SriYeduvaka Krishnam Naidu, CHENNAI V. ACIT, CHENNAI

ITA 594/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9467 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 14-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH IRS
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Commercial expediency; Condonation of delay

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , ! ' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO.594/MDS/2016 ! # $# / ASSESSMENT YEAR : 2010-2011 SHRI. YEDUVAKA KRISHNAM NAIDU PLOT NO.56, TKS NAGAR, THIRUVOTTRIYUR, CHENNAI 600 019. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 5, CHENNAI 600 006. [PAN AAAPY 5091M ] ( / APPELLANT) ( /RESPONDENT) %& ' ( / APPELLANT BY : SHRI.R. VIJAYARAGHAVAN, ADVOCATE )*%& ' ( /RESPONDENT BY : SHRI. A.V.SREEKANTH, IRS, JCIT. ' + / DATE OF HEARING : 04-04-2016 ,-$ ' + / DATE OF PRONOUNCEMENT : 22-04-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-5, CHEN NAI IN ITA NO.102/ CIT(A)-5/13-14, DT. 24.02.2016 FOR THE ASSE SSMENT YEAR 2010- ITA NO.594/MDS/2016. :- 2 -: 2011 PASSED U/S.143(3) AND 250 OF THE INCOME TAX A CT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). 2. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN CIVIL CONT RACTOR WORK DOING BUSINESS IN THE NAME OF S.V. CONSTRUCTION. TH E ASSESSEE FILED RETURN OF INCOME ON 15.10.2010 ADMITTING A TOTAL IN COME OF :30,07,450/- AND THE SAME WAS PROCESSED U/S.143(1) OF THE ACT. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND THE N OTICE U/S.143(2) OF THE ACT WAS ISSUED. THE LD. ASSESSING OFFICER COMPL ETED ASSESSMENT U/S.143(3) OF THE ACT DETERMINING TOTAL INCOME AT : 1,14,40,648/- AND DISALLOWED DEDUCTIONS U/S.40(A)(IA) OF THE ACT FOR THE PAYMENT TOWARDS FREIGHT CHARGES TO M/S. PAVITHRA TRANSPORT MADE BEFORE 1.10.2009 FOR NON DEDUCTION OF TDS : 4, 00,786/-, DISALLOWANCE OF EXPENDITURE TOWARDS PAYMENTS OF EQU IPMENT HIRE CHARGES AMOUNTING TO :3,37,159/- AND LODGING AND T ESTING CHARGES AMOUNTING TO 5,64,037/- FOR NON DEDUCTION OF TAX AT SOURCE, DISALLOWANCE OF REPAIR/RENOVATION EXPENSES OF OFFIC E PREMISES :3,84,375/- AND DISALLOWANCE EXPENDITURE U/S.40A(3) :67,46,841/-, AGGREGATING TO :84,33,198/-. AGGRIEVED BY THE ORDE R, THE ASSESSEE FILED AN APPEAL BEFORE COMMISSIONER OF INCOME TAX ( APPEALS). 3. IN THE APPELLATE PROCEEDINGS, THE LD. AUTHORISED REPRESENTATIVE RAISED GROUNDS ON THE GENUINESS OF E XPENSES WERE THE ITA NO.594/MDS/2016. :- 3 -: LD. ASSESSING OFFICER HAS OVERLOOKED THE NATURE AN D COMMERCIAL EXPEDIENCY OF BUSINESS WHICH WAS CONSIDERED IN EARL IER ASSESSMENTS. THE COMMISSIONER OF INCOME TAX (APPEALS) FOUND THAT THE ASSESSEE HAS MENTIONED THE RECEIPT OF THE ASSESSMENT ORDER O N 02.04.2013. AS PER THE PROVISIONS OF SEC.249 OF THE ACT, THE ASSES SEE HAS TO FILE AN APPEAL WITHIN A PERIOD OF 30 DAYS FROM THE DATE OF INTIMATION OF ORDER. WHEREAS THE APPEAL WAS FILED ON 07.05.2013 AND CON DONATION PETITION WAS FILED EXPLAINING THE REASONS AND CIRCUMSTANC ES REFERRED AT PAGE 4 OF CIT ORDER AS UNDER:- FOR THE ASSESSMENT YEAR 2010-11, THE ASSESSING OF FICER PASSED THE ASSESSMENT ORDER U/S.143(3) ON 02.04.201 3; APPEAL AGAINST THE SAID ASSESSMENT ORDER OUGHT TO H AVE BEEN FILED WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF THE ORDER I.E. ON OR BEFORE 02.05.2013, HOWEVER, THE AP PEAL IS FIELD TODAY WITH DELAY OF 5 DAYS. THE REASON FOR DELAY IN FILING THE APPEAL IS ORIGIN AL DEMAND NOTICE HAS BEEN MISPLACED AND COULD NOT BE TRACED IMMEDIATELY. WHILE RE-ARRANGING THE PAPERS, THE OR IGINAL DEMAND NOTICE WAS TRACED AND THE APPEAL IS BEING FI LED TODAY. HENCE, THERE IS A DELAY OF 5 DAYS, IN FILIN G THE APPEAL. THE DELAY IN FILING THE APPEAL IS NEITHER WILLFUL NOR WONTON BUT DUE TO THE BONAFIDE REASONS STATED ABOVE . IT IS PRAYED TO LD. COMMISSIONER OF INCOME TAX (APP EALS) MAY BE PLEADED TO CONDONE THE DELAY OF 5 DAYS IN F ILING THE APPEAL AND DISPOSED OFF THE SAME ON MERITS. THE COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERED THE FINDINGS OF THE ASSESSING OFFICER AND WITHOUT GOING INTO MERITS AS THE ASSESSEE COULD NOT EXPLAIN CIRCUMSTANCES AND SUBSTANTIATE TH E DELAY OF 5 DAYS IN ITA NO.594/MDS/2016. :- 4 -: CONDONATION PETITION AND IGNORED THE FACT THAT ORIG INAL DEMAND NOTICE HAS BEEN MISPLACED AND COULD NOT BE TRACED IMMEDIAT ELY. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE ASSESSEE DOES NOT HAVE SUFFICIENT CAUSE FOR DELAY AND AFFIDA VIT FILED IS NOT IN ORDER AS PER THE LAW AND THERE IS NO DUE DILIGENC E OF THE PROVISIONS OF THE ACT AND DISMISSED THE APPEAL IN LIMINE WITHO UT CONDONING THE DELAY. AGGRIEVED BY THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE ASSAILED AN APPEAL BEFORE TRIBUNAL. 4. THE LD. AUTHORISED REPRESENTATIVE ARGUED THAT ORIGI NAL DEMAND NOTICE HAS BEEN MISPLACED AND COULD NOT BE T RACED IMMEDIATELY, WHILE RE-ARRANGING THE PAPERS, THE ORI GINAL DEMAND NOTICE WAS TRACED AND THE APPEAL WAS FILED AND THERE WAS A DELAY OF 05 DAYS IN FILING THE APPEAL, AND THE DELAY IN FILING THE A PPEAL IS NEITHER WILLFUL OR WONTON AND PRAYED FOR ALLOWING THE APPEAL. 5. CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE RAISED OBJECTIONS TO CONDONATION OF DELAY. 6. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. BEFORE US, THE LD. AUTHORISED REPRESENTATI VE OF THE ASSESSEE REITERATED SUBMISSIONS MADE BEFORE THE ASSESSING O FFICER AND ALSO ON DELAY IN FILING THE APPEAL IN APPELLATE PROCEEDING S. CONSIDERING THE ITA NO.594/MDS/2016. :- 5 -: SUBMISSIONS OF AUTHORISED REPRESENTATIVE ON DELAY, WE HIGHLIGHT THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F N. BALAKRISHNAN V. M. KRISHNAMURTHY, AIR 1998 SC 3222 OBSERVED AS U NDER :- '11. RULES OF LIMITATION ARE NOT MEANT TO DESTROY T HE RIGHT OF PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT DILATORY TACTICS, BUT SEEK THEIR REMEDY PROMPTLY. THE OBJECT OF PROVIDING A LEGAL REMEDY IS TO REPAIR THE DAMAGE CAUSED BY RE ASON OF LEGAL INJURY. LAW OF LIMITATION FIXES A LIFE SPAN F OR SUCH LEGAL REMEDY FOR THE REDRESS OF THE LEGAL INJURY SO SUFFE RED. TIME IS PRECIOUS AND THE WASTED TIME WOULD NEVER REVISIT. D URING EFFLUX OF TIME NEWER CAUSES WOULD SPROUT UP NECESSITATING NEWER PERSONS TO SEEK LEGAL REMEDY BY APPROACHING THE COU RTS. SO A LIFE SPAN MUST BE FIXED FOR EACH REMEDY. UNENDING P ERIOD FOR LAUNDERING THE REMEDY MAY LEAD TO UNENDING UNCERTAI NTY AND CONSEQUENTIAL ANARCHY. LAW OF LIMITATION IS THUS FO UNDED ON PUBLIC POLICY. IT IS ENSHRINED IN THE MAXIM INTERES T REIPUBLICAE UP SIT F INIS LITIUM ( IT IS FOR THE GENERAL WELFAR E THAT A PERIOD BE PUT TO LITIGATION). RULES OF LIMITATION ARE NOT MEA NT TO DESTROY THE RIGHT OF THE PARTIES. THEY ARE MEANT TO SEE THA T PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THEIR REMEDY PR OMPTLY. THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. 12. A COURT KNOWS THAT REFUSAL TO CONDONE DELAY WOU LD RESULT IN FORECLOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PRESUMPTION THAT DELAY IN APPROACHING THE COURT IS ALWAYS DELIBERATE. THIS COURT HAS HELD THAT THE WORDS 'SUF FICIENT CAUSE' UNDER SECTION 5 OF THE LIMITATION ACT SHOULD RECEIV E A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE V IDE SHAKUNTALA DEVI JAIN V. KUNTAL KUMARI, AIR 1969 SC 575 AND STATE OF WEST BENGAL V. THE ADMINISTRATOR, HOWAH MUNICAPACITY, AIR 1972 SC 749.' FURTHER, WE REFER THE CASE OF STATE OF WEST BENGAL VS. ADMINISTRATOR, HOWRAH MUNICIPALITY, AIR 1972 SC 749, THE SUPREME C OURT HELD THAT EXPRESSION 'SUFFICIENT CAUSE' SHOULD RECEIVE A LIBE RAL CONSTRUCTION SO AS TO ADVANCE THE PURPOSE OF JUSTICE PARTICULARLY WHEN THERE IS NO MOTIVE BEHIND DELAY. THIS NECESSARILY IMPLIES THAT PARTIES MUST ACT BONAFIDELY, ITA NO.594/MDS/2016. :- 6 -: EXPEDITIOUSLY AND WITH DUE CARE. A CASUAL OR A NEGL IGENT LITIGANT WHO HAS ACTED WITH UTTER IRRESPONSIBLE ATTITUDE, CANNOT CLAIM THE CONDONATION OF DELAY IN LAW WHEN THE RIGHT HAS ACCR UED TO THE OTHER SIDE. THE EXPRESSION 'SUFFICIENT CAUSE' WILL ALWAYS HAVE RELEVANCY TO REASONABLENESS. THE ACTIONS WHICH CAN BE CONDONED B Y THE COURT SHOULD FALL WITHIN THE REALM OF NORMAL HUMAN CONDUC T OR NORMAL CONDUCT OF A LITIGANT. IT IS NEITHER EXPECTED NOR C AN IT BE A NORMAL CONDUCT OF A PUBLIC SERVANT OR A LITIGANT THAT THEY WOULD KEEP THE FILES UNMOVED, UNPROCESSED FOR MONTHS TOGETHER ON THEIR T ABLES. HOW THE POWER OF CONDONATION OF DELAY IS TO BE EXERCISED, H AS BEEN EXPLAINED BY THE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION V MST. KATIJI AND OTHERS- 167 ITR 471 (SC) AS UNDER:- ( PAGES 472 ). ' THE LEGISLATURE HAS CONFERRED THE POWER TO CONDON E DELAY BY ENACTING SECTION 51 OF THE LIMITATION ACT OF 1963 I N ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PART IES BY DISPOSING OF MATTERS ON DE MERITS '. THE EXPRESSION 'SUFFICIENT CAUSE ' EMPLOYED BY THE LEGISLATURE IS ADEQUATELY E LASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUB SERVES THE ENDS OF JUSTICE THAT BEING THE LIFE-PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COURTS. IT I S COMMON KNOWLEDGE THAT THE COURT HAS BEEN MAKING A JUSTIFIA BLY LIBERAL APPROACH IN MATTERS INSTITUTED IN THIS COURT. BUT T HE MESSAGE DOES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHER COURTS IN THE HIERARCHY. AND SUCH A LIBERAL APPROACH IS AD OPTED ON PRINCIPLE AS IT IS REALIZED THAT: 1. ORDINARILY, A LITIGANT DOES NOT STAND TO BENEFI T BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS, WHEN DELAY IS COND ONED, THE ITA NO.594/MDS/2016. :- 7 -: HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULDBE DEC IDED ON MERITS AFTER HEARING THE PARTIES. 1. ' ANY APPEAL OR ANY APPLICATION, OTHER THAN AN A PPLICATION UNDER ANY OF THE PROVISIONS OF ORDER XXI OF THE COD E OF CIVIL PROCEDURE, 1908, MAY BE ADMITTED AFTER THE PRESCRIB ED PERIOD IF THE APPELLANT OR THE APPLICANT SATISFIES THE COURT THAT HE HAD SUFFICIENT CAUSE FOR NOT PREFERRING THE APPEAL OR M AKING THE APPLICATION WITHIN SUCH PERIOD.' ( PAGE 473) 3. ' EVERY DAY'S DELAY MUST BE EXPLAIN ED' DOES NOT MEAN THAT PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOUR'S DELAY, EVERY SECOND'S DELAY? THE DOCTRINE MU ST BE APPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC M ANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDER ATIONS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A N ONDELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALAFIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN F ACT, HE RUNS SERIOUS RISK. 6. IT MUST BE GRASPED THAT THE JUDICIARY IS RESPEC TED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHN ICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO.' WE CONSIDER THE FACTUAL ASPECTS AND MERITS OF THE C ASE AS THE DELAY IN FILING THE APPEAL WAS NOT WANTON AS PER CONDONATI ON PETITION FILED IN APPELLATE PROCEEDINGS. THE SUBMISSIONS OF LD. AUTH ORISED REPRESENTATIVE ON GENUINE AND SUFFICIENT REASONS FO R DELAY CANNOT BE IGNORED. SO, CONSIDERING THE REASONS, WE FIND THER E IS SUFFICIENT CAUSE IN THE FACTUAL CIRCUMSTANCES AND WE CONDONE THE DEL AY. AS THE ASSESSEE RAISED GROUND WITH REGARD TO MERIT OF THE ADDITION MADE ITA NO.594/MDS/2016. :- 8 -: U/S.40(A)(IA) OF THE ACT, SINCE THE COMMISSIONER OF INCOME TAX (APPEALS) NOT ADJUDICATED THE GROUND, WE REMIT THE ISSUE TO THE FILE OF THE COMMISSIONER OF INCOME TAX (APPEALS) TO DECIDE THE ISSUE ON MERITS. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON FRIDAY, THE 22ND DAY OF APRIL, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI 0 / DATED:22.04.2016 KV 1 ' )!+23 43$+ / COPY TO: 1 . %& / APPELLANT 3. 5+ () / CIT(A) 5. 389 )!+! / DR 2. )*%& / RESPONDENT 4. 5+ / CIT 6. 9:# ; / GF