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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 ..... ividual of a small place and an ISO 9001-2000-company cannot be equated, while considering the condonation of delay. - Decided against the assessee. - ITA No. 7167/Mum/2011 - - - Dated:- 4-9-2013 - B.R. Mittal And Rajendra, JJ. For the Appellant : R. Muralidhar. For the Respondent : Prabhat Jha. ORDER:- PER : Rajendra Challenging the order dt. 04-08-2011 of the CIT(A)-22, Mumbai, Assessee has filed following Grounds of Appeal: "1. (a) The learned CIT(A) erred in not admitting the appeal on the grounds of delay when the appellant had in fact filed the appeal with the Dy.CIT 10(3) within the statutory time limit of 30 days period and duly acknowledged. (b) The second set of appeal was filed in view of the Dy. CIT 10(3) not forwarding the said appeal to the CIT (A) in charge. 2. The learned CIT(A) erred in not adjudicating on other grounds of appeal here under. a. On the facts and in the circumstances of the case the learned assessing officer erred in disallowing and making addition of Rs. 55,69,138/-out of Direct Expenses (Rs.39,45,687/-) and out of Administrative Expenses (Rs.16,23,451/-) which be set aside. i. The learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of filing of appeal at wrong place, that assessee had not explained as to why it was not aware of the so called mistake committed till 3 years and how the same was realised after more than 3 years, that the assessee was assisted by the CAs who were aware of the procedure of filing of appeal since the assessment as well as appellate proceedings were being represented by the duly authorised CA, that huge gap of more than 3 years which had not been explained by the assessee which proved that there was no diligence on the part of the assessee, that the assessee was totally negligent, that the cause of delay explained by the appellant in filing appeal was avoidable by due care and attention, that there was no reasonable cause within the meaning of provisions of section 249(3) of the Act. He relied upon the decision of D Bench of ITAT Chennai pronounced in the case of Sri. Venkatesa Paper Boards Ltd. (98 lTD 200) and 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time. But, said rules are meant to see that the parties seek their remedy promptly. Condonation of delay is the discretion of the Presiding Officers of judicial forums and is governed by section 5 of the Limitation Act, 1963.Courts are of the view that the words 'sufficient cause' of the said Act, should receive a liberal construction, so as to advance substantial justice. Once a judicial forum accepts the explanation as sufficient, it is the result of positive exercise of discretion. These provisions do not envisage that such a discretion can be exercised only if the delay is within a certain limit. The length of the delay is not the matter, acceptability of the explanation is the only criterion. Following the spirit of advancing substantial justice, Act has included discretionary powers for condoning delay in filing appeals. Section 249(3)of the Act, that allows the FAA to admit belated appeals, reads as under : "(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 decidi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same, as the Tribunal is located in Delhi." Appellant then filed appeal before the Hon'ble Allahabad High Court and applied for condonation of delay of 697 days. Dismissing the appeal Court observed as under: "The appellant was assisted and had the services of the counsel's, who are expert in the central excise and customs cases. They first filed a writ petition, and then without converting it into appeal obtained an interim order. They kept on getting the matter adjourned and thereafter in spite of specific objection taken, citing the relevant case law, which is well known, took time to study the matter. Thereafter, they took more than one year and three months, to study the matter to withdraw the appeal. They took a chance, which apparently looking to the facts in Ketan v. Parekh's case and this case appear to be the practice 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 hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the application and facts and circumstances of the case (Emphasis supplied). 2.3 d. In Indian Oil Corporation Ltd. v. Subrata Borah Chowlek 3 GLR 312,there was delay of 59 days. Explanations furnished by the applicant revealed, that not only the applicant whiled away time at various intervening stages even after the expiry of the period of limitation, it waited for the summer vacation of the Hon'ble Supreme Court of India and the Delhi High Court to be over to have the matter attended to by their counsel. 2.3 e. In the case of Ajit Singh Thakur Singh Anr. v. State of Gujarat the Hon'ble Supreme Court has explained as what constitutes sufficient cause. It was held that when a party allows limitation to expire and pleads sufficient cause for not filing the appeal earlier, the sufficient cause must establish that because of some event 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) Ltd. (72 ITR 395) Hon'ble Supreme Court had held that explanation of delay for the entire period is necessary. In other words what is expected of the appellant in such matters is to show that delay was occasioned due to some sufficient cause. The cause pleaded should not only be a probable one but it should be real and sufficiently reasonable. It would not be any sort of assertion that would amount to sufficient cause and would justify the condonation of delay. The cause pleaded must fit in the facts and circumstances of the given case and the explanation offered regarding the delay occasioned by such cause should appeal to reasons so as to get judicial approval. In short in matters of delay it is neither practicable 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'illiterate villagers' belonging to 'different families, different villages within the different police stations'. It was also submitted that delay was not intentional or they were not negligent or there was no allegation of inaction of any inaction on their part. Considering the above facts Hon'ble Supreme Court had condoned the delay. In the case under consideration it cannot be said that assessee was not knowing the procedure of filing of appeal was illiterate. It was represented by a professional during the assessment proceedings as well as the stay proceedings. It is a corporate 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication before the DIT (Exemptions), that later on some professional advice the society to prefer an appeal before the right Forum, considering these facts delay was condoned. From the above discussion, it is clear that none of the case relied upon by the AR of the assessee is applicable to the facts of the case under consideration. 3.2 Here, we would also like to mention a few facts which are useful in deciding the appeal. We find that AO had informed the assessee, as early as 31.12.2007,to file an appeal before the CIT(A).While issuing notice of demand u/s. 156 of the Act, vide paragraph 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 fav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and negligence of the assessee, there are no other reason for filing a belated appeal. We have avoided using adjectives before the words inaction and negligence, which are generally used by the higher forums of judiciary when they find that delay is result of total lack of prudence. Timely action is the essence of day-today activities of human being - a farmer not sowing his fields in time after the rains has to suffer. Principles of nature are equally applicable to human behaviour, including the judicial system. No action was taken by the assessee for a long 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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