSTIF ICATION AND BASIS. IT WAS CONTENDED THAT THE DELAY OCCURRED DUE TO IGNORANCE OF LAW BY THE CHARTERED ACCOUNTANT AND LA TER ON, SHRI J.P. GULATI, ADVOCATE, ADVISED THE ASSESSEE-COMPANY THAT SUCH AMOUNT IS NOT TAXABLE. HOWEVER, ASSESSEE-COMPANY HA S FAILED TO EXPLAIN AS TO HOW THE APPEALS OF THE ASSESSEE-CO MPANY WOULD BE MAINTAINABLE WHEN IT HAS AGREED FOR ADDITION BEF ORE THE A.O. THE EXPLANATION OF ASSESSEE-COMPANY IS WITHOUT SUBS TANCE AND WITHOUT BASIS. IT HAS NOT DISCLOSED ANY SUFFICIENT CAUSE FOR DELAY 7 ITA.NO.5320 & 5321/DEL./2016 M/S. V.S.B. INVESTMENTS P. LTD., FARIDABAD, HARYANA . IN FILING THE APPEALS BEFORE THE LD. CIT(A). 5.1. IT WOULD BE APPROPRIATE TO REFER TO SOME OF T HE JUDICIAL PRONOUNCEMENTS ON THE ISSUE OF DELAY IN FILING THE APPEALS. THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF HIND DEV ELOPMENT CORPORATION VS. ITO (1979) 118 ITR 873 (CAL.), HE LD THAT A TRIBUNAL CAN CONDONE THE DELAY IF THERE WAS SUFFICI ENT CAUSE FOR THE DELAY IN THE SUBMISSION OF THE APPEAL. IN THE C ASE OF VEDABAI ALIAS VIJAYANATABAI BABURAO PATIL V. SHANTARAM BABU RAO PATIL (2002) 253 ITR 798 (SC), WHERE IT WAS HELD THAT WHI LE EXERCISING DISCRETION UNDER SECTION 5 OF THE LIMITATION ACT, 1 963, TO CONDONE DELAY FOR SUFFICIENT CAUSE IN NOT FILING TH E APPEAL WITHIN THE PERIOD PRESCRIBED, COURTS SHOULD ADOPT A PRAGMA TIC APPROACH. A DISTINCTION MUST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDINATE AND A CASE WHERE THE DELAY IS OF A FEW DAYS. THE COURT OBSERVED THAT WHEREAS IN THE FORMER CONSIDERATION OF PREJUDICE TO THE OTHER SIDE WILL B E A RELEVANT FACTOR AND CALLS FOR A MORE CAUTIOUS APPROACH. IN T HE LATTER CASE NO SUCH CONSIDERATION MAY ARISE AND SUCH A CASE DES ERVES A 8 ITA.NO.5320 & 5321/DEL./2016 M/S. V.S.B. INVESTMENTS P. LTD., FARIDABAD, HARYANA . LIBERAL APPROACH. NOW IN THE PRESENT CASES DELAY IS NOT OF A FEW DAYS BUT OF 08 YEARS AND 04 YEARS RESPECTIVELY. BES IDES, THERE IS ABSOLUTELY NO VALID EXPLANATION/REASON FOR THE D ELAY. IN THE CASE OF CIT V. RAM MOHAN KABRA (2002) 257 ITR 773, THE HON'BLE PUNJAB & HARYANA HIGH COURT HAS OBSERVED TH AT WHERE THE LEGISLATURE SPELLS OUT A PERIOD OF LIMITATION A ND PROVIDES FOR POWER TO CONDONE THE DELAY AS WELL, SUCH DELAY CAN ONLY BE CONDONED ONLY FOR SUFFICIENT AND GOOD REASONS SUPPO RTED BY COGENT AND PROPER EVIDENCE. IT IS A SETTLED PRINCIP LE OF LAW THAT PROVISIONS RELATING TO THE SPECIFIED PERIOD OF LIMI TATION MUST BE APPLIED WITH THEIR RIGOR AND EFFECTIVE CONSEQUENCES . IN THIS CASE, DELAY FOR FILING THE APPEAL LATE FOR ONLY A FEW DAY S WAS NOT CONDONED. IN THE CASE OF ACIT VS. TAGGAS INDUSTRIE S DEVELOPMENT LTD. (2002) 80 ITD 21 (TRIBU.) (CAL.), THE CALCUTTA BENCH OF THE TRIBUNAL, DID NOT CONDONE THE DELAY FO R FILING THE APPEAL LATE BY 13 DAYS BECAUSE THE DELAY WAS NOT DU E TO SUFFICIENT CAUSE. THUS, RELYING ON THE ABOVE JUDGME NTS, WE HOLD THAT ASSESSEE FAILED TO EXPLAIN BEFORE THE LD. CIT( A) THAT DELAY IN FILING THE APPEALS WAS DUE TO SUFFICIENT CAUSE. THEREFORE, THE 9 ITA.NO.5320 & 5321/DEL./2016 M/S. V.S.B. INVESTMENTS P. LTD., FARIDABAD, HARYANA . LD. CIT(A), RIGHTLY DISMISSED THE APPEALS OF THE AS SESSEE- COMPANY ON THIS GROUND. 5.2. IN THE PRESENT CASES, THERE IS AN INORDINATE DELAY IN FILING THE APPEALS BEFORE THE LD. CIT(A) WITHOUT JU STIFICATION AND AS SUCH, PREJUDICE HAVE BEEN CAUSED TO THE REVENUE DEPARTMENT. FURTHER, NO SUFFICIENT CAUSE HAVE BEEN DISCLOSED IN THE EXPLANATION OF ASSESSEE-COMPANY. THEREFORE, THE LD. CIT(A), CORRECTLY DISMISSED THE APPEALS OF THE ASSE SSEE- COMPANY BY HOLDING THEM TO BE TIME BARRED. NO INTER FERENCE IS CALLED FOR IN THE MATTER. BOTH THE APPEALS OF THE A SSESSEE- COMPANY ARE DISMISSED. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE - COMPANY ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (LP SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 21 ST MARCH, 2018 VBP/- 10 ITA.NO.5320 & 5321/DEL./2016 M/S. V.S.B. INVESTMENTS P. LTD., FARIDABAD, HARYANA . COPY TO 1. THE APP ELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT G BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.