2013 (11) TMI 175 - AT - Income Tax

Condonation of delay in filing appeals Held that - Plea of the regarding the delay in filing these appeals is contradictory in nature. Firstly, the assessee has tried to make out a case that the assessee came to know by the CIT(A) only on receipt of complaint filed before the Economic Office Court, Hyderabad on 5.8.2012. Secondly, it was stated that the Managing Director of the assesseecompany is not keeping well and suffering from acute depression, mental instability, hypertension and diabetes. Delay cannot be condoned simply because the assessee s case calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay, it must be proved beyond the shadow of doubt that the assessee is diligent and was not guilty of negligence whatsoever. A sufficient cause within the contemplation of the Limitation provisions must be a cause which is beyond the control of the party invoking the aid of the provisions. Where no negligence, nor inaction or want of bona-fide can be imputed to the assessee a liberal construction of the provisions has to be made in order to advance substantial justice. Seekers of justice must come with clean hands. The assessee justified the delay only with reference to the doctors certificates with regard to Managing Director s ill health. In addition to this the assessee filed affidavit stating that the orders were not received. However, the fact that Sri Bathina Veerabhadra Rao continued to be Managing Director, directing the other functions of that post, notwithstanding the sickness claimed to be being suffered by him, shows the falsity or at least, inadequacy of reasonableness in that cause. Further, the evidence produced by the Department shows otherwise. Therefore, it shows that delay was due to the negligence and inaction on the part of the assessee. The assessee could have well avoided the delay by exercising all due care and attention Sufficient reason was not shown for condonation of delay Reliance has been placed upon the judgments in the cases s.a. Vedabai Alias Vaijanthibai Baburao Patil vs. Shantaram Baburao Patil 2001 (7) TMI 117 - SUPREME Court and Ramlal vs. Rewa Coal Fields Ltd. 1961 (5) TMI 54 - SUPREME COURT - Decided against the Assessee.

Issues Involved:

1. Delay in filing appeals.
2. Service of CIT(A) orders.
3. Validity of medical grounds for delay.
4. Rebuttal of presumption of service.
5. Application of judicial precedents on service and delay.

Detailed Analysis:

1. Delay in Filing Appeals:

The appeals were delayed by approximately six years. The assessee argued that they did not receive the CIT(A) orders and only became aware upon receiving a complaint from the Economic Offence Court on 5.8.2012. The assessee's Managing Director was claimed to be suffering from serious health issues, which was supported by medical certificates. The Tribunal examined these claims and found inconsistencies, noting that the Managing Director had actively participated in various proceedings during the period of alleged illness. The Tribunal concluded that the delay was not sufficiently justified and was due to negligence and inaction on the part of the assessee.

2. Service of CIT(A) Orders:

The assessee contended that the CIT(A) orders were not served. The Department provided evidence, including entries in the Dak Register, showing that the orders were dispatched and not returned. The Tribunal noted that the orders were sent to the correct address and were not returned undelivered. Additionally, the Managing Director had acknowledged receipt of various notices and orders during the relevant period, indicating that he was aware of the CIT(A) orders.

3. Validity of Medical Grounds for Delay:

The assessee claimed that the Managing Director's health issues prevented timely filing of appeals. The Tribunal scrutinized the medical certificates and found them insufficient to explain the prolonged delay. The Tribunal emphasized that the company, being a public limited entity managed by a board of directors, should have been able to file appeals irrespective of the Managing Director's health.

4. Rebuttal of Presumption of Service:

The assessee argued that mere dispatch by Speed Post does not presume proper service. The Tribunal referred to judicial precedents, including the case of CIT v. Vins Overseas India Ltd. (305 ITR 320), which established that if a notice is properly addressed and dispatched, there is a presumption of service. The Tribunal found that the assessee failed to rebut this presumption convincingly.

5. Application of Judicial Precedents on Service and Delay:

The Tribunal considered several judicial precedents cited by both parties. The assessee relied on cases like Collector, Land Acquisition v. M.S.T. Katiji & Ors. (167 ITR 471) to argue for leniency in condoning delays. However, the Tribunal found that the assessee's conduct did not align with the principles of these cases, as there was evidence of negligence and lack of bona fide effort to file appeals in a timely manner. The Tribunal also referred to the case of Vedabai alias Vaijayanatabai Baburao Patil v. Shanta Baburao Patil [2002] 253 ITR 798 (SC), emphasizing that sufficient cause must be beyond the control of the party and that the assessee must come with clean hands.

Conclusion:

The Tribunal dismissed the appeals, concluding that the assessee failed to demonstrate sufficient cause for the delay in filing. The evidence showed that the CIT(A) orders were properly served, and the Managing Director's health issues were not a valid excuse for the prolonged delay. The Tribunal emphasized the need for diligence and bona fide efforts in legal proceedings, which were lacking in this case.

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