Income Tax Appellate Tribunal - Amritsar
J & K Small Scale Industries Development ... vs Deputy Commissioner Of Income-Tax on 25 February, 1999
ORDER
G. L. Garoo, A.M.
1. The appellant has filed an appeal against the order passed by the CIT(A) vide order No. 43-J/1997-98, dt. 7th September, 1998 and taken various grounds in appeal.
2. The learned CIT(A) has observed that the appeal in the case of the appellant was filed on 29th April, 1997 and Form No. 35 shows that the order of the AO against which the appellant has filed appeal, was served upon the appellant on 29th March, 1997. The learned CIT(A) has observed that the appeal has been filed beyond time limit prescribed under s. 249(2). The learned CIT(A) has further observed that no application for condonation of delay under s. 249(3) has been filed by the appellant and in absence of any application for condonation of delay, the learned CIT(A) dismissed the appeal of the appellant.
3. The learned counsel of the appellant pleaded that the delay in filing of the appeal was only one day and the learned CIT(A) entertained the appeal, heard the arguments at length and also accepted the arguments put forth by the appellant. The learned counsel of the appellant pleaded that at no stage the appellant was informed regarding delay in filing of the appeal. Along with the arguments, the appellant filed an affidavit of A. K. Khullar, managing director, J & K Small Scale Industries Development Corporation Ltd., Gandhi Nagar, Jammu. In the 'affidavit' the managing director, who is principal officer of the company made following deposition :
"(1) That I am managing director of J & K Small Scale Industries Development Corporation Ltd., Gandhi Nagar, Jammu, appellant.
(2) That the above said concern is a J & K Government undertaking.
(3) That the appeal which was filed before the learned CIT(A) was signed by my predecessor on 28th of April, 1987.
(4) That our official immediately rushed, to file the appeal on the same date, i.e. 28th April, 1997 after getting it signed by my predecessor, to the office of the learned CIT(A), Jammu in a vehicle which was unfortunately on the way developed some mechanical defects and the official left the vehicle there and proceeded to the office of the CIT(A) Jammu but when he reached there the office of the CIT(A), Jammu was closed and the concerned person had left the office.
(5) That the learned CIT(A) himself sits at Amritsar and as such it could not be possible for our official to present the appeal before him at his residence on the same which otherwise could have been done.
(6) That due to the facts mentioned above paras our official had presented and filed the appeal on the very next day morning without loss or wastage of any time.
(7) That our official had ried his level best to present and file the appeal within stipulated statutory time but due to the circumstances beyond the control of the official the appeal was presented on the next day morning of the stipulated statutory period for filing appeal.
(8) That the averments made in the affidavit are correct and true to the best of knowledge, belief and record available in the office."
4. The learned counsel also filed an affidavit of Shri V. P. Sharma, Assistant Financial Advisor, of the company explaining therein the reason of delay for one day. The learned counsel also filed copies of the notice of fixation of appeal and adjournment of appeal on various dates and written submissions filed before the learned CIT(A) on the merits of various addition and disallowances made by the AO.
5. We have to give logical interpretation of s. 249 of the IT Act. Sec. 249 of the IT Act spells as follows :
"249. (1) Every appeal under this Chapter shall be in the prescribed form and shall be verified in the prescribed manner. .............
(2) The appeal shall be presented within thirty days of the following date, that is to say -
(a) Where the appeal relates to any tax deducted under sub-s. (1) of s. 195, the date of payment of the tax, or
(b) where the appeal relates to any assessment or penalty, the date of service of the notice of demand relating to the assessment or penalty :
Provided that, wherein application has been made under s. 146 for reopening an assessment, the period from the date on which the appellant is made to the date on which the order passed on the application is served on the assessee shall be excluded, or
(c) in any other case, the date on which limitation of the order sought to be appealed again is served.
(3) The Dy. CIT(A) or, as the case may be, the CIT(A) may admit an appeal after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within that period.
(4) No appeal under this Chapter shall be admitted unless at the time of filing of the appeal -
(a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or
(b) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him :
Provided that (in a case falling under cl. (b) and on an application made by the appellant in this behalf, the Dy. CIT(A) or as the case may be, the CIT(A) may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of provisions of that clause."
6. Sec. 249(3) gives powers to the learned CIT(A) to admit an appeal after the expiration of the period if he is satisfied that the appellant had sufficient cause for not presenting it within the period prescribed by s. 249(3). The order of the learned CIT(A) clearly indicates that the appellant was not made aware that his appeal is beyond period of limitation and delay is for one day. Even though the section does not cast the responsibility upon the CIT(A) to mention the fact of delay but judicial proprietary demands that an opportunity should have been given to the appellant to explain the reason for delay so that the CIT(A) may use his discretionary powers under s. 249(3) of the IT Act and in case, there was sufficient cause for not presenting the appeal within the prescribed period, he should have used his discretion on the subject-matter after obtaining reasonable cause or any other cause from the concerned appellant.
7. There are no strict rules of general applicability available in the section for dealing with the defective appeals. If such rules are not available and no guideline is given in the statute then the principles of judicial propriety will prevail, and the binding force will be to provide natural justice to the aggrieved. It is the duty of the Court to scrutinise the defect in the appeal at the time of presentation of such appeal and appellant should be given an opportunity to remove those defects. This is the normal Court procedure directed by the Supreme Court to be adopted by all the subordinate Courts. While deciding this type of issue, in the case of Jagat Dhish Bhargava vs. Jawahar Lal Bhargava AIR 1961 SC 832. Even though O. 41, r. 3A(1) of the CPC makes it mandatory for a person presenting an appeal after the expiry of the period of limitation to file an application for condonation of delay otherwise the appeal will be summarily dismissed by the competent Judge or authority, but this rule of the CPC cannot be strictly applied in the income-tax matters. The Hon'ble Gujarat High Court has held in the case of Naran Anappa Shethi vs. Jayantilal Chunialal Shah AIR 1987 Guj. 205 and Markland (P) Ltd. vs. State of Gujarat AIR 1989 Guj. 44-46 that the first appellate authority is not prohibited to condone the delay in absence of an application. Sec. 249(3) of the IT Act does not prohibit the CIT(A) to condone the delay in absence of an application for the condonation of delay. There are also various compelling circumstances which also make us to cast upon the responsibility on CIT(A) to mention the legal infirmity or defect to the appellant because appellant can remain under bona fide impression that his appeal is within time particularly when delay is for very short period. The other reason for us to cast upon this responsibility is that the authorities below have to give justice to an aggrieved party and denial of justice on simple technical default without going into merit of the grievance of the appellant will not be in tune with discharge of natural justice. The Punjab & Haryana High Court has held that law is not based on technicalities in the case of Chaman Lal Bros. (P) Ltd. vs. Punjab State (1961) 12 STC 43 (Punj).
8. Sec. 249(3) gives a discretionary power to the appellate authority because the section speaks of 'may' or 'may not'. This discretion should be used in most judicious manner and in a manner which will not harm the interest of the appellant on mere technicalities. The appellate authority must use judicial discretion in a manner that the appellant gets proper opportunity of being heard. The discretion can be used only if the appellant will file an application for condonation, that is why, we are of the opinion that the appellant should be intimated about the fact that his appeal is late and if he requests for condonation of delay, the same should be analysed in a judicious manner. The Karnataka High Court has dealt with similar situation in the case of Mak Wood Industries vs. State of Karnataka (1991) 83 STC 352 (Kar), whereby the Hon'ble High Court has held that in a situation where the authorities below dismiss the appeal as time barred without proper application of mind to the cause shown by the appellant in regard to delay in filing of the appeal, the order dismissing the appeal in limine cannot be maintained but has to be set aside. The Hon'ble Supreme Court has held in the case of Maharashtra State Co-operative Cotton Growers' Marketing Federation Ltd. vs. Shripati Pandurang Khade (1989) Supp (1) SCC 226, 223 that before dismissing the appeal as time-barred, the appellate authority and the Judges should afford an opportunity to the appellant concerned to explain the reason for delay. The appeal should not be dismissed in limine. The Supreme Court has given a landmark judgment in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC), whereby they have laid the guidelines for using of discretion by judicial and quasi-judicial authorities and directed that the discretion should be used with a liberal approach because litigant does not stand to benefit by lodging an appeal late. The Hon'ble Supreme Court was concerned that a situation where refusal to condone the delay may result in rejecting the meritorious matter at the very threshold. The Supreme Court further laid the law by observing that in a situation where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. The Hon'ble Supreme Court has given in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (supra), following in landmark guidance for the subordinate judiciary :
"It is common knowledge that this Court has been making a justifiable 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 in 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 grounds but because it is capable of removing injustice and is expected to do so.
Making a justice-oriented approach from this perspective, there was a sufficient cause for condoning the delay in the institution of the appeal. The fact that it was the "State" which was seeking condonation and not a private party was altogether irrelevant. The doctrine of equality before law demands that all litigants, including the State as a litigant, are accorded the same treatment and the law is administered in an even handed-manner."
9. The Supreme Court has given judicial meaning to s. 5 of Limitation Act, 1963, and along with all the provisions of other legislative law and administrative rules where they have their own limitation control mechanism. These directions are not only binding but are the path finding guidance to all the subordinate authorities who are dealing with the rules and procedure of the limitation attached with various such Central and other State legal systems.
10. Keeping in view the above observations, we are of the opinion that in such matters, not only the appellant should be intimated that he has filed his appeal beyond limitation but if he has any reason for filing the appeal beyond limitation the appellate authority should use his discretionary powers under s. 249(3) of the IT Act in an appropriate judicious manner.
11. We, therefore, refer this matter to the file of the learned CIT(A) with the direction that he should take on record the application for condonation of delay and decide the application in accordance with s. 249(3) of the IT Act.
12. For statistical purposes the appeal of the appellant is allowed.