HEMANT M. SHAH (HUF), MUMBAI v. DCIT CEN CIR 36, MUMBAI

ITA 5121/MUM/2010 | 2007-2008
Pronouncement Date: 30-09-2011 | Result: Allowed

Appeal Details

RSA Number 512119914 RSA 2010
Assessee PAN AAAHH1062F
Bench Mumbai
Appeal Number ITA 5121/MUM/2010
Duration Of Justice 1 year(s) 3 month(s) 9 day(s)
Appellant HEMANT M. SHAH (HUF), MUMBAI
Respondent DCIT CEN CIR 36, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted H
Tribunal Order Date 30-09-2011
Date Of Final Hearing 20-09-2011
Next Hearing Date 20-09-2011
Assessment Year 2007-2008
Appeal Filed On 21-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI R.S. SYAL A.M. AND SHRI V. DURGA RAO J.M. ITA NO. 5121/MUM/2010 ASSESSMENT YEAR : 2007-08 HEMANT M. SHAH (HUF) APPELLANT 23-F AKRUTI DOONGERSEY ROAD 1 WALKESHWAR MUMBAI 400 006. (PAN AAAHH1062F) VS. DY. COMMISSIONER OF INCOME-TAX RESPONDENT CENTRAL CIRCLE 36 AAYAKAR BHAVAN MUMBAI. APPELLANT BY : MR. VIJAY MEHTA RESPONDENT BY : MR. V.V. SHASTRI DATE OF HEARING : 20/09/2011 DATE OF PRONOUNCEMENT : ORDER PER V. DURGA RAO J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF CIT(A)-41 MUMBAI PASSED ON 08/04/2010 FOR THE ASSESSMENT YEAR 2007-08 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOW ING GROUND OF APPEAL:- 1. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LEARNED CIT(A) ERRED IN NOT CONDONING THE DELAY IN FILING THE APPEAL AGAINST THE ADDITION OF RS. 2 71 000/- MADE U/S 2(22)(E) (OF HUNDRED AND FIFTEEN DAYS) HOLDING THAT IT IS NO T SATISFIED THAT THERE WAS SUFFICIENT CAUSE FOR NOT PRESENTING APPEA L WITHIN LIMITATION PERIOD. THE ISSUE BEING A MATTER OF LEGA L INTERPRETATION AND THERE WERE SUFFICIENT REASONS FOR THE DELAY TH E DELAY NEEDS TO BE CONDONED IN THE INTEREST OF JUSTICE AND THE L EARNED CIT(A) NEEDS TO ADJUDICATE ON THE GROUNDS OF APPEAL FILED. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT AS SESSMENT U/S 143(3) OF THE ACT WAS COMPLETED DETERMINING THE TOT AL INCOME AT RS. ITA NO. 5121/MUM/2010 HEMANT M. SHAH 2 22 82 950/- AS AGAINST THE TOTAL INCOME DECLARED OF RS. 19 01 973/- BY MAKING THE ADDITION OF RS. 3 71 000/- MADE U/S 2 (22)(E) OF THE ACT. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). 3. THE ASSESSEE FILED THE APPEAL BEFORE THE CIT(A) BELATEDLY AS THE DUE DATE OF FILING APPEAL WAS 30/01/2009 BUT THE A SSESSEE FILED THE APPEAL ON 25/05/2009 RESULTING INTO A DELAY OF 115 DAYS. THE ASSESSEE HAD FILED A PETITION OF CONDONATION OF DEL AY WHICH WAS EXTRACTED BY THE CIT(A) AT PAGES 2 & 3 OF HIS ORDER . IN CONDONATION PETITION IT WAS STATED THAT THE ASSESSEE IS A MANA GING DIRECTOR TO AKRUTI GROUP AND THERE WAS SEARCH AND SEIZURE OPERA TION IN THE PREMISES OF THE ASSESSEE AS WELL AS OTHER GROUP OF COMPANIES AND INDIVIDUALS. DURING THE HEARING OF APPEAL BEFORE CI T(A) IN GROUP CASES AND WHILE PREPARING THE SUBMISSIONS FOR PENALTY PRO CEEDINGS IT WAS REALIZED THAT THE ASSESSEE SHOULD HAVE FILED THE AP PEAL FOR THE AY 2006-07 AS ADDITION MADE U/S 2(22)(E) ON ACCOUNT OF ALLEGED DEBIT BALANCE IN THE BOOKS OF AKRUTI NIRMAN LTD. FOR THIS YEAR WAS ERRONEOUS AND DESERVES TO BE CANCELLED. THE ASSESSE E PLACED RELIANCE ON THE DECISION IN THE CASE OF COLLECTOR LAND ACQU ISITION VS. MST KATIJI & ORS.[1987] 167 ITR 471(C) IN SUPPORT OF IT S CASE BEFORE THE CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE A SSESSEE THE CIT(A) HELD THAT THERE IS NO JUSTIFIABLE REASON FOR DELAY IN FILING OF APPEAL BY 115 DAYS HENCE DISMISSED THE APPEAL OF THE ASSESS EE IN LIMINE. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRI BUNAL. 4. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN HIS OWN BROTHERS CASE NAMELY VYOMESH M. SHAH THE ITAT IN ITA NO. 4459/M/2010 VIDE ORDER DATED 14 TH SEPTEMBER 2011 UNDER SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE UNDER C ONSIDERATION CONDONED THE DELAY AND RESTORED THE MATTER BACK TO THE FILE OF THE CIT(A) WITH A DIRECTION TO DECIDE THE APPEAL ON MER ITS AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THEREFORE THE LEARNED COUNSEL FOR THE ASSESSEE PLEADED THAT THE M ATTER MAY BE ITA NO. 5121/MUM/2010 HEMANT M. SHAH 3 RESTORED TO THE FILE OF THE CIT(A) WITH IDENTICAL D IRECTIONS. A COPY OF THE SAID ORDER (SUPRA) IS AVAILABLE ON RECORD. 5. ON THE OTHER HAND THE LEARNED DR HAS NOT CONTRO VERTED TO THE SUBMISSIONS MADE BY THE LEARNED COUNSEL FOR THE ASE SSSEE. 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDE RS OF THE AUTHORITIES BELOW. WE FIND THAT THE ITAT IN ASSESSE ES OWN BROTHERS CASE (SUPRA) RESTORED THE ISSUES BACK TO THE FILE O F THE CIT(A) BY OBSERVING AS UNDER:- 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUSE D THE RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW AS WELL AS THE PRECEDENTS CITED. THE HONBLE SUPREME COURT IN THE CASE OF N. BALAKRISHNAN V. M. KRISHNAMURTHY HELD A S UNDER:- CONDONATION OF DELAY IS A MATER OF DISCRETION OF T HE COURT. SECTION 5 OF THE LIMITATION ACT DOES NOT SAY THAT S UCH DISCRETION CAN BE EXERCISED ONLY IF THE DELAY IS WITHIN A CERT AIN LIMIT. LENGTH OF DELAY IS NO MATTER ACCEPTABILITY OF THE EXPLANA TION IS THE ONLY CRITERION. SOMETIMES DELAY OF THE SHORTEST RANGE MA Y BE UNCONDONABLE DUE TO A WANT OF ACCEPTABLE EXPLANATIO N WHEREAS IN CERTAIN OTHER CASES DELAY OF A VERY LONG RANGE CAN BE CONDONED AS THE EXPLANATION THERE IS SATISFACTORY. IN EVERY CASE OF DELAY THERE CAN BE SOME LAPSE ON THE PART OF TH E LITIGANT CONCERNED. THAT ALONE IS NOT ENOUGH TO TURN DOWN HI S PLEA AND TO SHUT THE DOOR AGAINST HIM. IF THE EXPLANATION DOES NOT SMACK OF MALA FIDES OR IT IS NOT PUT FORTH AS PART OF A DILA TORY STRATEGY THE COURT MUST SHOW UTMOST CONSIDERATION TO THE SUITOR. BUT WHEN THERE IS A REASONABLE GROUND TO THINK THAT THE DELA Y WAS OCCASIONED BY THE PARTLY DELIBERATELY TO GAIN TIME THEN THE COURT SHOULD LEAN AGAINST ACCEPTANCE OF THE EXPLANATION. A COURT KNOWS THAT REFUSAL TO CONDONE DELAY WOULD RESULT IN FOREC LOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PRESUMPTI ON THAT DELAY IN APPROACHING THE COURT IS ALWAYS DELIBERATE. THE WORDS SUFFICIENT CAUSE UNDER SECTION 5 OF THE LIMITATIO N ACT SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUB STANTIAL JUSTICE. 8. IN THE CASE OF RAM NATH SAO AND ORS. V. GOVARDHA N SAO AND ORS THE HONBLE SUPREME COURT HELD AS UNDER:- THE EXPRESSION SUFFICIENT CAUSE WITHIN THE MEANI NG OF SECTION 5 OF THE ACT OR O.22 R.9 OF THE CODE OR ANY OTHER SIM ILAR PROVISION SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVA NCE SUBSTANTIAL JUSTICE WHEN NO NEGLIGENCE OR INACTION OR BONA FIDE IS IMPUTABLE ITA NO. 5121/MUM/2010 HEMANT M. SHAH 4 TO PARTY. IN A PARTICULAR CASE WHETHER EXPLANATION FURNISHED WOULD CONSTITUTE SUFFICIENT CAUSE OR NOT WILL BE DEPENDENT UPON FACTS OF EACH CASE. THERE CANNOT BE A STRAITJACKET FORMULA FOR ACCEPTING OR REJECTING EXPLANATION FURNISHED FOR TH E DELAY CAUSED IN TAKING STEPS. BUT ONE THING IS CLEAR THAT THE CO URT SHOULD NOT PROCEED WITH THE TENDENCY OF FINDING FAULT WITH THE CAUSE SHOWN AND REJECT THE PETITION BY A SLIPSHOD ORDER IN OVER JUBILIATION OF DISPOSAL DRIVE. ACCEPTANCE OF EXPLANATION FURNISHED SHOULD BE THE RULE AND REFUSAL AN EXCEPTION MORE SO WHEN NO NEGLI GENCE OR INACTION OR WANT OF BONA FIDE CAN BE IMPUTED TO THE DEFAULTING PARTY. ON THE OTHER HAND WHILE CONSIDERING THE MAT TER THE COURTS SHOULD NOT LOSE SIGHT OF THE FACT THAT BY NOT TAKIN G STEPS WITHIN THE TIME PRESCRIBED A VALUABLE RIGHT HAS ACCRUED TO THE OTHER PARTY WHICH SHOULD NOT BE HIGHLY DEFEATED BY CONDON ING DELAY IN A ROUTINE LIKE MANNER. HOWEVER BY TAKING A PEDANTI C AND HYPER- TECHNICAL VIEW OF THE MATTER THE EXPLANATION FURNIS HED SHOULD NOT BE REJECTED WHEN STAKES ARE HIGH AND OR ARGUABLE PO INTS OF FACTS AND LAW ARE INVOLVED IN THE CASE CAUSING ENORMOUS L OSS AND IRREPARABLE INJURY TO THE PARTY AGAINST WHOM THE LI ST TERMINATES EITHER BY DEFAULT OR INACTION AND DEFEATING VALUABL E RIGHT OF SUCH A PARTY TO HAVE THE DECISION ON MERIT. WHILE CONSID ERING THE MATTER COURTS HAVE TO STRIKE A BALANCE BETWEEN RES ULTANT EFFECT OF THE ORDER IT IS GOING TO PASS UPON THE PARTIES E ITHER WAY. 9. THE BOMBAY HIGH COURT IN THE CASE OF BABURAO DEO RAO WANKHEDE VS. SEWA SAHAKARI SANTHA AND ANR. EXTRACT ED THE FINDINGS OF THE HONBLE SUPREME COURT IN THE CASE O F COLLECTOR LAND ACQUISITION ANANTNAG & ANR. V. MST. KATIJI & OTHERS [1987] ILLJ 500SC WHICH READ AS UNDER:- THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACTING SECTION 5 OF THE INDIAN LIMITATION ACT OF 1963 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PART IES BY DISPOSING OF MATTERS ON MERITS. THE EXPRESSION SUFFICIENT CA USE EMPLOYED BY THE LEGISLATURE ADEQUATELY ELASTIC TO ENABLE THE COURT TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUB SERVES THE ENDS OF JUSTICE THAT BEING THE LIFE-PURPOSE FOR THE EXISTEN CE OF THE INSTITUTION OF COURTS. IT IS COMMON KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL APPROACH IN MATTE RS INSTITUTED IN THIS COURT. BUT THE MESSAGE DOES NOT APPEAR TO H AVE PERCOLATED DOWN TO ALL OTHER COURTS IN THE HIERARCH Y. 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 MERITORIO US MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDO NED THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DE CIDED ON MERITS AFTER HEARING THE PARTIES. ITA NO. 5121/MUM/2010 HEMANT M. SHAH 5 3. EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOU RS DELAY EVERY SECONDS DELAY ? THE DOCTRINE MUST BE APPLIED IN A RATIONAL COMMON SENSE PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIO NS 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. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DE LIBERATELY OR ON ACCOUNT OF CAPABLE NEGLIGENCE OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESO RTING TO DELAY. IN FACT HE RUNS A SERIOUS RISK. 6. IT MUST BE GRASPED THAT JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GRO UNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 10. THE HONBLE SUPREME COURT IN THE CASE OF IMPROV EMENT TRUST VS. UJAGAR SINGH HELD AS UNDER:- I) WHILE CONSIDERING AN APPLICATION FOR CONDONATIO N OF DELAY NO STRAIGHTJACKET FORMULA IS PRESCRIBED TO COME TO THE CONCLUSION IF SUFFICIENT AND GOOD GROUNDS HAVE BEEN MADE OUT OR N OT. ECH CASE HAS TO BE WEIGHED FROM ITS FACTS AND THE CIRCUMSTAN CES IN WHICH THE PARTY ACTS AND BEHAVES. FROM THE CONDUCT BEHAV IOUR AND ATTITUDE OF THE APPELLANT IT CANNOT BE SAID THAT IT HAD BEEN ABSOLUTELY CALLOUS AND NEGLIGENT IN PROSECUTING THE MATTER. II) JUSTICE CAN BE DONE ONLY WHEN THE MATTER IS FOU GHT ON MERITS AND IN ACCORDANCE WITH LAW RATHER THAN TO DISPOSE I T OF ON SUCH TECHNICALITIES AND THAT TOO AT THE THRESHOLD. III) UNLESS MALAFIDES ARE WRIT LARGE ON THE CONDUCT OF THE PARTY GENERALLY AS A NORMAL RULE DELAY SHOULD BE CONDONE D. IN THE LEGAL ARENA AN ATTEMPT SHOULD ALWAYS BE MADE TO AL LOW THE MATTER TO BE CONTESTED ON MERITS RATHER THAN TO THR OW IT ON SUCH TECHNICALITIES. APART FROM THE ABOVE THE APPELLANT WOULD NOT HAVE GAINED IN ANY MANNER WHATSOEVER BY NOT FILING THE APPEAL WITHIN THE PERIOD OF LIMITATION. IT IS ALSO WORTH NOTICIN G THAT DELAY WAS ALSO NOT THAT HUGE WHICH COULD NOT HAVE BEEN CONDO NED WITHOUT PUTTING THE RESPONDENTS TO HARM OR PREJUDICE. IT IS THE DUTY OF THE COURT TO SEE TO IT THAT JUSTICE SHOULD BE DONE BETW EEN THE PARTIES. 11. IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE S UPREME COURT ESPECIALLY IN THE CASE OF COLLECTOR LAND A CQUISITION ANANTNAG & ANR. V. MST. KATIJI & OTHERS (SUPRA) T HE ARGUMENT OF THE LEARNED DR THAT THE LEARNED COUNSEL FOR THE ASS ESSEE HAS ITA NO. 5121/MUM/2010 HEMANT M. SHAH 6 FAILED TO EXPLAIN THE DAY TO DAY DELAY WITH ANY EVI DENCE DURING THE HEARING IS HEREBY REJECTED. THEREFORE RESPECT FULLY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT W E CONDONE THE DELAY AND RESTORE THE MATTER BACK TO THE FILE OF THE CIT(A) TO DECIDE THE APPEAL ON MERITS AFTER PROVIDING REASONA BLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 7. SINCE THE ISSUE UNDER CONSIDERATION IS IDENTICAL TO THAT OF THE CASE DECIDED BY THE TRIBUNAL IN ASSESSEES OWN BROT HER CASE (SUPRA) WE RESPECTFULLY FOLLOW THE DECISION OF THE CO-ORDIN ATE BENCH IN THE SAID CASE AND IN THE LIGHT OF THAT WE CONDONE THE DELAY AND RESTORE THE MATTER BACK TO THE FILE OF THE CIT(A) WITH A DIRECT ION TO DECIDE THE APPEAL ON MERITS AFTER PROVIDING REASONABLE OPPORTU NITY OF HEARING TO THE ASSESSEE. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF SEPTEMBER 2011. SD/- SD/- (R.S. SYAL) (V. DURGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI DATED: 30 TH SEPTEMBER 2011 KV ITA NO. 5121/MUM/2010 HEMANT M. SHAH 7 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE H BENCH I.T .A.T. MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR I.T.A.T. MUMBAI. -