VIVIDH MARGI INVESTMENT P.LTD, MUMBAI V. DCIT 9(3), MUMBAI

ITA 7429/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3027 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 12-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIPAK KUMAR SINHA
• Assessee Lawyers: VIJAY KOTHARI
• Keywords: Business income; Opportunity of being heard; Reasonable cause; Condonation of delay
• Section: 143(3); 14A; 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI JASON P. BOAZ ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO. 7429/MUM/2014 (ASSESSMENT YEAR : 2006-07) VIVIDH MARGI INVESTMENT PVT. LTD. 7, UDYOG NAGAR, UNIT 102, S.V.ROAD, GOREGAON (WEST), MUMBAI 400 104 PAN:AAACV0141N ... APPELLANT VS. THE DCIT 9(3), AAYKAR BHAVAN,M.K.ROAD, MUMBAI 400 020 ..... RESPONDENT APPELLANT BY : SHRI VIJAY KOTHARI RESPONDENT BY : SHRI DIPAK KUMAR SINHA DATE OF HEARING : 25/08/2016 DATE OF PRONOUNCEMENT : 21/09/2016 ORDER PER JASON P. BOAZ, A.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE CIT(APPEALS) 20, MUMBAI DATED 21/10/2014 FOR ASSE SSMENT YEAR 2006-07 DISMISSING THE ASSESSEES APPEAL FOR STATIS TICAL PURPOSES, FOR THE REASON THAT THE ASSESSEE HAVING FILED THE APPEA L BELATEDLY BY 144 DAYS, HAD FAILED TO SATISFY HIM THAT THERE WAS BONA FIDE EXPLANATION OR REASONABLE CAUSE FOR NOT PREFERRING THE APPEAL WITH IN THE TIME SPECIFIED UNDER SECTION 249(2) OF THE ACT. 2 ITA NO. 7429/MUM/2014 (ASSESSMENT YEAR : 2006-07) 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN NOT CONDONING THE DELAY IN FILING OF APPEAL AND WHILE D OING SO HE AMONGST OTHER FAILED TO APPRECIATE THAT THERE WAS AN INADVERTENT AND BONA FIDE LAPSE ON PART OF THE APPELLANT IN NOT PRESENTING THE APPEAL MEMO BEFORE THE CIT(A) WITHIN THE DUE DATE. 2. THE APPELLANT PRAYS THAT THE DELAY IN FILING OF THE APPEAL BE CONDONED AND THE APPEAL BE DIRECTED TO BE HEARD ON MERITS BY TH E CIT(A). 3. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER:- 3.1 THE ASSESSEE, A COMPANY IN THE BUSINESS OF TRAD ING IN PHARMACEUTICALS, FILED ITS RETURN FOR ASSESSMENT YE AR 2006-07 ON 28/11/2006 DECLARING INCOME OF RS.49,30,580/-. THE RETURN WAS PROCESSED UNDER SECTION. 143(1) OF THE INCOME TAX A CT, 1961 ( IN SHORT THE ACT ) AND THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E ACT VIDE ORDER DATED 17/11/2008; WHEREIN THE INCOME OF THE ASSESSE E WAS DETERMINED AT RS.50,43,980/-. PROCEEDINGS UNDER SECTION 147 OF THE ACT WERE INITIATED BY THE ASSESSING OFFICER AND AFTER RECORD ING REASONS FOR THE SAME, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUE D TO THE ASSESSEE ON 22/3/2013. IN RESPONSE TO THE NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE FILED A COPY OF THE ORIGINAL RETURN OF INC OME FILED UNDER SECTION 139 OF THE ACT. THE ASSESSMENT WAS COMPLET ED UNDER SECTION 144 R.W.S. 147 OF THE ACT VIDE ORDER DATED 28/3/201 4, WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.52,48,9 10/- IN VIEW OF THE FOLLOWING DISALLOWANCE/ADDITIONS:- (I) DISALLOWANCE UNDER SECTION 14A - RS. 2,04,985/- (II)STCG CONSIDERED AS BUSINESS INCOME - RS. 40,84,185/- 3 ITA NO. 7429/MUM/2014 (ASSESSMENT YEAR : 2006-07) 3.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DATED 28/0 3/2014 FOR THE ASSESSMENT YEAR 2006-07 DATED 28/3/2014, THE ASSESS EE PREFERRED AN APPEAL BEFORE THE CIT(A) -20, MUMBAI WHICH CAME BE DISMISSED FOR STATISTICAL PURPOSES VIDE THE IMPUGNED ORDER DATED 21/10/2014, AS THE CIT(A) WAS OF THE VIEW THAT THE ASSESSEE WAS NOT A BLE TO SATISFY HIM THAT IT HAD A BONA-FIDE EXPLANATION OR REASONABLE CAUSE FOR FILING THE APPEAL BELATEDLY BY 144 DAYS. CONSEQUENTLY, THE SA ID DELAY WAS NOT CONDONED AND THE APPEAL WAS NOT ADMITTED. 3.3 BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSES SEE SUBMITTED THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE AND HAD BONAFIDE EXPLANATION FOR HAVING FILED THE APPEAL BEFORE TH E CIT(A) BELATEDLY. THE APPLICATION FOR CONDONATION OF DELAY IN FILING THE APPEAL DATED 18/09/2014 AND AN AFFIDAVIT DATED 18/09/2014 WERE F ILED BEFORE THE CIT(A). IN THE SAID APPLICATION, IT IS SUBMITTED A S UNDER:- 1. ON RECEIPT OF THE ASSESSMENT ORDER U/S. 144 R. W.S. 147 OF THE ACT ON 30.3.2014, WE HAD FORWARDED THE ORDER TO OUR TAX AD VOCATE FOR DRAFTING THE APPEAL. 2. OUR TAX ADVOCATE DRAFTED THE GROUNDS OF APPEAL, STATEMENT OF FACTS AND REPLY TO THE SHOW CAUSE NOTICE ISSUED U/S. 274 R.W. S. 271(1)(C) TO OUR OFFICE ON 16.4.2014. 3. BY MISTAKE THE ACCOUNT, INSTEAD OF FILING THE APPEAL BEFORE YOUR OFFICE, FILED THE GROUNDS OF APPEAL AND STATEMENT OF FACTS BEFORE THE DCIT 9(3)ON 14.4.2014, ALONGWITH THE REPLY ON THE SHOW CAUSE NO TICE U/S. 274 R.W.S.271(1)(C). 4. WE RECEIVED ANOTHER NOT1CE U/S. 274 R.W.S. 271( 1)(C) ON 16.9.2014. ON VERIFICATION OF OUR RECORDS, WE REALIZED THAT THE A PPEAL HAS REMAINED TO BE FILED BEFORE YOUR HONOUR. 5. THE APPELLANT SUBMITS THAT THERE IS A DELAY IN FILING OF THIS APPEAL FOR THE REASONS STATED ABOVE. THE APPELLANT SUBMITS THAT HA VING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE DELAY IN FILING OF THIS APPEAL BE CONDONED AND THE APPEAL BE ADMITTED FOR HEARING ON MERITS. 4 ITA NO. 7429/MUM/2014 (ASSESSMENT YEAR : 2006-07) 3.4 IN SUPPORT OF THE ABOVE AVERMENTS, THE LD. REPR ESENTATIVE FOR THE ASSESSEE PLEADED THAT THE NON-CONDONATION OF THE DE LAY OF 144 DAYS IN FILING THE APPEAL HAD PUT THE ASSESSEE TO GREAT HAR DSHIP AND INJURY, WHILE NO INJURY WOULD BE CAUSED TO REVENUE IF THE DELAY OF 144 DAYS WAS CONDONED AND THE ASSESSEES APPEAL BE HEARD BY THE CIT(A) AND DISPOSED OFF ON MERITS. IN SUPPORT OF THE ASESSEE S PLEADINGS, THE LD. REPRESENTATIVE FOR THE ASSESSEE, INTER-ALIA, PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS:- (I) COLLECTOR, LAND ACQUISITION VS. MST. KATIJI AND OTHERS (167 ITR 471) AND (II) RADHAKRISHNA RAI V. ALLAHABAD BANK & OTHERS ( 2009) 9 SCC 733. 3.5 THE LD. DEPARTMENTAL REPRESENTATIVE ON HIS PART ADMITTED THAT THE CIT(A) HAD NOT ADJUDICATED ON THE MERITS OF THE GROUNDS RAISED IN THE ASSESSEES APPEAL. IT WAS SUBMITTED THAT IF TH E BENCH WERE INCLINED TO CONDONE THE DELAY OF 144 DAYS IN FILING THIS APP EAL, IT WOULD ONLY BE IN THE FITNESS OF THINGS IF THE ISSUES RAISED IN TH E ASSESSEES APPEAL BEFORE THE CIT(A), BE RESTORED TO THE FILE OF THE C IT(A) FOR CONSIDERATION AND ADJUDICATION OF THE SAME ON MERIT. 3.6.1 WE HAVE HEARD BOTH PARTIES AND PERUSED THE MA TERIAL ON RECORD. THE HONBLE APEX COURT IN THE CASE OF COLLECTOR, LA ND ACQUISITION(SUPRA), WHILE LAYING DOWN THE PRINCIPLE S TO BE FOLLOWED WHILE CONSIDERING THE APPLICATION FOR CONDONATION O F DELAY, HAS STATED THAT SUBSTANTIAL JUSTICE SHOULD PREVAIL OVER TECHNI CAL CONSIDERATIONS. THE HONBLE APEX COURT EXPLAINED THAT, EVERYDAYS D ELAY MUST BE EXPLAINED, DOES NOT MEAN THAT A PEDANTIC APPROACH S HOULD BE TAKEN . THE DOCTRINE MUST BE APPLIED IN A NATURAL, COMMON S ENSE AND 5 ITA NO. 7429/MUM/2014 (ASSESSMENT YEAR : 2006-07) PRAGMATIC MANNER. CONSIDERING THE AFORESAID PRINCI PLES AND THE SUBMISSIONS OF THE ASSESSEE, IT APPEARS TO US THAT THE ASSESSEES FAILURE TO FILE THIS APPEAL IN TIME WAS DUE TO THE MISTAKE AND FAILURE ON THE PART OF HIS ACCOUNTANT. FURTHER, WE ARE ALSO OF THE OP INION THAT IF THE DELAY OF 144 DAYS IN FILING THIS APPEAL IS CONDONED AND T HE MATTER BE RESTORED TO THE FILE OF THE CIT(A) FOR DISPOSAL OF THE ISSU ES RAISED BEFORE HIM IN APPEAL, THERE SHALL BE NO LOSS TO REVENUE AS LEGITI MATE TAXES PAYABLE TO REVENUE IN ACCORDANCE WITH LAW ALONE WILL BE COLLEC TED. IN THIS VIEW OF THE MATTER, WE ARE OF THE OPINION THAT THIS IS A FI T CASE FOR CONDONATION OF THE DELAY OF 144 DAYS IN FILING THE APPEAL AND A CCORDINGLY CONDONE THE SAME. IN VIEW OF THE FACT THAT THE CIT(A) HAS NOT ADJUDICATED THE ISSUES RAISED IN THE ASSESSEES APPEAL BEFORE HIM F OR ASSESSMENT YEAR 2006-07, WE, RESTORE THE MATTER TO THE FILE OF THE CIT(A) FOR FURTHER CONSIDERATION AND ADJUDICATION OF THE GROUNDS RAISE D IN THE APPEAL BEFORE HIM, ON MERITS AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS/SUBM ISSIONS REQUIRED IN THIS REGARD. WE HOLD AND DIRECT ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESSM ENT YEAR 2006-07 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21/09/201 6 SD/- SD/- (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 21/09/2016 VM , SR. PS 6 ITA NO. 7429/MUM/2014 (ASSESSMENT YEAR : 2006-07) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI