TMI Blog2020 (3) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... unal 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 has to be condoned. Question of condonation of delay is a factual matter and the result would depend upon the facts of the case and the cause shown by the assessee for the delay. It has also been opined that generally delays in preferring appeals are required to be condoned in the interest of justice, where no gross negligence or deliberate inaction or lack of bona fides is imputable to the party seeking condonation of the delay. In view of the foregoing, we are of the view that the assessees have shown sufficient cause for the delay in filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by different assessees are directed against different orders of the CIT(A)-II, Kochi of even date 25/01/2016 and pertain to the assessment year 2007-08. 2. Since the issues involved in these appeals are common, they were heard together and are being disposed of by this common order. 3. The assessees have raised the following common grounds except for variation in figures: 1. The Assessing Officer assessed the consideration on sale of Agricultrual land and the amount receivable in kind ₹ 57.50 lakhs totaling ₹ 1,36,66,000/- as income of the assessee. The CIT(A) confirmed the finding of the Assessing Officer ignoring the submissions of the assessee. 2. The fact that the land sold was rural agricultural was ignored by the CIT(A). 4. At the outset, we observed that there was a delay of 1250 days in filing the appeals before the Tribunal. The Ld. AR has filed condonation petitions accompanied by affidavits stating the reasons for the delay in filing the appeals before the Tribunal. We shall consider the affidavit filed in the case of Shri Mathew Joseph which reads as follows: AFFIDAVIT I, MATHEW JOSPEH, aged 45 years, S/o Late C.M. Joseph, residing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is situated in Thrikkakara Municipality and hence the consultant has not raised the plea before the Assessing Officer and the Appellate Authority that the land sold is agricultural and not a capital asset attracting taxable capital gains. My father was bed ridden during these days and he passed away on 10-082013. The fact that the Thrikkakara Municipality was formed only on 30-112010 and Thrikkakara Panchayath was not a notified area for urbanization at the time of transfer ie on 26-07-2006 for the purpose of defining ''capital asset in section 2(14) was overlooked by my father and the tax consultant. The aforesaid land was not taken as an urban land within the meaning of section 2 (ea) of the W T Act, therefore, not charged to Wealth Tax as per Wealth Tax Assessment made u/s 16 (3) for the A Y 2006-07. Myself and my wife returned to India in July, 2016 wounding up our business in U.S. I was new to the existing hotel business and the staff continued to manage the business and also payment of the tax in installments. When I noticed the huge demand still pending in respect of capital gains assessed Rs, 1,36,66,0007- for the A Y 2007-08 I gathered all detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23-07-2002 Departure Kochi 28 5. 31-05-2004 Arrival Kochi 28 6. 11-08-2005 Departure Kochi 30 7. 12-08-2004 Arrival USA 24 8. 11-08-2005 Arrival TVM 29 9. 24-07-2006 Departure Kochi 29 10. 25.07.2006 Arrival USA 27 11 30-03-2010 Arrival USA 29 12. 04-05-2011 Arrival Kochi 31 13. 13-05-2011 Departure Kochi 31 14. 26-08-2012 Arrival K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 8. 30-08-2014 Arrival USA 18 9. 18-05-2016 Arrival Kochi 17 10. 11-06-2017 Arrival Kochi 18 4.2 The Ld. AR submitted that the assessees came to know about the passing of the orders by the CIT(A) only when the Department required the assessees to make payment of outstanding demand in these cases. On one of such visits to Kerala, they approached earlier Counsel for the assessees, Shri Mathew Joseph, CA who stated that he had received the orders on 15/02/2016. He also drew our attention to the copy of the acknowledgment slip in the case of both the assessees which is attached. 4.2.1 Thereafter, the orders of the CIT(A) were handed over to the assessees on 05/08/2019 and the assessees took steps to file the appeals before this Tribunal, which caused the delay of 1250 days in filing the appeals. The Ld. AR has also filed the affidavits from earlier counsel for the assessees Shri Mathew Joseph, CA in both cases wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber, 2019 wherein it was held that condonation of delay of 1754 days: If the stand of the Applicant in the Affidavit that he had no knowledge about the passing of the order is not expressly refuted by the Respondent, the question of disbelieving the stand of the Applicant cannot arise. For this reason, indulgence should be shown to the Applicant by condoning the delay. 5. On the other hand, the Ld. DR submitted that the assessees had given the address of the earlier Counsel in Form No. 35 as the address to which the notice/order is to be served. The Ld. DR also submitted that the CIT(A) had duly served the appeal orders to the address of the earlier Counsel who has been duly authorized by the assessees. He submitted that it is the duty of the assessees to follow up the matter with their Counsel. It was also submitted that the assessees had engaged the Counsel and they were also aware of the details of hearing attended by the Counsel before the CIT(A). Hence, as a prudent person, the assessees should have taken due care by enquiring with their Counsel. If the assessees failed to take due care on the issue, it is not the fault of the Department and such inordinate delay should n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 6.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of non deliberate delay. Moreover, no counter-affidavit was filed by the Revenue denying the reasons advanced by the assessees. It is not the case of the Revenue that the appeals were filed deliberately with delay. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, 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 Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubstantial justice which is of prime importance, the expression sufficient cause should receive a liberal construction. 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 Madras 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. In our opinion, this Judgment of the Madras High Court is also squarely applicable to the facts of this case. A similar view was taken by the Madras High Court in the case of Venkatadri Traders Ltd. v. CIT (2001) 168 CTR (Mad) 81 : (2001) 118 Taxman 622 (Mad). 6.5 The Mumbai Bench of this Tribunal in the case of Bajaj Hindusthan Ltd. v. Jt. CIT (AT) (277 ITR 1) has condoned the delay of 180 days when the appeal was filed after the pronouncement of the Judgment of the Apex Court. Furthermore, the Revenue has not filed any counter-affidavit opposing the application of the assessee for condonation of delay. The Apex Court in the case of Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi (AIR 1978 SC 537) held that non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eritorious matter being thrown out at the very threshold and the cause of justice being defeated. It was stressed that there should not be a pedantic approach but the doctrine that is to be kept in mind is that the matter has to be dealt with in a rational commonsense pragmatic manner and cause of substantial justice deserves to be preferred over the technical considerations. It was also ruled that there is no presumption that delay is occasioned deliberately or on account of culpable negligence and that the courts are not supposed to legalise injustice on technical grounds as it is the duty of the court to remove injustice. In the said case the Division Bench observed that the State which represents the collective cause of the community does not deserve a litigant-non grata status and the courts are required to be informed with the spirit and philosophy of the provision in the course of interpretation of the expression sufficient cause . (b) In G. Ramegowda, Major and others v. Special Land Acquisition Officer, Bangalore (1988)(2 SCC 142), Venkatachaliah, J. (as his Lordship then was), speaking for the Court, has opined thus: The contours of the area of discretion of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condonation of delay no straitjacket formula is prescribed to come to the conclusion if sufficient and good grounds have been made out or not. It has been further stated therein that each case has to be weighed from its facts and the circumstances in which the party acts and behaves. 6.7 The principles that emanate from the above said decisions are that, in the matter of condonation of delay in filing appeals beyond the limitation period, the courts are empowered to condone the delay, provided the litigant is able to demonstrate that there was sufficient cause in preferring appeal beyond the limitation period. The Courts have also held that the expression sufficient cause should receive liberal construction so as to advance substantial justice. Hence, the question of condonation of delay is a factual matter and the result would depend upon the facts of the case and the cause shown by the assessee for the delay. It has also been opined that generally delays in preferring appeals are required to be condoned in the interest of justice, where no gross negligence or deliberate inaction or lack of bona fides is imputable to the party seeking condonation of the delay. In view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in cash of ₹ 2 crores together with built up area in the building to be constructed by the purchaser valued at 1.15 crores totaling the sale consideration at ₹ 3.15 crores. In response to the notice u/s. 153C my father, through his Chartered Accountant, had prepared and filed my return of income of the A Y 2007-08 disclosing total income ₹ 79,16,000/- being short term capital gain on transfer of 50% share in the aforesaid Rubber Estate in respect of the cash part of consideration received. In the assessment completed on 28/03/2013 u/s 143(3) r.w.s. 153C the capital gains of ₹ 1,36,66,000/- was charged by taking the sale value including the amount receivable in kind and thereby raised huge demand. The CIT (A) had confirmed the assessment of Short Term Capital Gains of ₹ 1,36,66,000/- in his order dated 20/01/2016. All these years I was in U.S. and was under the impression that everything was done properly by my father. I have only signed the return of income as I was not familiar with the taxation provisions in India. My father died on 10th day of August, 2013 after which my mother left India and joined us in U.S. The hotel business at K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to take on record the additional ground and pass consequential orders. If orders as prayed for are not granted, the petitioner would be put to irreparable loss and hardship. It is therefore accordingly prayed. All what is stated above are true and correct. sd/- MATHEW JOSEPH Deponent Solemnly affirmed and signed before me by the deponent who is personally known to me on this 4th day of December, 2019 at my office at Kottayam. Similar petition/affidavit for admission of additional ground was also filed in the case of Smt. Jiby Mathew. 7.2.1 The Ld. DR strongly opposed the admission of additional ground and submitted that there is no reasonable cause for filing the additional ground. 7.3 We have heard the rival submissions of the parties and we have perused the decisions on which reliance is placed from both the sides. The Tribunal while dealing with the subject-matter of the appeal in exercise of its power, it may allow the party to take up a new ground of appeal. In other words, the Tribunal has power to permit the assessee to raise a new ground of appeal, not set forth in the memorandum of appeal, even without formal amendment of the grounds se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds of appeal. Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. (supra) has held : ...The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose of assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a nontaxable item is taxed or a permissible deduction is denied, there is no reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of the item. There is no reason to restrict the power of the Tribunal under s. 254 only to decide the grounds which arise from the order of the CIT (A). Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. The Tribunal should not be prevented from considering questions of law arising in assessment proceedings, although not raised earlier. The view that the Tribunal is confined only to issues arising out of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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