TMI Blog2011 (1) TMI 1510X X X X Extracts X X X X X X X X Extracts X X X X ..... convenience, we heard them together and dispose of the same by way of this common order. 4. Mr. Vijay Mehta, learned counsel for the assessee first argued the issue of condonation of delay. He took this bench through the condonation petition filed by the assessee as well as the affidavit filed by him. His case is that the same amount has been assessed both in the regular assessment as well as in the block assessment and he was under a bonafide belief that the single appeal would be sufficient. He further submits that this belief arose out of advice given to him by a local Chartered Accountant at Goa. Later, this mistake was realized and the appeal against the block assessment order as confirmed by the CIT(Appeals) was filed with a petition for condonation of delay.. 5. Mr. Vijay Mehta further filed an affidavit given by Mr. Ganesh M. Daivajna, Chartered Accountant and partner of M/s Ganesh Ganesh Daivajna Co., Goa wherein the Chartered Accountant stated that in view of the fact that the same addition was made twice and as an appeal had already been filed against the order of the CIT(Appeals) for the assessment year 2002-03, he on his misunderstanding of law and facts, did a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is affidavit stated as follows : 4. I say that since the addition in both the assessments was confirmed byt Ld. Commissioner of Income-tax (Appeals) vide order dated 05.07.2006 for A.Y. 2002-03 and vide order dated 01.03.2007 for the block period, I advised that the addition cannot be made at two places. Since appeal is already filed before Hon ble ITAT against the order of CIT(A) for A.Y. 2002-03 on 27.09.2006, there was no need to file any appeal against the order of Ld. CIT(A) in respect of the block period. 5. I say that the said advice was given based on my understanding of the law and the facts of the case. In the condonation petition the assesse pleads that he was under a bonafide belief that the same amount cannot be added twice in two different assessments which is a double addition and in such circumstances, under an advice of a professional he believed that the single appeal would suffice. In our humble opinion, the delay caused due to wrong legal advice given by the counsel should be condoned as the delay was due to a reasonable cause. This Bench of the Tribunal in the case of Priyanka Chopra (supra) at para 20, 21 and 22 at pages 13 to 17 observed as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Representative. A litigant may be justified in believing that his/her Representative would discharge his professional obligation. Therefore in the case, where it is brought on record that the party has done everything in its power which is necessary for legal proceedings, the court should be liberal in considering the sufficient cause and should lien in favour of such party. However, the litigant does not stand to benefit by filing an appeal at a belated stage. Whenever substantial justice and technical consideration are opposed to each other, cause of substantial justice has to be preferred. Court should take justice oriented approach while deciding the application for condonation of delay . It does not mean a litigant has license to approach the court at its will. 21. In the case of N Balakrishnan V/s M Krishnamurthy reported in (1998) 7, SCC 123 vide paragraphs 9 and 13 have held as under : 9. It is axiomatic that condonation of delay is a matter of discretion of the court Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own by the Tribunal applies to the facts of this case. 9. On the issue of condonation of delay we find that recently the Hon ble Supreme Court in the case of Improvement Trust, Ludhiyana vs. Ujagar Singh and Others, Civil Appeal No. 2395 of 2008, judgment dated 9th June, 2010, at para 1 held as follows : While considering the application for condonation of delay no straight jacket formula is prescribed to come to a conclusion if sufficient and good grounds have been made out or not. Each case has to be made from its facts and the circumstances in which party acts and behaves. From the conduct, behavior and attitude of the appellant it cannot be said that it has been absolutely callous and negligent in prosecuting the matter. Thereafter at para 2, it held as follows : After all, justice can be done only when the matter is fought on merits and in accordance with law rather than to dispose it of on such technicalities and that too at the threshold. At para 3 it held as follows : It is pertinent to point out that unless malafide are writ large on the conduct of the party, generally as a normal rule, delay should be condoned. In the legal arena, an attempt sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that the assessee was under a bonafide belief, that he need not file an appeal against the order of the CIT(Appeals) dated 01-03-2007. Thus the delay. We find that the delay was not because of any malafide or deliberate intention and in fact the assessee has been pursuing a legal remedy in other proceedings. Thus we are of the considered opinion that the assessee has explained the delay, by giving sufficient and reasonable explanation which is supported with evidence. 11. On these facts and circumstances, we condone the delay and admit the appeal in IT(SS)A.No. 24/Mum/2009. 12. ITA No. 5102/Mum/2006. Mr. Vijay Mehta, learned counsel for the assessee, took up the appeal for the assessment year 2002-03. He submitted that the very same addition was made by the AO, both in the block assessment, as well as in the regular assessment. He filed a sheet giving chronology of events and pointed out that the regular assessment order u/s 144 was passed on 18-03-2005 for the assessment year 2002-03 and that thereafter a notice u/s 158BD was issued on 12-08-2005, for the reason that the original notice dated 20-04-2004 could not be served. He pointed out that the regular assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition u/s 144 and on this ground also it cannot be stated that this is a protective addition. He contended that mear mention that this is a protective addition does not decide the issue. Thus he submitted that this is a substantive addition made u/s 143(3)/144 for the assessment year 2002-03 and that this is not a protective addition. 13. On merits he submitted that, the addition is based on certain statements taken from third parties and the assessee has not been given an opportunity to cross examine those person. Thus he submits that the addition is bad in law. 14. The learned DR, Mr. Pavan Ved, opposed the contentions of the assessee and submitted that the assessee has not raised the issue that the addition in the regular assessment, is not the protective assessment, before the first appellate authority. He took this Bench through the statement of facts filed by the assessee before the CIT(Appeals) and submitted that nowhere in the statement of facts the assessee has raised the contention that this is not a protective assessment. Thus as per the learned DR the issue is raised for the first time. Further, the learned DR submitted that notice u/s 158BD was originally is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down by the various Courts have not been followed by the AO while stating that the said addition, assessment for the assessment year 2002-03 was a protective assessment. 16. Rival contentions heard. On a careful consideration of the facts and circumstances of the case and a perusal of the papers on record and the orders of the authorities below as well as the case laws cited, we hold as follows. 17. At last para of page 2 of the assessment order the AO states that a survey action u/s 133A was carried on on the assessee on 26-03-2006 and statement of Mr. Danial Shah, Director of the assessee company u/s 131 of the Act was recorded. It is further stated that during the survey operations the assessee company could not produce any documentary evidence or video clips of the advertisements. Thereafter it is stated that one Mr. Dilip Chhabria, Director of Sunjeet Advertising Pvt. Lt., had admitted on oath during search operation that accommodation bills were issued on 5% commission. The AO made an independent enquiry on 26-03-2003, with Commercial Officer, Doordarshan. The Director, Doordarshan vide letter dated 02-04-2003 denied of having telecast any advertisement pertaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment has preceded the addition on the same issue in the block assessment.` 20. We now examine the legal position. The Hon ble Supreme Court in the case of Lalji Haridas (supra) at page 392 held as follows : In cases where it appears to the income-tax authorities that certain income has been received during the relevant year but it is not clear who has received that income and, prima facie, it appears that the income may have been received either by A or B or by both together, it would be open to the relevant income-tax authorities to determine the said question by taking appropriate proceedings both against A B. By this judgment the Hon ble Supreme Court permitted protective assessment, when in doubt. In the case of Dilip Kumar Jain 5 ITD 552, the Tribunal at para 9, stated as follows : 9. The learned counsel for the assessee contended that the income-tax authorities have no right to call the present assessments as protective because till this date they have not started any proceedings against the alleged real owner of such income. In my opinion, the contention of the assessee has substance. No doubt, the income-tax authorities has the right to make the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f protective assessment has very clearly laid down that there mut be an exhaustive enquiry and the question as to who is liable to pay (in this case which year the capital gain is to be assessed and whether as long-term capital gain in assessment year 2001-02 or short term capital gain in assessment year 2000-01) should be determined after hearing objections. He should determine the question in the case of one person (in this case of the other person (in this case in other year) in whose case assessment has to be made protectively. Thus, protective assessment has to be done only after substantive assessment is done. An assessment can be considered as protective only when there is substantive assessment. Thus, substantive assessment has to precede protective assessment. In the present case, we are of the view that the observations of the Assessing Officer while completing assessment for assessment year 2001-02 which we have extracted above cannot be said to be an expression of his intention to make a protective assessment of the capital gain as long-term capital gain. It is an assessment pure and simple. Firstly, the words used by the Assessing Officer do not express his intentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a protective assessment. In the assessment order the basis of addition is a survey conducted and evidence gathered during the course of survey as well as investigation during the course of assessment. On this factual matrix, we have to necessarily hold that the assessment for the assessment year 2002-03 is not a protective assessment as stated by the AO in his order but is only a substantive assessment. The assessee has taken this argument before the CIT(Appeals) in the block assessment proceedings and hence it is not correct to argue that this is a new point raised for the first time. As the claim of the assessee is that this is a substantive assessment, there was no requirement for him to agitate this point in the statement of facts before the CIT(Appeals) during the course of regular assessment. The argument of the learned DR that the AO has the right to make the assessment in the right hands and in the right proceedings, is true, but in this case, as the assessment order is based on statement made in the survey and also on investigation in the assessment proceedings for the assessment year 2002- 03 where a letter dated 02-04-2003 was received from the Director, Doordershan. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 2002-03 was made on a protective assessment and hence the bar in Explanation (b) to sub-section (2) of section 58BA does not arise. At para 1.4 at page 5 he held as follows : 1.4 Therefore, as facts stand today, there is no illegality in the assessment made u/s 158BD of the Act. The appellant firm has relied on the judgment of the Kolkata High Court in the case of Caltradeco Steel Sales (P) Ltd. Ors. Vs. DCIT (158 CTR 369) for the proposition that if any income is assessed u/s 143(3) it cannot be assessed under chapter XIV-B, in pursuance of the notice u/s 158BC. However, in that case, substantive addition was made u/s. 143(3) and in the present case the addition has only been made on protective basis. Therefore, the fact are clearly distinguishable in the two cases. Hence, it is clear that the AO has rightly made the assessment u/s 158BD. That being so, this ground of appeal is dismissed. In our opinion, on a plain reading of clause (b) of sub-section (2) of section 158BA, it is clear that any income assessed in the regular assessment, cannot be brought to tax once again in the block assessment. We have already held that the addition in the regular assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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