TMI Blog2019 (12) TMI 1444X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of non-maintainability. In the light of above decision of Co-ordinate Bench of ITAT, we deem it appropriate to set-aside orders of the ld.CIT(A) on these appeals and restore all these to the file of the ld.CIT(A) for re-adjudication. Appeal of assessee allowed for statistical purpose. - I.T.A No’s.497 to 503 & 527/SRT/2019 - - - Dated:- 6-12-2019 - SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER For the Appellant : Shri Vijay Mehta CA, and Mrs. Sneha M.Padhiar CA For the Respondent : Shri O.P.Singh CIT-DR ORDER PER SANDEEP GOSAIN, JM: 1. This Eight appeals by the Assessee are directed against the separate orders of Ld.Commissioner of Income Tax(Appeals)-1, Surat dated 06.09.2007 and 28.10.2009 for the assessment years 1999- 2000 to 2005-06 and 2000-01 respectively. 2. Since common issues have been raised in all the appeals, hence, the appeals were heard together and are being disposed of by this common order for the sake of convenience. On all vital points, facts are common, therefore for the facility of reference we take up the facts from the appeal in the case of M.D.Industries Pvt. Ltd., in ITA No.497/SRT/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive, Advocate Hemant Jadia who was handling the case in Settlement Commission with regards to whether appeal before Hon'ble ITAT is to be filed against the order of CIT(A). Mr. Hemant Jadia had opined that since the matter is pending before Hon'ble Settlement Commission, there is no need to file any further appeal to Hon'ble ITAT as filing second appeal would result in to avoidable multiplicity of the proceedings as well as cost. We enclose herewith his affidavit confirming the said facts for Your Honours' ready perusal and record. 8. 20-02-2008: The Hon'ble settlement commission admitted the settlement petition filed for all the Assessment Years i.e., from A.Y. 1999-00 to 2005-06 vide their order passed u/s. 245HA of the Act. 9. 31-03-2008: All the admitted petitions of the Group including that of the appellant, were abated oriJU-0^2008jdue to the amendment brought in by Finance Act 2007 in section 245D(4) of the Act wherein it was provided that if the settlement proceedings were not concluded by 31-03-2008, such proceedings would be abated. Accordingly, the petition of appellant for A.Y. 1999-00 was also abated. 10. 28-04-2008: All the 20 mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the appellant would not have intended to challenge the additions. The delay is due to the unexpected events like amendment in section 2465D, subsequent annulment thereof by the Hon'ble High Court, abatement orders passed etc. and not due to any inaction on the part of the appellant. 15. In this connection, the appellant places reliance upon the following decisions: (i) Collector, Land Acquisition v. Mst. Katiji Ors. [167 ITR 471 (SC)]: (ii) N. Balakrishnan v. M. Ramamurthy [(1998) 7 SCC 123]: (iii) Sonerao Sadashivrao Patil Anr. v. Godawaribai [1999 (2) Mh. L.J. 273]: (iv) Venkatadri Traders Ltd. v. CIT [248ITR 681 (Mad)]: (v) Saurashtra Cement and Chemical Industries Ltd. v. CIT [115 ITR 27 (Guj)] (vi) Nicco Corporation Ltd. v. CIT [251 ITR 791, 798-799 (Cal)] (vii) J.M. Bhansali and Ors v. The State of Madras (21 STC 411) (viii) Cheminor Drugs Ltd. v. DCIT [105 ITD 613 (Hyd)] 16. We further pray before Your Honours that the reasons in delay of filing of this appeal is similar to those decided by the Hon'ble ITAT in earlier appeals of the group cases vide its following orders: (i) Older dated 01-06-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious gifts/income through Will, agriculture income and fictitious interest on loan etc. In the survey, it was found that Shri Mohanbhai Dhanjibhai Patel, group Managing Director was one of the major beneficiaries of bogus capital created by Shri Pankaj Danawala. During the course of survey, statement of Shri Kirit M. Patel, son of Shri Mohanbhai Dhanjibhai Patel was recorded and he was confronted with evidences found regarding creation of bogus capital by Shri Pankaj Danawala for the benefit of Shri Mohanbhai Dhanjibhai Patel Group. It is pertinent to point out that the assessee Shri Mohanbhai Dhanjibhai Patel (HUF) had given advance of ₹ 8,000/- to M.D. Textile Ltd., and ₹ 6 lakhs in the loan account. Thus, a total ₹ 6,08,000/- was given fresh in this year. This advance was shown in the balance sheet as on 31.3.2003. On account of this survey operation, information came to the AO, he reopened assessment by recording reasons and notice under section 148 was issued on 28.3.2008. The assessee was asked to explain the source of such advances. It failed to give any explanation. Accordingly, an addition of ₹ 6,08,000/- was made to the total income of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y members of the Group filed settlement petition for various assessment years ranging from 09-03-2006 to 05-04- 2007. All the twenty cases were covered by single survey. All these cases are connected and have common issues. All the members belonging to Group were wholly controlled and managed by Shri M. D. Patel. A common cash flow has been prepared in case of settlement petition of Shri M.D. Patel wherein transactions of all the twenty group members have been incorporated. The net income of the said cash flow has been offered as additional income of Shri M. D. Patel in his settlement petition. 4. 29-03-2006: The appellant filed its settlement petition for AY 1999- 00 to 2005-06 before the Hon'ble Income Tax Settlement Commission, Mumbai. However notice u/s. 148 and 143(2) of the Act was received only in case of AY 2000-01 and 2004-05 respectively at the time of filing the petition. 5. 20-02-2008: The Settlement Commission passed order for admission and abatement of all 20 petitions u/s. 245HA of the Act by one common order. According to the said order, settlement application of the appellant for assessment year 2000-01 and 2004-05 was proceeded with, while for AY 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y further appeal to Hon'ble IT AT. He was also of the opinion that in case of any abated years or in any year which will not be restored by Hon'ble Bombay High Court, the Hon'ble Settlement Commission would take up those years exercising their power u/.s 245E of the Act. Since all the years and member of the Group are connected, he opined that in all likelihood all matters would be heard together by the Settlement Commission. 12. 03-06-2016: During the course of hearing before Hon'ble Settlement Commission, the issue of reviving the abated years was discussed in length in the given cases fixed. Both the parties argued over the issue. The members however, declined to exercise their inherent power available u/s. 245E of the Act to revive the abated years. 13. 07-06-2016: Based on current circumstances and hearing held on 03-06-2016, M/s. Bhuta Shah Co LLP, the representative advised that appeal should be filed for all abated years as Hon'ble members of Settlement Commission had declined to revive all abated years. We are enclosing herewith copy of the said letter. 14. From the above chronology, the Hon'ble Members would observe that proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade to harm the valuable rights of the parties. The discretion is given to the Court to condone delay and admit the appeal in order that judicial power and discretion in that behalf should be Exercised to advance substantial justice ................................................................................ The requirement of explanation of every day's delay does not mean that a pedantic approach should be taken. The courts are required to take pragmatic approach while interpreting the concept of sufficient cause. Too much rigour of the law is not justice but the denial of it. It is to be borne in mind the maxim 'Summum Jus, Summa Injuria'. Extreme law is extreme injury. In the matter of condonation of delay, the duration of delay is insignificant. The Court has to take into account whether there is acceptable explanation or pardonable explanation. (iv) Venkatadri Traders Ltd, v. CIT F248 ITR 681 (Mad)]: The discretion so vested is required to be exercised in a manner which would protect and promote the just interest of the assessee. The position of the assessee vis-a-vis the revenue is not strictly adversarial, although more often t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in him was not exercised in a judicial manner and the result was that a substantial injury was 'caused to the petitionercompany so far as the consideration of the question regarding the revenue expenditure of ₹ 3,00,600 was concerned. 6. The ld.counsel for the assessee took us through the application as well as opinion of Shri Hemant Jadia dated 7.6.2016. Copy of the letter written by Shri Hemant Jadia to Kirit M. Patel has been placed on record. He also took us through writ petition filed by the respective assessees before the Hon ble Bombay High Court and also interim order passed by the Hon ble High Court. Apart from decisions referred in the application for condonation of delay, he made reference to a large number of Tribunal s orders which are placed in the paper book. On the strength of these pleadings, he contended that there was no deliberate attempt at the end of the assessee for not filing the appeal within time limit. According to the ld.counsel for the assessee, they were not properly advised by their tax consultant, and on account of that the appeals become time barred. 7. On the other hand, the ld.DR contended that there is no explanation at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The doctrine must be applied in a rational common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption 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 judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 9. Similarly, we would like to make reference to authoritative pronouncement of Hon ble Supreme Court in the case of N.Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under: Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposition laid down in other decisions. It is suffice to say that the Hon ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the condonation of delay, then such reasons are to be construed with a justice oriented approach. In the light of the above, let us consider explanation of the assessee. A perusal of the application for condonation of delay would indicate that on 29.3.2006 settlement petitions were filed before the Income Tax Settlement Commission in the Asstt.Year 1999-2000 to 2005-06. On 22.2.008, Settlement Commission has dismissed applications except for the Asstt.Year 2000-01 and 2004-05 in the case of Mohanbhai D. Patel. Similarly in other cases, applications were admitted either for one year or two years viz. in the case of Arvind Patel application for the Asstt.Year 2004-05 was admitted for consideration and application for Asstt.Year 1999-2000 to 2003-04 and 2005-2006 were abated on the grounds of nonpendency of the proceedings. Thereafter, amendments were brought in Finance Act, 2007 in Section 245D(4) of the Income Tax Act wherein it was provided that if settlement proceedings were not conclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiated reassessment proceedings in some of the years giving a belief to the assessee that now the proceedings are pending in other years. They can also be taken into Settlement Commission. The important fact which weigh with us for accepting bonafide of the assessee is that even in 2013, the ld.CIT(A) has haboured a belief that proceedings are pending before the Settlement Commission, and therefore, the ld.CIT(A) has no jurisdiction to entertain the issue agitated by the assessee on merit. This findings of the ld.CIT(A) supports bona fide of the assessee in believing that their applications under section 245E would be entertained by the Settlement Commission and there is no need to challenge the order of the CIT(A). It is also important to note that there is no adjudication on merit on the issues involved in these appeals by the ld.CIT(A). The appeals were dismissed for the reason that they are not maintainable. Considering this aspect and in the interest of justice, we deem it appropriate to condone the delay in filing of the appeal. We proceed to decide the appeal on merit. 5. On the other hand, the ld.Departmental Representative (DR) opposed the application and submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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