1993 (8) TMI 91 - AT - Income Tax

Summary

Issues Involved:
1. Condonation of delay in filing cross-objections
2. Disallowance under section 37(3B) for motor car expenses
3. Disallowance under section 37(3A) for sales promotion expenses

Detailed Analysis:

1. Condonation of Delay in Filing Cross-Objections:
The primary issue was whether the Tribunal's decision could constitute a reasonable cause for condoning the delay in filing cross-objections. The assessee filed cross-objections 518 days late, disputing disallowances under sections 37(3B) and 37(3A). The assessee argued that they were prompted to file cross-objections after becoming aware of an ITAT Ahmedabad Bench decision, which clarified the legal position on the disallowance of motor car expenses. The assessee's counsel cited various judgments, including those from the Supreme Court and High Courts, to support the condonation of delay.

The departmental representative opposed the condonation, arguing that the assessee failed to show reasonable cause for the delay. The Tribunal examined the cited cases and concluded that the decisions relied upon by the assessee did not support condoning the delay. The Tribunal emphasized that its decisions do not declare or pronounce the law, unlike Supreme Court judgments, which have retrospective effects under Article 141 of the Constitution of India. The Tribunal also noted that subsequent events or circumstances arising after the expiry of the limitation period cannot constitute a sufficient cause for delay.

2. Disallowance Under Section 37(3B) for Motor Car Expenses:
The assessee contested the disallowance of motor car running and maintenance expenses under section 37(3B). They argued that based on an ITAT Ahmedabad Bench decision, these expenses should not be considered for disallowance under section 37(3A). The Tribunal, however, did not address the merits of this issue due to the dismissal of the cross-objections as time-barred.

3. Disallowance Under Section 37(3A) for Sales Promotion Expenses:
Similarly, the assessee disputed the disallowance of Diwali cards and posters expenses, categorized as sales promotion expenses under section 37(3A). The Tribunal did not delve into the merits of this issue either, as the cross-objections were dismissed for being filed late.

Conclusion:
The Tribunal dismissed the cross-objections filed by the assessee as time-barred, concluding that the assessee failed to satisfactorily explain the delay of 518 days. The Tribunal underscored that its decisions do not declare the law and cannot justify condoning delays based on subsequent Tribunal decisions. The merits of the disallowances under sections 37(3B) and 37(3A) were not considered due to the procedural dismissal of the cross-objections.