Appeal details
Counselvise Citation
[2011] 124 COUNSELVISE.COM (IT) 8472 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 9 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
30-03-2011
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
J
Next Hearing Date
24-03-2011
Assessment Year
misc
Appeal Filed On
22-06-2009
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI D.K. AGARWAL (J.M.) AND SHRI T.R. SOOD ( A.M.) IT (SS) A NO. 134/MUM /2007 BLOCK PERIOD 01.04.1995 TO 20.03.2002 IT (SS) A NO. 71/MUM /2009 BLOCK PERIOD 01.04.1995 TO 20.03.2002 S HIKHARCHAND MOHANLAL PAHARIA HUF, JAI HIND ESTATE NO. 2A, 2 ND FLOOR, DR. A.M. ROAD, BHULESHWAR, MUMBAI 400 002. PAN : AAAHP0510J VS. A.C.I.T. 14(1), INCOME TAX OFFICE, EARNEST HOUSE, 2 ND FLOOR, MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHOK SHARMA RESPONDENT BY : SHRI SUMEET KUMAR O R D E R PER BENCH. THESE TWO APPEALS PREFERRED Y THE ASSESSEE ARE DIRE CTED AGAINST TWO SEPARATE ORDERS PASSED BY THE LD. CIT (A) DATED 5.7 .2007 & 20.4.2009 PERTAINING TO THE BLOCK PERIOD 1.4.1995 TO 20.3.200 2. BOTH THESE APPEALS ARE HEARD TOGETHER AND DISPOSED BY THIS COMMON ORDE R FOR THE SAKE OF CONVENIENCE. IT(SS)A NO. 134/MUM/2007. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE AN HUF DERIVES INCOME FROM RESALE OF TEXTILE CLOTH ON WHOL ESALE BASIS. A SEARCH AND SEIZURE ACTION WAS CONDUCTED U/S 132 OF THE INC OME TAX ACT, 1961 IT (SS)A NO.134/M/2007 & IT(SS)A 71/M/2009 SHRI SHIKHARCHAND MOHANLA L PAHARIA HUF 2 (THE ACT) AT THE RESIDENTIAL AND BUSINESS PREMISES OF SHRI ROSHANLAL AGARWAL ON 19.3.2002. DURING THE COURSE OF SEARCH P ROCEEDING, INCRIMINATING DOCUMENT RELATING TO A LOAN TRANSACTI ON BETWEEN SHRI SHIKHARCHAND PAHARIA (HUF), PROPRIETOR OF M/S VARUN ENTERPRISES AND MR. ROSHANLAL AGARWAL WAS FOUND AND SEIZED. ON REC EIPT OF INFORMATION FROM THE OFFICE OF THE ADDL. CIT, CENTRAL RG. IX, M UMBAI, THE A.O. ISSUED NOTICE U/S 158 BD OF THE ACT. IN RESPONSE TO THIS, THE ASSESSEE FILED RETURN DECLARING UNDISCLOSED INCOME AT ` NIL WHICH WAS SUBSEQUENTLY REVISED AT THE SAME INCOME I.E. ` NIL. IN RESPONSE TO NOTICES ISSUED U/S 143(2)/142(1) ALONG WITH QUESTIONNAIRE, SHRI V.R. S AMDARIA, C.A., AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED FROM TIME TO TIME AND FILED THE DETAILS AND CASE WAS DISCUSSED WITH HIM. ON PERUSAL OF THE SEIZED PAPER BEING PAGE NO. 52 OF A/2, THE A.O. NOT ED THAT SHRI SHIKHARCHAND PAHARIA HAD RECEIVED A SUM OF ` 3 LACS ON 15.3.2002 AS LOAN FROM SHRI ROSHANLALJI AGARWAL. A STATEMENT OF SHRI SHIKHARCHAND PAHARIA WAS RECORDED ON 6.4.2004 WHEREIN IN ANSWER TO QUESTION NO. 2, IT HAS BEEN, INTER ALIA, STATED THAT THE AMOUNT OF LOAN WAS NEVER RECEIVED BY HIM ON BEHALF OF M/S VARUN ENTERPRISES. AGAIN I T WAS CLARIFIED BY THE ASSESSEE VIDE LETTER DATED NIL THAT AS PER THE PRAC TICE PREVAILING IN THE MARKET FOR AVAILING THE ADVANCES, AN ADVANCE RECEIP T HAS TO BE SENT THROUGH BROKER AND THEREAFTER THE AMOUNT IS GIVEN. IN THE CASE OF THE ASSESSEE THOUGH THE RECEIPT WAS GIVEN/SENT, BUT THE AMOUNT WAS NOT RECEIVED THROUGH THE BROKER BY THE ASSESSEE. IT WA S FURTHER SUBMITTED THAT SHRI ROSHANLAL AGARWAL HAS ALREADY BEEN TAXED AND HENCE ASSESSING OF ALREADY TAXED INCOME TWICE IS AGAINST THE PRINCI PLE OF NATURAL JUSTICE. THE A.O. VERIFIED THIS FACT FROM THE BLOCK ASSESSME NT ORDER PASSED U/S 158BC IN THE CASE OF SHRI ROSHANLAL AGARWAL AND NOT ED THAT SHRI ROSHANLAL AGARWAL HAS OFFERED UNEXPLAINED ADVANCE T O THE EXTENT OF ` 31,85,153/- WHEREIN THE NAME OF M/S VARUN ENTERPRIS ES IS APPEARING AT SL. NO. 31 OF THE LIST OF THE PERSONS TO WHOM HE HA S MADE UNEXPLAINED IT (SS)A NO.134/M/2007 & IT(SS)A 71/M/2009 SHRI SHIKHARCHAND MOHANLA L PAHARIA HUF 3 ADVANCES. IN VIEW OF THE ABOVE, THE A.O. OBSERVED THAT LOAN TRANSACTION HAS BEEN TAKEN PLACE BETWEEN THE ASSESSEE AND SHRI ROSHANLAL AGARWAL NOT RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSE E. SINCE THE ASSESSEE HAS MADE LOAN TRANSACTION IN CASH IN CONTRAVENTION TO THE PROVISIONS OF SECTION 269SS OF THE ACT, THE A.O. INITIATED PROCEE DINGS U/S 271D OF THE ACT AND ACCORDINGLY COMPLETED THE ASSESSMENT ON A T OTAL UNDISCLOSED INCOME OF ` NIL VIDE ORDER DATED 20.12.2006 PASSED U/S 158BD /143(3) OF THE ACT. 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) WHICH WAS DELAYED BY ABOUT 5 MONTHS. IT WAS STATED THAT COPY OF THE ASSESSMENT ORDER FROM THE A.OS OFFICE WAS RECEIVED BY THE APPELLANTS C.A. SHRI VIJAIRAJ SAMDARIA ON 27.12.20 06 AND THE SAME WAS KEPT BY HIM. THE APPELLANT CAME TO KNOW THAT THE A .O. HAD PASSED THE ASSESSMENT ORDER ONLY ON 22.6.2007 WHEN THE APPELLA NT RECEIVED THE SHOW CAUSE NOTICE DATED 21.6.2007 U/S 274 R./W.S. 2 71-D. IT WAS SUBMITTED THAT IN THE CIRCUMSTANCES, THE APPELLANT WAS PREVENTED FROM FILING THE APPEAL AGAINST THE ASSESSMENT ORDER WITH IN THE TIME UNDER THE ACT. IT WAS THEREFORE REQUESTED THAT THE DELAY IN FILING THE APPEAL DESERVES TO BE CONDONED. AT THE TIME OF HEARING OF THE APPEAL BEFORE THE LD. CIT(A), AN AFFIDAVIT FROM THE C.A. SHRI VIJAIRA J SAMDARIA WAS ALSO FILED AFFIRMING THAT HE HAD RECEIVED THE COPY OF THE ASSE SSMENT ORDER AND THE NOTICE OF DEMAND ON 27.12.2006 BUT DID NOT HANDOVER THE SAME TO THE ASSESSEE PRIOR TO 22.6.2007. IT WAS FURTHER STATED THAT AFTER HAVING A CONFERENCE WITH THE COUNSEL, THE ASSESSEE WAS ADVIS ED TO FILE APPEAL BELATEDLY BEFORE THE CIT(A) AGAINST THE ORDER PASSE D BY THE A.O. HOWEVER, THE LD. CIT(A) OBSERVED THAT THE REASON GI VEN FOR THE DELAY IN FILING THE APPEAL IS ATTRIBUTED TO THE LAPSE ON THE PART OF THE C.A. IN NOT HANDING OVER THE ASSESSMENT ORDER TO THE APPELLANT HAS NO JUSTIFICATION FOR CONDONATION OF DELAY AS THE C.A. IS DULY AUTHOR IZED BY THE APPELLANT IT (SS)A NO.134/M/2007 & IT(SS)A 71/M/2009 SHRI SHIKHARCHAND MOHANLA L PAHARIA HUF 4 TO RECEIVE THE SERVICE OF ASSESSMENT ORDER AND THE SERVICE OF THE ASSESSMENT ORDER ON THE C.A. IS DEEMED TO BE A SERV ICE ON THE APPELLANT. THUS, LEGALLY THE APPELLANT IS DEEMED TO HAVE RECEI VED THE ASSESSMENT ORDER AND NOTICE OF DEMAND ON 27.12.2006 ITSELF. T HE LD. CIT(A) WHILE DISBELIEVING THE CONTENTION OF THE APPELLANT THAT T HE APPELLANT DID NOT KNOW THAT THE ASSESSMENT ORDER WAS PASSED AND RECE IVED BY THE C.A. ON THE GROUND THAT THE CASE BEING A SEARCH AND SEIZURE , THE ASSESSMENT WAS FRAMED AFTER A NUMBER OF HEARINGS AND THE APPELLANT MUST HAVE BEEN FULLY AWARE OF THE LIMITATION INVOLVED IN FRAMING T HE ASSESSMENT ORDER HELD THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE SUCH A GREAT DELAY OF ABOUT 5 MONTHS IN FILING THE APPEAL WAS WI THOUT ANY SUFFICIENT CAUSE CANNOT BE CONDONED AND HENCE REJECTED THE ASS ESSEES PETITION FOR CONDONATION OF DELAY. 4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS IN REJECTING THE CONDONATION OF DELAY OF 180 DAYS AND VALIDITY OF TH E ORDER PASSED BY THE A.O. 5. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE WHILE REITERATING THE SAME SUBMISSIONS AS SUBMITTED BEFOR E THE A.O. AND LD. CIT(A) FILED A COPY OF THE AFFIDAVIT OF SHRI VIJAIR AJ SAMDARIA, C.A. OF THE ASSESSEE WHEREIN HE HAS CLEARLY STATED AN OATH THAT THE ASSESSMENT ORDER ALONG WITH NOTICE OF DEMAND WAS RECEIVED BY HIM ON 27.12.2006 AND THE SAME WAS NOT HANDED OVER TO THE CLIENT PRIOR TO 22. 6.2007, THAT IS ON 22.6.2007 HE HANDED OVER THE ASSESSMENT ORDER AND N OTICE OF DEMAND TO THE ASSESSEE. HE FURTHER SUBMITS THAT THE ASSESSEE IMMEDIATELY ON RECEIPT OF THE ASSESSMENT ORDER FROM HIS C.A. FILED THE APPEAL BEFORE THE LD. CIT(A) WITHIN THE TIME. HE, THEREFORE, FURTHER SUBMITS THAT THE ASSESSEE SHOULD NOT BE TREATED IN DEFAULT ON THE MI STAKE COMMITTED BY IT (SS)A NO.134/M/2007 & IT(SS)A 71/M/2009 SHRI SHIKHARCHAND MOHANLA L PAHARIA HUF 5 HIS C.A. AND, THEREFORE, THE DELAY, IF ANY, BE COND ONED. THE RELIANCE WAS ALSO PLACED ON THE DECISION IN COLLECTOR, LAND ACQU ISITION VS. MST. KATIJI AND OTHERS (1987) 167 ITR 471(SC). HE FURTHER SUBM ITS THAT SINCE THE LD. CIT(A) HAS NOT DECIDED THE ISSUE ON MERITS, THE REFORE, IN THE INTEREST OF JUSTICE, THE MATTER MAY BE SET ASIDE TO THE FILE OF THE LD. CIT(A) TO DECIDE THE SAME AFRESH ON MERITS. 6. ON THE OTHER HAND, THE LD. D.R. WHILE RELYING ON THE ORDER OF THE LD. CIT(A) SUBMITS THAT HE HAS NO OBJECTION IF ON MERI TS THE ISSUE IS SET ASIDE TO THE FILE OF THE LD. CIT(A). 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. WE FIND THAT SHRI VIJAIRAJ SAMDARIA, C.A. HAS FILED AN AFFIDAVIT BEFORE THE LD . CIT(A) WHICH READS AS UNDER:- AFFIDAVIT I, VIJAIRAJ SAMDARIA, AGED ABOUT 51 YEARS, S/O SHRI PUKHRAJ SAMDARIA, INDIAN INHABITANT AND PRESENTLY HAVING OFFICE AT 25 A, RUNGATA BHAWAN, 2 ND FLOOR, 94/100, SITARAM PODDAR MARG, FANASWADI -400 002, DO HEREBY SOLEMNLY AFFIRM AS UNDER: 1. THAT I AM A PRACTISING CHARTERED ACCOUNTANT AND HAN DLING THE TAX MATTERS OF SHIKHARCHAND MOHANLAL PAHARIA HUF. 2. THAT THE ASSISTANT COMMISSIONER OF INCOME TAX (A.O. ), 14(1) ISSUED THE NOTICE DATED 03.12.2004 U/S 158BC R.W.S. 158BD TO SHRI SHIKHARCHAND MOHANLAL PAHARIA HUF. 3. THAT IN COMPLIANCE TO THE SAID NOTICE MY CLIENT SHI KHARCHAND MOHANLAL PAHARIA HUF FILED THE RETURN OF INCOME IN FORM 2B, FOR THE BLOCK PERIOD 01.04.1995 TO 20.03.2002, DECLARING UN DISCLOSED INCOME AT ` NIL. 4. THAT I AM DULY AUTHORIZED BY MY CLIENT SHIKHARCHAND MOHANLAL PAHARIA HUF TO REPRESENT THE INCOME TAX MATTERS BEF ORE THE A.O. DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS, I HAD APPEARED IT (SS)A NO.134/M/2007 & IT(SS)A 71/M/2009 SHRI SHIKHARCHAND MOHANLA L PAHARIA HUF 6 BEFORE THE A.O. AS THE AUTHORIZED REPRESENTATIVE ON BEHALF OF MY CLIENT. 5. THAT THE A.O. HAD PASSED THE BLOCK ASSESSMENT ORDER ON 20.12.2006 AND I HAD PERSONALLY RECEIVED THE COPY OF ASSESSMEN T ORDER AND NOTICE OF DEMAND FROM A.O. ON 27.12.2006. 6. THAT I HAVE NOT HANDED OVER THE ASSESSMENT ORDER AN D NOTICE OF DEMAND TO MY CLIENT PRIOR TO 22.06.2007. 7. THAT ON 22.06.2007 I HAVE HANDED OVER THE ASSESSMEN T ORDER AND NOTICE OF DEMAND TO MY CLIENT. THEREAFTER WE HAD C ONFERENCE WITH THE COUNSEL WHO HAD ADVISED MY CLIENT TO FILE APPEAL BE LATEDLY BEFORE THE LEARNED CIT (A)-XIV, AGAINST THE ASSESSMENT ORDER P ASSED BY A.O. U/S 158BC R.W.S. 158BD. 8. I AM MAKING THIS AFFIDAVIT TO BRING THE CORRECT FAC TS ON RECORD. SOLEMNLY AFFIRMED AT MUMBAI THIS 2 JUL 2007. SD/- DEPONENT FROM THE AFORESAID AFFIDAVIT, WE FIND THAT SHRI VIJ AIRAJ SAMDARIA, C.A. HAS STATED THAT HE HAD PERSONALLY RECEIVED THE COPY OF IMPUGNED ASSESSMENT ORDER AND NOTICE OF DEMAND DATED 20.12.2006 ON 27.1 2.2006 AND HAS HANDED OVER THE SAME TO THE ASSESSEE ON 22.6.2007 A ND IMMEDIATELY THEREAFTER I.E. WITHIN 4 DAYS OF THE RECEIPT OF THE ASSESSMENT ORDER, THE ASSESSEE HAS FILED THE APPEAL BEFORE THE LD. CIT(A) , THERE IS NO MATERIAL TO SHOW THAT THE C.A. HAS GIVEN THE ASSESSMENT ORDE R PRIOR TO 22.6.2007 OR THE CONTENTS OF THE AFFIDAVIT FILED BY THE C.A. ARE FALSE OR UNTRUE. WITH REGARD TO THE ASSESSEES CONTENTION THAT THE ASSESS EE DID NOT KNOW THAT THE ASSESSMENT ORDER WAS PASSED AND RECEIVED BY THE C.A., THE LD. CIT(A) OBSERVED THAT THE SAME IS NOT TRUE ON THE GROUND TH AT THE CASE BEING SEARCH AND SEIZURE, THE ASSESSMENT WAS FRAMED AFTER A NUMBER OF HEARING AND THE APPELLANT MUST HAVE BEEN FULLY AWAR E ABOUT THE LIMITATION INVOLVED IN FRAMING THE ASSESSMENT ORDER . HOWEVER, WE FIND THAT FOR FILING OF THE APPEAL BEFORE THE FIRST APPE LLATE PARTY, THE LIMITATION INVOLVED IN FRAMING THE ASSESSMENT ORDER IS NOT REQ UIRED. THE ONLY REQUIREMENT IS TO FILE THE APPEAL WITHIN ONE MONTH FROM THE RECEIPT OF THE IT (SS)A NO.134/M/2007 & IT(SS)A 71/M/2009 SHRI SHIKHARCHAND MOHANLA L PAHARIA HUF 7 ASSESSMENT ORDER AND NOT THE LIMITATION IN COMPLETI NG THE ASSESSMENT. THEREFORE, THE FINDING RECORDED BY THE LD. CIT(A) I N THIS REGARD IS DEVOID OF ANY MERIT. 8. IN BHARAT AUTO CENTRE V. CIT AND ANOTHER [2006] 282 ITR 366 (ALL), THEIR LORDSHIPS HAVE CONSIDERED THE FOLLOWING JUDGM ENTS (PAGE 368): 9 . IN THE CASE OF COLLECTOR, LAND ACQUISITION V. MST. KATIJI REPORTED IN [1987] 167 ITR 471, H ONBLE SUPREME COURT HELD AS FOLLOWS (PAGE 472) : 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 PARTIES BY DISPOSING OF M ATTERS ON MERITS. THE EXPRESSION SUFFICIENT CAUSE EMPLOYED BY THE LEGIS LATURE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICETHAT BEING THE LIFE-PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COURTS. IT IS COMMO N KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL APPROAC H IN MATTERS INSTITUTED IN THIS COURT. BUT THE MESSAGE DOES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHER COURTS IN THE HIER ARCHY. AND SUCH A LIBERAL APPROACH IS ADOPTED ON PRINCIPLE AS IT IS R EALIZED THAT : 1. ORDINARILY, A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTI CE BEING DEFEATED. AS AGAINST THIS, WHEN DELAY IS CONDONED, THE HIGHEST T HAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING TH E PARTIES. 3. EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT M EAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOURS DELAY , EVERY SECONDS DELAY ? THE DOCTRINE MUST BE APPLIED IN A RATIONAL, COMMONSENSE AND PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTIC E DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DELAY. IT (SS)A NO.134/M/2007 & IT(SS)A 71/M/2009 SHRI SHIKHARCHAND MOHANLA L PAHARIA HUF 8 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MA LA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT, HE RUNS A SERIOUS RISK. 6. IT MUST BE GRASPED THAT THE JUDICIARY IS RESPECT ED NOT ON ACCOUNT OF ITS POWER TO LEGALISE INJUSTICE ON TECHNICAL GROUND S BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 10. IN N. BALAKRISHNAN V. M. KRISHNAMURTHY REPORTED IN [1998] 7 SCC 123 THE APEX COURT EXPLAINED THE SCOPE OF LIMITATIO N AND CONDONATION OF DELAY, OBSERVING AS UNDER (HEADNOTE) : THE PRIMARY FUNCTION OF A COURT IS TO ADJUDICATE T HE DISPUTE BETWEEN THE PARTIES AND TO ADVANCE SUBSTANTIAL JUSTICE. THE TIM E-LIMIT FIXED FOR APPROACHING THE COURT IN DIFFERENT SITUATIONS IS NO T BECAUSE ON THE EXPIRY OF SUCH TIME A BAD CAUSE WOULD TRANSFORM INTO A GOO D CAUSE. RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHTS OF P ARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTI CS, BUT SEEK THEIR REMEDY PROMPTLY. THE OBJECT OF PROVIDING A LEGAL REMEDY I S TO REPAIR THE DAMAGE CAUSED BY REASON OF LEGAL INJURY. THE LAW OF LIMIT ATION FIXES A LIFESPAN FOR SUCH LEGAL REMEDY FOR THE REDRESS OF THE LEGAL INJU RY SO SUFFERED. THE LAW OF LIMITATION IS THUS FOUNDED ON PUBLIC POLICY. 11. IN SHANKARRAO V. CHANDRASENKUNWAR REPORTED IN [1987 ] SUPP SCC 338, THE SUPREME COURT TOOK THE VIEW THAT THE COURT SHOULD NOT ADOPT AN INJUSTICE-ORIENTED APPROACH IN REJECTING THE APPLIC ATION FOR CONDONATION OF DELAY. 12. IN VEDABAI ALIAS VAIJAYANATABAI BABURAO PATIL V . SHANTARAM BABURAO PATIL REPORTED IN [2002] 253 ITR 798, THE APEX COURT MADE A DISTINCTION IN DELAY AND INORDINATE DELAY OBSERVIN G AS UNDER (PAGE 799) : IN EXERCISING DISCRETION UNDER SECTION 5 OF THE LI MITATION ACT, THE COURTS SHOULD ADOPT A PRAGMATIC APPROACH. A DISTINCTION MU ST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDINATE AND A CASE WHE RE THE DELAY IS OF A FEW DAYS. WHEREAS IN THE FORMER CASE THE CONSIDERAT ION OF PREJUDICE TO THE OTHER SIDE WILL BE A RELEVANT FACTOR SO THE CAS E CALLS FOR A MORE CAUTIOUS APPROACH. . . . IT (SS)A NO.134/M/2007 & IT(SS)A 71/M/2009 SHRI SHIKHARCHAND MOHANLA L PAHARIA HUF 9 13. IN NEW INDIA INSURANCE CO. LTD. V. SMT. SHANTI MISR A [1977] 47 COMP CAS 453 ; AIR 1976 SC 237, THE HONBLE SUPRE ME COURT HELD THAT DISCRETION GIVEN BY SECTION 5 SHOULD NOT BE DEFINED OR CRYSTALLIZED SO AS TO CONVERT A DISCRETIONARY MATTER INTO A RIGID RUL E OF LAW. THE EXPRESSION SUFFICIENT CAUSE SHOULD RECEIVE A LIBERAL CONSTRU CTION. 14. IN BRIJ INDER SINGH V. KANSHI RAM, AIR 1917 PC 156, IT WAS OBSERVED THAT THE TRUE GUIDE FOR A COURT TO EXERCI SE THE DISCRETION UNDER SECTION 5 IS WHETHER THE APPELLANT ACTED WITH REAS ONABLE DILIGENCE IN PROSECUTING THE APPEAL. 15. IN SHAKUNTALA DEVI JAIN V. KUNTAL KUMARI, AIR 1 969 SC 575, THE HONBLE SUPREME COURT HELD THAT UNLESS WANT OF BONA FIDES OF SUCH INACTION OR NEGLIGENCE AS WOULD DEPRIVE A PARTY OF THE PROTECTION OF SECTION 5 IS PROVED, THE APPLICATION MUST NOT BE T HROWN OUT OR ANY DELAY CANNOT BE REFUSED TO BE CONDONED. 16. IN O. P. KATHPALIA V. LAKHMIR SINGH REPORTED IN AIR 1984 SC 1744, THE THE HONBLE SUPREME COURT HELD THAT IF THE REF USAL TO CONDONE THE DELAY RESULTS IN GRAVE MISCARRIAGE OF JUSTICE, IT WOULD BE A GROUND TO CONDONE THE DELAY. 17. IN STATE OF HARYANA V. CHANDRA MANI REPORTED IN AIR 1996 SC 1623, HONBLE SUPREME COURT CONSIDERED THE LARGE N UMBER OF ITS EARLIER JUDGMENTS INCLUDING BINOD BIHARI SINGH V. UNION OF INDIA REPORTED IN [1993] 1 SCC 572, SHAKAMBARI AND CO. V. UNION OF I NDIA REPORTED IN [1993] SUPPL 1 SCC 487, WARLU V. GANGOTRIBAI REPOR TED IN [1995] SUPPL 1 SCC 37, RAMLAL V. REWA COALFIELDS LTD., REPORTE D IN AIR 1962 SC 361, CONCORD OF INDIA INSURANCE CO. LTD. V. SMT. NIRMAL A DEVI [1979] 118 ITR 507; AIR 1979 SC 1666 ; [1979] 49 COMP CAS 463, MATA DIN V. A. IT (SS)A NO.134/M/2007 & IT(SS)A 71/M/2009 SHRI SHIKHARCHAND MOHANLA L PAHARIA HUF 10 NARAYANAN, AIR 1970 SC 1953, AND HELD THAT EXPRES SION EACH DAYS DELAY MUST BE EXPLAINED, DOES NOT MEAN THAT A PEDA NTIC APPROACH SHOULD BE MADE AND IT MUST BE APPLIED IN A RATIONA L COMMONSENSE PRAGMATIC MANNER. 18. THEIR LORDSHIPS IN BHARAT AUTO CENTRE (SUPRA) H ELD THAT IN THE MATTER OF CONDONATION OF DELAY A LIBERAL AND PRAGMA TIC VIEW SHOULD BE TAKEN. THE REASONS GIVEN BY THE ASSESSEE FOR THE DE LAY APPEARED TO BE SUFFICIENT AND, ACCORDINGLY, THE DELAY WAS LIABLE T O BE CONDONED. 19. IN CIT V. KHEMRAJ LAXMICHAND (1978) 114 ITR 75 (M.P.) IT HAS BEEN HELD (HEAD NOTE) :- THAT THE QUESTION WHETHER THE MISTAKE OF THE COUNS EL WAS BONA FIDE BEING ONE OF FACT AND THE TRIBUNAL HAVING COME TO T HE CONCLUSION THAT THE LAPSE ON THE PART OF THE COUNSEL WAS BONA FIDE, THE TRIBUNAL WAS JUSTIFIED IN CONDONING THE DELAY AND UPHOLDING THE REGISTRATI ON OF THE FIRM. 20. IN CIT VS. RAGHUNANDAN PRASAD MOHAN LAL (1974) 97 ITR 398 (ALL.) IT HAS BEEN HELD THAT (HEAD NOTE) :- THERE WAS A DELAY IN THE APPLICATION FOR REGISTRAT ION OF A FIRM. THE ASSESSEE EXPLAINED THAT THE APPLICATION HAD BEEN SE NT THROUGH AN ACCOUNTANT WHO HAD BEEN UNABLE TO SUBMIT IT IN TIME DUE TO THE SERIOUS ILLNESS OF HIS WIFE. AN AFFIDAVIT WAS FILED IN SUP PORT OF THE EXPLANATION. NO COUNTER-AFFIDAVIT OR OTHER MATERIAL WAS FILED ON BEHALF OF THE DEPARTMENT TO CONTROVERT THE AFFIDAVIT. THE TRIBUN AL OBSERVED THAT THE FIRM WAS GENUINE AND NO DEFECTS IN THE CONSTITUTION OF THE FIRM HAD BEEN POINTED OUT BY THE DEPARTMENT. THERE WAS SUFFICIEN T CAUSE FOR THE DELAY IN MAKING THE APPLICATION AND THE FIRM WAS ENTITLED TO REGISTRATION. ON A REFERENCE : HELD, THAT THE FINDING OF FACT BY THE TRIBUNAL THA T THE DELAY IN THE APPLICATION FOR REGISTRATION WAS FOR SUFFICIENT CAU SE WAS NOT VITIATED BY ANY ERROR OF LAW. THE DELAY SHOULD BE CONDONED AND THE FIRM SHOULD BE REGISTERED. IT (SS)A NO.134/M/2007 & IT(SS)A 71/M/2009 SHRI SHIKHARCHAND MOHANLA L PAHARIA HUF 11 21. IN SUBHKARAN & SONS V. N.A. KAZI, 5 TH ITO, AND OTHERS (1985) 152 ITR 231 HELD [HEAD NOTE (IX)] :- THAT THE MISTAKE HAD BEEN ADMITTED BY THE CHARTERE D ACCOUNTANTS AND THEY HAD ALSO REQUESTED THAT THE ASSESSEE SHOULD NO T SUFFER FOR NO FAULT OF THEIRS AND FOR A SHEER MISTAKE ARISING OUT OF OV ERSIGHT ON THE PART OF THE CHARTERED ACCOUNTANTS. THEREFORE, THE CASE WAS A FIT ONE FOR CONDONATION OF THE DELAY IN FILING FORM NO. 11A AND THE FIRM WAS ENTITLED TO REGISTRATION FOR THE ASSESSMENT YEAR 1977-78. 22. IN THE ABSENCE OF ANY CONTRARY MATERIAL PLACED ON RECORD BY THE REVENUE AND KEEPING IN VIEW THE RATIO OF THE DECISI ONS AS REFERRED HEREINABOVE, WE ARE OF THE VIEW THAT THE REASONS GI VEN BY THE APPELLANT FOR THE DELAY APPEAR TO BE REASONABLE THAT THERE WA S SUFFICIENT CAUSE AND ACCORDINGLY WE DIRECT THE LD. CIT(A) TO CONDONE THE DELAY IN FILING OF THE APPEAL BEFORE HIM. 23. SINCE THE LD. CIT(A) HAS NOT DECIDED THE ISSUE ON MERITS, THEREFORE, WE CONSIDER IT FAIR AND REASONABLE THAT THE MATTER SHOULD GO BACK TO THE FILE OF THE LD. CIT(A) AND ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) TO HIS FILE WHO SHALL DECIDE ALL THE GRO UNDS RAISED BY THE ASSESSEE ON MERITS AFRESH AND ACCORDING TO LAW AFTE R PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE GROUNDS TAKEN BY THE ASSESSEE, ARE, THEREFORE, PARTLY ALLOW ED FOR STATISTICAL PURPOSE. IT (SS) A 71/MUM/2009 24. SINCE THE PENALTY U/S 271D HAS BEEN IMPOSED ON THE BASIS OF THE FINDING RECORDED IN THE BLOCK ASSESSMENT ORDER WHIC H HAS BEEN SET ASIDE TO THE FILE OF THE LD. CIT(A) AND KEEPING IN VIEW T HAT IN THE QUANTUM APPEAL THE ASSESSEE HAS ALSO CHALLENGED THE VALIDIT Y OF THE ORDER AND ALSO KEEPING IN VIEW THAT THERE IS NO OBJECTION BY EITHE R OF THE PARTIES TO SET IT (SS)A NO.134/M/2007 & IT(SS)A 71/M/2009 SHRI SHIKHARCHAND MOHANLA L PAHARIA HUF 12 ASIDE THE MATTER TO THE FILE OF THE LD. CIT(A), WE IN THE INTERESTS OF JUSTICE, CONSIDER IT FAIR AND REASONABLE THAT THE ORDER IMPO SING PENALTY U/S 271D OF THE ACT SHOULD ALSO BE SET ASIDE TO THE FILE OF THE LD. CIT(A) AND ACCORDINGLY THE ISSUE IS RESTORED TO THE FILE OF LD . CIT(A) WHO SHALL DECIDE THE SAME AFRESH AND ACCORDING TO LAW AFTER PROVIDIN G A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GRO UNDS TAKEN BY THE ASSESSEE ARE, THEREFORE, PARTLY ALLOWED FOR STATIST ICAL PURPOSE. 25. IN THE RESULT, ASSESSEES APPEALS STAND PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THIS 30 TH DAY OF MARCH, 2011. SD/- (T.R. SOOD) ACCOUNTANT MEMBER SD/- (D.K. AGARWAL) JUDICIAL MEMBER MUMBAI, DATED 30 TH MARCH, 2011. RK IT (SS)A NO.134/M/2007 & IT(SS)A 71/M/2009 SHRI SHIKHARCHAND MOHANLA L PAHARIA HUF 13 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- XIV, MUMB AI 4. COMMISSIONER OF INCOME TAX, 14, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH J, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI IT (SS)A NO.134/M/2007 & IT(SS)A 71/M/2009 SHRI SHIKHARCHAND MOHANLA L PAHARIA HUF 14 1 DRAFT DICTATED ON 25. 3.11 SR PS 2 DRAFT PLACED BEFORE AUTHOR ON 28 . 3 .11 SR PS 3 DRAFT PR OPOSED & PLACE BEFORE THE 2 ND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY 2 ND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR PS 7 FILE SENT TO THE BENCH CLERK SR PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DESPATCH SR PS
