Maddi Narsaiah., Hyderabad V. Dy.CIT, Central Circle-2, Hyderabad

ITA 554/HYD/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6253 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 27-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K E SUNIL BABU
• Assessee Lawyers: S RAMA RAO
• Keywords: Search and seizure; Charitable institution; Reasonable cause
• Section: 143(3); 153A; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 554/HYD/2014 ASSESSMENT YEAR: 2010-11 MADDI NARSAIAH, HYDERABAD. PAN ADGPM 5768G VS. DY. COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE 2, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : SHRI K.E. SUNIL BABU DATE OF HEARING 07-08-2016 DATE OF PRONOUNCEMENT 09-09-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(A) - I, HYDE RABAD FOR AY 2010-11. 2. ON PERUSAL OF RECORD, WE FIND THAT THE ASSESSEE FILED THIS APPEAL BEFORE US WITH A DELAY OF 395 DAYS. IN THIS CONNECTION, THE ASSESSEE FILED A PETITION REQUESTING FOR CONDONATIO N OF THE SAID DELAY WHEREIN IT WAS STATED AS FOLLOWS: THE PETITIONER IS AN INDIVIDUAL. HE IS THE MANAGING DIRECTOR OF SHANTA SRIRAM CONSTRUCTIONS PVT. LTD. THE INCOME-TA X AUTHORITIES CONDUCTED SEARCH AND SEIZURE OPERATIONS AT THE RESIDENTIAL PREMISES OF THE PETITIONER ON 25.3.2010 . IN RESPONSE TO NOTICE U/S 153A OF THE I.T. ACT, THE PETITIONER FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 ON 26.7.2011 DECLARING AN INCOME OF RS.72,40,000/- AS ADMITTED BEFORE THE DDIT (INV). THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) I.T. ACT ON 30.12.2011. AGGRIEVED WITH THE ORDER OF ASSE SSMENT, THE 2 ITA NO. 554/H/14 MADDI NARSAIAH PETITIONER FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME- TAX (APPEALS]- I, HYDERABAD. THE LEARNED CIT (APPEA LS) DISPOSED OF THE SAID APPEAL VIDE ORDER IN ITA NO.05 72/CC- 2,HYD/CIT(A)-I/11-12 DATED 27.12.2012. DURING THE R ELEVANT PERIOD I.E. JANUARY & FEBRUARY 2013, THE PETITIONER WAS PRE- OCCUPIED WITH THE CRIMINAL CASE OF EMBEZZLEMENT OF CASH OF RS.14 LAKHS BELONGING TO SHANTA SRIRAM CONSTRUCTION S. THE CRIMINAL CASE WAS POSTED BEFORE THE XV METROPOLITAN MAGISTRATE, CYBERABAD AT MEDCHAL, RR DISTRICT FOR RECORDING THE EVIDENCE OF THE PETITIONER. ON 6.3.2013 THE PETITIONER'S EVIDEN CE WAS RECORDED BY THE SAID COURT (COPY ANNEXED). THE PETI TIONER DUE TO HIS PRE-OCCUPATION WITH THE LEGAL PROCEEDINGS IN TH E CRIMINAL CASE MENTIONED ABOVE, COULD NOT PAY HIS ATTENTION ON THI S MATTER. THE PETITIONER HUMBLY SUBMITS THAT DURING THE YEAR 2013 , THE COMPANY SHANTHA SRIRAM CONSTRUCTIONS PVT. LTD., WAS UNDERTAKING CONSTRUCTION WORK AT ABOUT 12 DIFFERENT SITES AT DIFFERENT LOCATIONS AND WAS ALSO PREPARING GROUND W ORK FOR ENTERING INTO DEVELOPMENT AGREEMENTS AT THREE NEW S ITES AT MANIKONDA, HYDERABAD, BLUE MOON VENTURE AT BEGUMPET AND SUNSHINE VENTURE, GACHIBOWLI, HYDERABAD. ALL SUCH W ORKS WERE TO BE PERSONALLY LOOKED AFTER BY THE MANAGING DIREC TOR. THE MAINTENANCE OF THE RECORDS OF ALL THE WORKS WAS CEN TRALIZED AT THE REGISTERED OFFICE OF THE COMPANY AND THE MANAGI NG DIRECTOR WAS NOT ABLE TO BESTOW HIS ATTENTION ON OTHER MATTE RS. WHEN THE ASSESSING OFFICER ISSUED LETTER DATED 28.1 .2014 REGARDING PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T. ACT, THE PETITIONER APPROACHED THE ADVOCATE ON 24.2.2014 FOR PREPARATION OF APPEAL. WHEN THE ADVOCATE HAS ENQUIRED ABOUT THE STATUS OF APPEAL AGAINST THE QUANTUM, IT WAS KNOWN THAT THE O RDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) WAS NO T CONTESTED BEFORE THE HON'BLE ITAT. THEREAFTER, ON V ERIFICATION OF THE RECORDS IN THE OFFICE OF THE SHANTHA SRIRAM CON STRUCTIONS PVT. LTD., THE ORDER OF THE LEARNED CIT (APPEALS) WAS TR ACED ON 25.3.2014 AND THE APPEAL WAS GOT PREPARED ON 26.3.2 014 AND THE SAME WAS FILED BEFORE THE HON'BLE ITAT ON 27.3.2014 . THE PETITIONER DID NOT RECORD THE DATE OF SERVICE OF TH E ORDER. THEREFORE, RECKONING THE DATE OF THE ORDER OF CIT ( APPEALS) AS DATE OF SERVICE, THERE IS A DELAY OF 395 DAYS. THE PETITIONER HUMBLY SUBMITS THAT THE DELAY IS FOR THE REASONS SU BMITTED ABOVE WHICH ARE BEYOND THE CONTROL OF THE ASSESSEE AND IS NOT INTENTIONAL. THE PETITIONER, THEREFORE, PRAYS THE H ON'BLE ITAT TO KINDLY CONDONE THE DELAY AND PASS APPROPRIATE ORDER GRANTING RELIEF AS PRAYED FOR. 3. ON PERUSAL OF THE ASSESSEE'S APPLICATION FOR CON DONATION OF DELAY SUPPORTED BY THE AFFIDAVIT OF ASSESSEE, IT IS OBSERVED THAT THE CIT(A) DISPOSED OF THE ORDER ON 27/12/2012. THE AS SESSEE STATED IN 3 ITA NO. 554/H/14 MADDI NARSAIAH THE PETITION THAT DURING THE RELEVANT PERIOD I.E. J ANUARY & FEBRUARY 2013, THE PETITIONER WAS PRE-OCCUPIED WITH THE CRIM INAL CASE OF EMBEZZLEMENT OF CASH OF RS.14 LAKHS BELONGING TO SH ANTA SRIRAM CONSTRUCTIONS. THE CRIMINAL CASE WAS POSTED BEFORE THE XV METROPOLITAN MAGISTRATE, CYBERABAD AT MEDCHAL, RR D ISTRICT FOR RECORDING THE EVIDENCE OF THE PETITIONER. ON 6.3.20 13 THE PETITIONER'S EVIDENCE WAS RECORDED BY THE SAID COURT (COPY ANNEX ED). THE PETITIONER DUE TO HIS PRE-OCCUPATION WITH THE LEGAL PROCEEDINGS IN THE CRIMINAL CASE MENTIONED ABOVE, COULD NOT PAY HIS AT TENTION ON THIS MATTER. THE PETITIONER HUMBLY SUBMITS THAT DURING T HE YEAR 2013, THE COMPANY SHANTHA SRIRAM CONSTRUCTIONS PVT. LTD., WAS UNDERTAKING CONSTRUCTION WORK AT ABOUT 12 DIFFERENT SITES AT DI FFERENT LOCATIONS AND WAS ALSO PREPARING GROUND WORK FOR ENTERING INTO DE VELOPMENT AGREEMENTS AT THREE NEW SITES AT MANIKONDA, HYDERAB AD, BLUE MOON VENTURE AT BEGUMPET AND SUNSHINE VENTURE, GACHIBOWL I, HYDERABAD. ALL SUCH WORKS WERE TO BE PERSONALLY LOOKED AFTER B Y THE MANAGING DIRECTOR. THE MAINTENANCE OF THE RECORDS OF ALL THE WORKS WAS CENTRALIZED AT THE REGISTERED OFFICE OF THE COMPANY AND THE MANAGING DIRECTOR WAS NOT ABLE TO BESTOW HIS ATTENTION ON OT HER MATTERS. 4. WE ARE OF THE VIEW THAT THE REASONS MENTIONED IN THE PETITION FOR CONDONATION ARE NOT CONVINCING AS THE REASONS M ENTIONED FOR DELAY IN FILING THE APPEAL BEFORE THE ITAT ARE THAT THE ASSESSEES ATTENTION WAS DIVERTED DUE TO CRIMINAL CASES AND PR E-OCCUPATION IN THE BUSINESS ACTIVITIES. THE CRIMINAL PROCEEDINGS WERE OVER BY 06/03/2013 BUT THE DELAY BEYOND THIS DAY IS PURE NE GLIGENCE ON THE PART OF THE ASSESSEE, THE DELAY OF WHICH CANNOT BE CONDONED AS PER THE REASONS MENTIONED IN THE PETITION. IN THIS CONN ECTION, WE REFER TO THE FOLLOWING JUDGMENTS: 4.1 THE HON'BLE SUPREME COURT IN THE CASE OF RAMLAL VS. REWA COALFIELDS LTD., AIR 1962 SC 361 HAS HELD THAT CAUS E FOR DELAY IN FILING THE APPEAL WHICH BY DUE CARE AND ATTENTION C OULD HAVE BEEN AVOIDED CANNOT BE A SUFFICIENT CAUSE WITHIN THE MEA NING OF THE 4 ITA NO. 554/H/14 MADDI NARSAIAH LIMITATION PROVISION. IT IS ONLY WHERE NO NEGLIGENC E, OR INACTION, OR WANT OF BONAFIDES CAN BE IMPUTED TO THE APPELLANT, A LIBERAL CONSTRUCTION OF THE PROVISIONS HAS TO BE MADE IN OR DER TO ADVANCE SUBSTANTIAL JUSTICE. BUT, WHERE THERE IS A GROSS N EGLIGENCE, INACTION OR WANT OF BONAFIDES ON THE PART OF THE APPELLANT, THE PROVISION TO CONDONE THE DELAY IN FILING THE APPEAL CANNOT BE SO LIBERALLY CONSTRUED PARTICULARLY IN VIEW OF THE FACT THAT WHERE THE DEL AY IS OF A SUBSTANTIAL PERIOD. 4.2 THE HON'BLE APEX COURT IN THE CASE OF VEDABAI ALIAS VAIJAYANATABAI BABURAO PATIL VS. SHANTARAM BABURAO PATIL, (2002) 253 ITR 798 HAS HELD THAT THOUGH IN EXERCISING DIS CRETION, UNDER SECTION 5 OF THE LIMITATION ACT, 1963, TO CONDONE T HE DELAY FOR SUFFICIENT CAUSE IN NOT PREFERRING AN APPEAL OR OTH ER APPLICATION WITHIN THE TIME PRESCRIBED, THE COURT SHOULD ADOPT A PRAGM ATIC APPROACH. A DISTINCTION MUST BE MADE WHERE THE DELAY IS INORDIN ATE AND A CASE WHERE THE DELAY IS OF FEW DAYS. WHEREAS IN THE FORM ER CASE THE CONSIDERATION OF PREJUDICE TO THE OTHER SIDE WILL B E A RELEVANT FACTOR AND CALLS FOR A MORE CAUTIOUS APPROACH, BUT IN THE LATTER CASE, NO SUCH CONSIDERATION MAY ARISE AND SUCH A CASE DESERVES A LIBERAL APPROACH. NO HARD AND FAST RULE CAN BE LAID DOWN IN THIS REGA RD. THE COURT HAS TO EXERCISE ITS DISCRETION ON THE FACTS OF EACH CAS E KEEPING IN MIND THAT IN CONSIDERING THE EXPRESSION 'SUFFICIENT CAUS E', THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANC E. IN THIS VIEW OF THE MATTER, I HAVE NO HESITATION IN SAYING THAT WHE RE NO NEGLIGENCE, OR INACTION, OR WANT OF BONAFIDES CAN BE IMPUTED TO TH E PETITIONER, A LIBERAL CONSIDERATION IS TO BE GIVEN TO THE EXPRE SSION 'SUFFICIENT CAUSE' WHILE EXERCISING A DISCRETION TO CONDONE THE DELAY IN NOT PREFERRING AN APPEAL, BUT WHERE THERE IS A GROSS NE GLIGENCE, INACTION OR WANT OF BONAFIDES IS PRIMA-FACIE IMPUTED ON THE PETITIONER, THE PROVISION TO CONDONE THE DELAY CANNOT BE SO LIBERAL LY CONSTRUED, AND MORE SO WHERE THE DELAY IS NOT OF A FEW DAYS ONLY. 5 ITA NO. 554/H/14 MADDI NARSAIAH 4.3 IN THIS CONTEXT, WE MAY REFER TO A RECENT DECI SION OF ITAT, CHENNAI BENCH 'B' (TM) IN THE CASE OF OF JCIT VS. T RACTORS & FARM EQUIPMENTS LTD., (2007) 104 ITD 149(CHENNAI) (TM) W HERE THE THIRD MEMBER AGREEING WITH THE VIEW OF THE ACCOUNTANT MEM BER AND AFTER DELIBERATING UPON THE DECISION IN THE CASE OF SRIN VASA CHARITABLE TRUST VS. DCIT, (2006) 280 ITR 357 (MADRAS), VEDABA I ALIAS VAIJAYANATABAI BABURAO PATIL VS. SHANTARAM BABURAO PATIL(SUPRA), COLLECTOR LAND ACQUISITION VS. MST. KATIGI, (1987) 167 ITR 471(SC) AND RMALAL V. REWA COALFIELDS LTD(SUPRA) HAS HELD T HAT THERE EXISTS NO SUFFICIENT AND GOOD REASON FOR DELAY OF 310 DAYS AND HAD THUS OBSERVED AS UNDER:- ' 4. THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY RELIED ON THE DECISION OF THE APEX COURT RENDERED IN THE CASE OF MST. KATIJI (SUPRA) WHEREIN IT WAS HELD THAT WHEN SUBSTA NTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EAC H OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERR ED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE A VESTED RIGHT IN I NJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DELAY. IN THIS CAS E AN APPEAL PREFERRED BY THE STATE OF JAMMU & KASHMIR ARISING O UT OF A DECISION ENHANCING COMPENSATION IN RESPECT OF ACQUI SITION OF LANDS FOR A PUBLIC PURPOSE TO THE EXTENT OF NEARLY 14 LAKHS RUPEES BY MAKING AN UPWARD REVISION OF THE ORDER OF 800 PER CENT WHICH ALSO RAISED IMPORTANT QUESTIONS AS REGAR DS PRINCIPLES OF VALUATION WAS DISMISSED AS TIME BARRE D BEING 4 DAYS BEYOND TIME BY REJECTING AN APPLICATION FOR CO NDONATION OF DELAY. HENCE, THE COLLECTOR OF LAND ACQUISITION FI LED APPEAL BY SPECIAL LEAVE BEFORE THE APEX COURT. THE HON'BLE SU PREME COURT HELD THAT THERE IS NO WARRANT FOR ACCORDING A STEP- MOTHERLY TREATMENT WHEN THE STATE IS THE APPLICANT PRAYING FOR CONDONATION OF DELAY. IN FACT EXPERIENCE SHOWS THAT ON ACCOUNT OF AN IMPERSONAL MACHINERY AND THE INHERITED BUREA UCRATIC METHODOLOGY IMBUED WITH THE NOTE-MAKING, FILE-PUSH ING, AND PASSING ON THE BUCK ETHOS, DELAY ON ITS PART IS LES S DIFFICULT TO UNDERSTAND THOUGH MORE DIFFICULT TO APPROVE. IN ANY EVENT, THE STATE WHICH REPRESENTS THE COLLECTIVE CAUSE OF THE COMMUNITY, DOES NOT DESERVE LITIGANT NON-GRATA STATUS. THE COU RTS, THEREFORE, HAVE TO BE INFORMED OF THE SPIRIT AND PH ILOSOPHY OF THE PROVISION IN THE COURSE OF THE INTERPRETATION O F THE EXPRESSION 'SUFFICIENT CAUSE'. SO ALSO THE SAME APP ROACH HAS TO BE EVIDENCED IN ITS APPLICATION TO MATTERS AT HAND WITH THE END IN VIEW TO DO EVEN-HANDED JUSTICE ON MERITS IN PREF ERENCE TO THE APPROACH WHICH SETTLES A DECISION ON MERITS. ON FAC TS IT WAS FOUND THAT THERE EXISTED SUFFICIENT CAUSE FOR THE D ELAY. 6 ITA NO. 554/H/14 MADDI NARSAIAH THEREFORE, THE ORDER OF THE HIGH COURT DISMISSING T HE APPEAL BEFORE IT AS TIME BARRED WAS SET ASIDE AND THE DELA Y OF 4 DAYS WAS CONDONED. 5. IN THE CASE OF SREENIVAS CHARITABLE TRUST (SUPRA ) THE ASSESSEE WAS A CHARITABLE TRUST. THE COPY OF THE OR DER SERVED ON THE ASSESSEE WAS MISPLACED AND THEREAFTER IT WAS FOUND AND SENT TO THE COUNSEL FOR PREPARING THE APPEAL AND TH EN THE APPEAL WAS PREPARED AND FILED BEFORE THE TRIBUNAL A ND IN THAT PROCESS THE DELAY OF 38 DAYS OCCURRED. THE DELAY OF 38 DAYS WAS CONDONED BY THE APEX COURT IN VIEW OF THE DECIS ION OF THE APEX COURT RENDERED IN THE CASE OF VEDABAI ALIAS VAIJAYANATABAI BABURAO PATIL (SUPRA). IN THIS CASE IT WAS HELD THAT IN EXERCISING DISCRETION UNDER SECTION 5 OF TH E LIMITATION ACT THE COURTS SHOULD ADOPT A PRAGMATIC APPROACH. A DISTINCTION MUST BE MADE BETWEEN A CASE WHERE THE DELAY IS INOR DINATE AND A CASE WHERE THE DELAY IS OF A FEW DAYS. WHEREA S IN THE FORMER CASE THE CONSIDERATION OF PREJUDICE TO THE O THER SIDE WILL BE A RELEVANT FACTOR SO THE CASE CALLS FOR A MORE C AUTIOUS APPROACH BUT IN THE LATTER CASE NO SUCH CONSIDERATI ON MAY ARISE AND SUCH A CASE DESERVES A LIBERAL APPROACH. NO HAR D AND FAST RULE CAN BE LAID DOWN IN THIS REGARD. THE COURT HAS TO EXERCISE THE DISCRETION ON THE FACTS OF EACH CASE KEEPING IN MIND THAT IN CONSIDERING THE EXPRESSION 'SUFFICIENT CAUSE', THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANC E. 6. IT IS PERTINENT TO NOTE THAT IN THE CASE OF MST. KATIJI (SUPRA) THE DELAY WAS ONLY FOUR DAYS. IN THE CASE OF VEDABA I ALIAS VAIJAYANATABAI BABURAO PATIL (SUPRA) THERE WAS A DE LAY OF SEVEN DAYS IN FILING THE APPEAL. IN THIS CASE, THE APEX COURT CLEARLY LAID DOWN THAT A DISTINCTION MUST BE MADE B ETWEEN A CASE WHERE THE DELAY IS INORDINATE AND A CASE WHERE THE DELAY IS OF A FEW DAYS. THE LAW ASSISTS THOSE WHO ARE VIG ILANT, NOT THOSE WHO SLEEP OVER THEIR RIGHTS. THIS PRINCIPLE IS EMBODIED IN THE DICTUM: VIGILANTIBUS NON DORMIENTIBUS JURA SUBV ENIUNT. 7. THE DELAY CANNOT BE CONDONED SIMPLY BECAUSE THE APPELLANT'S CASE IS HARD AND CALLS FOR SYMPATHY OR MERELY OUT OF BENEVOLENCE TO THE PARTY SEEKING RELIEF. IN GRANTIN G THE INDULGENCE AND CONDONING THE DELAY IT MUST BE PROVE D BEYOND THE SHADOW OF DOUBT THAT THE APPELLANT WAS DILIGENT AND WAS NOT GUILTY OF NEGLIGENCE WHATSOEVER. THE SUFFICIENT CA USE WITHIN THE CONTEMPLATION OF THE LIMITATION PROVISION MUST BE A CAUSE WHICH IS BEYOND THE CONTROL OF THE PARTY INVOKING THE AID OF THE PROVISIONS. THE HON'BLE SUPREME COURT IN THE CASE O F RAMLAL VS. REWA COALFIELDS LTD., AIR 1962 SC 361 HAS HELD THAT THE CAUSE FOR THE DELAY IN FILING THE APPEAL WHICH BY D UE CARE AND ATTENTION COULD HAVE BEEN AVOIDED CANNOT BE A SUFFI CIENT CAUSE WITHIN THE MEANING OF THE LIMITATION PROVISION. WHE RE NO NEGLIGENCE, NOR INACTION, OR WANT OF BONAFIDES CAN BE IMPUTED 7 ITA NO. 554/H/14 MADDI NARSAIAH TO THE APPELLANT A LIBERAL CONSTRUCTION OF THE PROV ISIONS HAS TO BE MADE IN ORDER TO ADVANCE SUBSTANTIAL JUSTICE. SE EKERS OF JUSTICE MUST COME WITH CLEAN HANDS. 8. IN THE PRESENT CASE, I FIND THAT THE ASSESSEE JU STIFIED THE DELAY ONLY WITH REFERENCE TO THE AFFIDAVIT OF SHRI M.L.S. RAO, DIRECTOR OF THE COMPANY. IN THE SAID AFFIDAVIT MR. RAO STATED THAT THE COMMISSIONER (A)'S ORDER WAS MISPLACED AND FORGOTTEN. IT WAS FOUND WHILE SORTING OUT THE UNWANTED PAPERS. THEREAFTER STEPS WERE TAKEN FOR THE PREPARATION OF THE APPEAL. CONSEQUENTLY THE DELAY WAS CAUSED. THIS CLEARLY SHO WS THAT THE DELAY WAS DUE TO THE NEGLIGENCE AND INACTION ON THE PART OF THE ASSESSEE. THE ASSESSEE COULD HAVE VERY WELL AVOIDED THE DELAY BY THE EXERCISE OF DUE CARE AND ATTENTION. IN MY OP INION THERE EXISTS NO SUFFICIENT AND GOOD REASON FOR THE DELAY OF 310 DAYS. I, THEREFORE, CONCUR WITH THE REASONINGS ADDUCED BY THE LEARNED ACCOUNTANT MEMBER.' 4.4 THE DECISION OF ITAT, CHENNAI BENCH (TM) (SUPRA ) IS A DECISION OF THREE MEMBER BENCH AND, THUS, IT HAS BINDING FOR CE ON THE DIVISION BENCH CONSISTING OF TWO MEMBERS. IN THE CASE OF DCI T VS. PADAM PRAKASH (HUF), (2007) 104 ITD 1(DELHI) (SB), THE HO N'BLE SPECIAL BENCH HAS HELD THAT MAJORITY DECISION IN THE THIRD MEMBER CASE IS ENTITLED TO AS MUCH WEIGHT AND RESPECT AS A DECISIO N OF A SPECIAL BENCH AND IT SHOULD BE FOLLOWED AND APPLIED BY REG ULAR BENCHES AND CANNOT BE DISREGARDED UNLESS ITS VIEWS ARE CONTRADI CTORY TO THE DECISION OF SPECIAL BENCH CONSTITUTED BY THE HON'BL E PRESIDENT U/S 255(3) OF THE ACT. THE RELEVANT OBSERVATION OF THE HON'BLE SPECIAL BENCH, ITAT, DELHI, AS EXTRACTED FROM THE HEAD NOTE , IS AS UNDER:- ' THE DELHI HIGH COURT IN THE CASE OF P.C. PURI VS. C IT(1985) 151 ITR 584 HAD CLEARLY LAID DOWN THAT WHERE DECISI ON IS GIVEN BY THE THIRD JUDGE ON ACCOUNT OF DIFFERENCE BETWEEN THE TWO JUDGES HEARING A MATTER, HIS OPINION IS DECISIVE AN D, THEREFORE, FOR THAT REASON, DECISION BY THREE JUDGES SHOULD BE TAKEN AS DECISION BY THE FULL BENCH. THEREFORE, THE MAJORITY DECISION IN THE THIRD MEMBER CASE IS ENTITLED TO AS MUCH WEIGHT AND RESPECT AS A DECISION OF A SPECIAL BENCH AND IT SHO ULD BE FOLLOWED AND APPLIED BY REGULAR BENCHES AND CANNOT BE DISREGARDED. FURTHER, FROM A READING OF SUB-SECTION (3) AND SUB- SECTION (4) OF SECTION 255, IT IS EVIDENT THAT THE SPECIAL BENCH CAN BE CONSTITUTED BY THE PRESIDENT UNDER SUB-SECTI ON (3) OF SECTION 255. THE PURPOSE OF CONSTITUTION OF A SPECI AL BENCH IS SOMEWHAT DIFFERENT FROM THE PURPOSE MENTIONED IN SU B-SECTION (4) OF SECTION 255, NAMELY, TO RESOLVE DIFFERENCE I N OPINION OF 8 ITA NO. 554/H/14 MADDI NARSAIAH THE MEMBERS OF THE BENCH BY REFERRING THE POINT OF DIFFERENCE TO THE THIRD MEMBER FOR GETTING THE MAJORITY VIEW AS E NVISAGED IN THE PROVISION. IT IS POSSIBLE THAT ON ACCOUNT OF DE VELOPMENT IN LAW, AND SEVERAL OTHER REASONS, FACTS AND CIRCUMSTA NCES NOT CONSIDERED BY A THIRD MEMBER, IT BECOMES NECESSARY FOR THE PRESIDENT TO CONSTITUTE A SPECIAL BENCH TO CONSIDER THE MATTER WHICH WAS EARLIER CONSIDERED BY THE THIRD MEMBER. H ENCE, THERE IS NO IMPEDIMENT TO THE CONSTITUTION OF A SPE CIAL BENCH. THEREFORE, THE DECISION OF THE SPECIAL BENCH EVEN O F THREE MEMBERS IS ENTITLED TO ALL THE WEIGHT AND MUST HAVE PRECEDENCE OVER THE DECISION OF A THIRD MEMBER. REGULAR BENCHE S ARE REQUIRED TO FOLLOW AND ACT UPON THE DECISION OF THE SPECIAL BENCH AND IN CASE ITS VIEWS ARE CONTRADICTORY TO TH E VIEWS OF THE THIRD MEMBER, PREFERENCE IS REQUIRED TO BE GIVE N TO THE SPECIAL BENCH. 4.5 THE HONBLE SUPREME COURT IN THE CASE OF BASAW ARAJ & ANR. VS.THE SPL. LAND ACQUISITION OFFICER,(2013) 14 SCC 81 1 HA S HELD AS FOLLOWS: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE B Y THE LEARNED COUNSEL FOR THE PARTIES AND PERUSED THE RECORD. 6. ADMITTEDLY, THERE WAS A DELAY OF 5-1/2 YEARS IN FILING THE SAID APPEALS UNDER SECTION 54 OF THE ACT BEFORE THE HIGH COURT. THE ONLY EXPLANATION OFFERED FOR APPROACHING THE COURT AT SU CH A BELATED STAGE HAS BEEN THAT ONE OF THE APPELLANTS HAD TAKEN ILL. 7. SHRI PATIL, LEARNED SENIOR COUNSEL, HAS TAKEN US THROUGH A LARGE NUMBER OF JUDGMENTS OF THE HIGH COURT WHEREIN DELAY HAD BEEN CONDONED WITHOUT CONSIDERING THE MOST RELEVANT FACT OR I.E. SUFFICIENT CAUSE ONLY ON THE CONDITION THAT APPLICANTS WOULD BE DEPRIVED OF INTEREST FOR THE DELAY PERIOD. THESE KINDS OF JUDGM ENTS CANNOT BE APPROVED. THE HIGH COURT WHILE PASSING SUCH UNWARRA NTED AND UNCALLED FOR ORDERS, FAILED TO APPRECIATE THAT IT W AS DECIDING THE APPEALS UNDER THE ACT AND NOT A WRIT PETITION WHERE THIS KIND OF ORDER IN EXCEPTIONAL CIRCUMSTANCES PERHAPS COULD BE JUSTI FIED. 8. IT IS A SETTLED LEGAL PROPOSITION THAT ARTICLE 1 4 OF THE CONSTITUTION IS NOT MEANT TO PERPETUATE ILLEGALITY OR FRAUD, EVEN BY EXTENDING THE WRONG DECISIONS MADE IN OTHER CASES. THE SAID PROVISION DOES NOT ENVISAGE NEGATIVE EQUALITY BUT H AS ONLY A POSITIVE ASPECT. THUS, IF SOME OTHER SIMILARLY SITUATED PERS ONS HAVE BEEN GRANTED SOME RELIEF/ BENEFIT INADVERTENTLY OR BY MI STAKE, SUCH AN ORDER DOES NOT CONFER ANY LEGAL RIGHT ON OTHERS TO GET TH E SAME RELIEF AS WELL. IF A WRONG IS COMMITTED IN AN EARLIER CASE, IT CANN OT BE PERPETUATED. 9 ITA NO. 554/H/14 MADDI NARSAIAH EQUALITY IS A TRITE, WHICH CANNOT BE CLAIMED IN ILL EGALITY AND THEREFORE, CANNOT BE ENFORCED BY A CITIZEN OR COURT IN A NEGAT IVE MANNER. IF AN ILLEGALITY AND IRREGULARITY HAS BEEN COMMITTED IN F AVOUR OF AN INDIVIDUAL OR A GROUP OF INDIVIDUALS OR A WRONG ORD ER HAS BEEN PASSED BY A JUDICIAL FORUM, OTHERS CANNOT INVOKE THE JURIS DICTION OF THE HIGHER OR SUPERIOR COURT FOR REPEATING OR MULTIPLYING THE SAME IRREGULARITY OR ILLEGALITY OR FOR PASSING A SIMILARLY WRONG ORDER. A WRONG ORDER/DECISION IN FAVOUR OF ANY PARTICULAR PARTY DO ES NOT ENTITLE ANY OTHER PARTY TO CLAIM BENEFITS ON THE BASIS OF THE W RONG DECISION. EVEN OTHERWISE, ARTICLE 14 CANNOT BE STRETCHED TOO FAR F OR OTHERWISE IT WOULD MAKE FUNCTIONING OF ADMINISTRATION IMPOSSIBLE . (VIDE: CHANDIGARH ADMINISTRATION & ANR. V. JAGJIT S INGH & ANR., AIR 1995 SC 705, M/S. ANAND BUTTON LTD. V. STATE OF HARYANA & ORS., AIR 2005 SC 565; K.K. BHALLA V. STATE OF M.P. & ORS., AIR 2006 SC 898; AND FULJIT KAUR V. STATE OF PUNJAB, AI R 2010 SC 1937). 9. SUFFICIENT CAUSE IS THE CAUSE FOR WHICH DEFENDAN T COULD NOT BE BLAMED FOR HIS ABSENCE. THE MEANING OF THE WORD 'SU FFICIENT' IS 'ADEQUATE' OR 'ENOUGH', INASMUCH AS MAY BE NECESSAR Y TO ANSWER THE PURPOSE INTENDED. THEREFORE, THE WORD 'SUFFICIENT' EMBRACES NO MORE THAN THAT WHICH PROVIDES A PLATITUDE, WHICH WHEN TH E ACT DONE SUFFICES TO ACCOMPLISH THE PURPOSE INTENDED IN THE FACTS AND CIRCUMSTANCES EXISTING IN A CASE, DULY EXAMINED FROM THE VIEW POI NT OF A REASONABLE STANDARD OF A CAUTIOUS MAN. IN THIS CONTEXT, 'SUFFI CIENT CAUSE' MEANS THAT THE PARTY SHOULD NOT HAVE ACTED IN A NEGLIGENT MANNER OR THERE WAS A WANT OF BONA FIDE ON ITS PART IN VIEW OF THE FACT S AND CIRCUMSTANCES OF A CASE OR IT CANNOT BE ALLEGED THAT THE PARTY HA S 'NOT ACTED DILIGENTLY' OR 'REMAINED INACTIVE'. HOWEVER, THE FA CTS AND CIRCUMSTANCES OF EACH CASE MUST AFFORD SUFFICIENT G ROUND TO ENABLE THE COURT CONCERNED TO EXERCISE DISCRETION FOR THE REAS ON THAT WHENEVER THE COURT EXERCISES DISCRETION, IT HAS TO BE EXERCI SED JUDICIOUSLY. THE APPLICANT MUST SATISFY THE COURT THAT HE WAS PREVEN TED BY ANY SUFFICIENT CAUSE FROM PROSECUTING HIS CASE, AND U NLESS A SATISFACTORY EXPLANATION IS FURNISHED, THE COURT SHOULD NOT ALLO W THE APPLICATION FOR CONDONATION OF DELAY. THE COURT HAS TO EXAMINE WHET HER THE MISTAKE IS BONA FIDE OR WAS MERELY A DEVICE TO COVER AN ULTERI OR PURPOSE. (SEE: MANINDRA LAND AND BUILDING CORPORATI ON LTD. V. BHOOTNATH BANERJEE & ORS., AIR 1964 SC 1336; LALA M ATADIN V. A. NARAYANAN, AIR 1970 SC 1953; PARIMAL V.VEENA @ B HARTI AIR 2011 SC 1150; AND MANIBEN DEVRAJ SHAH V. MUNICIPAL CORPORATION OF BRIHAN MUMBAI AIR 2012 SC 1629.) 10. IN ARJUN SINGH V. MOHINDRA KUMAR, AIR 1964 SC 9 93 THIS COURT EXPLAINED THE DIFFERENCE BETWEEN A GOOD CAUS E AND A SUFFICIENT CAUSE AND OBSERVED THAT EVERY SUFFICI ENT CAUSE IS A GOOD CAUSE AND VICE VERSA. HOWEVER, IF ANY DIFFERENCE EX ISTS IT CAN ONLY BE THAT THE REQUIREMENT OF GOOD CAUSE IS COMPLIED WITH ON A LESSER DEGREE OF PROOF THAT THAT OF SUFFICIENT CAUSE.11. THE EX PRESSION SUFFICIENT CAUSE 10 ITA NO. 554/H/14 MADDI NARSAIAH SHOULD BE GIVEN A LIBERAL INTERPRETATION TO ENSURE THAT SUBSTANTIAL JUSTICE IS DONE, BUT ONLY SO LONG AS NEGLIGENCE, INACTION OR L ACK OF BONA FIDES CANNOT BE IMPUTED TO THE PARTY CONCERNED, WHETHER OR NOT S UFFICIENT CAUSE HAS BEEN FURNISHED, CAN BE DECIDED ON THE FACTS OF A PA RTICULAR CASE AND NO STRAITJACKET FORMULA IS POSSIBLE. (VIDE: MADANLAL V . SHYAMLAL, AIR 2002 SC 100; AND RAM NATH SAO @ RAM NATH SAHU & ORS . V. GOBARDHAN SAO & ORS., AIR 2002 SC 1201.)12. IT IS A SETTLED LEGAL PROPOSITION THAT LAW OF LIMITATION MAYHARSHLY AFFEC T A PARTICULAR PARTY BUT IT HAS TO BE APPLIED WITH ALL ITSRIGOUR WHEN THE STATU TE SO PRESCRIBES. THE COURT HAS NO POWER TOEXTEND THE PERIOD OF LIMITATIO N ON EQUITABLE GROUNDS . A RESULTFLOWING FROM A STATUTORY PROVISION IS NE VER AN EVIL. A COURT HAS NO POWER TO IGNORE THAT PROVISION TO RELIEVE WHAT IT CONSIDERS A DISTRESS RESULTING FROM ITS OPERATION. THE STATUTORY PROVISION MA Y CAUSE HARDSHIP OR INCONVENIENCE TO A PARTICULA R PARTY BUT THE COURT HAS NO CHOICE BUT TO ENFORCE IT GIVING FULL EFFECT TO THE SAME. THE LEGAL MAXIM DURA LEX SED LEX WHICH MEANS THE LAW IS HA RD BUT IT IS THE LAW, STANDS ATTRACTED IN SUCH A SITUATION. IT HAS CONSIS TENTLY BEEN HELD THAT, INCONVENIENCE IS NOT A DECISIVE FACTOR TO BE CONS IDERED WHILE INTERPRETING A STATUTE.13. THE STATUTE OF LIMITATIO N IS FOUNDED ON PUBLIC POLICY, ITS AIM BEING TO SECURE PEACE IN THE COMMUN ITY, TO SUPPRESS FRAUD AND PERJURY, TO QUICKEN DILIGENCE AND TO PREVENT OP PRESSION. IT SEEKS TO BURY ALL ACTS OF THE PAST WHICH HAVE NOT BEEN AGITA TED UNEXPLAINABLY AND HAVE FROM LAPSE OF TIME BECOME STALE. ACCORDING TO HALSBURY'S LAWS OF ENGLAND, VOL. 24, P . 181: '330. POLICY OF LIMITATION ACTS. THE COURTS HAVE EX PRESSED AT LEAST THREE DIFFERING REASONS SUPPORTING THE EXISTENCE OF STATUTES OF LIMITATIONS NAMELY, (1) THAT LONG DORMANT CLAIMS HA VE MORE OF CRUELTY THAN JUSTICE IN THEM, (2) THAT A DEFENDANT MIGHT HAVE LOST THE EVIDENCE TO DISPROVE A STALE CLAIM, AND (3) THAT PE RSONS WITH GOOD CAUSES OF ACTIONS SHOULD PURSUE THEM WITH REASONABL E DILIGENCE'. AN UNLIMITED LIMITATION WOULD LEAD TO A SENSE OF INSECURITY AND UNCERTAINTY, AND THEREFORE, LIMITATION PREVENTS DISTURBANCE OR DEPRIVATION OF WHAT MAY HAVE BEEN ACQUIRED IN EQUIT Y AND JUSTICE BY LONG ENJOYMENT OR WHAT MAY HAVE BEEN LOST BY A PART Y'S OWN INACTION, NEGLIGENCE' OR LACHES. (SEE: POPAT AND KOTECHA PROPERTY V. STATE BANK OF INDIA STAFF ASSN. (2005) 7 SCC 510; R AJENDAR SINGH & ORS. V. SANTA SINGH & ORS., AIR 1973 SC 2537; AND PUNDLI K JALAM PATIL V. EXECUTIVE ENGINEER, JALGAON MEDIUM PROJECT, (2008) 17 SCC 448). 14. IN P. RAMACHANDRA RAO V. STATE OF KARNATAKA, AI R 2002 SC 1856, THIS COURT HELD THAT JUDICIALLY ENGRAFTING PRINCIPLES OF LIMITATION AMOUNTS TO LEGISLATING AND WOULD FLY IN THE FACE OF LAW LAID DOWN BY THE CONSTITUTION BENCH IN A. R. ANTULAY V. R.S. NAY AK, AIR 1992 SC 1701. 15. THE LAW ON THE ISSUE CAN BE SUMMARISED TO THE E FFECT THAT WHERE A CASE HAS BEEN PRESENTED IN THE COURT BEYOND LIMIT ATION, THE APPLICANT HAS TO EXPLAIN THE COURT AS TO WHAT WAS THE SUFFIC IENT CAUSE WHICH MEANS AN ADEQUATE AND ENOUGH REASON WHICH PREVENTED HIM TO 11 ITA NO. 554/H/14 MADDI NARSAIAH APPROACH THE COURT WITHIN LIMITATION. IN CASE A PAR TY IS FOUND TO BE NEGLIGENT, OR FOR WANT OF BONAFIDE ON HIS PART IN T HE FACTS AND CIRCUMSTANCES OF THE CASE, OR FOUND TO HAVE NOT ACT ED DILIGENTLY OR REMAINED INACTIVE, THERE CANNOT BE A JUSTIFIED GROU ND TO CONDONE THE DELAY. NO COURT COULD BE JUSTIFIED IN CONDONING SUC H AN INORDINATE DELAY BY IMPOSING ANY CONDITION WHATSOEVER. THE APP LICATION IS TO BE DECIDED ONLY WITHIN THE PARAMETERS LAID DOWN BY THI S COURT IN REGARD TO THE CONDONATION OF DELAY. IN CASE THERE WAS NO S UFFICIENT CAUSE TO PREVENT A LITIGANT TO APPROACH THE COURT ON TIME CO NDONING THE DELAY WITHOUT ANY JUSTIFICATION, PUTTING ANY CONDITION WH ATSOEVER, AMOUNTS TO PASSING AN ORDER IN VIOLATION OF THE STATUTORY PROV ISIONS AND IT TANTAMOUNTS TO SHOWING UTTER DISREGARD TO THE LEGIS LATURE. 16. IN VIEW OF ABOVE, NO INTERFERENCE IS REQUIRED W ITH IMPUGNED JUDGMENT AND ORDER OF THE HIGH COURT. THE APPEALS L ACK MERIT AND ARE, ACCORDINGLY, DISMISSED. 4.5 SINCE, IN THE PRESENT CASE, THE ASSESSEE COULD HAVE VERY WELL AVOIDED THE DELAY BY EXERCISING OF DUE CARE AND AT TENTION AT LEAST AFTER THE MONTH OF MARCH2013, WE ARE OF THE CONSID ERED OPINION THAT THERE EXISTS NO SUFFICIENT AND REASONABLE CAUSE FOR THE DELAY OF AN INORDINATE PERIOD OF 395 DAYS AND APPLYING THE PRIN CIPLE LAID DOWN BY HONBLE COURTS IN THE AFORESAID DECISIONS, WE ARE N OT INCLINED TO CONDONE THE SAID DELAY IN FILING THE APPEAL BEFORE US. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED AS BA RRED BY LIMITATION. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED IN THE MANNER AS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON 9 TH SEPTEMBER, 2016. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAH MAN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 9 TH SEPTEMBER, 2016 KV 12 ITA NO. 554/H/14 MADDI NARSAIAH COPY TO:- 1) SHRI MADDI NARSAIAH, C/O SRI S. RAMA RAO, ADVOCA TE, FLAT NO. 102, SHRIYAS ELEGANCE, H. NO. 3-6-643 , ST. NO. 9, HIMAYAT NAGAR, , HYDERABAD 500 029. 2) DCIT, CENTRAL CIRCLE - 2, POSNETT BHAVAN, RAMKOT I, HYDERABAD 3) CIT(A) - I, HYDERABAD 4 CIT (CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.