M/S.KOLARI SERVICE COP BANK LTD,KANNUR V. THE ITO WARD 3 , KANNUR

ITA 167/COCH/2023

AI Insights

The case involves Kolari Service Co-operative Bank Ltd., which appealed against the orders of the CIT(A)/NFAC for the assessment years 2010-11, 2012-13, and 2013-14. The appeals were initially dismissed by the CIT(A)/NFAC due to inordinate delays in filing, which were not condoned. The Tribunal found that the delays were not deliberate and were due to the assessee's lack of awareness and administrative oversights, including outdated contact information and misplaced documents. The Tribunal emphasized the principle of substantial justice over technicalities, citing various precedents that support condoning delays when substantial justice is at stake.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 34329 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Other Referred Cases: Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471), People Education & Economic Development Society Vs/ ITO (100 ITD 87 (TM) (Chen)), CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596), Sreenivas Charitable Trust (280 ITR 357)
• Laws Referred To: Income Tax Act, Faceless Appeal Scheme, 2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL; SNR
• Assessee Lawyers: ARUN RAJ S
• Keywords: Condonation of delay; Opportunity of being heard; Reasonable cause; Period of limitation; Charitable institution; Application of stay
• Section: 153; 13

Judgement Text

"ITANo. 167 - 169/Coch/2023 Kolari Service Co-operative Bank Ltd., Kannur IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH: COCHIN BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No. 167-169/Coch/2023 Assessment Year: 2010-11, 2012-13 & 2013-14 Kolari Service Co-operative Bank Ltd. C19, Mattanur Mattanur PO Kannur - 670702 Kerala PAN NO : AAAAK5525H Vs. ITO Ward - 3 Kannur Kerala APPELLANT RESPONDENT Appellant by : Shri Arun Raj S, Adv. Respondent by : Smt. Leena Lal, Snr. AR Date of Hearing : 03.12.2024 Date of Pronouncement : 26.12.2024 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: These appeals at the instance of the assessee are directed against the orders of ld. CIT(A) / NFAC, passed for the AY 2010-11, 2012-13 and 2013-14. Since common issues are raised in these appeals, they are clubbed together, heard together and disposed of by a consolidated order. 2. For all these assessment year under appeal, the assessee has raised common grounds of appeal as detailed below: ITANo. 167 - 169/Coch/2023 Kolari Service Co-operative Bank Ltd., Kannur Page 2 of 14 ITANo. 167 - 169/Coch/2023 Kolari Service Co-operative Bank Ltd., Kannur Page 3 of 14 ITANo. 167 - 169/Coch/2023 Kolari Service Co-operative Bank Ltd., Kannur Page 4 of 14 ITANo. 167 - 169/Coch/2023 Kolari Service Co-operative Bank Ltd., Kannur Page 5 of 14 3. There is a delay of 153 days for the AY 2010-11 (152 days mentioned in stay application), 146 days for the AY 2012-13 and also 146 days for AY 2013-14 in filing the appeal before this Tribunal. The ld. Counsel for the assessee has drawn our attention on the application for condonation of delay filed along with an affidavit dated 27/02/2023 in original sworn before the Notary Public, for the AY 2010–11 which are reproduced below for ease of reference & convenience :- ITANo. 167 - 169/Coch/2023 Kolari Service Co-operative Bank Ltd., Kannur Page 6 of 14 ITANo. 167 - 169/Coch/2023 Kolari Service Co-operative Bank Ltd., Kannur Page 7 of 14 ITANo. 167 - 169/Coch/2023 Kolari Service Co-operative Bank Ltd., Kannur Page 8 of 14 3.1 On going through the above application, the main reason as cited for the delay in filing the appeal before this Tribunal is that the assessee has neither received any notice for hearing nor any order passed by the ld. CIT (A) / NFAC. The assessee was not at all ITANo. 167 - 169/Coch/2023 Kolari Service Co-operative Bank Ltd., Kannur Page 9 of 14 aware of the passing of ld. CIT (A) / NFAC order and further, nor did they receive any alert or message in this regard. It is submitted that the assessee is a small Co-operative society working in a rural area who are not very tech savvy and run with minimum staff. The assessee present tax consultant when checked the income tax portal by logging in found that these orders / notices were issued by ld. CIT (A) / NFAC on various earlier dates however, when the profile was checked, it was understood that the email addresses and contact details recorded in the portal were of previous tax consultant. Thereafter, the assessee took voluntary steps to update the email address, phone numbers of the present management. Further, the ld. A.R. of the assessee vehemently submitted that the delay was neither intentional nor deliberate and arose due to circumstances beyond the control of the assessee & accordingly prayed to condone the delay and admit the appeal for adjudication. 4 The ld. DR on the one hand though opposed for the condonation of delay but could not controvert the submissions made therein. 5. We have heard the rival submissions and perused the materials available on record. In our opinion, it cannot be said that assessee is very callous in its approach in filing the appeal before us. Being so, when substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserve to be preferred, for the other side cannot claim to have vested right for injustice being done because of non-deliberate delay. Moreover no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the belated appeal was filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. Therefore, in our opinion, this is ITANo. 167 - 169/Coch/2023 Kolari Service Co-operative Bank Ltd., Kannur Page 10 of 14 a fit case to condone the delay of 153 days for the AY 2010-11, 146 days for the AY 2012-13 and 146 days for AY 2013-14 in filing the appeal before this Tribunal. Accordingly, the delay is condoned and the appeals are admitted for adjudication. 6. At the outset, the ld. AR of the assessee also drawn our attention to the order of the ld. CIT(A)/NFAC for all these years & submitted that there was a delay of 798 days for the AY 2010-11, 1,646 days for the AY 2012-13 and 1,646 days for AY 2013-14 in filing the appeal before the ld. CIT(A)/NFAC also, which were not condoned by the ld. CIT(A)/NFAC on the ground that cause of substantial justice would not be served by condoning inordinate delays. Accordingly, dismissed appeals in limine in view of provision of sec. 249 of the Act read with Faceless Appeal Scheme, 2020 paragraph 5(1)(ii). Aggrieved the assessee is in appeal before us. 7. We have also gone through the reasons explained by the assessee for filing the appeal belatedly before the ld. CIT(A)/NFAC. The main reason as stated by the assessee is that the assessee being primary agricultural credit society (PACS) registered under the co-operative society act need to take approval from various level of authorities to proceed with any action including the filing of appeal, selection of consultants and authorized representative etc. This required long time since it had to go through a long process which ended with delay in filing of the appeal. Moreover, the order entrusted to the then authorized representative was misplaced and was found recently. 7.1 We note that the ld. CIT(A)/NFAC by holding that the reason cited are insufficient and hence it is not considered in the interest of judicial discipline. Further, on going through the order of ld. CIT(A)/NFAC we found that in spite of issuing several notices for ITANo. 167 - 169/Coch/2023 Kolari Service Co-operative Bank Ltd., Kannur Page 11 of 14 hearing, the assessee neither appeared nor filed any response in compliance to the said notices. Therefore, we find force in the contention of the assessee in saying that the email addresses and contact details recorded in the portal were of previous tax consultant and therefore, the assessee has reasonable cause for filing appeal belatedly. Further, the orders entrusted to the then authorized representative was misplaced and therefore we are of the opinion that for the fault of the counsel, the assessee should not suffer. 7.2 It is not a case that the assessee has not cited any reasonable cause for filing appeal belatedly and we found that the ld. CIT(A)/NFAC also could not brought any material on record to controvert the cause of delay cited by the assessee but simply affirmed that the reasons cited by the assessee are insufficient. At this juncture, it is appropriate to mention the judgment of Hon’ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder: (1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late (2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner. ITANo. 167 - 169/Coch/2023 Kolari Service Co-operative Bank Ltd., Kannur Page 12 of 14 (4) When substantial justice and technical consideration 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 of a nondeliberate 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 a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 7.3 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of non deliberate delay. Moreover, no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the delayed appeal was filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. 7.4 Further, in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein held that “when substantial justice and technical consultation 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 of non-deliberate delay”. 7.5 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not ITANo. 167 - 169/Coch/2023 Kolari Service Co-operative Bank Ltd., Kannur Page 13 of 14 filing the appeal. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM) condoned more than six hundred days delay. 7.6 The Madras High Court in the case of Sreenivas Charitable Trust (280 ITR 357) (Mad.) held that no hard and fast rule can be laid down in the matter of condonation of delay and the Court should adopt a pragmatic approach and the Court should exercise their discretion on the facts of each case keeping in mind that in construing the expression \"sufficient cause\" the principle of advancing substantial justice is of prime importance and the expression \"sufficient cause\" should receive a liberal construction. Therefore, this Judgment of the Madras High Court (supra) clearly says that in order to advance substantial justice which is of prime importance, the expression \"sufficient cause\" should receive a liberal construction. 8. In view of the above deliberations, we are of the opinion that, by preferring the substantial justice, the delay of 798 days for the AY 2010-11, 1,646 days for the AY 2012-13 and 1,646 days for AY 2013-14 has to be condoned and accordingly we are setting aside the Order of the ld. CIT(A)/NFAC with a direction to condone the delay of 798 days for the AY 2010-11, 1,646 days for the AY 2012- 13 and 1,646 days for AY 2013-14 in filing appeal before him. Further as the ld. CIT(A)/NFAC has not adjudicated the case on ITANo. 167 - 169/Coch/2023 Kolari Service Co-operative Bank Ltd., Kannur Page 14 of 14 merits as the delay was not condoned, we also direct to adjudicate the case on merits in accordance with the law after giving reasonable opportunity of being heard to the assessee. It is ordered accordingly. 9. In the result, all the appeals filed by the assessee are partly allowed for statistical purposes. Order pronounced in the open court on 26th Dec, 2024 Sd/- (Prashant Maharishi) Vice President Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated: 26th Dec,2024. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Cochin. "