Income Tax Appellate Tribunal - Ahmedabad
Gopal Cold Storage, Tal.Anand vs Assessee on 8 July, 2008
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IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD BENCH "A" AHMEDABAD
Before S/Shri Bhavnesh Saini, JM and D.C.Agrawal, AM
ITA Nos.1727, 1728 &
1730/Ahd/2008
Asst. Years :1999-00-2001-02
Gopal Cold Storage, Vs. Asstt. CIT, Central
Lambhvel, Tal. Anand. Circle-2, Baroda.
(Appellant) .. (Respondent)
Assessee by :- Shri J. P. Shah, A.R.
Revenueby:- Shri R. K. Dhanesta, DR
ORDER
Per D. C. Agrawal, Accountant Member.
These are three appeals filed by the firm through one Smt. Geeta S. Patel, partner, two for Asst. Years 2000-01 & 2001-02 under section 153A r.w.s.144 of the IT Act, 1961 and one for Asst. Year 1999-00 being the regular appeal..
2. All the three appeals are late by 317 days. An application for condonation of delay has been filed, which reads as under :-
"To Hon. Members, The Income-tax Appellate Tribunal, Ahmedabad.
Dear Sirs, Sub: Request for condonation of delay in filing of appeal in case of Gopal Cold Storage, Lambhavel vs. ACIT, Central Circle-2, Baroda for Asst.
ITA Nos.1727, 1728 & 1739/Ahd/2008 Asst. Years1999-00 - 2001-02 Year 1999-00, Asst. Year 2000-01 and Asst. Year 2001-02. CIT(A) order served on 5/5/2007.
Myself, Geeta Suresh Patel, partner in Gopal Cold Storage (Firm), I am not a working partner of the said partnership firm. Being a sleeping partner of the firm, I was not aware about the business affairs and accounts of the firm.
A search action was carried out on 8/10/2003 covering the residential and business premises of Suresh Tobaccoo group of cases. After the search, the assessment proceedings were taken up u/s 153A rws 144 of the IT Act, 1961 and various details were called for by the AO. Since all the accounts were seized, the then Chartered Accountant was not co- operating and the other partners were having difference of opinion to the extent of non-talking terms, I could not furnish the requisite details as called for during the assessment proceedings. This resulted into heavy tax liability due to extravagant additions in the Assessment Orders.
I was again served with the notices for recovery after CIT appeals decision. To protect my interest, I am trying to collect information to the possible extent from various sources. In this process, I lost track of the time limit for filing of appeal in ITAT and therefore I request your honour to condone the delay in filing of appeals in the interest of justice.
Thanking you, Yours faithfully, For M/s Gopal Cold Storage Sd/- Smt. Geeta Suresh Patel Partner."
In addition to this, an affidavit dated 8.7.2008 has been filed which also reads as under :-
"AFFIDAVIT THE CONDONATION OF DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL Before Income-tax Appellate Tribunal, Ahmedabad.2
ITA Nos.1727, 1728 & 1739/Ahd/2008 Asst. Years1999-00 - 2001-02 In the matter of Gopal Cold Storage, Asst. Year 1999-2000-01 and 2001-
02. Affidavit of Smt. Gitaben Sureshbhai Patel aged about 46 years, wife of Shri Sureshbhai C. Patel, partner of firm Gopal Cold Storage carrying business at Lambhvel Road, Near Takshila Vidyalaya, Anand.
1. That I am sleeping partner of the above referred firm carrying on its business at Anand.
2. That for the Asst. Year 2000-01, 2003-04 and 2005-06 an appeal was filed before CIT(A) which was disposed of by him by his order dated 10.01.2007 for all the three assessment years.
3. That the time of filing appeal before the Tribunal was expired on 10.03.2007.
4. That the appeal papers including the grounds of appeal the memo of appeal, certified copy of orders of CIT(A) and the copy of assessment orders were duly prepared by 10.03.2007.
5. That due to lack of co-ordination between the partners of Gopal Cold Storage, the appeal documents could not be filed within the prescribed period of 60 days and delay of 317 days has occurred.
6. That the appeal could not filed be in due course due to various disputes between the partners.
7. That it is now demanded by the circumstances to file the appeal so as to resolve the matters and safeguard my interest.
DEPONENT: S.P. Gita S. Patel I, the above named deponent, do hereby verify that the contents of paras 1 to 7 above are true to the best of my knowledge and belief.
Signed and verified this on the 8th day of July, 2008.
Deponent - S.P. Gita S. Patel"3
ITA Nos.1727, 1728 & 1739/Ahd/2008 Asst. Years1999-00 - 2001-02
3. The ld. AR argued the matter at length submitting that in the interest of substantial justice delay should be condoned. He relied on following judgments :-
1. Supreme Court's order in N. Balkrishnan dt.3.9.98 (1998) 7 SCC 123.
2. Supreme Court's order in Ram Nath Sao alias Ram Nath Sahu & Ors. Dt.27.2.2002 (2002) 3 SCC 195
3. Allahabad High Court's order of Auto Centre dated 12.5.2005 (2005) 278 ITR 291 (All)
4. Gujarat High Court's order of G.S.F.C. Ltd. dt.1.2.2005 (2006) 283 ITR 149 (Guj)
5. Allahabad High Court's order of Bharat Auto Centre, dt.8.7.2005 (2006) 282 ITR 366 (All)
6. Tribunal's order in ITA No.2390/A/1996 dt.19.12.2001 for Asst. Year 1992-93 of Kailpar Credit & Mercantile P. Ltd.
7. Tribunal's common order in ITA 3676 to 3683/2004 of Chandravadan A. Taktawala for Asst. Year 19975-76, 1982-
83 dt.21.6.2005
4. Against this, the ld. DR strongly opposed the condonation of delay on the ground that assessee has not disclosed who are partners in the firm, why other working partners have not come up to file the appeals and application for condonation of delay. Further regarding alleged dispute between the partners the ld. DR submitted that there is no evidence on record as to how it has prevented the assessee firm from filing the appeals. Further, the facts stated in the application for condonation of delay and affidavit are quite contradictory. It is not clear as to when the assessee had actually received the order of ld. CIT(A). The cause shown by the assessee is not sufficient, rather it is dilatory tactics or utter negligence in filing the appeals. The ld. DR distinguished the authorities cited by the ld. AR and submitted that decisions in those cases are given on different facts matrix.
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5. The ld. AR in rejoinder submitted that all the working partners are having dispute with each other and the department has put up the burden of entire tax on the lady and she had come up in appeal.
6. We have considered the rival submissions and perused the material on record. In our considered view the facts narrated showing sufficient cause are not convincing. In the application for condonation of delay as referred above, it is stated that order of ld. CIT(A) was received on 5.5.2007 whereas in the affidavit as filed it is stated that all the appeal papers including the copy of order of ld. CIT(A) were duly prepared by 10.03.2007. This is contradictory as to the receipt of ld. CIT(A)'s order which is not clarified. Secondly the details as to who are the partners in the firm and who are non-working partners are not forth coming to explain the delay in filing the appeals. The ld. AR has sought to emphasize that there was dispute among the partners. He has filed a copy of the petition filed by one Shri Chhaganbhai Chhotabhai Patel against Naginbhai Chhotabhai Patel, before the Deputy Collector, Petlad. However, this petition does not show any substantive nature of dispute in relation to the finance of the assessee firm so as to make us believe that the working partners would not come forward to take up the responsibility of filing the appeals. Further, neither, Shri Chhaganbhai Chhotabhai Patel nor Shri Naginbhai Chhotabhai Patel are partners in the firm, therefore, it cannot be said that dispute put up by these two persons before Dy. Collector had any effect over the business of the firm. Thirdly, the assessee has not co-operated before the AO and has not filed any details nor attended before him resulting in ex parte order, which shows assessee's non-co-operative attitude and approach of neglecting tax matters. Fourthly, it is not made clear why the working partners whose identities are not disclosed, chose to put forward the lady partner who is 5 ITA Nos.1727, 1728 & 1739/Ahd/2008 Asst. Years1999-00 - 2001-02 non-working partner she has claimed that she has no knowledge about the working of the firm and finance thereof. Accordingly, we are not satisfied that there was any case for not filing the appeals in time. Question of considering it whether sufficient or not would not arise.
7. Even though in the matter of condonation of delay a pragmatic view should be adopted and a liberal approach should be taken but where it is found that assessee is not coming with a clean hands it is difficult to exercise the discretion in its favour. We are not convinced that a non- working partner, rather sleeping partner would be able to advance cause of justice when reasons for the working partners not coming forward, are not explained. The alleged dispute is shown between the working partners but none of them is coming forward to admit that there is family dispute and they were unable to prepare the papers for filing the appeals. On the other hand affidavit says that appeal papers were prepared by 10.03.2007 (as explained in point 4 of the affidavit furnished by Smt. S.P.Gita S. Patel, sleeping partner) then there was no reason to send those papers around 16.5.2008 on which date they were handed over to the Tribunal. Not being able to prepare the appeal papers is one thing and not to get them dispatched is another thing. It is apparently negligence or callousness in not being able to dispatch the papers to the Tribunal for nearly a year. No doubt the cause shown by the assessee should be given a liberal interpretation. But where cause shown has no relevancy to reasonableness, the delay could not be condoned. It is made clear in several decisions of the courts such as in Surendra Kumar Boveja vs. CWT (2006) 287 ITR 52 (Del) that sufficient cause would mean a cause beyond the control of the party i.e. a mistake made in good faith in respect of exercise of due care and attention, but where there is want of 6 ITA Nos.1727, 1728 & 1739/Ahd/2008 Asst. Years1999-00 - 2001-02 due care and attention or want of due diligence then there cannot be a sufficient cause warranting condonation of delay.
8.1. Now coming to various decisions referred to by ld. AR the first authority -Supreme Court's order in N. Balkrishnan dt.3.9.98 (1998) 7 SCC 123 it is held that the words "sufficient cause" should be construed liberally -acceptability of explanation for the delay is the sole criterior, length of delay not relevant. In absence of anything showing mala fide or deliberate delay as a dilatory tactic, court should normally condone the delay. In the present case we notice that avoidance by the working partners who have full knowledge of working of the firm and about its finance creates serious doubt in our mind that there is a deliberate avoidance by them so as to prevent the authorities including the Tribunal to know the correct facts about the financial transactions of the firm and therefore, to arrive at correct income. A sleeping lady partner coming forward to file the appeals will not lead to any substantive justice either to the firm or to the Revenue unless some body who has full knowledge about the working of the firm comes forward to assist the counsel and the Tribunal in sorting out the facts relating to assessee's appeals. Accordingly, we get an impression that delay is not unintentional and avoidance by the working partners is with the clear motive to avoid the disclosure of actual facts before the AO and before the Tribunal.
8.2 The next authority is in Supreme Court's order in Ram Nath Sao alias Ram Nath Sahu & Ors. Dt.27.2.2002 (2002) 3 SCC 195. It is held that liberal interpretation and balance between rights of parties should be considered by the court while examining the cause and its sufficiency. Further the court should see the substantial justice while condoning the delay. There is no dispute with above proposition. Substantial justice 7 ITA Nos.1727, 1728 & 1739/Ahd/2008 Asst. Years1999-00 - 2001-02 means justice to both the parties and not to the assessee only. If a sleeping partner comes forward to the counsel and before the Tribunal then, we are not convinced that full facts of the issues involved, would be known to the counsel or to the Tribunal and, therefore, substantial justice can not be done. Therefore, even if delay is condoned, substantial justice is not going to be done by adjudicating the appeals on merit.
8.3 The next authority is the decision of Hon. Allahabad High Court in Auto Centre vs. State of Uttar Pradesh (2005) 278 ITR 291 (All) wherein it is held that in the matter of condonation of delay a pragmatic view should be taken and there should be a liberal approach. In this case cause shown was that out of the two partners one was old and the other was ill which facts were not doubted. The cause was considered sufficient and delay was condoned. There is no dispute with the above proposition but is not applicable to the facts of the present case.
8.4 The next authority is the decision of Hon. Gujarat High Court in Gujarat State Fertilizers & Chemical Ltd. vs. CIT (2006) 283 ITR 149 (Guj). On the facts of that case the cause for delay was considered sufficient. The Hon. Court held as under :-
"Held-(i) that it was only by virtue of letter dated December 5, 2001, that the assessee was informed by the FICC to prefer claims on the basis of the revised retention price in the prescribed pro forma. The assessee was also advised to duly adjust the reduction in subsidy on account of the downward revision of the retention price in the arrears of bills or fresh bills that may be preferred with the FICC and only in cases where no payments were due from the Government, the assessee was required to refund the amount to the Government by the due date. In such circumstances, the approach of the Commissioner in refusing to condone 8 ITA Nos.1727, 1728 & 1739/Ahd/2008 Asst. Years1999-00 - 2001-02 the delay on the ground that there was no valid explanation was not in order. The impugned order to the extent it refused to condone the delay had to be quashed and set aside."
Since the facts in the present case are different this authority is of no help to the assessee firm.
8.5 The next judgment is of Hon'ble Allahabad High Court in the case of Bharat Auto Centre vs. CIT (2006) 282 ITR 366 (All). In this case the Hon. Court has followed the judgment of Hon. Apex Court in Balakrishnan (N) vs. Krishnamurthy (M) (1998) 7 SCC 123 wherein it is held as under -
"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.
Held, that in the matter of condonation of delay a liberal and pragmatic view should be taken. The reasons given by the assessee for the delay appeared to be sufficient and, accordingly, the delay was liable to be condoned."
8.6 In other two judgments also the judgment of Hon. Apex Court in Balakrishnan (N) vs. Krishnamurthy (M) (supra) case has been followed.
7. Even though in the matter of condonation of delay a pragmatic view should be adopted and a liberal approach should be taken but where it is found that assessee is not coming with a clean hands it is difficult to exercise the discretion in its favour. We are not convinced that a non-
9ITA Nos.1727, 1728 & 1739/Ahd/2008 Asst. Years1999-00 - 2001-02 working partner, rather sleeping partner would be able to advance cause of justice when reasons for the working partners not coming forward, are not explained. The alleged dispute is shown between the working partners but none of them is coming forward to admit that there is family dispute and they were unable to prepare the papers for filing the appeals. On the other hand affidavit says that appeal papers were prepared by 10.03.2007 (as explained in point 4 of the affidavit furnished by Smt. S.P.Gita S. Patel, sleeping partner) then there was no reason to send those papers around 16.5.2008 on which date they were handed over to the Tribunal. Not being able to prepare the appeal papers is one thing and not to get them dispatched is another thing. It is apparently negligence or callousness in not being able to dispatch the papers to the Tribunal for nearly a year. No doubt the cause shown by the assessee should be given a liberal interpretation. But where cause shown has no relevancy to reasonableness, the delay could not be condoned. It is made clear in several decisions of the courts such as in Surendra Kumar Boveja vs. CWT (2006) 287 ITR 52 (Del) that sufficient cause would mean a cause beyond the control of the party i.e. a mistake made in good faith in respect of exercise of due care and attention, but where there is want of due care and attention or want of due diligence then there cannot be a sufficient cause warranting condonation of delay.
9. Thus we are not satisfied with the reasons for filing appeals late. We decline to condone the delay. The appeals are accordingly barred by limitation. However, before parting away we may mention that let the working partners come forward and file fresh application for condonation of delay giving sufficient reasons. The appeals can be considered afresh if reasons given are found sufficient.
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10. In the result, the appeals filed by the assessee are dismissed.
Order was pronounced in open Court on 13/8/2010.
Sd/- Sd/-
(Bhavnesh Saini) (D.C.Agrawal)
Judicial Member Accountant Member
Ahmedabad,
Dated : 13/8/2010.
Mahata/-
Copy of the Order forwarded to:-
1. The Assessee.
2. The Revenue.
3. The CIT(Appeals)-
4. The CIT concerns.
5. The DR, ITAT, Ahmedabad
6. Guard File.
BY ORDER,
Deputy/Asstt.Registrar
ITAT, Ahmedabad
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