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TMI Blog1995 (5) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... closed its business in 1983 and as such the whole burden was on Mr. Kamal Narayan who was sick and confined to bed. The reasons with reference to the late filing of appeal No. 1533 (Del.) 1990 are that the firm closed business in 1983, that the order of appeal dated 15-6-1987 was received by someone else and sent to the Advocate Shri M.L. Khanna who did not file the appeal on wrong thinking or for reasons not explained to the assessee, that there was no default of any kind on the part of the assessee, that Shri Kamal Narayan fell ill in 1989 and had a heart attack, and that on the coming of the Tax Recovery Officer, the said order dated 15-6-1987 was searched from the office of Shri M.L. Khanna and the appeal was filed. 4. The learned counsel for the assessee Shri Raj K. Tandon submitted at the outset that the Tribunal had granted interim stay in these cases vide its order dated 23-5-1990 in stay application No. 28 (Del.) 90 and it is to be deemed that the delay in filing the said appeals has already been condoned by the Tribunal. He further invited our attention to the affidavit filed by Shri Kamal Narayan, partner of the assessee-firm, wherein it has been stated in para 3 that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s fact will also lead to the conclusion that the appeals have been admitted and the delay has been condoned; (iii) the stay order passed by the Tribunal was an order under section 254 and that the department did not file any application under section 254(2) for rectification of mistake. The department also did not file any reference application under section 256(2) and in the circumstances the stay order became final. In this connection he also relied on rule 35 and rule 35A(1)(a) and 35A(2)(iv) of the ITAT Rules, 1963 ; (iv) The Tribunal has no power to review its own orders and that in case the question of condonation of delay is again considered, the same will amount to review of the stay order by the Tribunal; (v) the assessee does not stand to benefit in any way by filing the appeals late and that a liberal approach be adopted by the Tribunal in condoning the delay so that the cause of justice is advanced and the appeals are heard on merits ; (vi) the words 'communication of the order' as mentioned in column 9 of Form No. 36 mean knowledge of the taxpayer about the appeal order. In this connection he relied on the decision of the Hon'ble Orissa High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation under the IT Act. (d) MST Katiji's case for the proposition that the legislature has conferred power to condone delay by enacting section 5 of the Limitation Act, 1963, in order to enable the courts to do substantial justice to parties by disposing of matters on merits and that the expression " sufficient cause " in that section is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice and that justifiably a liberal approach has to be adopted on principle. (e) CST v. Nawi Hussain [1983] 54 STC 394 (All.) for the proposition that in case of dissolved firm partners may not take any steps despite service and thereby jeopardize the interests of others and in such cases an application under section 5 of the Limitation Act for the condonation of delay should be construed liberally as fair play and justice demand hearing and no-one should be denied this right unless he does not act bona tide. (f) R.M. Seshadri v. Second Addl. ITO [1954] 25 ITR 400 (Mad.) for the proposition that the Tribunal is not a Court and the levy of fee for preferring an appeal before the Tribunal does not offend Article 14 of the Constitut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 5296, wherein the powers of the Tribunal are discussed and it is mentioned that its powers are limited to the subject matter of appeal before it. He submitted that the assessee has taken specific grounds of appeal for condonation of delay in all these appeals, which in themselves are contradictory, and that the Tribunal is required to dispose of the said grounds before the appeals can be heard on merits. He further submitted that no evidence has been filed by the assessee that the assessment orders were received by the Advocate Shri M.L. Khanna and that the assessee was not aware and that the entire fault lied with the said Advocate. He submitted that the assessee has not filed any affidavit from the earlier Advocate Shri M.L. Khanna in this behalf. In the circumstances he submitted that each day of delay has to be explained by the assessee. He further submitted that Shri Kamal Narayan, partner of the firm, had appeared before the learned CIT (Appeals), as is mentioned in the order dated 15-6-1987 relating to quantum appeal and that in the circumstances full blame cannot be thrown on the earlier Advocate Shri M.L. Khanna, as the partner has to be vigilant of the impending order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received by Shri Kamal Narayan and that the notice dated 5-2-1990 is with reference to the penalties and interest and not with reference to quantum. In view of the foregoing, the learned departmental representative emphasised that it was a clear case of sheer negligence on the part of the assessee and its attitude towards tax matters and that there are no genuine reasons given by the assessee explaining the delay in filing the appeals and that all the reasons now being given are an after-thought and that in such circumstances the delay in filing the appeals should not be condoned. 5.1 The learned departmental representative further submitted that there are no specific provisions in the IT Act for granting stay and that the stay is being granted by the Tribunal by virtue of its inherent powers under the Act. He mentioned that for the purpose of getting stay, the assessee has to file information in accordance with Rule 35-A of the Appellate Tribunal Rules, 1963 and the assessee has to indicate in terms of Rule 35-A(2)(iv) the date of filing the appeal before the Tribunal and its number, if known. He submitted that the purpose behind the said provision is to enable the Tribunal to k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 36-A instead of the prescribed Form No. 36 was dismissed on the ground that nothing was explained about ocurrence of the defect and nor any effort was made to remove the defect later on and no affidavit was filed. Only a letter stating that it was inadvertence and due to sufficient cause was filed, which was treated as totally vague and ambiguous and not amounting to showing of sufficient cause. (f) Kantilal K. Advani v. Second ITO [1994] 25 ITD 57, wherein the Tribunal, Bombay Bench 'A', had considered the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition v. MST Katiji 167 ITR 471 and had observed that " However, the Supreme court in the aforesaid case regarding condonation of delay has stated that there is no presumption that the delay is occasioned deliberately or on account of culpable negligence. This shows that the Supreme Court would have taken a different view if the delay was caused by culpable negligence. In fact the observation of the Supreme Court that the litigant runs a serious risk suggests that the appeal might be dismissed because of the delay. In the present case, there has been culpable negligence by the assessee as pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... donation of delay in filing the appeals. (i) Smt. Phool Sabharwal v. CIT [1983] 141 ITR 774 (Delhi) for the proposition that a bona fide mistake of the counsel or his clerk can be a ground for the condonation of delay but it must essentially depend on the circumstances of the case. (j) Raju Ramchandra Bhangde v. CIT [1984] 148 ITR 391 (Bom.) for the proposition that the Tribunal was justified in not condoning the delay where the appeal was filed late by the assessee's counsel, who was his father, after a delay of 520 days. (k) Sital Prasad v. CIT [1991] 187 ITR 135 (All.) for the proposition that the Tribunal was justified in not considering medical certificate sought to be filed after presenting appeal to the Tribunal, which was filed late. 6. In reply, the learned counsel submitted that the cases relied upon by the learned departmental representative are distinguishable on facts and do not apply to the facts of the present case. He further emphasised that the learned departmental representative has not been able to cite even a single case where stay was granted and appeals were dismissed. With reference to the contradictions in the grounds of appeal for condonation of delay, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justified in the circumstances of the case. In view of the foregoing, we reject the arguments of the learned counsel that the Tribunal had already considered the question of condonation of delay while granting the interim stay. The next argument of the learned counsel is that the stay order was an order under section 254 of the I.T. Act and that the department had not filed any application under section 254(2) for rectification of the mistake or moved any reference application under section 256(1) against the said stay order. We feel that this argument of the learned counsel is too far-fetched and we cannot subscribe to this and in any case the interim stay order dated 23-5-1990 got vacated as the assessee could not fulfil the condition of furnishing bank guarantee to the satisfaction of the ITO and could not report compliance with the said condition to the Tribunal by 22nd June, 1990, as stipulated in the stay order. The next argument of the learned counsel that the mere fact of issuing a notice for hearing by the office of the Tribunal means acceptance of appeals under section 253(5) also cannot be accepted as the notice is given to both the parties for the purpose of making an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vere heart attack and the appeals with reference to penalty orders could not be filed and that when the Recovery Officer came to collect the demand, Shri Kamal Narayan discovered that the appeals were not filed. We feel that on the one hand the assessee is stating in paragraph 2 that some penalty orders and other orders were sent to the Advocate, which only means that they were received by the deponent and sent to the Advocate, on the other hand, the deponent has mentioned that the appeals were not filed by the Advocate and that the orders received remained unperused. It is not clear from paragraph 3 as to whether the orders were received by the deponent or by the Advocate. During the course of hearing the learned departmental representative had pointed out that no affidavit had been filed by the assessee from the former Advocate Shri M.L. Khanna and the Tribunal afforded an opportunity to the assessee to file such an affidavit. However, Shri Kamal Narayan informed the Tribunal on 23-3-1995 that the former counsel was not traceable and instead an affidavit of the present learned counsel Shri Raj K. Tandon has been filed, wherein the submissions already made before the Tribunal have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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