Ita/44/2014 Of Dr.damodar Rout v. Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI THURSDAY, THE 28TH DAY OF MARCH 2019 / 7TH CHAITHRA, 1941 ITA.No. 44 of 2014 AGAINST THE ORDER IN ITA 489/Coch/2010 (2004-05) dated 16.08.2013of the Income Tax Appellate Tribunal,COCHIN BENCH, Kochi receivedby the appellant on 30.09.2013 APPELLANT/APPELLANT IN ITA DR.DAMODAR ROUTPLOT NO.1264, 4TH STREET, JAYALAKSHMI NAGAR, KATTUPAKKAM, CHENNAI-600 056. BY ADVS.SRI.M.GOPIKRISHNAN NAMBIARSMT.PREETHA S.NAIRSRI.K.JOHN MATHAI.KSRI.BENNY P.THOMASSRI.P.GOPINATH MENON (SR.) RESPONDENT/RESPONDENT COMMISSIONER OF INCOME TAXAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM-695 003. BY ADVS.SRI.JOSE JOSEPH, SC, FOR INCOME TAXSRI.P.K.RAVINDRANATHA MENON (SR.) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 28.03.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM & R.NARAYANA PISHARADI, JJ. **************************I.T.Appeal No.44 of 2014 ---------------------------------------------- Dated this the 28[th] day of March, 2019 J U D G M E N T C.K.Abdul Rehim, J The above appeal, under Section 260A of theIncome Tax Act, 1962 ('the Act' for short) is preferredagainst an order passed by the Income Tax AppellateTribunal, Cochin Bench in I.T.A.No.489/Coch/2010, dated16.08.2013. An appeal filed by the appellant – assesseeagainst an order passed by the Commissioner of IncomeTax, Thiruvananthapuram, under Section 263 of the Act,with respect to the assessment year 2004-05, waschallenged before the Tribunal. The appeal was filedalong with an application seeking condonation of delayto the extent of 439 days. The Tribunal had dismissedthe appeal by finding that there exists no sufficientcause for condoning the delay. The assessee isapproaching this Court challenging the said order. 2.Heard counsel for the appellant and the StandingCounsel for the Government of India (Taxes) appearing forthe respondent. 3.Based on the contentions raised, this Court framedthe substantial questions of law as follows: “i.Whether on the facts andcircumstances of the case, the Hon'bleAppellate Tribunal was justified in rejectingAnnexure H application for condonation ofdelay in filing the appeal against Annexure Eorder of the Commissioner of Income Taxwithout going into the merits of the case aswell as the bona fide reasons adduced for notprosecuting parallel proceedings? ii.Whether on the facts andcircumstances of the case, the Hon'bleAppellate Tribunal was justified in rejectingAnnexure H application for condonation ofdelay without considering the merits of thecase including the questions as to (a) whetherthe Commissioner was justified in invoking hispowers under Section 263 of the Income TaxAct (b) whether his finding that the appellant'sprofessional income should also be consideredas salary income was correct in law? iii.Whether on the facts andcircumstances of the case the appellatetribunal correctly applied the principles uponwhich courts or tribunals should consider applications for condonation of delay?” 4.Since the Tribunal had not considered the appealon merits, we are of the considered opinion that this appealcan be disposed of based on consideration of the question oflaw raised relating to the dismissal of the application forcondonation of delay alone, by leaving open the otherquestions. iii.Whether on the facts andcircumstances of the case the appellatetribunal correctly applied the principles uponwhich courts or tribunals should consider applications for condonation of delay?” 4.Since the Tribunal had not considered the appealon merits, we are of the considered opinion that this appealcan be disposed of based on consideration of the question oflaw raised relating to the dismissal of the application forcondonation of delay alone, by leaving open the otherquestions. 5.In the application submitted seeking condonationof delay the appellant/assessee had mentioned that, theCommissioner of Income Tax had passed the order underSection 263 of the Act on 24.03.2009 and it was received bythe assessee on 06.04.2009 and the appeal before theTribunal ought to have been filed under Section 253(1)(c) ofthe Act within sixty days, which the assessee had failed todo. The assessee had shown the reason that theconsequential assessment was completed by the AssistantCommissioner of Income Tax, who passed an order on12.11.2009 and the petitioner had preferred an appealagainst the said order before the Commissioner of IncomeTax (Appeals), Thiruvananthapuram. It is specificallymentioned that the assessee was under the impression thathe need only to challenge the assessment order before the CIT (Appeals). But, after getting proper legal advice, herealised that the order of the CIT under Section 263 has tobe challenged before the Tribunal in appeal. Therefore theappeal in question was filed with a delay of 439 days. 6.The Tribunal, while dismissing the appeal,observed that it is not a case where the assessee was notassisted by a professional in filing the returns of his incomeor in representing the matters before the Assessing Officer orbefore the Appellate Authorities. The Tribunal found that, theassessee is a senior Neuro Surgeon working in one of theleading hospitals in the country and it is beyond thecomprehension of the Tribunal that he did not sought properlegal advice in the matter. On the basis of such anobservation, Tribunal arrived at a conclusion that nosufficient cause was established for condonation of the delay. 7.We take note of the fact that the assessee hadpreferred an appeal against the assessment order issuedagainst him, within the time stipulated, before the CIT(Appeals). Therefore it is not a case where there was a totallack of diligence on the part of the assessee. On the otherhand, it has to be accepted that there occurred a lack ofproper advice upon him in the matter of preferring the appeal against the order of the CIT, before the Tribunal underSection 253(1)(c). Hence, we are of the view that it is not acase where the appellant had not shown any cause at all tocondone the delay. 8.The sufficiency of the cause shown by theappellant is a matter to be weighed on the scales of justice,which the Tribunal had virtually failed to do. Therefore, thereexist a substantial question of law as to whether the Tribunalhad acted in accordance with law while it refused to condonethe delay, at least in terms of cost. We are satisfied thatthere is failure in this regard on the part of the Tribunal.Consequently, the said question need to be answered infavour of the appellant and against the revenue. In view ofsuch finding we need not answer any other questions of lawframed, because the matter need to be remitted to theTribunal for consideration of the appeal on its merits. In the result, the above appeal is hereby allowed. The impugned order passed by the Income Tax AppellateTribunal, Cochin Bench in I.T.A.No.489/Coch/2010 is herebyset aside. The delay occurred in filing the appeal before theTribunal is hereby condoned, subject to the condition of theappellant paying cost of an amount of Rs.10,000/- (Rupees In the result, the above appeal is hereby allowed. The impugned order passed by the Income Tax AppellateTribunal, Cochin Bench in I.T.A.No.489/Coch/2010 is herebyset aside. The delay occurred in filing the appeal before theTribunal is hereby condoned, subject to the condition of theappellant paying cost of an amount of Rs.10,000/- (Rupees ten thousand only) to the Department, within a period of twoweeks from the date of receipt of a certified copy of thisjudgment. On noticing such remittance, the Tribunal isdirected to restore the appeal on its files and to allow theapplication seeking condonation of delay and to proceed withthe disposal of the appeal in accordance with law. (sd/-) C.K.ABDUL REHIM, JUDGE jsr (sd/-) R.NARAYANA PISHARADI, JUDGE APPENDIX APPELLANT'S ANNEXURES ANNEXURE A:TRUE COPY OF THE ASSESSMENT ORDERDATED 26.12.2006 FOR 2004-05 ISSUED BY THE INCOMETAX DEPARTMENT TO THE APPELLANT. ANNEXURE B:TRUE COPY OF THE NOTICE UNDER SECTION263 OF THE INCOME TAX ACT DATED 02.04.2008 ISSUEDBY THE INCOME TAX DEPARTMENT TO THE APPELLANT. ANNEXURE C:TRUE COPY OF THE REPLY 04.06.2008 TOTHE NOTICE UNDER SECTION 263 FILED BY THE APPELLANTBEFORE THE COMMISSIONER OF INCOME TAX. ANNEXURE D:TRUE COPY OF THE REPLY 02.03.2009 TOTHE NOTICE UNDER SECTION 263 FILED BY THE APPELLANTBEFORE THE COMMISSIONER OF INCOME TAX ANNEXURE E:TRUE COPY OF THE ORDER DATED24.03.2009 ISSUED TO THE APPELLANT BY THECOMMISSIONER OF INCOME TAX. ANNEXURE F:TRUE COPY OF THE FIRST HEARING NOTICEDATED 13.07.2010 RECEIVED BY THE APPELLANT ON22.07.2010 FROM THE COMMISSIONER OF INCOME TAX(APPEALS), TRIVANDRUM. RESPONDENT'S ANNEXURES NIL TRUE COPY PS TO JUDGE