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TMI Blog2013 (9) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... es (Rs.16,23,451/-) which be set aside. i. The learned assessing officer has made the addition arbitrarily, based on conjectures and surmises by estimating without bringing any details or facts on record. ii. The learned assessing officer erred in not considering the voluminous details including bills, vouchers, payments made etc., in support of all the expenses incurred and has erred in observing that no proper supporting details produced. iii. The appellant prays that the addition of Rs. 55,69,138/- be set aside. iv. Without prejudice, the addition made on estimate basis being on higher side is to be reduced. b. On the facts and in the circumstances of the case the learned assessing officer erred in not giving deduction u/s 80G on the donation of Rs. 10,40,000/- given to Rangachary Trust which is eligible and exempt. The appellant prays that the learned assessing officer be directed to give such deduction. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d dismissed the appeal filed by the assessee, as stated earlier. 2.2 Before us, Authorised Representative submitted that appeal was filed before the AO by mistake, that mistake came to its notice when it contacted office of the FAA, that once mistake was noticed assessee requested the AO to transfer it to the FAA, that dealy in filing appeal was because of bona fide belief that appeal has been filed before the right forum, that FAA should have condoned the delay, that a liberal view should be taken. He referred to pages no.1086,1091 of the Paper Book(PB) as well as the letters written by him to the officers of the department on various occasions. He also relied upon the cases of Ram Nath Sao (3 SCC 195), Mst. Katiji (167 ITR 471), N. Balkrishnan (7 SCC 123), Sankar Rao (AIR 1987 SC 1726), Bharat Auto Center (282 ITR 366 All.), Cheminor Drugs Ltd. (105 ITD 613 -Hyd) General Williams Masonic (ITAT Del). Departmental Representative (DR) submitted that FAA has held that no sufficient cause of delay was shown by the assessee, that there was negligence on part of the assessee, that assessee itself had admitted that it had field appeal before the FAA, that delay was not explained by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : "(3) The Commissioner (Appeals) may admit an appeal after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within that period." 2.3 a. Now, we would like to discuss a few cases relevant for deciding the issue at hand. In the case of Office of the Chief Post Master General v. Living Media India Ltd. (348ITR7)appeals were filed by the Postal Department before the Hon'ble Supreme Court by way of special leave along with an applications for condoning delay of 427 days. Dismissing the appeal Hon'ble apex Court held as under : .....Neither the Department nor the person in-charge had filed an explanation for not applying for the certified copy within the prescribed period. The other dates mentioned in the affidavit clearly showed that there was delay at every stage and there was no explanation as to why such delay had occasioned. The Department or the person concerned had not evinced diligence in prosecuting the matter to the court by taking appropriate steps. The persons concerned were well aware or conversant with the issues involved including the prescribed period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctice of the counsels appearing in such matters at Delhi High Court and succeeded in getting interim orders. The Supreme Court has strongly deprecated such practice of forum shopping. In this case also there is no pleading that the writ petition and thereafter appeal was filed in Delhi High Court, under bonafide belief that it had jurisdiction to hear the appeal and that the appellant was pursuing the remedies in wrong court with due diligence. The appellant, thereafter, caused a further delay of 20 days in filing this appeal, which he has not explained. For the aforesaid reasons, we are of the opinion that the appellant is not entitled to the benefit of Section 14 of the Limitation Act. This appeal is barred by limitation by 697 days, which has not been sufficiently explained by the appellant." Appellant challenged the order of the Hon'ble High Court before the Hon'ble Supreme Court. Not only Special leave petition, filed by the appellant, was dismissed by the Hon'ble Apex Court, but cost of Rs. 25,000/- was also imposed on the appellant.(2013-TIOL-36-SC-CUS) 2.3 c. In the case of Balwant Singh (Dead.) v. Jagdish Singh (8 SCC 685), issue before the Hon'ble Apex court was condona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or circumstances arising before limitation expired it was not possible to file the appeal within time. (1 SCC 495) 2.4 After considering the above referred judgments, we are of the opinion that delay can be condoned only if there is no gross negligence or deliberate inaction or lack of bona fide. Secondly, assessee should furnish acceptable and cogent reasons sufficient to condone delay. These are the pre-requisites for condoning delay. Besides the above referred basic principle of condonation delay certain other general principles on the subject, culled out from various case laws, can be summarised as under: (i) If sufficient cause for excusing delay is shown, discretion is available to the FAAs to condone the delay and admit the appeal. (ii) The expression 'sufficient cause' is not defined, but it means a cause which is beyond the control of an assessee. For invoking the aid of the section any cause which prevents a person approaching the FAA 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acticable nor desirable to explain minute-to-minute/hour-to-hour delay, but delay has to be explained. (viii) When an application for condonation of delay is made; to consider whether a sufficient cause has been made out by the assessee; the order of the FAA should disclose that he had applied his mind to the question raised before it. Due exercise of judicial discretion is a pre-condition for allowing/refusing an application filed for condoning delay. (ix) The application for condonation of delay should contain substantially all the relevant material and as far as possible it should be supported by affidavit, showing that there is sufficient cause for condonation. (x) If the delay is not vitiated by any error of law it should be condoned. (xi) Any event, cause or circumstance arising after the expiry of the limitation period cannot constitute a sufficient cause. (xii) It is said that non-filing of appeal before the FAA, before the end of limitation period, creates a vested right in favour of the Revenue. As a result of not filing of an appeal by an asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entity and is assisted by qualified professionals. In our opinion facts of both the cases are totally distinguishable. In the case of Mst. Katiji (supra) delay of 4 days was condoned by the Supreme Court because important question as regards principle of valuation was involved. It was found that there was upward revision of the order of compensation by 800 % and this revision raised an important question about valuation. Therefore, Hon'ble Apex Court delayed the condonation. It was also observed by the Hon'ble Court that appellant was a government body and that the experience showed that on account of impersonal machinery and the inherited bureaucratic hurdles delay was less difficult to understand though more difficult to approve. Thus, the facts of the case of Mst. Katiji are not relevant in deciding the issue the in matter under consideration-here no important legal issue has to be decided. Next case relied upon by the assessee is of N. Balkrishana (supra).In that case delay was caused by misrepresentation/inaction of the Advocate. Assessee had approached the Consumer Protection Court and was awarded compensation by District Forum from the Advocate. In those circumstances Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graph no.5,he specifically mentioned as under: " If you intend to appeal against the assessment/fine/penalty you may present an appeal under para-1 of Chapter XX of the Income Tax Act, 1961 to the CIT(A)-10 within 30 days of the receipt of this notice............." After that assessee applied for stay to various authorities of department. On 15.05.2008 in his letter to the Tax Recovery Officer(TRO),assessee had mentioned that it had filed an appeal with the Commissioner of Income Tax, Mumbai. He further mentioned that it strongly believed that the appeal of the Commissioner of appeal could be favourable and the tax demand would become Nil. Finally he requested the TRO to stay recovery proceedings till the appeal was heard and determined. Assessee claims itself an ISO 9001-2000 Company. With regard to stay of demand, Assessee's C.A. had appeared before the CIT(A)-10, Mumbai as evident from the order of the Commissioner dated 12.11.2008,In his order, he held that a portion of demand would be kept in abeyance till 31.01.2009 or the receipt of the order of the appeal from the CIT(A) which ever was earlier. On 22.03.2010 in its letter to ACIT-10 (3) in para-2, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng period to follow up his appeal. So, if the FAA found that no satisfactory cause, not to speak of sufficient cause, has been shown by the assessee, then fault does lies with the assessee and not with him. Assessee, itself has to be blamed for the uncomfortable situation in which it finds now. For a period of more than three years, it did not bother to find out the outcome of the appeal it had filed and that also when recovery proceedings were being undertaken by the department. Bank account of the assessee were attached as per the documents available in the PB. It contacted AO, TRO and the CIT for staying demand, but no effort was made to find out the fate of the appeal. In our opinion behaviour of the assessee can be termed as personified inaction and negligence. Courts are of unanimous opinion that act of negligence and inaction do not constitute reasonable cause. We are also of the opinion that by not filing appeal in time before the FAA, assessee had allowed the State to believe that it had a vested right in its favour. Rights of the Sovereign are as important as that of the tax-payers. In matter of condonation of delay both have to show a sufficient cause which a prudent pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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