M/S.evp Housing Chennai P. Ltd v. Assistant Commissioner Of Income Tax,Central Circle -Iv(2),Chennai - 600 034

In the High Court of Judicature at MadrasDated: 06.01.2015CoramThe Honourable Mr.JUSTICE R.SUDHAKARandThe Honourable Mr.JUSTICE R.KARUPPIAH Tax Case (Appeal) Nos.535 to 545 of 2014& M.P.No.1 of 2014 Mrs.P.S.Rajeswari ....Appellant in T.C.(A)Nos.535 & 536/2014 Mr.E.V.Perumalsamy Reddy .... Appellant in T.C.(A)Nos.537 to 539/2014 M/s.EVP Estates and Properties Development Ltd.No.1015, "Z" Block, 6th Avenue,Anna Nagar,Chennai - 600 040. .... Appellant in T.C.(A)Nos.540 to 543/2014 M/s.EVP Housing Chennai P. Ltd.No.1015, "Z" Block, 6th Avenue,Anna Nagar,Chennai - 600 040. .... Appellant in T.C.(A)Nos.544 & 545/2014 Vs. Assistant Commissioner of Income Tax,Central Circle -IV(2),Chennai - 600 034. .... Respondent in the above T.CAs APPEALs under Section 260A of the Income Tax Act against theorder dated 17.04.2014 made in I.T.A.Nos.2293, 2294, 2295 to 2297,2298 to 2301 and 2302 and 2303/Mds/2013 on the file of the IncomeTax Appellate Tribunal 'C' Bench, Chennai. preferred against the order made in (i) I.T.A.No.291 and 298 of2009-2010 dated 27.10.2010 on the file of the Commissioner of IncomeTax (Appeals)I Chennai-34 against the Assessment order dated31.12.2009 on the file of the Assistant Commissioner of Income Tax,Central Circle IV (2) Chennai-34 for the Assessment year 2006-2007and 2007-2008 in PAN/ACQPRO 638B) (in TC (A) No.535 & 536/14) https://hcservices.ecourts.gov.in/hcservices/ (ii)I.T.A.No.107-108/10-11dated20.12.2010andI.T.A.No.299/09-10 dated 27.10.2010 on the file of the Commissionerof Income Tax Appeal (I) Chennai 34 against the Assessment orderdated 31.12.2009 on the file of the Assistant Commissioner of IncomeTax, Central Circle IV (2) Chennai-34 for the assessment year 2004-2005, 2006-2007 and 2007-2008 in PAN/GIR.No.AGMP5934D (T.C.(A)No.537 to 539 of 2014) iii. ITA.No.294 to 297/09-10 dated 27.10.2010 on the file ofthe Commissioner of Income Tax Appeal I Chennai-34 against theAssessment order dated 31.12.2009 on the file of the AssistantCommissioner of Income Tax, Central Circle IV (2) Chennai-34 for theassessment year 2005-2006 to 2008-2009 in PAN: (in TC(A) )No.540 to 543/14. iv. ITA.No.292 & 293/09-10 dated 27.10.2010 on the file of theCommissioner of Income Tax Appeal I Chennai-34 against theAssessment order dated 31.12.2009 on the file of the AssistantCommissioner of Income Tax, Central Circle IV (2) Chennai-34 for theassessment year 2006-2007 & 2008-2009 in PAN: (in TC (A)No.544 to 545/14. The above Tax Case (Appeals) are filed by the assessees, asagainst the order of the Income Tax Appellate Tribunal dated17.04.2014, declining to condone the delay of 1100 days, raising thefollowing substantial questions of law: "1. Is not reasoning of the Tribunal failing tocondone the delay of 1100 days in filing the appealbefore it, is perverse and contrary to law?2. Whether on facts and circumstances of the case,the Appellate Tribunal was right in dismissing the appealon the point of limitation without appreciating thereasons stated in the affidavit filed by the appellant?3. Whether the Appellate Tribunal is correct in notconsidering the "sufficient cause" for the delay whichhad been explained by the assessee in filing the appealwith condonation of delay?4. Whether the finding of the Tribunal is perverseespecially after admission of the main case and aftergranting interim relief dismissed the main case incondonation application by overlooking the earlierdecision of another Bench? https://hcservices.ecourts.gov.in/hcservices/ 5. Whether on the facts and circumstances of thecase, the Tribunal was right in not considering thesubmission made by the counsel for the appellant at thetime of argument?" 2. The brief facts relating to the above batch of appeals areas follows: https://hcservices.ecourts.gov.in/hcservices/ 5. Whether on the facts and circumstances of thecase, the Tribunal was right in not considering thesubmission made by the counsel for the appellant at thetime of argument?" 2. The brief facts relating to the above batch of appeals areas follows: On 10.1.2008, search was conducted in terms of Section 132 ofthe Income Tax Act at the business place of the appellants. Duringthe course of search, 432 documents, account books and papers wereseized from the registered office of the business concern of theappellants. On 26.8.2008, the properties belonging to theappellants in Kocthiparai Village were attached by the respondentdepartment. On 29.9.2008, notice under Section 153A of the IncomeTax Act was issued for block assessment proceedings in respect ofthe searched persons. On 24.11.2008 it appears that the appellantshad made a representation requesting to release the originaldocuments so as to sell the property and pay the dues to therespondent. Further, in response to the notice, the appellants havefiled their return of income on 05.08.2009 admitting their incomefor each assessment year, however, the admitted tax has not beenpaid. 3. After scrutinising the return of income filed and afteraffording opportunity to the appellants, the Assessing Officerpassed an order of assessment by making additions in respect of allthe above appellants. The Assessing Officer also levied interest andpenalty. 4.Aggrievedbytheorderofassessment,theappellants/assessees filed appeals before the Commissioner of IncomeTax (Appeals), who, by order dated 27.10.2010 after following thedecisions of this Court in the case of S.Alagirisamy V. Income TaxOfficer reported in 296 ITR 43 and Commissioner of Income Tax V.Smt.G.A.Samanthakamani reported in 259 ITR 215, dismissed theappeals in limine, on the ground that the appellants have not paidtaxes on the admitted income. According to the assessees thatbetween January and April, 2010, they have paid certain amounttowards admitted tax. 5. Aggrieved by the orders of the Commissioner of Income Tax(Appeals), the assessees pursued the matter before the Income TaxAppellate Tribunal by filing appeals along with petitions to condonethe delay in filing the appeals. The details of the appeals filedby theappellantsareas follows:S.NoI.T.A.No.Name of the AssesseeNumber ofdays delay12293 of 2013 Mrs.P.S.Rajeswari110022294 of 2013 Mrs.P.S.Rajeswari1100https://hcservices.ecourts.gov.in/hcservices/32295 of 2013 E.V.Perumalsamy Reddy1127 6. The Tribunal, by a common order dated 17.4.2014 dismissed the appeals declining to condone the delay on the ground that theexplanation given by the assessees to condone the delay wasuntenable. The Tribunal in paragraph 3 of the order extracted thepetition dated 27.12.2013 filed for condonation of delay. Forbetter clarity, we extract the same as such. "3. In this case, it is to be seen that the appeal istime barred by 1100 days delay in filing. The assessee hasfiled a condonation petition dated 27.12.2013 as under:- “1. I am the Appellant herein and as such I am wellacquainted with the facts of the case.acquainted with the facts of the case. 2. I humbly submit that I am the Director of the CompanyM/s. EVP.Estates and Property Development Ltd. and EVPHousing Chennai Pvt. Ltd., Chennai - 600 040. My husbandMr. E.V. Perumalsamy Reddy is the Managing Director ofthe above companies and my son Mr. E. V. P. SanthosaReddy is the Director of the above said companies. On01-01-2008 the Income Tax Department conducted search u/s.132 and subsequently served a notice uj s. 153A of theIT Act. In fact I was planning for filing the return ofthe income in the month of January 2008 for all theassesses. Accordingly I have filed the return of incomeand the same has been accepted by the authoritiesconcerned. “1. I am the Appellant herein and as such I am wellacquainted with the facts of the case.acquainted with the facts of the case. 2. I humbly submit that I am the Director of the CompanyM/s. EVP.Estates and Property Development Ltd. and EVPHousing Chennai Pvt. Ltd., Chennai - 600 040. My husbandMr. E.V. Perumalsamy Reddy is the Managing Director ofthe above companies and my son Mr. E. V. P. SanthosaReddy is the Director of the above said companies. On01-01-2008 the Income Tax Department conducted search u/s.132 and subsequently served a notice uj s. 153A of theIT Act. In fact I was planning for filing the return ofthe income in the month of January 2008 for all theassesses. Accordingly I have filed the return of incomeand the same has been accepted by the authoritiesconcerned. 3. I humbly submit that the Income Tax Department hasseized all the original documents on 10-01-2008. Myreturn of income for the assessment year 2006-2007 andhttps://hcservices.ecourts.gov.in/hcservices/2007-2008 was duly accepted and filed within the due date as per the provisions of the Income Tax Act.Therefore penalty levied by the Assessing Officer u] s.271 (1) (c) of the Income Tax Act 1961 is erroneous.Therefore I have filed appeal before the Commissioner ofIncome Tax(Appeals-I). The said appeal was dismissed inlimine on 27-10-2010 on the short ground for non -payment of tax amount. 4. I submit that the entire original documents wereseized. Therefore I was not in a position to mobilisethe funds for the payment of the tax amount.5. I submit that my husband underwent bypass surgery andwas under treatment for Diabetes Mellitus Associatedwith Hypertension for the period from November 2010 toNovember 2013. He was strictly advised by the Doctorsthat any little strain may cause anxiety to his lifeitself. Therefore we did not informed to him about thelegal proceedings and we were not in a position toconsult our Lawyer.6. In the circumstances the Government of TamilNadu haddeposited the Award amount a sum of Rs.16,79,59,743/- onOctober 2012 on the file of Learned Sub-Court,Kancheepuram in the LAOP No.2 of 2011 for the landacquired from the EVP estates and properties developmentltd, Chennai 600 040. However the Tax Recovery Officerhas attached the said award amount under the provisionsof Section 226(4) and Rule 31(11 Schedule) of the Act1961 towards the tax liabilities of:-(i) E.V.P. Estates and Properties Development Ltd., (theAppellant herein) PAN : (ii)E.V.P. Housing Chennai Pvt.Ltd. PAN : (iii) Mr. E.V.Perumalsamy Reddy, PAN: (iv) Mrs. P.S. Rajeswari, PAN: and (v)Mr. E.V.P. Santhosa Reddy, PAN: We filed a writ petition in W.P.No.35073 of 2013 beforethe Hon'ble High Court of Madras for the followingrelief:- "To' issue a Writ of Mandamus directing the Respondentsto lift the attachment proceedings initiated by the 3rdRespondent u/s.226(4) in Form No.LT.C.P.10under Rule 31 of the Second Schedule of Income Tax Act,1961 in respect of the deposit amount of Rs.16,79,59,743/ -(Rupees Sixteen Crores Seventy NineLakhs Fifty Nine Thousand Seven Hundred and Forty Threeonly) made by the Special Tahsildar SIPCOT,Sriperumpudur, in favour of thePetitioner inL.A.o.P.No.2 of 2011 on the file of Sub-Court,Kancheepuram to enable the Petitioner to pay thereturned tax. amount payable totally a sum ofRs.10,06,41,779/-(Rupees Ten Crores Six Lakhs Forty OneThousand Seven Hundred and Seventy Nine only)for theAssessment Years 2005 - 2006 to 2008-2009 of thehttps://hcservices.ecourts.gov.in/hcservices/Assessees viz. (1) the Petitioner, (2) EVP Housing Chennai Pvt. Ltd., (3) E.V. Perumalsamy Reddy (4) Mrs.P.S.Rajeswari, and (5) E. V:P. Santhosa Reddy to theRespondents" Chennai Pvt. Ltd., (3) E.V. Perumalsamy Reddy (4) Mrs.P.S.Rajeswari, and (5) E. V:P. Santhosa Reddy to theRespondents" 7. I submit that in view of the proceedings passed bythe recovery officer in TRC.No.102/CR-IV(2)/10-11 dated06-11-2013 we have filed affidavit before the RecoveryOfficer giving consent to adjust the compensationawarded for land acquisition lying in the Hon'ble Sub-Court, Kancheepuram against the arrears of Tax for theAppellant and other assessee viz. E.V.P. Housing ChennaiPvt. Ltd. PAN: , Mr. E.V.Perumalsamy Reddy,PAN: , Mrs. P.S.Rajeswari, PAN No.ACQPR0638Band Mr. E.V.P. Santhosa Reddy, PAN: a sum ofRs.10,06,41,779/- Hence the Appellant is entitled tocontest this appeal on merit. Now the Tax RecoveryOfficer conducted survey u] s.133A(3)(ia) of IT Act.Hence I am advised to file this appeal. Now there is adelay of 1127 days in filing this appeal. The delay isnot wilful or wanton. It is only due to the reasonsstated above. Hence this application to condone thedelay of 1127 days in filing this appeal. If the saiddelay is condoned no prejudice would be caused to theRespondent and on the other hand if the delay is notcondoned I would be put to irreparable loss and gravehardship. I have prima facie case and balance ofconvenience is in my favour. Under the saidcircumstances the delay of 1127 days in filing the aboveappeal against the order dated 20-12-2010 passed by theLearned Commissioner of Income Tax(Appeals-I) inI.T.A.No.29J /09-10 may be condoned.It is therefore, prayed that this Hon'ble Court may bepleased to condone the delay of 1127 days in filing theappeal against the order dated 27-10-2010 passed by theRespondent i.e. Learned Commissioner of Income Tax(Appeals-I) in I.T.A.No.291 /2009-10 and thus renderjustice.” In this backdrop, the assessee submits that since delay of1100 days stands explained and the issue of payment ofadmitted tax has been adjudicated in writ proceedingsbefore the hon’ble jurisdictional high court, the matter berestored back to the CIT(A) for decision on merits." 7. It is seen that during the year 2010, the Government ofTamil Nadu had acquired the lands of the appellants for the purposeof expansion of the Chennai Airport under the Tamil Nadu Acquisitionof Lands for Industrial Purposes Act and the Government of TamilNadu had deposited a sum of Rs.16,79,59,793/- to the credit of theproceedings pending in LAOP No.2 of 2011 on the file of the Sub-Court, Kancheepuram. Thereafter, on 03.11.2010, demand notices weresent to the appellants for recovery of tax. On 25.2.2011, the TaxRecovery Officer wrote a letter under Section 226(4) of the IncomeTax Act to the Subordinate Judge, Kancheepuram requesting to holdhttps://hcservices.ecourts.gov.in/hcservices/the amounts deposited and lying before the Sub-Court, Kancheepuram in respect of the properties belonging to the appellants. Theletter dated 25.2.2011 reads as follows:"Date:- 25-02-11 ToThe Hon'ble Judge,Sub-Court,Kancheepuram.Sir, Where as M/s.E.V.P.Group Chennai has not paid thearrears amounting to Rs.2839.35 Lakhs and specificallyE.V.P.Estates & Properties Developments Ltd. has not paidthe arrears amounting to Rs.852.24 in respect ofcertificate Nos.98 to 104/CR-IV(2)/10-11 dt.3-11-2010drawn up by the under signed and the interest payableunder section 220(2) of the Income-tax Act, 1961 and theundersigned desires to attach sums of moneys or otherproperty, now in your custody.I request that you will hold the said money orproperty and any interest or dividend becoming payablethereon subject to the further order of the undersigned." ToThe Hon'ble Judge,Sub-Court,Kancheepuram.Sir, Where as M/s.E.V.P.Group Chennai has not paid thearrears amounting to Rs.2839.35 Lakhs and specificallyE.V.P.Estates & Properties Developments Ltd. has not paidthe arrears amounting to Rs.852.24 in respect ofcertificate Nos.98 to 104/CR-IV(2)/10-11 dt.3-11-2010drawn up by the under signed and the interest payableunder section 220(2) of the Income-tax Act, 1961 and theundersigned desires to attach sums of moneys or otherproperty, now in your custody.I request that you will hold the said money orproperty and any interest or dividend becoming payablethereon subject to the further order of the undersigned." 8. On 25.4.2011, one EVP Santhosha Reddy, Managing Director ofEVP Group addressed a letter to the Assistant Commissioner, IncomeTax Central Circle (1V) 2 seeking release of documents seized by theIncome Tax Department stating that the EVP group has no regularincome and therefore they wanted to sell the property to pay thetax. In that letter, he further stated that the value of theproperties was worth more than Rs.1000 crores and they were alsowilling for attaching the land acquisition amount awarded/depositedby the Government. Further assurance was given in the letter to paythe tax dues by way of monthly installment of Rs.75.00 lakhs. Thedetails of the said letter reads as follows: "We request u to Release your original Documentsseized by income tax Department from our office andhouse. we have filled our returns to department. Sincewe have no regular income we have to sell the propertyand pay the tax. Our tax due is approximately 9 crorefor which we request u to have our Chembarampakkam Landand Delhi Land worth more than Rs.1000 crores. And wealso axcept to Attach our Rs.15.4 cr. which is awarded byGovt. we also give assurence to pay Monthly installmentof Rs.75 Lakhs once our theam park is open." 9. In the meanwhile, 11 appeals have been filed along withpetitions to condone the delay before the Income Tax AppellateTribunal, Chennai as against the order of the Commissioner of IncomeTax (Appeals) dated 27.10.2010 as stated earlier. 10. Pending the appeals, the appellants pursued the matter withthe Department for release of the documents to enable them to sellthe same for tax payment. On 26.12.2013, the assessees had filedan affidavit giving consent to adjust the compensation amounthttps://hcservices.ecourts.gov.in/hcservices/awarded in the land acquisition proceedings, which amount is in deposit before Sub-Court, Kancheepuram, as against the tax arrearsto the tune of Rs.10,06,41,779/-. Since payments were not made, theTax Recovery Officer on 24.1.2014, attached the properties, namely,Land and Building at New No.23, Old No.15, Sir Thiyagaraya Road,T.Nagar, Chennai - 600 017 measuring total extent of 4804 sq.ft. andLand and Building at No.55, 55A, 55B, 56 and 56A, Old Peria ChettyStreet, Chengalpet, Kancheepuram Taluk measuring 5323 sq.ft.,belonging to the appellants and fixed the date of auction as10.02.2014. 11. Challenging the said auction proceedings, Writ Petitionshave been filed before this Court in W.P.Nos.3431 and 3432 of 2014.This Court, by order dated 10.2.2014, granted an order of interimstay on condition that the entire garnishee amount ofRs.16,79,59,793/- and interest thereon lying to the credit of LAOPNo.2 of 2011 on the file of the Sub Court, Kancheepuram has to beadjusted towards demand made by the Income Tax Department. 11. Challenging the said auction proceedings, Writ Petitionshave been filed before this Court in W.P.Nos.3431 and 3432 of 2014.This Court, by order dated 10.2.2014, granted an order of interimstay on condition that the entire garnishee amount ofRs.16,79,59,793/- and interest thereon lying to the credit of LAOPNo.2 of 2011 on the file of the Sub Court, Kancheepuram has to beadjusted towards demand made by the Income Tax Department. 12. In the meanwhile, the Tribunal by order dated 14.2.2014,granted an order of interim stay of recovery of penalty and interesttill 30.6.2014. However, it is pointed out by the learned StandingCounsel appearing for the Revenue that appeals were filed before theTribunal challenging only the quantum of tax demanded and not thelevy of penalty and interest. That issue has become academic atpresent as we are now dealing with the issue of condonation ofdelay, which the Tribunal declined. 13. Thereafter, the Tribunal, by order dated 17.4.2014dismissed all the appeals along with the condonation delay petitionsfiled by the assessees holding that the explanation for the delay ofover 1100 days in each case has not been properly explained, eventhough the appellants have knowledge of the proceedings of theCommissioner of Income Tax (Appeals). The Tribunal held that theexplanation offered by one of the assessees Mrs.P.S.Rajeswari, basedon medical certificate dated 16.11.2013 issued by Mohan NursingHome, Chennai, was untenable. The Tribunal further held that theplea of illness between November, 2010 and November, 2013 and suddenregaining of health was not supported by any evidence. ThatMrs.P.S.Rajeswari herself could have pursued the legal remediesduring the period of treatment. Consequently, the Tribunal came tohold that the delay has not been properly explained; the assesseeshave failed to act with due diligence and the explanation given wasnot satisfactory. Accordingly, the Tribunal dismissed the appealsholding that there was no ground to condone the delay. For betterclarity, the relevant portion of the order of the Tribunal, viz.,the explanation given by the assessee for condonation of delay andthe reasoning given by the Tribunal, is extracted hereunder:"5. We have heard both parties and gone through the casefile. Wefind that while framing assessment in order dated31.12.2009 in furtherance of a ‘search’ conducted on10.01.2008, the Assessing Officer had made addition of M25https://hcservices.ecourts.gov.in/hcservices/lakhs as ‘unaccounted’’ investments. The assessee filed appeal. The CIT(A) has dismissed her appeal in limine onthe ground of non payment of admitted tax. Before us, theassessee has filed the abovesaid condonation. A perusalthereof makes it clear that this is not the case that sheherself or her husband Shri. E.V. Perumalsamy Reddy wasnot aware of the CIT(A) order under challenge. So, it isnot a case of lack of knowledge about the CIT(A) ‘s order.The assessee’s averments in the condonotion petition readthat her husband had undergone bypass surgery andtreatment of diabetes mellitus associated withhypertension from November,2010 to November,2013. Shesupports this by way of a medical certificate dated16.11.2013 issued by Mohan Nursing Home, Chennai. However,this only appears to be an untenable explanation. Hercontention about Shri.Reddy’s sudden illness November,2010 to November, 2013 and sudden regaining of health isnot supported by any evidence that she herself could nothave pursued legal remedies in the treatment period. Inthis regard, the nursing home’s certificate only appearsto be an after-thought exercise in absence of otherdetails. Moreover, in ‘tribunal’s proceedings, theassessee’s/her husband’s personal appearance is notrequired. Coupled with this, she fails to explain each andevery day’s delay from 16th November, 2013 till the dateof filing the appeal i.e. 30.12.2013 as she is supposed toact with due diligence. Therefore, we hold that theassessee has failed to satisfactorily explain 1100 daysdelay in filing of this appeal. It is a trite prepositionof law that in delay matters, liberal and lenient approachto be adopted. But in this case, there is no plausibleexplanation much less a satisfactory one. In thesecircumstances, delay of 1100 days does not deserve to becondoned on mere asking. Therefore, this assessee’s appealITA 2293/Mds/2013 is dismissed as suffering from delay andlaches.6. Same order to follow in ITAs Nos.2294 to 2303/Mds/2013.7. To sum up, all appeals are dismissed as time barred." 14. Aggrieved by the order of the Tribunal, the present appealshave been filed by the assessees raising the substantial questionsof law mentioned supra. 15. The respondent was put on notice and Mr.T.R.Senthil Kumar,learned Standing Counsel takes notice for the respondent. 16. Subsequent to the hearing of the appeals, M.P.No.1 of 2014has been filed by the appellants seeking to furnish the medicalrecords in support of the certificate dated 16.11.2013 issued byMohan Nursing Home, Chennai. The said certificate reads as follows:"This is to certify that I have examined Mr.E.V.PerumalSwami Reddy, aged about 57years, sex-Male resident of No-53, Z-block, Annanagar, Chennai-600040 is diabetic withhttps://hcservices.ecourts.gov.in/hcservices/Coronary Artery Bypass Grafting (CABG) with LV remodeling, presented with unstable angina with liable ECG changes andGallbladder Surgery (Cholecystectomy) was under treatmentfor recent onset angina and long standing co-moridcondition like diabetes mellitus associated withhyptertension. He was under my treatment from 02-Nov-2010till 15-Nov-2013 with the consultation of respectivespecialists. In view of the above condition I haveadvised him to avoid physical and mental stress andcomplete bed rest which is absolutely necessary. Anylittle strain may cause anxiety to his life itself." 17. The said Miscellaneous Petition has been filed under Order41 Rule 27 of the Code of Civil Procedure seeking to produceadditional documents in support of the treatment taken, as claimedin the certificate dated 16.11.2013, which was filed before theTribunal. 18. The respondent has filed objection stating that newdocuments are sought to be filed. 17. The said Miscellaneous Petition has been filed under Order41 Rule 27 of the Code of Civil Procedure seeking to produceadditional documents in support of the treatment taken, as claimedin the certificate dated 16.11.2013, which was filed before theTribunal. 18. The respondent has filed objection stating that newdocuments are sought to be filed. 19. Learned counsel appearing for the appellants submitted thatSection 260A of the Income Tax Act provides that the provisions ofthe Civil Procedure Code will apply to the appeal filed before theAppellate Court. He further relies upon Order 41 Rule 27 of theCode of Civil Procedure and submitted that Rule 27 of the Code ofCivil Procedure provides for production of additional evidence, ifthe same is relevant to the disposal of the case. He furthersubmitted that the additional documents now filed are relevant tothe facts of the case, as the same are in support of the medicalcertificate dated 16.11.2013, which was filed before the Tribunal. 20. In this connection, learned counsel appearing for theappellant relies on the judgment of Supreme Court in the case of TekRam (Dead) through LRs V. Commissioner of Income Tax, Faridabad inCivil Appeal No.6262 of 2013 dated 05.08.2013 and submitted that ifadditional documents are necessary to the disposal of the case, thesame may be admitted. 21. Learned counsel appearing for the appellants alsosubmitted that the Tribunal without taking into consideration themedical certificate produced by the assessees, dismissed thecondonation petition. He also submitted that the explanation is twofold. One is on health ground and the other is non-release oforiginal documents. Since the Department had not released theoriginal documents sought for by the appellants, they are not in aposition to sell the property to pay the dues. Moreover,Mr.E.V.Perumalsamy Reddy was not in a position to prosecute thecase, since the Doctor had advised him to avoid physical and mentalstress and any little strain may cause anxiety to his life itself.Hence, the appellants could not proceed with the matter any further.He further submitted that the Tribunal failed to see the medicalcondition of Mr.E.V.Perumalsamy Reddy while declining to condone thehttps://hcservices.ecourts.gov.in/hcservices/delay. Further, the appellants are not in a position to mobilise funds, since the properties belonging to the appellants wereattached by the Department and the original documents were seizedduring the course of search. He further submitted that in some ofthe appeals filed before the Commissioner of Income Tax (Appeals),admitted tax has been paid, but the same was overlooked by theCommissioner of Income Tax (Appeals). He also submitted that therewas payment of tax by the orders of the Sub-Court, Kancheepuram,where the amount of approximately Rs.16.00 crores together withinterest totalling to Rs.22.00 crores was taken over by theDepartment and therefore, there was no tax due as on date and hence,the appeals should have been taken by the Tribunal after condoningthe delay. funds, since the properties belonging to the appellants wereattached by the Department and the original documents were seizedduring the course of search. He further submitted that in some ofthe appeals filed before the Commissioner of Income Tax (Appeals),admitted tax has been paid, but the same was overlooked by theCommissioner of Income Tax (Appeals). He also submitted that therewas payment of tax by the orders of the Sub-Court, Kancheepuram,where the amount of approximately Rs.16.00 crores together withinterest totalling to Rs.22.00 crores was taken over by theDepartment and therefore, there was no tax due as on date and hence,the appeals should have been taken by the Tribunal after condoningthe delay. 22. Per contra, learned Standing Counsel appearing for theRevenue submitted that the appellants are now trying to produce newdocuments, which are not produced before the Tribunal. He furthersubmitted that the appellants have yet not paid the entire tax dueand the amount awarded in respect of the land acquisitionproceedings was adjusted towards the tax arrears of the appellantson condition that if there is any third party claim, the same shouldbe refunded to the Court forthwith. Hence, this payment was not interms of the provisions of the Income Tax Act and it was only atemporary arrangement to secure the tax due. He further submittedthat there was no reasonable explanation offered by the assessees innot preferring the appeals in time before the Tribunal, even thoughthe assessees have the knowledge of the proceedings of theCommissioner of Income Tax (Appeals). He further submitted thataccording to the assessees, Mr.E.V.Perumalsamy Reddy was admitted inthe hospital in the month of November, 2012 only. But theProceedings of the Commissioner of Income Tax (Appeals) is dated27.10.2010. Before the Assessing Officer, the representative of theassessee has represented the case. Hence, the said representativecould have represented the matter before the Tribunal also. Hence,the appellants have not satisfactorily explained the delay in notpursuing the matter before the Tribunal. Consequently, the orderof the Tribunal is justified in declining to condone the delay. 23. Heard learned counsel appearing for the appellant and thelearned Standing Counsel appearing for the Revenue and perused thematerials placed before this Court. 24. Before going into the merits of the case, it is relevant tolook into the provisions relied on by the learned counsel appearingfor the appellants. 25. Clause 7 of Section 260A of the Income Tax Act providesthat the provisions relating to the Code of Civil Procedure mayapply in the case of appeal filed under Section 260A of the IncomeTax Act. The said provision reads as follows:"260A. (1) An appeal shall lie to the High Court fromevery order passed in appeal by the Appellate Tribunalbefore the date of establishment of the National Taxhttps://hcservices.ecourts.gov.in/hcservices/Tribunal, if the High Court is satisfied that the case involves a substantial question of law.(2).....(3)....(4)....(5)....(6)....(7) Save as otherwise provided in this Act, theprovisions of the Code of Civil Procedure, 1908 (5 of1908), relating to appeals to the High Court shall, as faras may be, apply in the case of appeals under thissection.” (emphasis supplied) 26. Order 41 Rule 27(1) of the Code of Civil Procedure providesfor production of additional evidence by the parties in appeal oncertain conditions. Rule 27(1)(b) of the Code of Civil Procedureprovides that if the Appellate Court requires any document to beproduced or any witness to be examined to enable it to pronouncejudgment, or for any other substantial cause, the Appellate Courtmay allow such evidence or document to be produced, or witness to beexamined. Clause (2) of Rule 27 provides for recording of reasonfor admission of such additional evidence. (emphasis supplied) 26. Order 41 Rule 27(1) of the Code of Civil Procedure providesfor production of additional evidence by the parties in appeal oncertain conditions. Rule 27(1)(b) of the Code of Civil Procedureprovides that if the Appellate Court requires any document to beproduced or any witness to be examined to enable it to pronouncejudgment, or for any other substantial cause, the Appellate Courtmay allow such evidence or document to be produced, or witness to beexamined. Clause (2) of Rule 27 provides for recording of reasonfor admission of such additional evidence. 27. Order 41 Rule 27 of the Code of Civil Procedure reads asfollows:"R.27. Production of additional evidence in AppellateCourt.- (1) The parties to an appeal shall not be entitledto produce additional evidence, whether oral ordocumentary, in the Appellate Court. But if - (a) the Court from whose decree the appeal ispreferred has refused to admit evidence which ought tohave been admitted, or (aa) the party seeking to produce additionalevidence, establishes that notwithstanding the exercise ofdue diligence, such evidence was not within his knowledgeor could not, after the exercise of due diligence, beproduced by him at the time when the decree appealedagainst was passed, or (b) the Appellate Court requires any document to beproduced or any witness to be examined to enable it topronounce judgment, or for any other substantial cause,the Appellate Court may allow such evidence or document tobe produced, or witness to be examined.(2) Whereever additional evidence is allowed to beproduced by an Appellate Court, the Court shall record thereason for its admission." 28. In this connection, the decision relied on by the learnedcounsel appearing for the appellants needs to be seen. The SupremeCourt, in the case of Tek Ram (Dead) through LRs V. Commissioner ofIncome Tax, Faridabad in Civil Appeal No.6262 of 2013 dated05.08.2013, held as follows:https://hcservices.ecourts.gov.in/hcservices/"3. This Court, while issuing notice to the respondent, by its order dated 03.02.2012, had passed thefollowing order:"....... Issue notice as to why the matter should not be sentback to the High Court as, today, learned counsel for thepetitioner has placed before us number of documents whichearlier were not placed before the High Court."4. In our opinion, the documents, which the appellantshave now filed before this Court are of some relevance andthose documents should be looked into by the High Courtbefore it comes to a conclusion whether the appealrequires to be allowed or to be rejected.5. Taking that view of the matter, we set aside the orderpassed by the High Court and remand the matter back to theHigh Court for fresh disposal of I.T.A.No.109 of 2005,after accepting the documents that were/may be filed bythe appellants." 29. Now addressing the first issue on the filing ofMiscellaneous Petition seeking to furnish additional documents, wefind that Order 41 Rule 27 of the Code of Civil Procedure providesthe party to the appeal to produce additional evidence, whether oralor documentary, in the Appellate Court only on two contingencies,namely, "(a) the Court from whose decree the appeal ispreferred has refused to admit evidence which ought tohave been admitted, or (aa) the party seeking to produce additionalevidence, establishes that notwithstanding the exercise ofdue diligence, such evidence was not within his knowledgeor could not, after the exercise of due diligence, beproduced by him at the time when the decree appealedagainst was passed." 29. Now addressing the first issue on the filing ofMiscellaneous Petition seeking to furnish additional documents, wefind that Order 41 Rule 27 of the Code of Civil Procedure providesthe party to the appeal to produce additional evidence, whether oralor documentary, in the Appellate Court only on two contingencies,namely, "(a) the Court from whose decree the appeal ispreferred has refused to admit evidence which ought tohave been admitted, or (aa) the party seeking to produce additionalevidence, establishes that notwithstanding the exercise ofdue diligence, such evidence was not within his knowledgeor could not, after the exercise of due diligence, beproduced by him at the time when the decree appealedagainst was passed." 30. In the present case, no material has been filed by theappellants to show that these documents were refused to be admittedby the Tribunal or that the appellants even after the exercise ofdue diligence could not produce such evidence before the Tribunal.Therefore, the applicability of clause (1) of Rule 27 of Order 41 ofthe Code of Civil Procedure does not arise. Hence, theMiscellaneous Petition filed by the appellants cannot becountenanced. Nevertheless, taking note of the certificate dated16.11.2013 issued by Mohan Nursing Home, Chennai (extracted supra),this Court, in exercise of power under clause (b) of Rule 27(1) ofOrder 41 of the Code of Civil Procedure, inclined to admit thedocuments now produced, so as to enable us to arrive at a decision,as we find that these documents are in relation to the treatmentsaid to have been undergone by one of the appellants, namely,E.V.Perumalsamy Reddy for the period November, 2010 to November,2013. The certificate dated 16.11.2013 states that Dr.C.Mohan Reddyof Mohan Nursing Home, Chennai had given treatment tohttps://hcservices.ecourts.gov.in/hcservices/Mr.E.V.Perumalsamy Reddy between this period and therefore, it will be necessary to go into these records to find out whether there wassufficient cause in not preferring the appeals before the Tribunalin time. Therefore, in exercise of power under Clause (b) of Rule27(1) of Order 41 of the Code of Civil Procedure, we admit theproduction of additional documents. Accordingly, M.P.No.1 of 2014in T.C.(A)No.535 of 2014 seeking to produce the additional documentsis allowed. 31. The next question that arises for consideration is whetherthe Tribunal is justified in declining to entertain the appeals onthe ground that the delay has not been satisfactorily explained. 32. At the outset, we perused the medical records, whichappears to be a prime reason for seeking condonation of delay.Paragraph 5 of the petition dated 27.12.2013 extracted in paragraph3 of the order of the Tribunal (extracted supra) states that thehusband of one of the appellants, viz., P.S.Rajeswari underwentbypass surgery and was under treatment for Diabetes Mellitusassociated with Hypertension for the period from November 2010 toNovember 2013 and the doctor advised him that any little strain maycause anxiety to his life itself. Hence, they did not inform to himabout the legal proceedings and they were not in a position toconsult their lawyer. This is backed up by the certificate dated16.11.2013. 33. We have perused the additional documents filed by theappellants and the following factors emerge from the said documents. 33. We have perused the additional documents filed by theappellants and the following factors emerge from the said documents. 34. The certificate dated 15th November, 2012 issued byDr.K.N.Reddy reads as follows:"November 15, 2012TO WHOMSOEVER IT MAY CONCERNThis is to certify that Mr.E.V.Perumalsamy Reddy, aged 58years, is a known case of Coronary artery disease,underwent Coronary artery bypass graft (CABG) surgery withEndoventricular Patch Plasty on 13.11.2003. He wasadmitted with history of recent onset angina (unstableangina) and dyspnea on exertion. At present, he isundergoing intensive medical treatment and evaluation inCoronary care unit of Vijaya Heart Foundation - VijayaHospital. In view of his cardiac condition and pasthistory of CABG with ventricular re-modeling surgery, heis not in a fit condition to shift out of the ICU." 35. From the above certificate, it is evident that surgery wasperformed in the year 2003. Shri.E.V.Perumalsamy Reddy was giventreatment in November, 2012 for a brief period. Thereafter, thereare series of test reports. There is also a list of reports fromDecember, 2012. From 1st January, 2013 till December, 2013, exceptmedicine bills, there appears to be no evidence showing that thesaid E.V.Perumalsamy Reddy had taken any treatment. Further, thecertificate, which was produced before the Tribunal dated 16.11.2013https://hcservices.ecourts.gov.in/hcservices/states that Dr.C.Mohan Reddy had given treatment from 02nd November, 2010 till 15th November, 2013. Therefore, the primary documentproduced before the Tribunal is a certificate. There is, however,absolutely no record to show that Dr.C.Mohan Reddy had giventreatment for the period November,2010 to November, 2013. Hence,the Tribunal was correct in stating that the explanation offered bythe assessee is untenable and the certificate is an after thoughtexercise in the absence of other details. The medical reports nowfurnished clearly show that the said Doctor, Dr.C.Mohan Reddy nevertreated the patient for such an extended period of time. A fewmedical test reference is pointed out. It, however, does not revealthat the said Shri.E.V.Perumalsamy Reddy is seriously ill and wascontinuously hospitalised as pleaded. 2010 till 15th November, 2013. Therefore, the primary documentproduced before the Tribunal is a certificate. There is, however,absolutely no record to show that Dr.C.Mohan Reddy had giventreatment for the period November,2010 to November, 2013. Hence,the Tribunal was correct in stating that the explanation offered bythe assessee is untenable and the certificate is an after thoughtexercise in the absence of other details. The medical reports nowfurnished clearly show that the said Doctor, Dr.C.Mohan Reddy nevertreated the patient for such an extended period of time. A fewmedical test reference is pointed out. It, however, does not revealthat the said Shri.E.V.Perumalsamy Reddy is seriously ill and wascontinuously hospitalised as pleaded. 36. Taking into consideration the submissions made by thelearned counsel appearing for the appellants, we went through theadditional documents filed, which contains medical reports andmedical bills, running to 431 pages. From the additional documents,all that we find is that from the year 2003, after the date ofsurgery, till March, 2005, there was no medical record. In the year2005, we find that there are certain routine medical tests.Thereafter in the year 2006, there is absolutely no record to showthat medical treatment was taken by the said E.V.Perumalsamy Reddy.Therefore, it is clear that there was no serious ailment tocomplaint in the year 2006. In the month of February, 2007, seriesof medical tests were taken, but there is nothing on record that hewas hospitalised or was under any medical management for seriousproblem. The series of medical tests show that they are routinecheck ups. Similarly in the year 2008 also, there is a briefmedical admission and series of tests during January, February,August and December, 2008, these are nothing but routine tests asper the reports. These tests appear to be periodical checkup. Inthe year 2009, i.e., after a period of six months, in June 2009,some tests have been done. These tests are also periodical innature. Thereafter from August, 2010, there is no treatment ormedical management till third month of 2011. Thereafter, medicalbill for the month of July, September and December, 2011 have beenenclosed. From January, 2012 to March, 2012, there is no medicalrecord or proof for having taken any treatment. Then in the monthof June, 2012, again regular health check up was done. ForOctober, 2012, there is no proof or medical treatment or record fortaking such treatment . During the months of November andDecember, 2012, series of medical tests have been done, which, onverification, are routine in nature. From January, 2013 toDecember, 2013, except medicine bills, no medical record is producedby the appellants. 37. A perusal of the entire record shows that after the surgeryundergone by E.V.Perumalsamy Reddy in the year 2003, there has beenperiodical medical management, but no where it has been stated thathis physical and mental condition is so bad and that he iscompletely bed- ridden. Therefore, the medical records now producedhttps://hcservices.ecourts.gov.in/hcservices/by the appellants by way of additional documents do not show that it is a case of incapacity of Sri.E.V.Perumalsamy Reddy to performusual duties. In any event, for the period November, 2010 toNovember, 2013, there appears to be no serious health issue. Hence,