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2018 (6) TMI 1536 - AT - Income TaxCondonation of delay filing appeal - Deduction u/s. 80IB denied on job work income earned in mixing of rubber compounds - delay in filling appeal - delay of 2819 days - sufficient cause - reason for delay - period of limitation - Held that:- 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 2819 days has to be condoned. Whether 2819 days was excessive or inordinate? - There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT v. K.S.P. Shanmugavel Nadai and Ors.[1984 (4) TMI 24 - MADRAS HIGH COURT] considered the delay of condonation and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 2819 days cannot be considered to be inordinate or excessive. In this case, the issue on merit regarding granting of deduction u/s. 80IB was covered in favour of the assessee by the Judgment of the jurisdictional High Court. Therefore, for the purpose of advancing substantial justice which is of prime importance in the administration of justice, the expression "sufficient cause" should receive a liberal construction. Thus we condone the delay of 2819 days in filing the appeal and admit the appeal for adjudication. With regard to the deduction u/s.80IB on the job work income earned in mixing of rubber compounds, which came up before this Tribunal in assessee’s own case [2014 (1) TMI 1037 - ITAT COCHIN] there is nothing in the section to indicate that article or thing produced or manufactured should be final product in itself. So much so, the activity of the assessee in their new industrial unit, which is mixing rubber with chemicals, process oil etc., making compound rubber, is covered by section 80IB of the Act - Decided in favour of assessee.
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