Sh. Yuvraj Mahajan, Chandigarh V. ITO, Chandigarh

ITA 958/CHANDI/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8360 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 05-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Opportunity of being heard; Period of limitation; Additional evidence; Time period of passing order; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.958/CHD/2014 ( ASSESSMENT YEAR : 2009-10) SH.YUVRAJ MAHAJAN VS. THE INCOME TAX OFFICER, H.NO. 1436, SECTOR 22-B, WARD 3(3), CHANDIGARH. CHANDIGARH. PAN: AFRPM3676C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 17.02.2016 DATE OF PRONOUNCEMENT : 17.03.2016 O R D E R PER RANO JAIN, A.M . : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), CHANDIGARH DATED 20.12.2012. 2. THE REGISTRY HAS INFORMED THAT THERE IS DELAY O F 625 DAYS IN FILING THE APPEAL. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO THE APPLICATION FOR CONDONATIO N OF DELAY FILED BY THE ASSESSEE. THE CONTENTS OF WHICH ARE AS UNDER : 2 1. THAT THE ABOVE INCOME TAX APPEAL AGAINST THE ORD ER DATED 20 12.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS), CHANDIGARH WAS FILED ON 05.11.2014 WHICH WAS LATE BY 625 DAYS. 2. THAT THE APPELLATE ORDER WAS RECEIVED ON 20.12.20 12 AND AS SUCH THE APPEAL WAS TO BE FILED BY 19.02.2013. 3. THAT SHRI CHAMAN LAI SHARMA, ADVOCATE MY LOCAL COUNSEL HAD DEPOSITED THE REQUISITE FEE OF RS.10,000/- FOR FILING THE APPEAL IN THE HONBLE I.T.A.T. ON 30.01.2013. 4. THAT DUE TO ROOF LEAKAGE IN THE RECORD ROOM OF THE OFFICE OF SHRI CHAMAN LAL SHARMA, ADVOCATE THE FILES WERE SHIFTED TEMPORARILY AND MY CASE FILE GOT TIED UP WITH THE BUNDLE OF SOME OTHER CLIENT AND APPEAL COULD NOT B E FILED. 5. THAT I VISITED THE OFFICE OF SHRI CHAMAN LAI SHARMA, ADVOCATE WITH THE RECOVERY SUMMONS DATED 29.10.2014 TO ENQUIRE ABOUT THE STATUS OF MY APPEAL AND I WAS UNDER THE IMPRESSION THAT THE APPEAL HAS BEEN FILED. HE IMMEDIATELY STARTED SEARCHING THE FILE AND AFTER FINDING THE SAME REALIZED THAT THE APPEAL NOT BEEN FILED TILL DATE, THOUGH THE SAME WAS PREPARED IN TIME. 6. THAT THE APPEAL IN MY CASE COULD NOT BE FILED IN TIM E BEFORE THE HON'BLEI TAT, CHANDIGARH BENCH, CHANDIGARH DUE TO AN OVERSIGHT IN HIS OFFICE. 7. THAT IMMEDIATELY CORRECTIVE MEASURES WERE INITIATE D AND THE APPEAL WAS FILED THOUGH BELATEDLY ON 05.11.2014. 8. THAT THERE BEING NO MALA FIDE INTENTION OF NOT F ILING THE APPEAL IN TIME IN AS MUCH AS THE APPEAL FEE WAS ALSO FILED WITHIN THE LIMITATION PERIOD, IT IS PRAYED THAT THE DELAY BE CONDONED. 3 9. THAT THE AFFIDAVIT OF SHRI CHAMAN LAI SHARMA, ADVOC ATE IS ENCLOSED HEREWITH. 3. IN VIEW OF THE ABOVE, THE LEARNED COUNSEL FOR T HE ASSESSEE ARGUED THAT THERE IS A SUFFICIENT CAUSE WH ICH WAS NOT UNDER THE CONTROL OF THE ASSESSEE BECAUSE OF WH ICH THERE WAS A DELAY OF 625 DAYS IN FILING THE APPEAL. IT WAS VEHEMENTLY ARGUED THAT IT WAS NEVER THE INTENTION O F THE ASSESSEE NOT TO FILE THE APPEAL IN TIME AS IS EVIDE NT FROM THE COUNTER FOIL OF THE CHALLAN FOR APPEAL FEE DEPO SITED BY THE ASSESSEE, WHICH IS DATED 30.1.2013 AND ALSO IT CAN BE SEEN FROM FORM NO.36 THAT THE ASSESSEE HAD SIGNED T HE VERIFICATION ON THIS FORM AS ON 25.1.2013. THEREFO RE, IT WAS PRAYED THAT THE DELAY BE CONDONED. THE AFFIDAV IT OF THE ADVOCATE WITH REGARD TO THE OVERSIGHT IN HIS OF FICE WAS ALSO FILED WITH THE APPLICATION FOR CONDONATION OF DELAY. 4. THE LEARNED D.R. VEHEMENTLY OPPOSED THE CONDONATION OF DELAY. HIS ARGUMENT WAS THAT THE DE LAY IS INORDINATE AND IT IS OF 625 DAYS AND REASONS GIVEN IN THE APPLICATION FOR CONDONATION OF DELAY DOES NOT PROVE THAT THERE WAS SUFFICIENT CAUSE BEFORE THE ASSESSEE FOR NOT FILING THE APPEAL IN TIME. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE APPLICATION FOR CONDONATION OF DELAY, WE OBSERVE TH AT THERE IS A DELAY OF 625 DAYS IN FILING THE APPEAL BEFORE THE 4 TRIBUNAL, WHICH IS QUITE AN INORDINATE DELAY. HOWE VER, IT IS ALSO OBSERVED THAT THE FORM NO.36 IS SIGNED BY T HE ASSESSEE AS ON 25.1.2013 AND ALSO THE COUNTER FOIL OF CHALLAN FOR FILING THE APPEAL FEE IS ALSO DATED 30. 1.2013, WHICH PROVES THAT THE APPEAL FEE WAS DEPOSITED WELL IN TIME AND THE REASON FOR DELAY IN FILING THE APPEAL IS STATED TO BE CERTAIN CONTINGENCIES APPEARING IN THE OFFICE OF THE ADVOCATE AND FOR THIS AN AFFIDAVIT OF SHRI CHAMAN L AL SHARMA, ADVOCATE OF THE ASSESSEE HAS ALSO BEEN FILE D. 6. BEFORE US, THE DEPARTMENT COULD NOT CONTROVERT THE CONTENTS OF THE SAID AFFIDAVIT. THE ONLY REASO N STATED BY THE LEARNED D.R. PRAYING FOR NOT CONDONING THE D ELAY IS THAT THE CIRCUMSTANCES STATED IN THE APPLICATION AS WELL AS IN THE AFFIDAVIT DOES NOT SEEM REAL. HOWEVER, WE F EEL THAT THESE TYPE OF CONTINGENCIES CAN BE BROUGHT ON RECOR D ONLY BY MEANS OF AN AFFIDAVIT OF THE CONCERNED AND SAME ARE TO BE CONSIDERED TRUE UNLESS REBUTTED BY THE OTHER PAR TY. 7. IT HAS BEEN CONSISTENTLY HELD BY THE HON'BLE APEX COURT IN A NUMBER OF CASES THAT IN THE MATTER OF CONDONATION OF DELAY, A LIBERAL AND PRAGMATIC VIEW SHOULD BE TAKEN BY THE COURTS. FURTHER, IT IS ALSO EQUALL Y WELL SETTLED THAT WHEN TECHNICALITIES AND SUBSTANTIAL JU STICE ARE PITTED AGAINST EACH OTHER, THE COURT WILL ALWAY S LEAN IN FAVOUR OF SUBSTANTIAL JUSTICE. THE INCOME TAX A CT HAS SURELY PROVIDED A LIMIT FOR FILING THE APPEAL BEFORE THE 5 INCOME TAX TRIBUNAL. HOWEVER, AS PER PROVISIONS OF SECTION 253(5), THE I.T.A.T. HAS ALSO BEEN GIVEN PO WERS TO CONDONE THE DELAY. IN THIS WAY, THE DISCRETION HAS BEEN GIVEN TO THE I.T.A.T. TO CONDONE THE DELAY IN CASES WHERE SUFFICIENT CAUSE IS PROVED BY THE DEFAULTER. 8. IN THE CASE OF VEDABAI ALIAS VAIJAYANATABAI BABURAO PATIL VS. SHANTARAM BANURAO PATIL & ORS. (2 002) 253 ITR 798 (SC), THE HON'BLE SUPREME COURT HELD AS UNDER : 'IN EXERCISING DISCRETION UNDER S. 5 OF THE LIMITATION ACT, 1963, TO CONDONE DELAY FOR SUFFICIENT CAUSE IN NOT PREFER RING AN APPEAL OR OTHER APPLICATION WITHIN THE PERIOD PRESCRI BED, COURTS SHOULD ADOPT A PRAGMATIC APPROACH. A DISTINC TION MUST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDINAT E AND A CASE WHERE THE DELAY IS OF A FEW DAYS. WHEREAS IN TH E FORMER CONSIDERATION OF PREJUDICE TO THE OTHER SIDE WILL BE A RELEVANT FACTOR AND CALLS FOR A MORE CAUTIOUS APPROACH, IN THE LA TTER CASE NO SUCH CONSIDERATION MAY ARISE AND SUCH A CASE DES ERVES A LIBERAL APPROACH. NO HARD AND FAST RULE CAN BE LAID DO WN IN THIS REGARD. THE COURT HAS TO EXERCISE ITS DISCRETION ON THE FACTS OF EACH CASE KEEPING IN MIND THAT IN CONSTRUI NG THE EXPRESSION 'SUFFICIENT CAUSE' THE PRINCIPLES OF ADV ANCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANCE. THE EXPRESS ION 'SUFFICIENT CAUSE' SHOULD RECEIVE A LIBERAL CONSTRUCTION. ' 9. IN THE CASE OF BHARAT AUTO CENTER VS. CIT (2006 ) 282 ITR 366, THE HON'BLE ALLAHABAD HIGH COURT OBSER VED THAT THE LAW OF LIMITATION IS ENSHRINED IN THE MAXIM INTEREST REIPUBLICAE UT SIT FINIS LITIUM (IT IS FOR THE GENERAL 6 WELFARE THAT A PERIOD BE PUT TO LITIGATION). RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHTS OF T HE PARTIES, RATHER THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME . 10. FURTHER, IN THE CASE OF COLLECTOR, LAND ACQUISITION & ANR. VS. MST. KATIJI & ORS. (1987) 62 CTR (SC)(SYN) 23 : 1987 (28) ELT 185 (SC), THE SUPREME COURT HELD THAT THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACTING S. 5 OF THE INDIAN LIMITA TION ACT OF 1963 IN ORDER TO ENABLE THE COURTS TO DO SUBSTAN TIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON MERIT S. THE EXPRESSON 'SUFFICIENT CAUSE' EMPLOYED BY THE LEGISL ATURE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY TH E LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUS TICE THAT BEING THE LIFE-PURPOSE FOR THE EXISTENCE OF TH E INSTITUTION OF COURT . 11. APPLYING THE ABOVE JUDICIAL PRONOUNCEMENTS TO THE PRESENT CASE, WE SEE THAT IT IS A FACT THAT THE DELAY IS ENORMOUS. HOWEVER, THE REASON HAS BEEN STATED IN T HE FORM OF AN AFFIDAVIT OF THE ADVOCATE, WHICH HAS NOT BEEN REBUTTED BY THE DEPARTMENT AND IN CASE THE DELAY IS CONDONED, NO PREJUDICE IS CAUSED TO THE DEPARTMENT. IN VIEW OF THIS, WE ARE INCLINED TO CONDONE THE DELAY IN FILING THE APPEAL AND PROCEED TO ADJUDICATE THE APPEAL ON MERITS. 7 12. THE ASSESSEE HAS RAISED FOUR GROUNDS OF APPEAL . HOWEVER, THE LEARNED COUNSEL FOR THE ASSESSEE PREFE RRED NOT TO PRESS GROUND NOS. 1 AND 2. THEREFORE, GROUN D NOS.1 AND 2 ARE DISMISSED AS BEING NOT PRESSED. 13. GROUND NO.3 OF THE APPEAL RAISED BY THE ASSESSEE READS AS UNDER : 3. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) I S NOT JUSTIFIED IN UPHOLDING THE ORDER OF THE LD. ASSESSING OFFICER REGARDING ADDITION OF RS.17,00,000/- U/S 69A OF THE INCOME TAX ACT 1961 ON ACCOUNT OF AMOUNT DEPOSITED IN THE SAVING BANK WITH BANK OF BARODA AS THESE AMOUNT WAS RECEIVED FROM OLD OUTSTANDING DEBTORS. THIS ADDITION IS HIGH LY UNCALLED FOR AND DESERVES TO BE DELETED AS IT HAS BEING MADE MERELY ON SURMISES AND CONJECTURES. 14. BRIEFLY, THE FACTS ARE THAT THE ASSESSING OFFI CER NOTICED THAT THERE WERE SOME FRESH DEPOSITS OF RS.1 7 LACS IN THE SAVING BANK ACCOUNT OF THE ASSESSEE WITH BAN K OF BARODA. 15. BEFORE THE ASSESSING OFFICER, IT WAS SUBMITTED THAT THE ASSESSEE HAD GOT AN AGENCY OF SINGER INDIA LTD. FOR DISTRIBUTION OF THEIR PRODUCTS IN EARLIER YEARS . HE HAS INVESTED A SUM OF RS.47 LACS IN THE YEAR 2003 AND D UE TO SLUMP IN THE MARKET AND DISPUTE WITH THE COMPANY AL L THE STOCKS LYING REMAINED AS UNSOLD AND WITH GREAT DIFF ICULTY, THE SAME WAS CLEARED AND THE AMOUNT REMAINED RECEIV ABLE 8 FROM DIFFERENT PARTIES AND AGAIN WITH GREAT DIFFICU LTY. SUBSEQUENTLY, THESE WERE COLLECTED AND DURING THE Y EAR THE ASSESSEE HAD RECEIVED A SUM OF RS.17,24,000/- F ROM OLD OUTSTANDING DEBTORS. NOT SATISFIED WITH THE SUB MISSION OF THE ASSESSEE, THE ASSESSING OFFICER MADE ADDITIO N OF RS.17 LACS UNDER SECTION 69A OF THE ACT. 16. BEFORE THE LEARNED CIT (APPEALS) ALSO, THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER AND FILED BALANCE SHEET OF M/S MA HAJAN ELECTRONICS FOR THE PRECEDING YEAR AND FOR THIS YEA R. AS PER THE LEARNED CIT (APPEALS), THE ASSESSEE DID NOT FILE ACCOUNTS OF THE DEBTORS AND IN THE ABSENCE OF ANY S UCH INFORMATION, HE HELD THAT IT CANNOT BE SAID THAT TH E SOURCE OF CASH DEPOSITS WAS IN FACT, THE MONEY RECEIVED FR OM THE DEBTORS. IN THIS WAY, THE ADDITION WAS SUSTAINED B Y THE LEARNED CIT (APPEALS). 17. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSE E FILED AN APPLICATION FOR ADMISSION OF ADDITIONAL EV IDENCES. THE CONTENTS OF THE APPLICATION ARE AS UNDER : THE ABOVEMENTIONED APPEAL IS FIXED FOR HEARING ON T HE 3 RD OF DECEMBER. 2015. THERE IS ONE ADDITION OF RS.17,00,0 00/- WHICH IS UNDER CHALLENGE IN GROUND NO. 3 BEFORE THE HON'B LE BENCH. IT WAS EXPLAINED DURING THE COURSE OF ASSESSMENT AS WE LL AS APPELLATE PROCEEDINGS THAT THE ASSESSEE WAS AN AGEN T OF M/S SINGER INDIA LIMITED IN THE YEAR 2003 AND HAD INVES TED RS.47 LACS IN THE STOCK . THERE WAS A SLUMP IN THE MARKET A ND THE STOCK REMAINED UNSOLD. THIS STOCK WAS SOLD WITH GREAT DIF FICULTY AND THE AMOUNT DEPOSITED IN THE BANK WAS IN RESPECT OF OLD RECOVERIES FROM DEBTORS. THIS WAS EXPLAINED TO THE A SSESSING 9 OFFICER AS WELL AS THE COMMISSIONER OF INCOME TAX (A PPEALS) THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE EXPLANATION OF THE ASSESSEE FOR WANT OF DOCUMENTARY EVIDENCE IN THE FORM OF COPIES OF ACCOUNT. COPIES OF ACCOUNT OF THE DEBTORS ALONGWITH THE BILLS AVAILABLE WITH THE ASSESSEE ARE BEING PLACED ON RECORD AS ADDITIONAL EVIDENCE AS IT WAS OLD RECO RD AND COULD NOT BE TRACED IMMEDIATELY. 18. THE LEARNED D.R. OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCES. 19. AFTER GOING THROUGH THE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCES FILED BY THE LEAR NED COUNSEL FOR THE ASSESSEE, WE SEE THAT IT CONTAINS C OPIES OF ACCOUNT OF DEBTORS ALONGWITH THE BILLS. THE CONTEN TION OF THE ASSESSEE BEFORE THE LOWER AUTHORITIES HAD ALL A LONG BEEN THAT THE DEPOSITS IN BANK WERE OUT OF RECOVERI ES FROM OLD DEBTORS. THE FACTS CITED BY THE LEARNED COUNSE L FOR THE ASSESSEE ARE THAT THE ASSESSEE GOT AN AGENCY OF SIN GER INDIA LTD. IN THE YEAR 2003. HOWEVER, DUE TO SLUMP IN MARKET, NO BUSINESS WAS DONE AFTER 31.3.2004. IN T HE PRECEDING FINANCIAL YEAR 2008-09, THE RECOVERIES AR E ALLEGED TO BE MADE OUT OF THE DEBTORS ARISING IN TH IS PERIOD. THE LEARNED CIT (APPEALS) HAD CONFIRMED THE ADDITION IN THE ABSENCE OF COPY OF ACCOUNTS OF DEBT ORS AND BILLS. IN VIEW OF THIS, WE OBSERVE THAT THESE EVID ENCES NOW FILED BEFORE US, GOES TO THE ROOT OF THE ISSUE INVO LVED AND SINCE THE DOCUMENTS RELATED TO AN OLD PERIOD, IT CA N ALSO BE ACCEPTED THAT THE ASSESSEE TOOK TIME IN COMPILIN G THE SAME. IN THE INTEREST OF JUSTICE, WE ARE INCLIN ED TO ADMIT THESE ADDITIONAL EVIDENCES AND SEND TH E 10 MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO ADJUDICATE THE ISSUE IN VIEW OF THESE EVIDENCES AND EXPLANATION GIVEN BY THE ASSESSEE AND DECIDE THE AP PEAL AS PER LAW. NEEDLESS TO ADD THAT THE ASSESSEE BE G IVEN A PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD. 20. THE GROUND NO.4 RAISED BY THE ASSESSEE IS GENERAL AND NEEDS NO ADJUDICATION. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF MARCH, 2016. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 17 TH MARCH, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE D R. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 11