MR. YATIN K. ASHAR, MUMBAI v. ITO WARD-22(2)(2), MUMBAI

ITA 3769/MUM/2010 | 2003-2004
Pronouncement Date: 31-03-2011 | Result: Partly Allowed

Appeal Details

RSA Number 376919914 RSA 2010
Assessee PAN AADPA5190J
Bench Mumbai
Appeal Number ITA 3769/MUM/2010
Duration Of Justice 10 month(s) 19 day(s)
Appellant MR. YATIN K. ASHAR, MUMBAI
Respondent ITO WARD-22(2)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-03-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted G
Tribunal Order Date 31-03-2011
Date Of Final Hearing 29-03-2011
Next Hearing Date 29-03-2011
Assessment Year 2003-2004
Appeal Filed On 11-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G MUMBAI BEFORE SHRI D.K. AGARWAL (J.M.) AND SHRI R.K. PANDA (A.M.) ITA NOS. 3769 TO 3772/MUM /2010 ASSESSMENT YEARS 2003-04 TO 2006-07 ITA NOS. 1815 TO 1817/MUM /2009 ASSESSMENT YEARS 2003-04 TO 2005-6 MR. YATIN K. ASHAR M/S PRAMOD C. SHAH & CO. CHARTERED ACCOUNTANTS 1201 REGENT CHAMBERS J.B. MARG 208 NARIMAN POINT MUMBAI 400 021. PAN : AADPA 5190J VS. INCOME TAX OFFICER WARD 22(2)(2) 4 TH FLOOR TOWER NO. 6 VASHI RLY STATION COMPLEX NAVI MUMBAI 400 706. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HITESH P. SHAH RESPONDENT BY : SHRI A.K. NAYAK O R D E R PER BENCH. ALL THESE APPEALS PREFERRED BY THE ASSESSEE ARE DI RECTED AGAINST SEPARATE ORDERS ALL DATED 22.2.2010 PASSED BY THE L D. CIT(A) AGAINST THE ASSESSMENT ORDERS PASSED BY THE A.O. FOR THE ASSESS MENT YEARS 2003-04 2004-05 2005-06 AND 2006-07. THE ASSESSEE HAS ALS O FILED APPEALS AGAINST THE SUSTENANCE OF PENALTY IMPOSED BY THE A. O. U/S 271(1)(C) OF THE INCOME TAX ACT 1961 (THE ACT) AND CONFIRMED BY THE LD. CIT(A) VIDE SEPARATE ORDERS ALL DATED 12.12.2008 FOR ASSESSMENT YEARS 2003-04 2004-05 AND 2005-06. SINCE FACTS ARE IDENTICAL AND ISSUES INVOLVED ARE COMMON ALL THESE APPEALS ARE HEARD TOGETHER AND DI SPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA 3769 TO 3772/M/10 & ITA 1815 TO 1817/M/2009 MR. YATIN K. ASHAR 2 2. BRIEFLY STATED FACTS OF THE CASE EXTRACTED FROM ITA NO. 3769/MUM/2010 FOR A.Y. 2003-04 ARE THAT THE ASSESSE E AN INDIVIDUAL IS A DEVELOPMENT OFFICER OF LIFE INSURANCE CORPORATION OF INDIA. THE RETURN WAS FILED DECLARING TOTAL INCOME OF ` 9 96 953/- CLAIMING REFUND OF ` 2 37 100/-. THE A.O. AFTER PROCESSING OF THE RETU RN U/S 143(1) ISSUED NOTICE U/S 148 OF THE ACT. IN RESPONSE THE ASSESS EE DID NOT FILE THE RETURN. SUBSEQUENTLY THE A.O. ISSUED NOTICE U/S 1 42(1) ALONG WITH LETTER DATED 23 RD APRIL 2008 REQUIRING THE ASSESSEE TO PRODUCE MATE RIAL TO SUPPORT OF HIS CLAIM FOR EXPENSES FROM THE SALARY I NCOME APART FROM THE DEDUCTION SHOWN IN FORM NO. 16 ISSUED BY THE EMPLOY ER INCLUDING ANY JUDICIAL PRONOUNCEMENTS OR CIRCULAR ISSUED BY THE C BDT. IN RESPONSE THE ASSESSEE HAS MADE NO COMPLIANCE HOWEVER ON 25 TH AUG. 2008 THE ASSESSEE HAS MADE PART OF THE COMPLIANCE. IN THE AB SENCE OF ANY SUPPORTING MATERIAL IN SUPPORT OF THE EXPENSES CLAI MED BY THE ASSESSEE THE A.O. REJECTED THE CLAIM OF EXPENSES CLAIMED BY THE ASSESSEE AND COMPUTED THE SALARY AS PER FORM NO. 16 FILED ALONG WITH THE RETURN OF INCOME AND THEREBY COMPLETED THE ASSESSMENT AT AN I NCOME OF ` 17 27 791/- VIDE ORDER DATED 29 TH AUGUST 2008 PASSED U/S 143(3) R.W.S. 147 OF THE ACT. 3. AGAINST THE ORDER PASSED BY THE A.O. THE ASSESS EE FILED APPEAL BEFORE THE LD. CIT(A). ON EXAMINATION OF FORM NO. 35 THE LD. CIT(A) OBSERVED THAT THE APPEAL FILED BY THE ASSESSEE IS D ELAYED BY ALMOST 5 MONTHS. BEFORE THE LD. CIT(A) THE ASSESSEE FILED A N APPLICATION FOR CONDONATION OF DELAY DATED 19.2.2009 FOR THE ASSESS MENT YEARS 2003-04 TO 2005-06 WHICH READS AS UNDER:- 1. THE CONSULTANT WHO WAS ENTRUSTED TO ATTEND TO M Y CASE AND WHOM I RELIED ON DID NOT ATTEND BEFORE THE A.O. AS REQUIRED. 2. HE EVEN DID NOT FILE THE COPY OF JUDGMENT OF THE DECIDED CASE ON THE BASIS OF WHICH HE HAD ADVISED ME TO CLAIM EXPEN SES FROM THE ITA 3769 TO 3772/M/10 & ITA 1815 TO 1817/M/2009 MR. YATIN K. ASHAR 3 INCENTIVE BONUS THAT WAS PAID TO ME IN ADDITION TO MY SALARY RECEIVED FROM THE LIC. 3. DUE TO THESE CIRCUMSTANCES BEYOND MY CONTROL MY CLAIM OF EXPENSES WAS DISALLOWED. 4. HE EVEN DID NOT INFORM ME ABOUT HIS NON-ATTENDAN CE AND GAVE ME A CHANCE TO MAKE ANY ALTERNATIVE ARRANGEMENT TO ATT END TO MY CASE. 5. I CAME TO KNOW OF THIS WORST SITUATION ONLY WHEN I RECEIVED PENALTY ORDERS FOR THE ABOVE YEARS AND WHEN MY SALARY WAS A TTACHED. 6. HE THEN ADVISED ME TO FILE APPEALS AGAINST THE P ENALTY ORDERS. HOWEVER AT THAT TIME ALSO HE DID NOT INFORM ME OF THE NECESSITY OF FILING APPEALS AGAINST THE ASSESSMENT ORDERS. 7. ON CONSULTATION WITH A SENIOR CONSULTANT WHOM I HAVE ENGAGED NOW I AM ADVISED THAT I SHOULD HAVE FILED APPEALS AGAINST THE QUANTUM OF ADDITIONS ALSO BECAUSE THE PENALTIES ARE BASED ON THAT QUANTUM ONLY. UNDER THESE CIRCUMSTANCES THE APPEALS WHICH I AM P REFERRING NOW AGAINST THE ASSESSMENT ORDERS FOR THE ABOVE YEARS A RE DELAYED DUE TO THE CIRCUMSTANCES BEYOND MY CONTROL. THE ABOVE MENTIONE D THREE APPEALS ARE DELAYED BY ABOUT 173 DAYS. IN SUPPORT THE ASSESSEE HAS ALSO FILED AFFIDAVIT DA TED 29 TH OCTOBER 2009. 4. THE LD. CIT(A) WHILE REJECTING THE CONDONATION O F DELAY HAS HELD VIDE PARA NOS. 3.3 AND 3.4 OF HIS ORDER AS UNDER:- 3.3 . WHEN THE CASE OF THE APPELLANT IS EXAMINED FROM THE SE ANGLES IT IS SEEN THAT IN APPELLANTS CASE THE APPELLANT HAS NO CONCRETE OR ACCEPTABLE REASON WITH HIM WHICH WOULD EXPLAIN THE FILING OF A PPEAL LATE IN CONTRAVENTION TO THE PROVISIONS OF THE INCOME TAX A CT 1961. THE APPELLANT HAS SOUGHT TO PUT THE ENTIRE BLAME ON THE CHARTERED ACCOUNTANT AND STATED THAT CIRCUMSTANCES WERE NOT I N HIS CONTROL. HOWEVER EVEN IF THE SAME IS ACCEPTED IT IS NOT UN DERSTOOD WHY THE APPELLANT DELAYED FILING OF THIS APPEAL FURTHER BY A PERIOD OF APPROXIMATELY 4 MONTHS AS HE HAD ALREADY TAKEN ACTI ON TO FILE APPEAL AGAINST THE PENALTY ORDER IN TIME. BY FILING THE A PPEAL AGAINST THE PENALTY ORDER IN TIME THE APPELLANT HAD BECOME AWA RE OF THE PROVISIONS OF LAW AND HENCE CANNOT TAKE REFUGE IN THE STATEMEN T THAT HIS CHARTERED ACCOUNTANT ADVISED HIM WRONGLY. EVEN IF IT IS ACCEP TED THAT HIS CHARTERED ACCOUNTANT DID NOT ADVISE HIM REGARDING F ILING OF APPEAL AGAINST QUANTUM ADDITION IN TIME I FIND THAT THE A PPELLANT WOULD HAVE HAD A CASE IF HE HAD TAKEN REMEDIAL MEASURES REGARD ING FILING OF APPEAL AS AND WHEN HE FILED THE APPEAL AGAINST THE PENALTY ORDER AS BY THIS TIME ITA 3769 TO 3772/M/10 & ITA 1815 TO 1817/M/2009 MR. YATIN K. ASHAR 4 HE WAS MADE AWARE OF THE INCOME TAX ACT AND LAW. O N THE WHOLE I FIND THAT IT IS ONLY WHEN THE PENALTY U/S 271(1)(C) LEVI ED WAS CONFIRMED BY THE APPELLATE AUTHORITY THAT THE APPELLANT DECIDED TO STRENGTHEN HIS CASE BEFORE THE HONBLE ITAT WHERE HE HAD FILED FURTHER APPEAL AGAINST THE ORDER OF THE CIT(A) BY FILING AN APPEAL BEFORE THE CIT(A) IN QUANTUM CASE AND THUS BRINGING TO RECORD VARIOUS SUBMISSIONS AND DOCUMENTS WHICH HE THOUGHT WOULD BE REQUIRED TO DEFEND HIS CASE IN THE HONBLE ITAT. FROM THE ABOVE FACTS THAT HAVE BEEN NARRATED IT CA N BE SAID THAT THE APPELLANT HAS BEEN GROSSLY NEGLIGENT AND THE REASON GIVEN BY HIM FOR DELAY IN FILING APPEAL ARE NOT ACCEPTABLE. THE LON G DELAY IS NOT EXCUSABLE IN THE CASE OF THE APPELLANT. THE ACTION OF THE AP PELLANT IS SUCH THAT HE HAS TAKEN IT FOR GRANTED THAT CONDONATION OF DELAY IN HIS CASE IS A MATTER OF RIGHT. 3.4 I AM THEREFORE NOT INCLINED TO ACCEPT THE REASO N GIVEN BY THE APPELLANT REGARDING DELAY IN FILING OF THIS APPEAL AS A REASONABLE CAUSE AND CONDONE THE DELAY. THE APPEAL OF THE APPELLANT FILED IS THEREFORE TO BE TREATED AS UNADMITTED. ON MERITS THE ASSESSEE HAS ALSO FILED VOLUMINOUS S UBMISSIONS TO SUPPORT HIS CLAIM. HOWEVER THE LD. CIT(A) WITHOUT PASSING ANY ORDER ON THE ADMISSION OR REJECTION OF ADDITIONAL EVIDENCE I N TERMS OF RULE 46A OF THE INCOME TAX RULES 1962 HAS HELD THAT EXPENSES C LAIMED BY THE ASSESSEE ARE NOT ALLOWABLE AS THE SAME HAVE ALREADY BEEN REIMBURSED BY THE LIFE INSURANCE CORPORATION OF INDIA AND THE ASS ESSEE HAS FAILED TO DISCHARGE HIS BURDEN AND ACCORDINGLY HE DISMISSED T HE APPEAL TREATED AS UNADMITTED. 5. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE REJECTION OF CONDONATION OF DELAY AND SUSTENANCE OF DISALLOWANCE OF EXPENSES CLAIMED BY THE ASSESSEE. 6. AT THE TIME OF HEARING BEFORE US THE LD. COUNSE L FOR THE ASSESSEE WHILE REITERATING THE SAME SUBMISSIONS AS SUBMITTED BEFORE THE LD. CIT(A) FOR CONDONATION OF DELAY SUBMITS THAT SINCE THE CON SULTANT WHO WAS ENTRUSTED TO ATTEND THE ASSESSEES CASE DID NOT ATT END THE CASE BEFORE THE ITA 3769 TO 3772/M/10 & ITA 1815 TO 1817/M/2009 MR. YATIN K. ASHAR 5 A.O. AND HAS NOT GIVEN PROPER ADVISE TO THE ASSESSE E THEREFORE THERE WAS A REASONABLE CAUSE AND THEREFORE THE LD. CIT(A) HAS ERRED IN NOT CONDONING THE DELAY. ON MERITS HE SUBMITS THAT TH E ASSESSEE HAS FILED ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A) AS HIS PR EVIOUS COUNSEL TO WHOM HE HAS ENTRUSTED HIS CASE HAS NOT FILED THE SAME BE FORE THE A.O. THEREFORE THE LD. CIT(A) WAS NOT JUSTIFIED IN NOT ADMITTING AND NOT CONSIDERING THE SAME. HE THEREFORE SUBMITS THAT I N THE INTERESTS OF JUSTICE AFTER CONDONATION OF THE DELAY THE ISSUE MA Y BE RESTORED BACK TO THE FILE OF THE LD. CIT(A) TO CONSIDER THE SAME AFR ESH. 7. THE LD. D.R. ON THE OTHER HAND WHILE RELYING O N THE ORDER OF THE A.O. AND LD. CIT(A) SUBMITS THAT IN VIEW OF THE FIN DINGS RECORDED BY THE LD. CIT(A) IN HIS ORDER VIDE PARA NOS. 3.2 3.3 AND 3.4 OF HIS ORDER THE LD. CIT(A) WAS FULLY JUSTIFIED IN NOT CONDONING THE DEL AY. HE THEREFORE SUBMITS THAT THE ORDER PASSED BY THE LD. CIT(A) BE UPHELD. 8. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND THAT THERE IS NO DISPUTE THAT FOR CONDONATION OF DELAY IN FILING OF THE APPEAL BEFORE THE LD. CIT(A) THE ASSESSEE HAS FILED PETITION FOR CONDONA TION OF DELAY SUPPORTED BY AN AFFIDAVIT. THE LD. CIT(A) WITHOUT EXAMINING THE SAME REJECTED THE CONDONATION OF DELAY FOR THE REASONS AS STATED IN P ARA NOS. 3.3 AND 3.4 OF HIS ORDER WHICH WE HAVE ALREADY EXTRACTED IN PARA 4 OF THIS ORDER. 9 . IN BHARAT AUTO CENTRE V. CIT AND ANOTHER [2006] 2 82 ITR 366 (ALL) THEIR LORDSHIPS HAVE CONSIDERED THE FOLLOWING JUDGM ENTS (PAGE 368): 10 . IN THE CASE OF COLLECTOR LAND ACQUISITION V. MST. KATIJI REPORTED IN [1987] 167 ITR 471 H ONBLE SUPREME COURT HELD AS FOLLOWS (PAGE 472) : ITA 3769 TO 3772/M/10 & ITA 1815 TO 1817/M/2009 MR. YATIN K. ASHAR 6 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 M ATTERS ON MERITS. THE EXPRESSION SUFFICIENT CAUSE EMPLOYED BY THE LEGIS LATURE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICETHAT BEING THE LIFE-PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COURTS. IT IS COMMO N KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL APPROAC H IN MATTERS INSTITUTED IN THIS COURT. BUT THE MESSAGE DOES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHER COURTS IN THE HIER ARCHY. AND SUCH A LIBERAL APPROACH IS ADOPTED ON PRINCIPLE AS IT IS R EALIZED THAT : 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 CAUSE OF JUSTI CE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDONED THE HIGHEST T HAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING TH E PARTIES. 3. EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT M EAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOURS DELAY EVERY SECONDS DELAY ? THE DOCTRINE MUST BE APPLIED IN A RATIONAL COMMONSENSE AND PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER THE CAUSE OF SUBSTANTIAL JUSTIC E 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 MA LA 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 THE JUDICIARY IS RESPECT ED NOT ON ACCOUNT OF ITS POWER TO LEGALISE INJUSTICE ON TECHNICAL GROUND S BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 11. IN N. BALAKRISHNAN V. M. KRISHNAMURTHY REPORTED IN [1998] 7 SCC 123 THE APEX COURT EXPLAINED THE SCOPE OF LIMITATIO N AND CONDONATION OF DELAY OBSERVING AS UNDER (HEADNOTE) : ITA 3769 TO 3772/M/10 & ITA 1815 TO 1817/M/2009 MR. YATIN K. ASHAR 7 THE PRIMARY FUNCTION OF A COURT IS TO ADJUDICATE T HE DISPUTE BETWEEN THE PARTIES AND TO ADVANCE SUBSTANTIAL JUSTICE. THE TIM E-LIMIT FIXED FOR APPROACHING THE COURT IN DIFFERENT SITUATIONS IS NO T BECAUSE ON THE EXPIRY OF SUCH TIME A BAD CAUSE WOULD TRANSFORM INTO A GOO D CAUSE. RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHTS OF P ARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTI CS BUT SEEK THEIR REMEDY PROMPTLY. THE OBJECT OF PROVIDING A LEGAL REMEDY I S TO REPAIR THE DAMAGE CAUSED BY REASON OF LEGAL INJURY. THE LAW OF LIMIT ATION FIXES A LIFESPAN FOR SUCH LEGAL REMEDY FOR THE REDRESS OF THE LEGAL INJU RY SO SUFFERED. THE LAW OF LIMITATION IS THUS FOUNDED ON PUBLIC POLICY. 12. IN SHANKARRAO V. CHANDRASENKUNWAR REPORTED IN [1987 ] SUPP SCC 338 THE SUPREME COURT TOOK THE VIEW THAT THE COURT SHOULD NOT ADOPT AN INJUSTICE-ORIENTED APPROACH IN REJECTING THE APPLIC ATION FOR CONDONATION OF DELAY. 13. IN VEDABAI ALIAS VAIJAYANATABAI BABURAO PATIL V . SHANTARAM BABURAO PATIL REPORTED IN [2002] 253 ITR 798 THE APEX COURT MADE A DISTINCTION IN DELAY AND INORDINATE DELAY OBSERVIN G AS UNDER (PAGE 799) : IN EXERCISING DISCRETION UNDER SECTION 5 OF THE LI MITATION ACT THE COURTS SHOULD ADOPT A PRAGMATIC APPROACH. A DISTINCTION MU ST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDINATE AND A CASE WHE RE THE DELAY IS OF A FEW DAYS. WHEREAS IN THE FORMER CASE THE CONSIDERAT ION OF PREJUDICE TO THE OTHER SIDE WILL BE A RELEVANT FACTOR SO THE CAS E CALLS FOR A MORE CAUTIOUS APPROACH. . . . 14. IN NEW INDIA INSURANCE CO. LTD. V. SMT. SHANTI MISR A [1977] 47 COMP CAS 453 ; AIR 1976 SC 237 THE HONBLE SUPRE ME COURT HELD THAT DISCRETION GIVEN BY SECTION 5 SHOULD NOT BE DEFINED OR CRYSTALLIZED SO AS TO CONVERT A DISCRETIONARY MATTER INTO A RIGID RUL E OF LAW. THE EXPRESSION SUFFICIENT CAUSE SHOULD RECEIVE A LIBERAL CONSTRU CTION. 15. IN BRIJ INDER SINGH V. KANSHI RAM AIR 1917 PC 156 IT WAS OBSERVED THAT THE TRUE GUIDE FOR A COURT TO EXERCI SE THE DISCRETION UNDER ITA 3769 TO 3772/M/10 & ITA 1815 TO 1817/M/2009 MR. YATIN K. ASHAR 8 SECTION 5 IS WHETHER THE APPELLANT ACTED WITH REAS ONABLE DILIGENCE IN PROSECUTING THE APPEAL. 16. IN SHAKUNTALA DEVI JAIN V. KUNTAL KUMARI AIR 1 969 SC 575 THE HONBLE SUPREME COURT HELD THAT UNLESS WANT OF BONA FIDES OF SUCH INACTION OR NEGLIGENCE AS WOULD DEPRIVE A PARTY OF THE PROTECTION OF SECTION 5 IS PROVED THE APPLICATION MUST NOT BE T HROWN OUT OR ANY DELAY CANNOT BE REFUSED TO BE CONDONED. 17. IN O. P. KATHPALIA V. LAKHMIR SINGH REPORTED IN AIR 1984 SC 1744 THE THE HONBLE SUPREME COURT HELD THAT IF THE REF USAL TO CONDONE THE DELAY RESULTS IN GRAVE MISCARRIAGE OF JUSTICE IT WOULD BE A GROUND TO CONDONE THE DELAY. 18. IN STATE OF HARYANA V. CHANDRA MANI REPORTED IN AIR 1996 SC 1623 HONBLE SUPREME COURT CONSIDERED THE LARGE N UMBER OF ITS EARLIER JUDGMENTS INCLUDING BINOD BIHARI SINGH V. UNION OF INDIA REPORTED IN [1993] 1 SCC 572 SHAKAMBARI AND CO. V. UNION OF I NDIA REPORTED IN [1993] SUPPL 1 SCC 487 WARLU V. GANGOTRIBAI REPOR TED IN [1995] SUPPL 1 SCC 37 RAMLAL V. REWA COALFIELDS LTD. REPORTE D IN AIR 1962 SC 361 CONCORD OF INDIA INSURANCE CO. LTD. V. SMT. NIRMAL A DEVI [1979] 118 ITR 507; AIR 1979 SC 1666 ; [1979] 49 COMP CAS 463 MATA DIN V. A. NARAYANAN AIR 1970 SC 1953 AND HELD THAT EXPRES SION EACH DAYS DELAY MUST BE EXPLAINED DOES NOT MEAN THAT A PEDA NTIC APPROACH SHOULD BE MADE AND IT MUST BE APPLIED IN A RATIONA L COMMONSENSE PRAGMATIC MANNER. 19. THEIR LORDSHIPS IN BHARAT AUTO CENTRE (SUPRA) H ELD THAT IN THE MATTER OF CONDONATION OF DELAY A LIBERAL AND PRAGMA TIC VIEW SHOULD BE ITA 3769 TO 3772/M/10 & ITA 1815 TO 1817/M/2009 MR. YATIN K. ASHAR 9 TAKEN. THE REASONS GIVEN BY THE ASSESSEE FOR THE DE LAY APPEARED TO BE SUFFICIENT AND ACCORDINGLY THE DELAY WAS LIABLE T O BE CONDONED. 20. IN CIT V. KHEMRAJ LAXMICHAND (1978) 114 ITR 75 (M.P.) IT HAS BEEN HELD (HEAD NOTE) :- THAT THE QUESTION WHETHER THE MISTAKE OF THE COUNS EL WAS BONA FIDE BEING ONE OF FACT AND THE TRIBUNAL HAVING COME TO T HE CONCLUSION THAT THE LAPSE ON THE PART OF THE COUNSEL WAS BONA FIDE THE TRIBUNAL WAS JUSTIFIED IN CONDONING THE DELAY AND UPHOLDING THE REGISTRATI ON OF THE FIRM. 21. IN CIT VS. RAGHUNANDAN PRASAD MOHAN LAL (1974) 97 ITR 398 (ALL.) IT HAS BEEN HELD THAT (HEAD NOTE) :- THERE WAS A DELAY IN THE APPLICATION FOR REGISTRAT ION OF A FIRM. THE ASSESSEE EXPLAINED THAT THE APPLICATION HAD BEEN SE NT THROUGH AN ACCOUNTANT WHO HAD BEEN UNABLE TO SUBMIT IT IN TIME DUE TO THE SERIOUS ILLNESS OF HIS WIFE. AN AFFIDAVIT WAS FILED IN SUP PORT OF THE EXPLANATION. NO COUNTER-AFFIDAVIT OR OTHER MATERIAL WAS FILED ON BEHALF OF THE DEPARTMENT TO CONTROVERT THE AFFIDAVIT. THE TRIBUN AL OBSERVED THAT THE FIRM WAS GENUINE AND NO DEFECTS IN THE CONSTITUTION OF THE FIRM HAD BEEN POINTED OUT BY THE DEPARTMENT. THERE WAS SUFFICIEN T CAUSE FOR THE DELAY IN MAKING THE APPLICATION AND THE FIRM WAS ENTITLED TO REGISTRATION. ON A REFERENCE : HELD THAT THE FINDING OF FACT BY THE TRIBUNAL THA T THE DELAY IN THE APPLICATION FOR REGISTRATION WAS FOR SUFFICIENT CAU SE WAS NOT VITIATED BY ANY ERROR OF LAW. THE DELAY SHOULD BE CONDONED AND THE FIRM SHOULD BE REGISTERED. 22. IN SUBHKARAN & SONS V. N.A. KAZI 5 TH ITO AND OTHERS (1985) 152 ITR 231 HELD [HEAD NOTE (IX)] :- THAT THE MISTAKE HAD BEEN ADMITTED BY THE CHARTERE D ACCOUNTANTS AND THEY HAD ALSO REQUESTED THAT THE ASSESSEE SHOULD NO T SUFFER FOR NO FAULT OF THEIRS AND FOR A SHEER MISTAKE ARISING OUT OF OV ERSIGHT ON THE PART OF THE CHARTERED ACCOUNTANTS. THEREFORE THE CASE WAS A FIT ONE FOR CONDONATION OF THE DELAY IN FILING FORM NO. 11A AND THE FIRM WAS ENTITLED TO REGISTRATION FOR THE ASSESSMENT YEAR 1977-78. ITA 3769 TO 3772/M/10 & ITA 1815 TO 1817/M/2009 MR. YATIN K. ASHAR 10 23. IN THE LIGHT OF THE RATIO OF THE ABOVE DECISION S AND IN ABSENCE OF ANY MATERIAL PLACED ON RECORD BY THE REVENUE THAT T HE AFFIDAVIT FILED BY THE ASSESSE WAS FOUND TO BE FALSE WE ARE OF THE VI EW THAT THERE WAS SUFFICIENT CAUSE FOR THE DELAY IN FILING OF THE APP EAL BEFORE THE LD. CIT(A) HENCE WE DIRECT THE LD. CIT(A) TO CONDONE THE DELA Y AND ADMIT THE APPEAL FILED BY THE ASSESSEE. 24. ON MERITS WE FIND THAT THERE IS NO DISPUTE THA T THE ASSESSEE HAS FILED VOLUMINOUS SUBMISSIONS AND EVIDENCE BEFORE TH E LD. CIT(A) WHICH HAS ALSO BEEN FILED BEFORE US ALSO CONTAINING PAGE NO. 1 TO 89 OF ASSESSEES PAPER BOOK THE ADMISSION OF WHICH HAS N OT BEEN REJECTED BY THE LD. CIT(A) WITHOUT PASSING ANY SPEAKING ORDER I N THIS REGARD AND KEEPING IN VIEW THAT THERE WAS SUFFICIENT CAUSE IN NOT FILING THE SAME BEFORE THE A.O. AS HIS PREVIOUS COUNSEL HAS NOT FIL ED THE SAME BEFORE THE A.O. WE ARE OF THE VIEW THAT THE ADDITIONAL EVIDEN CE FILED BY THE ASSESSEE SHOULD BE ADMITTED AND ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND RESTORE THE ISSUE TO HIS FILE WHO SH ALL ADMIT THE SAME IN ACCORDANCE WITH PROVISIONS OF RULE 46-A OF THE INCO ME TAX RULES AND DECIDE THE ISSUE AFRESH AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GRO UNDS TAKEN BY THE ASSESSEE ARE THEREFORE PARTLY ALLOWED FOR STATIST ICAL PURPOSE. ITA NO. 3770/M/2010 A.Y. 2004-05 ITA NO. 3771/M/2010 A.Y. 2005-06 ITA NO. 3772/M/2010 A.Y. 2006-07 25. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BR OUGHT ON RECORD BY THE PARTIES EXCEPT PERIOD OF DELAY OF 2 MONTHS IN F ILING APPEAL BEFORE THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2006-07 WE FOR THE REASONS AS DISCUSSED IN PARAS 8 TO 24 OF THIS ORDER DIRECT TH E LD. CIT(A) TO CONDONE THE DELAY IN FILING THE APPEALS BEFORE HIM AND ON M ERIT SET ASIDE THE ISSUE ITA 3769 TO 3772/M/10 & ITA 1815 TO 1817/M/2009 MR. YATIN K. ASHAR 11 TO HIS FILE TO DECIDE THE SAME AFRESH IN THE LIGHT OF OUR OBSERVATIONS HEREINABOVE AND ACCORDING TO LAW AFTER PROVIDING RE ASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN B Y THE ASSESSEE ARE THEREFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1815/M/2009 A.Y. 2003-04 ITA NO. 1816/M/2009 A.Y. 2004-05 ITA NO. 1817/M/2009 A.Y. 2005-06 26. ALL THESE APPEALS ARE AGAINST THE SUSTENANCE OF PENALTY IMPOSED BY THE A.O. U/S 271(1)(C). SINCE IN THE QUANTUM APPEAL WE HAVE SET ASIDE THE MATTER TO THE FILE OF THE LD. CIT(A) TO DECIDE THE QUANTUM APPEAL AFRESH THEREFORE WE CONSIDER IT FAIR AND REASONAB LE ALL THESE PENALTY APPEALS ARE ALSO BE SET ASIDE TO THE FILE OF LD. CI T(A) AND ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) ON THI S ACCOUNT AND SENT BACK THE MATTER TO THE FILE OF LD. CIT(A) WHO SHALL DECIDE THE SAME AFRESH AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE AS SESSEE ARE THEREFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 27. IN THE RESULT ALL THE APPEALS ARE PARTLY ALLOW ED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THIS 31 ST DAY OF MARCH 2011. SD/- (R.K. PANDA) ACCOUNTANT MEMBER SD/- (D.K. AGARWAL) JUDICIAL MEMBER MUMBAI DATED 31 ST MARCH 2011. RK ITA 3769 TO 3772/M/10 & ITA 1815 TO 1817/M/2009 MR. YATIN K. ASHAR 12 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- XIV MUMB AI 4. COMMISSIONER OF INCOME TAX 14 MUMBAI 5. DEPARTMENTAL REPRESENTATIVE BENCH J MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR ITAT MUMBAI 1 DRAFT DICTATED ON 28 .3.11 SR PS 2 DRAFT PLACED BEFORE AUTHOR ON 29.3.11 SR PS 3 DRAFT PROPOSED & PLACE BEFORE THE 2 ND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY 2 ND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR PS 7 FILE SENT TO THE BENCH CLERK SR PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DESPATCH SR PS ITA 3769 TO 3772/M/10 & ITA 1815 TO 1817/M/2009 MR. YATIN K. ASHAR 13