BALAJI CONSTRUCTION, MUMBAI V. ASST CIT25(3), MUMBAI

ITA 7600/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3356 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 19-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANDHIR GUPTA
• Keywords: Principle of natural justice; Bonafide belief; Reasonable cause; Condonation of delay
• Section: 69C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI R.C. SHARMA(AM) AND SHRI SANDEEP GOSAIN (JM) ITA NO. 7600/MUM/2014 ASSESSMENT YEAR: 2009-10 M/S BALAJI CONSTRUCTION VS. ASST. CIT25(3) F/303 PRUTHVI CLASSIQ, MUMBAI MODI PARK IKRANI WADI RD. NO. 3, KANDIVALI(W) MUMBAI - 400067 PAN NO. AAGFB7408P (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI. RANDHIR GUPTA DATE OF HEARING : 25/07/201 6 DATE OF PRONOUNCEMENT : 07/09/2016 O R D ER PER SANDEEP GOSAIN, JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-35, MUMBAI DT. 22/09/2014 FOR AY 2009-10 ON THE GROUND MENTIONED HEREIN BELOW: DELAY CONDONATION 1. THE LEARNED CIT(A) ERRED IN REJECTING THE ASSESS EES APPLICATION FOR CONDONATION OF DELAY OF 127 DAYS IN FILING THE APPE AL, WITHOUT APPRECIATING THAT ASSESSEE HAD ACTED ON BONAFIDE BELIEF TO FILE APPEA L ONLY AFTER GATHERING THE 2 RELEVANT DOCUMENTS, THUS THE DELAY IN FILING THE A PPEAL WAS DUE TO REASONABLE CAUSE AND DELAY MAY BE CONDONE IN INTEREST OF JUSTI CE BY PROVIDING THE ASSESSEE AN OPPORTUNITY TO REPRESENT THE CASE ON MERIT. ON MERITS 2. THE LEARNED CIT(A) ERRED IN NOT ADJUDICATING THE MATTER ON MERITS IN REGARDS TO DISALLOWANCE OF RS. 16,75,677/- BEING PU RCHASES AND RS. 72,283/- BEING MOTOR CAR EXPENSES. 2. AT THE VERY OUTSET, IT IS NOTICED THAT NONE HAS APPEARED ON BEHALF OF ASSESSEE IN SPITE OF VARIOUS CALLS AND EVEN NO APPL ICATION FOR ADJOURNMENT WAS MOVED TODAY. ON THE OTHER HAND LD. DR IS PRESENT IN THE COURT AND IS READY WITH ARGUMENTS. THEREFORE WE HAVE DECIDED TO PROCEED WIT H THE HEARING OF THE CASE EX-PARTE WITH THE ASSISTANCE OF THE LD. DR AND THE MATERIAL ON RECORD. 3. FROM THE RECORDS WE HAVE NOTICED THAT THE ASSESS EE HAS RAISED THIS GROUND NO.1 AND MENTIONED THAT LD. CIT(A) ERRED IN REJECTING THE ASSESSES APPLICATION FOR CONDONATION OF DELAY OF 127 DAYS IN FILING THE APPEAL, WITHOUT APPRECIATING THAT ASSESSEE HAD ACTED ON BONAFIDE BE LIEF AND THE DELAY IN FILING THE APPEAL WAS UNINTENTIONAL. SINCE THIS GROUND GOES TO THE ROOTS OF THE CASE THE REFORE WE HAVE DECIDED TO TAKE UP THIS GROUND FIRSTLY. THE LD. CIT(A)HAS ALSO DISMISSED THE APPEAL WHILE D ISALLOWING THE APPLICATION FOR CONDONATION OF DELAY. THE OPERATIVE PARA OF THE LD. CIT(A) IS REPRODUCED HEREUNDER: 3 4. FACTS OF THE CASE RETURN OF INCOME WAS FILED ON 29/09/2009 AT A TOTAL INCOME OF RS. 36,27,710/-. THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN CIVIL CON TRACT. DURING THE YEAR THE ADDITIONS WERE MADE ON ACCOUNT OF NON GENUINE PURCH ASES OF RS. 16,75,677/- AND 20% DISALLOWANCE OUT OF MOTOR CAR EXPENSES CLAI MED ON ACCOUNT OF PERSONAL USAGE. THE ASSESSMENT ORDER WAS MADE ON 26 /12/2011 AND THE SAME WAS RECEIVED BY THE REPRESENTATIVE OF THE APPELLANT ON 30/12/2011 WHICH WAS SUBSEQUENTLY HANDED OVER TO THE APPELLANT ON 31/12/ 2011. AS PER SECTION 249(2) THE APPEAL SHOULD HAVE BEEN FILED WITHIN A PERIOD O F 30 DAYS FROM THE RECEIPT OF THE ORDER AND THE NOTICE OF DEMAND I.E. ON 30/12/20 11. HOWEVER, THE APPEAL HAS BEEN FILED ON 15/06/2012 BEING DELAYED BY MORE THAN 4 MONTHS AND 1 WEEK (127 DAYS). THE APPELLANT HAS FILED FOR CONDONATION OF D ELAY U/S 249(3). THE REASON GIVEN BY THE APPELLANT IS AS UNDER: WE HAVE DISCUSSED THE ISSUE AND THE BASIS OF ADDI TION MADE BY THE AO IN OUR ASSESSMENT OF AY 2009-10 WITH OUR CHARTERED ACCOUNT ANT WHO HAS INFORMED US TO COLLECT ANALYTICAL DATA OF STOCK AND PROPER DOCUMEN TARY EVIDENCE ABOUT THE DISPATCH PROOF OF GOODS SUCH AS RC RECORD FROM DEL IVERY AGENCY OR TRANSPORT AGENCY. THE SAID DOCUMENTARY EVIDENCE AND ANALYSIS OF STOCK PREPARED BY US AND THEN WE CONCLUDED THAT WE HAVE PROPER EVIDENCE TO IDENTIFY THE GENUINENESS OF OUR TRANSACTION WITH THE SUPPLIER. W E HAVE FILED AN APPEAL ON 15/06/2012, WHICH IS LATE BY 127 DAYS (AROUND FOUR MONTHS AND ONE WEEK). OUR CHARTERED ACCOUNTANT HAS INSISTED THAT HE WILL REPR ESENT OUR MATTER ONLY AFTER RECEIPT OF STOCK RECORDS AND DOCUMENTARY EVIDENCE F OR DISPATCH. WE HAVE TO INFORM YOU THAT AO HAS PASSED THE ASSESSM ENT ORDER ON THE BASIS OF MVAT INFORMATION AND DISALLOWED THE PURCHASES MADE FROM DEFAULTER DEALER UNDER MVAT ACT. WE HAVE MADE INQUIRY WITH OUR DIFFE RENT LEGAL CONSULTANT AND FOUND THAT COURT WILL NOT ALLOW SUCH PURCHASES EVEN UNDER INCOME TAX ALSO, WHERE AS IN FACT WE FOUND THAT WE CAN PROVE THE DEL IVERY OF GOODS, WEIGHT MEASUREMENT AND EXISTENCE OF PARTY. WE HAVE ANALYZE D THE COURT JUDGMENT ON SUCH ISSUE AND FOUND THAT OUR CASE IS FIT FOR APPEA L. HENCE OUR APPEAL HAS DELAYED BY 127 DAYS (AROUND FOUR MONTHS AND ONE WEE K) DUE TO DELAY IN COLLECTING OF DATA AND CASE CITATION FOR REPRESENTA TION IN APPEAL, AS THE MATTERS REPRESENTED BY INCOME TAX DEPARTMENT AS A VERY HIGH VALUE AND ITS LEGAL COST IS ERY HIGH. OUT TAX ADVISOR HAS INFORMED THAT WE HAVE TO PAY PENALTY U/S. 271(1)(C) OF I.T. ACT, 1961 AND WE SHOULD FILE APPEAL ON THE BASIS OF AVAILABLE CITATION AND DETAILS OF CONSUMPTION OF MATERIAL. WE HAVE COLLECTED THE INFORMATION AS REQUIRED BY OU R CHARTERED ACCOUNTANT AND TO SUSTAIN OUR APPEAL BEFORE YOUR HONOUR FOR ID ENTIFYING THE GENUINENESS OF OUR TRANSACTION. WE HAVE FILED OUR APPEAL LATE DUE TO DELAY IN COLLECTION OF INFORMATION AND EVIDENCE TO SUSTAIN OUR APPEAL AND TO SAVE THE TIME OF YOUR 4 HONOUR IN DEVOTING THE TIME IN IMPROPER APPEAL FILE D WITHOUT EVIDENCE OR ANY ANALYSIS. OUR DELAY IS MAINLY DUE TO COLLECTION OF D ATA AND ETHICS OF OUR CHARTERED ACCOUNTANT THAT TO FILE APPEAL ONLY AFTER SATISFACTORY EVIDENCE OR ANALYSIS. ALSO, OUR LADY ACCOUNTANT WAS ON LEAVE SI NCE JANUARY 2012 TILL APRIL DUE TO HER SICKNESS AND PREGNANCY PERIOD. HENCE SHE WAS UNABLE TO ATTEND THE OFFICE WHICH IS AN ANOTHER REASON FOR DELAY IN FILI NG OF APPEAL AS SHE USE TO HANDLE ACCOUNTING PARTY AND TO FOLLOW THE MATTERS BEFORE O UR CA WHEN EVER REQUIRED DUE TO WHICH DELAY OCCURRED. WE HAVE MADE APPEAL TO PROTECT OUR RIGHT ON THE BAS IS OF PRINCIPAL OF NATURAL JUSTICE, AS ASSESSING OFFICER HAS MADE ADDITION WIT HOUT VERIFYING CONSUMPTION AND DELIVERY RECORDS AND CITATION OF COURT CASES. 5. DECISION I HAVE GONE THROUGH THE CONTENTS OF THE REASONING G IVEN BY THE APPELLANT FOR LATE FILING. HOWEVER, I DO NOT FIND ANY MERIT IN THE REA SONING GIVEN BY THE APPELLANT REGARDING COLLECTION OF ANALYTICAL DATA OF STOCK ET C. ON THE BASIS OF WHICH DELAY SEEMS TO HAVE BEEN CAUSED. IF WE SEE THE DETAILS NO W AS PART OF THE APPEAL PROCEEDINGS, THE APPELLANT HAS FILED LEDGER ACCOUNT , BANK STATEMENT AND FEW OF THE INVOICES. THE ADDITION UNDER SECTION 69C HAS BE EN MADE ONLY WITH RESPECT TO ONE PROPERTY M/S CENTURIAN SALES CORPORATION AND TH ERE IS ABSOLUTELY NO COGENT REASON GIVEN BY THE APPELLANT AS TO WHY IT SHOULD H AVE TAKEN AS LONG AS IT DID TO COLLECT DOCUMENTS WHICH ARE ONLY PART OF ITS OWN FI NAL ACCOUNTS ONCE THE APPELLANT WAS AWARE OF THE REASONS OF THE GENUINENE SS OF THE TRANSACTION WITH M/S. CENTURIAN SALES CORPORATION THEN ALL IT NEEDED TO DO WAS TO DRAFT THE APPEAL OBJECTING TO THE ADDITION. IN THE LIGHT OF THE ABSE NCE OF ANY REASONABLE CAUSE BEING BROUGHT FORTH BY THE APPELLANT FOR SEEKING CO NDONATION OF DELAY I REJECT THE ADMISSION OF THE APPEAL. 4. WE HAVE HEARD LD. REPRESENTATIVE OF THE DEPARTME NT AND PERUSED THE MATERIAL PLACE ON RECORD. 5. WE HAVE NOTED THAT LD. CIT(A) HAS REJECTED THE A PPLICATION OF THE ASSESSEE FOR SEEKING CONDONATION OF DELAY ON THE GR OUND THAT NO COGENT REASONS HAVE BEEN GIVEN BY THE ASSESSEE AS TO WHY I T SHOULD HAVE TAKEN SO LONG TO COLLECT DOCUMENTS WHICH ARE ONLY PART OF ITS OWN FINANCIAL ACCOUNTS. 5 LD. CIT(A) ALSO FOUND THAT THERE WAS NO REASONABLE CAUSE FOR SEEKING CONDONATION OF DELAY. 6. AFTER CONSIDERING THE FACT OF THE PRESENT CASE A ND WHILE DRAWING SUPPORT FROM THE JUDGMENT OF HON'BLEBLE SUPREME CO URT IN CASE OF COLLECTOR LAND ACQUISITION, VS MST. KATIJI & ORS REPORTED IN 1987 AIR 1353 (SC) WHEREIN IT HAS BEEN HELD THAT THE EXPRESSION 'SUFFICIENT CAUSE' EM PLOYED BY THE LEGISLATURE IN SECTION 5 OF THE INDIAN LIMITATION ACT, 1963 IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON MERITS. THE HON'BLE SUPREME COURT HAS FURTHER HELD THAT ORD INARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE AND MORE OVER REFUSING TO CONDONE DELAY CAN RESULT IN A MERITORIOUS MATTER BEING THRO WN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THI S WHEN DELAY IS CON- DONED THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD B E DECIDED ON MERITS AFTER HEARING THE PARTIES. 7. IN THE PRESENT CASE ALSO CONSIDERING THE SAME PR INCIPLE AND WHILE TAKING INTO CONSIDERATION IN THE INTEREST OF JUSTICE, WE C ONDONE THE DEALY AND REMIT THE CASE BACK TO THE FILE OF LD. CIT(A)TO DECIDE THE CA SE ON MERITS. ASSESSEE IS DIRECTED TO APPROACH THE OFFICE OF THE LD. CIT(A) W ITH IN 30 DAYS FROM THE DATE OF RECEIPT OF THE COPY OF ORDER AND ASSESSEE IS FUR THER DIRECTED NOT TO TAKE UNNECESSARY ADJOURNMENT BEFORE THE LD. CIT(A). NEED LESS TO MENTION, THE LD. 6 CIT(A) WOULD DECIDE THE MATTER ON MERITS AFTER PROV IDING OPPORTUNITY TO THE ASSESSEE. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7TH SEPTE MBER, 2016. SD/- SD/- (R.C. SHARMA) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED: 07/09/2016 / 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 AG (ON TOUR)