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TMI Blog2013 (5) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... - 15-2-2013 - R.K. Gupta, AND Rajendra, JJ. For the Appellant Dr. Milind Bhusari. For the Respondent K.P. Dewani. ORDER:- Rajendra, Accountant Member - Challenging the order dt. 24-05-2010 of CIT(A)-I, Nagpur, Assessing Officer (AO) has filed the following Grounds of Appeal: 1. On the facts and in the circumstances of the case, it is prayed that delay in filing the appeal may be condoned on the basis of the decision of the Hon'ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji Ors [1987] [167 ITR 471] (SC) and CIT v. Sothia Mining Mfg. Corpn. Ltd. [46 Taxman 195] (Cal.). 2. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition of Rs. 1,08,31,978/- rightly held by the AO as income from an adventure in the nature of trade. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have considered (i) intention of the assessee, (ii) period of holding and (iii) development potential in the surrounding areas and held that sale of lands was adventure in the nature of trade. 4. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in ign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the exemption claim made by the assessee in respect of piece of land No. 42/1 and 43/2 of Dongargaon and added Rs. 26.45 Lakhs and Rs. 81.86 Lakhs for the said assets respectively to the total income of the assessee. 3. Assessee preferred an appeal before the First Appellate Authority (FAA). After considering the submissions of the assessee and two Remand Reports (dt. 12-04-2010 and 12-05-2010) of the AO in the appellate proceedings FAA found that during the relevant assessment year the assessee derived income from salary, house property and income from other sources and agricultural income, that these were the sources of income for the previous assessment years also, that during the relevant assessment year assessee had shown Shot Term Gain on sale of three plots, that three plots of land were situated in Municipal area and due to multiple claims on these properties the assessee had disposed off the same, that surplus arising thereon was offered for taxation as Capital Gain and was so assessee by the AO. He held that the undisputed fact and evidence on record was that the assessee had transferred agricultural land located at Dongargaon, that the 7/12 extracts in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Report, i.e., 7/12 report suggested that the appellant had cultivated these lands after the purchase as owner of agricultural land. (vi) the lands in Kh.No. 43/2 and 22/1 of Mouza: Dongargaon were sold as agriculture lands only. This was apparent from the Sale Deeds. These lands were sold on Hector basis and not on per square feet or yards basis. (vii) that from Khasra Reports (i.e., 7/12 Reports) of Kh. No. 43/2 and 22/1 after these lands were sold by the appellant clearly indicated that the agriculture operations were continued by the purchasers also. These Khasra Reports were for next 2/3 years subsequent to the sale. (viii) that these lands were never converted as non-agricultural lands. The user of the lands had not undergone any change neither in the hands of the assessee nor by the purchaser of agricultural land from the assessee. (ix) it was also not disputed that there is no developmental activity in land around the surrounding the lands. The surrounding lands were claimed to be agricultural lands only. (x) these two agricultural lands sold are assessed to land revenue as agricultural land. (xi) the agricultural lands on Kh. No. 43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preferring appeal before the Tribunal. In the said application AO; after stating the facts of the case and order of the FAA; mentioned time limit for filing the appeal before the Tribunal had expired on 16-09-2010, that no appeal was filed on the reasoning that there was no infirmity in the order of the FAA in holding that surplus sale of proceeds was exempt as per the provisions of Sec. 2(14) of the Act. A photocopy of the note sheet of the office file of the CIT-I, Nagpur was enclosed with the application for ready reference. In the application, AO has further stated that in view of the decisions of the Hon'ble Jurisdictional High Court delivered in the case of Dy. CIT v. Gopal Ramnarayan Kasat it was decided to file appeal before the Tribunal. It was further stated that in Aug. 2010,while deciding the question of filing an appeal to the Tribunal, CIT did not have benefit of the decision of Gopal Ramnarayan Kasat (supra),that CIT-I, Nagpur had authorised him to file condonation applications. In his support, he referred to the decisions of Collector, Land Acquisition v. MST. Katiji [1987] 167 ITR 471(SC) and CIT v. Sothia Mining Mfg. Corpn. Ltd. [1990] 186 ITR 182 delivered by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gion) Act, 1958 he could not be held as trader or dealer in agricultural lands, that ratios of cases of G. Venkataswami Naidu Co., v. CIT[1959] 35 ITR 594 (SC) and Gopal Ramnarayan Kasat (supra) were distinguishable on facts and inapplicable to the facts in the case of assessee. He relied upon the orders of the decisions of Shagun Infrastructure (P.) Ltd., [ITA No. 209/NAG/2009 AY 2006-07] and Satyanarayan O Agarwal [ITA No.169/NAG/12 AY 2007-08] delivered by the ITAT, Nagpur Bench on 27-06-2011 30-11-2012 respectively. 5. We have heard the rival submissions and perused the material before us. Before discussing the merits of the matter under consideration, we would like to deal with the application filed by the AO for condoning the delay. As per the application, after considering the decision of the jurisdictional High Court delivered in the case of Gopal Ramnarayan Kasat (supra) it was decided that appeal should be filed before the Tribunal. If the submissions of the AO are accepted even for the sake of arguments only there is no explanation for the period from Nov.2011 and May, 2012 when the decision was published and appeal before the Tribunal was filed respectively. AO ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Courts as per the provisions of section 260A(2) of the Act. So, as per our humble understanding CCIT has no role in filing or not filing of an appeal before the Tribunal. But, the record in the case under consideration clearly show that CIT changed his stand after receiving confidential communication from the office of the CCIT. Application for condonation of delay, filed by the AO, can be dismissed only on this basis, but we would like to deal with prayer of condoning the delay along the merits of the case. 5.2 Condonation of delay is governed by section 253(5) of the Act and the said section reads as under: "(5) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in sub-section (3) or sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period." Over the decades, principles of condoning the delay have evolved. It is said that the law of limitation is enshrined in the maxim interest reipublicae ut sit finis litium (it is for the general welfare that a period be put to litigation). Rules of limitation are not meant to destro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (vi) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds, but because it is capable of removing injustice and is expected to do so. From the various decisions of other courts including the judgments of Hon'ble Supreme Court, other general principles of condonation of delay can be summarised as under: (a) If sufficient cause for excusing delay is shown, discretion is given to the Presiding Officers (POs) to condone the delay and admit the appeal. This discretion has been conferred on the Pos, so that judicial power and discretion is exercised to advance substantial justice. (b) The expression 'sufficient cause' is not defined, but it means a cause which is beyond the control of the party. For invoking the aid of the section any cause which prevents a person approaching the POs within time is considered sufficient cause. In doing so, it is the test of reasonable man in normal circumstances which has to be applied. The test whether or not a cause is sufficient is to see whether it could have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner. He is the only authority who has the discretion to file or not to file an appeal. His discretionary powers are not controlled by any mandatory / rigid provision of law. He is not supposed to follow instruction of any superior in this regard. He may authorise his juniors to file appeals after taking a decision of filing of appeal. (h) If it is difficult in the Departmental hierarchy to expedite the authorisation being filed in time, that itself cannot form the basis for praying for condonation of delay. In other words taxation authorities cannot expect some kind of privilege while filing belated appeals. Like the assessees they also have to prove that for delay there was a reasonable cause. (i) Just because there is merit in the appeal filed by the litigant, any amount of delay, however, negligently caused, cannot be condoned. In other words a very strong case on merits is not relevant for condonation of delay in filing the appeals. (j) Requirement of sufficient cause for delay cannot be ignored and it becomes very important and significant when the delay is inordinate and abnormal. (k) In the matter of J.B. Advani Co. (P.) Ltd. (72 ITR 395) Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of V.V. Kudva v. Employees State Insurance Corporation AIR 1972 Mysore 204. The High Court, at p. 206 of the report held as follows : "None of the decisions relied on by Mr. Hande supports his contention that a litigant who has acquiesced in the judgment of a Court by not preferring an appeal within the period of limitation, can wake up and prefer an appeal after a subsequent ruling . which he considers as being favourable to him. Nor can the advice of his counsel that his case is not a fit one for appeal, which advice may turn out to be a mistaken one in the light of a subsequent ruling of the Supreme Court or the High Court, be regarded as a sufficient ground for condoning such delay." 5.4 We also find that AO has not filed any affidavit along with the condonation-application, though the note sheet talks of filing of an affidavit if necessary, as stated at paragraph No.5 of our order. Generally application filed for condonation of delay are accompanied by an affidavit, as it throws lights on the though process of the applicant for submitting the petition. For deciding the issue of reasonableness or sufficiency of cause affidavits play a vital role. But, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase was made in October 1941 the name of a benamidar covering land measuring about 28 cents and the second and subsequent purchases were made in November, 1941, June, 1942, and November, 1942, the plots of land measuring about 2 acres 79 cents, 28 cents and 1 acre and 90 cents, respectively. Appellant made no effort to cultivate them or erect any superstructure on them but allowed them to remain un-utilised. The appellant sold these lands to the company managed by it in two lots in September and November, 1947, for a total consideration of Rs. 52,600.Considerring the above facts Tribunal held that the plots were purchased by the appellant wholly and solely with the idea of selling them at a profit to the company, that the amount was not a capital accretion but was a gain made in an adventure in the nature of business and was therefore, taxable. On a reference, the High Court held that the transaction was an adventure in the nature of trade and that the Department was justified in taxing the amount. Hon'ble Apex Court confirmed the order of the High Court and dismissed the appeal filed by the assessee. Following was the final decision of the Hon'ble Supreme Court: "Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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