MAXTECH FORMULATIONS (INDIA) P. LTD, THANE V. ITO WD 4(2), THANE

ITA 5903/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75709 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 04-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'SMC' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT ITA NO. 5903/MUM/2013 (ASSESSMENT YEAR: 2007-08) MAXTECH FORMULATIONS (I) P. LTD. INCOME TAX OFFICER - 4(2) PLOT NO. 86, VASAI MUNICIPAL ROOM NO. 29, B WING, 6 TH FLOOR INDUSTRIAL ESTATE, VS. ASHAR I.T. PARK ROAD, 16-Z, WAGLE VASAI (W), THANE INDL. ESTATE, THANE 400604 PAN - AAECM2059C APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI AIRIJU JAIKARAN DATE OF HEARING: 06.03.2014 DATE OF PRONOUNCEMENT: 06.03.2014 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE ASSESSEE COMPANY IS DIRECTED AGA INST THE ORDER PASSED BY THE LEARNED CIT(A)-II, THANE AND IT PERTA INS TO A.Y. 2007-08. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. I, THEREFO RE, PROCEED TO DISPOSE OF THE APPEAL EXPARTE, QUA ASSESSEE, ON MER ITS. 3. AT THE OUTSET IT MAY BE NOTICED THAT THE LEARNED CI T(A) DISMISSED THE APPEAL ON THE GROUND THAT THE ASSESSEE WAS NOT PREV ENTED BY REASONABLE CAUSE FROM FILING THE APPEAL WITHIN THE TIME PRESCR IBED UNDER SECTION 249(2) OF THE INCOME TAX ACT, 1961. THE ASSESSMENT ORDER W AS RECEIVED BY THE ASSESSEE ON 04.01.2010. THE ASSESSEE OUGHT TO HAVE FILED AN APPEAL IN THE MONTH OF FEBRUARY WHEREAS THE APPEAL, BEFORE THE CI T(A), WAS ACTUALLY FILED ON 09.08.2010 RESULTING IN A DELAY OF 176 DAYS. IN SUPPORT OF THE FACT THAT THERE WAS SUFFICIENT CAUSE FOR THE DELAY IN FILING THE APPEAL THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY FILED AN AFFIDAVIT STATING THAT HE (SHRI POPATLAL K. SHAH) IS 73 YEARS OLD AND WAS LOOKING I NTO THE ACCOUNTS OF THE COMPANY. DUE TO THE HEAVY ADDITIONS MADE BY THE AO IN THE GROUP CONCERNS HE WENT INTO DEPRESSION FROM DECEMBER, 2009 TO SEPT EMBER, 2010. HE WAS ITA NO. 5903/MUM/2013 MAXTECH FORMULATIONS (I) P. LTD. 2 THE ONLY PERSON LOOKING INTO THE AFFAIRS OF THE COM PANY AND CONVERSANT WITH THE ACCOUNTS OF THE COMPANY. HE HAS ALSO FILED AN A FFIDAVIT IN SUPPORT OF HIS CONTENTION THAT DUE TO MENTAL PRESSURE HE LOST SIGH T OF THE ISSUE CONCERNING FILING OF THE APPEAL AND SOON AFTER IT HAS COME TO HIS NOTICE THE APPEAL WAS FILED AND THUS THE DELAY WAS NEITHER INTENTIONAL NO R WILFUL. 4. THE LEARNED CIT(A) HELD THAT THE ASSESSEE HAD SHIFT ING HIS STAND WHILE EXPLAINING THE REASONS FOR DELAY; IN HIS OWN AFFIDA VIT IT WAS STATED THAT THE DELAY WAS ON ACCOUNT OF OVERSIGHT UNDER MENTAL DEPR ESSION WHEREAS IN THE WRITTEN SUBMISSION THE STAND TAKEN WAS THAT THE MAN AGING DIRECTOR WAS UNDERGOING TREATMENT FOR DEPRESSION. IN HIS OPINION , A PERSON WHO WAS UNDER MENTAL DEPRESSION COULD HAVE BEEN MORE CONSCI OUS AND UNDER SUCH CIRCUMSTANCES ANOTHER DIRECTOR, SHRI HASMUKHLAL SHA H, COULD HAVE FILED THE APPEAL IN TIME. FOR THE ABOVE REASONS HE CONCLUDED THAT THE ASSESSEE WAS NOT PREVENTED BY REASONABLE CAUSE FROM FILING THE A PPEAL IN TIME. 5. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. THE MAIN GROUND OF THE ASSESSEE IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DISMISSING THE APPEAL ON THE GROUND OF DELAY IN FILING THE APPEAL OVERLOOKING THE FACT THAT DEPRESSION WAS CAUSED DUE TO THE ABNORMAL DEMAND RA ISED BY THE DEPARTMENT. THE AUTHORISED REPRESENTATIVE OF THE AS SESSEE, SHRI AVADESH KUMAR, HAS FILED A LETTER DATED 28.01.2014 WHEREIN IT WAS SUBMITTED THAT HEAVY ADDITIONS WERE MADE BY THE AO IN THE GROUP CO NCERNS WHICH RESULTED IN THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY GO ING INTO DEPRESSION AND A MEDICAL CERTIFICATE WAS ALSO ENCLOSED IN SUPPORT THEREOF. THE LEARNED CIT(A) HAS WRONGLY ASSUMED THAT THE ASSESSEE HAD TA KEN TWO INDEPENDENT STANDS. IT WAS ALSO CONTENDED THAT THE OTHER DIRECT OR OF THE ASSESSEE COMPANY WAS NOT LOOKING TO THE AFFAIRS OF THE COMPA NY AND ALSO SUBMITTED THAT EVEN ON MERITS THE ASSESSEE HAS A STRONG PRIMA FACIE CASE AND IN SUCH AN EVENT THE APPEAL SHOULD NOT HAVE BEEN DISMISSED ON TECHNICAL GROUNDS. 6. I HAVE HEARD THE LEARNED D.R. IN THIS REGARD AND PE RUSED THE RECORD. 7. THE LEARNED CIT(A) DISMISSED THE APPEAL AS UNADMITT ED MAINLY ON THE GROUND THAT THE ASSESSEE HAS TAKEN A DUAL STAND. BU T IN MY CONSIDERED OPINION THE ASSESSEE HAD CONSISTENTLY TAKEN A STAND THAT THE MANAGING ITA NO. 5903/MUM/2013 MAXTECH FORMULATIONS (I) P. LTD. 3 DIRECTOR WAS LOOKING AFTER THE ACCOUNTS AND DUE TO MENTAL TENSION THE NEED TO FILE THE APPEAL ESCAPED ATTENTION AND THE OTHER DIRECTOR BEING NOT INCHARGE OF THE DAY-TO-DAY AFFAIRS OF THE COMPANY, IT RESULTED IN DELAY IN FILING THE APPEAL. IT MAY BE NOTICED THAT DUE TO TH E CHANGED CIRCUMSTANCES SHRI HASMUKHLAL SHAH, ANOTHER MANAGING DIRECTOR, MI GHT HAVE APPEARED BEFORE THE CIT(A). IT WOULD RATHER SUPPORT THE STAN D OF THE ASSESSEE THAT THE MANAGING DIRECTOR WAS STILL UNDER DEPRESSION WHICH IS ALSO SUPPORTED BY AN AFFIDAVIT AND CERTIFICATE OF A PHYSICIAN & SURGEON. THE APEX COURT HAS TIME AND AGAIN HELD THAT ORDINARILY THE ASSESSEE WOULD N OT BE BENEFITED BY FILING AN APPEAL BELATEDLY AND ANY EXPLANATION GIVEN WITH REGARD TO THE DELAY IN FILING THE APPEAL SHOULD BE CONSIDERED IN THAT BACK DROP. IN OTHER WORDS, THE EXPLANATION HAS TO BE CONSIDERED LIBERALLY. ON A CO NSPECTUS OF THE MATTER, I AM OF THE VIEW THAT THIS IS A FIT CASE FOR CONDONIN G THE DELAY IN FILING THE APPEAL AND ACCORDINGLY DIRECT THE LEARNED CIT(A) TO ADMIT THE APPEAL AND DISPOSE OF THE SAME ON MERITS. THE MATTER IS SET AS IDE TO THE FILE OF THE CIT(A) FOR DISPOSAL ON MERITS. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH MARCH, 2014. SD/- (D. MANMOHAN) VICE PRESIDENT MUMBAI, DATED: 6 TH MARCH, 2014 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) II, THANE 4. THE CIT III, THANE 5. THE DR, SMC BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.