M/S.bannari Amman Sugars Ltd v. The Assistant Commissioner Of Income Tax, Company Circle-I(2)Coimbatore

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 23.11.2018 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE DR.JUSTICE ANITA SUMANTH Tax Case (Appeal) No.469 of 2009 M/s.Bannari Amman Sugars Ltd.,1212, Trichy Road,Coimbatore 641 018. Appellant Vs. The Assistant Commissioner of Income Tax, Company Circle-I(2)Coimbatore. Respondent Tax Case Appeal filed under Sec. 260A of the Income Tax Act,1961 against the order of the Income Tax Appellate Tribunal,Madras 'A' Bench, Chennai, dated 5.1.2009 in ITA No.439/Mds/2008against the order dated 09/01/2008 made in Appeal No.102/07-08on the file of the Commissioner of Income Tax (Appeals)-I,Coimbatore and against the order dated 23/02/2006 and made inPAN.GIR No.AACB8933G/B-09 on the file of the AssistantCommissioner of Income Tax, Company Circle I(2), Coimbatore. For Appellant : Mr.R.Vijayaraghavan for M/s.Subbaraya AiyarFor Respondent : Mr.T.R.Senthilkumar Senior Standing CounselJUDGMENT (Judgment of the court was delivered by DR.ANITA SUMANTH,J.) This appeal is filed challenging an order of the Income TaxAppellate Tribunal dated 5.1.2009 in relation to assessment year2003-04. 2. The following two substantial questions of law have beenadmitted for hearing:- "i) Whether, on the facts and in the circumstancesof the case, the Tribunal was right in law inconfirming the order of the Commissioner of Income https://hcservices.ecourts.gov.in/hcservices/ Tax (Appeals) dismissing the appeal withoutcondoning the delay of 580 days in filing theappeal? ii) Whether, on the facts and in the circumstancesof the case, the Tribunal ought to have appreciatedthat the appellant had reasonable cause for delay infiling the appeal before CIT(A) and therefore oughtto have directed the CIT(A) to condone the delay anddecide the appeal on merits?" 3. The brief sequence of dates and events that would berelevant for the disposal of the appeal are set out hereunder:-(i) An order of Assessment dated 23.2.2006 came to be passedmaking two disallowances, one relating to taxability of SalesTax and Excise Duty as part of sale proceeds and the second inrelation to taxability of Excise Duty on exports. (ii) As the assessee was of the view that the adjustmentsas above constituted an error apparent on the face of therecord, an application was filed in terms of Section 154 of theIncome Tax Act (in short 'Act') seeking a rectification of theerrors. (iii) An order was passed on 10.4.2006 rejecting theapplication. (iv) An appeal was filed against the aforesaid order whichwas decided by the Commissioner of Income Tax (Appeals) (inshort 'CIT(A)') on 17.10.2007 as against which a second appealwas filed by the appellant before the Income Tax AppellateTribunal in ITA No.439/Mds/2008. (v) In consideration of the appeal, the Tribunal allowed theissue relating to the taxability of sales tax collectionsexcluding the sales tax and excise duty therefrom. Theassessment was confirmed insofar as it relates to the taxabilityof excise duty on exports. (vi) According to Mr.R.Vijayaraghavan, learned counsel forthe appellant, in the course of hearing before the appellateauthority, the appellant was given to understand that theadjustments did not constitute an error apparent on recordamenable to section 154 and accordingly, it would be in theirinterest to file a regular appeal challenging the order ofassessment. (vii) Accordingly, an appeal came to be filed before the CIT(A) challenging the order of assessment dated 23.2.2006 albeit,with a delay of 580 days. (viii) The appeal was dismissed by the CIT(A), by orderdated 9.1.2008, holding, at the threshold, that no justifiablereason had been set out by the appellant explaining the delay.(ix) The appellant filed a second appeal before the IncomeTax Appellate Tribunal, which passed the impugned order dated12.5.2009. https://hcservices.ecourts.gov.in/hcservices/ (vii) Accordingly, an appeal came to be filed before the CIT(A) challenging the order of assessment dated 23.2.2006 albeit,with a delay of 580 days. (viii) The appeal was dismissed by the CIT(A), by orderdated 9.1.2008, holding, at the threshold, that no justifiablereason had been set out by the appellant explaining the delay.(ix) The appellant filed a second appeal before the IncomeTax Appellate Tribunal, which passed the impugned order dated12.5.2009. https://hcservices.ecourts.gov.in/hcservices/ 4. The Tribunal, dealing with the delay of 580 days infiling the appeal, has come to the conclusion that the reasonsfor the delay were not persuasive. According to the Tribunal,the appellant was assisted by a competent Chartered Accountantand thus, ought to have filed the appeal in time. 5. Having heard the learned counsel for the appellant andthe Revenue, we are of the view that the reasons set out seekinga condonation would justify the delay of 580 days. The assesseehad originally taken a conscious decision to file a petitionunder section 154, being of the opinion that the adjustmentsmade amounted to a rectifiable error. This petition was filedwithin time. Appeals, thereafter were also filed in time andpursued diligently. It was only in the course of hearing beforethe CIT(A) that the appellant was advised that it would beprudent to challenge the original order of assessment by way ofregular appeal. 6. Para 8 of the petition for condonation is extractedbelow:- "Now, when the appeal against section 154 orderswere posted for hearing by the HonourableCommissioner of Income Tax (Appeals)-I, a query wasraised as to why appeal against the order undersection 143(3) was not filed. In this background,your appellant company has now hastened to file thepresent appeal against the assessment order interms of section 246A of Income Tax Act. Thestatement of facts and grounds of appeal alongwithappeal memorandum are separately filed before yourgoodself today, along with this petition tocondonation of delay." 7. The narration of facts leads us to conclude that therewas a bona fide reason for the assessee to have filed the appealbelatedly. We are thus of the view that the delay of 580 days infiling the appeal ought to have been condoned by the Tribunaland are inclined to set aside the order of the Tribunalrejecting the appeal as belated. The Tribunal is requested toadjudicate upon the appeal on merits. The appeal relating toassessment year 2003-2004 and the appeal itself being of theyear 2008, this exercise will be carried out within a period ofone month from the date of receipt of a copy of this order. TheTax Case (Appeal) is allowed. No costs. Sd/- Assistant Registrar //True Copy// ssk Sub Assistant Registrar To 1)Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai, 2)The Assistant Commissioner of Income Tax,Company Circle I(2), Coimbatore.Company Circle I(2), Coimbatore. 3)The Commissioner of Income Tax (Appeals)-I,Coimbatore.Coimbatore. +1 cc to Mr.T.R.Senthil Kumar, Advocate, S.R.No.79908. +1 cc to M/s.Subbaraya Aiyar, Advocate, S.R.No.79913. VD(CO)SSM(09/01/2019) T.C.A.No.469 of 2009