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TMI Blog2014 (9) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... n the letter as well as the affidavit only to accommodate the assessee herein - the conduct of the C.A. firm not only denigrates its name/reputation, but also badly affects the high standards, confidence, quality, prestige, reputation etc. enjoyed by the C.A. profession - the assessee is having connection with many tax professionals and, in all probabilities, the assessee might have had consultation with any one or more of them on the problem – the C.A firm might have given the affidavit only to accommodate the assessee, which conduct is also not expected from a Professional - If it is considered that the C.A firm has colluded with the assessee for giving such kind of affidavit, then it only warrants disciplinary action against them - Even, if it is considered that the said C.A. firm has really given such advices, then also it may require disciplinary action against them for giving such kind of advices, without proper verification of facts and without proper consideration of law - strict actions and fast disposal of disciplinary proceedings would not only instill discipline among the C.A fraternity, but also help curtail these kind of undesired practices adopted by some of the Char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld A.R placed his reliance on host of case law in support of the above said submissions. On the contrary, the Ld D.R strongly opposed the submissions made by the Ld A.R and submitted that the explanations furnished by the assessee cannot be considered as sufficient cause for condoning the delay. 2.1 Various case law relied upon by the assessee only lay down the principle that the delay, if supported by a sufficient cause, needs to be condoned. Hence, the assessee is required to show that there existed sufficient cause in filing the appeals belatedly. Hence, the condonation of delay would depend upon the reasons so furnished by the assessee to explain the delay. Generally a liberal approach is required to be followed while examining the reasons furnished by the assessee. Hence, the end result of the present question would ultimately depend upon the reasons furnished by the assessee. 3. We proceed to set out the facts surrounding this issue first and also the reasons furnished by the assessee to explain the delay in filing the impugned appeals. Since the reasons furnished by the assessee for both the years under consideration are identical, for the sake of convenience, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hartered Accountant M/s. Rajesh Rajeev and Associates advised me not to file further appeals before the Tribunal for both the years to avoid multiplicity of litigation as the issue of sec. 80-O involved in the appeals for AY-1994-95 and 1996- 97 was identical to the issue involved in the appeal filed by me before the Tribunal for AY 1993-94 which was then pending before Tribunal. I was further advised by my chartered accountant that after adjudication of the appeal for AY 1993-94 by the Tribunal, I could move a rectification application before the AO to bring the assessment order in conformity with the decision of the Tribunal. (8) I say that the Hon'ble Tribunal, vide order dated 29.6.2006, restored the matter back to the file of the AO to examine the issue of allowability of deduction under section 80-O of the Act. Thereafter, the AO passed an order on 19.2.2009 allowing my claim of deduction under section 80-O of the Act. (9) I say that the order giving effect to the Tribunal's order was received by me on somewhere in May 2009. Immediately after receiving the order of the A.O., I preferred rectification application before the A.O. to rectify the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant was disallowed by the Assessing Officer [ A.O. ] for the Assessment Year 1993-94. The Appeals were also dismissed by the Commissioner of Income-tax (Appeals). Against the order of the CIT(A), the Appellant filed appeals before the Hon'ble Income-tax Appellate Tribunal [ ITAT ] being I.T.A. nos. 4398/Mun/1997 and 4399/Mum/1997. 5. I say that while the appeal was pending before ITAT for Assessment Year 1993-94, the A.O. as well as CIT (A) disallowed the claim of the Appellant under section 80-0 for A.Y. 1994-95 and A.Y.1996-97 also. 6. I say that when the Appellant approached me to seek my advice on the further course of action, I advised him that since he was an individual, having limited resources to individually pursue appeals for each year in the ITAT and since the facts in all the subsequent years were identical to the facts in Assessment Year 1993-94 which were already in appeal before ITAT, he need not go for repeated appeals for Assessment Years 1994-95 and 1996-97 and instead file a rectification or review application before the A.O, once the issue is settled by the ITAT and the order giving effect to ITAT order is passed for A.Y. 1991-92 and 1993-94. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toring the issue relating to the deduction claimed u/s 80-O of the Act to the file of the AO. The assessing officer subsequently passed the consequential order in May, 2009, wherein he allowed the claim of the assessee. (f) Subsequently, on 15.07.2009, the assessee filed rectification petition before the AO for both the years under consideration. The assessing officer rejected the petitions, vide his order dated 14.05.2010. (g) Thereafter, he again consulted M/s Rajesh Rajeev and Associates, who gave a letter dated 15-04-2011 stating that the approach of the department was not correct. (h) Thereafter he consulted Mr. Yatin K Desai, who advised him to file appeals before ITAT and hence the appeals were filed on 20-07-2011. 6. Before proceeding further, we feel it appropriate to refer to some of the judicial pronouncements made on the issue of condonation of delay. The Hon'ble Calcutta High Court in the case of CIT v. Metal Distributors Ltd. [1988] 172 ITR 356 has held as under: that in the absence of proper explanation for the delay in presenting for leave to appeal to the Hon'ble Supreme Court, the delay could not be condoned. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identical in nature. In the present cases, when the Ld CIT(A) passed the orders, the assessee was prosecuting the appeals relating to the assessment years 1991-92 and 1993-94 before the Tribunal by engaging one of the eminent and leading counsels Shri S.E. Dastur assisted by Shri Nitesh Joshi to argue his case before Tribunal. (b) From the explanations furnished by the assessee, it is noticed that the assessee has availed services from more than one professional, viz., (a) Shri S.E. Dastur, Advocate (b) Shri Nitesh Joshi, Advocate (c) M/s Rajesh Rajeev and Associates (From 1997 to Nov.2006) (d) Shri Sunil Chaudhari, Chartered Accountant ( Nov. 2006 to April 2007) (e) M/s P.A. Dhanbhoora Co., Chartered Accountants (May 2007 to February, 2011). (f) Ms. K. Bijlani, C.A., from M/s Ashok Rao Co., Chartered Accountants - Before AO in AY 1994-95. (g) Mrs. Rasneem Varavalla, CA from M/s Ashok Rao Co., Chartered Accountants - Before AO in AY 1996-97. (h) Shri Ashish Srivastava, CA before Ld CIT(A) in AY 1994-95 and 1996-97. (i) Mr. Yatin K Desai, Chartered Accountant (who advised him to file appeals before ITAT). Despite having connections with so man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the actual date of filing of the application. However, the assessee has failed to show any reason for the delay occurred in between periods, viz., (i) Order giving effect to Tribunal order was passed on 19-02-2009 and claimed to have been received in May 2009, but the assessee filed rectification petitions only on 15.07.2009. (About 2 months gap) (ii) The AO has rejected the rectification petitions on 14.05.2010. But the assessee has consulted and received letter from M/s Rajesh Rajeev Associates, Chartered Accountants only on 15.04.2011. (About 11 months gap) (iii) Thereafter, he has consulted another C.A and the appeal was finally filed on 20-07-2011 (About 3 months gap). (iv) The Ld CIT(A) passed the orders for these years on 01-02-2000. The Tribunal passed order for AY 1993-94 in June, 2006. As stated earlier, the ITAT had only restored the matter to the file of the AO without deciding the issue. Even at that point of time also, it is unbelievable that it did not occur in the mind of professional CA or the assessee that they should file appeals before the Tribunal. If the assessee had filed appeals in June, 2006 itself, there might have been some merit in his conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal approach adopted by them to address the problems enable them to give near perfect advice in a given situation and hence tax payers and tax gatherers repose confidence in them. These kind of domain expertise could be achieved by a C.A due to strict training methodologies adopted by and also high level of standards maintained by the Institute of Chartered Accountants of India (ICAI), its vast and versatile curriculum, tough examination pattern, continuous updating of curriculum etc.. Most of all, the practical on-site training obtained by the students from a practicing Chartered Accountant, that too during the period of study itself, makes the C.A course a unique one. The cumulative effect of these methodologies makes the students a perfect Chartered Accountant having high caliber, ability, high standards etc., and hence they are enabled to set up their own practice from day one itself. Though the Chartered Accountants are having domain expertise in accountancy and auditing areas, yet the training they undergo as well as the curriculum of C.A course makes them a best tax professional also. Another important feature is that the ICAI ensures that the Chartered Accountants are up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n March, 2003. Hence, at that point of time, the time limit for filing rectification petition for AY 1994-95 had already expired and the time limit for AY 1996-97 was due to expire on 31.3.2003. Hence, it is hard to believe that the above said C.A firm would have given such an advice to the assessee to file rectification petitions, that too, after the receipt of order of the Tribunal for an earlier year, viz., for AY 1993-94. At that point of time, the appeals relating to AY 1991-92 and 1993-94 were pending before the Tribunal and both the C.A firm and assessee are not aware as to when the said appeals will be taken up by the Tribunal for disposal as well as its outcome. Under these set of facts, it is not understandable as to how a C.A firm could have given such an advice. 9.4 Another important point to be noted here is that the assessing officer has, in fact, allowed the claim for deduction u/s 80-O in AY 1994-95 and it is the Ld CIT(A), who has disallowed the said claim. Under these set of facts, the question of rectification of the assessment order for AY 1994-95 would not arise at all. 9.5 Further, under the principle of 'Doctrine of Merger', an assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f mind, analytical ability etc. and they enable the C.A students to have strong grip over the subjects and also to attain expertise in them. The commendable feature of the C.A course is that, as stated earlier, the C.A students are trained by the practicing Chartered Accountants during their articled clerk training program. Thus, the methodology adopted by the ICAI enabled the C.A. students to become a thorough professional with versatile knowledge and innovative mind. We notice that, in the recent past, the methodology of self study is given a go-by by some of the C.A students and they have started depending more and more on the Commercial Coaching Centers, who undertake coaching of various subjects in the class room model. We notice that the ICAI does not appear to have taken steps to contain mushrooming growth of such coaching institutes, which indulge in manufacturing of Chartered Accountants through class room model, which may ultimately have undesirable effect on the quality of Chartered Accountants, since the habit of thinking, introspection, application of mind is replaced by spoonfeeding, which kind of teaching discourages independent thinking. There should not be any cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inuous updating or refreshing of the knowledge of Chartered Accountants. The advice claimed to have been given by M/s Rajesh Rajeev Associates, Chartered Accountants, if considered to have been really given, would create doubt about the efficacy of the CPE programmes, since such kind of advices is not expected from a Professional. Further these kind of advices claimed to have been given by a C.A firm clearly give signals that the CPE programmes might have failed to achieve the desired objectives with some of the Chartered Accountants. It is hightime that the ICAI should take note of these practicalities and should take corrective steps in order to maintain/restore the high standards and quality expected from a C.A. professional. We have also expressed the view that the above said C.A firm might have given the affidavit only to accommodate the assessee, which conduct is also not expected from a Professional. If it is considered that the C.A firm has colluded with the assessee for giving such kind of affidavit, then it only warrants disciplinary action against them. Even, if it is considered that the said C.A. firm has really given such advices, then also it may require disciplinary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of demand in respect of the assessment years in question were not served on him before the commencement of recovery proceedings. As said earlier, this statement is clearly an afterthought and was made when the deponent became sure that the Department is handicapped by the non-availability of the relevant records. The normal and natural course for the ITO is to send the assessment order along with notice of demand, and tender for deposit of the amount due in a treasury or bank, to the assessee. This course must have been followed in the instant case as well. There is no reason for us to think that the income-tax office would have departed from this well-known and well-established practice of the Department when an order of assessment was made and it was found that certain amount of income-tax was due from the assessee. In the instant case, we have observed earlier that a C.A. firm could not have given such kind of advices. Hence, we are constrained to reject the affidavit given by the C.A firm. The affidavit given by the assessee is also liable to be rejected since it gains strength only from the affidavit given by the C.A. firm. 12. In the instant cases, the discussions m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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