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TMI Blog2024 (1) TMI 1223X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee-company in relation to closing of accounts and preparation of annual reports for the year 31.3.2019 and to comply various other statutory formalities; that the top management was also busy in various meetings, negotiations, discussions with the stakeholders for finalizing various other projects expansion programmes of the assessee-company; that due to these heavy pressure on the management, the order of the ld. Pr. CIT could not be forwarded to the tax consultants of the assessee for contemplating further course of action, hence the impugned delay was caused. It is therefore prayed that the impugned delay being unintentional, the same be condoned, and the appeal may be taken for adjudication on merits. The relevant contents of the letter dated 29.9.2023 are extracted as under: "3. The order of the PCIT u/s. 263 was sent to the Finance Department of the Company. The Finance Department of the Company was pre-occupied with the closing of accounts for financial reporting for the year ending 31-3- 2019. The Company was required to complete several formalities pertaining to closing of books of accounts as well as GST compliances. The Finance department was under pressure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taken and the appeal may please be admitted. Justice should not be denied on account of procedural lapses. We therefore request to condone the delay in filing the appeal and admit the same." 3. The ld.counsel for the assessee contended that these being sufficient cause for the impugned delay, in the interest of justice the same be condoned. He relied on various case laws in this regard. 4. The ld.DR vehemently opposed the application for condonation of delay filed by the assessee stating that there was inordinate delay of 262 days and no sufficient cause was adduced by the assessee for the delay. 5. We have heard contentions of both the parties; gone through the facts relating to delay in filing of the appeal as presented before us, and have also gone through various settled decisions of higher Courts on the issue of condonation of delay. Section 5 of the Limitation Act and section 253(5) of the Act provides power to condone delay on demonstrating sufficient cause to the satisfaction of the courts. This satisfaction accordingly has been held by Courts to be interpreted liberally, for advancement of substantial justice. The Hon'ble Apex Court in the case of Collector, Land A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. Making a justice-oriented approach from this perspective, there was sufficient cause for condoning the delay in the institution of the appeal. The fact that it was the 'State' which was seeking condonation and not a private party was altogether irrelevant. The doctrine of equality before law demands that all litigants, including the State as a litigant, are accorded the same treatment and the law is administered in an even handed manner. There is no warrant for according a step-motherly treatment when the 'State' is the applicant praying for condonation of delay. In fact exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 8 of the Income Tax (Appellate Tribunal) Rules, 1963, as they are a blend of descriptive and argumentative contents. In fact, these grounds of appeal, solely focus on challenging the validity of the revisionary order of the ld. Pr. CIT passed under section 263 of the Act and invocation of provisions of section 52(2)(viib) of the Act by debunking the calculation of fair market value of shares done by the assessee and accepted by the AO, under Rule 11UA of IT Rules. By the impugned order, the ld. Pr. CIT set aside the assessment order passed by the ld.AO under section 143(3) of the Act holding it as erroneous and prejudicial to the interest of the Revenue. Our discussions for adjudication of this issue as follows. 10. The error noted by the ld. Pr. CIT in the assessment order framed in the case of the assessee under section 143(3) of the Act was to the effect that the AO had failed to make proper inquiries regarding valuation of fair market value of shares issued by the assessee during the year at a premium, which valuation as per the ld. Pr. CIT was not in accordance with law as done by the assessee. As per the ld. Pr. CIT, the fair market value of the shares was below premium at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 Reserves & Surplus 14,33,64,935 Provision for taxation 95,00,000 Amount set apart for equity and preference dividend 0 Any amount representing provisions made for unascertained liabilities 0 Any amount representing contingent liabilities 0 Book value of liabilities 49,94,01,766 Note No.3 - Calculation of amount of paid up of equity shares 46,94,01,766 Particulars Amount Paid up share capital 4,00,00,000 Amount of paid up share capital 4,00,00,000 11. Before us, the assessee has not raised any contention or contested the calculation of the FMV of the shares by the ld. Pr. CIT at Rs. 47.07 per shares. His argument before us, against revisionary order passed by the ld. Pr. CIT is that, the ld. Pr. CIT has held the assessment order erroneous causing prejudice to the Revenue without dealing with the contention raised by the assessee, and without dealing with and/or distinguishing the case laws referred by the assessee in support of its contention before him. 12. The ld.counsel for the assessee, in this regard, pointed out that during revisionary proceedings, the assesseehad contended to the ld. Pr. CIT that these 5,00,000 shares issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee, and also case laws referred to before him in the case of Vaani Estates (P.) Ltd. Vs. ITO (supra) at para-6 of his order as under: "The submission of the assessee has been considered and not found tenable. The assessee company has converted the amount of unsecured loans of Rs. 3,00,00,000/-- in the name of existing share holders, in Equity shares at a premium of 50 Rs. Per share. The main contention of the assessee is that no fresh money has been brought in through this issuance of equity shares and the shares have been issued to the existing share holders in the same proportion in their pre issuance share holding pattern. The assessee has referred various judicial pronouncements and mainly relied upon the decision of Madras ITAT in the case of Vaani Estates. In the instant case, the fact are totally different from the facts present in the case of the assessee company. The ITAT has held in that case as the shares have been transferred from the mother to her daughter and no fresh money has been introduced in the balance sheet, the provisions of section 52(2)(vii) are not attracted in this case." He therefore stated that the argument of the ld.counsel for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the assessee, the ld. Pr. CIT has not dealt with. We find that para-6.1 to 6.3 of the ld. Pr. CIT order deals with the above contentions of the assessee. The same is extracted hereunder for brevity: 20. As is evident from the above, the ld. Pr. CIT has noted above contentions of the assessee, as also taken note of the case laws cited by the assessee, and has rejected the same stating that it is acceptable legal principle that an interpretation cannot be given to a deeming fiction so as to bring to naught. He has also stated that the case laws referred to by the assessee have no direction relation to the case of the assessee-company. We have also noted that the ld. Pr. CIT has clearly distinguished on facts the decision of Chennai Bench of the ITAT and the ld.counsel for the assessee was unable to point out any infirmity in distinction so made by the ld. Pr. CIT. 21. As for the decision cited by the ld.counsel in the case of Sudhir Menon HUF (supra), we have noted from the ld. Pr. CIT order, from where gist of the case is reproduced at page no.7 of the order that the issue in the said case related to the invocation of the provisions of 56(2)(vii) of the Act which relate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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