NARESH KARLA (HUF), MUMBAI V. ACIT CIR 4(3), MUMBAI

ITA 7653/MUM/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0455 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 30-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITA P KAUSHIK
• Keywords: Condonation of delay
• Section: 271(1)(c); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.7653/MUM/2016(A.Y. 2012-13) ITA N0.7654/MUM/2016(A.Y. 2012-13) NARESH KARLA (HUF) G-142, OSHIWARA TARAPORE GARDEN, NEW LINK ROAD, ANDHERI WEST, MUMBAI, MAHARASHTRA 400 053 PAN:AAAHN 1578A ...... APPELLANT VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIR.24(3),6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI -400013. ..... RESPONDENT APPELLANT BY : SHRI VIJAY MEHTA RESPONDENT BY : MS. KAVITA P. KAUSH IK DATE OF HEARING : 12/09/2019 DATE OF PRONOUNCEMENT : 12/09/2019 ORDER PER VIKAS AWASTHY, JM: THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST ORDER OF CIT(A)-36, MUMBAI DATED 24/10/2016, COMMON FOR THE ORDERS PASSED ON QUANTUM ADDITION AND PENALTY LEVIED UNDER SECTION 2 71(1)(C) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 2. SHRI VIJAY MEHTA, APPEARING BEHALF OF THE ASSES SEE SUBMITTED AT THE OUTSET THAT THE CIT(A) HAS DISMISSED QUANTUM APPEAL OF ASSESSEE ON THE 2 ITA NO.7653/MUM/2016(A.Y. 2012-13) ITA N0.7654/MUM/2016(A.Y. 2012-13) GROUND OF LIMITATION ALONE. THERE WAS DELAY OF 2 5 DAYS IN FILING OF THE APPEAL, THE ASSESSEE GAVE REASONS FOR DELAY IN FILI NG OF THE APPEAL. HOWEVER, CIT(A) REJECTED THE SAME AND DISMISSED THE APPEAL BEING BARRED BY LIMITATION. THE ASSESSEE HAD ALSO FILED AN APPEAL ASSAILING LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. SIN CE THE QUANTUM APPEAL OF THE ASSESSEE WAS DISMISSED, THE CIT(A) DISMISSED THE PENALTY APPEAL AS WELL, HOWEVER, THE SAME WAS DECIDED ON MERITS. 3. ON THE OTHER HAND, MS. KAVITA P. KAUSHIK, REPRES ENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ORDER OF CIT(A) DISMISSING BOTH THE APPEALS OF ASSESSEE,. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTA TIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES B ELOW. THE CIT(A) HAS DISMISSED THE QUANTUM APPEAL OF ASSESSEE BEING BA RRED BY LIMITATION. UNDISPUTEDLY, THERE WAS A DELAY OF 25 DAYS IN FILIN G OF THE APPEAL. THE ASSESSEE HAD FILED EXPLANATION SEEKING CONDONATION OF DELAY ON THE GROUND THAT THE ASSESSEE WAS TRAVELLING TO LONDON D URING THAT PERIOD. THE ASSESSEE IN SUPPORT OF HIS CONTENTIONS HAVE FILED A PHOTOCOPY OF THE PASSPORT INDICATING THE DATES OF DEPARTURE AND ARRI VAL OF THE ASSESSEE FROM/IN INDIA. 4.1 THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF RAM NATH SAO ALIAS RAM NATH SAHU & ORS. VS. GOBARDHAN SAO & ORS. ( (2002) 3 SCC 195) HAS HELD THAT ACCEPTANCE OF EXPLANATION FURNISH ED SHOULD BE THE RULE AND REFUSAL, AN EXCEPTION. THE RELEVANT EXTR ACT OF THE JUDGMENT IS REPRODUCED HEREIN BELOW: 3 ITA NO.7653/MUM/2016(A.Y. 2012-13) ITA N0.7654/MUM/2016(A.Y. 2012-13) 'BUT ONE THING IS CLEAR THAT THE COURTS SHOULD NOT PROCEED WITH THE TENDENCY OF FINDING FAULT WITH THE CAUSE SHOWN AND REJECT THE PETITION BY A SLIPSHOD ORDER IN OVER-JUBILATION OF DISPOSAL DRIVE. ACCEPTANCE OF EXPLANATION FURNIS HED SHOULD BE THE RULE AND REFUSAL, AN EXCEPTION, MORE SO WHEN NO NEGLIGENCE OR INACTIO N OR WANT OF BONA FIDES CAN BE IMPUTED TO THE DEFAULTING PARTY. ON THE OTHER HAND, WHILE CONSIDERING THE MATTER THE COURTS SHOULD NOT LOSE SIGHT OF THE FACT THAT BY NO T TAKING STEPS WITHIN THE TIME PRESCRIBED A VALUABLE RIGHT HAS ACCRUED TO THE OTHE R PARTY WHICH SHOULD NOT BE LIGHTLY DEFEATED BY CONDONING DELAY IN A ROUTINE-LIKE MANNE R. HOWEVER, BY TAKING A PEDANTIC AND HYPERTECHNICAL VIEW OF THE MATTER THE EXPLANATI ON FURNISHED SHOULD NOT BE REJECTED WHEN STAKES ARE HIGH AND/OR ARGUABLE POINTS OF FACT S AND LAW ARE INVOLVED IN THE CASE, CAUSING ENORMOUS LOSS AND IRREPARABLE INJURY TO THE PARTY AGAINST WHOM THE US TERMINATES, EITHER BY DEFAULT OR INACTION AND DEFEA TING VALUABLE RIGHT OF SUCH A PARTY TO HAVE THE DECISION ON MERIT. WHILE CONSIDERING THE M ATTER, COURTS HAVE TO STRIKE A BALANCE BETWEEN RESULTANT EFFECT OF THE ORDER IT IS GOING TO PASS UPON THE PARTIES EITHER WAY. 4.2 THE HONBLE APEX COURT IN THE CASE OF COLLECT OR LAND ACQUISITION, VS MST. KATIJI & ORS., 167 ITR 471(SC) HELD THAT TH E EXPLANATION FURNISHED BY THE ASSESSEE FOR SEEKING CONDONATION SHOULD BE A CCEPTED. THE EXPRESSION SUFFICIENT CAUSE SHOULD BE INTERPRETED LIBERALLY. 4.3 IN VIEW OF THE WELL SETTLED LAW AND EXPLANATI ON FURNISHED BY THE ASSESSEE, WE ARE OF THE VIEW THAT THE CIT(A) HAS ER RED IN TAKING PEDANTIC AND HYPER-TECHNICAL VIEW IN NOT ACCEPTING THE EXPLA NATION FURNISHED BY THE ASSESSEE FOR CONDONATION OF 25 DAYS DELAY IN F ILING OF THE APPEAL. THE IMPUGNED ORDER IS SET-ASIDE AND THE APPEAL OF THE A SSESSEE IS RESTORED TO THE FILE OF CIT(A) FOR DENOVO ADJUDICATION ON MER ITS. THE CIT(A) IS DIRECTED TO GRANT REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE WHILE ADJUDICATING THE APPEAL, IN ACCORDANCE WITH LAW. 4.4 SINCE WE HAVE QUASHED THE ORDER OF CIT(A) IN Q UANTUM APPEAL, THE ORDER OF CIT(A) CONFIRMING LEVY OF PENALTY UNDER S ECTION 271(1)(C) OF THE ACT WILL NOT SURVIVE. ACCORDINGLY, APPEAL OF THE A SSESSEE ASSAILING LEVY OF 4 ITA NO.7653/MUM/2016(A.Y. 2012-13) ITA N0.7654/MUM/2016(A.Y. 2012-13) PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS ALSO RESTORED BACK TO THE FILE OF CIT(A) FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. 5. IN THE RESULT, BOTH THE APPEALS BY ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AFTER HEARING O F APPEALS ON THURSDAY THE 12 TH DAY OF SEPTEMBER,2019. SD/- SD/- (RAJESH KUMAR ) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 12/09/2019 VM , SR. PS(O/S) 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