Punjab Heritage and Tourism Promotion Board, Chandigarh V. Commissioner of Income Tax, Chandigarh

ITA/148/2014

AI Insights

The case involves M/s Punjab Heritage and Tourism Promotion Board, which appealed against the Commissioner of Income Tax, Chandigarh, concerning the denial of tax exemption for the assessment year 2008-09. The core issue was the delay in filing appeals against the orders of the Assessing Officer and the Commissioner of Income Tax. The appellant argued that the delay was due to pursuing a rectification remedy, which was erroneously believed to be a valid ground for delay. The High Court examined whether there was a 'sufficient cause' for the delay under the legal standards set by the Supreme Court, particularly referencing the cases of Oriental Aroma Chemical Industries Ltd. and R.B. Ramlingam. The court found that the appellant did not act with reasonable diligence and that the delay was inordinate and unexplained, leading to the dismissal of the appeals.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 795388 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 28-07-2014
• Assessment Year: misc
• Other Referred Cases: Oriental Aroma Chemical Industries Ltd. v. Gujarat Industrial Development Corporation, R.B. Ramlingam v. R.B. Bhavaneshwari
• Laws Referred To: Income Tax Act, 1961, Limitation Act, 1963
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: RADHIKA SURI; TEJ MOHAN SINGH GULATI
• Keywords: Condonation of delay; Income Tax; Rectification Application; Registration under section 12A
• Section: 154; 12AA; 260A; 253(5)

Judgement Text

"ITA No. 147 of 2014 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 147 of 2014 (O&M) Date of Decision: 28.7.2014 M/s Punjab Heritage and Tourism Promotion Board, Chandigarh ....Appellant Versus Commissioner of Income Tax, Chandigarh ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MR. JUSTICE JASPAL SINGH. PRESENT: Ms. Radhika Suri, Senior Advocate with Mr. Tej Mohan Singh Gulati, Advocate for the appellant. AJAY KUMAR MITTAL, J. 1. Delay of 7 days in re-filing the appeal is condoned. 2. This order shall dispose of a bunch of four appeals bearing ITA Nos. 147 to 150 of 2014 as according to the learned counsel for the appellant, the facts involved therein are similar and the grounds seeking condonation of delay before the Tribunal are identical. For brevity, the facts are being taken from ITA No. 147 of 2014. 3. This appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against the order dated 22.8.2012 passed by the Income Tax Appellate Tribunal, Chandigarh Bench “B”, Chandigarh, in ITA No. 1095/Chd/2011, for the assessment year 2008-09, claiming the following substantial question of law:- Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal has fallen in error GURBACHAN SINGH 2014.08.29 14:23 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No. 147 of 2014 (O&M) -2- in upholding the order passed by the Assessing Officer for Assessment Year 2007-08 by refusing to exercise its powers for condoning the delay under Section 253(5) of the Income Tax Act in appeal filed against the order passed by the Commissioner of Income Tax dated 2.7.2008 even though the Appellant had demonstrated that it had been pursuing the remedy of rectification erroneously and thus had bonafidely failed to file the appeal before the Tribunal? 4. A few facts necessary for adjudication of the instant appeal as narrated therein may be noticed. The assessee is a Board constituted by the State Government and applied for registration under Section 12AA of the Act vide application dated 18.12.2006. The Commissioner of Income Tax vide letter dated 22.6.2007 objected to the dissolution clause in the Trust Deed of the appellant-Board. However, no order on the said application was passed. In the meantime, the assessee amended the dissolution clause and filed amended bye-laws along with amended application on 15.4.2008. The Commissioner of Income Tax vide order dated 2.7.2008 (Annexure A-1) granted registration with effect from assessment year 2009-10. The Assessing Officer vide order dated 23.11.2010 (Annexure A-2) assessed the income of the assessee for the assessment year 2008-09 without granting the benefit of registration under Section 12A of the Act. The assessee filed an application for rectification of the order dated 2.7.2008 (Annexure A-1). The said application was rejected vide order dated 4.12.2009 (Annexure A-3) which was served upon the assessee on 7.2.2011. The assessee filed appeal before the Tribunal on 15.3.2011 GURBACHAN SINGH 2014.08.29 14:23 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No. 147 of 2014 (O&M) -3- challenging order dated 2.7.2008. The assessee filed an appeal before the Commissioner of Income Tax (appeals) [for brevity “the CIT(A)”] against the order of the assessment. The CIT(A) vide order dated 6.9.2011 (Annexure A-4) upheld the order of the Assessing Officer and also affirmed the additions made by the Assessing Officer as the exemption granted to the assessee was for assessment year 2009-10 onwards. Since the assessee was pursing the remedy of rectification against the order dated 2.7.2008 before the Commissioner of Income Tax, a delay of 921 days had occurred in filing the appeal before the Tribunal. Accordingly, the assessee filed an application (Annexure A-5) under Section 253(5) of Act for condonation of delay in filing the appeal. The Tribunal vide order dated 22.8.2012 (Annexure A-6) dismissed the appeal being time barred holding that no sufficient cause had been made out to condone the delay. Hence, the present appeals. Since the appeals filed before this Court were also barred by time, applications under Section 5 of the Limitation Act, 1963 (in short, the “1963 Act”) have been filed for condonation of delay of 379 and 426 days in filing the appeals. 5. We have heard learned counsel for the appellant. 6. The primary question that arises for consideration in these appeals is whether there was sufficient cause for condonation of delay in filing the appeals before the Tribunal as also before this Court which are belated. 7. Examining the legal position relating to condonation of delay under Section 5 of the Limitation Act, 1963 (in short, the “1963 Act”) it may be observed that the Supreme Court in Oriental Aroma Chemical Industries Ltd. v. Gujarat Industrial Development Corporation and GURBACHAN SINGH 2014.08.29 14:23 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No. 147 of 2014 (O&M) -4- another, (2010) 5 SCC 459 laying down the broad principles for adjudicating the issue of condonation of delay, in paras 14 & 15 observed as under:- “14. We have considered the respective submissions. The law of limitation is founded on public policy. The legislature does not prescribe limitation with the object of destroying the rights of the parties but to ensure that they do not resort to dilatory tactics and seek remedy without delay. The idea is that every legal remedy must be kept alive for a period fixed by the legislature. To put it differently, the law of limitation prescribes a period within which legal remedy can be availed for redress of the legal injury. At the same time, the courts are bestowed with the power to condone the delay, if sufficient cause is shown for not availing the remedy within the stipulated time. 15. The expression “sufficient cause” employed in Section 5 of the Indian Limitation Act, 1963 and similar other statutes is elastic enough to enable the courts to apply the law in a meaningful manner which sub serves the ends of justice. Although, no hard and fast rule can be laid down in dealing with the applications for condonation of delay, this Court has justifiably advocated adoption of a liberal approach in condoning the delay of short duration and a stricter approach where the delay is inordinate-Collector GURBACHAN SINGH 2014.08.29 14:23 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No. 147 of 2014 (O&M) -5- (L.A.) v. Katiji N. Balakrishnan v. M. Krishnamurthy and Vedabai v. Shantaram Baburao Patil.” 8. It was further noticed by the Apex Court in R.B. Ramlingam v. R.B. Bhavaneshwari 2009(1) RCR (Civil) 892 as under:- “.....It is not necessary at this stage to discuss each and every judgment cited before us for the simple reason that Section 5 of the Limitation Act, 1963 does not lay down any standard or objective test. The test of “sufficient cause” is purely an individualistic test. It is not an objective test. Therefore, no two cases can be treated alike. The statute of limitation has left the concept of “sufficient cause” delightfully undefined, thereby leaving to the Court a well-intentioned discretion to decide the individual cases whether circumstances exist establishing sufficient cause. There are no categories of sufficient cause. The categories of sufficient cause are never exhausted. Each case spells out a unique experience to be dealt with by the Court as such.” It was also recorded that:- “For the aforestated reasons, we hold that in each and every case the Court has to examine whether delay in filing the special leave petition stands properly explained. This is the basic test which needs to be applied. The true guide is whether the petitioner has acted with reasonable diligence in the prosecution of his appeal/petition....” GURBACHAN SINGH 2014.08.29 14:23 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No. 147 of 2014 (O&M) -6- 9. From the above, it emerges that the law of limitation has been enacted which is based on public policy so as to prescribe time limit for availing legal remedy for redressal of the injury caused. The purpose behind enacting law of limitation is not to destroy the rights of the parties but to see that the uncertainty should not prevail for unlimited period. Under Section 5 of the 1963 Act, the courts are empowered to condone the delay where a party approaching the court belatedly shows sufficient cause for not availing the remedy within the prescribed period. The meaning to be assigned to the expression “sufficient cause” occurring in Section 5 of the 1963 Act should be such so as to do substantial justice between the parties. The existence of sufficient cause depends upon facts of each case and no hard and fast rule can be applied in deciding such cases. 10. The Apex Court in Oriental Aroma Chemical Industries Ltd. and R.B. Ramlingam's cases (supra) noticed that the courts should adopt liberal approach where delay is of short period whereas the proof required should be strict where the delay is inordinate. Further, it was also observed that judgments dealing with the condonation of delay may not lay down any standard or objective test but is purely an individualistic test. The court is required to examine while adjudicating the matter relating to condonation of delay on exercising judicial discretion on individual facts involved therein. There does not exist any exhaustive list constituting sufficient cause. The applicant/petitioner is required to establish that inspite of acting with due care and caution, the delay had occurred due to circumstances beyond his control and was inevitable. 11. Adverting to the factual matrix in the present cases, we do GURBACHAN SINGH 2014.08.29 14:23 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No. 147 of 2014 (O&M) -7- not find any merit in the appeals. The question regarding whether there is sufficient cause or not depends upon each case and primarily is a question of fact to be considered taking into totality of events which had taken place in a particular case. According to the learned counsel for the appellant, the assessee had filed an application for rectification of the order dated 2.7.2008 (Annexure A-1) on the ground that the registration was to be granted from assessment year 2007-08 whereas it was allowed from assessment year 2009-10. The said application was dismissed on 4.12.2009 and according to the assessee, the said order was served on it on 7.2.2011. In this view of the matter, the assessee failed to file the appeals within the stipulated period of limitation. It was urged that the delay, if any, has occurred in the aforesaid circumstances in filing the appeals before the Tribunal as well as before this Court. Learned counsel further argued that the delay was unintentional and due to the circumstances beyond the control of the appellant. 12. In the present case after appreciating the matter it cannot be said that there was sufficient cause for condonation of delay. The order granting registration was passed by the Commissioner of Income Tax on 2.7.2008 and the application filed under Section 154 of the Act for rectification of order dated 2.7.2008 was rejected on 4.12.2009. However, the appeal before the Tribunal was required to be filed within the stipulated period of limitation of sixty days from the date of service of order dated 2.7.2008. But the appellant filed the appeals before the Tribunal on 15.3.2011, after a delay of 921 days. Even the appeals filed before this Court are also barred by time which is more than one year. In fact, the perusal of Annexure A-11 filed in ITA No. 148 of 2014 shows that the copy of order dated 4.2.2009 was sent to the assessee in GURBACHAN SINGH 2014.08.29 14:23 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No. 147 of 2014 (O&M) -8- pursuance to its application No. PHTPB/313 dated 25.1.2011 by it on 7.2.2011. There is nothing on record on the basis of which it could be concluded that the order on rectification application was never served on the assessee before 7.2.2011. The appellant has not been able to establish that there existed 'sufficient cause' for the delay in filing the appeals before the Tribunal. Further, the appellant took a plea before this Court that the files relating to the years in question were misplaced and therefore, the appeals in the High Court also could not be filed in time. Such pleas do not stand substantiated in the facts and circumstances of the present case. There has been an inordinate delay in filing the appeals before the Tribunal as well as before this Court. The narration of facts as noticed hereinabove clearly demonstrates that the approach of the appellant is totally casual and berefit of bonafides. 13. In view of the above, no question of law much less a substantial question of law arises in these appeals. Accordingly, the appeals as well as the applications filed under Section 5 of the Limitation Act for condonation of delay in filing the appeals before this Court are dismissed. (AJAY KUMAR MITTAL) JUDGE July 28, 2014 (JASPAL SINGH) gbs JUDGE GURBACHAN SINGH 2014.08.29 14:23 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No. 147 of 2014 (O&M) -9- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.M. Nos. 14885-86-CII of 2014 & ITA No. 148 of 2014 (O&M) Date of Decision: 28.7.2014 M/s Punjab Heritage and Tourism Promotion Board, Chandigarh ....Appellant Versus Commissioner of Income Tax, Chandigarh ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MR. JUSTICE JASPAL SINGH. PRESENT: Ms. Radhika Suri, Senior Advocate with Mr. Tej Mohan Singh Gulati, Advocate for the appellant. AJAY KUMAR MITTAL, J. C.M. No. 14885-CII of 2014 Allowed as prayed for. C.M. No. 14886-CII of 2014 Application is allowed and Annexures A-6 to A-11 filed along with the application are taken on record. ITA No. 148 of 2014 (O&M) For orders, see ITA No. 147 of 2014 (M/s Punjab Heritage and Tourism Promotion Board, Chandigarh v. Commissioner of Income Tax, Chandigarh). (AJAY KUMAR MITTAL) JUDGE July 28, 2014 (JASPAL SINGH) gbs JUDGE GURBACHAN SINGH 2014.08.29 14:23 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No. 147 of 2014 (O&M) -10- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 149 of 2014 (O&M) Date of Decision: 28.7.2014 M/s Punjab Heritage and Tourism Promotion Board, Chandigarh ....Appellant Versus Commissioner of Income Tax, Chandigarh ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MR. JUSTICE JASPAL SINGH. PRESENT: Ms. Radhika Suri, Senior Advocate with Mr. Tej Mohan Singh Gulati, Advocate for the appellant. AJAY KUMAR MITTAL, J. Delay of 7 days in refiling the appeal is condoned. For orders, see ITA No. 147 of 2014 (M/s Punjab Heritage and Tourism Promotion Board, Chandigarh v. Commissioner of Income Tax, Chandigarh). (AJAY KUMAR MITTAL) JUDGE July 28, 2014 (JASPAL SINGH) gbs JUDGE GURBACHAN SINGH 2014.08.29 14:23 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No. 147 of 2014 (O&M) -11- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 150 of 2014 (O&M) Date of Decision: 28.7.2014 M/s Punjab Heritage and Tourism Promotion Board, Chandigarh ....Appellant Versus Commissioner of Income Tax, Chandigarh ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MR. JUSTICE JASPAL SINGH. PRESENT: Ms. Radhika Suri, Senior Advocate with Mr. Tej Mohan Singh Gulati, Advocate for the appellant. AJAY KUMAR MITTAL, J. Delay of 7 days in refiling the appeal is condoned. For orders, see ITA No. 147 of 2014 (M/s Punjab Heritage and Tourism Promotion Board, Chandigarh v. Commissioner of Income Tax, Chandigarh). (AJAY KUMAR MITTAL) JUDGE July 28, 2014 (JASPAL SINGH) gbs JUDGE GURBACHAN SINGH 2014.08.29 14:23 I attest to the accuracy and integrity of this document High Court Chandigarh "