Mansi Builders Pvt.Ltd., Ahmedabad V. The ACIT.,Cent.Circle-1(1), Ahmedabad

ITA 907/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8965 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-09-2009
• Assessment Year: 1999-2000
• Appeal Filed On: 24-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL
• Assessee Lawyers: G C PIPARA
• Keywords: Opportunity of being heard; Principle of natural justice; Right to appeal; Condonation of delay; Set aside
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI H. L. KARWA, JM AND N. S. SAINI, AM) ITA NO.907, 908, 909,910,911,912 AND 913/AHD/2009 A. Y.: 1999-00, 2000-01, 2001-02, 2002-03, 2003-04, 20 04-05 AND 2005-06 MANSI BUILDERS, VIKASH CHAMBERS, OPP. UNIVERSITY HOSTEL, NR. DADA SAHEB NA PAGLA, NAVRANGPURA, AHMEDABAD PA NO. AAACM 0084 F VS THE A. C. I. T., CENT. CIRCLE-1(1), 3 RD FLOOR, AAYAKAR BHAVAN, ASHRAM ROAD, AHMEDABAD (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI G. C. PIPARA, AR DEPARTMENT BY SHRI SHELLEY JINDAL, DR O R D E R PER BENCH: THESE SEVEN APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST CONSOLIDATED ORDER OF THE CIT(A)-I , AHMEDABAD DATED 09-05-2008 RELATING TO ASSESSMENT YEARS 1999-00, 2000-01,2001-02, 2002-03, 2003-04,2004-05 AND 2005-06 IN SUSTAINING THE PENALTY OF RS.50,000/- FOR EACH OF THE SEVEN YEARS LEVIED BY T HE AO U/S 271(1)(B) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IT IS OBSERVED THAT THE REGISTRY OF THE TRIBUNAL HAS POINTED OUT THAT THERE IS DELAY OF 249 DAYS IN FILING EACH APPEAL BE FORE THE TRIBUNAL. THE ASSESSEE HAS SUBMITTED AN APPLICATION FOR CONDONATI ON OF DELAY ALONG WITH AFFIDAVIT OF SHRI VIKASH A. SHAH, MANAGING DIR ECTOR OF MANSI BUILDERS. THE AFFIDAVIT READS AS UNDER: I, VIKAS A.SHAH, SON OF SHRI ARVIND MADHUKAR SHAH AGED ABOUT 55 YEARS, RESIDING AT 210, ANAL FLATS , VIJAY CHAR RAS TA ROAD, AHMEDABAD 380 009, DO HEREBY SOLEMNLY DECLARE AND AFFIRM AS UNDER:- ITA NO.907 TO 913/AHD/2009 MANSI BUILDERS LIMITED 2 1. THAT I AM THE MANAGING DIRECTOR OF MANSI BUILDERS L TD. AND LOOKING AFTER THE ENTIRE AFFAIRS OF THE SAID COMPAN Y. 2. THAT THE SAID COMPANY HAVE FILED AN APPEAL ON DATED 12/12/206, BEFORE THE COMMISSIONER OF INCOME-TAX (A PPEALS), FOR A. Y. 2000-01, AGAINST THE ORDER PASSED BY THE DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 1(2), AHMEDABAD U/S. 271(1)(B) DATED 22/12/206, IMPOSING A PENALTY OF RS.50,000/-. 3. THE SAID APPEAL HAS BEEN DECIDED BY THE COMMISSIONE R OF INCOME-TAX (APPEALS)-I, AHMEDABAD VIDE ORDER DATED 9/5/2008, CONFIRMING THE PENALTY AS EXPARTE, ON THE GROUND TH AT NOTICES ISSUED WERE NOT ATTENDED. 4. THE SAID ORDER OF THE COMMISSIONER OF INCOME-TAX (A PPEALS DATED 9/5/2008 WAS RECEIVED BY ME ON 19/5/2008 AND ACCORD INGLY, I SHOULD HAVE PREFERRED AN APPEAL BEFORE THE HONBLE INCOME TAX APPELLATE TRIBUNAL WITHIN A PERIOD OF 60 DAYS FROM 9/5/2008. 5. THAT DURING THE PERIOD APRIL , 2008 TO DECEMBER 200 8, I WAS MENTALLY DISTURBED ,AS MY ENTIRE PROPERTIES INCLUDI NG THE HOUSE IN THE NAME OF MY WIFE, HAS BEEN ATTACHED BY THE IN COME-TAX DEPARTMENT VIDE AN ORDER U/S. 281B DATED 22/2/2008 AND THEREFORE, THE COMPLETE BUSINESS OF MY COMPANY MANS I BUILDERS LTD. WERE STOPPED, THE CONSTRUCTION ACTIVITY HAS CO ME TO A HALT AND VARIOUS PERSONS WHO HAS BOOKED FLATS IN OUR SCH EMES HAS DEMANDED REFUND OF THE AMOUNT, WHICH I WAS UNABLE T O PAY AS ALL THE BANK ACCOUNTS WERE ALSO SEALED BY THE INCOM E-TAX DEPARTMENT. EVEN SOME OF THE PROPERTIES RUNNING INT O ABOUT RS.70 TO 80 CROERS OF WORTH , HAS BEEN TAKEN POSSES SION BY CERTAIN PERSONS, UNAUTHORISEDLY AND THEREFORE, I WA S MENTALLY DISTURBED AND ABSOLUTELY PRE-OCCUPIED IN THE LEGAL MATTERS PERTAINING TO THE RELEASE OF THE PROPERTIES AND THE REFORE, I COULD NOT LOOK INTO ANY OF THE ASPECTS PERTAINING TO FILI NG OF THE RETURN, ASSESSMENT PROCEEDINGS, APPEAL HEARING ETC. 6. THAT IN THE MONTH OF DECEMBER, 2008/ JANUARY, 2009 WHEN I WAS OUT OF MY MENTAL TENSION I STARTED LOOKING INTO VARIOUS OTHER ASPECTS AND THEREAFTER, I CAME TO KNOW THAT THE ORD ER DATED 9/5/2008 PASSED BY THE COMMISSIONER OF INCOME-TAX ( APPEALS), COULD NOT BE ATTENDED FOR FURTHER APPEAL. 7. THAT IN THE MONTH OF JANUARY, 2009/ FEBRUARY, 2009 I STARTED FOR LOOKING FOR ANOTHER CHARTERED ACCOUNTANT TO LOOK AF TER MY INCOME- TAX MATTERS AS CERTAIN APPEALS WERE NOT PREFERRED, CERTAIN ITA NO.907 TO 913/AHD/2009 MANSI BUILDERS LIMITED 3 ASSESSMENTS WERE MADE EXPARTE WHICH COULD NOT BE AP PEALED BEFORE THE CIT(A) ETC. ETC. , AS THE EARLIER CHARTE RED ACCOUNTANT NAMELY DHIRENDRA & CO. HAS STOPPED LOOKING AFTER MY APPEAL WORK AS HIS FEES COULD NOT BE PAID BY ME IN TIME. 8. THAT IN THE MONTH OF FEBRUARY, 2009 I HAVE APPOINTE D M/S. PIPARA & CO., CHARTERED ACCOUNTANTS TO LOOK AFTER M Y INCOME TAX MATTERS AND HANDED OVER ALL THE PENDING ORDERS WHIC H WERE TO BE APPEALED AGAINST FURTHER AND OTHER PAPERS TO BE ATT ENDED INCLUDING THE PROPERTIES ETC. WHICH HAS BEEN SEIZED . 9. THAT APPEALS PERTAINING TO A. Y. 2000-01 FOR PENALT Y U/S. 271 (1) (B) WAS ACCORDINGLY FILED BY M/S. PIPARA & CO., CHA RTERED ACCOUNTANTS ON 24/3/2009, BEFORE THE HONBLE INCOME TAX APPELLATE TRIBUNAL, WHICH WAS DELAYED BY 249 DAYS. 10. THAT THE SAID DELAY IN FILING THE APPEAL IS DUE TO MY MENTAL DISTURBANCE DURING THE YEAR 2008 WHEREIN I COULD NO T LOOK AFTER THE MATTER AND THEREFORE, A SEPARATE APPLICATION IS BEING MOVED FOR THE CONDOLENCE OF THE DELAY. WHATEVER STATED ABOVE IS TRUE AND CORRECT TO THE BE ST OF MY KNOWLEDGE AND BELIEF. (VIKASH A SHAH) MANAGING DIRECTOR MANSI BUILDERS LTD. PLACE: AHMEDABAD DATE: SEPTEMBER 17 TH ,2009. 4. SHRI G. C. PIPARA, LEARNED COUNSEL FOR THE ASSE SSEE SUBMITTED THAT JURISDICTION TO CONDONE DELAY SHOULD BE EXERCISE LI BERALLY. THE MATTER RELATING TO CONDONATION OF DELAY SHOULD BE JUDGED B ROADLY AND NOT IN A PEDANTIC MANNER. HE RELIED ON THE JUDGMENT OF THE H ONBLE SUPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS . MST. KATIJI (1987) 167 ITR 471. ON THE OTHER HAND, SHRI SHELLEY JIDNAL, LE ARNED DR SUBMITTED THAT THERE WAS INORDINATE DELAY IN FILING THE APPEA L BEFORE THE TRIBUNAL. HE FURTHER SUBMITTED THAT EVERY DAY OF DELAY MUST B E EXPLAINED BY THE ASSESSEE. ACCORDINGLY, IT WAS SUBMITTED THAT DELAY IN FILING THE APPEAL MAY NOT BE CONDONED. ITA NO.907 TO 913/AHD/2009 MANSI BUILDERS LIMITED 4 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS TRUE THAT THE REASONS GIVEN BY THE ASSESSEE FOR DELAY IN FILING THE APPEAL HAVE NOT BE EN CONTROVERTED BY THE LEARNED DR. IN THE FACTS AND CIRCUMSTANCES OF THE P RESENT CASE, WE ARE OF THE VIEW THAT THE ASSESSEE WAS PREVENTED BY SUFFICI ENT CAUSE FROM FILING THE APPEAL BEFORE THE TRIBUNAL. IT IS SETTLED LAW T HAT THE PHRASE SUFFICIENT CAUSE IS NOT A QUESTION OF PRINCIPLE BUT IT IS A Q UESTION OF FACT. HENCE, WHETHER TO CONDONE THE DELAY OR NOT, DEPENDS UPON T HE FACTS AND CIRCUMSTANCES OF EACH CASE. HENCE, SUFFICIENT CAUS E FOR CONDONATION OF DELAY DEPENDS ON THE FACTS AND CIRCUMSTANCES PLACED BY THE APPLICANT BEFORE THE AUTHORITIES CONCERNED. WE DO NOT FIND AN Y MERITS IN THESE CONTENTIONS OF THE LEARNED DR THAT THERE IS INORDIN ATE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL. IT IS WELL SETTLED LAW THAT LENGTH OF DELAY IS NOT THE MATTER IN THE CONTEXTS OF CONDONATION OF DE LAY. IN OUR VIEW, IN THE MATTER OF CONDONATION OF DELAY, IT SHOULD BE EXERCI SED LIBERALLY. IN THE CASE OF COLLECTOR, LAND ACQUISITION VS MST. KARTIJI (1987) 167 ITR 471, THE HONBLE SUPREME COURT HAS LAID DOWN AS UNDER: THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACTING SECTION 5 OF THE LIMITATION ACT OF 1963 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PART IES BY DISPOSING OF MATTERS ON DE MERITS '. THE EXPRESSION SUFFICIENT CAUSE ' EMPLOYED BY THE LEGISLATURE IS ADEQUATELY E LASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUB-SERVES THE ENDS OF JUSTICE THAT BEING THE LIFE PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COUR TS. IT IS COMMON KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL APPROACH IN MATTERS INSTITUTED IN THIS COURT. BUT THE MESSAGE DOES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHER COURTS IN THE HIERARCHY. AND SUCH A LIBERAL APPROACH IS ADOPTED ON PRINCIPLE AS IT IS REALIZED THAT: 1. ORDINARILY, A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. ITA NO.907 TO 913/AHD/2009 MANSI BUILDERS LIMITED 5 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND C AUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS, WHEN DELAY IS CONDONED, THE HIGHEST THAT CAN HAPPEN IS THAT A CAU SE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. 3. ' EVERY DAY'S DELAY MUST BE EXPLAINED DOES NOT MEAN THAT PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOU R'S DELAY, EVERY SECOND'S DELAY? THE DOCTRINE MUST BE A PPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE O F A NON DELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT, HE RUNS SERIOUS RISK. 6. IT MUST BE GRASPED THAT 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 INJUSTICE AND IS EXPECTED TO DO SO. 6. IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE S UPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION (SUPRA), WE ARE OF THE VIEW THAT THERE WAS SUFFICIENT CAUSE FOR FILING THE APPEAL LATE BY 249 DAYS. ACCORDINGLY, WE CONDONE THE DELAY IN FILING THE APPEAL. 7. AS REGARDS THE MERITS OF THE CASE, THE AO LEVIED PENALTY OF RS.50,000/- IN EACH YEAR U/S 271 (1) (B) OF THE ACT FOR NON-COMPLIANCE OF THE NOTICES ISSUED U/S 142(1) OF THE ACT. 8. ON APPEAL, THE CIT(A) CONFIRMED THE PENALTY OF R S.50,000/- LEVIED BY THE AO IN EACH ASSESSMENT YEAR. 9. AT THE VERY OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) HAS PASSED THE IMPUGNED ORDER WITHO UT AFFORDING ITA NO.907 TO 913/AHD/2009 MANSI BUILDERS LIMITED 6 ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . THE RELEVANT PORTION OF THE ORDER OF CIT(A) ARE AS UNDER: 5. THE FIRST NOTICE OF HEARING IN THE CASE WAS GIV EN ON 21.3.07 FIXING THE CASE FOR 12.4.07. ON 12.4.07, ON THE BASIS OF A LETTER OF ADJOURNMENT FOR EACH YEAR, THE CASES WERE ADJOURNED FOR 26.4.07. HOWEVER, ON THAT DATE, NONE ATTENDED NOR ANY WRITTEN REPLY FILED. THEREAFTER, TWO MORE O PPORTUNITIES WERE GIVEN TO THE APPELLANT, VIDE NOTICES DATED 7.3 .08 AND 29.4.08 FIXING THE CASE FOR 29.4.08 AND 8.5.08. BUT IN BOTH THE OCCASIONS, NEITHER THE ASSESSEE NOT HIS REPRESENTAT IVE ATTENDED THE PROCEEDINGS NOR WAS ANY WRITTEN REPLY FILED FOR ANY OF THE YEARS, FROM 1999-2000 TO 2005-06. THIS S HOWS THAT THE APPELLANT DOES NOT WANT TO AVAIL OF THE OPPORTU NITIES GIVEN TO HIM. OTHERWISE, TOO, THE HISTORY OF THE ASSESSEE SHOWS THAT HE IS NOT COOPERATIVE IN ATTENDING TO HIS INCOME TA X PROCEEDINGS. THEREFORE, WITHOUT WAITING FOR LONG, T HE APPEALS ARE BEING DECIDED EXPARTE ON MERITS. 10. THE LEANED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ORDER OF THE CIT(A) MAY BE SET ASIDE AND THE MATTER MAY BE R ESTORED TO THE FILE OF CIT(A) WITH A DIRECTION TO DECIDE ALL THE APPEALS A FRESH ON MERITS AFTER AFFORDING DUE AND REASONABLE OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. ON THE OTHER HAND, SHRI SHELLEY JINDAL, LEARNED DR STRONGLY OPPOSED THE ABOVE CONTENTIONS OF THE LEARNED COUNSEL FOR THE AS SESSEE. 11. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES AT LENGTH. IT IS OBSERVED THAT THE LEARNED CIT(A) HAS DECIDED THE APPEALS OF THE ASSESSEE EXPARTE. AFTER PERUSAL OF THE IMPUGNED ORDER IT WOULD BE CLEAR THAT THE CIT(A) HAS NOT PROVIDED ADEQUATE OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE APPEALS. IN OUR OPINION, THE CIT(A) SHOULD HAVE AFFORDED ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE APPEALS. IN THE CASE O F RADHIKA CHARAN BANERJEE VS. SAMBALPUR MUNICIPALITY, AIR (1979) ORI SSA 69, THE HONBLE ORISSA HIGH COURT HELD THAT A RIGHT OF APPEAL WHERE VER CONFERRED INCLUDES A RIGHT OF BEING AFFORDED AN OPPORTUNITY OF BEING H EARD, IRRESPECTIVE OF THE LANGUAGE CONFERRING SUCH RIGHT. THAT IS A PART AND PARCEL OF THE PRINCIPLE ITA NO.907 TO 913/AHD/2009 MANSI BUILDERS LIMITED 7 OF NATURAL JUSTICE. WHERE AN AUTHORITY IS REQUIRED TO ACT IN A QUASI- JUDICIAL CAPACITY, IT IS IMPERATIVE TO GIVE THE APP ELLANT AN ADEQUATE OPPORTUNITY OF BEING HEARD BEFORE DECIDING THE APPE AL. 12. THUS, CONSIDERING THE ENTIRE FACTS OF THE PRES ENT CASE, WE THINK IT PROPER TO SET ASIDE THE ORDER OF THE LEARNED CIT(A) IN TOTO AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO DECIDE THE A PPEALS AFRESH ON MERITS IN ACCORDANCE WITH LAW AFTER AFFORDING DUE AND REAS ONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 13. FOR STATISTICAL PURPOSES, ALL THE APPEALS ARE A LLOWED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18-09 -2009 SD/- SD/- (N. S. SAINI) ACCOUNTANT MEMBER (H. L. KARWA) JUDICIAL MEMBER DATE : 18-09-2009 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD