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TMI Blog2019 (7) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... ., JM For the Assessee : Shri Thomson Thomas, CA For the Revenue : Smt. A.S. Bindhu, Sr. DR ORDER PER CHANDRA POOJARI, AM: These appeals filed by the assessee is directed against the common order of the CIT(A)-III, Kochi dated 04/02/2019 which relates to quantum additions as well as levy of penalty u/s. 271(1)(c) of the Act and pertain to the assessment years 2009- 10, 2010-11, 2012-13, 2013-14, 2014-15, 2015-16. 2. The assessee has raised the following grounds of appeal: 1. The order passed by the CIT(A) is against equity and justice. 2. The CIT(A) ought to have considered the fact that the appellant had received the assessment orders only 16/03/2018 and the appeals were filed within 30 days as permitted by section 249(2) and hence there was delay in filing the appeals. 3. If at all the date of service of notice is taken as the date on which the assessment orders were handed over to the ex-employee of M/s. Al Zarafa Travels and Manpower Consultants (P) Ltd., the CIT(A) ought to have considered the fact that the delay in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above appeals were filed before CIT(A) in the aforesaid cases on the following dates:- A.Y. Date of order Section Date of filing of appeal 2009-10 29.11.2016 153A r.w.s 144 19.03.2018 2010-11 30.11.2016 153A r.w.s.144 20.03.2018 2012-13 30.11.2016 153A r.w.s.144 20.03.2018 2013-14 30.11.2016 153A r.w.s.144 21.03.2018 2014-15 30.11.2016 153A r.w.s.144 21.03.2018 2015-16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... torship on 01.10.2009 and was not associated with the company. In the assessment orders also, address of the appellant was written as the address of the company, whereas as per PAN records, the address of the appellant is his residence address at Puthuppally, Kottayam. Appellant contacted one of the employees of the company and was informed that the assessment order was handed over to the erstwhile Chartered Accountant on 16.03.2018. If at all the date of service of the order at the office, it is prayed to condone the delay in filing the appeal at it was due to reasons beyond the control of the appellant. It may be noted that appellant was not a director of the company Al Zarafa Travels and Manpower Consultants (P) Ltd . He has resigned his directorship on 01.10.2009. His address as per PAN records is his residence address. The assessment orders and penalty orders were served on an ex-employee handed over the same to the erstwhile Chartered Accountant. The appellant got the assessment orders only on 16.03.2018. The appeals were filed on 20.03.2018. The service of the assessment order on the ex-employee of Al Zarafa Travels and Manpower Consult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in respect of penalty proceedings initiated u/s 271(1)(c)/271AAB, the assessee's erstwhile authorized representative had replied to this office by email requesting for adjournment on 26.05-2017. It is pertinent to mention the assessee himself has accepted the letter dated 26.05.2017, as the same has been placed as an exhibit in the course of filing of writ petition on 25.03.2018, before the Hon'ble High Court against the order u/s. 230. From the above, it is very clear that the assesse was aware of the assessment proceedings as could be evidenced by the filing of letter dated 26.05.2017. When the assessee could seek an adjournment from the penalty proceedings on 26.05.2017, it has to be the fact that he was aware of the assessment made. Therefore the claim that he was aware only on 14.03.2018, is false and misleading. In respect of point (iii), as stated supra, the assessee was clearly aware because of the filing of letter dated 26.05.2017. Therefore, it is clear that the assessee has got no reasons for the delay and it appears that the assessee had chosen to file an appeal only after his travel got prohibited by issue of an order u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el ban imposed by the UAE Government upon request from Government Agencies in India. Subsequenly, I approached the Honourable High Court of Kerala seeking permission to return to India and the High Court granted me permission to come to India and surrender before the investigation agencies. On 14lh March. 2018, I had to appear before the CBI Court, Emakulam in connection with getting my passport back as per the directions of the Honourable High Court of Kerala. In the CBI Court, an order u/s. 230 of the Income Tax Act, 1961 was handed over to the court by the Department lawyer in the form of a petition. Only at this point, I was aware of the assessments and orders imposing penalty. The assessment orders and orders imposing penalty were handed over to one of the ex-employees of the company M/s. Al Zarafa Travels Manpower Consultants (P) Ltd. alleging that I was the managing director of the company, when infact, I had resigned the directorship on 01.10.2009 and was not associated with the company. The address given in the assessment orders were that of the company whereas as per my PAN records available in Income Tax Data base, the address is my house at Puthuppa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occasion, Chartered Accountant James Thomas advised me to contact Sri. Varughese M. Uthup. However, since Sri. Varughese M. Uthup was out of the country, 1 could not contact him. On 13.03.2018, Sri. Varughese M. Uthup contacted me and asked me whether I had received any communication from the Income Tax Department. I appraised him about the fact that the assessment orders and penalty orders were handed over to Chartered Accountant Sri. James Thomas. 4.2 It was further submitted that in similar circumstances in the case of Al Zarafa Travels and Manpower Consultants (P) Ltd. in ITA Nos. 518-523/Coch/2018 vide order dated 04/02/2019, the Tribunal condoned the delay in filing the appeals before the CIT(A) and remitted to the file of the CIT(A) to decide the issue on the merit of additions made by the Assessing Officer. Accordingly, it was submitted that on the same logic, the delay in filing the present appeals may be condoned and remitted to the file of the CIT(A) to decide the issue on merit. The Ld. AR also filed written submissions on this count which is placed on record. 5. The Ld. DR submitted that the assessee was not coopera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to the assessee-company which is said to be the assessment order. Thereafter, Mr. Paul Varghese went to the Railway station at Ernakulam Junction for collecting the assessment order from the staff of the Department. To that extent, there is no dispute that the assessee s ex-employee had received the assessment order from the staff of the IT Department. The Department has not filed an counter affidavit in this regard. Shri Paul Varghese handed over the assessment order to the assessee s erstwhile Chartered Accountant, Shri James Thomas on 15/02/2017 who later expired on 15/06/2018. The assessee had also filed death certificate dated 15/01/2019, confirming the sad demise of Shri James Thomas, CA on 15/06/2018. 8.1 It was submitted before the CIT(A) that assessee s Managing Director, Shri Renny Eapen abandoned the company without informing the other Director, Smt. Susan Thomas. Smt. Susan Thomas is a non-resident who is employed in UAE for last two decades and was not conversant with the affairs of the company. 8.2 Subsequent to the search action u/s 132 of the IT Act against Shri Varughese M. Uthup on 27.03.2015, notices u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y on 13.03.2018. On receipt of the order, the managing director was contacted and was requested to file appeal against the order but no action was taken by him. In view of this, Smt. Susan Thomas took the initiative to file the appeal. But. for filing the appeal, Digital Signature was mandatory. To get Digital Signature, PAN was also mandatory. Hence, she had to apply for PAN, get PAN and then apply for Digital Signature. All this resulted in delay of filing the appeals before the CIT(A). 8.3 Therefore, we have to consider whether the assessee s failure is sufficient cause for condoning the delay. The Madras High Court considered an issue in the case of Sreenivas Charitable Trust v. Dy. CIT (280 ITR 357) and held that mixing up of papers with other papers are sufficient cause for not filing the appeal in time. The Madras High Court further observed that the expression sufficient cause should be interpreted to advance substantial justice. Therefore, advancement of substantial justice is the prime factor while considering the reasons for condoning the delay. 8.4 There is a technical defect in the appeals since the appeals wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deliberately with delay. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalise injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalising an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorised by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalise an illegal and unconstitutional order passed by the lower authority. Therefore, in our opinion, by preferring the substantial justice, the delay of 71 days has to be condoned. 8.6 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Chartered Accountant had already made arrangements for filing the appeal and as so many appeals were pending before the ITAT, he was under the impression that the appeal for this year also was filed. It was submitted that the non-filing of the appeal was due to an inadvertent omission on his part in handing over the file to the AR at Cochin. Hence, it was prayed that the delay of 2819 days in filing the appeal may be condoned. As such, this Tribunal condoned the above delay of 2819 days. 8.8 The Madras High Court in the case of Sreenivas Charitable Trust (supra) held that no hard and fast rule can be laid down in the matter of condonation of delay and the Court should adopt a pragmatic approach and the Court should exercise their discretion on the facts of each case keeping in mind that in construing the expression sufficient cause the principle of advancing substantial justice is of prime importance and the expression sufficient cause should receive a liberal construction. Therefore, this Judgment of the Madras High Court (supra) clearly says that in order to advance substantial justice which is of prime importance, the expression sufficient cause s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al order. The power given to the Tribunal is not to legalise an injustice on technical ground but to do substantial justice by removing the injustice. The Parliament conferred power on this Tribunal with the intention that this Tribunal would deliver justice rather than legalise injustice on technicalities. Therefore, when this Tribunal was empowered and capable of removing injustice, in our opinion, the delay in filing the appeals before the CIT(A) has to be condoned and the appeals of the assessee have to be admitted and disposed of on merit. 8.9.2 In view of the above, we condone the delay in filing the appeals before the CIT(A) and remit the issue to the file of the CIT(A) to decide the issue on the merit of the additions made by the Assessing Officer. Since the assessment order was passed ex parte u/s. 144 of the Act, the CIT(A), if required, may call for the remand report from the Assessing Officer and confront the same to the assessee before deciding the appeals. We also make it clear that if the CIT(A) or the Assessing Officer relied on any statement of the third parties so as to frame the impugned assessments on an earlier occasion, the same is to be con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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