Income Tax Appellate Tribunal - Delhi
Kapil Dev, New Delhi vs Assessee on 4 July, 2003
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'H
'H' : NEW DELHI
BEFORE SHRI G.D.AGRAWAL,
G.D.AGRAWAL, VICE PRESIDENT AND
SHRI CHANDRA MOHAN GARG,
GARG, JUDICIAL MEMBER
ITA Nos
Nos.4788/Del/2003 & 4789/Del/2003
Assessment Years
Years : 1992-
1992-93 & 93-
93-94
Assistant Commissioner of Vs. Shri Kapil Dev,
Income Tax, 39, Sunder Nagar,
Central Circle-
Circle-9, New Delhi.
New Delhi. PAN : AADPD9024A.
(Appellant) (Respondent)
Cross Objection Nos.344/Del/2011 & 345/Del/2011
Assessment Years
Years : 1992-
1992-93 & 93-
93-94
Shri Kapil Dev, Vs. Assistant Commissioner of
39, Sunder Nagar, Income Tax,
New Delhi. Central Circle-
Circle-9,
PAN : AADPD9024A. New Delhi.
(Appellant) (Respondent)
Revenue by : Shri Tarun Seem, Sr.DR.
Assessee by : Shri K.Sampath and
Shri Raj Kumar, Advocates.
ORDER
PER G.D.AGRAWAL, G.D.AGRAWAL, VP :
ITA Nos.4788 & 4789/Del/2003:-
4789/Del/2003:-
These appeals by the Revenue are directed against the order of learned CIT(A)-II, New Delhi dated 4th July, 2003 for the assessment years 1992-93 & 1993-94.
2 ITA-4788 & 4789/D/2003 & C.O. 344 & 345/D/2011
2. The common ground raised in these appeals by the Revenue reads as under:-
"On the facts and in the circumstances of the case the ld.CIT(A) erred in annulling the Asstt. by ignoring the fact that no Asstt. was made in this case u/s 143(3) therefore reference to provision to section 147 is not called for."
3. The facts of the case are that in both the years, the assessments were reopened under Section 147 of the Income-tax Act, 1961 and against such order of reassessment, the assessee had filed the appeal before the learned CIT(A) who had cancelled the reopening of assessment and, consequently, had annulled the assessment order. Against the order of learned CIT(A), the Revenue was before the ITAT. The ITAT, vide order dated 15th February, 2006 in ITA Nos.4787 to 4789/Del/2003, upheld the order of learned CIT(A) and dismissed the appeals filed by the Revenue. On appeal by the Revenue, Hon'ble Jurisdictional High Court remitted the matter to the ITAT with the following finding:-
"These appeals are in respect of the assessment years 1992-93 and 1993-94 and arise out of the order passed by the Income Tax Appellate Tribunal on 15.02.2006 in respect of the ITA Nos.4788 to 4789/Del/2003. The impugned order is a common order which also includes the assessment year 1991-92. The appeal against the assessment year 1991-92 being ITA no.1563/2006 has been dismissed by this Court today itself by a separate order.
2. However, we are taking a different approach in respect of the present appeal because there appears to be a mistake in Tribunal's order with regard to the two years in question in these appeals. In paragraph No.8 of the impugned order, it has been recorded that :-
"It is not disputed that in all the three assessment years, the assessment had been completed under Section 143(3) 3 ITA-4788 & 4789/D/2003 & C.O. 344 & 345/D/2011 Income Tax Act, 1961, and therefore, in view of the proviso to Section 147, the assessment could be reopened only in case of assessee failed or to disclose the fully and truly all material facts necessary for his assessment..."
3. It is an admitted position before this Court that in so far as the assessment years 1992-93 and 1993-94 are concerned there was no assessment under Section 143(3) of the Act. The only assessment under Section 143(3) was in respect of the assessment year 1991-92. The Tribunal seems to have overlooked this fact and has based its decision purely on the ground that the assessment had been completed under Section 143(3) of the Act in respect of the assessment years 1992-93 and 1993-94 also. Since this error is apparent and the learned counsel for the parties have fairly stated that no such assessment has been done in respect of the years in question in these appeals, we feel that it would be appropriate that the matter with regard to these years is remitted to the Tribunal for consideration afresh.
4. Consequently, we dispose of these appeals and direct that the Tribunal shall consider the appeals filed by the Revenue for the assessment years 1992-93 and 1993- 94 afresh."
4. Accordingly, these appeals were fixed for hearing. At the time of hearing before us, the learned counsel fairly admitted that the original assessment for these two years was not made under Section 143(3) and, therefore, proviso to Section 147 was not applicable. He, however, stated that all the facts were on record and, therefore, even if original assessment was made under Section 143(1), reopening is based upon the change of opinion.
5. Learned DR, on the other hand, stated that when there was no original regular assessment, obviously, no opinion was expressed by the Assessing Officer. When no opinion was expressed, the question of change of opinion does not arise.
4 ITA-4788 & 4789/D/2003 & C.O. 344 & 345/D/2011
6. After considering the arguments of both the sides, we entirely agree with the argument of the learned DR. In this case, there was no original assessment. Once there was no original assessment, no opinion was expressed by the Assessing Officer. Therefore, it cannot be said that the reopening of assessment was due to change of opinion by the Assessing Officer. Moreover, by these appeals, the Revenue has challenged the order of learned CIT(A) dated 4th July, 2003 which was the common order for AY 1991-92, 1992-93 & 1993-94. From a perusal of learned CIT(A)'s order, it is evident that he discussed the facts in detail relating to AY 1991-92 and held that the original assessment was completed under Section 143(3). All the material facts necessary for assessment were duly disclosed by the assessee. Therefore, the reopening of assessment after four years from the end of the relevant assessment year was bad in law in view of the proviso to Section 147. Thereafter, on the last page, he just mentioned one line "The facts and circumstances are similar for asstt. year 92-93 and 93-94 and, therefore, on a careful consideration of all the facts and circumstances of the case the impugned assessments are annulled." Now, it is evident that the facts of AY 1991-92 are different than that of AY 1992-93 & 1993-94. In AY 1991-92, original assessment was completed under Section 143(3) and, therefore, proviso to Section 147 was applicable because the assessment was reopened after four years from the end of the relevant assessment year. So far as the assessment years 1992-93 & 1993-94 are concerned, the original assessment was not completed under Section 143(3). Therefore, proviso to Section 147 was not applicable. In view of the above, the order of learned CIT(A) for AY 1992-93 and 1993-94 cannot be sustained. We reverse the same and hold that learned CIT(A) was not justified in quashing the reopening of assessment as well as annulling the impugned assessment orders for AY 1992-93 and 1993-94. Accordingly, the appeals of the Revenue are allowed.
5 ITA-4788 & 4789/D/2003 & C.O. 344 & 345/D/2011 Cross-
Cross-Objection Nos.344 & 345/Del/2011:-
345/Del/2011:-
7. These cross-objections filed by the assessee are late by 2082 days. The assessee had filed the application for condonation of delay and, at the time of hearing before us, the learned counsel for the assessee argued at length with regard to condonation of delay. He stated that when the appeal was fixed for hearing originally, i.e. on 14th February, 2006, the appeal memo from the department was not served upon the assessee and the assessee sought adjournment vide letter dated 14th February, 2006 in which the assessee had requested for the supply of copy of the grounds of appeal as filed by the department.
However, the Bench rejected the assessee's application for adjournment and the case was heard in which Revenue's appeal was dismissed. Thus, the appeal was decided by the ITAT even without the supply of copy of appeal memo by the department. The assessee can file the cross-objection only after the receipt of copy of appeal memo filed by the department. That after the order of ITAT, wherein the Revenue's appeal was dismissed, the assessee had no occasion to file the cross-objection because the impugned assessment order stood annulled. That the Hon'ble High Court decided the matter against the assessee vide order dated 21st August, 2008. However, the person who appeared before the High Court on behalf of the assessee never advised the assessee that any cross-objection is now required to be filed before the ITAT. That the assessee is a sportsperson viz., a cricketer who, once upon a time, was the captain of the Indian Cricket Team. He is not aware of the intricacies of the Income-tax Act. That when the appeals for the years under consideration were fixed before the ITAT on 12th October, 2011, the present counsel advised the assessee to file the cross-objections and the cross-objections were immediately filed on 14th October, 2011. He, therefore, submitted that 6 ITA-4788 & 4789/D/2003 & C.O. 344 & 345/D/2011 the delay in filing of the cross-objections may be condoned. In support of his contention, he relied upon the following decisions:-
(i) Collector, Land Acquisition Vs. MST. Katiji and Others -
[1987] 167 ITR 471 (SC).
(ii) Auto Centre Vs. State of Uttar Pradesh and Others - [2005] 278 ITR 291 (All).
(iii) N. Balakrishnan Vs. M. Krishnamurthy - [1998] 7 SCC 123 (SC).
8. Learned DR, on the other hand, stated that even if it is accepted that during original proceedings before the ITAT the assessee did not get adequate opportunity of filing the cross-objections because his appeals were decided ex parte, the assessee ought to have filed the cross-objections immediately after the pronouncement of the order by the Hon'ble Jurisdictional High Court. That the Hon'ble Jurisdictional High Court pronounced the order on 21st August, 2008 and the cross- objections were filed by the assessee on 14th October, 2011. Thus, there was a delay of more than three years in filing the cross- objections after the order of Hon'ble Jurisdictional High Court. No satisfactory explanation has been given for such delay of more than three years. He, therefore, submitted that the delay in filing of the cross-objections should not be condoned.
9. We have carefully considered the arguments of both the sides and perused the material placed before us. Insofar the filing of cross- objections before the original order of the ITAT is concerned, we find that originally, the appeals of the Revenue were fixed for hearing for the first time on 14th February, 2006. The assessee sought adjournment vide letter dated 14th February, 2006 with the following request:-
7 ITA-4788 & 4789/D/2003 & C.O. 344 & 345/D/2011 "The above matter is fixed for hearing before your Honours today. In this matter the Grounds of appeal as filed by the department are yet to be received. Kindly therefore make the same available and provide us."
10. However, the assessee's request was rejected by the Bench with the remark "Case Heard. Adj. rejected.". We could not find on record any evidence of service of appeal memo and the grounds of appeal upon the assessee. In view of the above, we accept the assessee's contention that he did not had any occasion to file the cross-objections after the filing of the appeals by the Revenue. In the original order, the ITAT had dismissed the Revenue's appeals and thereby, upheld the annulling of assessment. Therefore, till the order of the Hon'ble Jurisdictional High Court, the assessee had no grievance. However, Hon'ble Jurisdictional High Court set aside the matter of the ITAT for the assessment years under appeal on 21st August, 2008. Thereafter, the assessee ought to have filed the cross-objections. However, we notice that before the Hon'ble Jurisdictional High Court, one Shri S.Krishnan appeared on behalf of the assessee, viz., Shri Kapil Dev. While, before the ITAT, he is represented by Shri K. Sampath. The assessee is a renowned cricketer and, therefore, we accept the contention of the learned counsel that the assessee was not aware about the intricacies of the Income-tax Act and his counsel, who appeared before Hon'ble High Court, never advised to file cross- objection. After the order of Hon'ble Jurisdictional High Court, the appeals were fixed for hearing for the first time before the ITAT on 12th October, 2011 and the assessee filed the cross-objections on 14th October, 2011.
11. Hon'ble Apex Court in the case of MST. Katiji and Others (supra) held as under:-
8 ITA-4788 & 4789/D/2003 & C.O. 344 & 345/D/2011 "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 matters on 'merits'. The expression 'sufficient cause' employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice - that being the life-
purpose of the existence of the institution of courts. 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.
2. Refusing to condone delay can result in a meritorious matter being thrown out 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, common sense and pragmatic manner.
4. When substantial justice and technical considerations 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 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 a serious risk.
6. It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical 9 ITA-4788 & 4789/D/2003 & C.O. 344 & 345/D/2011 grounds but because it is capable of removing injustice and is expected to do so."
12. In the case of N.Balakrishnan Vs. M. Krishnamurthy (supra), Hon'ble Apex Court held as under:-
"The primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice. The time-limit fixed for approaching the court in different situations is not because on the expiry of such time a bade cause would transform into a good cause. Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy ... for the redress of the legal injury so suffered. The law of limitation is thus founded on public policy."
13. In the case of Auto Centre (supra), Hon'ble Allahabad High Court held as under:-
"In matters of condonation of delay a pragmatic view should be taken and there should be a liberal approach. The law of limitation is enshrined in the maxim interest reipublicae ut sit finis litium (it is for the general welfare that a period be put to litigation). Rules of limitation are not meant to destroy the rights of the parties, rather the idea is that every legal remedy must be kept alive for a legislatively fixed period of time."
14. Respectfully following the above decisions of Hon'ble Apex Court as well as Hon'ble Allahabad High Court and considering the facts of the assessee's case, we deem it proper to condone the delay and admit the cross-objections for hearing on merits.
15. The grounds raised in both the cross-objections read as under:-
10 ITA-4788 & 4789/D/2003 & C.O. 344 & 345/D/2011 C.O. No.344/Del/2011:-
"1. On the facts and in the circumstances of the case and in law, the authorities below erred in holding that the benefit of CBDT's Circular No.447 dated 22.01.1986 was not available to the assessee.
2. On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming addition in sum of Rs.5,14,275 on account of cricket earnings.
The findings returned by the Revenue authorities are misconceived and erroneous, and must be quashed, with directions of appropriate relief."
C.O. No.345/Del/2011:-
"1. On the facts and in the circumstances of the case and in law, the authorities below erred in holding that the benefit of CBDT's Circular No.447 dated 22.01.1986 was not available to the assessee.
2. On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming addition in sum of Rs.20,19,293 on account of cricket earnings.
The findings returned by the Revenue authorities are misconceived and erroneous, and must be quashed, with directions of appropriate relief."
16. At the time of hearing before us, it is stated by the learned counsel that the Assessing Officer had denied the exemption available as per CBDT Circular No.447 dated 22.01.1986 on the only ground that the assessee is professional cricketer and not an amateur cricketer. While doing so, he also relied upon the decision of another cricketer Shri Ajay Jadeja. It is stated by the learned counsel that subsequently, the case of Shri Ajay Jadeja is decided in assessee's favour by the ITAT vide order dated 25th July, 2008 in ITA Nos.4451 & 4452/Del/2004, 1249/Del/2002 and C.O.Nos.44 & 45/Del/2006. That similar issue is also decided in the case of Shri Manoj Prabhakar and in his case, the SLP is dismissed by the Hon'ble Apex Court. He further submitted that 11 ITA-4788 & 4789/D/2003 & C.O. 344 & 345/D/2011 even in assessee's own case, in all the subsequent years, i.e., AY 1994- 95, 1995-96 and 1999-2000, in the order passed under Section 143(3), the Revenue has allowed the benefit of above Circular accepting the assessee to be an amateur cricketer. He, therefore, submitted that the addition made by the Assessing Officer may be deleted.
17. Learned DR, on the other hand, relied upon the orders of authorities below.
18. We find that the identical issue came up for consideration in assessee's own case for AY 1994-95 wherein in the original assessment, the Assessing Officer denied the exemption claimed by the assessee on the cricket earning on the ground that the assessee is a professional cricketer and not an amateur. On appeal before the ITAT, the ITAT, vide order dated 28th November, 2008 in ITA Nos.3895, 3896 & 3897/Del/2002, set aside the matter to the file of the Assessing Officer with the following direction:-
"5. We have considered the submissions of the representatives of both the parties and orders of authorities below. We find substance in the submission of the ld.AR and in the interest of justice we consider it prudent to restore the matter to the Assessing Officer after setting the orders of authorities below with a direction to decide the issues disputed before us after considering the order of Tribunal in the case of Shri Ajay Jadeja dated 21 July 2008 (supra) and the documents of expenses as may be produced by the assessee before him. Needless to say that Assessing Officer will give due opportunity of hearing to the assessee while deciding the issues afresh. In view of the above all the three appeals of the assessee are allowed for statistical purposes."
19. Thereafter, the Assessing Officer, vide order dated 1st December, 2009, gave effect to the order of the ITAT wherein the assessee's claim 12 ITA-4788 & 4789/D/2003 & C.O. 344 & 345/D/2011 was accepted. The relevant portion of the assessment order reads as under:-
"3.3 The Hon'ble ITAT, on further appeal, has directed the AO to decide the issue regarding the assessee as being amateur or professional cricketer after considering the order of tribunal vide ITA Nos.4451/Del/2004 & 4452/Del/2004. On careful reading of the above mentioned order it has been noticed that the Hon'ble ITAT has not given any specific direction with regard to the applicability of instruction number 1432 of CBDT in the case of Ajay Jadeja but has restored the matter back to the AO. However, the Hon'ble ITAT has relied upon the decision of Bangalore bench of ITAT in the case of G.R. Vishwnath (29 ITD 142) and the decision of Delhi bench of ITAT in the case of Sri Manoj Prabhakar in ITA No.564 & others/Del/2004 wherein it was held that there was no material in the possession of the AO to arrive at a finding that the assessee was a professional cricketer not entitled for the benefit of circular no.447 dated 22.01.1986.
3.4 Based on the opinion held by Hon'ble ITAT in the case of Sh. Ajay Jadeja wherein it is held that 'the assessee was entitled for exemption in respect of award money as per circular number 447 dated 22.01.1986', the same treatment is being done in the present case of Sh. Kapil Dev. Accordingly, the amount of Rs.18,24,198/- which was treated as taxable by the AO in the original assessment is considered as exempt as per circular no. 447 of CBDT being the awards and gifts received by the assessee. Further, the same ratio is applied in the case of income receipt from test matches as per circular No.1432 of CBDT and only 75% of Rs.538,546/- (after reducing the contribution to Players' Benevolent Fund) amounting to Rs.403909/- is considered as exempt and Rs.134,637/- considered as taxable professional income."
20. Similar view was taken by the Assessing Officer in AY 1995-96 as well as 1999-2000. Thus, when in the subsequent year the Assessing Officer himself has accepted that the assessee is an amateur cricketer and not a professional cricketer, there could be no justification to hold that during the accounting year relevant to AY 1992-93 and 1993-94, 13 ITA-4788 & 4789/D/2003 & C.O. 344 & 345/D/2011 the assessee was a professional cricketer. That in the case of other cricketers who also played for Indian Cricket Team, viz., Shri Ajay Jadeja and Shri Manoj Prabhakar, the appellate authorities and the Hon'ble Courts have decided the issue in favour of the assessee, however, the details of which is already discussed by the Assessing Officer in his order for AY 1994-95, therefore, the same is not being discussed again for the sake of brevity. In view of the totality of above facts, we direct the Assessing Officer to allow exemption to the assessee which is available as per Board's Circulars to the amateur cricketers.
21. In the result, the appeals of the Revenue as well as the cross- objections of the assessee are allowed.
Decision pronounced in the open Court on 28th June, 2013.
Sd/- Sd/-
(CHANDRA MOHAN GARG)
GARG) (G.D.AGRAWAL)
JUDICIAL MEMBER VICE PRESIDENT
Dated : 28.06.2013
VK.
Copy forwarded to: -
1. Revenue : Assistant Commissioner of Income Tax,
Central Circle-
Circle-9, New Delhi.
2. Assessee : Shri Kapil Dev,
39, Sunder Nagar, New Delhi.
3. CIT
4. CIT(A)
5. DR, ITAT
Assistant Registrar