Income Tax Appellate Tribunal - Ahmedabad
Mansi Builders Pvt. Ltd.,, Ahmedabad vs Assessee on 13 March, 2007
IN THE INCOME TAX APPELLATE TRIBUNAL
'C' BENCH - AHMEDABAD
(BEFORE S/SHRI H. L. KARWA, JM AND N. S. SAINI, AM)
ITA No.1056/Ahd/2009
A. Y.: 1998-99
Mansi Builders, Vs The A. C. I. T., Cent. Circle-1(1),
Vikash Chambers, 3rd floor, Aayakar Bhavan,
Opp. University Hostel, Ashram Road,
Nr. Dada Saheb na Pagla, Ahmedabad
Navrangpura, Ahmedabad
PA No. AAACM 0084 F
(Appellant) (Respondent)
Assessee by Shri G. C. Pipara, AR
Department by Shri Shelley Jindal, DR
ORDER
BY BENCH: This appeal filed by the Assessee is directed against order of the CIT(A)-IV, Ahmedabad dated 13-03-2007 relating to assessment years 1998-99.
2. In this appeal, the assessee has raised the following grounds:
"1. The learned CIT(A) has erred in law while applying the judgment in the case of CIT Vs. Multiplan India Pvt. Ltd. 38 ITD 320 (Del), in the case of appellant, and passing the order exparte, dismissing the appeal. In view of legal position, the learned CIT(A) has erred in dismissing the appeal.
2. The learned CIT(A) has also erred confirming penalty of Rs.5,00,000/- imposed by the A. O. u/s. 271 (1 ) ( c ) of the Act, on disallowance of certain expenses as confirmed by the CIT(A). In view of the facts of the case, the impugned penalty imposed u/s. 271(1) ( c) requires to be deleted.."
3. It is observed that the Registry of the Tribunal has pointed out that there is delay of 683 days in filing the appeal before the Tribunal. The ITA No.1056/Ahd/2009 2 Mansi Builders Limited assessee has submitted an application for condonation of delay along with Affidavit of Shri Vikash A. Shah, Managing Director of Mansi Builders. The Affidavit reads as under:
"I, Vikas A.Shah, son of Shri Arvind Madhukar Shah aged about 55 years, residing at 210, Anal Flats , Vijay Char Rasta Road, Ahmedabad - 380 009, do hereby solemnly declare and affirm as under:-
1. That I am the Managing Director of Mansi Builders Ltd. and looking after the entire affairs of the said company.
2. That the said company have filed an appeal dated 12/4/206, before the Commissioner of Income-tax (Appeals), for A. Y. 1996-
97, against the order passed by the Asstt. Commissioner of Income-tax, Central Circle 1(2), Ahmedabad u/s. 271(1)( c ) dated 6/3/206, imposing a penalty of Rs.5,00,000/-.
3. The said appeal has been decided by the Commissioner of Income-tax (Appeals)-I, Ahmedabad vide order dated 13/3/2007, confirming the penalty as exparte, on the ground that notices issued were not attended iand applying the judgement of CIT vs. Multiplan India Pvt. Ltd. - 38 ITD 320 (Del.).
4. The said order of the Commissioner of Income-tax (Appeals dated i13/3/2007 was received by me on 27/3/2007 and accordingly, I should have preferred an appeal before the Hon'ble Income Tax Appellate Tribunal within a period of 60 days from 27/3/2007.
5. That during the period March, 2007 to December, 2007 I was having certain financial problem and business was closed and that since during the period April , 2008 to December 2008, I was mentally disturbed ,as my entire properties including the house in the name of my wife, has been attached by the Income-tax Department vide an order u/s. 281B dated 22/2/2008 and therefore, the complete business of my company Mansi Builders Ltd. were stopped, the construction activity has come to a halt sand various persons who has booked flats in our schemes has demanded refund of the amount, which I was unable to pay as all the bank accounts were also sealed by the Income-tax Department. Even some of the properties running into about Rs.70 to 80 Croers of worth , has been taken possession by certain persons, unauthorisedly and therefore, I was mentally disturbed and absolutely pre-occupied in the legal matters ITA No.1056/Ahd/2009 3 Mansi Builders Limited pertaining to the release of the properties and therefore, I could not look into any of the aspects pertaining to filing of the return, assessment proceedings, appeal hearing etc.
6. That in the month of December, 2008/ January, 2009 when I was out of my mental tension I started looking into various other aspects and thereafter, I came to know that the order dated 9/5/2008 passed by the Commissioner of Income-tax (Appeals), could not be attended for further appeal.
7. That in the month of January, 2009/ February, 2009 I started for looking for another Chartered Accountant to look after my income- tax matters as certain appeals were not preferred, certain assessments were made exparte which could not be appealed before the CIT(A) etc. etc. , as the earlier Chartered Accountant namely Dhirendra & Co. has stopped looking after my appeal work as his fees could not be paid by me in time.
8. That in the month of February, 2009 I have appointed M/s. Pipara & Co., Chartered Accountants to look after my8 income tax matters and handed over all the pending orders which were to be appealed against further and other papers to be attended including the properties etc. which has been seized.
9. That appeals pertaining to A. Y. 1996-97 for penalty u/s. 271 (1) ( c ) was accordingly filed by M/s. Pipara & Co., Chartered Accountants on 8/4/2009, before the Hon'ble Income Tax Appellate Tribunal, which was delayed by 683 days.
10. That the said delay in filing the appeal is due to my mental disturbance during the year 2008 wherein I could not look after the matter and therefore, a separate application is being moved for the condolence of the delay.
Whatever stated above is true and correct to the best of my knowledge and belief.
(ViKASH A SHAH) MANAGING DIRECTOR MANSI BUILDERS LTD.
Place: Ahmedabad Date: September 17th,2009.
4. Shri G. C. Pipara, learned Counsel for the Assessee submitted that jurisdiction to condone delay should be exercise liberally. The matter ITA No.1056/Ahd/2009 4 Mansi Builders Limited relating to condonation of delay should be judged broadly and not in a pedantic manner. He relied on the judgment of the Hon'ble Supreme Court in the case of Collector, Land Acquisition Vs. Mst. Katiji (1987) 167 ITR 471. On the other hand, Shri Shelley Jidnal, learned DR submitted that there was inordinate delay in filing the appeal before the Tribunal. He further submitted that every day's delay must be explained by the assessee. Accordingly, it was submitted that delay in filing the appeal may not be condoned.
5. We have considered the rival submissions and have also perused the materials available on record. It is true that the reasons given by the assessee for delay in filing the appeal have not been controverted by the learned DR. In the facts and circumstances of the present case, we are of the view that the assessee was prevented by sufficient cause from filing the appeal before the Tribunal. It is settled law that the phrase "sufficient cause" is not a question of principle but it is a question of fact. Hence, whether to condone the delay or not, depends upon the facts and circumstances of each case. Hence, "sufficient cause" for condonation of delay depends on the facts and circumstances placed by the applicant before the authorities concerned. We do not find any merits in these contentions of the learned DR that there is inordinate delay in filing the appeal before the Tribunal. It is well settled law that length of delay is not the matter in the contexts of condonation of delay. In our view, in the matter of condonation of delay, it should be exercised liberally. In the case of Collector, Land Acquisition Vs Mst. Kartiji (1987) 167 ITR 471, the Hon'ble Supreme Court has laid down as under:
"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 de merits ". The expression "sufficient cause " employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner ITA No.1056/Ahd/2009 5 Mansi Builders Limited which sub-serves 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 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 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".
6. In view of the ratio laid down by the Hon'ble Supreme Court in the case of Collector, Land Acquisition (supra),, we are of the view that there was sufficient cause for filing the appeal late by 683 days. Accordingly, we condone the delay in filing the appeal.
ITA No.1056/Ahd/2009 6Mansi Builders Limited
7. As regards the merits of the case, we find that the CIT(A) dismissed the appeal of the assessee without considering facts and grounds raised by the assessee. The CIT(A) observed that the assessee failed to put in appearance on various dates of hearing and finally on 13-3-2007 again, none appeared nor any intimation seems to have been received on behalf of the assessee nor through learned Counsel. The CIT(A) proceeded to dismiss the appeal for non-prosecution. The CIT(A) has placed reliance on the following decisions:
1. The Manager, S. B. I. , Ludhiana Vs CIT, Ludhiana in ITA No.24/Chandi/2000 for Assessment Year 1998-99 decided by Hon'ble ITAT Chandagarh, Bench 'B', on 06.02.2004.
2. G. S. Auto International Lt., Ludhiana Vs JCIT Sp. Range, Ludiana in ITA No.725/Chandi/2000 for Assessment Year 1995-96 by Hon'ble ITAT Chandigarh, Bench 'A' , on 27.02.2004
3. CIT Vs Multiplan India (P) Ltd., 38 ITD 320 (Del),
4. Estate of Tukojirao Holkar Vs CWT, 223 ITR 480 (M).
8. After hearing the learned representatives of both the parties, we find that the issue is squarely covered in favour of the assessee and against the Revenue by the decision of ITAT Ahmedabad "C" Bench in the case of Guajrat Themis Biosyn Ltd. Vs JCIT (2000) 74 ITD 339 (Ahd). On similar set of facts the Tribunal has held as under:
"3. We have carefully considered the facts and circumstances of the case as well as submissions made before us. The impugned order passed by the CIT(A) is clearly violative of the express provisions of section 250(6), which provides that the appellate orders of the CIT(A) are to state the points arising in the appeal, the decision of the authority thereon and the reasons for such decision. The underlying rationale of the provision is that such orders are subject to further appeal to the appellate Tribunal. Speaking order would obviously enable a party to know precise points decided in his ITA No.1056/Ahd/2009 7 Mansi Builders Limited favour or against him. Absence of the formulation of the point for decision for want of clarity in a decision undoubtedly puts a party in quandary. Section 250(6) expressly embodies the principles of natural justice and such a provision is clearly mandatory in nature. The impugned order passed by the Commissioner (Appeals) in violation of the provisions of section 250(6) cannot, therefore, be sustained. Regarding the decisions of the Delhi Bench of the Tribunal in Multiplan India (P.) Ltd.'s case (supra) cited by the ld. CIT(A), we find that the said decision is clearly distinguishable. Section 254 referring to the orders of the Tribunal confers plenary jurisdiction on the Tribunal in the matter of passing orders under section 254(1). There is no such express stipulation in section 254 as contained under the provisions of section 250(6) relating to the orders of first appellate authority. Therefore, reliance placed by the CIT(A) on Multiplan India (P.) Ltd.'s case (supra) is entirely misplaced. Similarly, the case of Estate of Late Tukojirao Holkar (supra) cited by the ld. CIT(A) is distinguishable and does not support the view taken by the CIT(A).
4. For the reasons indicated above, we hereby set aside the impugned order of the CIT(A) and direct the CIT(A) to dispose of the appeal of the assessee afresh after allowing proper opportunity in accordance with law.
9. Respectfully, following the order of the Tribunal (supra), we set aside the order of the CIT(A) in toto and restore the matter to the file of the CIT(A) with a direction to decide the appeal of the assessee afresh on merits in accordance with law after affording due and reasonable opportunity of being heard to the assessee.
10. In the result, for statistical purposes, the appeal is allowed.
The order was pronounced in the open court on 18-09-2009 Sd/- Sd/-
(N. S. SAINI) (H. L. KARWA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Date : 18-09-2009
Lakshmikant/-
ITA No.1056/Ahd/2009 8
Mansi Builders Limited
Copy of the order forwarded to:
1. The Appellant
2. The Respondent
3. The CIT concerned
4. The CIT(A)
5. The DR, ITAT, Ahmedabad
6. Guard File
BY ORDER
Dy. Registrar, ITAT, Ahmedabad