D.K. Ashok, Bangalore V. DCIT, Bangalore

ITA 846/BANG/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86007 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-11-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 22-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BIJOY KUMAR PNADA
• Assessee Lawyers: H N KHINCHA
• Keywords: Rectification of order; Opportunity of being heard; Condonation of delay
• Section: 143(3); 244A; 142(1); 234B; 132; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE SHRI RAJPAL YADAV , JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER I.T.A. NO . 846 / BANG /20 1 2 ( ASSESSMENT YEAR : 200 8 - 09 ) SHRI D.K. ASHOK, NO.28, BVK IYENGAR ROAD, BANGALORE. . APPELLANT PAN ACWPA 7004Q VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), BA NGALORE . .. RESPONDENT. APPELLANT BY : SHRI H.N. KHINCHA, C.A. RESPONDENT BY : S HRI BIJOY KUMAR PNADA, ADDL. CIT (D.R) DATE OF H EARING : 19.11.2014 DATE OF P RONOUNCEMENT : 16.1.2015. O R D E R PER S HRI JASON P. BOAZ : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT (APPEALS) II, BANGALORE DT.22.5.2012 FOR ASSESSMENT YEAR 2008 - 09. 2. THE FACT OF THE CASE, BRIEFLY, ARE AS UNDER : - 2.1 THERE WAS A SEARCH ACTION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS 'THE ACT') AT THE ASSESSEE'S PREMISES ON 27.4.2007. THE ASSESSEE FILED THE RET URN OF INCOME FOR ASSESSMENT YEAR 2008 - 09 ON 9.1.2009 DECLARING INCOME OF RS.98,08,540 ITA NO. 846 /BANG/ 2012 2 IN RESPONSE TO NOTICE UNDER SECTION 142(1) OF THE ACT. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DT.24.12.2009 ACCEPTING THE TOTAL INCOME OF RS.98,08,540 DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME . WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER CHARGED THE ASSESSEE INTEREST UNDER SECTION 234A, 234B AND 234C OF THE ACT. 2.2 THE ASSESSEE BEING AGGRIEVED BY THE ORDER OF ASSE SSMENT FOR ASSESSMENT YEAR 2008 - 09 DT.24.12.2009 IN RESPECT OF BEING CHARGED INTEREST OF RS.1,27,405 UNDER SECTION 234A ; RS.3,82,214 UNDER SECTION 234B AND RS.1,17,849 UNDER SECTION 234C OF THE ACT FILED A RECTIFICATION APPLICATION UNDER SECTION 154 OF TH E ACT WITH THE ASSESSING OFFICER ON 5.1.2010 SEEKING RECOMPUTATION OF THE INTEREST CHARGEABLE UNDER THE AFORESAID SECTIONS IF ANY AND ALSO FOR BEING ALLOWED INTEREST UNDER SECTION 244A OF THE ACT AS PER THE AVERMENTS PUT FORTH IN THE RECTIFICATION APPLICAT ION. THE ASSESSEE'S APPLICATION WAS REJECTED BY THE ASSESSING OFFICER VIDE ORDER DT.3.2.2010. 2.3 THE ASSESSEE SUBSEQUENTLY FILED AN APPEAL BEFORE THE CIT (APPEALS) II, BANGALORE ON 4.5.2010 CHALLENGING THE ASSESSING OFFICER S ACTION IN CHARGING H IM INTEREST UNDER S ECTIONS 234A, 234B AND 234C OF THE ACT IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2008 - 09 DT.24.12.2009. THERE WAS A DELAY OF 96 DAYS IN FILING THE APPEAL BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) DISMISSED THE ASSESSEE'S APPEAL V IDE ORDER DT.22.5.2012, HOLDING IT AS NON - MAINTAINABLE ON TECHNICAL GROUNDS, BY NOT CONDONING THE DELAY OF 96 DAYS IN FILING THE APPEAL FOR THE REASONS THAT THE DELAY WAS INORDINATE AND THAT THE EXPLANATION PUT FORTH BY THE ASSESSEE WAS NOT REASONABLE. ITA NO. 846 /BANG/ 2012 3 3. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A) II, BANGALORE DT.22.5.2012, THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING THE IMPUGNED ORDER BY WAY OF RAISING THE FOLLOWING GROUNDS : - 1. THE AUTHORITIES BELOW HAVE ERRED IN PASSING THE ORDERS IN TH E MANNER PASSED BY THEM. THE ORDERS PASSED ARE BAD IN LAW AND ARE LIABLE TO BE QUASHED. 2.1 IN ANY CASE AND WITHOUT PREJUDICE, THE LEARNED CIT (APPEALS) HAS ERRED IN DISMISSING THE APPEAL AS NOT MAINTAINABLE ON THE GROUND THAT THE DELAY IN FILING THE APP EAL IS INORDINATE AND THE EXPLANATION FURNISHED CANNOT BE TREATED AS REASONABLE. THE ACTION OF THE CIT (APPEALS) BEING NOT CORRECT TO ON FACTS AND LAW IS TO BE DISREGARDED AND THE DELAY IN FILING THE APPEAL IS TO BE CONDONED. 2.2 THE LEARNED CIT (APPE ALS) HAS ERRED IN DISMISSING THE APPEAL. ON THE GROUND THAT THERE IS A CONSIDERABLE DELAY IN FILING THE APPEAL EVEN AFTER PASSING THE ORDER UNDER SECTION 154 BY THE ASSESSING OFFICER. THE REASONING GIVEN BY THE CIT (APPEALS) IS BASED ON ERRONEOUS APPREC IATION OF FACTS AND IS TO BE DISREGARDED. 2.3 ON PROPER APPRECIATION OF FACTS AND CIRCUMSTANCES OF THE CASE AND THE LAW APPLICABLE, THERE BEING REASONABLE AND SUFFICIENT CAUSE FOR CONDONING THE DELAY, SAME IS TO BE CONSIDERED, THE DELAY IS TO BE CONDO NED AND APPEAL FILED IS TO BE ADMITTED. 3. HAVING ADMITTED THE APPEAL FOR HEARING, THE LEARNED CIT (APPEALS), HAS ERRED IN DISMISSING THE APPEAL ON THE GROUND THAT THE DELAY IN FILING THE APPEAL COULD NOT BE CONDONED. THIS MAKES THE ORDER BAD IN LAW AND S AME IS LIABLE TO BE QUASHED. 4. IN ANY CASE AND WITHOUT FURTHER PREJUDICE THE LEARNED ASSESSING OFFICER HAD ERRED IN LEVYING INTEREST UNDER SECTION 234A, B AND C OF THE ACT, WITHOUT CONSIDERING THE CASH SEIZED ON 27.4.2007 AMOUNTING TO RS.50,00,000. THE ACTION OF ASSESSING OFFICER NOT ONLY AGAINST THE PROVISIONS OF LAW BUT ALSO CONTRARY TO THE ORDERS / JUDGEMENTS OF JURISDICTIONAL TRIBUNAL AND HIGH COURT IS TO BE DISREGARDED. 5. IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE ADDUCED AT THE TIME OF HEARIN G, IT IS REQUESTED THAT THE DELAY IN FILING THE APPEAL BE CONDONED, AND APPEAL FILED BE ADMITTED FOR HEARING, AND INTEREST LEVIED UNDER SECTION 234A, B AND C BE CALCULATED ONLY AFTER CONSIDERING THE CASH SEIZED ON 27.4.2007 AMOUNTING TO RS.50,00,000 AS TO THE TAX PAID FROM THE DATE OF SEIZURE. ORDER ON THE PETITION FOR CONDONATION OF DELAY OF 96 DAYS IN FILING THE APPEAL BEFORE CIT (APPEALS). 4.1 THE G ROUNDS RAISED BY THE ASSESSEE AT S.NOS.1 TO 3 IN THIS APPEAL ASSAIL THE IMPUGNED ORDER OF THE LEARN ED CIT(A) IN DISMISSING THE ASSESSEE'S APPEAL, NOT ON THE MERITS OF THE APPEAL BUT BY NOT CONDONING THE DELAY OF 96 DAYS IN FILING THE APPEAL AGAINST THE ORDER OF ITA NO. 846 /BANG/ 2012 4 ASSESSMENT BEFORE HER, FOR THE REASON THAT THE DELAY WAS INORDINATE AND THE EXPLANATION PUT F ORTH BY THE ASSESSEE FOR THE SAID DELAY WAS NOT REASONABLE. 4.2.1 ACCORDING TO THE ASSESSEE, THE FACTS OF THE MATTER ARE AS FOLLOWS : ADMITTEDLY, THE ORDER OF ASSESSMENT FOR ASSESSMENT YEAR 2008 - 09 DT.24.12.2009 WAS SERVED ON THE ASSESSEE ON 28 .12.2009 AND THEREFORE THE ASSESSEE OUGHT TO HAVE FILED THE APPEAL BEFORE THE LEARNED CIT(A) II, BANGALORE ON OR BEFORE 27.1.2010. IT WAS HOWEVER FILED ON 4.5.2010; THEREBY LEADING TO A DELAY OF 96 DAYS IN FILING THE APPEAL. ALONG WITH THE APPEAL, TH E ASSESSEE FILED A PETITION FOR CONDONATION OF THE DELAY OF 96 DAYS IN FILING THE APPEAL , ENCLOSING AN AFFIDAVIT DT.29.4.2010, SWORN TO BY THE ASSESSEE. IN THE PETITION, THE ASSESSEE SUBMITTED THAT AFTER SERVICE OF THE ASSESSMENT ORDER FOR ASSESSMENT YE AR 2008 - 09 DT.24.12.2009 ON 28.12.2009, HE HAD FILED A RECTIFICATION APPLICATION UNDER SECTION 154 OF THE ACT DT.4.1.2010 BEFORE THE ASSESSING OFFICER SEEKING RECTIFICATION OF MISTAKES APPARENT FROM THE RECORD BY RECOMPUTATION AND DELETION OF THE INTEREST CHARGED UNDER SECTION 234A, 234B AND 234C OF THE ACT IN HIS CASE. THE ASSESSEE ALSO REQUESTED FOR GRANT OF INTEREST UNDER SECTION 244A OF THE ACT IN VIEW OF THE FACTS STATED IN THE SAID RECTIFICATION APPLICATION. THE ASSESSEE'S RECTIFICATION APPLICATION W AS REJECTED BY THE ASSESSING OFFICER BY ORDER DT.3.2.2010 AND IT IS ONLY AFTER THIS, THAT ON THE ADVICE OF HIS TAX CONSULTANT , HE FILED THE APPEAL BEFORE THE LEARNED CIT(A) ON 4.5.2010. IT WAS PLEADED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE F ACTUAL POSITION OF THE CASE WOULD CLEARLY ESTABLISH THAT THE DELAY IN FILING THE APPEAL BEFORE THE CIT (APPEALS) WAS NEITHER DELIBERATE NOR INORDINATE, BUT IN THE REASONABLE HOPE THAT RECTIFICATION PROCEEDINGS WOULD ADDRESS HIS GRIEVANCE IN RESPECT OF THE ITA NO. 846 /BANG/ 2012 5 ERRONEOUS AND EXCESSIVE CHARGING OF INTEREST UNDER SECTION 234A, 234B AND 234C OF THE ACT IN HIS CASE. THE LEARNED AUTHORISED REPRESENTATIVE PLEADED THAT IF THE ASSESSEE'S DELAY OF 96 DAYS IN FILING THE APPEAL IS NOT CONDONED, THE ASSESSEE WOULD BE PUT TO GREAT HARDSHIP, BY BEING BURDENED WITH AN ERRONEOUS TAX BURDEN OF RS.6,27,468 ON ACCOUNT OF THE INTEREST CHARGED UNDER SECTION 234A, 234B AND 234C OF THE ACT, WHEREAS ON THE OTHER HAND, REVENUE WOULD NOT BE PUT TO ANY HARDSHIP IF THE DELAY IS CONDONED AND THE APPEAL BE DECIDED ON MERITS. IN SUPPORT OF THE ASSESSEE'S PLEA FOR CONDONATION OF DELAY OF 96 DAYS IN FILING THE APPEAL, THE LEARNED AUTHORISED REPRESENTATIVE PLACED RELIANCE ON THE FOLLOWING DECISIONS OF VARIOUS COURTS AND TRIBUNALS : - I) COLLEC TOR, LAND ACQUISITION V MST KATIJI (167 ITR 471) (SC) II) CIT V SANMAC MOTOR FINANCES LTD. (322 ITR 309) (MADRAS). III) CIT V ISRO SATELLITE CENTRE (ITA NO.582/2008 DT.28 .12.2011) OF THE KARNATAKA HIGH COURT. IV) RAGHAVENDRA CONSTRUCTIONS V ITO (ITA NO.425/BANG/2012 DT .14.12.2012). V) SHAKUNTALA HEGDE (L/R OF R.K. HEGDE) V ACIT IN ITA NO.2785/BANG/2004. 4.2.2 THE LEARNED AUTHORISED REPRESENTATIVE PRAYS THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, AS FACTUALLY LAID OUT ABOVE, THE DELAY OF 96 DAYS IN FILING THE APPE AL BEFORE THE LEARNED CIT(A) BEING NEITHER DELIBERATE NOR WILLFUL BE CONDONED AND THE APPEAL BE RESTORED TO THE FILE OF THE LEARNED CIT(A) WITH DIRECTION S TO DISPOSE OFF THE ASSESSEE'S APPEAL ON MERITS. 4.3 PER CONTRA, THE LEARNED DEPARTMENTAL REPRESE NTATIVE OPPOSED THE ASSESSEE'S PLEA FOR CONDONATION OF THE DELAY OF 96 DAYS IN FILING THE APPEAL FOR ASSESSMENT YEAR 2008 - 09 BEFORE ITA NO. 846 /BANG/ 2012 6 THE LEARNED CIT(A). IT WAS CONTENDED THAT THE ORDER OF THE LEARNED CIT(A) IS IN ORDER AND THE PLEA OF THE ASSESSEE BE REJE CTED. 4.4.1 WE HAVE HEARD BOTH PARTIES ON THE ISSUE OF CONDONATION OF THE DELAY OF 96 DAYS IN FILING THE APPEAL BEFORE THE CIT (APPEALS) AND HAVE CAREFULLY PERUSED AND CONSIDERED THE MATERIAL ON RECORD IN THIS REGARD. THE HON'BLE APEX COURT IN THE CAS E OF COLLECTOR, LAND ACQUISITION V MST KATIJI (SUPRA) HAS LAID DOWN THE PRINCIPLES TO BE TAKEN INTO ACCOUNT WHILE CONSIDERING THE APPLICATION / PETITIONS FOR CONDONATION OF DELAY IN FILING THE APPEAL. THE HON'BLE APEX COURT HAD EMPHASISED THAT SUBSTANTIA L JUSTICE SHOULD PREVAIL OVER TECHNICAL CONSIDERATIONS AND THAT A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING THE APPEAL LATE. IT WAS HELD THAT EVERY DAY S DELAY MUST BE EXPLAINED DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE TAKEN AND THE DOCTRIN E MUST BE APPLIED IN A RATIONAL , COMMON SENSE AND PRAGMATIC MANNER. THE HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF ISRO SATELLITE CENTRE (SUPRA) HAS CONDONED THE DELAY OF 5 YEARS HOLDING THAT THE VERY LIABILITY OF THE ASSESSEE WAS NON - EXISTENT AND TH EREFORE THE DELAY NEEDS TO BE CONDONED. FURTHER, IN THE CASE OF SHAKUNTALA HEGDE, L/R OF LATE R.K. HEGDE (SUPRA), THE CO - ORDINATE BENCH OF THIS TRIBUNAL HAD CODONED THE DELAY OF 1331 DAYS IN FILING THE APPEAL , WHEREIN THE PLEA OF DELAY IN FILING THE APPE AL WAS DUE TO THE ADVICE GIVEN BY A NEW COUNSEL WAS ACCEPTED AS SUFFICIENT. A CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF RAGHAVENDRA CONSTRUCTIONS (SUPRA) HAS CONSIDERED ALL THE ABOVE DECISIONS WHILE CONDONING THE DELAY OF 678 DAYS, HOLDING THAT BY CONDONATION OF DELAY THERE IS NO LOSS TO REVENUE AS LEGITIMATE TAXES PAYABLE IN ACCORDANCE WITH LAW ALONE WOULD BE COLLECTED. IN THE CASE ON HAND, WE FIND AS PER THE FACTS NARRATED , THAT THE DELAY OF 96 DAYS IN FILING THE APPEAL BEFORE THE LEARNED CIT(A) ITA NO. 846 /BANG/ 2012 7 WAS MAINLY DUE TO THE ASSESSEE PURSUING RECTIFICATION PROCEEDINGS UNDER SECTION 154 OF THE ACT BEFORE THE A.O. TO HAVE THE INTEREST CHARGED UNDER SECTION 234A, 234B AND 234C OF THE ACT RECOMPUTED AND DELETED. IT IS SEEN THAT WITHIN ABOUT TWO MONTHS OF HIS RECTIFICATION APPLICATION BEING REJECTED BY THE ASSESSING OFFICER THE ASSESSEE PREFERRED THE APPEAL ON THE VERY SAME ISSUE OF PROPER COMPUTATION, REDUCTION / OR DELETION OF INTEREST CHARGED UNDER SECTION 234A, 234B AND 234C BEFORE THE LEARNED CIT(A). 4 .4.2 IN THE FACTUAL MATRIX OF THE CASE, AS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED OPINION THAT, BY APPLYING THE PRINCIPLES LAID DOWN IN THE ABOVE CITED CASES, THIS IS A FIT CASE FOR CONDONATION OF THE DELAY OF 96 DAYS IN FILING THE APPEAL BEFORE TH E CIT (APPEALS) II, BANGALORE AND DO SO AS WE FIND THAT NEITHER I S THE DELAY INORDINATE NOR IS THE FACTUAL EXPLANATION PUT FORTH BY THE ASSESSEE UNREASONABLE. CONSEQUENTLY, THE DELAY OF 96 DAYS IN FILING THE APPEAL BEFORE THE CIT (APPEALS) II, BANGALO RE IS CONDONED. 5. IT IS SEEN THAT THE LEARNED CIT(A) IN THE IMPUGNED ORDER DT.22.5.2012 HAS DISMISSED THE ASSESSEE'S APPEAL AS NON - MAINTAINABLE, ONLY ON THE TECHNICAL GROUND BY NON - CONDONATION OF THE DELAY OF 96 DAYS IN FILING SAID APPEAL. THE LEARNE D CIT(A) HAS NOT ADJUDICATED ON THE MERITS OF THE ISSUES OF CHARGEABILITY OF INTEREST UNDER SECTION 234A, 234B AND 234C OF THE ACT AGITATED BY THE ASSESSEE IN THE APPEAL BEFORE HER. IN THIS VIEW OF THE MATTER, HAVING CONDONED THE DELAY OF 96 DAYS IN FILIN G THE APPEAL FOR ASSESSMENT YEAR 2008 - 09, WE RESTORE THIS APPEAL TO THE FILE OF THE CIT (APPEALS) II, BANGALORE FOR CONSIDERATION OF THE GROUNDS OF APPEAL RAISED BEFORE THE LEARNED CIT(A) ON MERITS AND ADJUDICATION THEREON AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS / SUBMISSIONS WHICH WILL BE DULY ITA NO. 846 /BANG/ 2012 8 CONSIDERED. THE ASSESSEE IS ALSO DIRECTED TO FILE DETAILS / SUBMISSIONS REQUIRED BY THE LEARNED CIT(A) SO THAT THE SAID APPEAL CAN BE DISPOSED OFF EXPEDITIOUSLY AND IN ACCORDANCE WITH LAW. IT IS ORDERED ACCORDINGLY. CONSEQUENTLY, THE GROUNDS RAISED BY THE ASSESSEE AT S.NOS. 1 TO 3 ARE ALLOWED. 6. IN VIEW OF OUR RESTORING THE ASSESSEE'S APPEAL TO THE FILE OF THE CIT (APPEALS) II, BANGALORE, FOR ADJUDICATION ON T HE MERITS OF THE APPEAL BEFORE THAT AUTHORITY, WE DO NOT DEEM IT FIT, AT THIS JUNCTURE, TO ADJUDICATE ON THE MERITS OF THE ISSUE OF INTEREST CHARGED UNDER SECTION 234A, 234B AND 234C OF THE ACT IN THE ASSESSEE'S CASE RAISED AT GROUND NOS.4 AND 5 OF THIS APPEAL . 7. IN THE RESULT, THE ASSESSEE'S APPEAL FOR ASSESSMENT YEAR 2008 - 09 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH JAN., 201 5 . SD/ - SD/ - ( RAJPAL YADAV ) ( JASON P BOAZ ) JUDICIAL MEMBER ACCOUNTANT MEMBER *REDDY GP COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE. (TRUE COPY ) BY ORDER ASST. REGISTRAR, ITAT, BANGALORE