Commissioner Of Income Taxcentral Circle Iiichennai v. S.duraipandi& S.thalavaipandian (Aop)

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE : 08.09.2014 THE HONOURABLE MR. JUSTICE R.SUDHAKARANDTHE HONOURABLE MR. JUSTICE G.M.AKBAR ALI Commissioner of Income TaxCentral Circle IIIChennai... Appellant in all theappeals- Vs - S.Duraipandi& S.Thalavaipandian (AOP)C/o. M/s.CNGSN & AssociatesNo.22, Vijaraghava RoadT. Nagar, Chennai 600 017. .. Respondent in all the appeals Appeals filed under section 260 of the Income Tax Act 1961against the order dated 27.09.2013, passed by the Income TaxAppellate Tribunal, 'A' Bench, Chennai, made in ITA Nos.1766/Mds/2013to 1771/Mds/2013 preferred against the orders of the Commissioner ofIncome Tax [A] [C]-II Chennai dated 31.07.2013 and made in ITA Nos107 to 113/13-14, against the Assistant Commissioner of Income TaxCentral Circle III [4], Chennai, dated 04.11.2011 and made in PAN/GIRNo.AAAA D4723 G, for the Assesment years 2003-2004 to 2008-2009respectively. These appeals are preferred by the Revenue against the orderpassed by the Tribunal, wherein the delay of 534 days in filing theappeals before the Commissioner of Income Tax (Appeals) was allowed,along with another six appeals, which were dismissed as infructuous. 2. The respondent/assessee in all these cases, initially, filedappeals before the Commissioner of Income Tax (Appeals) against thehttps://hcservices.ecourts.gov.in/hcservices/ order passed by the Assessing Officer under Section 271 (1) (c) ofthe Income Tax Act, with a delay of 97 days. However, whilepreferring the said appeals, the assessee had not paid the tax due atthe time of filing the appeals and since the appeals have not beenfiled as required under Section 249 (4) (a) of the Income Tax Act,the appeals were dismissed by the Commissioner of Income Tax(Appeals). Thereafter, the assessee paid the admitted tax due andfiled another six appeals with a delay of 534 days. However, allthose appeals came to be dismissed by the Commissioner of Income Tax(Appeals) holding that sufficient cause has not been shown forcondoning the delay. Aggrieved against the said order, the assesseepreferred twelve appeals before the Tribunal. Insofar as the sixappeals relating to the delay of 534 days, which were filed afterpayment of admitted tax, the Tribunal was of the view that reasonablecause has been shown by the assessee and placing reliance on thedecision of the Supreme Court in Ram Nath Sao @ Ram Nath Sahu & Ors.- Vs – Gobardhan Sao & Ors. (2002 (3) SCC 195), allowed the appealsof the assessee and remitted the matter back to the Commissioner ofIncome Tax (Appeals) for deciding the matter on merits. Consequentto the order remitting the above matters back to the Commissioner ofIncome Tax (Appeals), the appeals against the order of theCommissioner of Income Tax (Appeals) dismissing the appeals onaccount of the delay of 97 days for non-compliance of Section 249 (4)(a) was dismissed as infructuous as the relief has been granted inone set of appeals. As against the abovesaid order of the Tribunal,the Revenue is before this Court by preferring the present appealscontending that the Tribunal ought not to have taken a lenient viewin the matter when there is no sufficient cause shown by the assesseefor the delay in filing the appeals. 3. Heard Mr. M.Swaminathan, learned standing counsel appearingfor the appellant and perused the documents as also the orders of theCommissioner of Income Tax (Appeals) and the Tribunal available onrecord. 3. Heard Mr. M.Swaminathan, learned standing counsel appearingfor the appellant and perused the documents as also the orders of theCommissioner of Income Tax (Appeals) and the Tribunal available onrecord. 4. On a perusal of the documents placed before the Court, wefind that the appeals before the Commissioner of Income Tax (Appeals)relates to penalty. The pre-condition for filing the appeals isrequirement of deposit of admitted tax due, which apparently theassessee had deposited with a delay of 534 days. But the factremains that appeals were filed earlier without deposit of theadmitted tax due, however, with some delay and with reason for thedelay. Taking note of the nature of business of the assessee and thefinancial hardship expressed by the assessee, wherein the assesseehad stated that was in dire financial difficulty to pay the tax atthat particular point of time and after making sufficientarrangements to get the funds, the assessee had later paid the taxdue on account of which delay occasioned, the Tribunal, accepting thereason shown by the assessee, allowed the appeals. While coming tothe above conclusion, the Tribunal has relied upon various decisionsof the Supreme Court, more particularly, the judgment of the SupremeCourt reported in Ram Nath Sao's case (supra), wherein the SupremeCourt, in a case of condonation of delay, has held as under :-https://hcservices.ecourts.gov.in/hcservices/ "......... It is axiomatic that condonation ofdelay is a matter of discretion of the court.Section 5 of the Limitation Act does not say thatsuch discretion can be exercised only if the delay iswithin a certain limit. Length of delay is nomatter, acceptability of the explanation is the onlycriterion. Sometimes delay of the shortest range maybe uncondonable due to a want of acceptableexplanation whereas in certain other cases, delay ofa very long range can be condoned as the explanationthereof is satisfactory. ........ Acceptance of explanation furnished shouldbe the rule and refusal an exception more so when nonegligence or inaction or want of bona fide can beimputed to the defaulting party. ........ However, by taking a pedantic and hypertechnical view of the matter the explanationfurnished should not be rejected when stakes are highand/or arguable points of facts and law are involvedin the case, causing enormous loss and irreparableinjury to the party against whom the lis terminateseither by default or inaction and defeating valuableright of such party to have the decision on merit.While considering the matter, courts have to strike abalance between resultant effect of the order it isgoing to pass upon the parties either way.”This ratio of the judgment as laid down by the Supreme Court inthe above cited decision will be applicable to the facts of thepresent case. 5. The prima facie case of the assessee before the Tribunal wasthat there was no liability for the assessee to pay the penalty underSection 271 (1) (c) of the Income Tax Act. However, the assessee hadalso made good the requirement of Section 249 (4) (a) of the IncomeTax Act at a later date. Taking note of the above facts andcircumstances, the Tribunal allowed the appeals and remitted thematters back to the Commissioner of Income Tax (Appeals). 6. The Revenue, before this Court, contends that the delay hasnot been properly explained and only on that reason the Commissionerof Income Tax (Appeals) had dismissed the appeals of the assessee,which the Tribunal did not appreciate in proper light and allowed theappeals, which warrants interference at the hands of this Court. 5. The prima facie case of the assessee before the Tribunal wasthat there was no liability for the assessee to pay the penalty underSection 271 (1) (c) of the Income Tax Act. However, the assessee hadalso made good the requirement of Section 249 (4) (a) of the IncomeTax Act at a later date. Taking note of the above facts andcircumstances, the Tribunal allowed the appeals and remitted thematters back to the Commissioner of Income Tax (Appeals). 6. The Revenue, before this Court, contends that the delay hasnot been properly explained and only on that reason the Commissionerof Income Tax (Appeals) had dismissed the appeals of the assessee,which the Tribunal did not appreciate in proper light and allowed theappeals, which warrants interference at the hands of this Court. 7. However, such a stand of the Revenue is not sustainable onthe facts and circumstances of the case. On a careful perusal of theorder of the Tribunal, this Court too finds that there appears to besome explanation shown by the assessee showing sufficient cause forthe delay in filing the appeals. The judgment of the Supreme Court,relied on by the Tribunal, is applicable to the facts of the present https://hcservices.ecourts.gov.in/hcservices/ case. Therefore, this Court is of the considered view that there isno reason warranting interference with the order passed by theTribunal. 8. For the reasons aforesaid, all the appeals filed by theRevenue are dismissed. Consequently, connected miscellaneouspetitions are closed. Since the matter has already been remandedback to the Commissioner of Income Tax (Appeals), the Commissioner ofIncome Tax (Appeals) is directed to dispose of the appeals on meritsand in accordance with law in accordance with the roster. Sd/- Assistant Registrar//True Copy//Sub-Assistant RegistrarGLNTo1 The Income Tax Appellate Tribunal,“A” Bench, Chennai2 The Income Tax Appellate Tribunal“D” Bench, Chennai3 The Commissioner of IncomeTax [A] [C]-II, Chennai4 The Assistant Commissioner of IncomeTax Central Circle III [4], Chennai+ 1 C.C. TO MR.M.M.Swaminathan, Advocate Sr.42381 dt 8/9 EV KS 30/09/2014