VISHAL TECHNO COMMERCE LIMITED, MUMBAI V. ACIT, CENT.CIR-36, MUMBAI, MUMBAI

ITA 6754/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4832 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 28-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SRINIVAS
• Keywords: Opportunity of being heard; Application of stay; Reasonable cause; Condonation of delay
• Section: 131; 273B; 234B

Judgement Text

VISHAL TECHNO COMMERCIAL LTD. V. DCIT CC - 5(1) MUMBAI / I.T.A. NO 6754 / MUM /201 7 /A.Y. 2011 - 12 PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI C.N. PRASAD , JUDICIAL MEMBER AND SHRI O. P. MEENA, ACCOUNTANT MEMBER I.T.A. NO. 6754 / MUM / 20 1 7 : ASSESSMENT YEAR : 20 1 1 - 12 VISHAL TECHNO COMMERCE LTD. UNIT NO. 116, FIRST FLOOR, REHAB BUILDING NO. 4, AKRUTI ANNEXE, ROAD, NO. 7, MAROL MIDC, ANDHERI (E), MUMBAI - 400093 PAN:AAACV1767G VS. DCIT CENTRAL CIRCLE - 5(1) MUMBAI (NOW, DCIT CC - 5(1), MUMBAI) ROOM NO. 1928, 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT MUMBAI - 400021. APPELLANT RESPONDENT ASSESSEE BY SHRI PAVAN VED (A . R . ) REVENUE BY SHRI B. SRINIVAS ( D.R ) DATE OF HEARING 14 .02.2019 DATE OF PRONOUNCEMENT 1 5 . 02.20 19 ORDER PER O. P. MEENA, AM 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISS IONER OF INCOME - TAX (APPEALS) - 53 , MUMBAI (IN SHORT THE CIT ( A)) DATED 23.10.2017 IN RESPECT OF PENALTY ORDER UNDER SECTION 221 OF THE ACT FOR THE ASSESSMENT YEAR 2011 - 12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS. - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT ( A) - 53 HAS ERRED IN NOT CONDONING DELAY OF 1392 DAYS IN FILING OF APPEAL. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) 53, MUMBAI HAS ERRED IN CONFIRMING HUGE PENALTY OF RS.3,50,00,000 BEING 23.52% OF SELF - ASSESSMENT TAX OF RS. 14,88,17,690/ - UNDER SECTION 221(1) R.W.S 140A(3) OF THE INCOME TAX ACT' 1961. THE PENALTY IS LEVIED ON A DELAY OF A PERIOD LESS THAN SIX MONTHS, IGNORING GENUINE FINANCIAL HARDSHIP AND IS EXCESSIVE, UNFAIR AND BAD IN LAW. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) - 53, MUMBAI HAS ERRED IN CONFIRMING THE HUGE PENALTY DESPITE APPELLANT BEING ALREADY S UBJECTED TO INTEREST U/S 234B OF THE INCOME TAX ACT' 1961. VISHAL TECHNO COMMERCIAL LTD. V. DCIT CC - 5(1) MUMBAI / I.T.A. NO 6754 / MUM /201 7 /A.Y. 2011 - 12 PAGE 2 OF 10 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) - 53, MUMBAI HAS FURTHER ERRED IN CONFIRMING PENALTY U/S 221(1) R.W.S 140A ON THE INTEREST COMPONENT OF THE SELF - ASSESSMENT TAX. THE PENALTY LEVIED ON THE INTEREST COMPONENT OF SELF - ASSESSMENT TAX IS EXCESSIVE, UNFAIR AND BAD IN LAW. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, PENALTY U/S 221(1) R.W.S 140A, IN THE ABSENCE OF ANY PROVISION UNDER THE INCOME TAX ACT FOR DELAY OR FAILURE TO PAY SELF - ASSESSMENT TAX IS UNFAIR AND BAD IN LAW. 3. GROUND NO. 1 RELATES TO NOT CONDONING THE DELAY OF 1392 DAYS IN FILLING OF APPEAL. 4. BRIEFLY STATED TH E FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 30.09.2 011 SHOWING INCOME AT RS. 40,80,09.310. HOWEVER, IT WAS NOTICED THAT THE ASSESSEE HAS NOT PAID SELF - ASSESSMENT TAX OF RS. 14,88,17,690 . THEREFORE, THE ASSESSEE WAS DEEMED TO BE IN DEFAULT IN RESPECT OF TAX E S AND INTEREST PAYABLE ON THE BASIS OF RETURNED IN COME. ACCORDINGLY, A PENALTY ORDER U/S 221 R.W.S 140A(3) OF THE ACT WAS PASSED ON 26.03.2012 BY LEVYING THE PENALTY OF RS.3,50,00,000/ - . 5. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (A). THE APPEAL FILED BEFORE THE CIT(A) ON 22.02.2016 WHEREAS PENALTY ORDER WAS SERVED UPON THE ASSESSEE ON 03.04.2012 . THUS, THE APPEAL WAS FILED BEFORE THE CIT(A) BY CONSIDERABLY DELAY AND BEYOND THE DUE DATE PERMISSIBLE FOR FILING OF APPEAL. THE ASSESSEE HAS REQUESTED THAT THE DELAY OF FILING OF APPEAL OF 1392 DAYS MAY BE CONDONED. IN THE CONDONATION PETITION, IT WAS STATED THAT THE PENALTY ORDER WAS SERVED ON 03.04.2012 AGAINST WHICH THE APPEAL WAS TO BE FILED ON OR BEFORE 2 ND MAY, 2012 WHICH IS LATE BY ON 1392 DAYS. IT WAS SUBMITTED THAT THE DR AFT OF FORM NO.35 WAS DULY PREPARED ON 10.04.2012 BY SHRI RAJESH GUJARATH I BY (IN - HOUSE OFFICER OF THE APPELLANT COMPANY). VISHAL TECHNO COMMERCIAL LTD. V. DCIT CC - 5(1) MUMBAI / I.T.A. NO 6754 / MUM /201 7 /A.Y. 2011 - 12 PAGE 3 OF 10 THE APPLICATION FOR STAY OF DEMAND WAS ALSO PREPARED. HOWEVER, BEFORE THE DRAFT OF APPEAL WAS FINALIZED, MOTHER OF SHRI RAJESH GUJARA THI FELL ILL ON 13TH APRIL, 2012 AND FINALLY EXPIRED ON 22 - 11 - 2012 DUE TO ILLNESS. THEREFORE, APPEAL COULD NOT BE FILED. THE ASSESSEE HAS FILED AN AFF IDAVIT OF SHRI RAJESH GUJARATHI . HOWEVER, SHRI RAJESH (GUJARATHI LEFT THE ORGANIZATION ON 01 - 02 - 2013 VIDE RESIGNATION LETTER DATED 10 - 01 - 2013 (COPY OF RESIGNATION LETTER WAS ENCLOSED). THE APPELLANT AND SHRI RAJESH GUJARATHI WERE UNDER IMPRESSION THAT THE APPEAL WAS FILED IN TIME. LATER , THE APPELLANT COMPANY MADE PART PAYMENT OF RS.1,25,00,000/ - IN SEPTEMBER, 2012. THE BALANCE OF THE PENALTY AMOUNT WAS RECOVERED BY THE AO THROUGH ADJUSTMENT OF REFUNDS, WHICH WERE RECEIV ABLE BY THE COMPANY. ON 17.02.201 6 , SHRI PAWAN VED, ADVOCATE WAS HAN DLING THE APPEAL FILE OF GROUP CONCERN 'HEDDLE KNOWLEDGE PRIVATE LIMITED IN WHICH HE WAS TO PREPARE FOR ITAT APPEAL AGAINST SIMILAR PENALTY. DURING THE COURSE OF DISCUSSION, HE POINTED THAT THERE WAS NO PROVISION IN INCOME TAX ACT THAT PENALTY U/S.221 CAN BE LEVIED FOR DEFAULT U/S. 140A(3) OF THE ACT. HE WAS AWARE THAT THE GROUP WAS FACING SEVERE LIQUIDITY CRUNCH. HE, THEREFORE, ENQUIRED WHETHER SUCH PENALTY WAS LEVIED IN ANY OTHER GROUP CONCERN SO THAT ALL SIMILAR MATTERS COULD BE PREPARED IN ONE STROKE. A T THAT POINT OF TIME, ON SEARCHING THE RECORDS FOR SIMILAR PENALTY MATTER IN THE CASES OF THE GROUP, IT WAS FOUND THAT PENALTY UNDER THIS SECTION WAS LEVIED IN THE CASE OF THE APPELLANT COMPANY FOR AY 2011 - 12. ON EXAMINATION OF RECORDS, IT CAME TO THE NOTI CE OF THE APPELLANT TH AT APPEAL AGAINST ORDER U/S.221RWS 140A(3) HAD NOT BEEN FILED. THUS, THERE WAS DELAY IN FILING OF THE PRESENT APPEAL AND THE APPELLANT HAS REQUESTED TO CONDONE THE DELAY IN FILING APPEAL. HOWEVER, THE CIT(A) OBSERVED IN PARA NO. 8 WHI CH IS HEREBY REPRODUCED AS UNDER. - VISHAL TECHNO COMMERCIAL LTD. V. DCIT CC - 5(1) MUMBAI / I.T.A. NO 6754 / MUM /201 7 /A.Y. 2011 - 12 PAGE 4 OF 10 8. THE FIRST ISSUE THAT ARISES IS WHETHER THERE ARE ANY GOOD GROUNDS TO CONDONE THE HUGE DELAY IN FILING APPEAL. I FIND THAT THE JUSTIFICATION GIVEN BY MAKING REFERENCE TO AUDITED ACCOUNTS FOR FY 2013 - 14 AND 2014 - 15 STAT ING THAT THE APPELLANT WAS UNDER THE IMPRESSION THAT APPEAL WAS FILED IS NOT SUBSTANTIATED BY PRODUCING THE SAME IN THE APPELLATE PROCEEDINGS. SHRI RAJESH GUJARATHI IS NOT PRODUCED IN THESE PROCEEDINGS AND HENCE THE AFFIDAVIT CLAIMED TO BE FILED BY HIM CAN NOT BE VERIFIED AND EXAMINED. IT IS FURTHER OBSERVED THAT THE APPELLANT HAS STATED THAT THE APPELLANT COMPANY MADE PART PAYMENT OF RS. 1,25,00,000/ - IN SEPTEMBER, 2012. IF THAT IS THE CASE, HOW COME THE APPELLANT DID NOT FIND OUT THAT STAY PETITION AND APP EAL IS NOT FILED. I AM THEREFORE UNABLE TO BELIEVE THAT THERE WERE BONA - FIDE REASONS FOR DELAY IN FILING OF APPEAL AND THAT THE DELAY SHOULD BE CONDONED. THE DELAY IS THEREFORE NOT CONDONED. 6. BEING AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE THIS TRIBUNAL . THE LD. COUNS EL FOR THE ASSESSEE SUBMITTED THAT THE PREPARATION WORK FOR FILING OF APPEAL WAS BEING HANDLED BY SHRI RAJESH GUJARATHI , AN EMPLOYEE OF THE ASSESSEE COMPANY WHO HAS PREPARED THE DRAFT FOR FILING OF APPEAL. HOWEVER, HIS MOTHER F ELL I LL ON 13.04.2012 AND FINALLY EXPIRED ON 22.11.2013. IN VIEW OF THESE CIRCUMSTANCES, THE ASSESSEE AND SHRI RAJESH GUJARATHI WERE UNDER THE IMPRESSION THAT WAS APPEAL HAS BEEN FILED . HOWEVER, WHEN CASE OF OTHER GROUP, COMPANIES ON SAME ISSUE WERE NOTICED, AN D THEN IT WAS CAME TO NOTICE THAT APPEAL HAS NOT BEEN FILED AGAINST PENALTY ORDER UNDER SECTION 221 OF THE ACT. IN SUPPORT OF CLAIM OF BONA FIDE BELIEF THAT THE APPEAL AGAINST PENALTY ORDER HAS ALREADY BEEN, THE LEARNED COUNSEL REFERRED A COPY OF BALANCE S HEET PREPARED ON 31.03.2013 WHEREIN A SUM OF RS.2.65 CRORES WAS SHOWN ON THE ASSET SIDE UNDER THE HEAD OTHER LOAN AND ADVANCES AND SUB - HEAD TAX DEDUCTED/SOURCE IN COME TAX. THE AMOUNT IN INTER - ALIA INCLUDING THE AMOUNT PAID BY ASSESSEE COMPANY AGAINST PENALTY. IF APPEAL WERE BELIEF OF DECISION TAKEN NOT BE FILE THEN THIS AMOUNT BECOME THE EXPENDITURE WOULD HAVE BEEN SHOWN IN THE P&L ACCOUNT AND NOT IN THE BALANCE SHEET . THIS FACT SHOWS THAT THE ASSESSEE WAS UNDER THE BELIEF THAT APPELLANT COMPA NY HAS FILED THE APPEAL PENALTY ORDER UNDER SECTION 221 OF THE ACT. THE LD. COUNSEL FURTHER REFERRED THE VISHAL TECHNO COMMERCIAL LTD. V. DCIT CC - 5(1) MUMBAI / I.T.A. NO 6754 / MUM /201 7 /A.Y. 2011 - 12 PAGE 5 OF 10 BALANCE SHEET AS ON 31.03.2014 PLACED AT PAPER BOOK PAGE NO. 65 , WHEREIN THE DEMAND RAISED U/S 221 WAS SHOWN AS DISPUTED AGAINST WHICH APPEAL IS PENDIN G BEFORE CIT (A). THUS, THE ASSESSEE COMPANY WAS UNDER BONA FIDE IMPRESSION THAT APPEAL HAS BEEN FILED. FURTHER, THE AUDITED OF THE COMPANY HAS ALSO MENTIONED IN HIS AUDITED REPORT PARA (IX)(B) THAT THE APPEAL OF THE COMPANY WAS PENDING BEFORE CIT(A) IN RE SPECT OF THIS DEMAND. SIMILARLY, IN MARCH, 2015, THE AUDITOR HAS MADE SIMILAR OBSERVATION IN HIS AUDIT REPORT IN PARA (VII)(B). THE LD. COUNSEL ALSO PLACED RELIANCE UPON THE DECISION IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST KATIJI & ORS REPORTED I N (167 ITR 471) (SC). HOWEVER, THE LD. CIT(A) REJECTED THE CONTENTION OF THE ASSESSEE ON THE GROUND OF THAT THESE DOCUMENTS MAKING REFERENCE TO AUDITED ACCOUNTS FOR F.Y. 2013 - 14 & 2014 - 15 WERE NOT PROVIDED IN THE APPELLATE PROCEEDING. SIMILARLY, SHRI RAJES H GUJARATHI WAS ALSO NOT PRODUCED IN THESE PROCEEDINGS HENCE, THE AFFIDAVIT CLAIMS TO BE FILED BY HIM CANNOT BE VERIFIED AND EXAMINED. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT CIT (A) HAS NOT ASKED FOR NOR ASKED TO PRODUCED OTHERWISE THE ASSESSE E COULD HAVE PRODUCED SHRI RAJESH GUJARATHI FOR EXAMINATION BELIEF SO DISPUTE BY CIT(A). 7. ON THE OTHER HAND, THE LD. SENIOR DR OPPOSED THE CONTENTION OF THE ASSESSEE AND SUBMITTED THAT THE CIT(A) HAS RIGHTLY OBSERVED THAT THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE THE REASON FOR DELAY AND FILING OF THIS APPEAL. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. W E ARE OF THE VIEW THAT IT IS SETTLED LAW THAT THE COURTS ARE QUASI - JUDICIAL BODIES AND ARE EMPOWERED TO CONDONE THE DELAY IF THE LITIGANT SATISFIES THE COURT THAT THERE WERE SUFFICIENT REASONS FOR THE AVAILING THE REMEDY AFTER THE EXPIRY OF THE LIMITATION. SUCH A REASONING SHOULD BE TO THE SATISFACTION O F THE COURT. THE EXPRESSION VISHAL TECHNO COMMERCIAL LTD. V. DCIT CC - 5(1) MUMBAI / I.T.A. NO 6754 / MUM /201 7 /A.Y. 2011 - 12 PAGE 6 OF 10 SUFFICIENT CAUSE OR REASON AS PROVIDED IN SUBSECTION (5) OF SECTION 253, SUBSECTION (3) OF SECTION 249 OF THE INCOME TAX ACT 1961 IS USED IN IDENTICAL TERMS IN THE LIMITATION ACT AND THE CPC. SUCH EXPRESSION HAS ALSO BEEN USED I N UNDER SECTION 273B OF THE ACT, 1961. THE EXPRESSION SUFFICIENT CAUSE WITHIN THE MEANING OF SECTION 5 OF LIMITATION ACT AS WELL AS A SIMILAR OTHER PROVISIONS AND THE AMBIT OF EXERCISE OF POWERS THEREUNDER HAVE BEEN SUBJECT MATTER OF CONSIDERATION BEFOR E THE HONOURABLE APEX COURT ON VARIOUS OCCASIONS. IN THE CASE OF THE STATE OF WEST BENGAL VS. ADMINISTRATOR, HOWRAH MUNICIPALITY, AIR 1972 SC 749 , THE HON`BLE SUPREME COURT, WHILE CONSIDERING THE SCOPE OF THE EXPRESSION OF SUFFICIENT CAUSE FOR CONDONATION OF DELAY, HAS HELD THAT THE SAID EXPRESSION SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONAFIDE IS IMPUTABLE TO THE PARTY. IN THE CASE OF N. BALAKRISHNAN VS. M. KRISHNAMURTHY AIR (1 998) 7 SC 124, (SC) THERE WAS A DELAY OF 883 DAYS IN FILING OF APPLICATION IN SETTING ASIDE THE EX - PARTE DECREE FOR WHICH APPLICATION FOR CONDONATION OF DELAY WAS FILED. THE TRIAL COURT HAVING FOUND THAT SUFFICIENT CAUSE WAS MADE OUT FOR CONDONATION OF DEL AY CONDONED THE DELAY. THE HON`BLE SUPREME COURT WHILE RESTORING THE ORDER OF THE TRIAL COURT HAS OF OBSERVED THAT CONDONATION OF DELAY IS MATTER OF DISCRETION OF THE COURT. SECTION 5 OF LIMITATION ACT SAYS THAT DISCRETION CAN BE EXERCISED ONLY IF THE DEL AY IS WITHIN REASONABLE LIMIT. LENGTH OF DELAY IS NO MATTER; ACCEPTABILITY OF THE EXPLANATION IS THE ONLY CRITERION. .. THERE IS NO PRESUMPTION THAT DELAY IN APPROACHING THE COURT IS ALWAYS DELIBERATE. THE WORDS SUFFICIENT CAUSE UNDER SECTION 5 OF THE L IMITATION ACT SHOULD RECEIVE A LIBERAL CONSTRUCTION TO ADVANCE SUBSTANTIAL JUSTICE. THE HON`BLE SUPREME COURT FURTHER OBSERVED THAT RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHTS OF THE PARTIES. VISHAL TECHNO COMMERCIAL LTD. V. DCIT CC - 5(1) MUMBAI / I.T.A. NO 6754 / MUM /201 7 /A.Y. 2011 - 12 PAGE 7 OF 10 THEY ARE MEANT TO SEE THAT THE PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THE REMEDY PROMPTLY. THE HON`BLE APEX COURT FURTHER OBSERVED THAT THE REFUSAL TO CONDONE THE DELAY WOULD RESULT IN FORECLOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PRESUMPTION THAT THE DELAY IN APPROACHING THE CO URT IS ALWAYS DELIBERATE. THE HON`BLE SUPREME COURT IN SLP CIVIL NO. 12980 OF 1986, DECIDED ON 19 TH FEBRUARY 1987, IN THE CASE OF COLLECTOR, LAND ACQUISITION, V. MST. KATIJI [1987] 167 ITR 471 (SC) : 1987 AIR 1353 HAS OBSERVED AS UNDER: THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACTING SECTION 51 OF THE INDIAN LIMITATION ACT OF 1963 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON MERITS. THE EXPRESSION SUFFICIENT CAUSE EMPLOYED BY THE L EGISLATURE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANING - FULL MANNER WHICH SUB - SERVES THE ENDS OF JUSTICE THAT BEING THE LIFE - PURPOSE FOR THE EXISTENCE OF THE INSTITUTION OF COURTS. IT IS COMMON KNOWLEDGE THAT THIS COURT HAS BEE N MAKING A JUSTIFIABLY LIBERAL APPROACH IN MATTERS INSTITUTED IN THIS COURT. BUT THE MESSAGE DOES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHER COURTS IN THE HIERARCHY. AND SUCH A LIBERAL APPROACH IS ADOPTED ON PRINCIPLE AS IT IS REALIZED THAT: - ANY APPEAL OR ANY APPLICATION, OTHER THAN AN APPLICATION UNDER ANY OF THE PROVISIONS OF ORDER XXI OF THE CODE OF CIVIL PROCEDURE, 1908 MAY BE ADMITTED AFTER THE PRESCRIBED PERIOD IF THE APPELLANT OR THE APPLICANT SATISFIES THE COURT THAT HE HAD SUFFICIENT CAU SE FOR NOT PREFERRING THE APPEAL OR MAKING THE APPLICATION WITHIN SUCH PERIOD. 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITORIOUS MATTER BEING THROWN OUT AT THE VERY THRES HOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDONED THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. 3. EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT MEAN THAT A PEDANTIC APPROA CH SHOULD BE MADE. WHY NOT EVERY HOURS DELAY, EVERY SECONDS DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL COMMON SENSE PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUST ICE DESERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON - DELIBERATE DELAY. VISHAL TECHNO COMMERCIAL LTD. V. DCIT CC - 5(1) MUMBAI / I.T.A. NO 6754 / MUM /201 7 /A.Y. 2011 - 12 PAGE 8 OF 10 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOU NT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT HE RUNS A SERIOUS RISK. 6. IT MUST BE GRASPED THAT JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 9. IN THE LIGHT OF ABOVE CITED JUDGEMENTS, IF WE EXAMINED THE FACTS OF THE PRESENT CASE, WE FIND THAT THE ORDER UNDER SECTION 221 WAS PASSED ON 26.03.2012 WHEREAS PENALTY ORDER WAS SERVED UPON THE ASSESSEE ON 03.04.2012. IT HAS BEEN CLAIMED THAT THE PENALTY ORDER WAS SERVED ON 03.04.2012 AGAINST WHICH THE APPEAL WAS TO BE FILED ON OR BEFORE 2 ND MAY, 2012, WHICH IS LATE BY ON 1392 DAYS. IT WAS SUBMITTED THAT THE DRAFT OF FORM NO.35 WAS DULY PREPARED ON 10.04.201 2 BY SHRI RAJESH GUJARATHI BY (IN - HOUSE OFFICER OF THE APPELLANT COMPANY). THE APPLICATION FOR STAY OF DEMAND WAS ALSO PREPARED. HOWEVER, BEFORE THE DRAFT OF APPEAL WAS FINALIZED, MOTHER OF SHRI RAJESH GUJARATHI FELL ILL ON 13TH APRIL, 2012 AND FINALLY EXP IRED ON 22 - 11 - 2012 DUE TO ILLNESS. THEREFORE, APPEAL COULD NOT BE FILED. THE ASSESSEE HAS FILED AN AFFIDAVIT OF SHRI RAJESH GUJARATHI. THE ASSESSEE HAS CLAIMED THAT THE ASSESSEE AND HIS EMPLOYEE WAS UNDER IMPRESSION THAT THE APPEAL AGAINST THE ORDER HAS B EEN FILED. THIS CLAIM THAT THE ASSESSEE WAS UNDER THE BELIEF THAT APPELLANT COMPANY HAS FILED THE APPEAL PENALTY ORDER UNDER SECTION 221 OF THE ACT HAS BEEN SUBSTANTIATED THROUGH DOCUMENTARY EVIDENCE BEING THE BALANCE - SHEET AS ON 31.03.2014 PLACED AT PAPER BOOK PAGE NO. 65, WHEREIN THE DEMAND RAISED U/S 221 WAS SHOWN AS DISPUTED AGAINST WHICH APPEAL IS PENDING BEFORE CIT (A). THUS, THE ASSESSEE COMPANY WAS UNDER BONA FIDE IMPRESSION THAT APPEAL HAS BEEN FILED. FURTHER, THE AUDITED OF THE COMPANY HAS ALSO ME NTIONED IN HIS AUDITED REPORT PARA (IX)(B) THAT THE APPEAL OF THE COMPANY WAS PENDING BEFORE CIT(A) IN RESPECT OF THIS VISHAL TECHNO COMMERCIAL LTD. V. DCIT CC - 5(1) MUMBAI / I.T.A. NO 6754 / MUM /201 7 /A.Y. 2011 - 12 PAGE 9 OF 10 DEMAND. SIMILARLY, IN MARCH, 2015, THE AUDITOR HAS MADE SIMILAR OBSERVATION IN HIS AUDIT REPORT IN PARA (VII)(B). 10. HOWEVER, SUBSEQUENTLY, WHEN IT WAS CAME TO HER NOTICE ON THE ADVICE OF HIS COUNSEL IN OTHER GROUP CASES THAT NO PENALTY IS LEVIABLE UNDER SECTION 221 OF THE ACT. T HE ASSESSEE FIND OUT STATUS OF HIS APPEAL. HOWEVER, IT WAS FOUND THAT NO APPEAL WAS FILED AGAINST THE ORDER . THER EFORE, THE DELAY WAS OCCURRED IN FILING OF APPEAL BEFORE CIT (A). WHICH APPEARS TO BE REASONABLE CAUSE FOR NON - FILING OF APPEAL IN TIME. HOWEVER, THE CIT (A) HAS REJECTED THE CONDONATION OF DELAY ON THE GROUND THAT TH E DOCUMENTS WERE NOT PROVIDED AND SHRI RAJESH GUJARATHI WAS NOT PRODUCED BEFORE HIM FOR EXAMINATION. ON QUERY FROM BENCH, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WOULD TRY TO PRODUCE SHRI GUJARATHI IF CIT (A) ISSUES SUMMONS TO HIM. WE FIND THAT THE EXPLANATION PROVID ED BY THE ASSESSEE IS SUBSTANTIATED BY DOCUMENTARY EVIDENCE AND AFFIDAVIT OF SHRI RAJESH GUJARATHI. HOWEVER, AS THESE DOCUMENTS WERE NOT PROVIDED TO CIT (A) AND SHRI GUAJRATI WAS NOT PRODUCED. THEREFORE, WE ARE OF THE VIEW THAT ISSUE NEEDS TO BE SET - ASIDE TO THE FILE OF CIT (A) TO ENABLE THE ASSESSEE TO PRODUCE REQUIRED DOCUMENT AND PRODUCE SHRI GUJARATHI BEFORE HIM. THEREFORE, IN EXERCISE OF POWER CONFERRED UNDER RULE 28 OF TRIBUNAL RULES, WE RESTORE THIS APPEAL TO THE FILE OF LD. CIT (A) FOR RECONSIDERATI ON THE DELAY OF CONDONATION FOR RECONSIDERATION AS FRESH AND ISSUING SUMMONS UNDER SECTION 131 TO SHRI GUJARATHI AND AFTER ALLOWING PROPER OPPORTUNITY OF BEING HEARD IN ACCORDANCE WITH LAW. NEVERTHELESS, TO MENTION THAT THE ASSESSEE WILL COOPERATE IN THE APPEAL PROCEEDINGS AND FILE NECESSARY EVIDENCES ON WHICH HE WANTS TO RELY UPON. 11. GROUND NO. 2 RELATES TO CONFIRMING THE PENALTY OF RS.3,50,00,000 LEVIED UNDER SECTION 221 OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE RELYING ON THE DECISION OF HON`BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. KAMAL MILLS LTD. TAX APPEAL NO. 819 - 821 OF 2008 DTD. 17.06.2009 (COPY FILED) THAT NO PENALTY UNDER SECTION 221 IS LEVIABLE AGAINST THE DEFAULT FOR NON - PAYMENT OF SELF - ASSESSMENT THE ASSESSEE UNDER SECTION 140A. WHE REAS LEARNED DEPARTMENTAL REPRESENTATIVE RELIED IN THE CASE OF CALRIS LIFE SCIENCE LTD. V. DCIT [2017] 86 TAXMANN.COM 56 (AHD TRIB) (SB) AND OTHERS . CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WITHOUT COMMENTING ON MERITS OF THE CASE AND VISHAL TECHNO COMMERCIAL LTD. V. DCIT CC - 5(1) MUMBAI / I.T.A. NO 6754 / MUM /201 7 /A.Y. 2011 - 12 PAGE 10 OF 10 IN THE INTEREST OF SUBSTANTIAL JUSTICE AND FAIR PLAY, AS WE HAVE SET - ASIDE THE ISSUE OF CONDONATION OF DELAY TO THE FILE OF LD. CIT (A). THEREFORE, WE SET - ASIDE THE ENTIRE ISSUE OF DELAY OF CONDONATION AS WELL AS DECISION ON MERIT FOR LEVY OF PENALTY UNDER SECTI ON 221 FOR DENOVA CONSIDERED AFRESH BY THE LD. CIT (A IN ACCORDANCE WITH LAW. NEVERTHELESS, TO MENTION THAT THE ASSESSEE WILL COOPERATE IN THE APPEAL PROCEEDINGS AND FILE NECESSARY EVIDENCES ON WHICH HE WANTS TO RELY UPON. 12. IN THE RESULT, APPEAL OF THE ASSE SSEE IS ALLOWED FOR STATISTICAL PURPOSE. 13. THE ORDER PRONOUNCED IN THE OPEN COURT ON 15 .02.2019 SD/ - SD/ - (C.N. PRASAD) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: DATED: 15 , FEBRUARY, 2019/OPM COPY OF ORDER SENT TO - ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER ASSISTANT REGISTRAR, MUMBAI