ACIT 14(3)(3), MUMBAI V. MALHAR INFORMATION SERVICES, MUMBAI

ITA 7144/MUM/2012

• Counselvise Citation: 714419914 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 30-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C PERUMAL
• Assessee Lawyers: N JAYENDRAN
• Keywords: Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO. 7144/MUM/2012 (ASSESSMENT YEAR: 2002-03) A C I T 14(3)(3) M/S. MALHAR INFORMATION SERVICES EARNEST HOUSE, 606 198, MANGALDAS BLDG. 6 TH FLOOR, NARIMAN POINT VS. MANGALDAS ROAD, MUMBAI 400002 MUMBAI 400021 PAN AAFFM7250D APPELLANT RESPONDENT APPELLANT BY: SHRI M.C. PERUMAL RESPONDENT BY: SHRI N. JAYENDRAN DATE OF HEARING: 06.02.2014 DATE OF PRONOUNCEMENT: 12.02.2014 O R D E R PER B.R. MITTAL J.M. THE DEPARTMENT HAS FIELD THIS APPEAL FOR A.Y. 2002- 03 AGAINST THE ORDER OF THE CIT(A) DATED 18.08.2010 ON THE FOLLOWING GRO UNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW AND IGNORING THE FACT THAT THE A.O. HAD BROUGHT IN FRES H MATERIAL AND NEW LINES OF ARGUMENT IN THE ASSESSMENT ORDER, THE CIT(A) ERRED IN DIRECTING THE A.O., TO ALLOW THE DEDUCTION U/S 80HH E OF THE ACT, FOLLOWING THE ORDER OF THE CIT(A) FOR THE A.Y. 2002 -03 ACCEPTING THE PLEA OF THE ASSESSEE THAT IT HAD BEEN CONSISTENTLY ALLOWED DEDUCTION U/S 80HHE/80HHC FOR THE A.YS. 1996-97 TO 2002-03. 2. FOR THESE AND ANY OTHER REASONS THAT MAY BE URGE D AT THE TIME OF HEARING, IT IS REQUESTED THAT THE ORDER OF THE CIT( A) BE QUASHED AND THAT OF THE A.O. BE RESTORED. 2. THE APPEAL FILED BY THE DEPARTMENT IS DELAYED BY 74 6 DAYS AND THE DEPARTMENT HAS FILED AN APPLICATION FOR CONDONATION OF DELAY STATING THAT THE APPEAL COULD NOT BE FILED DUE TO OVERSIGHT . 3. AT THE TIME OF HEARING THE LEARNED D.R. REITERATED THE FACT THAT THE APPEAL COULD NOT BE FILED BY THE DEPARTMENT DUE TO OVERSIGHT AND THE DELAY OF TWO YEARS AND 16 DAYS, I.E. 746 DAYS, MAY BE CON DONED. ITA NO. 7144/MUM/2012 M/S. MALHAR INFORMATION SERVICES 2 4. HOWEVER, THE LEARNED A.R. NOT ONLY OPPOSED CONDONAT ION OF DELAY BUT ALSO SUBMITTED THAT THE ISSUE IS SQUARELY COVERED I N FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE BY THE ORDER OF THE TRIBUNAL DA TED 15 TH OCTOBER, 2008 FOR ASSESSMENT YEARS 1999-2000 TO 2001-02 IN ITA NO . 6753, 3951 & 6736/MUM/2004. HE FURTHER SUBMITTED THAT THE HON'BL E BOMBAY HIGH COURT ALSO CONFIRMED THE ORDER OF THE TRIBUNAL BY I TS ORDER DATED 8 TH JANUARY, 2013 IN INCOME TAX APPEAL NO. 608/2010. 5. BE THAT AS IT MAY, WE HAVE CONSIDERED THE APPLICATI ON OF THE DEPARTMENT FOR CONDONATION OF DELAY. PRINCIPLES GOV ERNING CONDONATION OF DELAY ARE PART OF THE LIMITATION ACT, 1963. SECTION 5 OF THE SAID ACT GIVES POWER TO THE COURT TO CONDONE THE DELAY IN FILING A PPEALS/APPLICATIONS IF SUFFICIENT CAUSE IS SHOWN. COURTS ARE OF THE VIEW T HAT THE WORDS SUFFICIENT CAUSE UNDER SECTION 5 OF THE LIMITATION ACT, 1963 SHOULD RECEIVE A LIBERAL CONSTRUCTION, SO AS TO ADVANCE SUBSTANTIAL JUSTICE. ONCE THE COURT ACCEPTS THE EXPLANATION AS SUFFICIENT, IT IS THE RESULT OF POSITIVE 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 LIM IT. THE LENGTH OF THE DELAY IS NOT THE MATTER, ACCEPTABILITY OF THE EXPLANATION IS THE ONLY CRITERION. IN SOME CASES THE DELAY OF THE SHORTEST RANGE MAY NOT BE CO NDONED 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 FOUN D TO BE SATISFACTORY. THE EXPRESSION SUFFICIENT CAUSE IS NOT DEFINED, BUT I T MEANS A CAUSE WHICH IS BEYOND THE CONTROL OF THE PARTY. FOR INVOKING THE A ID OF THE SECTION ANY CAUSE WHICH PREVENTS A PERSON APPROACHING THE APPEL LATE AUTHORITIES WITHIN TIME IS CONSIDERED SUFFICIENT CAUSE. IN DOING SO, I T 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 COUL D 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 DEEME D TO BE DONE BONA FIDE OR IN GOOD FAITH WHICH IS NOT DONE WITH DUE CARE AN D ATTENTION. WHAT MAY BE SUFFICIENT CAUSE IN ONE CASE MAY BE OTHERWISE IN AN OTHER. WHAT IS OF ESSENCE IS WHETHER IT WAS AN ACT OF PRUDENT OR REASONABLE M AN. THEREFORE, IN THE ABSENCE OF SUITABLE AND ACCEPTABLE EXPLANATION FOR THE DELAY, THE QUESTION TO ITA NO. 7144/MUM/2012 M/S. MALHAR INFORMATION SERVICES 3 BE POSED IS WHY THE DELAY SHOULD BE CONDONED MECHAN ICALLY. THE APPELLANT HAS TO SHOW THAT THERE WAS NO GROSS NEGLIGENCE OR D ELIBERATE INACTION OR LACK OF BONAFIDES ON HIS PART IN THE MATTER OF CONDONATI ON OF DELAY. 6. IN THE CASE BEFORE US WE OBSERVED THAT THE DEPARTME NT HAS NOT GIVEN ANY PLAUSIBLE REASON FOR SUCH A LONG DELAY OF 746 D AYS IN FILING THE APPEAL BEFORE THE TRIBUNAL AND HAS MERELY STATED IN THE AP PLICATION FOR CONDONATION OF DELAY DATED 29 TH NOVEMBER, 2012 THAT THE LAST DATE FOR FILING OF TH E APPEAL BEFORE THE TRIBUNAL WAS 15 TH NOVEMBER, 2010 AND THE SAME COULD NOT BE FILED DUE TO OVERSIGHT. THE APPEAL HAS BEEN FILED BEFORE THE TRIBUNAL ON 30 TH NOVEMBER, 2012. WE HOLD THAT THE EXPLANATION OFFERE D BY THE DEPARTMENT FOR CONDONATION OF DELAY OF MORE THAN TWO YEARS IS NEIT HER REASONABLE NOR SUFFICIENT AND RATHER IT SHOWS THE NEGLIGENCE AND C ASUAL EFFORTS OF THE DEPARTMENT IN FILING THIS APPEAL BEFORE THE TRIBUNA L. HENCE WE REJECT THE APPEAL OF THE DEPARTMENT BEING BARRED BY LIMITATION . 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED BEING BARRED BY LIMITATION. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH FEBRUARY, 2014. SD/- SD/- RAJENDRA (B.R. MITTAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 12 TH FEBRUARY, 2014 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 25, MUMBAI 4. THE CIT 14, MUMBAI CITY 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.