Sri Vishnu Cements Limited (Merged with Zuari Cement Ltd0, Bangalore v. JCIT, Spl.Range-4, Hyd (presently, Nellore

ITA 76/HYD/2011 | 1997-1998
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 7622514 RSA 2011
Assessee PAN AADCS4056M
Bench Hyderabad
Appeal Number ITA 76/HYD/2011
Duration Of Justice 6 month(s) 4 day(s)
Appellant Sri Vishnu Cements Limited (Merged with Zuari Cement Ltd0, Bangalore
Respondent JCIT, Spl.Range-4, Hyd (presently, Nellore
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 22-07-2011
Date Of Final Hearing 06-07-2011
Next Hearing Date 06-07-2011
Assessment Year 1997-1998
Appeal Filed On 17-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO. 1543/H/2010 - ASSESSMENT YEAR 1995-96 ITA NO. 1544/H/2010 - ASSESSMENT YEAR 1996-97 SHRI VISHNU CEMENTS LIMITED BANGALORE (PAN AADC S4056 M) VS THE ACIT CIRCLE 2(1) TIRUPATI APPELLANT RESPONDENT ITA NO. 1618/H/2010 - ASSESSMENT YEAR 1999-2000 SHRI VISHNU CEMENTS LIMITED BANGALORE (PAN AADC S4056 M VS THE DCIT CIRCLE 3(1) HYDERABAD (PRESENTLY ACIT CIRCLE 2(1) TIRUPATI). APPELLANT RESPONDENT ITA NO. 76/H/2011 - ASSESSMENT YEAR 1997-98 SHRI VISHNU CEMENTS LIMITED BANGALORE (PAN AADC S4056 M) VS THE JCIT SPECIAL RANGE- 4 HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SHRI GANGAIAH RESPONDENT BY: SHRI B.V. PRASAD REDDY ORDER PER CHANDRA POOJARI A.M. THESE FOUR APPEALS PREFERRED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) IV HYDERABA D AND PERTAINS TO THE ASSESSMENT YEARS 1995-96 1996-97 1997-98 & 1999-2000. SINCE ISSUES INVOLVED IN THESE FOUR AP PEALS ARE COMMON IN NATURE THEY ARE CLUBBED AND HEARD TOGETH ER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE. SHRI VISHNU CEMENTS LTD. TIRUPATI 2 2 2. THE ASSESSEE IS A COMPANY VIZ. SRI VISHNU CEMENTS LIMITED (MERGED WITH ZUARI CEMENT LIMITED) FILED AP PEALS AGAINST THE ORDERS OF CIT(A) IN RESPECT OF THE ASSE SSMENT YEARS 1995-96 1996-97 AND 1999-2000. THE ASSESSEE FILED AN APPEAL AGAINST RECTIFICATION OF APPEAL ORDER OF CIT(A) FOR THE ASSESSMENT YEAR 1997-98. 3. THE ASSESSEES INITIAL PLEA IN THESE APPEALS IS AGA INST CONDONATION OF DELAY IN FILING THESE APPEALS. 3.1 I.T.A. NO. 1543/H/2010 ASSESSMENT YEAR 1995-9 6 : IN THIS YEAR THE ASSESSEE SHRI VISHNU CEMENT LIMITED FILED AN APPEAL AGAINST THE ORDERS OF CIT(A) BEFORE THE I TAT WITH A DELAY OF 9 YEARS TEN MONTHS AND 20 DAYS. TH E TRIBUNAL REGISTERED THE APPEAL WITH THE DELAY OF 29 34 DAYS. 3.2 ITA NO. 1544/H/2010 ASSESSMENT YEAR 1996-97 : THE ASSESSEE FILED THIS APPEAL BEFORE THIS TRIBUNAL WIT H A DELAY OF 8 YEARS ONE MONTH AND 3 DAYS AND THE SAME WAS REGISTERED BY THE TRIBUNAL WITH THE DELAY OF 3602 D AYS DELAY. 3.3 ITA NO. 1618/H/2010 - ASSESSMENT YEAR 1999-2000 : THE ASSESSEE FILED THIS APPEAL WITH A DELAY OF 8 YEAR S AND 24 DAYS. THE TRIBUNAL HAS REGISTERED THE APPEAL WITH DELAY OF FILING THE APPEAL BY THE ASSESSEE FOR A PERIOD O F 2946 DAYS. 3.4 ITA NO. 76/H/2001- ASSESSMENT YEAR 1997-98: THIS APPEAL IS FILED BY THE ASSESSEE SEEKING RECTIFICATI ON OF THE ORDER OF CIT(A). IN THIS APPEAL THE ASSESSEE HAS S OUGHT CONDONATION OF DELAY IN FILING ITS APPEAL BEFORE TH IS SHRI VISHNU CEMENTS LTD. TIRUPATI 3 3 TRIBUNAL FOR THE TOTAL PERIOD OF 1266 DAYS AND THE TRIBUNAL HAS REGISTERED THE DELAY OF 3 YEARS SIX MO NTHS AND 21 DAYS. 4. THE ASSESSEE HAS OFFERED A DETAILED SUBMISSION WITH PRAYER TO CONDONE THE DELAY IN FILING ALL THE APPEA LS AND REQUESTED TO DISPOSE THE APPEALS ON MERITS AS FOLLO WS: 4.1. THE ASSESSEE HAD FUNDED THE INTEREST PAYABLE TO FINANCIAL INSTITUTION AS PER THE BIFR ORDER IN THE PREVIOUS Y EARS TO ASSESSMENT YEAR 1993-94. THE APPEAL ON THE BIFR WA S RESTORED TO THE FILE OF ASSESSING OFFICER BY THE TRIBUNAL VI DE ITS ORDERS DATED 23/12/2003 IN ITA NOS. 1224/H/97 777 & 778/ H/02 SUBJECT TO VERIFICATION OF NECESSARY EVIDENCE. THE ASSESSING OFFICER HAS REJECTED THE CLAIM AND THE APPEAL IS FI LED AGAINST THE ASSESSMENT ORDER TO CIT(A)-IV HYDERABAD FOR WANT OF CONFIRMATION LETTERS FROM BANKER EVEN THOUGH BIFR O RDER WAS ON THE FILE. 4.2. HE FURTHER SUBMITTED THAT THE APPEAL WAS TRAN SFERRED TO CIT(A) TIRUPATI. THE ASSESSEE HAD FILED NECESSARY DOCUMENTS IN SUPPORT OF THE CLAIM OF FUNDED INTEREST AND PRIOR P ERIOD EXPENSES. THE SUCCESSIVE TWO CIT(A)S TIRUPATI HE ARD THE APPEAL EVEN AFTER GETTING REMAND REPORT FROM THE AS SESSING OFFICER. THE APPEAL FILED ONCE AGAIN WAS TRANSFERR ED TO CIT(A) GUNTUR DUE TO ABOLISHING THE OFFICE OF CIT(A) AT TI RUPATI. THE APPEAL WAS HEARD BY CIT(A) GUNTUR ON 3 RD DECEMBER 2010. 4.3. HE SUBMITTED THAT THE TRIBUNAL SPECIFIED THE C LAIM IS TO BE ACCEPTED AS PER LAW. BUT AS PER THE RETROSPECTIVE AMENDMENT OF SECTION 43B BY INSERTION OF EXPLANATION 3C THE CLA IM IS TO BE ALLOWED IN THE YEAR OF PAYMENT. HE EXPRESSED THAT THE APPEALS AGAINST THE YEARS OF PAYMENT OF FUNDED INTEREST ARE NOT BEFORE SHRI VISHNU CEMENTS LTD. TIRUPATI 4 4 HIM. THE ASSESSEE HAD TAKEN STEPS TO FILE THE APPE ALS IN RESPECT OF ASSESSMENT IN WHICH THE PAYMENT OF FUNDED INTERE ST IS MADE. THE PAYMENT OF FUNDED INTEREST IS MADE IN 8 ASSESSM ENT YEARS. THE TRIBUNAL HAS ALREADY CONSIDERED THE ISSUE OF PA YMENT OF FUNDED INTEREST IN TWO ASSESSMENT YEAR YEARS I.E. 2 001-02 AND 2002-03 VIDE ITS ORDER DATED 9 TH JANUARY 2009 IN ITA NO. 1221/H/2004. HENCE THE ISSUE IN 6 ASSESSMENT YEARS IS TO BE DECIDED. THE ASSESSEE HAS FILED 4 APPEALS AGAINST APPEAL ORDERS/RECTIFICATION OF APPEAL ORDERS OF THE CIT(A) BEFORE THE TRIBUNAL AND TWO APPEALS BEFORE THE CIT(A) GUNTUR W ITH CONDONATION OF DELAY. 5. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSES SEE RELIED ON THE FOLLOWING JUDGEMENTS: 1. CA ABRAHAM UPPOTTIL VS. INCOME TAX OFFICER (19 60 IND LAW SC 280) 2. COLLECTOR OF LAND ACQUISITION VS. MST. KATIJI & OTHER (167 ITR 471) (SC) 6. ACCORDING TO HIM THERE EXISTS SUFFICIENT CAUSE FOR DELAY IN FILING THESE APPEALS AND HE PRAYED THAT THE DELAY T O BE CONDONED AND APPEALS TO BE DISPOSED ON MERITS. 7. HE SUBMITTED THAT THE ASSESSEE HAD PAID FUNDED INTE REST IN THE PREVIOUS YEARS TO THE ASSESSMENT YEARS OUT O F THE INTEREST FUNDED IN ASSESSMENT YEAR 1993-94. THE APPEAL IS P ENDING AGAINST THE ASSESSMENT YEAR 1993-94 BEFORE THE CIT( A) GUNTUR. THE TRIBUNAL MAY DIRECT THE REVENUE TO FIND OUT THE VERACITY OF THE INFORMATION. THE INFORMATION IS AS FOLLOWS: SHRI VISHNU CEMENTS LTD. TIRUPATI 5 5 SL. NO. APPEAL NO. ASSESSMENT YEAR PAYMENT OF FUNDED INTEREST IN RS. LAKHS 1 1543/H/2010 1995-96 133.15 2 1544/H/2010 1996-97 258.05 3 1618/H/2010 1999-00 309.06 4 0076/H/2011 1997-98 244.07 TOTAL AMOUNT OF FUNDED INTEREST PAID IN THE ASSESSMENT YEARS 944.33 8. HE SUBMITTED THAT THE ASSESSEE HAS COME BEFORE THE TRIBUNAL IN RESPECT OF THE FIRST THREE APPEALS AGAI NST APPEAL ORDERS OF THE CIT(A) WITH ADDITIONAL GROUND AND IN RESPECT OF 4 TH APPEAL AGAINST RECTIFICATION OF APPEAL ORDERS WITH AN UNDERTAKING THAT THE FUNDED INTEREST IN RESPECT OF INTEREST FUNDED IN ASSESSMENT YEAR 1993-94 WILL BE WITHDRAWN FROM THE APPEAL BEFORE THE CIT(A) GUNTUR. THE PAYMENT IS TO BE ALLOWED IN ONE YEAR. 9. ACCORDINGLY TO A.R. DUE TO RETROSPECTIVE AMENDMENT WITH 17 YEARS THE ASSESSEE IS FORCED TO FILE THE APPEAL WITH A DELAY. HAD THERE MIGHT HAVE NOT BEEN AMENDMENT THE ASSESS EE MIGHT HAVE PURSUED THE APPEAL BEFORE THE CIT(A) GUNTUR. THE ASSESSEE HAD NO CONTROL OR INFORMATION WHATSOEVER I N RESPECT OF RETROSPECTIVE AMENDMENT TO FILE THE RETURNS BY CLAI MING DEDUCTION OF FUNDED INTEREST IN YEAR OF PAYMENT. I F THE REVENUE IS READY TO GIVE DEDUCTION OF FUNDED INTEREST IN TH E YEAR PAYMENT THE ASSESSEE HAD NO GROUND TO AGITATE. RE VENUE IS SUPPOSED TO GIVE DEDUCTION AT ONE PLACE EITHER IN A YEAR OF PAYMENT OF FUNDED INTEREST OR IN THE YEAR OF FUNDIN G THE INTEREST. IF IS FOR THE REVENUE TO SPECIFY THE YEA R OF DEDUCTION OF PAYMENT OF FUNDED INTEREST. 10. HE SUBMITTED THAT THERE IS NO METHOD SPECIFIED ANYW HERE TO CLAIM THE DEDUCTION IN RESPECT OF RETROSPECTIVE AMENDMENT. SHRI VISHNU CEMENTS LTD. TIRUPATI 6 6 AMBIGUITY IN TAX LAWS ARE TO BE DECIDED IN FAVOUR O F THE ASSESSEE AND AGAINST THE REVENUE. THE ASSESSEE CANNOT BE FO UND FAULT FOR NOT ANTICIPATION OF FUTURE RETROSPECTIVE AMENDM ENT IN FILING THE RETURN OF INCOME. 11. FURTHER HE SUBMITTED THAT THE ASSESSMENT ORDER PAS SED FOR THE FIRST TIME IN RESPECT OF ASSESSMENT YEAR 19 93-94 DISALLOWED THE FUNDED INTEREST FOR WANT OF CONFIRMA TION LETTERS FROM THE BANKER IN RESPECT OF FUNDING THE INTEREST EVEN THOUGH THE BANKERS ARE SUPPOSED TO FUND THE INTEREST AS PE R BIFR ORDER. DEMANDING CONFIRMATION LETTERS TO FOLLOW TH E ORDERS OF BIFR IS BAD IN LAW. HE DREW OUR ATTENTION TO SECT ION 18(7) OF SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT SPECIFIES: (7) THE SANCTION ACCORDED BY THE BOARD UNDER SUB SECTION (5) SHALL BE CONCLUSIVE EVIDENCE THAT ALL T HE REQUIREMENTS OF THIS SCHEME RELATING TO THE RECONSTRUCTION OR AMALGAMATION OR ANY OTHER MEASURE SPECIFIED THEREIN HAVE BEEN COMPLIED WITH AND A COPY OF THE SANCTIONED SCHEME CERTIFIED IN WRITING BY AN OFFICER OF THE BOARD TO BE TRUE COPY THEREOF SHALL IN ALL LEGAL PROCEEDINGS (WHETHER IN APPEAL OR OTHERWISE) BE ADMITTED AS EVIDENCE. DISALLOWANCE OF FUNDED INTEREST IN THE ASSESSMENT YEAR FOR WANT OF CONFIRMATION LETTERS FROM BANKERS IS BAD AND IN IGNORANCE OF LAW. BIFR ORDER IS TAKEN O N RECORD. ASSESSING OFFICER MIGHT HAVE ALLOWED THE DEDUCTION ON THE BASIS OF BIFR ORDER. THE ASSESSEE MIGHT HAVE NOT BROUGHT THE SICA ACT TO THE NOTICE O F ASSESSING OFFICER. THE ENTIRE EXERCISE OF MULTIPLE APPEALS IS BECAUSE OF DEMANDING CONFIRMATION LETTER S WHEN THE ORDER OF BIFR IS EVIDENCE. NOBODY SHOULD ASK ANY PAPER OTHER THAN LEGALLY RECOGNISED EVIDENCE. 12. HE SUBMITTED THAT ON THIS COUNT ALSO THERE IS SUFF ICIENT CAUSE TO SPECIFY THAT THE FIRST ASSESSMENT ORDER IS NOT AS PER LAW. THERE IS RETROSPECTIVE AMENDMENT TO ADD THE S AME FOR SHRI VISHNU CEMENTS LTD. TIRUPATI 7 7 MULTIPLE APPEALS. THE ENTIRE EXERCISE IS DUE TO IG NORANCE OF LAW BY ASSESSING OFFICER AND NOT BRINGING THE PROPER LE GAL POSITION BY THE ASSESSEE. THE ASSESSEE ALONE CANNOT BE FOUN D FAULT IN THE EXERCISE. 13. THE AR FURTHER BROUGHT TO THE NOTICE OF THE TRIBUNA L THAT EXPLANATION 3C WAS INSERTED TO SECTION 43B SPECIFYI NG THE PAYMENT OF FUNDED INTEREST WILL BE ALLOWED IN THE Y EAR OF PAYMENT NOT IN THE YEAR OF FUNDING. THE TRIBUNAL O N PRAYER FOR ADDITIONAL GROUND IN ITA NO.1221/H/2004 AND 721/H/2 007 DATED 9.1.2009 ADMITTED THE ADDITIONAL GROUND AND R ESTORED THE MATTER TO THE FILE OF ASSESSING OFFICER. 14. HE ALSO DREW OUR ATTENTION TO THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IN THAT APPEAL WHICH IS AS FOLLOWS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ASSESSEE OUGHT TO HAVE BEEN ALLOWED THE DEDUCTION ON PAYMENT BASIS IN RESPECT OF FUNDED INTEREST ACTUALLY PAID TO FINANCIAL INSTITUTIONS DU RING THE ASSESSMENT YEAR 2001-02 IN VIEW OF THE RETROSPECTIVE AMENDMENT TO SECTION 43B OF THE ACT MADE BY THE FINANCE ACT 2006. 15. THE ASSESSEE PRAYED THAT THE TRIBUNAL MAY CONSIDER THE GROUND ON PROCEDURE AND ON MERITS TO CONDONE THE DE LAY AND DISPOSE THE APPEAL ON MERITS. 16. ON MERITS OF THE APPEALS THE ASSESSEES COUNSEL STA TED AS FOLLOWS: 17. ITA NO.1543/H/2010 ASSESSMENT YEAR 1995-96 : THE ASSESSEE PRAYED TO DELETE THE ADDITION OF LATE PAYM ENT OF PF AND ESI CONTRIBUTIONS OF RS. 1 68 854/- AND ADMIT THE A DDITIONAL SHRI VISHNU CEMENTS LTD. TIRUPATI 8 8 GROUND AND GIVE SUITABLE DIRECTIONS. THE ASSESSEE UNDERTAKES TO CLAIM THE PAYMENT OF FUNDED INTEREST IN THE PREV IOUS YEAR TO ASSESSMENT YEAR 1995-96 OF RS. 133.15 LAKHS AND TO WITHDRAW THE CLAIM OF FUNDED INTEREST IN ASSESSMENT YEAR 199 3-94 TO THE EXTENT ALLOWED IN THE YEAR 1995-96. 18. ITA NO. 1544/H/2010 ASSESSMENT YEAR 1996-97 : THE ASSESSEE PRAYED TO DELETE THE ADDITION OF NOTIONAL INTEREST OF RS. 49 65 099 ON LOANS GIVEN TO SISTER CONCERNS. THE T RIBUNAL IN ITS ORDERS DATED 9.1.2009 IN ITA NO. 1221/H/2004 DECIDE D IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE. THE TRIBUNAL IN ITS ORDERS SPECIFIED THAT THE SUPREME COURT THEN WE NT ON TO DISCUSS THE EXPRESSION COMMERCIAL EXPEDIENCY BUT OBVIOUSLY NOT ENUMERATING WHAT COULD BE THE SITUATIONS COVERE D UNDER THE SAID EXPRESSION. SUFFICE IT TO SAY THAT THE AMOUNT SO UTILISED SHOULD NOT BE FOR THE PERSONAL BENEFIT OF THE DIREC TORS OR SHOULD NOT HAVE ANY SENTIMENTAL OR PERSONAL REASONS TO MAK E THE ADVANCE. IT ALSO OBSERVED THAT IT IS FOR THE ASSES SEE TO DECIDE WHAT IS EXPEDIENT FOR IT AND THE REVENUE CANNOT JUS TIFIABLY CLAIM TO PUT ITSELF IN THE ARM CHAIR OF THE BUSINESS OR I N THE POSITION OF THE BOARD OF DIRECTIONS AND ASSUME THE ROLE TO DECI DE HOW MUCH IS REASONABLE EXPENDITURE HAVING REGARD TO THE CIRC UMSTANCES OF THE CASE. IN THE LIGHT OF THE JUDGEMENT OF THE SUP REME COURT AND THE FOREGOING DISCUSSION WE ARE OF THE VIEW TH AT NO INCOME CAN BE ADDED NOTIONALLY UNLESS PERMITTED BY THE STA TUTE AND THE PRESENT ADDITION NOT BEING AN INCOME EARNED BY THE ASSESSEE WE DELETE THE SAME. DELETE THE ADDITION OF PRIOR PERIOD INCOME RS. 78 703/- WHICH IS ALREADY CREDIT TO PROFIT AND LOSS ACCOUNT. ADMIT THE ADDITIONAL GROUND OF PAYMENT OF FUNDED IN TEREST RS. 258.05 AND ALLOW THE INTEREST OR GIVE SUITABLE INST RUCTIONS TO ASSESSING OFFICER. SHRI VISHNU CEMENTS LTD. TIRUPATI 9 9 ITA NO. 1618/H/2010 ASSESSMENT YEAR 1990-2000 : THE ASSESSEE PRAYED TO DELETE THE ADDITION OF PAYMENT O F ROYALTY OF RS. 3 LAKHS AND TO ADMIT THE ADDITIONAL GROUNDS IN RESPECT OF DONATIONS OF RS. 44 04 176/- WHICH IS GIVEN IN THE COURSE OF BUSINESS. HE ALSO RELIED ON THE ORDER OF THE TRIBU NAL IN ASSESSEES OWN CASE DATED 9.1.2004 IN ITA NO. 1221/ H/2004 WHICH IS IN ITS FAVOUR. 19. HE ALSO PRAYED TO ADMIT THE ADDITIONAL GROUND IN RE SPECT OF PAYMENT OF PENAL INTEREST U/S 234B AND 234C ON M AT. 20. HE FURTHER REQUESTED THE BENCH TO ADMIT THE ADDITIO NAL GROUND IN RESPECT OF DISALLOWANCE OF NOTIONAL INTER EST OF RS. 9 59 619 ON LOANS GIVEN TO SISTER CONCERNS AND GRO UND RELATING TO PRIOR PERIOD EXPENSES RS.60 500/- WHICH CRYSTALL ISED IN THE PREVIOUS YEAR AND PAYMENT OF FUNDED INTEREST RS.30 9.6 I.T.A. NO.76/H/2011 ASSESSMENT YEAR 1997-98 21. THE ASSESSEE IS FILED THIS APPEAL AGAINST REJECTION OF RECTIFICATION PETITION REJECTING THE ASSESSEE CONTE NTION TO RECTIFY THE APPEAL ORDERS ALLOWING THE PAYMENT OF FUNDED IN TEREST RS. 244.07 SPECIFYING THAT THE RETROSPECTIVE AMENDMENT DOES NOT EXIST AT THE TIME OF PASSING THE APPEAL ORDER. THE INCOME TAX ACT USES THE WORD DEEMED IN MANY NUMBER SITUATIONS AND MANY NUMBER OF SECTION. THE INSERTION OF EXPLANATI ON 3C TO SECTION 43B DEEMED TO BE IN THE STATUTE BOOK AS SPE CIFIED IN THE ACT. EXPLANATION 3C TO SECTION 43B IS DEEMED IN ST ATUE BOOK FROM 1.4.1989 NON RECOGNITION OF THE EXISTENCE IS B AD IN LAW. 22. HE SUBMITTED THAT INSERTION OF EXPLANATION 3C W.E.F . 1.4.1989 BY FINANCE ACT 2006 DEEMED TO BE IN STATU TE BOOK AS ON THE DATE OF PASSING APPEAL ORDER DATED 20 TH SEPTEMBER 2002. SHRI VISHNU CEMENTS LTD. TIRUPATI 10 10 THE REASONING GIVEN BY THE CIT(A) IN HIS RECTIFICAT ION ORDERS DATED 3.5.2007 IS AGAINST THE BASIC CONCEPTS OF INC OME TAX ACT WHICH IS TO BE ANNULLED. THE ASSESSEE PRAYS TO MOD IFY RECTIFICATION ORDERS OF CIT(A) HYDERABAD AND ALLOW THE PAYMENT FUNDED INTEREST DURING THE PREVIOUS YEARS OR GIVE S UITABLE INSTRUCTION TO ASSESSING OFFICER. THE ASSESSEE PRA YS TO ALLOW THE APPEALS AS PRAYED BY CONDONING THE DELAY IN FILING 23. THE DR SUBMITTED THAT THE ASSESSMENT IN THE INSTANT CASE WAS COMPLETED U/S 143(3) ON 23.3.2000 BY THE JT. CI T(A) SPECIAL RANGE-3. AN ADDITION OF RS. 2 04 79 277 WA S MADE TO THE RETURN OF INCOME OF RS. 10 47 32 127. AGGRIEVE D BY THE ADDITIONS THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) WHO PARTLY ALLOWED THE APPEAL BY GIVING RELIEF OF RS. 7 92 195. THE CIT(A) ORDER WAS PASSED ON 20.9.2002 AND THE ASSESS EE CLAIMS TO HAVE RECEIVED THE ORDER ON 1.6.2007. THE ASSESS EE ALSO FILED A PETITION U/S 154 BEFORE THE CIT(A) SEEKING ALLOWA NCE OF PAYMENT OF FUNDED INTEREST IN VIEW OF THE AMENDED P ROVISIONS OF SECTION 43B AFTER THE INSERTION OF EXPLANATION 3C. THE 154 PETITION OF THE ASSESSEE WAS REJECTED. 24. THE DR FURTHER SUBMITTED THAT LATER THE ASSESSEE HA S FILED A SECOND APPEAL BEFORE THE TRIBUNAL ON 17.1.2011 AN D PRAYED FOR ADMISSION OF ADDITIONAL GROUND IN RESPECT PAYME NT OF FUNDED INTEREST OF RS. 244.77 LAKHS DURING THE PREVIOUS YE AR. THE APPEAL WAS FILED WITH A DELAY OF 3 YEARS 6 MONTHS A ND 21 DAYS. THE ASSESSEE HAS SOUGHT CONDONATION OF DELAY IN FIL ING THE APPEAL BEFORE THE TRIBUNAL. AS PER SUB SECTION 3 S ECTION 253 EVERY APPEAL UNDER SUB SECTION (1) OR SUB SECTION ( 2) SHALL BE FILED WITHIN SIXTY DAYS OF THE DATE OF ON WHICH THE ORDER SOUGHT TO BE APPEALED AGAINST IS COMMUNICATED TO THE ASSES SEE OR TO THE CIT(A) AS THE CASE MAY BE. WHILE SEEKING CONDO NATION OF SHRI VISHNU CEMENTS LTD. TIRUPATI 11 11 DELAY IN FILING THE APPEAL THE ASSESSEE HAS STATED THAT THE EXPLANATION 3C WAS INTRODUCED TO SECTION 43B SPECI FYING THE ALLOWANCE OF PAYMENT OF FUNDED INTEREST IN THE YEAR OF PAYMENT AND NOT IN THE YEAR OF FUNDING. THIS EXPLANATION H AS BEEN MADE RETROSPECTIVELY EFFECTIVE FROM 1.4.1989 AND WAS INT RODUCED BY THE FINANCE ACT 2006. 25. HE SUBMITTED THAT IT HAS ALSO BEEN STATED BY THE AS SESSEE THAT BIFR IN RESPECT OF THE INTEREST PAYABLE IN 199 3-94. IN VIEW OF THE FILING OF APPEAL IN RESPECT OF ALLOWING FUND ED INTEREST IN THE YEAR OF FUNDING I.E. 1992-93 ASSESSMENT YEAR 19 93-94 THE PAYMENT OF FUNDED INTEREST DURING THE PREVIOUS YEAR 1996-97 ASSESSMENT YEAR 1997-98 WAS NOT CLAIMED AS DEDUCTIO N. TO AVAIL BENEFIT OF THE INSERTION OF EXPLANATION 3C TO SECTION 43B THE ASSESSEE HAS FILED THE PRESENT APPEAL. THE ASS ESSEE HAS CLAIMED THAT HE WILL WITHDRAW THE CLAIM FOR PAYMENT OF FUNDED INTEREST FOR THE ASSESSMENT YEAR 1993-94 IF HIS CLA IM FOR THE ASSESSMENT YEAR 1995-96 IS ALLOWED. 26. ACCORDING TO THE DR THE CLAIM OF THE ASSESSEE FOR CONDONATION OF DELAY IN FILING THE APPEAL SHOULD NO T BE CONSIDERED FOR THE FOLLOWING REASONS. 27. IN THE CASE OF DCIT VS. JAYA PUBLICATIONS THE REV ENUE HAS SOUGHT CONDONATION OF DELAY. IN THIS CASE REPO RTED IN ITA NOS. 1221 TO 1223/MAD/2002 AND 279 TO 281/MDS/) 200 6 DATED NOV. 30 2007 THE TRIBUNAL CHENNAI A BENCH H AS HELD AS UNDER : THE COURT HAS TO EXERCISE THE DISCRETION ON THE FA CTS OF EACH CASE KEEPING IN MIND THAT IN CONSIDERING THE EXPRESSION SUFFICIENT CAUSE. IN PRINCIPLE OF ADVAN CING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANCE. IT IS ALSO NOTED THAT IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST. SHRI VISHNU CEMENTS LTD. TIRUPATI 12 12 KATTIGI (167 ITR 471 (SC) THE DELAY WAS ONLY 4 DAYS . IN THE CASE OF VEDABAI ALIA VAIJAYANTABHAI BABURAO PAT IL BS. SHANTARAM BABURAO PATIL (253 ITR 798) (SC) THE DELA Y OF 7 DAYS WAS CONSIDERED. IN THIS CASE THE HONBLE A PEX COURT CLEARLY LAID DOWN THAT A DISTINCTION MUST BE MADE BETWEEN A CASE WHERE THE DELAY IS INORDINATE AND A CASE WHERE THE DELAY IS OF A FEW DAYS. THE LAW ASSISTS THOSE WHO ARE VIGILANT AND NOT THOSE WHO SLEEP OVER THEIR RIGHTS. THIS PRINCIPLE IS EMBODIED IN THE DICTUM VIGILANT B US NON DORMIENTIBUS JURA SUBSVENIUNT. THE DELAY CANNOT BE CONDONED IF THE ASSESSEES CASE IS HARD AND CALLS F OR SYMPATHY OR MERELY OUT OF BENEVOLENCE TO THE PARTY SEEKING RELIEF. IN GRANTING THE INDULGENCE AND CON DONING THE DELAY IT MUST BE PROVED BEYOND THE SHADOW OF DO UBT THAT THE REVENUE WAS DILIGENT AND WAS NOT GUILTY OF NEGLIGENCE WHATSOEVER. THE SUFFICIENT CAUSE WITHIN THE CONTEMPLATION OF THE LIMITATION PROVISION MUST BE A CAUSE WHICH IS BEYOND THE CONTROL OF THE PARTY INVOKING T HE AID OF THE PROVISIONS. IN THE CASE OF RAMLAL V. REWA COALFIELDS LTD. (AIR 1962 SC 361) THE HONBLE APEX COURT HAS HELD THAT THE CAUSE FOR THE DELAY IN FILI NG THE APPEAL WHICH BY DUE CARE AND ATTENTION COULD HAVE BEEN AVOIDED CANNOT BE A SUFFICIENT CAUSE WITHIN THE ME ANING OF THE LIMITATION PROVISION. WHERE NO NEGLIGENCE O R INACTION OR WANT OF BONA FIDES CAN BE IMPUTED TO TH E ASSESSEE A LIBERAL CONSTRUCTION OF THE LIMITATION PROVISIONS HAS TO BE MADE OR ORDER TO ADVANCE SUBSTANTIAL JUSTICE. SEEKERS OF JUSTICE MUST COME WITH CLEAN HANDS. WE DO NOT FIND ANY REASONABLE CAUSE F OR CONDONING THE DELAY. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE THE DELAY WAS DUE TO NEGLIGENCE AND INACTION ON THE PART OF THE REVENUE AUTHORITIES AND THE INORDINATE DELAY OF 2569 DAYS C ANNOT BE CONDONED AND THE APPEALS ARE DISMISSED AS TIME BARRED. THE DECISION OF THE TRIBUNAL CHENNAI IS S QUARELY ATTRIBUTABLE TO THE CASE OF THE ASSESSEE. EVEN OTH ERWISE THE SAID EXPLANATION 3C TO SECTION 43B WAS INTRODUC ED BY THE FINANCE ACT 2006 WHICH BECOMES OPERATIVE W.E.F. 1.4.2006. THE ASSESSEE OUGHT TO HAVE FILED THE APP EAL IN THE YEAR 2006. THERE IS A DELAY OF MORE THAN 4 YEA RS AFTER THE SAID AMENDMENT WAS INCORPORATED IN THE ST ATURE. NOTHING PREVENTED THE ASSESSEE FROM FILING APPEALS EVEN THOUGH APPEAL BEFORE THE CIT(A) WAS PENDING AS THE ASSESSEE IS SUPPOSED TO TAKE DUE CARE. SHRI VISHNU CEMENTS LTD. TIRUPATI 13 13 28. HE SUBMITTED THAT AS OBSERVED BY THE TRIBUNAL CHENN AI IN THE CASE OF DCIT VS. JAYA PUBLICATIONS QUOTED SUPRA THE LAW ASSISTS THOSE WHO ARE VIGILANT AND NOT THOSE WHO SL EEP OVER THE RIGHTS. THIS PRINCIPLE IS EMBODIED IN THE DICTUM VIGILANTI BUS NON DORMIENTIBUS JURA SUBSVENUINT. IN THE CASE OF RAMLAL V. REWA COALFIELDS LTD. SUPRA THE HONBLE 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 WITHIN THE MEANING OF THE LIMITATI ON PROVISION. 29. HE SUBMITTED THAT IF THE ASSESSEE SLEPT OVER THE M ATTER AND DID NOT FILE FOR 10 YEARS JUST BECAUSE APPEAL B EFORE THE CIT(A) IS PENDING HE HAS NO LEGAL OR MORAL GROUND OR COGENT REASON TO FILE SUCH AN ABNORMALLY BELATED APPEAL. IF THE DELAY IN FILING THE APPEAL BY THE ASSESSEE IS CONDONED IT W OULD OPEN A PANDORAS BOX OF LARGE NUMBER OF ASSESSEES COMING W ITH APPEALS TIME BARRED BY MORE THAN A DECADE AND THE TIME LIMI TATION AS PER STATUTE WILL HAVE NO SANCTITY NOR RELEVANCE. 30. HE CONTENDED THAT THE LEARNED AUTHORIZED REPRESENTA TIVE FOR THE ASSESSEE HAS ORALLY MENTIONED THAT HIGH COU RT CONDONED DELAY OF 442 DAYS IN DEPARTMENTAL APPEAL IN THE CAS E OF THE SAME ASSESSEE FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03. IT IS PERTINENT TO MENTION THAT THE DEPARTMENT NEVE R APPROACHED FOR CONDONATION OF ABNORMAL DELAY OF SAY MORE THAN 9 OR 10 YEARS BEFORE THE TRIBUNAL. THE SAID DELAY WAS NOT IN FILING OF THE APPEAL. ONLY CERTAIN DEFECTS IN THE APPEAL WERE RE CTIFIED. HENCE NOT COMPARABLE WITH THE FACTS OF THIS CASE. 31. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIALS AVAILABLE ON RECORD. ADMITTEDLY IN THESE CASES T HERE WAS A DELAY IN FILING THESE APPEALS AS FOLLOWS: SHRI VISHNU CEMENTS LTD. TIRUPATI 14 14 SL. NO. ITA NO. DELAY (IN DAYS) 1. 1543/HYD/10 2934 2. 1544/HYD/10 3602 3. 1618/H/2010 2946 4. 76/H/2001 1266 32. THE ASSESSEE HAS ADVANCED REASONS FOR DELAY THAT DU E TO RETROSPECTIVE AMENDMENT TO SEC. 43B BY INSERTION OF EXPLANATION 3C THE CLAIM OF THE ASSESSEE IS TO BE ALLOWED IN THE YEAR OF PAYMENT IN RESPECT OF FUNDED INTEREST. THE RETROSPECTIVE AMENDMENT HAS FORCED THE ASSESSEE TO FILE THESE APP EALS WITH DELAY. HAD THERE BEEN NO AMENDMENT THE ASSESSEE C OULD HAVE PURSUED THE APPEAL BEFORE THE CIT(A). THIS ARGUMEN T OF THE ASSESSEE IS DEVOID OF MERIT. EXPLANATION 3C TO SEC TION 43B WAS INTRODUCED BY THE FINANCE ACT 2006 WHICH BECOMES OP ERATIVE WITH EFFECT FROM 1.4.2006. THE ASSESSEE MUST HAVE FILED THE APPEAL WITHIN THE REASONABLE TIME FROM 1 ST APRIL 2006. HOWEVER THE ASSESSEE HAS FILED THE APPEAL AS FOLLOWS: I.T.A. NO. DUE DATE OF FILING ACTUAL DATE OF FILING NO. OF DAYS DELAY 1543/HYD/10 08.11.2002 10.12.2010 2934 1544/HYD/10 29.01.2001 10.12.2010 3602 1618/HYD/10 26.11.2002 20.12.2010 2946 76/HYD/11 31.07.2007 17.01.2011 1266 33. THUS EVEN AFTER THE AMENDMENT THE ASSESSEE HAS NO T FILED THE APPEALS WITHIN THE REASONABLE TIME. THE REASON FOR DELAY IN FILING THE APPEAL AFTER THE SAID AMENDMENT IS NOT EXPLAINED BY THE ASSESSEE. THERE IS DISTINCTION BE TWEEN INORDINATE DELAY AND DELAY OF FEW DAYS. IN THESE C ASES THERE WAS INORDINATE DELAY IN FILING THE APPEALS. BEING SO THE CONSIDERATION OF PREJUDICE TO THE OTHER SIDE WILL B E A RELEVANT FACTOR SO THE CASE CALLS FOR A MORE CAUTIOUS APPROA CH BUT IN THE CASE OF FEW DAYS DELAY NO SUCH CONSIDERATION MAY A RISE AND SHRI VISHNU CEMENTS LTD. TIRUPATI 15 15 SUCH A CASE DESERVES A LIBERAL APPROACH. NO HARD A ND FAST RULE CAN BE LAID DOWN IN THIS REGARD. WE HAVE TO EXERCI SE THE DISCRETION ON THE FACTS OF EACH CASE KEEPING IN MI ND THAT IN CONSIDERING THE EXPRESSION SUFFICIENT CAUSE THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANC E. IT IS PERTINENT TO NOTE THAT IN THE CASE OF MST. KATIJI C ITED SUPRA THE DELAY WAS ONLY 4 DAYS. THE LAW ASSISTS THE VIGILAN T NOT THOSE WHO SLEEP OVER RIGHT. THE DELAY CANNOT BE CONDONED SIMPLY BECAUSE THE ASSESSEE CASE IS HARD AND CALLS FOR SYM PATHY OR MERELY OUT OF BENEVOLENCE TO THE PARTY SEEKING RELI EF. IN GRANTING THE INDULGENCE AND CONDONING THE DELAY IT MUST BE PROVEN 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 LI MITATION PROVISION MUST BE A CAUSE WHICH IS BEYOND THE CONTR OL OF THE PARTY INVOKING THE AID OF THE PROVISIONS. THE CAUS E FOR THE DELAY IN FILING THE APPEAL WHICH BY DUE CARE AND ATTENTIO N COULD HAVE BEEN AVOIDED CANNOT BE A SUFFICIENT CAUSE WITHIN TH E MEANING OF LIMITATION PROVISION. WHERE NO NEGLIGENCE NOR INA CTION OR WANT OF BONA-FIDES CAN BE IMPUTED TO THE ASSESSEE A LIBE RAL CONSTRUCTION OF THE PROVISIONS HAS TO BE MADE IN OR DER TO ADVANCE SUBSTANTIAL JUSTICE. SEEKERS OF JUSTICE MU ST COME WITH THEIR CLEAN HANDS. IN THESE CASES WE FIND NO BONA -FIDE REASONS TO CONDONE THE DELAY. THE REASONS GIVEN BY THE ASS ESSEE IS NOTHING BUT NEGLIGENCE AND INACTION ON THE PART OF THE ASSESSEE WHICH CANNOT BE CONDONED. THE ASSESSEE COULD HAVE VERY WELL AVOIDED THE DELAY BY THE EXERCISE OF DUE CARE AND A TTENTION. IN OUR OPINION THERE EXISTS NO SUFFICIENT AND GOOD RE ASONS FOR SUCH AN INORDINATE DELAY AS ENUMERATED EARLIER. WE THER EFORE DECLINE TO ENTERTAIN THESE APPEALS. ACCORDINGLY T HESE APPEALS ARE DISMISSED AS UN-ADMITTED. AS SUCH WE REFRAIN OURSELVES SHRI VISHNU CEMENTS LTD. TIRUPATI 16 16 FROM GOING INTO THE MERIT OF OTHER GROUNDS RAISED B Y THE ASSESSEE IN THESE APPEALS AS THE APPEALS ARE UNADMI TTED. 34. IN THE RESULT ALL THE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON _22 ND JULY 2011. SD/- G.C. GUPTA SD/- CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER HYDERABAD DATED THE 22 ND JULY 2011 COPY FORWARDED TO: 1. SRI VISHNU CEMENTS LTD. C/O. SHRI P. MURALI MOHAN RAO CA 6-3-655/2/3 1 ST FLOOR SOMAJIGUDA HYDERABAD 2. THE DCIT CENTRAL CIRCLE-2 HYDERABAD 3. THE CIT(A) III HYDERABAD 4. THE CIT HYDERABAD 5. THE DR ITAT HYDERABAD NP/TPRAO