Income Tax Appellate Tribunal - Indore
Income Tax Officer vs Shri Hemraj Onkarji Mali, Shri Bhagwan ... on 31 May, 2006
Equivalent citations: [2007]106ITD513(INDORE), (2007)108TTJ(INDORE)100
ORDER
U.B.S. Bedi, Judicial Member
1. These four appeals of the revenue in the case of four different assessees arise out of consolidated/separate orders passed on 30th September 96 all relevant to assessment year 89-90 wherein department has raised the following single common effective ground:
That on the facts and in the circumstances of the case, Id CIT(A) erred in annulling the assessment holding that the compensation amount could be considered only in the assessment year 86-87 as the position has been changed with effect from 1/4/88 when the law has been amended.
2. These appeals of the department were found to have been filed late by 8 years, 7 months and 10 days for which respective defect memos stand already issued. In response thereto Learned D. R. not only pleaded for condonation of delay but also filed affidavit of one Shri M. R. Somasekra, Income Tax Officer, Ward-1(1), Ujjain and of Shri Mukesh Kumar, learned CIT, Ujjain to support his plea whereas all the assessees have also filed their counter affidavits in identical manner.
3. Learned D. R. while taking support from the facts as narrated in affidavit filed by the department' has pleaded for condonation of delay on the ground that there was sufficient and reasonable cause for not preferring the appeals within the stipulated time and moreover it is a case of government department where more time is taken in decision making as compared to private parties or individuals only criteria is acceptability of explanation irrespective of length of delay and primary function of the Tribunal being adjudication of disputes between the parties to advance substantial justice so the request of the department should be accepted. To support his plea reliance was placed on Collector Land Acquisition ms/ Mst. Katiji , State of Haryana v. Chandra Mani , G. Ramgowda Major v. Special Land and Vaijayantibai B Patel v. Shantiram B Patil (2002), 253 ITR 798 (SC). It was thus urged to condone the delay and to admit the appeals for hearing in the interest of justice.
4. Learned Counsel for the assessee has challenged very language of the affidavits filed by Income Tax Officer, and learned CIT and pleaded that those are not in accordance with law; hence, should be ignored. In order to support his plea, assessee's counsel has also filed counter affidavits in all the four cases. It is strongly contended that since there is long delay of more than 8 years and when filing of appeal is to be authorised by the Commissioner of Income Tax who is a very senior officer of the department and if at that relevant time, conscious decision has been taken not to file appeals against the orders of learned CIT(A) in all these cases, it cannot be taken as reasonable cause for late filing of appeals and no other reason has been given. That apart it was submitted that the plea of the revenue that State cannot be treated at par with individual as decision making takes longer time in Government department than in the case of individual, where decisions are quickly taken, is liable to be rejected in view of length of delay involved. Otherwise no valid reason or justifiable cause for the delay has been demonstrated by the department, therefore, application of revenue for condonation of such long delay be rejected and all the four appeals of the department may not be admitted for hearing and reliance was placed on 153 ITR 596 (Madras), (Ramchander v. State of Kerala).
5. After hearing both the sides and considering the material on record as well as documentary evidence furnished by rival sides and the case law relied upon, I find that the issue involved is assess ability of income received as compensation by the person on compulsory acquisition of the land by Ujjain Development Authority. The compensation was received by the persons in financial year 88-89 relevant to assessment year 89-90. The amount of compensation was accordingly brought to capital gain tax for assessment year 89-90. The assessee went in appeal before CIT(A) who vide his order dated 30/9/96 held that the said compensation was not taxable in assessment year 89-90 and was instead taxable in assessment year 86-87. Reference is invited to CIT(A)'s order in appeal No. IT-U-39, 40, 41, 42/95-96 dated 30/9/96 passed by CIT(A), Gwalior, the then jurisdictional CIT(A). The said decision was rendered by CIT(A), Gwalior ignoring the amendment in the provisions of law as per which the compensation on acquisition of land was to be taxed on receipt basis and as such the jurisdictional High Court decision, referred by CIT(A) in his order and also Hon'ble Supreme Court decision referred by CIT(A), was not applicable in view of the amendment in the Act with retrospective effect by Finance Act, 1991 and also the amendment by Finance Act, 1987. The above decision of CIT(A) was not appealed against by the department as not authorised by the then CIT (Administration), Bhopal and reason given is that the then Assessing Officer, Addl. CIT and also Income Tax Officer, (Tech) posted in the office of CIT, Bhopal ignored the amendment in law referred to above and it was not brought to the notice of CIT, Bhopal. Following the decision of CIT(A) dated 30/9/96, action under Section 148 was taken for assessment year 86-87 in these cases and the above decision of CIT(A) was also accepted by the assessee. Department while accepting the decision for assessment year 89-90 did not contest it also on the ground that the taxability of the capital gain was upheld by CIT(A) and instead of 89-90, the year of taxability was determined as 86-87 in case of all four assessees. The assessee filed appeal against the order of assessment passed in the four cases for assessment year 86-87 before CIT(A), Ujjain wherein various grounds and issues were agitated. One of the issues taken before CIT(A), Ujjain was that compensation amount was taxable in assessment year 89-90 in view of the amended provisions of law which came to be accepted. in view of amendment made in relevant provision and department filed appeals against earlier order of CIT(A) for assessment year 89-90 with application for condonation of delay in all these four cases.
6. In view of these facts it is to be seen whether delay caused by the department in filing appeal before the Tribunal in all these four cases is condonable or not. In these cases as per assertions made, the decision of CIT(A) rendered on 30th September 96 was accepted by CIT Bhopal and file was practically closed and issue of taxability of capital gain was again taken up in March 2005 after CIT(A), Ujjain vide order dated 28/1/2005 decided the issue of taxation of capita! gain to be not valid for assessment year 86-87 for which proceedings were initiated after orders were passed on 30th September 96 by CIT(A) in appeals for assessment year 89-90 and where after Assessing Officer issued notice under Section 148 in all the four cases to bring to tax capital gain in assessment year 86-87 and on this basis it has been strongly pleaded on behalf of the department that there was sufficient and reasonable cause for not preferring the appeals against order for assessment year 89-90 within the due time and support has been taken from decided cases as detailed in earlier paragraphs.
7. After considering facts, material on record and various case laws as cited by rival sides, I find it to be settled position of law that right of appeal is neither an absolute nor an ingredient of natural justice, the principle of which must be followed in judicial and quashi judicial adjudication. The right to appeal is a statutory right and it can be circumscribed by the condition in the grant. If a statute gives right to appeal upon certain conditions it is upon fulfillment of those conditions that the right becomes vested in and exercisable by the appellant. As per 253(3) appeal is required to be filed by the assessee or the department within sixty days from the date of communication of the order to be appealed against on the assessee or the Commissioner, as the case may be and under Section 253(5) Tribunal may admit an appeal after expiry of relevant period referred to in Section 253(3) if it is satisfied that there was sufficient cause for not presenting the appeal within that period. No doubt it is specifically provided that appeal can be admitted after the prescribed period if the assessee satisfies the Tribunal that he/she had sufficient cause for not preferring the appeal within period as prescribed in this behalf. Where the time for preferring an appeal has expired, a valuable right is secured to the respondent or the opposite party and such right ought not to be lightly disturbed (as held by Hon'ble Supreme Court in the case of Ramlal v. Rewa Coalfields Limited ). The appeal preferred or made after the expiry of the prescribed period can be admitted only if the assessee satisfied the Tribunal that there was sufficient cause for not preferring the appeal within such period. The Tribunal has power to condone the delay only when sufficient cause is shown with a view to advance substantial justice and even after sufficient cause has been shown the party is not entitled to condonation of delay, as a matter of right. If sufficient cause is shown then Tribunal has to enquire, whether in its discretion, it should condone the delay, consideration of bonafides or due diligence are always material. Since all other circumstances are also to be taken into account before applying the provisions of law in this regard and in this case the department did not file the appeals within due time in all these cases and cause shown by it does not conclusively show that same is reasonable or sufficient. No doubt at more than one occasion Hon'ble Supreme Court has specifically held that State cannot be put on the same footing as an individual because individual would be quick in taking the decision whereas Government machinery, there is impersonal mechanism through its officers or servants but position here is not the same as it was not a case of no action or inaction but here a conscious decision has been taken not to file appeals by the senior officer of the rank of Commissioner of Income Tax at relevant time when files were put up before him for getting authorization to file appeals in the Tribunal soon after passing of order by CIT(A) for assessment year 89-90 and now when appeals in all these cases for assessment year 1986 -87 have been allowed by learned CIT(A) whereby it was held that in view of amendment of relevant provision, the compensation is not taxable in assessment year 86-87 and after this decision, appeals have been filed against earlier order passed for assessment year 89-90 dated 30/9/96 and department has sought condonation of delay, which, in my considered view, cannot be held to be a sufficient or reasonable cause for not filing the appeals within stipulated time in the light of facts and circumstances explained and discussed above.
8. As such, considering the totality of facts and circumstances, pleas raised and discussion held in the light of decided cases, as relied upon, I decline to condone the delay caused in filing of all these appeals, refuse to admit them for hearing and dismiss them in limine.
9. As a result, all the appeals get dismissed.