TMI Blog2012 (10) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... erations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay. - Delay condoned. - IT (SS) A NOS. 23 & 25 (HYD.) OF 2011 - - - Dated:- 18-5-2012 - Chandra Poojari And Asha Vijayaraghavan, JJ. K. C. Devadas for the Appellant V. Srinivas for the Respondent ORDER Chandra Poojari, Accountant Member These two appeals by the assessee are directed against the common order of the CIT(A)-I, Hyderabad dated 23.8.2004 for the block period from 1996-97 to 2002-03. Since common issues are involved, these appeals are clubbed together, heard together and are being disposed of by this common order for the sake of convenience. 2. Facts leading to the filing of the present appeals in brief are that there were search and seizure operations on the premises of the assessee on 5.2.2002, in the course of which incriminating documents and cash of ₹ 1,60,000 were seized. Assessee thereafter filed block return in Form No. 2B on 22.7.2002 admitting an undisclosed income of ₹ 23,15,677, on which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no provisions for restoration of appeal, as is being sought by the assessee. 6. Aggrieved by the above communication of the CIT(A) rejecting the petition of the assessee seeking restoration of appeal and adjudication of the same on merits, assessee preferred the other appeal, IT(SS)A No. 23/Hyd/2011 before us. 7. In the appeal which is directed against the order of the CIT(A) passed under S. 250 of the Act dated 23.8.2004, viz. IT(SS)A. No. 25/Hyd/2011, which is filed with a delay of 2491 days, grounds taken by the assessee are as follows- 1. The Order of the Commissioner of Income-tax (Appeals)-I, Hyderabad in dismissing the Appeal 'in limine as the admitted Tax was not paid by the Appellant is wholly unsustainable in Law and on facts. 2. The learned CIT(A)-I Hyderabad failed to note that the shortfall in payment of admitted tax was due to reasons beyond the control of the Appellant and therefore, the CIT(A)-I, Hyderabad, erred in dismissing the Appeal in limine . 3. Any other ground or grounds that may be urged at the time of hearing. 8. At the outset, we may note that the assessee has filed a petition in the form of an affidavit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urable defect, and as and when the defect is cured, the assessee is entitled to approach the appellate authority to admit the appeal and dispose of the same on merits. That being so, once the defect is cured by making payment of admitted taxes, the assessee is entitled for disposal of its appeal on merits, subject to condonation of delay by the CIT(A), in curing the defect by the assessee. 10. In support of the above contentions, learned counsel for the assessee placed reliance on the following decisions- ( a ) Improvement Trust v. Ujagar Singh [2010] 6 SCC 786 ( b ) Poonja Arcade v. Asstt. CIT [2010] 326 ITR 123/191 Taxman 291 (Kar.) ( c ) Sreenivas Charitable Trust v. Dy. CIT [2006] 280 ITR 357/154 Taxman 377 (Mad.) ( d ) Auto Centre v. State of Uttar Pradesh [2005] 278 ITR 291/148 Taxman 573 (All.) ( e ) Ganga Sahai Ram Swarup v. ITAT [2004] 271 ITR 512 (All.) ( f ) CIT v. Orissa Concrete Allied Industries Ltd. [2003] 264 ITR 186/[2004] 135 Taxman 187 (Cal.) ( g ) Vedabai Vaijayanatabai Baburao Patil v. Shantaram Baburao Patil [2002] 253 ITR 798/122 Taxman 114 (SC) ( h ) Venkatadri Traders Ltd. v. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect being cured by the assessee at his own convenience after overcoming all his personal difficulties. It is settled position of law that it is only marginal delays that can be condoned, and not inordinate delays running into several years. We may at this juncture, refer to the Third Member decision of Tribunal (Chennai) in the case of Jt. CIT v. Tractors Farms Equipments Ltd. [2007] 104 ITD 149, wherein drawing out a distinction between normal delay and inordinate delay, it has been observed, vide head-note on page 150 of the Reports (104 ITD) as follows- A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case, the consideration of prejudice to the other side will be a relevant factor, so the case calls for more cautious approach, in the latter case, no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The Court has to exercise the discretion on the facts of each case, keeping in mind that in considering the expression 'sufficient cause', the principle of advancing substantial justice is of prime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delay of 2491 days, and dismiss this appeal of the assessee as barred by limitation. 16. Now we will take up IT(SS)A No. 23/Hyd/2011 for adjudication. This appeal is against the communication of the CIT(A) dated 14.7.2011, declining to restore the appeal of the assessee, and thereby rejecting the petition of the assessee. In this case the assessee had filed an appeal on 12.4.2004 against the block assessment dated 27.02.2004 passed u/s. 158BC of the IT Act. The same was dismissed by the CIT(A) in limine as the admitted tax was not paid. The assessee vide letter dated 14.3.2011 requested the CIT(A) to restore the appeal as the admitted tax has been paid by that time. However, the CIT(A) refused the same by holding that there is no provision under the Act to restore the appeal which is dismissed for violation of provisions of section 249(4) of the I.T. Act. Against this the assessee is in appeal before us. 17. It is an admitted fact that as on the date of passing of the impugned order dated 23.8.2004 by the CIT(A), admitted tax was not paid and the appeal was defective in terms of S. 249(4) of the Act. That being so, the CIT(A) dismissed the appeal as non-maintainable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within that period. Section 249(4) : No appeal under this Chapter shall be admitted unless at the time of filing of the appeal,-- ( a ) Where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or ( b ) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him : Provided that, in a case filling under Clause (b) and on an application made by the appellant in this behalf, the CIT(A) may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of that clause. Section 254(1) : The Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. 21. For considering the powers of Tribunal contemplated in Sub-section (1) of Section 254, it would be imperative for us to refer the judgment of the Hon'ble Supreme Court rendered in the case of Huk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty. The power of the AAC under Section 251(1)(b) includes the power even to enhance the penalty subject to the requirement of Sub-section (2) of Section 251 of a reasonable opportunity of showing cause against such enhancement being given to the appellant assessed. This could have been done in the assessee's appeal itself filed in the present case. The power of the Tribunal to make an order of remand in such a situation is well-settled in Hukumchand Mills Ltd. v. CIT [1967] 63 ITR 232 (SC). 23. On plain reading of Sub-section (3) of Section 249 shall reveal that if the assessee showed sufficient reasons for late filing of his appeals, then such delay can be condoned and controversy would be silenced on merit. Similarly, for sake of explanation, if an assessee did not have sufficient funds for complying the requirement of Section 249(4) and has not filed the appeal within the time provided under Section 249(2), subsequent to expiry of limitation, he made compliance of Section 249(4) and filed the appeal with a prayer of condonation of delay then it would be in discretion of the first appellate authority to see whether sufficient reasons for late fili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rinciple of natural justice as recognized by all civilized states is of supreme importance when a quasi-judicial body embarks on determining disputes between the parties. 27. From the judgment of Hon'ble Delhi High Court, it is clear that whenever legal justice fails to achieve the solemn purpose of securing justice then natural justice is called in aid of legal justice. From the details submitted by the assessee in the paper book as extracted by us, it reveals that assesses kept on making the payment of tax along with interest in instalments. Had the assessee was having sufficient fund with him, then no prudent businessman would allow to swell the liability of interest in such a way. For example, the total tax required to be paid by the assessee in asst. yr. 1991-92 on the agreed return along with interest was ₹ 17,30,273. Against it, by the end of December, 1997, assessee has paid ₹ 26,09,843. Thus, it clearly indicates that assessee was not having sufficient funds at the relevant time for compliance of Section 249(4) which rendered the appeals of the assessee as defective one. In the interest of justice, we are of the opinion that these appeals deserve to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s failure to comply with Section 249(4) of the Act and in remitting the cases to the first appellate forum for disposal on merits. Accordingly, the question referred is answered in the affirmative. 28. Thus, we are fortified for our view by the above decision of the Hon'ble High Court. 29. The next issue for our adjudication is whether sufficient reasons exist for curing defect after expiry of limitation provided under Section 249(2) of the Act. Since, we have held in the upper part of the order that appeal filed in violation of Section 249(4) would be termed as a defective one and the moment defect is cured then those can be disposed of on merit subject to limitation. The Courts and the quasi-judicial bodies are empowered to condone the delay if a litigant satisfies the Court that there were sufficient reasons for availing the remedy after expiry of limitation. Such reasoning should be to the satisfaction of the Court. The expression sufficient cause or reason , as provided in Sub-section (3) of Section 249 of the Act, is used in identical position in a number of statutes and the Hon'ble Supreme Court as well as the Hon'ble High Courts have time and a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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