IN THE INCOME TAX APPELLATE TRIBUNAL
\nTHIRD MEMBER CASE, : AMRITSAR
\nBEFORE SHRI B.R BASKARAN, ACCOUNTANT MEMBER
\n(THIRD MEMBER)
\nITA No.169\/Asr\/2015
\nAssessment year : 2006-07
\nM\/s Bhagwati Colonizers Pvt. Ltd.,
\nSunni Gali, Gaushala Road,
\nMansa.
\nPAN \u2013 AACCB 4831F
\nVs. TheIncome-tax Officer,
\nWard-1(4),
\nMansa.
\nAPPELLANT RESPONDENT
\nAppellant by : Shri P.N Arora (Adv.)
\nRespondent by : Shri Sandeep Chauhan, CIT (DR)
\nDate of hearing : 29.08.2019
\nDate of Order : 22.10.2019
\nO R D E R
\nPer B.R Baskaran,Accountant Member
\nOn account of difference of opinion between Hon\u2019ble Judicial
\nMember and the Hon\u2019ble Accountant Member, the Hon\u2019ble President
\nwas pleased to nominate me as Third Member in the instant case
\nwith a direction to resolve the issue.
\n2. The difference of opinion has arisen in the matter relating to
\ncondoning the delay in filing of appeal by the assessee before the
\nTribunal. The appeal filed by the assessee was barred by limitation
\nby 571 days. The averments made in the affidavit filed by the
\nITANo.169\/Asr\/2015
\nPage 2 of 16
\ndirector named Shri Amba Parshad of the assessee company
\nexplaining the reasons for delay are extracted below:-
\n\u201cI take oath and solemnly depose as follows: –
\n1. That in this case the appeal was filed on 31.3.2015.
\n2. That there was delay in filing the appeal before the
\nLearned ITAT, Amritsar bench, Amritsar on account of the
\nfollowing reasons:-
\n(i) That the order of worthy CIT(A) dated 14\/6\/2013
\nwas not received by me or any authorized person
\nof the Company.
\n(ii) That we never knew the fact that the order has
\nbeen passed by the Learned CIT(A) on
\n14\/6\/2013. It was only in the penalty
\nproceedings it came to know that the appeal of the
\nassessee was decided and on receipt of the
\ninformation the appellant made a request before
\nthe Ld CIT(A) on 05\/03\/2014 for supply of the
\ncopy of order of Ld CIT(A).
\n(iii) That the copy of the order of worthy CIT(A) was
\nreceived on 04\/03\/2015 along-with a letter
\nstating that the copy of the order was received by
\nthe counsel who appeared before the Ld CIT(A) but
\nthe counsel never informed us about the disposal
\nof the appeal as well as about the order of the
\nworthy CIT(A).
\n(iv) That the delay took place in filing the appeal
\nbefore the Learned Bench and was reasonable
\nITANo.169\/Asr\/2015
\nPage 3 of 16
\nand sufficient cause for filing the belated appeal.
\nAs there such, it is prayed that the delay may
\nkindly be condoned under these circumstances.\u201d
\n3. Before Ld CIT(A), the assessee was represented by an Advocate
\nnamed Shri J.K. Gupta. During the course of hearing, the Ld
\nDepartmental Representative furnished a copy of prescribed Form
\nNo.35 filed by the assessee before Ld CIT(A), wherein the address of
\nShri J.K. Gupta was mentioned as the address to which the
\nnotice\/order to be served. As per the records of Ld CIT(A), the order
\nwas served on Shri J.K.Gupta on 08\/07\/2013 itself and a copy of
\nacknowledgement of such service was also placed on record.
\n4. According to the assessee, the Counsel Shri J.K. Gupta did
\nnot intimate or forward copy of appellate order passed by Ld CIT(A).
\nIt came to know of order passed by Ld CIT(A) only when the penalty
\nproceedings were commenced by the AO and accordingly it filed an
\napplication with the office of Ld CIT(A) on 05-03-2014 seeking a
\ncopy of the appellate order passed by Ld CIT(A). The copy of the
\norder was supplied by the office of Ld CIT(A) on 04-03-2015 (after
\nexpiry of about one year from the date of application filed by the
\nassessee). Immediately after the receipt of copy of the appellate
\norder on 04-03-2015, the assessee filed appeal before the Tribunal
\non 31.03.2015.
\n5. With regard to the petition filed by the assessee praying for
\ncondonation of delay, the Learned Accountant Member took the
\nview that the assessee has failed to show that it was prevented by
\nITANo.169\/Asr\/2015
\nPage 4 of 16
\nsufficient cause in filing the appeal belatedly. Accordingly the Ld
\nAccountant member held that the delay cannot be condoned and
\nthe appeal of the assessee is not liable to be admitted. The
\nLearned Judicial Member, however, took the view that the
\nexplanations given by the assessee along with relevant documents
\nclearly demonstrated the bonafide and sufficient cause for nonfiling
\nof appeal within the time limit. Accordingly Learned Judicial
\nmember took the view that the delay should be condoned.
\n6. There was difference of opinion between the members with
\nregard to the matter of framing questions relating to point of
\ndifference also. With regard to the point of difference, the Ld.
\nAccountant Member has framed the following questions:-
\n1.(a) Whether sufficient cause, which is a question of
\nfact, to be considered 1\u00e1ing the totality of the events that
\nhave taken place in particular case as explained by the
\nHon’ble jurisdictional High Court in Harish Kumar
\nChhabra vs. CIT (in ITA No.38\/2012, {O&M} dated
\n28.08.2012), be said to have been shown by the
\nassessee-appellant in the instant case or not?
\nb) Whether the assessee can, in the facts and
\ncircumstances of the case, be said to have satisfied the
\nCourt that it was prevented by sufficient cause from
\npreferring, the appeal under reference within the
\nprescribed time, which is the only criteria 1aid down by
\nthe clear enunciation of sections 3 & 5 of the Limitation AI
\n963?
\n2. Whether the assessee\u2019s conduct, vital in condoning the
\ndelay, be regarded as bona fide or not in the given facts
\nand circumstances of the case?
\nITANo.169\/Asr\/2015
\nPage 5 of 16
\n3. Whether the decision on merits, requiring delving into
\nthe facts of the case, should influence the decision of the
\nCourt in deciding the matter of limitation in-as-much as
\njurisdiction to adjudicate on merits could only follow the
\nadmission of the appeal, with it being otherwise trite law
\nthat the Courts have no power to extend the limitation,
\nwhere otherwise not liable to be condoned; the decision
\non merits being rendered only in view of the difference
\nbetween the members constituting the Bench? \u201c
\n7. The Ld Judicial Member did not agree with the questions
\nframed by Ld Accountant Member and accordingly the Ld
\nJudicial Member has framed following questions:-
\n\u201c(i) Whether communication of the order appealed
\nwhich is requires to be communicated to the assessee,
\nas reflects from the provisions of Sec 253(3) of the IT
\nAct, 1961 has been communicated in the instant case to
\nthe assessee or not, or can it be dispensed with.
\n(ii) Whether once the Revenue Department failed to
\nestablish on record the service of the order appealed
\ndirect or otherwise to the Assessee as held in the
\ninstant case, then the delay if any in filing the appeal is
\ncondonable or not.
\n(iii) Whether in the instant case, the sufficient and
\nbonafide cause has been shown by the assessee and
\ndelay has been properly explained by the assessee for
\nnot filing the appeal within the prescribed period of
\nlimitation.\u201d
\n8. In view of the difference of opinion between the members in
\nframing questions on the point of difference also, I am constrained
\nto frame the question on the point of difference to bring out the
\ncontroversy appropriately and to render decision on those
\nITANo.169\/Asr\/2015
\nPage 6 of 16
\nquestion(s). Upon considering the facts of the case, issue before me
\nand the questions proposed by both the members, I am of the view
\nthat the following question may be taken up to bring out difference
\nof opinion expressed by the Members:-
\n\u201cWhether, in the facts and circumstances of the case, the
\nexplanations furnished by the assessee for not filing the
\nappeal within the prescribed period of limitation would
\nconstitute sufficient cause or not and accordingly whether the
\ndelay in filing the appeal should be condoned or not?\u201d
\n9. The Ld A.R reiterated the submissions made in the petition
\nfiled by the assessee requesting the bench to condone the delay. He
\nsubmitted that the assessee has shown sufficient cause for the
\ndelay and further the delay is not intentional. He placed his reliance
\non the following case laws and submitted that, in the interest of
\nnatural justice, the delay should be condoned.
\n(a) Collector, Land Acquisition vs. Mst. Katiji&ors (167 ITR
\n471)(SC)
\n(b) CIT vs. West Bengal Infrastructure Development finance
\nCorp. Ltd ((2011)(334 ITR 269)(SC)
\n(c) Bhivchandra Shankar More vs. BaluGangaram More
\n(Civil Appeal No.4669 of 2019)(SC)
\n(d) Elnet Technologies Ltd vs. DCIT (99 taxmann.com
\n219)(Mad)
\n(e) Sivalogam Steels (P) Ltd vs. CESTAT (70 taxmann.com
\n301)(Mad)
\n(f) E-Governance Society vs. CIT (Exemption)(261 taxman
\n289)(HP)
\nITANo.169\/Asr\/2015
\nPage 7 of 16
\n(g) M\/s Lahoti Overseas Ltd vs. DCIT (ITA
\nNo.3786\/Mum\/2012)
\nThe Ld A.R submitted that the appellate order passed by Ld CIT(A)
\nwas served upon the earlier Counsel and he has failed to
\ncommunicate\/forward the same to the assessee. Hence the
\nassessee was not aware of the fact of passing of order by Ld CIT(A).
\nThe assessee came to know about the appellate order only when the
\nassessing officer started penalty proceedings. Immediately the
\nassessee applied for a copy of the order, but the same was supplied
\nafter one year from the date of application. Immediately after the
\nreceipt of the order, the assessee has preferred the present appeal.
\nHe submitted that the assessee should not be found fault with the
\ndelay, since the non-communication of the order by the earlier
\ncounsel and the delay in furnishing the copy of order by Ld CIT(A)
\nare beyond the control of the assessee. Accordingly he submitted
\nthat there was sufficient cause for the assessee in preferring the
\nappeal belatedly. He further submitted that, if the time of limitation
\nis computed from the date of service of order to the earlier counsel,
\nthe same would result in delay. However, if the time limit is
\ncomputed from the date of supply of the order to the assessee, the
\nsame is within the time limit.
\n10. The Ld D.R, on the contrary, submitted that the assessee has
\ngiven the address of the earlier counsel in Form No.35 as the
\naddress to which the notice\/order to be served. The Ld D.R also
\nfurnished a copy of Form No.35 filed before Ld CIT(A). Accordingly,
\nhe submitted that the Ld CIT(A) has duly served the appellate order
\nto the address of the Counsel, who has been duly authorized by the
\nITANo.169\/Asr\/2015
\nPage 8 of 16
\nassessee. He submitted that it is the duty of the assessee to followup
\nthe matter with his counsel. He submitted that the assessee
\nhas appointed the counsel and is also aware about the details of
\nhearing attended by the Counsel before Ld CIT(A). Hence, as a
\nprudent businessman, the assessee should have enquired about
\nthe results of the appeal. However, the assessee has remained
\nsilent, lethargic and has simply put the blame on the earlier
\ncounsel, which is also not supported by any material. Accordingly
\nthe Ld D.R submitted that there was no sufficient cause for the
\ndelay and hence the delay should not be condoned.
\n11. In the rejoinder, the Ld A.R submitted that, since there was
\nlapse on the part of the earlier counsel in the form of noncommunication
\norder and in view of the strained relationship, there
\nwas no co-operation from the earlier counsel and hence the
\nassessee could not get a confirmation letter him. Hence the
\nassessee was constrained to change the counsel. Accordingly he
\nsubmitted that the bonafides of the submissions made in the
\naffidavit should not be doubted with.
\n12. I heard the parties on this issue. Before proceeding further, I
\nprefer to extract below some of observations made\/principles laid in
\nthe matter of condonation of delay by Hon’ble Courts. In the
\ndecision rendered by Hon’ble Supreme Court in the case of Esha
\nBhattacharjee vs. Managing Committee of Raghunathpur Nafar
\nAcademy & others (Civil Appeal Nos.8183 \u2013 8184 of 2013), the
\nHon’ble Supreme Court has referred to some of the decisions
\nrendered by Hon’ble Courts on the principles to be followed while
\nITANo.169\/Asr\/2015
\nPage 9 of 16
\nadjudicating the issue of condonation of delay. For the sake of
\nconvenience, I extract below some of them:-
\n\u201c(a) In Collector, Land Acquisition, Anantnag and another v.
\nMst. Katiji and others (supra), a two-Judge Bench observed
\nthat the legislature has conferred power to condone delay by
\nenacting Section 5 of the Indian Limitation Act of 1963 in order
\nto enable the courts to do substantial justice to parties by
\ndisposing of matters on merits. The expression \u201csufficient
\ncause\u201d employed by the legislature is adequately elastic to
\nenable the courts to apply the law in a meaningful manner
\nwhich subserves the ends of justice, for that is the life-purpose
\nfor the existence of the institution of courts. The learned
\nJudges emphasized on adoption of a liberal approach while
\ndealing with the applications for condonation of delay as
\nordinarily a litigant does not stand to benefit by lodging an
\nappeal late and refusal to condone delay can result in a
\nmeritorious matter being thrown out at the very threshold and
\nthe cause of justice being defeated. It was stressed that there
\nshould not be a pedantic approach but the doctrine that is to be
\nkept in mind is that the matter has to be dealt with in a
\nrational commonsense pragmatic manner and cause of
\nsubstantial justice deserves to be preferred over the technical
\nconsiderations. It was also ruled that there is no presumption
\nthat delay is occasioned deliberately or on account of culpable
\nnegligence and that the courts are not supposed to legalise
\ninjustice on technical grounds as it is the duty of the court to
\nremove injustice. In the said case the Division Bench observed
\nITANo.169\/Asr\/2015
\nPage 10 of 16
\nthat the State which represents the collective cause of the
\ncommunity does not deserve a litigant-non grata status and the
\ncourts are required to be informed with the spirit and
\nphilosophy of the provision in the course of interpretation of the
\nexpression \u201csufficient cause\u201d.
\n(b) In G. Ramegowda, Major and others v. Special Land
\nAcquisition Officer, Bangalore (1988)(2 SCC 142),
\nVenkatachaliah, J. (as his Lordship then was), speaking for the
\nCourt, has opined thus:
\n\u201cThe contours of the area of discretion of the courts in the
\nmatter of condonation of delays in filing appeals are set out
\nin a number of pronouncements of this Court. See : Ramlal,
\nMotilal and Chhotelal v. Rewa Coalfield Ltd.(1962)(2 SCR
\n762); Shakuntala Devi Jain v. Kuntal Kumari(1969)(1 SCR
\n1006); Concord of India Insurance Co. Ltd. V. Nirmala
\nDevi(1979)(3 SCR 694); Lala Mata Din v. A.
\nNarayanan(1970)(2 SCR 90); Collector, Land Acquisition v.
\nKatiji etc. There is, it is true, no general principle saving the
\nparty from all mistakes of its counsel. If there is negligence,
\ndeliberate or gross inaction or lack of bona fide on the part
\nof the party or its counsel there is no reason why the
\nopposite side should be exposed to a time-barred appeal.
\nEach case will have to be considered on the particularities
\nof its own special facts. However, the expression \u2018sufficient
\ncause\u2019 in Section 5 must receive a liberal construction so as
\nto advance substantial justice and generally delays in
\npreferring appeals are required to be condoned in the
\nITANo.169\/Asr\/2015
\nPage 11 of 16
\ninterest of justice where no gross negligence or deliberate
\ninaction or lack of bona fides is imputable to the party
\nseeking condonation of the delay.\u201d\u2026.
\n(c) In this context, we may refer with profit to the authority
\nin Oriental Aroma Chemical Industries Limited v. Gujarat
\nIndustrial Development Corporation and another (2010)(5
\nSCC 459), where a two-Judge Bench of this Court has
\nobserved that the law of limitation is founded on public
\npolicy. The legislature does not prescribe limitation with the
\nobject of destroying the rights of the parties but to ensure
\nthat they do not resort to dilatory tactics and seek remedy
\nwithout delay. The idea is that every legal remedy must be
\nkept alive for a period fixed by the legislature. To put it
\ndifferently, the law of limitation prescribes a period within
\nwhich legal remedy can be availed for redress of the legal
\ninjury. At the same time, the courts are bestowed with the
\npower to condone the delay, if sufficient cause is shown for
\nnot availing the remedy within the stipulated time.
\nThereafter, the learned Judges proceeded to state that this
\nCourt has justifiably advocated adoption of liberal approach
\nin condoning the delay of short duration and a stricter
\napproach where the delay is inordinate.
\n(d) In Improvement Trust, Ludhiana v. Ujagar Singh and
\nothers(2010)(6 SCC 786), it has been held that while
\nconsidering an application for condonation of delay no
\nstraitjacket formula is prescribed to come to the conclusion if
\nITANo.169\/Asr\/2015
\nPage 12 of 16
\nsufficient and good grounds have been made out or not. It
\nhas been further stated therein that each case has to be
\nweighed from its facts and the circumstances in which the
\nparty acts and behaves.\u201d
\n13. The principles that emanate from the above said decisions are
\nthat, in the matter of condonation of delay in filing appeals beyond
\nthe limitation period, the courts are empowered to condone the
\ndelay, provided the litigant is able to demonstrate that there was
\n\u201csufficient cause\u201d in preferring appeal beyond the limitation period.
\nThe Courts have also held that the expression \u201csufficient cause\u201d
\nshould receive liberal construction so as to advance substantial
\njustice. Hence the question of condonation of delay is a factual
\nmatter and the result would depend upon the facts of the case and
\nthe cause shown by the assessee for the delay. It has also been
\nopined that generally delays in preferring appeals are required to be
\ncondoned in the interest of justice, where no gross negligence or
\ndeliberate inaction or lack of bona fides is imputable to the party
\nseeking condonation of the delay.
\n14. Now I shall turn to the facts of the present case. In the
\naffidavit, the main reason cited by the assessee for the delay is that
\nthe copy of appellate order was received by the counsel who
\nappeared before the Ld CIT(A), but the counsel never informed the
\nassessee about the disposal of the appeal by Ld CIT(A). It is a fact
\nthat the office of Ld CIT(A) served the appellate order to the counsel
\nof the assessee, as the address of the counsel was given in Form
\nNo.35 as the address to which notice\/order to be served. Once the
\nITANo.169\/Asr\/2015
\nPage 13 of 16
\norder was served, it is the duty of the Counsel to inform the
\nassessee about the order received by him. According to the
\nassessee, the Counsel did not inform or forward the copy of
\nappellate order to it.
\n15. Since the assessee has put blame on the Counsel, it was
\nspecifically asked by the bench as to whether the assessee could get
\na letter from the Counsel in support of the averments made in the
\naffidavit. The Ld A.R submitted that it may not be possible to get a
\nletter from the counsel due to strained relationship between the
\nassessee and counsel, since there was lapse on the part of the
\ncounsel.
\n16. An assessee usually engages a counsel to advise him and
\nalso to deal with legal matters and hence, in the normal
\ncircumstances, an assessee fully places his reliance on the counsel,
\ndue to domain expertise possessed by the Counsel. In that
\nsituation, generally the assessee should not be put in trouble for
\nthe mistake, if any, committed by a counsel. The following
\nobservations made Hon’ble Supreme Court in the case reported in
\nAIR 1971 Ker. 211 @ 215 supports the above said view:-
\n\u201cThe law is settled that mistake of counsel may in certain
\ncircumstances be taken into account in condoning delay
\nalthough there is no general proposition that mistake of
\ncounsel by itself is always a sufficient ground. It is always a
\nquestion whether the mistake was bonafide or was merely a
\ndevice to cover an ulterior purpose such as laches on the part
\nITANo.169\/Asr\/2015
\nPage 14 of 16
\nof the litigant or an attempt to save limitation in an
\nunderhand way\u2026\u2026\u2026\u201d
\nThough the above said observations were made in the context of the
\nwrong advice given by the Counsel, I am of the view that the above
\nsaid proposition can also be conveniently extended to the lapse of
\nthe counsel in not communicating the appellate to the assessee on
\nright time. When an assessee authorizes a counsel to appear on his
\nbehalf, such authorization is given by placing faith on the legal
\nexpertise of the Counsel and also with the hope that the counsel
\nshall take care of the interest of the assessee. Hence, when there is
\na lapse on the part of the legal counsel, in my view, the assessee
\nshould not be found fault with, unless it is shown that the blame
\nput on the counsel with malafide intentions in order to cover up
\nthe mistake\/lapse on the part of the assessee. In the instant case,
\nit is the contention of the Ld D.R that the explanation of the
\nassessee is not supported by any evidence. In my view, the
\nsubmission of the Ld A.R that the assessee could not collect a letter
\nfrom the Counsel in view of the strained relationship, is a
\nreasonable explanation when we take into account human conduct
\nand probabilities, since a professional counsel cannot be expected
\nto admit his lapses, lest it should affect his reputation. In any case,
\nno material was brought on record by the revenue to show that the
\nassessee was continuing to avail the services of very same counsel
\neven after noticing his lapse. Hence, I am of the view that the
\nreason given by the affidavit cannot be considered to be a malafide
\none. It is well settled proposition that the mistake on the part of the
\ncounsel constitutes sufficient cause in the matter relating to
\ncondonation of delay.
\nITANo.169\/Asr\/2015
\nPage 15 of 16
\n17. The assessee has also submitted that it had applied for a copy
\nof order by filing application with the office of Ld CIT(A) on 05-03-
\n2004 and the same was supplied to the assessee on 04-03-2015.
\nThe delay that has occurred in supplying copy of order cannot be
\nattributed to the assessee, since it is beyond the control of the
\nassessee. I notice that the assessee has filed appeal before the
\nTribunal on 31.3.2005, i.e., immediately after the receipt of copy of
\norder.
\n18. The issue before me can be looked from another angle. I
\nnotice that the Hon\u2019ble Accountant member, even though declined
\nto condone the delay, yet he has adjudicated the grounds urged on
\nmerits. The Hon\u2019ble Judicial Member has also agreed with the view
\ntaken by Hon\u2019ble Accountant Member on the grounds urged on
\nmerits. Thus, in effect, the appeal has been disposed of on merits.
\nThe Hon\u2019ble Madras High Court considered an issue relating to
\ncondonation of delay in the case of Vijayeswari Textiles Ltd vs. CIT
\n(2003)(131 Taxman 833) on identical circumstances, i.e., in the
\ncase before Hon\u2019ble Madras High Court also, the Tribunal had
\nrefused to condone the delay, but disposed the appeal on merits
\nalso. The Hon\u2019ble Madras High Court observed as under:-
\n\u201c7. Matters relating to condonation of delay are indeed
\ndiscretionary and are normally left to the Tribunal and this
\ncourt will not ordinarily interfere with the discretion. In this
\ncase, as we have already pointed out, the Tribunal did not
\nstop with the order declining to condone the delay, but
\nconsidered the matter on merits and has practically treated
\nITANo.169\/Asr\/2015
\nPage 16 of 16
\nthe appeal as being properly before it and has answered the
\nquestion brought before it with reference to the material
\nplaced on record. It is in the circumstances, we hold that the
\nTribunal was in error in not condoning the delay. The
\nquestion regarding the correctness of the Tribunal\u2019s holding
\nthat the delay is not to be condoned is therefore answered in
\nfavour of the assessee and against the Revenue\u2026.\u201d
\nAccording to the ratio of the above said decision, if the appeal is
\nadjudicated on merits, then refusing to condone the delay is an
\nerror.
\n19. In view of the foregoing, I am of the view that the assessee
\nhas shown sufficient cause for the delay in filing appeal before the
\nTribunal and accordingly I concur with the view taken by Hon\u2019ble
\nJudicial Member.
\n20. The Registry of ITAT is directed to list these matters before the
\nDivision Bench for passing of orders in accordance with the
\nmajority view.
\nSd\/-
\n(B.R Baskaran)
\nAccountant Member
\nBangalore,
\nDated, 22nd October, 2019.
\n\/ vms \/<\/p>\n","protected":false},"excerpt":{"rendered":"
When an assessee authorizes a counsel to appear on his behalf, such authorization is given by placing faith on the legal expertise of the Counsel and also with the hope that the counsel shall take care of the interest of the assessee. Hence, when there is a lapse on the part of the legal counsel, in my view, the assessee should not be found fault with, unless it is shown that the blame put on the counsel with malafide intentions in order to cover up the mistake\/lapse on the part of the assessee.<\/p>\n