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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 ..... his Counsel. Further it was submitted that the words "sufficient cause" should be construed liberally and the Courts should adopt a pragmatic approach for advancing substantial justice to the assessee. The Ld A.R further submitted that the improper guidance given the Chartered Accountant was sincerely followed by the assessee and the same would constitute sufficient cause for condoning the delay. 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in that regard. (6) I say that the assessing officer ("the A.O.") passed the assessment order for A.Y. 1994-95 and A.Y. 1996-97 on 25.03.1997 and 25.03.1999, respectively, denying the claim u/s 80-0 of the Act. For the A.Y. 1994-95 and 1996 -97, I filed the appeal before the CIT (A) on 09.04.1997 and 29.04.1999, respectively. The CIT (A) dismissed the appeal filed before him for both the years. (7) I say that when my appeal for A.Y.1994-95 and A.Y. 1996 - 97 were dismissed by the CIT (A), my then Chartered 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 confo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; (13) I say that I am a law abiding citizen and nowhere in past I was guilty of any negligence or latches for any of my income tax obligations. I say that all that has been stated above is true to the best of my knowledge and belief Solemnly affirmed on this 19th day of July, 2011" 4. In support of the averments made in the affidavit, the assessee has filed a letter dated 15-04-2011 furnished by M/s Rajesh Rajeev & Associates, Chartered Accountants and also an affidavit dated 22-08-2013 furnished by one of the partners of the above said CA firm. For the sake of convenience, we extract below the contents of the said affidavit. "4. That for Assessment Years 1991-92 and 1993-94, the Appellant had claimed deduction under section 80-0 for the salary income earned by him. However, the claim of the 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e his order dated 01-02-2000. According to the assessee, the appellate order dated 01.02.2000 was received by him only on 20-03-2003, i.e., after expiry of about three years. (c) The appeal filed before Tribunal for AY 1993-94 was pending at the time the Ld CIT(A) passed orders for AY 1994-95 and 1996-97. (d) According to the assessee, his Chartered Accountants M/s Rajesh Rajeev & Associates had advised him not to file further appeals before the Tribunal for AY 1994-95 and 1996-97, since the appeal filed by him for AY 1993-94 was pending at that point of time before the Tribunal. It is stated further that the assessee has been advised by the above said CA firm that he can get relief by filing rectification petition for both the years before the AO u/s 154 of the Act, after the receipt of order from ITAT for AY 1993-94. (e) The Tribunal disposed of the appeal relating to AY 1993-94 on 29-06-2006 by restoring the issue relating to the deduction claimed u/s 80-O of the Act to the file of the AO. The assessing officer subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Seal AIR 1954 Cal.238, Hon'ble Calcutta High Court has held as under:- "The existence of "sufficient cause" is a condition precedent for the exercise of discretion under section 5 of the Indian Limitation Act. "sufficient cause" must mean a cause beyond the control of the party invoking the aid of the section. A cause for delay which the party could have avoided by the exercise of the care and attention cannot be a sufficient cause. In other words, the Court must be able to say, having regard to the facts and circumstances of the case that the delay was reasonable. A cause arising from the negligence of the party cannot be a "sufficient cause" within the meaning of section 5". 7. Now we shall examine the explanations/reasons furnished by the assessee to find out as to whether there was sufficient cause for him to file these appeals belatedly. (a) We have noted earlier that the Tribunal has passed a consolidated order for AY 1991-92 and 1993-94. It is pertinent to note that the Tribunal has considered a common issue relating to valuation of perquisites in both the years. Hence, the assessee is exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal would be decided in assessee's favour. Under the above discussed circumstances, in our view, a prudent man could not have kept idle accepting the advice given by the above said C.A firm alone, since the assessee is having acquaintance with many professionals. (d) In the letter dated 15-04-2011 and also in the affidavit dated 22- 08-2013 filed by Shri CA Chandrasekar of M/s Rajesh Rajeev & Associates, Chartered Accountants, it is stated that the assessee, being an individual, is having limited resources to individually pursue appeals for each year in the ITAT. However, we notice from the order passed by Ld CIT(A) for AY 1994-95, the assessee has spent Rs. 6,024 in Willingdon Club, Rs. 34,000/- in Belvedere Club at Oberoi Hotel. Further, we notice that the assessee has declared salary income of about Rs. 14.50 lakhs and Rs. 23.00 lakhs respectively for AY 1994-95 and AY 1996-97. There should not any controversy that, with the above said salary level in those days, the assessee could be considered as highly paid employee. These fact does not support the statement made by the C.A firm. (e) We have noticed that the assessee is required to show sufficient cause for not filin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is unfortunate that the revenue did not care to verify the records to find out the veracity of the said submissions. Further, the revenue has also not chosen to counter the averment made in the affidavit by furnishing any other counter affidavit / explanations. The Department Representatives, posted to argue the case of the revenue, should be aware that they are "Officers of the Court" and it is their primary duty to assist the bench to arrive at a fair and reasonable conclusion on the issues contended by either of the parties. It is unfortunate that we did not get any kind of assistance from the Ld D.R in this regard. 9. We have noticed that the assessee herein has claimed that he was following the advices given by his C.A firm. Hence, it is imperative to examine the said claim on the basis of facts available on record. In the process we shall also discuss about the veracity of the affidavit furnished by the Chartered Accountant, i.e., one of the partners of M/s Rajesh Rajeev & Associates, Chartered Accountants, who claimed to have given advice to the assessee to file rectification petitions. We are aware that the Chartered Accountancy profession commands high respect and value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of law and also for completing various statutory functions. For example, the Income tax Act prescribes time limits for filing return of income and also for completing the assessments. Thus, a prudent person should be aware that non-compliance of the provisions within the prescribed time limit may land him in trouble. 9.3 The rectification petitions claimed to have been suggested by M/s Rajesh Rajeev & Associates, Chartered Accountants are required to be filed u/s 154 of the Act. Under the provisions of sec. 154 of the Act, the rectification petitions are required to be filed within four years from the end of financial year in which the order sought to be amended was passed. In the instant cases, the assessment order for AY 1994-95 was passed on 27-03-1997 and the assessment order for AY 1996-97 was passed on 25-03-1999. Hence the four years time limit, prescribed u/s 154 of the Act, would expire on 31.3.2001 and 31.3.2003 respectively for AY 1994-95 and 1996-97. It would not be difficult for a Chartered Accountant to determine the above said time limit, since the Chartered Accountants are considered to be experts in handling the figures, i.e., in computations and calculations. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fession. 9.6 However, if it is considered for a moment that the above said C.A firm has really given such advice to the assessee herein and accordingly it has furnished the letter and affidavit, then, in our view, it may be showing signs of deteriorating standards with some of the Chartered Accountants in profession, which needs to be stopped on war footing by the ICAI. We have already noticed that 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 impugned problem. It is inconceivable that all the Chartered Accountants, whom the assessee might have had consultation or availed services, would have concurred with the view expressed by the above said C.A firm. If it is presumed for a moment that all the C.A.s have concurred with the said view, then it only shows that the C.A profession is losing its grip over the Income tax matters, which is another cause of concern for ICAI. The self study model coupled with 'on-site articled clerk training' embedded in the Chartered Accountancy course aims to achieve high quality education and training through undergoing pract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication or review application before the AO, once the issue is settled by the ITAT. We notice that the expressions "rectification" and "review" appear to have been used in the affidavit with the understanding that they are synonyms to each other. Under sec. 154 of the Act, mistakes apparent from record alone can be rectified and the question of "review" does not come within the ambit of that section. Further, we have already noticed that the question of filing rectification petition for assessment year 1996-97 does not arise at all, since the AO had actually allowed the deduction u/s 80-O of the Act in that year and it is the Ld CIT(A) who had withdrawn the said deduction. Thus, it is seen that the advice claimed to have been given by the C.A firm has been given without analysing the facts prevailing in the instant case and also without clear understanding of the provisions of the Act and their implications. We have also noticed that a C.A firm could not give such kind of advice, since it cannot forecast the outcome of an appeal filed before the Tribunal. We have already noticed that the CPE programs have been designed by ICAI with the noble objective of enlightening the Chartered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it given by the assessee could not relied upon. The relevant observations made by Hon'ble Allahabad High Court in the above cited case are extracted below, for the sake of convenience:- "The fact that the Department has not been able to make a definite assertion that the notices of demand were served on the assessee cannot help the assessee or the petitioners in this case. The failure of the respondents to make a positive assertion is not sufficient in view of the peculiar facts of the instant case, to lead to the conclusion that the assertion made by the assessee is true and worthy of reliance. It is neither a rule of prudence nor a rule of law that the statements made in an affidavit which remains uncontroverted, must invariably be accepted as true and reliable. Ordinarily, in the absence of denial, the statements may be accepted as true but if there are circumstances which suggest that the statements on affidavit should not be accepted as true, the absence of denial by the other side, would not by itself be sufficient to clothe the statements on affidavit with truthfulness and reliability. In vie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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