Shri. K.S. Sunil Gupta, Bangalore v. ACIT, Bangalore

ITA 1488/BANG/2010 | 2005-2006
Pronouncement Date: 30-11-2011 | Result: Allowed

Appeal Details

RSA Number 148821114 RSA 2010
Assessee PAN ABYPS1801N
Bench Bangalore
Appeal Number ITA 1488/BANG/2010
Duration Of Justice 11 month(s) 8 day(s)
Appellant Shri. K.S. Sunil Gupta, Bangalore
Respondent ACIT, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-11-2011
Date Of Final Hearing 30-11-2011
Next Hearing Date 30-11-2011
Assessment Year 2005-2006
Appeal Filed On 22-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.K. SAINI ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K. JUDICIAL MEMBER ITA NOS.1487 & 1488/BANG/2010 ASSESSMENT YEAR : 2005-06 SHRI K.S. SUNIL GUPTA S-711 7 TH FLOOR SOUTH BLOCK MANIPAL CENTER DICKENSON ROAD BANGALORE - 560 001. PAN : ABYPS 1801N VS. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(1) BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN C.A. RESPONDENT BY : SHRI P.H. NARGUNDKAR ADDL.CIT(DR) DATE OF HEARING : 30.11.2011 DATE OF PRONOUNCEMENT : 30.11.2011 O R D E R PER BENCH THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AG AINST THE SEPARATE ORDERS EACH DATED 21.10.2011 OF THE CIT(A PPEALS)-I BANGALORE. 2. THESE APPEALS RELATE TO THE SAME ASSESSEE THE M AIN ISSUE AGITATED VIDE GROUND NO.2 IS COMMON IN BOTH THESE APPEALS WH ICH WERE HEARD ITA NOS1487 & 1488/BANG/10 PAGE 2 OF 8 TOGETHER SO THESE ARE BEING DISPOSED OF BY THIS CO MMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. THE COMMON GROUND NO.2 RAISED IN BOTH THESE APPE ALS READ AS UNDER: 2. THE LEARNED CIT(A) IS NOT JUSTIFIED IN NOT COND ONING THE DELAY IN FILING THE APPEAL BY THE APPELLANT UNDER T HE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE. 4. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE FILED THE RETURN OF INCOME OF RS.10 12 810 WHICH WAS PROCESSED U/S. 143 (1) OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS THE ACT IN SHORT] ON 7.8.2006. LATER ON THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESS ING OFFICER MADE CERTAIN ADDITIONS AND FRAMED THE ASSESSMENT AT AN INCOME OF RS.51 24 230. THE AO ALSO LEVIED A PENALTY OF RS.15 11 269 U/S. 271(1 )(C) OF THE ACT. 5. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A PPEALS) WHO NOTICED THAT THE APPEAL FILED BY THE ASSESSEE ON QU ANTUM WAS DELAYED BY 308 DAYS AND THE APPEAL AGAINST THE PENALTY U/S. 27 1(1)(C) WAS BELATED BY 126 DAYS. THE ASSESSEE FILED AN APPLICATION FOR CO NDONATION OF DELAY THE CONTENTS OF WHICH ARE MENTIONED IN PARA 4 OF THE IM PUGNED ORDER OF THE LD. CIT(A) WHICH ARE REPRODUCED VERBATIM AS UNDER: I. THAT THE ORDER OF ASSESSMENT U/S. 143(3) OF TH E DATED 31-12- 2007 PASSED BY THE LEARNED ASST. COMMISSIONER OF IN COME-TAX CIRCLE 1(1) BANGALORE WAS RECEIVED BY ME ON 31-12 -2007 AND THE APPEAL OUGHT TO HAVE BEEN FILED ON OR BEFORE 30 -01-2008. 2. THAT SOON AFTER THE RECEIPT OF THE ASSESSMENT O RDER THE SAME WAS PLACED IN THE HANDS MY AUDITOR SRI. K. RAV I FCA FOR ADVICE IN THE MATTER. SRI. K. RAVI AFTER GOING THRO UGH THE ORDER ADVISED ME THAT A RECTIFICATION PETITION U/S. 154 O F THE ACT COULD BE FILED AS THERE WERE CERTAIN MISTAKES APPARENT O N THE FACE OF ITA NOS1487 & 1488/BANG/10 PAGE 3 OF 8 RECORDS AND ONCE THE ORDER IS RECTIFIED THERE WOULD NOT BE ANY ADDITIONS. 3. THAT THE UNDERSIGNED HAS BEEN TIME AND AGAIN AP PROACHING THE AFORESAID SRI. K. RAVI FCA FOR PREPARATION AN D FILING OF THE RECTIFICATION PETITION AND HE STATED THAT THERE WAS SUFFICIENT TIME FOR FILING THE RECTIFICATION. 4. THAT SUBSEQUENTLY PENALTY PROCEEDINGS U/S. 271( 1)(C) OF THE ACT WERE ALSO INITIATED AND ACCORDINGLY ORDER O F PENALTY WAS PASSED AND WAS ALSO SERVED ON THE UNDERSIGNED ON 30 -06-2008 AND APPEAL OUGHT TO HAVE BEEN FILED ON OR BEFORE 30 -07-2008. 5. THAT IMMEDIATELY ON RECEIPT OF THE SAID PENALTY ORDER THE UNDERSIGNED ONCE AGAIN APPROACHED THE AFORESAID SRI . K. RAVI FCA FOR FURTHER ADVICE. SRI. K. RAVI INFORMED ME T HAT ONCE THE RECTIFICATION PETITION IS FILED AND THE ORDER IS RE CTIFIED THE PENALTY ORDER WOULD ALSO BE AUTOMATICALLY RECTIFIED AND THA T THERE WOULD BE NO DEMAND. 6. THAT AFTER REGULARLY PURSUING THE MATTER WITH THE AFORESAID SRI. K. RAVI I NOTICED THAT HE SRI. K. RAVI WAS BE SET WITH CERTAIN PROFESSIONAL AND PERSONAL PROBLEMS THAT PREVENTED H IM FROM ATTENDING TO THE BRIEF OF THE DEPONENT AND ACCORDIN GLY THE DEPONENT APPROACHED M/S. S. VENKATESAN & CO. CHART ERED ACCOUNTANTS TO ADVICE IN THE MATTER OF FILING THE RECTIFICATION PETITION BEFORE THE ASSESSING OFFICER. 7. THAT AFTER GOING THROUGH THE ASSESSMENT ORDER A ND PENALTY ORDER I WAS ADVISED BY M/S. S. VENKATESAN & CO. C HARTERED ACCOUNTANTS THAT ONLY AN APPEAL AGAINST THE ORDER O F ASSESSMENT IMMEDIATELY BY SEEKING CONDONATION OF DELAY WAS THE ONLY REMEDY AS RECTIFICATION OF THE ASSESSMENT ORDER WOU LD NOT BE POSSIBLE IN RESPECT OF DEBATABLE MATERS. 8. THAT ON RECEIPT OF THE AFORESAID ADVISE FROM M /S. S. VENKATESAN & CO. CHARTERED ACCOUNTANT IMMEDIATE S TEPS WERE TAKEN TO PREPARE AN APPEAL AGAINST THE ASSESSMENT O RDER U/S. 143(3) DATED 31-12-2006 AND PENALTY LEVIED U/S. 271 (1)(C) OF THE ACT DATED 27-06-2008. THUS THERE IS A DELAY OF 308 DAYS IN FILING THE APPEAL AGAINST THE ORDER U/S. 143(3) DATED 31-1 2-2006 AND 126 DAYS AGAINST THE PENALTY ORDER U/S. 271(1)(C) DATED 27-0 6-2008. 9. THAT I WAS UNDER A BONAFIDE BELIEF THAT FILING A RECTIFICATION PETITION BEFORE THE AO WOULD BE THE P ROPER REMEDY BASED ON THE ADVICE OF SRI.K.RAVI FCA AND THAT THE DELAY IN FILING THE APPEAL WAS DUE TO REASONS BEYOND MY CONT ROL AND THE ITA NOS1487 & 1488/BANG/10 PAGE 4 OF 8 DELAY WAS NEITHER INTENTIONAL WILLFUL NOR DELIBERA TE AND WAS OCCASIONED ONLY ON ACCOUNT OF THE REASONS STATED AB OVE. 10. IT IS THEREFORE PRAYED THAT THE DELAY IN FIL ING THE APPEALS MAY KINDLY BE CONDONED AND THE APPEAL MAY KINDLY BE ADMITTED AND DISPOSED OFF ON MERITS FOR THE ADVANCEMENT OF S UBSTANTIAL CAUSE OF JUSTICE. 6. THE LD. CIT(APPEALS) DID NOT FIND MERIT IN THE S UBMISSIONS OF THE ASSESSEE AND THE DELAY WAS NOT CONDONED BY OBSERVIN G IN PARAS 5 TO 8 OF THE IMPUGNED ORDERS WHICH READ AS UNDER:- 5. THE ABOVE SHOWS THAT THE EARLIER AUTHORIZED REPRESENTATIVE COULD NOT UNDERTAKE THE RESPONSIBILI TY ASSIGNED TO HIM BY THE APPELLANT CAUSING THE ADMITTED INORDINAT E DELAYS IN BOTH THE CASES. 6. THE GENERAL LAW IS THAT S.249(2) OF I.T.ACT PRO VIDES THE TIME OF 30 DAYS FOLLOWING THE DATE OF SERVICE OF TH E DEMAND NOTICE AND THEREAFTER THE ONUS IS ON THE APPELLANT TO SHOW SUFFICIENT CAUSE FOR NOT FILING THE APPEAL ON THE L AST DAY OF THE LIMITATION AND MUST EXPLAIN THE DELAY OF THE LIMITA TION AND MUST EXPLAIN THE DELAY MADE THEREAFTER ON DAY BY DAY TIL L ACTUAL DATE OF FILING OF THE APPEAL VIDE. (I) RAMLAL VS. REWA COALFIELDS LTD. A1R 1962 SC 36 1 (II) SITARAM RAMCHANDRA VS. M.N. NAGARSANNA AIR 196 0 SC 260 NEVERTHELESS IN THE CASE OF - COLLECTOR LAND ACQUISITION VS. M. KATIGI (1987) 167 ITR 471 (SC) THE APEX COURT HELD THAT IN THE INTEREST OF SUBSTAN TIAL JUSTICE THE INTERPRETATION SHOULD BE GIVEN A LIBERAL MEANING AN D THEREFORE CONDONED THE DELAY OF MERE 4 DAYS DIRECTING THE HIG H COURT OF JAMMU & KASHMIR NOT TO ADOPT A PEDANTIC APPROACH BY COUNTING THE DAY BY HOURS AND MINUTES. BUT THIS DOES NOT MEA N THAT THE APPELLANT CAN GET THE CONDONATION ORDER EVEN IN CAS E OF INORDINATE DELAYS EVEN IF IT IS NOT ABLE TO SHOW SPECIFIC AND SUFFICIENT REASONS FOR SUCH DELAY. SUCH WAS THE VIEW OF THE BO MBAY HIGH COURT WHICH CONFIRMED THE DECISION OF THE ITAT IN T HE CASE OF ITA NOS1487 & 1488/BANG/10 PAGE 5 OF 8 CIT VS. SANJAY K. SARASWAGI (2007) 301 ITR 232 (BOM) REJECTING THE PETITION OF CONDONATION OF DELAY FIND ING THE DELAY INORDINATE BEING DELAY OF 150 DAYS. SIMILARLY IN TH E CASE OF ORNATE TRADERS (P) LTD. VS. ITO (2008) 173 TAXMAN 192 (BOM) THE HIGH COURT HAS REFUSED TO CONDONE THE DELAY OF 1 YEAR TREATING THE SAME AS INORDINATE DELAY. THE COURT OB SERVED THAT THE WORDS SUFFICIENT CAUSE SHOULD RECEIVE A LIBE RAL CONSTRUCTION SO AS TO ADVANCE THE PURPOSE OF JUSTIC E BUT HOW LONG THE COURTS WILL CONDONE DEFAULTS IS THE QU ESTION TO BE ANSWERED. IT ALSO OBSERVED THAT SUCH LIBERAL INTERPRETATION OF WORDS SUFFICIENT CAUSE HAS GENE RATED NEGLIGENCE AND CALLOUSNESS ON THE PART OF THE ASSES SEES RESULTING IN THE FEELING I WILL DEAL WITH THE MATT ER AT LEISURE AND AT MY CONVENIENCE. APPLYING THE ABOVE RATIOS I SEE NOTHING BUT NEGLIGE NT ATTITUDE OF APPELLANT WHICH IS AN ANATHEMA TO WORDS SUFFICIENT CAUSE. 7. THE ABOVE LEGAL EXPOSITION REVEALS THAT THERE I S HEAVY BURDEN ON THE APPELLANT TO SHOW SPECIFIC AND SUFFIC IENT CAUSES IN CASE OF LONG DELAYS COMMITTED BY IT TO GET THE APPE AL ADMITTED. IN THIS CASE FACTS REVEAL THAT NO SUFFICIENT CAUSE HAS BEEN SHOWN. THE ONLY CAUSE SHOWN IS THAT THE A.R. FAILED TO DO THE NECESSARY TO FILE THE APPEAL IN TIME. IN FACT I FIND IT IS NOT THE AR BUT THE APPELLANT ITSELF IS RESPONSIBLE FOR CAUSE OF THE DELAY. IN FA CT HE WAS CALLOUS AND CARELESS IN HIS APPROACH TOWARDS THE INCOME-TAX DEPARTMENT. THIS CONCLUSION I DRAW NOT FROM THE BEH AVIOUR OF ERSTWHILE AR BUT FROM THE PRESENT AR WHO HAS NOT AP PEARED ON A SINGLE DAY OF HEARING FIXED IN BOTH THESE CASES EXC EPT THE LAST DAY I.E. OF 20-10-2010 NOR ANY ADJOURNMENT PETITION HA D BEEN FILED AND THEREFORE FOLLOWING THE DECISION OF THE JURISDI CTIONAL ITAT IN THE CASE OF M/S. GREEN AGRO PACK PVT. LTD. (A.Y. 2005-06) IN ITA.NO. 61(BANG)/2010 DATED 20-09-2010 THE CASE SHOULD HAVE BEEN DISMISSED IN LIMINE. EVEN ON THE DATE 20-10-10 THE AR FAILED TO EXPLAIN THE DELAYS IN FI LING THE APPEALS. ON THE WHOLE ON ANALYSIS OF THE FACTS I FI ND THAT THE APPELLANT IS NOT ONLY CALLOUS BUT ALSO CARELESS IN ITS APPROACH RESULTING IN SUCH DELAY IN FILING THE APPEALS TRYIN G TO FIRE A SHOT PUTTING THE GUN ON THE SHOULDER OF THE ERSTWHILE AU DITOR BECAUSE THE INHERENT BEHAVIOR OF CARELESSNESS HAS ALSO GOT MIRRORED IN NOT ITA NOS1487 & 1488/BANG/10 PAGE 6 OF 8 PROVIDING ANY IMPETUS AND INSPIRATION TO THE PRESEN T AUDITORS TO APPEAR AFTER FILING THE APPEALS. 8. THE PETITIONS FOR CONDONATION OF DELAY ARE REJE CTED. APPEALS ARE NOT ADMITTED AND TREATED AS DISMISSED F OR STATISTICAL PURPOSE WITHOUT GOING INTO MERITS OF THE CASES. 7. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(APPEALS) WITHOUT CONSIDE RING THE EXPLANATION OF THE ASSESSEE DISMISSED THE APPEALS IN LIMINE AND HAD NOT DISPOSED OF THE APPEALS ON MERITS. IT WAS STATED THAT THE LD. CIT( A) HAS NOT GIVEN ANY REASON IN SUPPORT OF HIS DECISION SO THE ORDER PAS SED BY THE LD. CIT(A) IS A NON-SPEAKING ORDER. IT WAS SUBMITTED THAT THERE WA S REASONABLE CAUSE IN FILING THE APPEAL BELATEDLY SO THE LD. CIT(A) OUGH T TO HAVE CONSIDERED THE EXPLANATION OF THE ASSESSEE AND CONDONED THE DELAY. IT WAS FURTHER STATED THAT THE CASES RELIED BY THE LD. CIT(A) WERE NOT AP PLICABLE TO THE FACTS OF THE ASSESSEES CASE. 8. IN HIS RIVAL SUBMISSIONS THE LD. DR SUPPORTED T HE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE IT IS NOTICED THAT THE LD. CIT(A) HAD REPRODUC ED THE EXPLANATION GIVEN BY THE ASSESSEE IN PARA 4 OF THE IMPUGNED ORDERS I N PARA 5 HE HAD STATED THAT EARLIER AR COULD NOT UNDERTAKE THE RESPONSIBIL ITY ASSIGNED TO HIM BY THE ASSESSEE CAUSING THE ADMITTED INORDINATE DELAY IN BOTH THE CASES WHICH CLEARLY SHOWS THAT DELAY WAS NOT ON THE PART OF THE ASSESSEE BUT IT WAS BY THE FAULT OF THE THEN AR. IN PARAS 6 & 7 OF THE IM PUGNED ORDERS THE LD. ITA NOS1487 & 1488/BANG/10 PAGE 7 OF 8 CIT(A) HAD DISCUSSED CERTAIN CASE LAWS BUT IT WAS NO WHERE MENTIONED THAT THOSE DECISIONS WERE CONFRONTED TO THE ASSESSE E OR OPPORTUNITY OF BEING HEARD WAS GIVEN TO THE ASSESSEE VIS--VIS THE CASE LAWS RELIED BY THE LD. CIT(A). IN PARA 8 OF THE IMPUGNED ORDER THE L D. CIT(A) SIMPLY STATED THAT THE PETITION FOR CONDONATION OF DELAY WAS REJE CTED APPEALS ARE NOT ADMITTED BUT NO REASON HAS BEEN GIVEN AS TO HOW AN D WHY THE EXPLANATION FURNISHED BY THE ASSESSEE WAS NOT A PLAUSIBLE EXPLA NATION WE THEREFORE ARE OF THE VIEW THAT THE ORDERS PASSED BY THE LD. C IT(A) DESERVE TO BE SET ASIDE SINCE THE SAME HAD BEEN PASSED WITHOUT PROVID ING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. WE THEREFORE REMAND THESE CASES TO THE FILE OF THE LD. CIT(APPEA LS) TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH THE LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. IN THE RESULT THE APPEALS ARE ALLOWED FOR STAT ISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF NOVEMBER 2011. SD/- SD/- ( GEORGE GEORGE K. ) ( N.K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 30 TH NOVEMBER 2011. DS/- ITA NOS1487 & 1488/BANG/10 PAGE 8 OF 8 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.