S.Duraipandi & S.Thalavaipandian, CHENNAI v. ACIT, CHENNAI

ITA 2067/CHNY/2013 | 2007-2008
Pronouncement Date: 08-04-2014

Appeal Details

RSA Number 206721714 RSA 2013
Assessee PAN AAAAD4723G
Bench Chennai
Appeal Number ITA 2067/CHNY/2013
Duration Of Justice 4 month(s) 12 day(s)
Appellant S.Duraipandi & S.Thalavaipandian, CHENNAI
Respondent ACIT, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 08-04-2014
Appeal Filed By Assessee
Bench Allotted C
Tribunal Order Date 08-04-2014
Date Of Final Hearing 05-03-2014
Next Hearing Date 05-03-2014
Assessment Year 2007-2008
Appeal Filed On 26-11-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNALC BENCH CHEN NAI . . . ! ' # $ BEFORE DR. O.K. NARAYANAN VICE PRESIDENT & SHRI VIKAS AWASTHY JUDICIAL MEMBER I.T.A. NOS. 2062 2063 2064 2065 2066 & 2067/MDS /2013 ASSESSMENT YEARS : 2002-03 2003-04 2004-05 2005- 06 2006-07 & 2007-08 SHRI S.DURAIPANDI AND SHRI S.THALAVAIPANDIAN(AOP) CNGSN & ASSOCIATES SWATHI COURT FLAT C & D NO.22 VIJAYARAGHAVA ROAD T.NAGAR CHENNAI-17 [PAN: AAAAD 4723 G] ( !% /APPELLANT) VS ACIT CENTRAL CIRCLE-III(4) CHENNAI ( &'!% /RESPONDENT) / APPELLANT BY : SHRI T.BANUSEKAR CA. / RESPONDENT BY : SHRI T.N.BETGERI JCIT / DATE OF HEARING : 05-03-2014 / DATE OF PRONOUNCEMENT : 08-04-2014 #( / O R D E R PER VIKAS AWASTHY J.M: THE ASSESSEE HAS FILED SIX APPEALS AGAINST THE COM MON ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)(C) -II CHENNAI DATED 29-08-2013 FOR THE ASSESSMENT YEARS (AYS) 200 2-03 2003- 04 2004-05 2005-06 2006-07 & 2007-08. SINCE COM MON ISSUE I.T.A. NOS. 2062 2063 2064 2065 2066 & 2067/MDS/2013 2 IS INVOLVED IN ALL THE APPEALS THEREFORE ALL THE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION. THE CIT(APPEALS) HAS DISMISSED THE APPEAL OF THE ASSESSEE FOR ALL THE SIX AYS ON THE G ROUND OF LIMITATION. THE APPEALS WERE FILED BEFORE THE CIT( APPEALS) WITH THE DELAY OF 922 [NINE HUNDRED TWENTY TWO] DAYS. 2. THE FACTS OF THE CASE AS EMANATING FROM THE ORDE RS OF THE AUTHORITIES BELOW ARE AS UNDER: SHRI DURAIPANDI AND SHRI THALAVAIPANDIAN ASSOCIATI ON OF PERSONS [AOP] ARE IN THE BUSINESS OF MONEY LENDING AND AGRI CULTURE. A SEARCH WAS CONDUCTED AT THE PREMISES OF SHRI DURAIP ANDI AND SHRI THALAVAIPANDIAN ON 16-05-2007. A SURVEY U/S.133A O F THE INCOME TAX ACT 1961 (HEREIN AFTER REFERRED TO AS THE ACT ) WAS CARRIED OUT IN THE BUSINESS PREMISES OF M/S.TEXB SECURITIES PVT . LIMITED IN WHICH BOTH SHRI DURAIPANDI AND SHRI THALAVAIPANDIAN ARE DIRECTORS. BOTH THE AFORESAID PERSONS MADE A STATE MENT THAT THEY HAVE BEEN DOING BUSINESS JOINTLY IN THE CAPACITY OF AOP. HOWEVER NO REGULAR BOOKS OF ACCOUNTS WERE MAINTAIN ED IN THE NAME OF AOP. THE ASSESSMENTS WERE COMPLETED FOR TH E AYS UNDER REFERENCE U/S.153C OF THE ACT. THE ASSESSEE PREFERRED APPEALS AGAINST THE ASSESSMENT ORDER FOR THE RESPEC TIVE SIX AYS BEFORE THE CIT(APPEALS). THE CIT(APPEALS) PARTLY A LLOWED THE I.T.A. NOS. 2062 2063 2064 2065 2066 & 2067/MDS/2013 3 APPEALS OF THE ASSESSEE. THEREAFTER APPEALS WERE FILED BEFORE THE TRIBUNAL IMPUGNING THE ORDER OF CIT(APPEALS). THE TRIBUNAL CONFIRMED THE ORDER OF THE CIT(APPEALS). THEREAFTER THE ASSESSEE FILED RECTIFICATION PETITI ON U/S.154 BEFORE THE ASSESSING OFFICER PRAYING FOR RECTIFICAT ION OF CERTAIN MISTAKES ALLEGEDLY APPARENT IN ORDER DT.20-09-2010 PASSED BY THE ASSESSING OFFICER FOR GIVING EFFECT TO THE ORDER OF CIT(APPEALS). THE ASSESSING OFFICER DISMISSED THE RECTIFICATION P ETITIONS WITH OBSERVATIONS THAT THERE IS NO MISTAKE. IN FIRST AP PEAL THE CIT(APPEALS) CONSIDERED THE SCOPE OF SECTION 154 AN D HELD THAT THE ISSUE RAISED IN THE RECTIFICATION PETITION IS D EBATABLE AND DISMISSED THE APPEALS OF THE ASSESSEE. THE ASSESSE E THEREAFTER FILED APPEAL ASSAILING THE ORDER OF ASSESSING OFFIC ER DT.20-09-2010 BEFORE THE CIT(APPEALS). THE SAID APPEALS WERE FIL ED WITH THE DELAY OF 922 [NINE HUNDRED TWENTY TWO] DAYS BEFORE THE CIT(APPEALS). THE APPEALS OF THE ASSESSEE WERE DIS MISSED BY THE CIT(APPEALS) ON THE GROUND THAT THE ASSESSEE H AS FAILED TO SHOW ANY SUFFICIENT CAUSE FOR FILING THE APPEALS WI TH THE DELAY OF 922 [NINE HUNDRED TWENTY TWO] DAYS. AGGRIEVED AGAINST THIS ORDER OF CIT(APPEALS) THE A SSESSEE HAS COME IN APPEAL BEFORE THE TRIBUNAL. I.T.A. NOS. 2062 2063 2064 2065 2066 & 2067/MDS/2013 4 3. SHRI T.BANUSEKAR APPEARING ON BEHALF OF THE ASS ESSEE SUBMITTED THAT AFTER QUANTUM ORDER FOR THE AYS UNDE R CONSIDERATION WAS CONFIRMED BY THE TRIBUNAL THE ASSESSING OFFICE R PASSED ORDER GIVING EFFECT TO THE ORDER OF CIT(APPEALS) ON 20-09 -2010. THE ASSESSEE HAD FILED RECTIFICATION PETITIONS U/S.154 BEFORE THE ASSESSING OFFICER HIGHLIGHTING CERTAIN MISTAKES IN ORDER GIVING EFFECT TO THE ORDER OF CIT(APPEALS). HOWEVER THE SAME WERE DISMISSED BY THE ASSESSING OFFICER. IN FIRST APPEA L THE CIT(APPEALS) DISMISSED THE APPEALS OF THE ASSESSEE. THEREFORE THE ASSESSEE WAS CONSTRAINED TO FILE APPEAL AGAINST THE ORDER DT. 20-09-2010 ASSAILING THE LEVY OF INTEREST U/S.234A & 234B OF THE ACT. THE DELAY OF 922 [NINE HUNDRED TWENTY TWO] DA YS IN FILING OF THE APPEAL BEFORE THE CIT(APPEALS) WAS EXPLAINED. HOWEVER THE CIT(APPEALS) BRUSHED ASIDE THE REASON SUBMITTED BY THE ASSESSEE AND DISMISSED THE APPEALS OF THE ASSESSEE ON THE GR OUND OF LIMITATION ALONE. 4. ON THE OTHER HAND SHRI T.N.BETGERI APPEARING O N BEHALF OF THE REVENUE VEHEMENTLY OPPOSED THE SUBMISSIONS MADE BY THE LD.AR. THE LD.DR SUPPORTING THE IMPUGNED ORDER PRA YED FOR THE DISMISSAL OF THE APPEALS OF THE ASSESSEE. I.T.A. NOS. 2062 2063 2064 2065 2066 & 2067/MDS/2013 5 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES. WE HAVE ALSO EX AMINED THE ORDERS OF THE AUTHORITIES BELOW. THE CIT(APPEALS) HAS DISMISSED THE APPEALS OF THE ASSESSEE FOR THE AYS 2002-03 20 03-04 2004- 05 2005-06 2006-07 & 2007-08 FOR THE REASONS THAT THE ASSESSEE HAS NOT BEEN ABLE TO SHOW SUFFICIENT CAUSE FOR DELA Y IN FILING OF THE APPEALS. 6. THE ASSESSEE IS IN THIRD ROUND OF LITIGATION BEF ORE THE TRIBUNAL FOR THE AYS UNDER CONSIDERATION. THEREFORE BEFORE WE PROCEED WITH THE PRESENT APPEAL IT IS NECESSARY TO KNOW BR IEF HISTORY OF THE CASE. THE ASSESSEE IS AN AOP. IN PURSUANCE OF NOT ICE U/S.153C ASSESSMENT WAS MADE ON THE ASSESSEE FOR THE AYS 200 2-03 2003-04 2004-05 2005-06 2006-07 & 2007-08. AGGR IEVED AGAINST THE ASSESSMENT ORDER THE ASSESSEE PREFERRE D APPEALS FOR THE AFORESAID AYS BEFORE THE CIT(APPEALS). THE CIT (APPEALS) PARTLY ALLOWED THE APPEALS OF THE ASSESSEE. HOWEVE R THE MATTER WAS CARRIED IN APPEAL TO THE TRIBUNAL. THE TRIBUNA L CONFIRMED THE FINDINGS OF CIT(APPEALS). THE ASSESSING OFFICER IN GIVING EFFECT TO THE ORDER OF CIT(APPEALS)-II PASSED ORDER DT.20-09- 2010. THEREAFTER THE ASSESSEE FILED PETITION U/S.154 BEF ORE ASSESSING OFFICER PRAYING FOR RECTIFICATION OF CERTAIN MISTAK ES IN THE ORDER I.T.A. NOS. 2062 2063 2064 2065 2066 & 2067/MDS/2013 6 DT.20-09-2010. THE ASSESSING OFFICER DISMISSED THE RECTIFICATION PETITIONS WITH OBSERVATIONS THAT THERE IS NO MISTAK E IN THE ORDER. THE ASSESSEE CARRIED APPEALS TO THE CIT(APPEALS). T HE CIT(APPEALS) HELD THAT ISSUE RAISED IN RECTIFICATIO N PETITION IS DEBATABLE AND DISMISSED THE APPEALS OF THE ASSESSEE . THEREAFTER THE ASSESSEE FILED SECOND APPEAL BEFORE THE TRIBUNA L I.E. I.T.A. NOS. 2223 TO 2229/MDS/2012 FOR AYS 2002-03 TO 2008- 09 WHEREIN FOLLOWING GROUNDS WERE RAISED BY THE ASSESSEE: 2. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN UPHOLDING THAT THE ASSESSEES APPEAL IS NO T MAINTAINABLE U/S.154 AS THE ISSUE OF INTEREST INVOL VES A DEBATABLE ISSUE EVEN THOUGH THE SAME IS A MISTAKE APPARENT FROM THE RECORDS. 3. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN REJECTING THE ASSESSEES APPEAL ON THE GRO UND THAT THE ASSESSEE SOUGHT THE AMOUNT SEIZED TO BE TREATED AS ADVANCE TAX WHERE AS ACTUALLY THE ASSES SEE HAD REQUESTED THAT THE SUMS SEIZED BE TREATED AS T AX PAID BY THE ASSESSEE UNDER SECTION 140A OR OTHERWIS E AS DEFINED U/S.234B(2) OF THE INCOME TAX ACT 1961. 4. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN NOT DIRECTING THAT THE INTEREST U/S.234B S HOULD CEASE TO BE CHARGED TO THE EXTENT OF CASH SEIZURE. I.T.A. NOS. 2062 2063 2064 2065 2066 & 2067/MDS/2013 7 THE ASSESSEE ALSO RAISED ADDITIONAL GROUND BEFORE THE TRIBUNAL: THE LD. ASSESSING OFFICER ERRED IN CALCULATION OF INTEREST UNDER SECTIONS 234A OF THE INCOME TAX ACT 1961. THE TRIBUNAL VIDE ORDER DT.20-03-2013 ALLOWED THE A PPEALS OF THE ASSESSEE AND HELD THAT THE AMOUNT OF ` 1.65 CRORES SEIZED AT THE TIME OF SEARCH AND SUBSEQUENT PAYMENT OF ` 31.00 LAKHS MADE BY THE ASSESSEE BE FIRST GIVEN CREDIT AS ADVANCE PA YMENT OF TAX AND INTEREST U/S.234A AND 234B WILL BE CHARGED ONLY AFTER THE CREDIT IS EFFECTED. THEREAFTER ON 31-03-2013 THE ASSESSEE INSTITUTED THE APPEALS BEFORE THE CIT(APPEALS) AGAI NST THE ORDER DT.20-09-2010 WITH THE DELAY OF 922 [NINE HUNDRED T WENTY TWO] DAYS. IN APPEAL THE ASSESSEE RAISED THE FOLLOWING GROUNDS BEFORE THE CIT(APPEALS): I. THE ORDER OF THE ASSESSING OFFICER IS CONTRARY TO LAW FACTS AND CIRCUMSTANCES OF THE CASE AND IS OPPOSED TO THE PRINCIPLES OF NATURAL JUSTICE EQUITY AND FAIR PLAY. II. THE LEARNED ASSESSING OFFICER ERRED IN LEVYING INTE REST U/S.234A & 234B. FROM THE IMPUGNED ORDER AND THE STATEMENT OF FACTS FILED BEFORE THE CIT(APPEALS) WE OBSERVE THAT FOR THE RE ASONS I.T.A. NOS. 2062 2063 2064 2065 2066 & 2067/MDS/2013 8 UNKNOWN THE ASSESSEE HAS NOT BROUGHT TO THE KNOWLE DGE OF CIT(APPEALS) THE VITAL FACT THAT THE ASSESSEE HAS G OT RELIEF FROM THE TRIBUNAL ON THE ISSUE OF COMPUTATION OF INTEREST LE VIED U/S.234A AND 234B OF THE ACT. IT WOULD NOT BE OUT OF PLACE TO MENTION HERE THAT THE AR WHO APPEARED BEFORE THE CIT(APPEALS) HA D REPRESENTED THE ASSESSEE BEFORE THE TRIBUNAL. 7. IN THE BACKGROUND OF ABOVE FACT WE HAVE TO CONS IDER THE APPEALS OF THE ASSESSEE. THE HONBLE SUPREME COURT OF INDIA HAS TIME AND AGAIN HELD THAT ACCEPTANCE OF EXPLANATION FURNISHED FOR CONDONATION OF DELAY SHOULD BE THE RULE AND REFUSAL AN EXCEPTION MORE SO WHEN NO NEGLIGENCE OR INACTION OR WANT OF B ONAFIDE CAN BE IMPUTED TO THE DEFAULTING PARTY. THE HONBLE SU PREME COURT IN THE CASE OF RAM NATH SAO VS. GOBARDHAN SAO REPORTED AS 2002(3) SCC 195 HAS HELD AS UNDER: THUS IT BECOMES PLAIN THAT THE EXPRESSION 'SUFFICI ENT CAUSE' WITHIN THE MEANING OF SECTION 5 OF THE ACT OR ORDER 22 RULE 9 OF THE CODE OR ANY OTHER SIMILAR PROVISION SHOULD R ECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL J USTICE WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE IS I MPUTABLE TO A PARTY. IN A PARTICULAR CASE WHETHER EXPLANATION F URNISHED WOULD CONSTITUTE 'SUFFICIENT CAUSE' OR NOT WILL BE DEPENDANT UPON FACTS OF EACH CASE. THERE CANNOT BE A STRAITJA CKET FORMULA FOR ACCEPTING OR REJECTING EXPLANATION FURN ISHED FOR THE I.T.A. NOS. 2062 2063 2064 2065 2066 & 2067/MDS/2013 9 DELAY CAUSED IN TAKING STEPS. BUT ONE THING IS CLEA R THAT THE COURTS SHOULD NOT PROCEED WITH THE TENDENCY OF FIND ING FAULT WITH THE CAUSE SHOWN AND REJECT THE PETITION BY A S LIPSHOD ORDER IN OVER JUBILATION OF DISPOSAL DRIVE. ACCEPTA NCE OF EXPLANATION FURNISHED SHOULD BE THE RULE AND REFUSA L AN EXCEPTION MORE SO WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE CAN BE IMPUTED TO THE DEFAULTING PARTY. O N THE OTHER HAND WHILE CONSIDERING THE MATTER THE COURTS SHOUL D NOT LOSE SIGHT OF THE FACT THAT BY NOT TAKING STEPS WITHIN T HE TIME PRESCRIBED A VALUABLE RIGHT HAS ACCRUED TO THE OTHE R PARTY WHICH SHOULD NOT BE LIGHTLY DEFEATED BY CONDONING D ELAY IN A ROUTINE LIKE MANNER. HOWEVER BY TAKING A PEDANTIC AND HYPER TECHNICAL VIEW OF THE MATTER THE EXPLANATION FURNIS HED SHOULD NOT BE REJECTED WHEN STAKES ARE HIGH AND/OR ARGUABL E POINTS OF FACTS AND LAW ARE INVOLVED IN THE CASE CAUSING ENO RMOUS LOSS AND IRREPARABLE INJURY TO THE PARTY AGAINST WHOM TH E LIS TERMINATES EITHER BY DEFAULT OR INACTION AND DEFEAT ING VALUABLE RIGHT OF SUCH A PARTY TO HAVE THE DECISION ON MERIT . WHILE CONSIDERING THE MATTER COURTS HAVE TO STRIKE A BAL ANCE BETWEEN RESULTANT EFFECT OF THE ORDER IT IS GOING T O PASS UPON THE PARTIES EITHER WAY. THE HONBLE SUPREME COURT OF INDIA WHILE GIVING LIB ERAL CONSTRUCTION TO THE TERM SUFFICIENT CAUSE IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST. KATIJI AND OTHERS REPORTED AS 167 ITR 471 (SC) HAS HELD: 'ANY APPEAL OR ANY APPLICATION OTHER THAN AN APPLI CATION UNDER ANY OF THE PROVISIONS OF ORDER XXI OF THE COD E OF CIVIL I.T.A. NOS. 2062 2063 2064 2065 2066 & 2067/MDS/2013 10 PROCEDURE 1908 MAY BE ADMITTED AFTER THE PRESCRIBE D PERIOD IF THE APPELLANT OR THE APPLICANT SATISFIES THE COU RT THAT HE HAD SUFFICIENT CAUSE FOR NOT PREFERRING THE APPEAL OR M AKING THE APPLICATION WITHIN SUCH PERIOD. 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND C AUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CON- DONED THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE W OULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. 3. 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT M EAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY H OUR'S DELAY EVERY SECOND'S DELAY? THE DOCTRINE MUST BE A PPLIED IN A RATIONAL COMMON SENSE PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER CAUSE OF SUBSTANTIAL JUS TICE DESERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE O F A NON- DELIBERATE DELAY. I.T.A. NOS. 2062 2063 2064 2065 2066 & 2067/MDS/2013 11 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 JUDICIARY IS RESPECTED N OT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHN ICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. MAKING A JUSTICE-ORIENTED APPROACH FROM THIS PERSPE CTIVE THERE WAS SUFFICIENT CAUSE FOR CONDONING THE DELAY IN THE INSTITUTION OF THE APPEAL. 8. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PR ESENT CASE AND THE LAW LAID DOWN BY THE HONBLE APEX COURT WE ARE OF THE CONSIDERED OPINION THAT THE APPEALS OF THE ASSESSEE DESERVE TO BE ALLOWED. THE ASSESSEE HAS BEEN ABLE TO SHOW SUFFI CIENT CAUSE FOR DELAY IN FILING OF APPEALS BEFORE THE CIT(APPEALS) THE MATTER IS REMITTED BACK TO THE CIT(APPEALS) TO DECIDE THE APP EALS OF THE ASSESSEE ON MERITS. THE CIT(APPEALS) WHILE ADJUDICA TING THE APPEALS ON MERITS SHALL ALSO TAKE INTO CONSIDERATIO N THE EFFECT OF THE DECISION OF THE TRIBUNAL IN ASSESSEES APPEALS IN ITA NOS.2223 I.T.A. NOS. 2062 2063 2064 2065 2066 & 2067/MDS/2013 12 TO 2229/MDS/2012 FOR AYS.2002-03 TO 2008-09 DECIDED ON 20-03-2013. ORDER PRONOUNCED ON TUESDAY THE 08 TH APRIL 2014 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIKAS AWAS THY) ( . . . ) ( ! ) / VICE PRESIDENT ! '# / JUDICIAL MEMBER $ /CHENNAI %'& /DATED: 08 TH APRIL 2014 TNMM ''(!)*+* /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. ' ' -. /CIT(A) 4. ' ' /CIT 5. */0!!12 /DR 6. 0345 /GF.