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TMI Blog2012 (10) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... ment determining the total undisclosed income of the assessee for the block period at Rs. 3,32,78,152, vide order of assessment dated 27.2.2004 passed under S. 158BC(c) of the Act. 3. Aggrieved by the block assessment made as above, assessee preferred appeal before the CIT(A). The CIT(A), vide his order dated 23.8.2004, taking note of the fact that the assessee has paid tax of Rs. 30,000 only on 10.4.2003, observed that there was default on the part of the assessee in paying tax on the returned undisclosed income. He accordingly issued a show-cause notice inviting attention of the assessee to sub-section (4) of S. 249 of the Act, as per which no appeal can be admitted unless the full amount of admitted tax is paid at the time of filing an appeal. The assessee in response appeared in person on 13.8.2004, and stated that full amount of admitted tax has not been paid till then. The CIT(A) observed that even after the adjustment of seized cash of Rs. 1,60,000 towards admitted tax, the aggregate payment of tax works out to Rs. 1,90,000 only as against tax due on admitted undisclosed income returned of Rs. 13,84,406. In the circumstances, after referring to the Board Circular No. 559 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of the appeal, and stated inter alia that the assessee was under a bona fide impression that the appeal would be restored on the file of the CIT(A), on the basis of his application dated 17.3.2011 seeking such restoration and disposal on merits, submitted after payment of admitted taxes, and it is only when such a thing has not happened, that he has filed the present appeal. He has also mentioned in great detail the personal suffering and mental agony which he suffered during the years of delay involved. He submitted that there was reasonable cause for the assessee for not paying the admitted tax, which is elaborately explained in the affidavit seeking condonation of delay. The learned counsel for the assessee submitted that there is, in that process, a reasonable cause for delay in filing of the appeal by the assessee, and as such the same may be condoned and the appeal be disposed of on merits. He submitted that if the delay is not condoned, the assessee would not have any opportunity to put forth its case on merits in the face of huge tax demand thrust on him and there would be gross violation of the principles of natural justice. 9. With regard to the other appeal, viz. IT(S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axman 133 (Mad.) (l) Royal Airways Ltd. v. Addl. DIT (International Taxation) [2006] 98 ITD 259 (Delhi) (m) All India Primary Teachers Federation v. DIT (Exemption) [2005] 93 TTJ 155 (Delhi) (n) Kamal Jewellers v. ITO [1995] 55 ITD 451 (Delhi) (o) Kadur Vidhya Pratishtana v. CIT [2007] 15 SOT 75 (Bang.) (p) Angela J. Kazi v. ITO [2006] 10 SOT 139 (Mum.) (q) Collector Land Acquisition v. Mst. Katiji [1987] 167 ITR 471 (SC) (r) Smt. Rameshwari Devi v. Sansar Chand AIR 1986 Himachal Pradesh 67 (s) Order of Hyderabad Bench 'B' of the Tribunal dated 13.10.2011 in Chida Spinning Mills v. ACIT (ITA No.1068/Hyd/2003) 11. Reliance is also placed on the decision of Hyderabad Bench 'A' of this Tribunal dated 5.6.2009 in Lavu Educational Society v. CIT Vijayawada (in ITA No. 648/ Hyd/2009). 12. The Learned Departmental Representative on the other hand, strongly supported the appellate order of the CIT(A) and submitted that payment of admitted tax is mandatory and there is no violation of principles of natural justice on account of dismissal of appeal in limine in terms of S.249(4) of the Act. 13. We have considered the rival submissions and perused the orders of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;sufficient cause' the principles of advancing substantial justice is of prime importance and the expression 'sufficient cause' should receive a liberal construction. A liberal view ought to be taken in terms of delay of few days. However, when there is inordinate delay, one should be very cautious while condoning the delay. The delay of 2491 cannot be condoned simply because the assessee's case is hard and 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 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 the aid of the provisions. The Supreme Court in the case of Ramlal v. Rewa Coalfields Ltd. AIR 1962 SC 361 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 limitation provision. Where no negligence, nor inaction, or want of bona fides can be imputed to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. There is no appealable order in this case. 19. We have duly considered the rival contentions. From the perusal of record and on consideration of respective arguments, following points have emerged out for our adjudication: (1) Whether the Tribunal has powers under Section 254(1) to give a finding that, an appeal filed in violation of Section 249(4) would be termed as defective one and the moment the defect is cured by making payment of agreed tax, the appeal can be decided on merit subject to limitation provided in Section 249(2) and its condonation thereof as per Section 249(3). (2) Whether non-availability of funds for making payment of agreed taxes with the assessee could be considered as a reasonable cause for filing defective appeals in violation of Section 249(4) of the Act. (3) Whether sufficient reason exists for curing this defect after expiry of limitation provided in Section 249(2) of the Act. 20. It is undisputed proposition of law that appeal is a continuation of the original proceedings and right of appeal is not an inherent right but it is a statutory right. It is open to the legislature to give or not to give a right of appeal against decisions made by auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (except possibly the power of enhancement) which are conferred upon the AAC by Section 31 of the Act. Consequently, the Tribunal has authority under this section to direct the AAC or the ITO to hold a further enquiry and dispose of the case on the basis of such enquiry." 22. Then again this expression came for consideration before the Hon'ble Supreme Court in the case of CIT v. Assam Travels Shipping Service [1993] 199 ITR 1/67 Taxman 269 (SC). In this case, assessee filed the return late for asst. yrs. 1963-64 and 1964 65. Thus, violated Section 271(1)(a)(2) of the Act. The learned AO levied the penalty. However, while calculating the penalty, he worked out the amount at a very lower figure. He levied the penalty at Rs. 6,494 and Rs. 70,118 for asst. yrs. 1963-64 and 1964-65 respectively as against the amount of Rs. 65,700 and Rs. 93,564. The assessee challenged this levy of penalty before the CIT(A). The learned CIT(A) quashed the penalty on the ground that the AO levied the penalty contrary to the provisions of Section 271(1). The matter further travelled to the Tribunal. The Tribunal has also dismissed the appeal of the Department by confirming the order of the CIT(A) on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 254 provides wide powers to the Tribunal for passing such orders thereon as it thinks fit in the interest of justice. 24. There is no dispute that the assessee has discharged the huge tax liability on 17.2.2011 vide Challan No. 788, Indian Bank, Himayatnagar Branch, Hyderabad, BSR Code 0260025 which is evident from the document filed by the assessee. Thus, it would be totally unfair for not providing an opportunity to him for disputing the additions made by the AO on merit. The Hon'ble Full Bench of Delhi High Court in J.T. (India) Exports v. Union of India [2003] 262 ITR 269, while elaborating the principle of natural justice along with the legal justice, has observed as under : "Natural justice is another name for commonsense justice. Rules of natural justice are not codified canons. But they are principles ingrained into the conscience of man. Natural justice is the administration of justice in a commonsense liberal way. Justice is based substantially on natural ideals and human values. The administration of justice is to be freed from the narrow and restricted considerations which are usually associated with a formulated law involving linguistic technicalities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned AO determined the income of assessee at Rs. 17,500 and Rs. 30,000. Against this order, the appeals were filed before the first appellate authority on 29th Oct., 1975. By then Section 249 has been amended by incorporating Sub-section (4) w.e.f. 1st Oct., 1975. The learned first appellate authority dismissed the appeal of the assessee in limine on the ground that assessee failed to pay the agreed tax at the time of filing of the appeal. During the pendency of appeal before the Tribunal, the assessee paid agreed tax on 15th June, 1976, The Tribunal set aside the order of the learned CIT(A) and restored the matter back to the file of first appellate authority. The Revenue has challenged the order of the Tribunal on the ground that decision given by the first appellate authority was not one under Section 250 of the Act and, therefore, no appeal would lie to the Tribunal and the Tribunal has no jurisdiction under Section 253 for setting aside the order of first appellate authority and directing the first appellate authority to decide the issue afresh on merit. The Hon'ble High Court rejected the contention of the Revenue and upheld the order of the Tribunal. While doing so, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay. Thus, considering the hardship of the assessee, we are of the opinion that there exist sufficient reasons for not filing a valid effective appeal before the CIT(A). It is aptly said that facts should be viewed in a natural perspective having regard to the compulsion of circumstances of a case where it is possible to draw inferences, from the facts and where there is no evidence of any dishonest or improper motive on the part of the assessee it would be just and equitable to draw such inference in such a -manner that would lead to equity and justice. Too hyper technical or legalized approach should be avoided in looking at a provision which must be equitably interpreted and justly administered. Hence, taking into consideration the overall facts and circumstances of the case we are of the opinion that these appeals deserve to be allowed and, accordingly, allowed. We set aside the order of the learned CIT(A) and restore the matters before him for deciding the controversy on merit. 30. In the result, IT(SS)A No. 25/Hyd/2011 is dism ..... X X X X Extracts X X X X X X X X Extracts X X X X
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