PUJA AGENCIES P. LTD, MUMBAI V. DCIT RG 5(2), MUMBAI

ITA 5690/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4017 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 15-07-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 13-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard; Period of limitation; Reasonable cause; Right to appeal; Time period of passing order; Condonation of delay
• Section: 5(2)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - C BENCH. . . , / , BEFORE S/SH. B.R. MITTAL, JUDICIAL MEMBER & RAJEN DRA, ACCOUNTANT MEMBER ./ ITA NO.5690 /MUM/2010, ! ! ! ! ' ' ' ' / ASSESSMENT YEAR-2003-04 PUJA AGENCIES PVT. LTD. 501, GORAGANDHI APARTMENTS, LABURNU ROAD, GAMDEVI MUMBAI- 400007 VS. DCIT RANGE 5(2) MUMBAI. PAN: AAACP0524H ( #$ / APPELLANT ) ( %&#$ / RESPONDENT ) #$ #$ #$ #$ ' ' ' ' / APPELLANT BY : SHRI VIJAY MEHTA %&#$ ( ' / RESPONDENT BY : SHRI MOHIT JAIN (DR) ! ! ! ! ( (( ( )* )* )* )* / DATE OF HEARING : 18-07-2013 +,' ( )* / DATE OF PRONOUNCEMENT : 24-07-2013 ! ! ! ! , 1961 ( (( ( 254(1) )-) )-) )-) )-) . . . . ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, A.M. CHALLENGING THE ORDER DT.24.05.2010 OF THE CIT(A)-9 ,MUMBAI,ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: GROUND NO.1: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) [CIT (A)] ERRED IN HOLDING THE DELAY IN FI LING THE APPEAL CANNOT BE CONDONED. THE APPELLANT PRAYS THAT THE DELAY BE CONDONED AND APPEAL SHOULD BE TAKEN UP FOR HEARING. GROUND NO.2: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-9, MUMBAI ERRED IN LAW AND ON FACTS IN CO NFIRMING THE DECISION OF THE LEARNED ASSESSING OFFICER, ASSISTANT COMMISSIONER OF INCOME TAX, RANG E 5(2), MUMBAI IN PASSING THE ORDER U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 THEREBY IMPOS ING A PENALTY OF RS. 71,310. THE APPELLANTS PRAYS THAT THE ORDER U/S 271(1)(C) OF THE INCOME TAX ACT , 1961 PASSED BY THE AO IMPOSING A PENALTY OF RS. 71,310/- SHOULD NOT BE UPHELD. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL HEREIN ABOVE AND TO SUBMIT SUCH FURTHER ARGUMENTS, STATEME NTS, DOCUMENTS AND PAPERS AS MAY BE CONSIDERED NECESSARY EITHER AT OR BEFORE THE HEARING OF THE AP PEAL. BESIDES THE MAIN GROUNDS OF APPEAL,ASSESSEE HAS ALS O FILED FOLLOWING ADDITIONAL GROUNDS ON 17.07.2013: 2 ITA NO. 5690/MUM/2010 PUJA AGENCIES PVT. LTD. WITHOUT PREJUDICE TO ANY OTHER GROUND, ON THE FACT S AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE CIT(A) ERRED IN NOT GRANTING AN EFFECTI VE OPPORTUNITY OF BEING HEARD TO THE APPELLANT. IN VIEW OF THE SAME, THE APPELLANT PRAYS THAT THE ORDE R OF HONBLE CIT(A) NEEDS TO BE SET ASIDE. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW THE ABOVE MENTIONED GROUND OF APPEAL AND TO SUBMIT SUCH FURTHER ARGUMENTS, STATEMENTS, D OCUMENTS AND PAPERS AS MAY BE CONSIDERED NECESSARY EITHER AT OR BEFORE THE HEARING OF THE AP PEAL. 2. ASSESSEE-COMPANY,ENGAGED IN THE BUSINESS OF SHARE T RADING AND INVESTMENT,FILED ITS RETURN OF INCOME ON 01.12.2003 DECLARING TOTAL LOSS OF RS.1.4 1 CRORES.ASSESSING OFFICER (AO)FINALISED THE ASSESSMENT ON 13.12.2005 U/S.143(3)OF THE ACT ASSES SING THE TOTAL LOSS AT RS.4.66 LAKHS.WHILE PASSING THE ASSESSMENT ORDER AO, TREATED RECEIPT OF RS.2.85 LAKHS UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND DISALLOWED DEPRECIATION CLAIMED ON IT.CHALLENGING THE ORDER OF THE AO, ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY(FAA).AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDE R,FAA UPHELD THE ORDER OF THE AO. MEANWHILE,AO INITIATED PENALTY PROCEEDINGS AS ENVIS AGED UNDER SECTION 271(1)(C) R.W.S.274 OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF IN COME.AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE,AO LEVIED MINIMUM PENALTY OF RS.71,310/-.V IDE HIS ORDER DATED 25.03.2008. 2.1. AGAINST THE PENALTY ORDER ASSESSEE FILED AN APPEAL BEFORE THE FAA ON 13.02.2009.HE FOUND THAT DEMAND NOTICE WAS SERVED ON THE ASSESSEE ON 31 .03.2008 AND THUS THERE WAS DELAY OF 288 DAYS IN FILING APPEALE BEFORE HIM.IN ITS LETTER DAT ED 13.02.2009,ASSESSEEMADE A REQUEST FOR CONDONING THE DELAY.IN ITS LETTER ASSESSEE SUBMITTE D THAT QUANTUM-ORDER OF THE FAA WAS CHALLENGED BEFORE THE ITAT,THAT DURING THE APPELLAT E PROCEEDINGS BEFORE THE TRIBUNAL NEW AUTHORISED REPRESENTATIVE(AR) BOUGHT TO THE ITS NOT ICE THAT THE PENALTY ORDER WAS NOT CHALLENGED BEFORE THE FAA,THAT AS PER THE ADVICE OF THE NEW AR APPEAL AGAINST THE PENALTY WAS FILED.NONE APPEARED BEFORE THE FAA DURING APPELLATE PROCEEDING S.AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE,HE HELD THAT FAA COULD ADMIT BELATED APPEA LS AS PER THE PROVISIONS OF SECTION 249(3)OF THE ACT IF SUFFICIENT CAUSE FOR NOT FILING APPEAL I N TIME WAS SHOWN,THAT ASSESSEE HAD NOT GIVEN ANY GOOD OR SUFFICIENT REASON FOR FILING THE APPEAL IN TIME,THAT DEMAND NOTICE WAS SERVED ON THE ASSESSEE ON 31.03.2008,THAT AT THAT TIME ASSESSEE H AD SOUGHT ADVICE FROM THE THEN AR,THAT ON HIS ADVICE APPEAL WAS NOT FILED,THAT NEW AR INFORMED TH E ASSESSEE ABOUT NON FILING OF APPEAL BEFORE THE FAA,THAT APPEAL FILED APPEAL AS PER THE ADVICE OF THE NEW AR,THAT DELAY OF 288 DAYS IN FILING THE APPEAL COULD NOT BE CONDONED ON THAT REASON ALO NE,THAT THE ASSESSEE WAS REVIEWING ITS EARLIER DECISION OF NOT FILING OF APPEAL,THAT IT WAS NOT SU FFICIENT REASON FOR NOT FILING APPEAL IN TIME. FINALLY, HE REJECTED THE REQUEST OF THE ASSESSEE FO R CONDONING DELAY IN FILING APPEAL. 2.2. BEFORE US,AR SUBMITTED THAT THERE WAS DELAY IN FILI NG APPEAL WAS BECAUSE OF THE ADVICE OF THE OLD AR,THAT IMMEDIATELY AFTER GETTING ADVICE FROM T HE NEW AR,ASSESSEE FILED APPEAL BEFORE THE FAA,THAT AR OF THE ASSESSEE HAD APPEARED BEFORE THE FAA, .DR SUBMITTED THAT NO REASONABLE CAUSE WAS FURNISHED BY THE ASSESSEE FOR ADMITTING B ELATED APPEAL,THAT THERE WAS NO EVIDENCE OF PRESENCE OF AR BEFORE THE FAA DURING THE APPELLATE PROCEEDINGS. 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT ASSESSEE HAD FILED A PAPER BOOK(PB)CONTAINING 57 PAGES.AS PE R THE CERTIFICATE,ENCLOSED WITH THE PB, PAGES 6 TO57 WERE NOT AVAILABLE TO THE AO/FAA.PAGES 24-57 ARE CAPTIONED AS COPY OF WRITTEN SUBMISSIONS READY TO BE SUBMITTED BEFORE THE HONBL E CIT(A).NO APPLICATION WAS FILED BY THE ASSESSEE,BEFORE US,FOR ADMITTING ADDITIONAL EVIDENC ES MENTIONED IN THE PB.HENCE SAME ARE NOT BEING CONSIDERED FOR ADJUDICATING THE APPEAL.DURING THE COURSE OF HEARINGBEFORE US, A SPECIFIC QUESTION WAS ASKED TO THE AR OF THE ASSESSEE AS WHE THER AN APPLICATION U/S.154 OF THE ACT WAS FILED BEFORE THE FAA ABOUT THE PRESENCE OF THE AR D URING HEARING OF PENALTY APPEAL ? HE ADMITTED THAT NO APPLICATION WAS FILED BEFORE THE F AA ASCERTAINING THE FACT THAT AR OF THE ASSESSEE HAD REPRESENTED THE MATTER BEFORE HIM.IN T HESE CIRCUMSTANCES,WE ARE OF THE OPINION THAT FAA WAS FACTUALLY CORRECT WHEN HE MENTIONED THAT NO NE APPEARED BEFORE HIM.BEFORE US, ARGUMENT HAS NOT BEEN RAISED THAT ADJOURNMENT APPLI CATION WAS FILED BY THE ASSESSEE REQUESTING 3 ITA NO. 5690/MUM/2010 PUJA AGENCIES PVT. LTD. THE FAA TO POSTPONE THE HEARING OF PENALTY APPEAL.S O,IF CAN SAFELY BE CONCLUDED THAT ASSESSEE CHOOSE NOT TO APPEAR BEFORE THE FAA ON THE DAY OF H EARING. EVEN THEN FAA HAS NOT DISMISSED THE APPEAL FOR NON ATTENDANCE.THEREFORE,ADDITIONAL GROU ND TAKEN BY THE ASSESSEE IS DECIDED AGAINST IT,AS THE FAULT LIES WITH THE ASSESSEE AND NOT WITH THE FAA.IT WAS ASSESSEE WHO DID NOT APPEAR BEFORE THE FAA.NOT ONLY THIS-IT DID NOT FILE AN APP LICATION FOR ADJOURNING THE CASE. IN THESE CIRCUMSTANCES TO SUBMIT THAT FAA DID NOT GRANT EFFE CTIVE OPPORTUNITY OF HEARING IS FACTUALLY INCORRECT STATEMENT.A PASSENGER NOT ARRIVING AT THE PLATFORM IN TIME CANNOT BLAME THAT TRAIN,FOR WHICH HE HAD A TICKET,LEFT THE STATION AT STIPULATE D TIME WITHOUT WAITING FOR HIM.OTHER SIDE OF THE COIN OF THE RIGHT OF APPEAL CONTAIN DUTIES OF THE ASSESSEE.WE FIND THAT THE ASSESSEE CHOOSE TO IGNORE HIS DUTIES.THEREFORE WE UPHOLD THE ORDER OF THE FAA TO DECIDED THE ISSUE ON MERITS IN ABSENCE OF THE ASSESSEE OR THE AR OF THE ASSESSEE. 2.3.A. NOW,COMING TO THE MERITS OF THE REJECTION OF THE CO NDONATION-APPLICATION BY THE FAA,WE WOULD LIKE TO DISCUSS A FEW PRINCIPLES THAT GOVERN THE LAW OF LIMITATION. CONDONATION OF DELAY IS THE DISCRETION OF THE COURT AND IS GOVERNED BY SECT ION 5 OF THE LIMITATION ACT,1963. COURTS ARE OF THE VIEW THAT THE WORDS SUFFICIENT CAUSE UNDER SE CTION 5 OF THE LIMITATION ACT,1963,SHOULD RECEIVE A LIBERAL CONSTRUCTION,SO AS TO ADVANCE SUB STANTIAL JUSTICE. ONCE THE COURT ACCEPTS THE EXPLANATION AS SUFFICIENT, IT IS THE RESULT OF POSI TIVE EXERCISE OF DISCRETION.PROVISIONS OF THE SAID SECTION DO NOT ENVISAGE THAT SUCH DISCRETION CAN BE EXERCISED ONLY IF THE DELAY IS WITHIN A CERTAIN LIMIT.THE LENGTH OF THE DELAY IS NOT THE MATTER, AC CEPTABILITY OF THE EXPLANATION IS THE ONLY CRITERION. IN SOME CASES THE DELAY OF THE SHORTEST RANGE MAY NOT BE CONDONED DUE TO WANT OF ACCEPTABLE EXPLANATION WHEREAS IN CERTAIN OTHER CAS ES, THE DELAY OF A VERY LONG RANGE COULD BE CONDONED IF EXPLANATION IS FOUND TO BE SATISFACTORY . II)THE EXPRESSION 'SUFFICIENT CAUSE' IS NOT DEFINED ,BUT IT MEANS A CAUSE WHICH IS BEYOND THE CONTROL OF THE PARTY.FOR INVOKING THE AID OF THE SECTION AN Y CAUSE WHICH PREVENTS A PERSON APPROACHING THE FAAS WITHIN TIME IS CONSIDERED SUFFICIENT CAUSE. I N DOING SO, IT IS THE TEST OF REASONABLE MAN IN NORMAL CIRCUMSTANCES WHICH HAS TO BE APPLIED. THE TEST WHETHER OR NOT A CAUSE IS SUFFICIENT IS TO SEE WHETHER IT COULD HAVE BEEN AVOIDED BY THE PARTY BY THE EXERCISE OF DUE CARE AND ATTENTION. IN OTHER WORDS,WHETHER IT IS BONA FIDE CAUSE, INASMUCH AS NOTHING SHALL BE DEEMED TO BE DONE BONA FIDE OR IN GOOD FAITH WHICH IS NOT DONE WITH DUE CA RE AND ATTENTION. WHAT MAY BE SUFFICIENT CAUSE IN ONE CASE MAY BE OTHERWISE IN ANOTHER. WHAT IS OF ESSENCE IS WHETHER IT WAS AN ACT OF PRUDENT OR REASONABLE MAN. III)NO DOUBT THAT ASSESSES ARE ENTITLED TO WAIT UNT IL THE LAST DATE OF THE LIMITATION FOR FILING OF TH E APPEAL,BUT WHEN IT ALLOWS THE LIMITATION TO EXPIRE AND COME FORWARD WITH A EXPLANATION ENUMERATING REASONABLE CAUSES FOR NOT FILING THE AP PEAL WITHIN THE TIME PRESCRIBED UNDER THE STATUTE,THEN THE CAUSES SO SHOWN MUST ESTABLISH THA T BECAUSE OF SOME EVENT OR CIRCUMSTANCES ARISING BEFORE LIMITATION EXPIRED,ASSESSEE WAS NOT ABLE TO FILE THE APPEAL WITHIN THE STIPULATED TIME MANDATED IN LAW.ANY EVENT, CAUSE OR CIRCUMSTANCE AR ISING AFTER THE EXPIRY OF THE LIMITATION PERIOD CANNOT CONSTITUTE A SUFFICIENT CAUSE. IV)JUST BECAUSE THERE IS MERIT IN THE APPEAL FILE D BY THE ASSESSEE, ANY AMOUNT OF DELAY, HOWEVER, NEGLIGENTLY CAUSED, CANNOT BE CONDONED.IN OTHER WOR DS A VERY STRONG CASE ON MERITS IS NOT RELEVANT FOR CONDONATION OF DELAY IN FILING THE APPEALS. V)IN BELATED APPEALS EXPLANATION OF DELAY FOR THE E NTIRE PERIOD IS NECESSARY.IN OTHER WORDS WHAT IS EXPECTED OF THE APPELLANT IN SUCH MATTERS IS TO SHO W THAT DELAY WAS OCCASIONED DUE TO SOME SUFFICIENT CAUSE.THE CAUSE PLEADED SHOULD NOT ONLY BE A PROBABLE ONE,BUT IT SHOULD BE REAL AND SUFFICIENTLY REASONABLE.THE CAUSE PLEADED MUST FIT IN THE FACTS AND CIRCUMSTANCES OF THE GIVEN CASE AND THE EXPLANATION OFFERED REGARDING THE DELAY OCC ASIONED BY SUCH CAUSE SHOULD APPEAL TO REASONS SO AS TO GET JUDICIAL APPROVAL. IN SHORT IN MATTERS OF DELAY IT IS NEITHER PRACTICABLE NOR DESIRABLE TO EXPLAIN MINUTE-TO-MINUTE AND HOUR-TO-H OUR DELAY,BUT DELAY HAS TO BE EXPLAINED. 4 ITA NO. 5690/MUM/2010 PUJA AGENCIES PVT. LTD. VI)WHEN AN APPLICATION FOR CONDONATION OF DELAY IS MADE; TO CONSIDER WHETHER A SUFFICIENT CAUSE HAS BEEN MADE OUT BY THE PETITIONER; THE ORDER OF T HE FAAS SHOULD DISCLOSE THAT THEY HAD APPLIED THEIRMIND TO THE QUESTION RAISED BEFORE IT. DUE EX ERCISE OF JUDICIAL DISCRETION IS A PRE-CONDITION FO R ALLOWING/REFUSING AN APPLICATION FILED FOR CONDONIN G DELAY. 2.3.B. FROM THE ABOVE GENERAL PRINCIPALS IT IS CLEAR THAT TOUCHSTONE FOR CONDONATION OF DELAY IS SUFFICIENCY/REASONABLENESS OF THE CAUSE. FILING O F AN APPEAL IN TIME IS A NORMAL JUDICIAL PROCESS, WHEREAS FILING A BELATED APPEAL IS AN ABNORMAL STEP .IT IS SAID EXTRAORDINARY REMEDIES NEED EXISTENCE OF EXTRAORDINARY CIRCUMSTANCES.IN THE CAS E UNDER CONSIDERATION, ASSESSEE HAD NOT BROUGHT ON RECORD ANY REASONABLE CAUSE FOR CONDON ATION OF DELAY.THERE IS NO EVIDENCE,EXCEPT THE ASSERTION OF THE ASSESSEE THAT THE OLD AR HAD N OT ADVISED IT PROPERLY.WE HAVE NOT COME ACROSS THE LETTER OR AFFIDAVIT OF THE OLD AR SUGGESTING TH AT AS PER HIS ADVISE ASSESSEE DID NOT FILE THE APPEAL BEFORE THE FAA. BEFORE US,ALSO ASSESSEE HAS NOT FILED ANY AFFIDAVIT ALONG WITH THE APPEAL PAPERS.GENERALLY IN SUCH MATTERS AFFIDAVITS ARE FIL ED,AS THEY THROW LIGHTS ON THE THOUGHT PROCESS OF THE APPLICANT AS WELL AS THE COMPELLING CIRCUMSTANC ES FACED BY THE ASSESSEE.FOR DECIDING THE ISSUE OF REASONABLENESS OR SUFFICIENCY OF CAUSE AFFIDAVIT S PLAY A VITAL ROLE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE OPINION THA T FAA HAS RIGHTLY REJECTED THE CONDONATION APPLICATION FILED BY THE ASSESSEE,BECAUSE SUFFICIEN CY/REASONABLENESS OF CAUSE WAS TOTALLY MISSING.THEREFORE, UPHOLDING HIS ORDER WE DECIDE BO TH THE GROUND OF APPEALS AGAINST THE ASSESSEE. AS A RESULT,APPEAL FILED BY THE ASSESSEE STANDS DIS MISSED. / )0 !/) 1 2 ( - /3 ( ) 56 . ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JULY,2013 . . ( +,' 7 8! 24 , 2013 , ( - 9 SD/ SD/- ( . : : : : . . B.R.MITTAL ) ( / RAJENDRA ) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 8! /DATE: 24 TH JULY,2013 SK . . . . ( (( ( %); %); %); %); <;') <;') <;') <;') / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / #$ 2. RESPONDENT / %&#$ 3. THE CONCERNED CIT (A) / = > , 4. THE CONCERNED CIT / = > 5. DR C BENCH, ITAT, MUMBAI / ;?- %)! , . . . 6. GUARD FILE/ - @ &;) &;) &;) &;) %) %)%) %) //TRUE COPY// .! / BY ORDER, A / 5 DY./ASST. REGISTRAR , /ITAT, MUMBAI