Tca/529/2014 Of M/S Ajmeer Sherriff And Co v. The Income Tax Officer I (2)

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 02.02.2015 CORAM: THE HONOURABLE MR.JUSTICE R.SUDHAKARandTHE HONOURABLE MRS.JUSTICE S.VIMALA Tax Case (Appeal) No.529 of 2014 M/s.Ajmeer Sherriff and Co.44 C Women's Hospital StreetThiruthuraipoondi - 614 713 .. Appellant versus.. Respondent The Income Tax Officer - I (2),Income Tax Department,Nagapattinam. PRAYER: Tax Case Appeal filed under Section 260A of the Income TaxAct, 1961 as against the order dated 09.10.2013 made inI..T.A..No.523/Mds/2013 on the file of the Income Tax AppellateTribunal, Madras 'B' Bench for the assessment year 2007-2008. against the order of the Commissioner of Income Tax (Appeals)Trichirappalli dated 27.12.2010 made in ITA.No.371/09-10 against theIncome Tax Officer, ward 1 (2) Nagapattinam dated 30.12.2009 made inPAN.NO.AALFA 5285E Assessment year 2007-2008 (Judgment of the Court was delivered by S.VIMALA, J.) This Tax Case (Appeal) has been filed by the assessee,challenging the order passed by the Income Tax Appellate Tribunaldated 09.10.2013 declining to condone the delay of 754 days in https://hcservices.ecourts.gov.in/hcservices/ filing the appeal, raising the following substantial questions oflaw: "1. Whether the Appellate Tribunal is correct inlaw in dismissing the appeal on the ground of limitationin spite of the Managing Partner's continuing multiplemedical complications shown as the reason in theaffidavit filed in support of the plea for condonation ofdelay in filing the said appeal before them? 2. Whether the Appellate Tribunal is correct in lawfor not condoning the delay in filing the appeal beforethem to challenge the unreasonable and wrongdisallowances which resulted in additions in thecomputation of taxable total income by the respondentupon overlooking the binding principles laid down by theApex Court reported in 167 ITR 461? 3. Whether the Appellate Tribunal is correct in lawfor not considering the grounds of appeal formed part ofstatutory Form No.36 in challenging the wrong additionmade in the computation of taxable total income eventhough the said disallowances were challenged on variouslegal facets?" 2. The brief facts of the case are as follows: The assessment in this case relates to the assessment year2007-2008. The assessee is a firm engaged in the business of runningof lorry on contract basis. The assessee had filed its return ofincome for the assessment year in question disclosing income ofRs.2,83,653/- The Assessing Officer while completing the assessmentdisallowed the entire freight expenditure and 50% of themiscellaneous expenditure claimed by the assessee. As against thesaid order of the Assessing Officer, the assessee filed an appealbefore the Commissioner of Income Tax (Appeals), who, by order dated27.12.2010, upheld the order of the Assessing Officer exceptreducing the disallowance of miscellaneous expenditure at 25%. Asagainst the said order of the Commissioner of Income Tax (Appeals)dated 27.12.2010, the assessee preferred an appeal before the IncomeTax Appellate Tribunal with a delay of 754 days. The Tribunal, byorder dated 9.10.2013, dismissed the appeal holding that theexplanation offered by the assessee was not satisfactory. Aggrievedby the said order of the Tribunal declining to condone the delay,the assessee is before this Court. 3. Heard learned counsel appearing for the assessee and thelearned Standing Counsel appearing for the Revenue and perused thematerials placed before this Court. 4. It is seen that as against the order passed by theCommissioner of Income Tax (Appeals) dated 27.12.2010, the assesseehad filed an appeal before the Income Tax Appellate Tribunal along 3. Heard learned counsel appearing for the assessee and thelearned Standing Counsel appearing for the Revenue and perused thematerials placed before this Court. 4. It is seen that as against the order passed by theCommissioner of Income Tax (Appeals) dated 27.12.2010, the assesseehad filed an appeal before the Income Tax Appellate Tribunal along with a petition to condone the delay of 754 days in filing theappeal. The Tribunal, while dismissing the petition, has reasonedthat, (a) the allegation regarding ill-health and multiple medicalcomplications is bereft of details and as required by law, everydays delay has not been explained; and (b) even assuming that thereason is true, the appellant is a firm containing four partners andtherefore, even if one of the partner was not well, the otherpartners could have taken steps to file the appeal in time andtherefore, there is no justification to condone the delay. 5. The justification of this order is under challenge in thisappeal. 6. The contention of the learned counsel for the appellant isthat the term “sufficient cause” has always received liberalinterpretation by the Courts and sought indulgence of this Court insetting aside the order declining to condone the delay. 6.1. Per contra, the learned Standing Counsel for therespondent submitted that the delay is not of a short duration, butinordinate and therefore, strict approach is called for. 7. The contentions raised on both sides have to be consideredin the light of the facts pleaded / placed. 8. Admittedly, the appellant is a partnership firm consistingof four partners. Moreover, one of the partner is stated to be theson of the Managing Partner. Though the medical terminology used inthe affidavit, i.e., continuing multiple medical complications,gives an impression that the Managing Partner should have been undercontinuous treatment, the discharge summaries, dated 10.09.2010,08.07.2011, 15.09.2011 and 22.7.2013 would show that the ManagingPartner had been on treatment for a very short duration for anintermittent period. It would not have been difficult for theManaging Partner if really he had been diligent to file the appealin time. Even assuming that he was on continuous medical treatment,the son or other partners should have been diligent in taking up theresponsibility in filing the appeal in time. Therefore, when theconduct on the part of the appellant exhibited gross negligence /procrastinating attitude and incorrect grounds, the Income TaxAppellate Tribunal rightly dismissed the petition to condone thedelay. 9. The principles involved and the approach needed whileconsidering the application for condonation of delay has beenhighlighted in the decision reported in 2013 (5) CTC 547 (EshaBhattacharjee V. Managing Committee of Raghunathpur, Nafar Academyand others, and the relevant portions are extracted for convenientreference:- "15. From the aforesaid authorities the principlesthat can broadly be culled out are: i) There should be a liberal, pragmatic, justice-oriented, non- pedantic approach while dealing with anapplication for condonation of delay, for the courts arenot supposed to legalise injustice but are obliged toremove injustice. ii) The terms "sufficient cause" should beunderstood in their proper spirit, philosophy andpurpose regard being had to the fact that these termsare basically elastic and are to be applied in properperspective to the obtaining fact situation. iii) Substantial justice being paramount andpivotal the technical considerations should not be givenundue and uncalled for emphasis. iv) No presumption can be attached to deliberatecausation of delay but, gross negligence on the part ofthe counsel or litigant is to be taken note of. v) Lack of bona fides imputable to a party seekingcondonation of delay is a significant and relevant fact. ii) The terms "sufficient cause" should beunderstood in their proper spirit, philosophy andpurpose regard being had to the fact that these termsare basically elastic and are to be applied in properperspective to the obtaining fact situation. iii) Substantial justice being paramount andpivotal the technical considerations should not be givenundue and uncalled for emphasis. iv) No presumption can be attached to deliberatecausation of delay but, gross negligence on the part ofthe counsel or litigant is to be taken note of. v) Lack of bona fides imputable to a party seekingcondonation of delay is a significant and relevant fact. vi) It is to be kept in mind that adherence tostrict proof should not affect public justice and causepublic mischief because the courts are required to bevigilant so that in the ultimate eventuate there is noreal failure of justice. vii) The concept of liberal approach has toencapsule the conception of reasonableness and it cannotbe allowed a totally unfettered free play. viii) There is a distinction between inordinatedelay and a delay of short duration or few days, for tothe former doctrine of prejudice is attracted whereas tothe latter it may not be attracted. That apart, thefirst one warrants strict approach whereas the secondcalls for a liberal delineation. ix) The conduct, behaviour and attitude of a partyrelating to its inaction or negligence are relevantfactors to be taken into consideration. It is so as thefundamental principle is that the courts are required toweigh the scale of balance of justice in respect of bothparties and the said principle cannot be given a totalgo by in the name of liberal approach. x) If the explanation offered is concocted or thegrounds urged in the application are fanciful, thecourts should be vigilant not to expose the other sideunnecessarily to face such a litigation. xi) It is to be borne in mind that no one gets awaywith fraud, misrepresentation or interpolation by takingrecourse to the technicalities of law of limitation. xii) The entire gamut of facts are to be carefully https://hcservices.ecourts.gov.in/hcservices/ scrutinized and the approach should be based on theparadigm of judicial discretion which is founded onobjective reasoning and not on individual perception.xiii) The State or a public body or an entityrepresenting a collective cause should be given someacceptable latitude." 10. We find that the appellant in the present case has beenlackadaisical in approach and in a nonchalant manner they havetried to seek condonation of delay. The Supreme Court in thedecision referred supra has deprecated the practice of showingleniency in unwarranted fact situation. The parameters laid down bythe Supreme Court as to when the delay should not be condoned getsquarely attracted to the facts of the present case and therefore,we find no reason to condone the delay. The Tribunal was correct indismissing the appeal on that score. 11. In the light of the above, we find no question of law muchless any substantial question of law arises for consideration inthis appeal. Accordingly, this Tax Case (Appeal) stands dismissed.No costs. Sd/- Asst.Registrar (CS III) /true copy/ sl Sub Asst. Registrar To1. The Income Tax Appellate Tribunal, Madras 'B' Bench. 2. The Income Tax Officer -1(2)Income Tax DepartmentNagapattinam 3. The Commissioner of Income Tax (Appeals)Trichirapalli1 cc to M/s.J. Narayanaswamy, Advocate, sr. 55001 cc to M/s.S. Sridhar, Advocate, sr. 5261 CA (CO)kk 18/2