The Dharmaj Peoples Co.Op. Bank Ltd.,, Dist.Anand v. The Income tax Officer, Ward-3(3),, Petlad

ITA 1118/AHD/2008 | 1998-1999
Pronouncement Date: 06-08-2010 | Result: Dismissed

Appeal Details

RSA Number 111820514 RSA 2008
Assessee PAN AAACT8600Q
Bench Ahmedabad
Appeal Number ITA 1118/AHD/2008
Duration Of Justice 2 year(s) 4 month(s) 6 day(s)
Appellant The Dharmaj Peoples Co.Op. Bank Ltd.,, Dist.Anand
Respondent The Income tax Officer, Ward-3(3),, Petlad
Appeal Type Income Tax Appeal
Pronouncement Date 06-08-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 06-08-2010
Date Of Final Hearing 29-07-2010
Next Hearing Date 29-07-2010
Assessment Year 1998-1999
Appeal Filed On 31-03-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI BHAVNESH SAINI JM & SHRI A N PAHUJA AM ITA NO.1118/AHD/2008 (ASSESSMENT YEAR:-1998-99) THE DHARMAJ PEOPLES CO- OP. BANK LTD. DHARMAJ DISTRICT: ANAND [PAN: AAACT 8600 Q] V/S INCOME-TAX OFFICER WARD- 3(3) PETLAD [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI S N SOPARKAR AR REVENUE BY:- SHRI K M MAHESH DR O R D E R A N PAHUJA: THIS APPEAL BY THE ASSESSEE AGAINST AN ORDER DATED 03- 11-2003 OF THE LD. CIT(APPEALS)-II BARODA RAISES THE FOLLOWING GROUNDS:- 1 THE ASSESSMENT ORDER PASSED BY THE AO AND PARTLY CONFIRMED BY FIRST APPELLATE AUTHORITY IS BAD IN LAW AND DESERVES TO B E UNCALLED FOR. 2 THE AO AS WELL AS FIRST APPELLATE AUTHORITY HAS E RRED IN LAW AND ON FACTS IN ASSESSING INCOME OF RS.18 78 709/- BY DENYING TH E DEDUCTION U/S 80P OF I.T. ACT AND OBSERVING THAT THE INTEREST ON INVESTMENT MADE BY THE ASSESSEE IS IN VIOLATION OF SECTION 71 OF CO-OP ERATIVE SOCIETIES ACT AND SO NOT ELIGIBLE FOR DEDUCTION. HOWEVER THE SAM E DESERVES TO BE DELETED. 3 THE ASSESSEE CRAVES TO RESERVE ITS RIGHT TO ADD ALTER AMEND OR DELETE ANY GROUND OF APPEAL DURING THE COURSE OF HEARING. 2 AT THE OUTSET WE FIND THAT APPEAL IN THIS CASE H AS BEEN FILED AFTER A DELAY OF 1538 DAYS. ADMITTEDLY IMPUGNED OR DER WAS COMMUNICATED TO THE ASSESSEE ON 15.11.2003 AND APPE AL WAS REQUIRED TO BE FILED WITHIN 60 DAYS OF THE COMMUNIC ATION OF THE SAID ORDER I.E. ON OR BEFORE 14.1.2004.HOWEVER IT WAS FI LED ON 31.3.2008 AFTER A DELAY OF 1538 DAYS. THOUGH APPEALS FOR THE AY 1999-2000 TO 2001-02 WERE ALSO FILED BELATEDLY HOWEVER THESE A PPEALS WERE WITHDRAWN BY THE ASSESSEE. IN THEIR APPLICATION FOR CONDONATION OF ITA NO.1118/AHD/2008 FOR AY 1998-99 THE DHARMAJ PEOPLES CO- OP. BANK LTD. 2 DELAY FILED ALONG WITH THE APPEAL FOR THE AY 1998-9 9 IT WAS MENTIONED THAT THE DELAY WAS MAINLY ON ACCOUNT OF I GNORANCE OF LAW AS AFTER THE DECISION OF THE ITAT IN THE CASE OF SU RAT DISTRICT CO-OP. BANK LTD. VS. ITO 78 TTJ 1 THE ASSESSEE BELIEVED T HAT ALL ITS INCOME WAS ELIGIBLE FOR DEDUCTION U/S 80P OF THE AC T. THEREFORE NO APPEAL WAS FILED. IT WAS FURTHER SUBMITTED THAT MIS TAKE WAS NOTICED ONLY WHEN RECOVERY PROCEEDINGS STARTED AND CASE WAS REFERRED TO AUTHORIZED REPRESENTATIVE. IN THEIR AFFIDAVIT FILED ALONG WITH LETTER DATED 23-05-2008 THE MANAGER OF THE BANK STATED AS UNDER:- I RAJNIKANT K SHAH MANAGER AND AUTHORIZED PERSON OF THE DHARMAJ PEOPLES CO-OPERATIVE BANK LTD. POST DHARMAJ TALUKO PETLAD DISTRICT ANAND ON BEHALF OF THE SAID BANK DO SOLEMNLY AFFIRM AS UNDER 1. THE BANK HAS NOT FILED THE APPEAL WITHIN PRESCRI BED TIME BEFORE THE HONORABLE INCOME TAX APPELLATE TRIBUNAL FOR THE AY 1998-99 AGAINST THE ORDER OF FIRST APPELLATE AUTHORITY BECA USE THE BANK BELIEVED THAT THEIR CLAIM OF DEDUCTION U/S 80P(2)(A )(I) OF INCOME TAX ACT WILL BE FULLY ALLOWABLE AFTER THE DECISION OF A HMEDABAD BENCH IN CASE OF SURAT DISTRICT CO-OPERATIVE BANK VS. ITO 85 ITD 1 AND ALSO THE BANKS OWN CASE. 2. HOWEVER WHEN THE RECOVERY WAS INITIATED BY THE DEPARTMENT PERTAINING TO DEMAND RAISED ON INCOME ARISING OUT O F THE INVESTMENT MADE NOT COMPLYING THE PROVISIONS OF SEC. 71 OF CO- OPERATIVE SOCIETY ACT IN PURSUANCE OF THE APPEAL EFFECT ORDE R THE BANK CAME TO KNOW THAT THE MENTIONED ISSUE OF ELIGIBILITY FOR DEDUCTION OF THE INCOME FROM INVESTMENTS MADE IN VIOLATION OF THE PR OVISIONS OF SEC. 71 OF CO-OPERATIVE SOCIETY ACT RAISED BY THE FIRST APPELLATE AUTHORITY IN HIS ORDER WAS NOT PRESSED BY THE BANK WHEN THE D EPARTMENT HAD GONE IN APPEAL BEFORE HONORABLE TRIBUNAL. 3. THE SAID ISSUE WAS NOT PRESSED AT THE TIME OF DE PARTMENTS APPEAL BECAUSE THE BANK BELIEVES THAT THE RATIO OF THE SUR AT DIST CO- OPERATIVE BANK LTD. (SUPRA) WAS THAT WHATEVER INCOM E ARISES TO THE COOPERATIVE BANK FROM THE READILY REALIZABLE INVEST MENTS WILL BECOME ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF T HE INCOME TAX ACT. ITA NO.1118/AHD/2008 FOR AY 1998-99 THE DHARMAJ PEOPLES CO- OP. BANK LTD. 3 4. ONLY WHEN THE RECOVERY WAS INITIATED AS SAID BEF ORE THE LEGAL ADVICE WAS SOUGHT FROM THE EXPERTS WHO BROUGHT TO THE NOTI CE OF THE BANK THAT IT WOULD HAVE BEEN BETTER THAT A SEPARATE GROU ND BY WAY OF CROSS OBJECTION PERTAINING TO CLAIM FOR DEDUCTION O F THE INCOME ARISING OUT OF INVESTMENTS MADE AGAINST THE PROVISI ONS OF SECTION 71 OF COOPERATIVE SOCIETIES ACT SHOULD HAVE FILED BEFO RE THE HONBLE TRIBUNAL WHEN THE DEPARTMENT WAS IN APPEAL. AS THE SAME COULD NOT E FILED IN TIME DUE TO PECULIAR FACTS EXPLAINED BEFORE THE BANK DECIDED TO FILE THE APPEAL BELATELY. 5. CONSEQUENTLY THE APPEAL WAS FILED BY THE BANK ON 31/03/2008 WITH THE DELAY OF 1538 DAYS AGAINST THE ORDER OF FIRST A PPELLATE AUTHORITY. THE ABOVE MENTIONED FACTS ARE TRUE AND CORRECT TO T HE BEST OF OUR KNOWLEDGE. 3. AT THE TIME OF HEARING THE LD. AR ON BEHALF O F THE ASSESSEE MERELY REITERATED THE AVERMENTS IN THE APPLICATION FOR CONDONATION OF DELAY AND SUBMITTED THAT THE ASSESSEE DID NOT FILE APPEAL UNDER THE BELIEF THAT ISSUE WOULD BE DECIDED IN THE APPEA L FILED BY THE DEPARTMENT. ON THE BASIS OF ABOVE FACTS NARRATED IN THE AFFIDAVIT IT WAS PLEADED THAT DELAY OF 1538 DAYS IN FILING THE A PPEAL MAY BE CONDONED. 4. ON THE OTHER HAND THE LEARNED DR STRONGLY OBJEC TED TO THE PLEA FOR CONDONATION OF DELAY AND POINTED OUT THAT THERE WAS NO PLAUSIBLE REASON FOR THE CONDONATION OF DELAY IN TH IS CASE. 5. AS IS EVIDENT FROM THE AFORESAID THE AVERMENT S IN THEIR APPLICATION FOR CONDONATION OF DELAY AND AFFIDAVIT FILED BY THE MAN AGER OF THE BANK THE ONLY REASON ADDUCED IS THAT THE ASSESSEE WAS UNDER THE B ELIEF THAT THEIR ENTIRE INCOME WAS DEDUCTIBLE U/S 80P(2)(A)(I) OF INCOME TAX ACT 1961[HEREINAFTER REFERRED TO AS THE ACT] IN TERMS OF THE DECISION OF AHMEDABAD BENCH OF THE ITAT IN CASE OF SURAT DISTRICT CO-OPERATIVE BANK(SUPRA) AND ALSO TH E BANKS OWN CASE. HOWEVER THE BASIS FOR FORMATION OF THIS BELIEF AND WHEN THE BELIEF WAS FORMED HAS NOT BEEN MENTIONED IN THEIR APPLICATION FOR CONDONATION OF DELAY OR EVEN IN THE ITA NO.1118/AHD/2008 FOR AY 1998-99 THE DHARMAJ PEOPLES CO- OP. BANK LTD. 4 AFFIDAVIT FILED BY THE MANAGER OF THE BANK NOR WAS PLACED BEFORE US DURING THE HEARING. IT IS FURTHER STATED IN THE AFORESAID APPL ICATION AND AFFIDAVIT THAT THE MISTAKE WAS NOTICED WHEN RECOVERY PROCEEDINGS WERE STARTED BY THE DEPARTMENT. THE RELEVANT DETAILS AS TO WHEN THE RECOVERY PROC EEDINGS WERE STARTED AND WHEN THE MATTER WAS REFERRED TO THE AUTHORIZED REPR ESENTATIVE HAVE NOT BEEN MENTIONED IN THE SAID APPLICATION OR AFFIDAVIT NOR EVEN PLACED BEFORE US DURING THE COURSE OF HEARING . APPARENTLY THE AVERMENTS IN TH E APPLICATION AND AFFIDAVIT OF THE MANAGER ARE VAGUE AND ARE DEVOID OF ANY BASIS. THE LD. AR APPEARING BEFORE US DID NOT ESTABLISH AS TO HOW THE AVERMENTS IN THE APPLICATION OR AFFIDAVIT ESTABLISHED SUFFICIENT CAUSE TOWARDS DELAY OF 1538 DAYS IN FILING THE APPEAL . EVEN OTHER WISE THE STATEMENT THAT THE BANK WAS U NDER THE BELIEF THAT THEIR INCOME WAS DEDUCTIBLE U/S 80P(2)(A)(I) OF THE ACT IN VIEW OF DECISION OF THE AHMEDABAD BENCH OF THE ITAT IN CASE OF SURAT DISTR ICT CO-OPERATIVE BANK(SUPRA) IS NOT CORRECT ESPECIALLY WHEN THE LD. CIT(A) AFTER ANALYZING THE DECISIONS IN THE SAID CASE AS ALSO DECISIONS OF THE HONBLE APEX COURT IN CIT VS. KARNATAKA STATE COOP. APEX BANK 251 ITR 194(SC) AND MEHSANA DISTRICT COOP. BANK LTD. VS. ITO 251 ITR 532(SC)) CONCLUDED THAT I N ORDER TO BE ELIGIBLE FOR DEDUCTION OF INTEREST ALL INVESTMENTS OF CO-OPERAT IVE BANKS IN GUJRAT MUST FALL WITHIN THE FOUR CORNERS OF THE PROVISION OF SECTION 71 OF THE GUJRAT CO-OPERATIVE SOCIETIES ACT AND ADMITTEDLY INVESTMENT OF RS. 50 LACS IN FIXED DEPOSITS WITH CRB CAPITAL MARKET LTD. WAS NOT COVERED BY THE SAI D PROVISIONS. IN THE LIGHT OF THIS CLEAR FINDING OF THE LD. CIT(A) IN THE IMPUG NED ORDER IT HAS NOT BEEN EXPLAINED BEFORE US AS TO ON WHICH BASIS THE BANK F ORMED THE BELIEF THAT THEIR ENTIRE INCOME WAS DEDUCTIBLE U/S 80P(2)(A)(I) OF TH E ACT. THE BANK IS ADVISED BY A NUMBER OF CAS AND ADVOCATES AND IS BEING ASSESSED FOR THE LAST SO MANY YEARS. THERE IS NOTHING TO SUGGEST AS TO WHO HAD ADVISED THE BANK FOR THE BELIEF FORMED BY THEM AND AT LEAST NO SUCH EVIDENCE HAS BEEN PLAC ED BEFORE US. IN VIEW OF THE FOREGOING WHEN THE AVERMENTS IN THE APPLICATION O R AFFIDAVIT EXECUTED ON 20.05.08 ARE VAGUE AND NOT CORROBORATED BY ANY INDE PENDENT EVIDENCE WHILE NO OTHER REASONS FOR DELAY IN FILING THE APPEAL HAVE BEEN SUBMITTED ACCORDINGLY THE DELAY OF FILING THE APPEAL BY 1538 DAYS CAN NOT BE CONDONED. ITA NO.1118/AHD/2008 FOR AY 1998-99 THE DHARMAJ PEOPLES CO- OP. BANK LTD. 5 5.1 IN THE LIGHT OF AFORESAID FACTS TH ERE BEING NO SUFFICIENT CAUSE FOR DELAY IN FILING THE APPEAL THERE IS NO ALTERNATIVE BUT T O REJECT THE APPLICATION OF THE TAXPAYER FOR CONDONATION OF DELAY IN FILING APPEAL BY 1538 DAYS. REGARDING SUFFICIENT CAUSE IN THE CASE OF GOPAL FILMS VS. CIT AND OTHERS 237 ITR 655(KAR) IT WAS HELD BY THE HONBLE COURT THAT WHENEVER A PARTY WANTS DELAY TO BE CONDONED HE SHOULD SHOW SUFFICIENT CAUSE. IF NO CAUSE IS SHOWN AT ALL THE ONLY CONCLUSION THAT CAN BE REACHED IS THAT THE DELAY CA NNOT BE CONDONED PARTICULARLY WHEN LACK OF BONA FIDES IS E VIDENT. 5.2 THE RECENT JUDICIAL APPROACH SHOWS THAT THE COURTS HAVE ADOPTED LIBERAL APPROACH IN ENTERTAINING THE APPLICATION FOR CONDON ATION OF DELAY . HOWEVER WHILE DECIDING THE PRAYER FOR CONDONATION OF DELAY THE C OURT CANNOT IGNORE OR GIVE A GO-BY TO THE BASIC PRINCIPLE THAT THE ONUS IS ALWAY S ON THE ASSESSEE TO PROVE THE EXISTENCE OF SUFFICIENT CAUSE AND THERE IS NO PRESU MPTION THAT THE DELAY OCCASIONED IN THE FILING OF THE APPEAL IS ALWAYS B ONA FIDE . THE LAW OF LIMITATION PRESCRIBED IN THE PROVISIONS OF SECTION 253(5) OF T HE ACT ENVISAGES THAT THERE SHOULD HAVE BEEN A SUFFICIENT CAUSE FOR NOT PRESENT ING THE APPEAL WITHIN THE PERIOD AS PRESCRIBED. WHERE THE ASSESSEE APPLICANT HAS FAILED TO SHOW SUFFICIENT CAUSE FOR CONDONATION OF DELAY THE APPLICATION FOR CONDONATION OF DELAY IS LIABLE TO BE REJECTED. IN THE CASE IN HAND THE STATEMENT S MADE BY THE ASSESSEE IN THEIR APPLICATION FOR CONDONATION OF DELAY OR IN THE AFFI DAVIT SIGNED BY A MANAGER OF THE BANK ARE NOT CORROBORATED BY ANY INDEPENDENT EVIDE NCE . RATHER INACTION AND NEGLIGENCE GALORE. EVEN THOUGH A LIBERAL APPROACH H AS TO BE ADOPTED BUT THAT DOES NOT MEAN THAT ANY PLEA WITHOUT ANY PLAUSIBLE O R ACCEPTABLE BASIS AND NOT EVEN HAVING SEMBLANCE OF RATIONALITY HAS TO BE ACCE PTED AND DELAY HAS NECESSARILY TO BE CONDONED. THAT SHALL BE AGAINST T HE VERY SPIRIT OF LAW. PRESCRIPTION OF TIME-LIMIT FOR FILING APPEALS BECOM ES MEANINGLESS IN SUCH EVENT. AT THE SAME TIME THE ASSESSEE MUST SHOW THAT HE WAS D ILIGENT ALL ALONG IN TAKING APPROPRIATE STEPS AND THE DELAY WAS CAUSED NOTWITHS TANDING HIS DUE DILIGENCE. IT IS THE PARTY CONCERNED TO SUBSTANTIATE THE REASONS FOR DELAY AND IT IS NOT THE FUNCTION OF THE APPELLATE AUTHORITY TO FIND THE CAU SE OF THE DELAY. THE APPELLATE ITA NO.1118/AHD/2008 FOR AY 1998-99 THE DHARMAJ PEOPLES CO- OP. BANK LTD. 6 AUTHORITY HAS TO EXAMINE WHETHER SUFFICIENT CAUSE HAS BEEN SHOWN BY THE PARTY FOR CONDONING THE DELAY AND WHETHER SUCH CAUSE IS A CCEPTABLE OR NOT. THE WORD 'SUFFICIENT CAUSE' AS ENUMERATED IN SECTION 253(5) OF THE ACT IN THE CONTEXT OF CONDONATION OF DELAY SHOULD BE GIVEN A LIBERAL CON STRUCTION SO AS TO GIVE SUBSTANTIAL JUSTICE BUT ONLY WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE IS IMPUTABLE TO THE PARTY CONCERNED. IN THE PRESENT CA SE NOT ONLY THAT REASONS HAVE NOT BEEN SUBSTANTIATED RATHER FOR MORE THAN 1538 DAYS THE ASSESSEE REMAINED NEGLIGENT AND DID NOT INITIATE ANY STEPS AT ALL. INACTION AND WANT OF DILIGENCE ON THE PART OF THE APPLICANT WOULD NOT EN TITLE THE APPLICANT TO THE BENEFIT OF THE PROVISIONS OF SECTION 253(5) OF THE ACT. 5.3. IN THE CASE OF SITARAM RAM CHARAN [1959-60] 17 FJR 379 ; AIR 1960 SC 260 THE HONBLE SUPREME COURT OBSERVED THA T THE WHOLE OF THE PERIOD OF DELAY WAS REQUIRED TO BE EXPLAINED WHICH WOULD INDICATE EVEN THE PERIOD PRESCRIBED BY THE LAW OF LIMITATION. HON'BLE SUPREM E COURT IN THE CASE OF VEDABAI ALIAS VAIJAYANATABAI BABURAO PATIL V. SHANTARAM BAB URAO PATIL [2002] 253 ITR 798 MADE A DISTINCTION BETWEEN THE CASE WHERE THERE IS INORDINATE DELAY AND WHERE THE DELAY IS OF A FEW DAYS. THE HON'BLE APEX COURT HELD AS UNDER: IN EXERCISING DISCRETION UNDER SECTION 5 OF T HE LIMITATION ACT THE COURTS SHOULD ADOPT A PRAGMATIC APPROACH. A DISTINCTION MUST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDINATE A ND A CASE WHERE THE DELAY IS OF A FEW DAYS. WHEREAS IN THE FO RMER CASE THE CONSIDERATION OF PREJUDICE TO THE OTHER SIDE WI LL BE A RELEVANT FACTOR SO THE CASE CALLS FOR A MORE CAUTIO US APPROACH BUT IN THE LATTER CASE NO SUCH CONSIDERATION MAY AR ISE AND SUCH A CASE DESERVES A LIBERAL APPROACH. NO HARD AND FAST RULE CAN BE LAID DOWN IN THIS REGARD. THE COURT HAS TO E XERCISE THE DISCRETION ON THE FACTS OF EACH CASE .............. .. 5.31 IN THE CASE OF COMMISSIONER OF INCOME-TAX.VS RAM MOHAN KABRA(257 ITR 773(PB) IT WAS OBSERVED BY THE HONB LE COURT THE PROVISIONS RELATING TO PRESCRIPTION OF LIMI TATION IN EVERY STATUTE MUST NOT BE CONSTRUED SO LIBERALLY THAT IT WOULD HAVE THE EFFECT OF TAKING AWAY THE BENEFIT ACCRUING TO THE O THER PARTY IN A MECHANICAL MANNER. WHERE THE LEGISLATURE SPELLS OUT A PERIOD OF LIMITATION AND PROVIDES FOR POWER TO CONDONE THE DE LAY AS WELL ITA NO.1118/AHD/2008 FOR AY 1998-99 THE DHARMAJ PEOPLES CO- OP. BANK LTD. 7 THERE SUCH DELAY CAN BE CONDONED ONLY FOR SUFFICIEN T AND GOOD REASONS SUPPORTED BY COGENT AND PROPER EVIDENCE. NO W IT IS A SETTLED PRINCIPLE OF LAW THAT THE PROVISIONS RELATI NG TO SPECIFIED PERIOD OF LIMITATION MUST BE APPLIED WITH THEIR RIG OUR AND EFFECTIVE CONSEQUENCES. IN THIS REGARD REFERENCE CAN BE MADE TO THE LATEST LAW IN THE CASE OF P.K. RAMACHANDRAN V. STATE OF KERALA AIR 1 998 SC 2276. THE RELEVANT PORTION READS AS UNDER: LAW OF LIMITATION MAY HARSHLY AFFECT A PARTICULAR PARTY BUT IT HAS TO BE APPLIED WITH ALL ITS RIGOUR WHEN T HE STATUTE SO PRESCRIBES AND THE COURTS HAVE NO POWER TO EXTEND T HE PERIOD OF LIMITATION ON EQUITABLE GROUNDS. THE DISCRETION EXERCISED BY THE HIGH COURT WAS THUS NEITHER PROPER NOR JUDIC IOUS. THE ORDER CONDONING THE DELAY CANNOT BE SUSTAINED. THIS APPEAL THEREFORE SUCCEEDS AND THE IMPUGNED ORDER IS SET A SIDE. CONSEQUENTLY THE APPLICATION FOR CONDONATION OF DE LAY FILED IN THE HIGH COURT WOULD STAND REJECTED AND THE MISCELL ANEOUS FIRST APPEAL SHALL STAND DISMISSED AS BARRED BY TIM E. NO COSTS.' 5.32 IN THE CASE OF STATE OF WEST BEN GAL VS. ADMINISTRATOR HOWRAH MUNICIPALITY AIR 1972 SC 749(SC) IT WAS OBSERVED THAT THE EXPRESSION SUFFICIENT CAUSE SHOULD BE GIVEN A LIBERAL CONSTR UCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONAFIDES IS IMPUTABLE TO A PARTY. 5.33 THE ITAT IN THE CASE O F SRI VENKATESA PAPER AND BOARDS LTD. VS. DCIT 98 ITD 200 HELD THAT IN GRANTING INDULGE NCE AND CONDONATION OF DELAY APPELLATE AUTHORITY MUST BE SATISFIED THAT THERE H AD BEEN DILIGENCE ON THE PART OF THE APPELLANT. 5.34 IN THE CASE OF VINAY EXTRACTION (P) LTD. V . VIJAY KHANNA [2004] 271 ITR 450 (GUJ) IT WAS HELD THAT IT IS TRUE THAT THE APEX COURT HAS HELD THAT THE COURT SHOULD ADOPT A LIBERAL APPROACH IN CONSIDERING THE APPLICA TION FOR CONDONATION OF DELAY AND THAT SUBSTANTIAL JUSTICE D ESERVES TO BE PREFERRED OVER TECHNICAL CONSIDERATIONS. HOWEVER I T IS EQUALLY WELL SETTLED THAT A PERSON INVOKING THE DISCRETION OF TH E APPELLATE OR REVISIONAL AUTHORITY BEYOND THE PRESCRIBED PERIOD O F LIMITATION IS REQUIRED TO SHOW SUFFICIENT CAUSE WHICH WOULD INCLU DE SHOWING THAT THE PETITIONER/APPELLANT WAS EITHER BONA FIDE PURSU ING HIS REMEDIES ITA NO.1118/AHD/2008 FOR AY 1998-99 THE DHARMAJ PEOPLES CO- OP. BANK LTD. 8 OR WAS PREVENTED BY SUFFICIENT CAUSE FROM PURSUING HIS REMEDIES. WHETHER SUFFICIENT CAUSE IS MADE OUT OR NOT IS ALWA YS A QUESTION OF FACT DEPENDING UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE AND HAS TO BE ESTABLISHED ON RECORD. AN APPLICATION SEE KING CONDONATION OF DELAY HAS ALSO TO ESTABLISH THAT THERE WAS NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDES AND TH AT THE RIGHT GRANTED UNDER LAW TO CHALLENGE THE ORDER WAS NOT AB ANDONED . IT CANNOT BE OVERLOOKED THAT ON EXPIRY OF THE PERIOD O F LIMITATION PRESCRIBED FOR SEEKING LEGAL REMEDY A CORRESPONDIN G RIGHT ACCRUES IN FAVOUR OF THE OTHER PARTY AND THE SAME SHOULD NO T BE LIGHTLY INTERFERED WITH. 5.35 IN SAURASHTRA CEMENT AND CHEMICAL INDUSTRIES LTD. V. CIT [1978] 115 ITR 27 (GUJ) THE COMMISSIONER OF INCOME -TAX REFUSED TO CONDONE THE DELAY IN FILING REVISION APPLICATION ALTHOUGH THE P ETITIONER HAD EXPLAINED THAT DURING THE INTERVENING PERIOD THE PETITIONER WAS PU RSUING HIS REMEDIES OF APPEAL BEFORE THE APPELLATE ASSISTANT COMMISSIONER AND THE REAFTER BEFORE THE INCOME- TAX APPELLATE TRIBUNAL. HONBLE GUJRAT HIGH COURT F OLLOWING THE DECISIONS OF THE APEX COURT IN DINABANDHU SAHU V. JADUMONI MANGARAJ AIR 1954 SC 411 AND RAMLAL V. REWA COALFIELDS LTD. AIR 1962 SC 361 HE LD THAT THE WORDS SUFFICIENT CAUSE (IN SECTION 5 OF THE LIMITATION ACT) SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE WHEN NO NEGLIGENCE NOR INACTION NOR WANT OF BONA FIDE IS IMPUTABLE TO THE APPELLANT. IT WAS FURTHER HELD THAT WHILE CONSIDERING SUCH AN APPLICATION WHAT IS TO BE SEEN IS WHETHER NEGLIGENCE OR INACTION OR WANT OF BONA FIDES IS IMPUTABLE TO THE PARTY CONCERNED AND WHETHER SUBSTANTIAL JUSTICE WOULD BE ADVANCED BY CONDONING THE DELAY AND AGAIN IN EXERCISING THE JUDICIAL DISCRETION IN CONDONING THE DELAY THIS DISCRETION LIKE THE OTHER JUDICIAL DISCRETIONS MUST BE EXERCISED WITH V IGILANCE AND CIRCUMSPECTION ACCORDING TO JUSTICE COMMONSENSE AND SOUND JUDGMEN T. 5.36 HON'BLE MADHYA PRADESH HIGH COURT IN THE C ASE OF NIHALKARAN V. CWT [1989] 175 ITR 14 HAS HELD AS UNDER: 'THE BURDEN IS ON THE PARTY CLAIMING CONDONATION OF DELAY TO PLACE BEFORE THE COURT IN CLEAR AND EXPLICIT TERMS ALL FACTS ON WH ICH THE PARTY RELIES SO THAT THE COURT CAN COME TO THE CONCLUSION THAT IT IS NOT A C ASE OF WANT OF DILIGENCE OR INACTION ON THE PART OF THE APPLICANT. IN THE INSTA NT CASE THE APPLICANT HAS FAILED ITA NO.1118/AHD/2008 FOR AY 1998-99 THE DHARMAJ PEOPLES CO- OP. BANK LTD. 9 TO PLACE ON RECORD ALL THESE FACTS. INACTION OR WAN T OF DILIGENCE ON THE PART OF THE APPLICANT WOULD NOT ENTITLE THE APPLICANT TO THE BE NEFIT OF THE PROVISIONS OF SECTION 5 OF THE LIMITATION ACT. IN OUR OPINION THEREFORE THE APPLICANT HAS FAILED TO MAKE OUT A CASE THAT THERE WAS SUFFICIENT CAUSE FOR DELA Y IN FILING THE APPLICATION UNDER SECTION 27(3) OF THE ACT. THE APPLICATION FOR CONDO NATION OF DELAY IS ACCORDINGLY REJECTED. AS THE APPLICATION UNDER SECTION 27(3) OF THE ACT IS BARRED BY LIMITATION IT DESERVES TO BE REJECTED ON THIS GROUND ALONE.' IN THE AFORESAID CASE THE QUES TION THAT AROSE FOR CONSIDERATION WAS WHETHER THE APPLICANT HAS MADE OUT A CASE FOR CONDO NATION OF THE DELAY. THE ONLY GROUND URGED IN SUPPORT OF THE APPLICATION UNDER SE CTION 5 OF THE LIMITATION ACT WAS THAT THE CLERK OF THE APPLICANT HAD TAKEN THE C ASE PAPERS TO THE OFFICE OF THE COUNSEL BUT THOSE PAPERS 'GOT MIXED UP IN THE DISPO SED OF FILES'. IN SUPPORT OF THIS GROUND AN AFFIDAVIT HAS BEEN FILED BY THE CLERK OF THE APPLICANT. THE RELEVANT PORTION OF THAT AFFIDAVIT WAS AS FOLLOWS : 'THAT I OBTAINED THE CASE PAPERS FROM R. D. JOSHI A ND CO. FOR BEING TAKEN TO COUNSEL AND ACCORDINGLY HAD TAKEN THE SAME TO TH E COUNSEL'S OFFICE. HOWEVER THE FILE GOT MIXED UP IN THE 'DISPOSED OF' FILES. T HIS REFERENCE SHOULD HAVE BEEN FILED BY JULY 11 1984 BUT WHEN ON OR ABOUT JULY 1 THE PAPERS WERE SOUGHT THE FILE COULD NOT BE TRACED IN SPITE OF DILIGENT SEARC H IN THE OFFICE OF THE APPLICANT AND ALSO COUNSEL. IT WAS LOCATED ONLY ON OR ABOUT OCTOB ER 8 1984 WHEN THE DISPOSED OF FILES WERE INSPECTED FOR THE RECORD OF ANOTHER C ASE IN WHICH AN EXECUTION HAD TO BE FILED.'. THE HONBLE COURT OBSERVED THE AFORESAID AFFIDAVIT DOES NOT DISCLOSE WHETHER THE PAPERS WERE HANDED OVER BY THE CLERK OF THE APPLICANT TO THE CO UNSEL. THE COUNSEL HAS NOT FILED ANY AFFIDAVIT. THE AFFIDAVIT OF THE APPLICANT'S CLERK DOES NOT ALSO DISCLOSE WHAT STEPS WERE BEING TAKEN BY THE APPLICANT FOR FILING AN APPLICATION UNDER SECTION 2 7(3) OF THE ACT FROM JULY 11 WHEN THE APPLICATION SHOULD HAVE BEEN FILED TILL OCTOBER 8 WHEN THE PAPERS ARE ALLEGED TO HAVE BEEN LOCATED. 5.4 IN MADHU DADHA VS THE ASSISTANT COMMISSIONER HONBLE MADRAS HIGH COURT IN THEIR DECISION DATED 23.6.2009 IN TC(A). NO. 421 OF 2009 WHILE REFERRING TO THE AFORESAID DECISION OF THE HONBLE APEX COURT IN P.K. RAMACHANDRAN V. STATE OF KERALA OBSERVED THAT 14. AT THIS JUNCTURE WE HAVE TO BE GUIDE D BY THE JUDGMENT REPORTED IN [1990] 1 LLN 457 IN THE CASE OF T.N.M. BANK LTD. V. APP. AUTY. SHOPS ACT. IN THAT PARTICULAR CASE THE DIVISION BENCH OF THIS COURT HAS HELD THAT ITA NO.1118/AHD/2008 FOR AY 1998-99 THE DHARMAJ PEOPLES CO- OP. BANK LTD. 10 '.................. WE ARE OF THE VIEW THAT THE QUE STION OF LIMITATION IS NOT MERELY A TECHNICAL CONSIDERATION. RULES OF LIMITATI ON ARE BASED ON PRINCIPLES OF SOUND POLICY AND PRINCIPLES OF EQUITY . IS A LITIGANT LIABLE TO HAVE A DAMOCLES' SWORD HANGING OVER HIS HEAD INDEFI NITELY FOR A PERIOD TO BE DETERMINED AT THE WHIMS AND FANCIES OF THE OPPON ENT?' IN THAT DECISION THIS COURT HAS HELD THAT THE DELAY OF 285 DAYS IN PREFERRING THE APPEAL COULD NOT BE CONDONED. IT WAS HELD THAT THE CONDONATION OF DELAY WAS NOT JUSTIFIED ON FACTS AND EVIDENCE OF THE CASE . AS RIGHTLY POINTED OUT THAT THE RULES OF LIMITATION ARE BASED ON PRINCIPLE S OF SOUND PUBLIC POLICY AND PRINCIPLES OF EQUITY. THOUGH THERE IS NO PRESUM PTION THAT THE DELAY IS OCCASIONED DELIBERATELY OR ON ACCOUNT OF CULPABLE N EGLIGENCE IF THE ADMITTED FACTS IN THAT CASE ARE TAKEN NOTE OF THER E IS NO DOUBT THAT THE DELAY ON THE PART OF THE APPELLANT IS DELIBERATE AN D THE APPELLANT IS CLEARLY GUILTY OF CULPABLE NEGLIGENCE. SUCH NEGLIGENT ATTIT UDE OF THE APPELLANT WAS NOT TAKEN CARE TO PRESERVE THE RIGHT OF APPEAL AND HAVING BEEN SLEPT OVER FOR MORE THAN 558 DAYS AND NOT EXPLAINED THE DELAY WITHOUT ANY REASONABLE DOUBT THE APPELLANT CANNOT AVAIL SYMPAT HY OR DISCRETION OF THIS COURT 5.41 IN VIEW OF THE AFORESAID OBSERVATIONS HONBLE HIGH COURT CONCLUDED THAT THE DISCRETION HAVING BEEN RIGHTLY REFUSED BY THE T RIBUNAL THERE WAS NO SUFFICIENT REASON OR CAUSE TO INTERFERE WITH THE ORDER PASSED BY THE TRIBUNAL. IN THIS CASE ALSO THE ASSESSEE FAILED TO EXPLAIN THE SUFFICIENT CAUSE OR REASON BY GIVING NECESSARY DETAILS AS TO HOW THE DELAY OF 558 DAYS F ROM JANUARY 2007 TO THE DATE OF FILING THE APPEAL HAD OCCURRED. HONBLE HIGH CO URT IN THIS CASE QUOTED THE FOLLOWING FINDINGS OF THE ITAT . FROM THE FACTS IT SEEMS THAT THE ASSEESSEE WA S NEGLIGENT BY NOT TAKING THE NECESSARY STEP FOR FILING THE APPEAL WITHIN TH E TIME PRESCRIBED BY THE STATUTE AND THEREBY FROM THE CONDUCT OF THE ASSESSEE IT SE EMS THAT THE ASSESSEE TAKES THE CONDONATION OF DELAY PROVISION AS GRANTED. IT I S WELL SETTLED LAW THAT THE COURT HELPS THE VIGILANT AND NOT INDOLENT. WE ARE THEREFO RE OF THE VIEW THAT THE ASSEESEE HAS NOT MADE OUT SUFFICIENT CAUSE FOR COND ONING THE DELAY IN THE PRESENT APPEAL. THE CAUSE SHOWN BY THE ASSESSEE IS MUCH LESS THAN THE SUFFICIENT CAUSE AS TO WHY THE APPEAL WAS NOT FILED WITHIN THE LIMITATION PERIOD AND EVEN AFTER THE EXPIRY OF LIMITATION PERIOD. SINCE THE AS SESSEE HAS NOT GIVEN ANY DETAILS AS TO WHAT STEP SHE TOOK FOR FILING THE APPEAL WITH IN THE LIMITATION PERIOD OR AS EARLY AS POSSIBLE THEREFORE THE EXPLANATION FOR DE LAY OF 558 DAYS APPEARS TO BE TOO INSUFFICIENT UNSATISFACTORY AND UNREASONABLE F OR CONDONING THE INORDINATE DELAY. FROM THE AFFIDAVIT IT REFLECTS THAT AVERMENT S ARE QUITE VAGUE AS NO DATES HAVE BEEN SPECIFIED AS TO WHEN THE PAPERS WERE HAND ED FOR DRAFTING AN APPEAL AND ON WHAT OCCASION THE ENQUIRIES WERE MADE FOR PR EPARATION AND FILING OF APPEAL. MOREOVER WHEN THE ASSESSEE NEVER WENT FOR SIGNING THE APPEAL HOW IT ITA NO.1118/AHD/2008 FOR AY 1998-99 THE DHARMAJ PEOPLES CO- OP. BANK LTD. 11 COULD HAVE BEEN FILED AS PRESUMED BY THE ASSESSEE. EVEN THE CONDUCT OF THE ASSESSEE BEFORE THIS TRIBUNAL IS ALSO NOT APPRECIAB LE AS VARIOUS NOTICE WERE SENT TO THE ASSESSEE AND FIRST TIME THE ASSESSEE APPEARE D ON 3.3.2008 WHEN THE APPEAL WAS HEARD. WE THEREFORE DECLINE TO CONDONE T HE DELAY OF 558 DAYS IN FILING THE PRESENT APPEAL. ACCORDINGLY THE PRAYER FOR CONDONATION OF DELAY IS REJECTED.' 5.42 IN THE INSTANT CASE ALSO THE ASSEESSEE SEEM S TO BE QUITE NEGLIGENT BY NOT TAKING THE NECESSARY STEPS FOR FILING THE APPEAL W ITHIN THE TIME PRESCRIBED BY THE STATUTE .THE CONDUCT OF THE ASSESSEE REVEALS THAT THE ASSESSEE TAKES THE CONDONATION OF DELAY PROVISION AS GRANTED. THE ASS ESSEE HAS NOT GIVEN ANY DETAILS AS TO WHAT STEPS THE BANK ADVISED BY LEGA L LUMINARIES TOOK FOR FILING THE APPEAL WITHIN THE LIMITATION PERIOD OR AS EARLY AS POSSIBLE THEREAFTER. THE EXPLANATION FOR DELAY OF 1538 DAYS IS TOO INSUFFIC IENT UNSATISFACTORY AND UNREASONABLE FOR CONDONING THE INORDINATE DELAY. AS ALREADY MENTIONED EVEN THE AVERMENTS IN AFFIDAVIT ARE QUITE VAGUE AS NO DATES HAVE BEEN SPECIFIED AS TO WHEN THE CONCERNED PERSONS N THE BANK FORMED THE BELIEF AND ON WHICH BASIS AND ON WHAT OCCASION THE ENQUIRIES WERE MADE FOR P REPARATION AND FILING OF APPEAL. THE LAW ASSISTS THOSE WHO ARE VIGILANT AND NOT THOSE WHO SLEEP OVER THEIR RIGHTS. THIS PRINCIPLE IS EMBODIED IN THE DIC TUM : VIGILANTI-BUS NON DORMIENTIBUS JURA SUBSVENIUNT. IN GRANTING THE INDU LGENCE AND CONDONING THE DELAY IT MUST BE PROVED BEYOND THE SHADOW OF DOUBT THAT THE ASSESSEE WAS DILIGENT AND WAS NOT GUILTY OF NEGLIGENCE WHATSOEVE R. THE SUFFICIENT CAUSE WITHIN THE CONTEMPLATION OF THE LIMITATION PROVISION MUST BE A CAUSE WHICH IS BEYOND THE CONTROL OF THE PARTY INVOKING THE AID OF THE PROVIS IONS. IN THE CASE OF RAMLAL V. REWA COALFIELDS LTD. (AIR 1962 SC 361) THE HON BL E APEX COURT HAS HELD THAT THE CAUSE FOR THE DELAY IN FILING THE APPEAL WHICH BY DUE CARE AND ATTENTION COULD HAVE BEEN AVOIDED CANNOT BE A SUFFICIENT CAUSE WIT HIN THE MEANING OF THE LIMITATION PROVISION. T HE RULE OF LIMITATION ALSO CONTAINS A RULE OF JUSTI CE ESPECIALLY WHERE A PERSON CHOOSES NOT TO TAKE UP REQUISITE LEG AL REMEDIES FOR AN INORDINATE LENGTH OF TIME AND WITHOUT REASONABLE CAUSE THE TR IBUNAL SHOULD APPLY THE RULE OF LIMITATION. SEEKERS OF JUSTICE MUST COME WITH CLEAN HANDS. IN THE INSTANT CASE WE DO NOT FIND ANY REASONABLE CAUSE FOR CONDONING THE DELAY. ITA NO.1118/AHD/2008 FOR AY 1998-99 THE DHARMAJ PEOPLES CO- OP. BANK LTD. 12 6. IN THE LIGHT OF AFORESAID DECISIONS THE BURDEN IS ON THE PARTY CLAIMING CONDONATION OF DELAY TO PLACE BEFORE THE COURT IN CLEAR AND EXPLICIT TERMS ALL FACTS ON WHICH THE PARTY RELIES SO THAT THE COURT CAN CO ME TO THE CONCLUSION THAT IT IS NOT A CASE OF WANT OF DILIGENCE OR INACTION ON THE PART OF THE APPLICANT. INACTION OR WANT OF DILIGENCE ON THE PART OF THE APPLICANT WOUL D NOT ENTITLE THE APPLICANT TO THE BENEFIT OF THE PROVISIONS OF SECTION 253(5) OF THE ACT. IN THE CASE UNDER CONSIDERATION ADMITTEDLY THE ASSESSEE BANK HAS NO T SHOWN ANY ACTION OR VIGILANCE FOR A PERIOD OF MORE THAN 1538 DAYS AFTER THE IMPUGNED ORDER WAS SERVED UPON THE ASSESSEE . IN THE FACTS OF THE PRES ENT CASE THE ASSESSEE HAS NOT PROVED ANY INACTION OR NEGLIGENCE ON THE PART O F A THIRD PARTY MUCH LESS HAVE THEY PLEADED ANY ACTION OR VIGILANCE ON THEIR OWN P ART. THE ASSESSEE DID NOT CARE TO FILE AN APPEAL FOR 1598 DAYS. THE AVERMENTS MADE EITHER IN THE APPLICATION FOR CONDONATION OF DELAY OR IN THE AFORESAID AFFID AVIT OF A MANAGER OF THE BANK ARE NOT CORROBORATED BY ANY EVIDENCE. 7. IN VIEW OF THE FOREGOING ESPECIAL LY WHEN THE ASSESSEE HAS NOT COME WITH CLEAN HANDS BEFORE US AND HAS ALSO FAILED TO ESTABLISH WITH COGENT AND PROPER EVIDENCE THAT THERE EXISTED SUFFICIENT CAUSE FOR NOT PRESENTING THE APPEAL WITHIN THE STIPULATED PERIOD AND HAS NOT SUBSTANTIA TED THEIR STATEMENTS IN THE APPLICATION FOR CONDONATION OF DELAY OR IN SUBSEQUE NT AFFIDAVIT EXECUTED ON 20.5.2008 DELAY OF 1538 DAYS IN FILING APPEAL CA N NOT BE CONDONED .SINCE THE ASSESSEE HAS FAILED TO MAKE OUT A CASE THAT THERE W AS SUFFICIENT CAUSE FOR DELAY IN FILING THE APPEAL THE APPLICATION FOR CONDONATI ON OF DELAY IS ACCORDINGLY REJECTED. AS THE APPEAL IS BARRED BY LIMITATION IT DESERVES TO BE REJECTED ON THIS GROUND ALONE. THEREFORE WE DECLINE TO ADMIT THE A PPEAL. 8. IN THE RESULT THE APPEAL IS DISMISSED IN LIMI NE. ORDER PRONOUNCED IN THE COURT TODAY ON 6 -08-2010 SD/- SD/- (BHAVNESH SAINI) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 6-08-2010 ITA NO.1118/AHD/2008 FOR AY 1998-99 THE DHARMAJ PEOPLES CO- OP. BANK LTD. 13 COPY OF THE ORDER FORWARDED TO: 1. THE DHARMAJ PEOPLES CO-OP. BANK LTD. DHARMAJ D ISTRICT: ANAND 2. ITO WARD-3(3) PETLAD 3. CIT CONCERNED 4. CIT(A)-II BARODA 5. DR BENCH-C ITAT AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD