ADMINISTRATOR OF THE ESTATE OF LATE MR. E.F DINSHAW, MUMBAI V. ITO (IT) 1(1), MUMBAI

ITA 7542/MUM/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3630 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 14-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 21-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M MURLIDR
• Keywords: Condonation of delay

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.7542/MUM/2012 ASSESSMENT YEAR-2009-10 ADMINISTRATOR OF THE ESTATE OF LATE MR. E.F. DINSHAW, 412, CHURCHGATE CHAMBERS, SIR V.T. MARG, MUMBAI-400020 / VS. ITO(I NTERNATIONAL TAXATION)-1(1), SCINDIA HOUSE, BALLARD ESTATE, MUMBAI PAN NO.AAEPD8394A ( / APPELLANT) ( / RESPONDENT) ! / ASSESSEE BY SHRI MANISH SHAH ' / REVENUE BY SHRI M.MURLI-DR # '$ % !& / DATE OF HEARING : 14/03/2016 % !& / DATE OF ORDER: 14/03/2016 ITA NO.7542/MUM/2012 ADMINISTRATOR OF THE ESTATE OF LATE MR. E.F. DINSHAW 2 / O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 23/08/2012 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI. 2. WE FIND THAT THE PRESENT APPEAL IS BARRED BY LIMITATION FOR 38 DAYS IN FILING THE APPEAL BEFORE THIS TRIBUNAL. THE ASSESSEE HAS ALSO FILED APPLICATION FOR CONDONATION OF DELAY SUPPORTED BY AN AFFIDAVIT. TH E LD. COUNSEL ADVANCED ARGUMENTS AND EXPLAINED THE DELAY AS MENTIONED IN THE APPLICATION/AFFIDAVIT. THE LD. DR CONTENDED THAT ASSESSEE IS EXPECTED TO EXPLAIN THE DELAY OF EACH DAY, THEREFORE, IN THE ABSENCE OF ANY VALID RE ASON, DELAY MAY NOT BE CONDONED. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. CONSIDERING THE TOTALITY OF FACTS, NO DOUBT FILING OF AN APPEAL IS A RIGHT GRANTED UNDER THE STATUTE TO THE ASSESSEE AND IS NO T AN AUTOMATIC PRIVILEGE, THEREFORE, THE ASSESSEE IS EXP ECTED TO BE VIGILANT IN ADHERING TO THE MANNER AND MODE IN W HICH THE APPEALS ARE TO BE FILED IN TERMS OF THE RELEVAN T PROVISIONS OF THE ACT. NEVERTHELESS, A LIBERAL APPR OACH HAS TO BE ADOPTED BY THE APPELLATE AUTHORITIES, WHERE DELA Y HAS OCCURRED FOR BONA FIDE REASONS ON THE PART OF THE ASSESSEE OR THE REVENUE IN FILING THE APPEALS. IN MATTERS C ONCERNING ITA NO.7542/MUM/2012 ADMINISTRATOR OF THE ESTATE OF LATE MR. E.F. DINSHAW 3 THE FILING OF APPEALS, IN EXERCISE OF THE STATUTORY RIGHT, A REFUSAL TO CONDONED THE DELAY CAN RESULT IN A MERIT ORIOUS MATTER BEING THROWN OUT AT THE THRESHOLD, WHICH MAY LEAD TO MISCARRIAGE OF JUSTICE. THE JUDICIARY IS RESPECT ED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHN ICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUS TICE AND IS EXPECTED TO DO SO. 2.2. THE HONBLE APEX COURT IN A CELEBRATED DECISI ON IN COLLECTOR, LAND ACQUISITION VS MST. KATIJI & ORS. 1 67 ITR 471 OPINED THAT WHEN TECHNICAL CONSIDERATION AND SUBSTANTIAL JUSTICE ARE PITTED AGAINST EACH OTHER, THE COURTS ARE EXPECTED TO FURTHER THE CAUSE OF SUBSTANTIAL JU STICE. THIS IS FOR THE REASON THAT AN OPPOSING PARTY, IN A DISPUTE, CANNOT HAVE A VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON- DELIBERATE DELAY. THEREFORE, IT FOLLOWS THAT WHILE CONSIDERING MATTERS RELATING TO THE CONDONATION OF DELAY, JUDICIOUS AND LIBERAL APPROACH IS TO BE ADOPTED. I F SUFFICIENT CAUSE IS FOUND TO EXIST, WHICH IS BONA -FIDE ONE, AND NOT DUE TO NEGLIGENCE OF THE ASSESSEE, THE DELA Y NEEDS TO CONDONED IN SUCH CASES. THE EXPRESSION SUFFICI ENT CAUSE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS T O APPLY LAW IN A MEANINGFUL MANNER, WHICH SUB-SERVES THE EN D OF JUSTICE- THAT BEING THE LIFE PURPOSE OF THE EXISTEN CE OF THE INSTITUTION OF THE COURTS. WHEN SUBSTANTIAL JUSTIC E AND TECHNICAL CONSIDERATION ARE PITTED AGAINST EACH OTH ER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERR ED. THIS ITA NO.7542/MUM/2012 ADMINISTRATOR OF THE ESTATE OF LATE MR. E.F. DINSHAW 4 MEANS THAT THERE SHOULD BE NO MALAFIDE OR DILATORY TACTICS. SUFFICIENT CAUSE SHOULD RECEIVE LIBERAL CONSTRUCTIO N TO ADVANCE SUBSTANTIAL JUSTICE. THE HONBLE APEX COUR T IN COLLECTOR, LAND ACQUISITION VS MST. KATIJI & ORS. ( 167 ITR 471) OBSERVED AS UNDER:- 3. THE LEGISLATURE HAS CONFERRED THE POWER TO COND ONE DELAY BY ENACTING SECTION 51 OF THE LIMITATION ACT OF 196 3 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO P ARTIES BY DISPOSING OF MATTERS ON DE MERITS. THE EXPRESSION SUFFICIENT CAUSE EMPLOYED BY THE LEGISLATURE IS ADEQUATELY EL ASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICE THAT BEING THE LIFE-PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COURTS. IT I S COMMON KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFI ABLY LIBERAL APPROACH IN MATTERS INSTITUTED IN THIS COUR T. BUT THE MESSAGE DOES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHERS COURTS IN THE HIERARCHY. 2.3. FURTHERMORE, THE HON'BLE SUPREME COURT IN THE CASE OF VEDABAI ALIA VAIJAYANATABAI BABURAO PATIL V S. SHANTARAM BABURAO PATIL 253 ITR 798 HELD THAT THE C OURT HAS TO EXERCISE THE DISCRETION ON THE FACTS OF EACH CASE KEEPING IN MIND THAT IN CONSTRUING THE EXPRESSION SUFFICIENT CAUSE, THE PRINCIPLE OF ADVANCING SUBS TANTIAL JUSTICE IS OF PRIME IMPORTANCE. THE COURT HELD THAT THE EXPRESSION SUFFICIENT CAUSE SHOULD RECEIVE LIBERA L CONSTRUCTION. ITA NO.7542/MUM/2012 ADMINISTRATOR OF THE ESTATE OF LATE MR. E.F. DINSHAW 5 HAVING MADE THE AFORESAID OBSERVATION AND CONSIDERING THE MATERIAL FACTS AVAILABLE ON RECORD AND MORE SPECIFICALLY THE REASON OF DELAY, AS MENTIONED IN T HE APPLICATION, WHICH IS SUPPORTED BY AN AFFIDAVIT, TH E DELAY IS CONDONED, 3. SO FAR AS, CONFIRMATION OF THE DISALLOWANCE OF EXPENSES AMOUNTING TO RS.25,98,244/- ON THE PLEA TH AT EXPENSES WERE NOT INCURRED OR EXPANDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF EARNING INCOME UNDE R THE HEAD INCOME FROM OTHER SOURCES IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE, SHRI MANISH SHAH, AT THE OUTSET, CONTENDED THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL FOR A.Y. 1991-92 (ITA NO.4892/BOM/1995) ORDER DATED 28/05/2002 AND THE DECISION FOR A.Y. 2008-09 (ITA NO.4733 AND 2327/MUM/2011) ORDER DATED 19/02/2014. THE LD. COUNSEL FURTHER CONTENDED THAT IF THE AFORESAID GRO UND IS DECIDED IN FAVOUR OF THE ASSESSEE THEN THE REMAININ G GROUNDS WILL REMAIN FOR ACADEMIC INTEREST ONLY. THI S FACTUAL MATRIX WAS CONSENTED TO BE CORRECT BY LD. DR, SHRI M. MURLI. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THE TRIBUNAL CONSIDERED THE ISSUE OF EXPENDITURE IN A.Y . 1991- 92 (GROUND NO.4) AND FINALLY AFTER HEARING THE RIVA L SUBMISSIONS REDUCED THE RELIEF TO 50% (HALF). IDEN TICALLY FOR ITA NO.7542/MUM/2012 ADMINISTRATOR OF THE ESTATE OF LATE MR. E.F. DINSHAW 6 A.Y. 2008-09, WHILE DELIBERATING UPON IN THE CROSS APPEALS, THE TRIBUNAL, VIDE ORDER DATED 19/02/2014 (ITA NO.2327/MUM/2011) IN THE APPEAL OF THE ASSESSEE WIT H RESPECT TO GROUND NO.2, ADJUDICATING THE SAME IN GR OUND NO. 11 & 12 HELD AS UNDER:- 11. REGARDING GROUND NO.2, LD COUNSEL FOR THE ASSE SSEE FILED A COPY OF THE ORDER OF THE TRIBUNAL FOR THE ASSESSMEN T YEAR 1991-92 VIDE ITA NO.4892/M/1995 AND MENTIONED THAT THE GROUND NO .4 OF THE SAID APPEAL DECIDED BY THE TRIBUNAL IS RELEVANT TO THE G ROUND NO.2 OF THE PRESENT APPEAL. BRINGING OUR ATTENTION TO PARA 7 OF THE SAID ORDER OF THE TRIBUNAL, LD COUNSEL MENTIONED THAT THE ISSUE STAND S COVERED TO THE TUNE OF 50% OF THE CLAIM OF THE ASSESSEE. RELEVANT PARA 7 OF THE SAID TRIBUNAL'S ORDER (SUPRA) READS AS UNDER: '7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS PER THE FIGURES GIVEN ON PAGES 8 & 9 OF THE ASSESSMENT ORDER, THE ASSESSEE'S OVERALL INCOME EARNING ACTIVITIES CONSTITUTE NUMBER OF TRANSACTIONS I.E., CAPITAL GAINS, INTEREST FROM DEPOSITS MADE IN THE CAPITAL GAINS SCHEME ETC. IN TECT; THE ASSESSEE HAS NOT FURNISHED SEPARATE ACTIVITY-WIS E DETAILS OF EXPENDITURE. THE EXPENDITURE INCURRED AGAINST THE C APITAL GAINS IMPLIEDLY WILL NOT BE ADMISSIBLE. THE CIT (AJ HAS NOT CONSIDERED THIS A SPECT. BEFORE THE AD NO SUCH BREAD-UP WAS FILED. UNDER THESE CIRCUMSTANCES, THE INESCAPABLE CONCLUSION WHICH EMERGES IS THAT THE EXPENDITURE OF RS. 2,76,334/- COMPRISES OF EXPENSES PERTAINING TO CAPITAL GAINS A S WELL AS INCOME FROM OTHER SOURCES. THOUGH THE DETAILS ARE NOT AVAILABLE, SETTING ASIDE AT THIS LEVEL WILL AGAIN BE A REPETITION OF THE SAME EXERCIS E. CONSEQUENTLY, WE DEEM IT EXPEDIENT TO ESTIMATE, TO THE INTEREST OF JUSTIC E, AND DIRECT THAT ONE HALF OF THE EXPENDITURE OUT OF THESE SHOULD BE HELD TO BE ATTRIBUTABLE TO INCOME FROM OTHER SOURCES. CONSEQUENTLY, THE RELIEF GIVEN BY THE CIT (A) ON THIS ISSUE SHOULD BE REDUCED BY HALF. THIS GROUND OF THE REVENUE IS PARTLY ALLOWED. ' 12. ON PERUSAL OF THE SAID ORDER OF THE TRIBUNAL AN D THE FACTS OF THE PRESENT APPEAL FOR THE 2008-2009 UNDER CONSIDERATI ON, WE ARE OF THE OPINION THAT THE ASSESSEE WILL SUCCEED PARTLY ON TH IS ISSUE. ACCORDINGLY, WE DIRECT THE AO TO EXAMINE THE FACTS OF THE PRESENT CASE WITH THAT OF THE APPEAL DECIDED BY THE TRIBUNAL AND GRANT RELIEF IN ACCORDANCE WITH THE ORDER OF THE TRIBUNAL DATED 28. 5.2002. ACCORDINGLY, GROUND NO.2 IS DECIDED IN THE ABOVE ME NTIONED MANNER. ITA NO.7542/MUM/2012 ADMINISTRATOR OF THE ESTATE OF LATE MR. E.F. DINSHAW 7 IN THE AFORESAID ORDER, THE TRIBUNAL CONSIDERING TH E TOTALITY OF FACTS, REDUCED THE DISALLOWANCES OF EXP ENSES TO 50%. IN THE ABSENCE OF ANY CONTRARY FACTS OR DECISI ON, BROUGHT TO OUR NOTICE, BY EITHER SIDE, FOLLOWING TH E AFORESAID ORDER, THE DISALLOWANCE OF EXPENSES IS REDUCED TO 5 0% (AS AGREED FROM BOTH SIDES), THUS, THE APPEAL OF THE AS SESSEE IS PARTLY ALLOWED. 4. SO FAR AS, THE REMAINING GROUNDS ARE CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE, DURING HEARING, AGREED/SUGGESTED THAT IF THE AFORESAID GROUND IS AL LOWED, IN TERMS INDICATED HEREINABOVE, THEN, THE REMAINING GR OUND BECOME IN-FRUCTUOUS, THEREFORE, DISMISSED AS SUCH. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 14/03/2016. SD/- SD/- (RAJENDRA) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; ) DATED : 14/03/2016 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT ITA NO.7542/MUM/2012 ADMINISTRATOR OF THE ESTATE OF LATE MR. E.F. DINSHAW 8 2. / THE RESPONDENT. 3. + + # ,! ( ) / THE CIT, MUMBAI. 4. + + # ,! / CIT(A)- , MUMBAI 5. /'01 !2 , + & 23 , # $ / DR, ITAT, MUMBAI 6. 14 5$ / GUARD FILE. / BY ORDER, /! ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI