Tiswadi, Goa v. The Commissioner Of Income Tax

IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NOS.19, 21, 22, 23, 24 AND 25 OF 2017 Mr. Peter Vaz, Age 49 years, Indian National, Residing at Bunglow No. 4, Models Meridien, Marine Road, Caranzalem, Ilhas, Goa. PAN NO. (i) Mrs. Natalina Vaz (ii) Ms. Danira Isabel Vaz (iii) Mr. Diogo Nathan Vaz (iv) Ms. Dionne Nyra Vaz (No. IV being Minor through her mother & natural guardian Mrs. Natalina Vaz) All residents of Bungalow No.4, Models Meridien, Marine Road, Caranzalem, ... Appellants. Ilhas-Goa, Tiswadi, Goa. Versus 1. The Commissioner of Income Tax, Central Circle, Bangalore. 2. The Assistant Commissioner of Income Tax, Central Circle, Panaji, Goa. 3. The Principle Commissioner of ... Respondents. Income, Panaji, Goa. WITH TAX APPEAL NOS.20, 26, 27, 28, 29 & 30 OF 2017 Mr. Edgar Braz Afonso, Age 54 years, Indian National,Residing at H. No. E-374,Tivai Waddo, Calangute Bardez, Goa. PAN NO. Versus 1. The Commissioner of Income Tax, Central Circle, Bangalore. ... Appellant. 2. The Assistant Commissioner of Income Tax, Central Circle, Panaji, Goa. 3. The Principle Commissioner of Income, Panaji, Goa. ... Respondents. Mr. P. Pardiwala, Senior Advocate with Mr. J. Sanghavi, and Mr. H. D. Naik, Advocates for the Appellants-Assessees. Ms. S. Linhares, Standing Counsel for the Respondents-Revenue. Coram:- M. S. SONAK & SMT. M. S. JAWALKAR, JJ. stReserved on:- 31 March 2021Pronounced on : 5[th] April 2021 JUDGMENT ( Per M. S. Sonak, J) Heard Mr. Pardiwala, learned Senior Advocate along withMr. J. Sanghavi and Mr. H. D.Naik, learned counsel for the Appellantsin each of these appeals. 2.Heard Ms. S. Linhares, learned Standing Counsel for theIncome Tax Department in each of these appeals. 3.issues involved therein are virtually identical. The learned counsel for the parties agree that these Tax Appeals can be disposed of by a common judgment and order since the 4.These appeals were admitted by order dated 15th June 2017on the following substantial questions of law : 1. Whether in the facts and in the circumstances of the case and in law, the Appellate Ld Tribunal was right in invokingthe provision of Section 2(22)(e) of the Act and making anaddition of deemed dividend in the hands of the Appellant? 2. Whether on the facts and in the circumstances of the caseand in law, the Ld. Tribunal was justified in holding that thetransactions which are recorded in the books of accounts of the Company and the Firm would be regarded as incriminating material in the case of the Appellant when the Appellant was not a party to the said transactions? 3. Whether on the facts and in the circumstances of the case and in law the Ld. Tribunal was justified in holding that the provision of Section 2(22)(e) are applicable without considering the argument of the appellant that the accountbetween the Company and the Firm was a running currentaccount? 4. Whether on the facts and circumstances of the case and inlaw, the Appellate Ld. Tribunal was correct in rejecting thecross objections filed by the appellant solely on the ground of delay, when admittedly, the Appellate Ld. Tribunal in the impugned order has come to the conclusion that the issues raised in the cross objection are legal issues? 5.After these appeals were heard for some time, we weresatisfied that these appeals involve an additional substantial question oflaw. Accordingly, by our order dated 30th March 2021, we framed theadditional substantial question of law and adjourned the matter to enablethe learned counsel for the parties to address us on such additionalsubstantial question of law. The additional substantial question of law framed by us reads as follows:- 4. Whether on the facts and circumstances of the case and inlaw, the Appellate Ld. Tribunal was correct in rejecting thecross objections filed by the appellant solely on the ground of delay, when admittedly, the Appellate Ld. Tribunal in the impugned order has come to the conclusion that the issues raised in the cross objection are legal issues? 5.After these appeals were heard for some time, we weresatisfied that these appeals involve an additional substantial question oflaw. Accordingly, by our order dated 30th March 2021, we framed theadditional substantial question of law and adjourned the matter to enablethe learned counsel for the parties to address us on such additionalsubstantial question of law. The additional substantial question of law framed by us reads as follows:- “Whether in the facts and circumstances of the present case,it was open to the appellant/assessee to have supported theorders of the Commissioner (Appeals), based on the groundthat the jurisdictional parameters prescribed under Section153C of the I.T. Act were not fulfilled, even without thenecessity of filing any cross objections ?” 6.To appreciate the setting in which the aforesaid substantialquestions of law arise, it is necessary to refer to some skeletal facts. 7.Peter Vaz, (since deceased and now represented by his legalrepresentatives) and Edgar Afonso were partners holding 50% stakerespectively in the partnership firm functioning under the name and style“Models Real Estate Developers” ( the said firm). They also held equalstake as shareholders of the company “Models Constructions PrivateLimited” ( the said company). Both the firm as well as the company wereengaged in the business of real estate, construction, and development. 8.On 31.01.2012, a search was held in terms of Section 132 ofthe Income Tax Act, 1961 ( IT Act) on the said firm and the saidcompany. Pursuant to such search notices were issued on 30.07.2012 to Peter Vaz and Edgar Afonso calling upon them to file returns of incomefor the Assessment Years 2006-2007 to 2011-2012. For theseAssessment Years, the original assessment had already been completedunder Section 143(1) of the IT Act. 9.Both Peter Vaz and Edgar Afonso responded to the noticesunder Section 153C of the IT Act submitting inter alia the returnsoriginally filed by them under Section 139(1) of the IT Act may betreated as returns in response to the notices under Section 153C of theIT Act. 10.In the course of assessment proceedings, Peter Vaz and EdgarAfonso were required to show cause as to why the loans given by the saidcompany to the said firm should not be treated as 'deemed dividend' inthe hands of Peter Vaz and Edgar Afonso in terms of Section 2(22)(e) ofthe IT Act. Both of them filed detailed responses submitting howaccording to them, the provisions of Section 2(22)(e) of the IT Act werenot at all attracted in the facts and circumstances of the case. 11.Assessing Officer vide Assessment Order dated 31.03.2014however held that the amounts reflected in the books of the said firm aspayable to the company were like 'loans and advances' and accordingly,directed that the same be treated as 'deemed dividend' under Section2(22)(e) of the IT Act. These amounts were added to the income of theassessees' Peter Vaz and Edgar Afonso and brought to additional tax. 31.03.2014, the assessees' Peter Vaz and Edgar Afonso appealed to theCommissioner of Income Tax (Appeals). By order dated 28.07.2015, theCIT (Appeals) allowed the appeals and held that the amounts reflected inthe books of the said firm could not be treated as 'deemed dividend'under Section 2(22)(e) of the IT Act. Accordingly, the AssessmentOrders dated 31.03.2014 made by the Assessing Officer were set aside. 31.03.2014, the assessees' Peter Vaz and Edgar Afonso appealed to theCommissioner of Income Tax (Appeals). By order dated 28.07.2015, theCIT (Appeals) allowed the appeals and held that the amounts reflected inthe books of the said firm could not be treated as 'deemed dividend'under Section 2(22)(e) of the IT Act. Accordingly, the AssessmentOrders dated 31.03.2014 made by the Assessing Officer were set aside. 13.The Revenue aggrieved by the orders dated 28.07.2015made by the CIT (Appeals) instituted appeals before the Income TaxAppellate Tribunal (ITAT). During the pendency of the appeals, theassessees requested the Assistant Commissioner of Income Tax to furnishthem a copy of 'satisfaction for issuance of notice under Section 153C'.Such copies were furnished to the assessees on 22.08.2016 orthereabouts. However, the documents which were relied upon by theAssistant Commissioner were not furnished to the assessees. Therefore,the assessees, by letters dated 25.08.2016 sought the same. There was noresponse to these letters dated 25.08.2016. 14.The assessees filed cross-objections on 30.08.2016 before theITAT accompanied by an application seeking condonation of delay of248 days in filing the cross-objections. 15.The ITAT, by a common judgment and order dated02.12.2016 allowed the appeals filed by the Revenue but dismissed thecross-objections filed by the assessees by refusing to condone the delay of248 days in filing of the same. Aggrieved by the impugned judgment and order dated 02.12.2016, the assessees' Peter Vaz and Edgar Afonsohave instituted the present appeals under Section 260A of the IT Act onthe aforesaid substantial questions of law. 16.Mr. Pardiwala, learned Senior Advocate for the Appellants, atthe outset, referred us to the provisions of Section 153C of the IT Act asamended till the year 2013 and thereafter compared the same with theprovisions of Section 153C as amended from time to time between theyears 2013 and 2020. He submitted that the provisions of Section 153Cof the IT Act have undergone significant changes between the years 2013and 2020. He pointed out that in terms of the provisions of Section153C as amended till 2013, the jurisdiction to proceed under Section153C was entirely dependent on the satisfaction that any money, bullion,jewelry, or other valuable article or thing or books of account ordocuments seized or requisitioned 'belongs or belong to a person' otherthan the person referred to in Section 153A of the IT Act. Thereafter, theprovisions of Section 153A were amended and proceedings underSection 153C could be initiated even where the Assessing Officer wassatisfied that any books of account or documents, seized or requisitioned,'pertains or pertain to', or any information contained therein relates to aperson other than the person referred to in Section 153A of the IT Act. 17.Mr. Pardiwala submitted that since these matters concern theAssessment Years 2006-2007 to 2011-2012, the provisions of Section153C as amended up to the year 2013, were attracted. He submitted thatfrom the material available on record, including the satisfaction note 17.Mr. Pardiwala submitted that since these matters concern theAssessment Years 2006-2007 to 2011-2012, the provisions of Section153C as amended up to the year 2013, were attracted. He submitted thatfrom the material available on record, including the satisfaction note submitted to the assessees, it is apparent that the books of accountsbelonging to the said firm or the said company were found in the courseof a search under Section 132 of the IT Act. There is no material onrecord to hold that any books of accounts belonging to either Peter Vazand Edgar Afonso, assessees herein were ever found in the course of asearch under Section 132 of the IT Act. He submits that in the absenceof satisfaction on this jurisdictional aspect, no action in terms of Section153C of the IT Act was competent. He, therefore, submits that theaction under Section 153C of the IT Act was without jurisdiction andthis ground was required to be considered by the ITAT, irrespective ofwhether or not any cross objections were filed by the assessees. Hesubmitted that this was an issue of law that went to the root of thematter and there was no justification on the part of the ITAT in evenrefusing to consider such a significant issue. He relied on B. R. BamasiVs Commissioner of Income Tax1, Commissioner of Income Tax VsEdward Keventer Sucessors P. Ltd.2, National Thermal Power Co.Ltd. Vs Commissioner of Income Tax3, Commissioner of Sales TaxVs Sarjoo Prasad Ram Kumar4, Mavany Brothers Vs Commissionerof Income Tax5, Director of Income Tax Vs Ingram Micro India6Exports P. Ltd., in support of his submissions. 18.Mr. Pardiwala submitted that in this case there was nonecessity of filing any cross-objections because the assessees were only 11972(83) ITR 223(Bom). 2123 ITR 200 (Del)31998(97) Taxman 358 (SC)31998(97) Taxman 358 (SC) 41976(37) STC 533 52015(62) Taxmann. com 50 (Bom) 62015(60) Taxmann.com 57(Bom) seeking to support the orders made by the CIT (Appeals), which werealready in their favour. He relied on Rule 27 of the Appellate TribunalRules, 1963 (the said Rules) to submit that the Respondent, though hemay not have appealed may support the order appealed against on any ofthe grounds decided against him. He relied on B. R. Bamasi ( supra),Dahod Sahakari Kharid Vechan Sangh Ltd. Vs Commissioner ofIncome Tax7, S. Nazeer Ahmed Vs State Bank of Mysore, andothers8in support of his contentions that in the facts of the present case,there was no necessity of even filing any cross-objections before the ITATto urge the issue of failure to comply with jurisdictional preconditionsbefore invoking the provisions of Section 153C of the IT Act. 19.Mr. Pardiwala finally submitted that more than sufficientcause was shown by the assessees for condoning the delay of 248 days infiling the cross-objections. He submits that refusal to condone the delaywas contrary to several decisions requiring a liberal approach in thematters of condonation of delay. He submitted that irrelevantconsiderations have been taken into account by ITAT to refuse thecondonation of delay and to that extent, there is perversity involved. Herelied on Indian Bank Vs Manilal Govindji Khona9, Collector VsMst. Katiji and others10and Rathna Stores P. Ltd Vs Commissionerof Income Tax11and some other decisions in support of his contentions. 9, Collector Vs, Collector Vs 20.Ms. S. Linhares, learned Standing Counsel for the Revenue 7(2006) 282 ITR 3218(2007) 11 SCC 7592015(3) SCC 71210 1987(2) SCC 10711 2020(120) Taxmann. com 260 (Mad)8(2007) 11 SCC 7592015(3) SCC 71210 1987(2) SCC 10711 2020(120) Taxmann. com 260 (Mad) 9, Collector Vs, Collector Vs 20.Ms. S. Linhares, learned Standing Counsel for the Revenue 7(2006) 282 ITR 3218(2007) 11 SCC 7592015(3) SCC 71210 1987(2) SCC 10711 2020(120) Taxmann. com 260 (Mad)8(2007) 11 SCC 7592015(3) SCC 71210 1987(2) SCC 10711 2020(120) Taxmann. com 260 (Mad) defended the impugned orders made by the ITAT based upon thereasoning reflected therein. She submitted that in this case, it wasnecessary to file cross-objections and since no sufficient cause was shownby the assessees, the application seeking condonation of delay was quiterightly rejected. She referred to the provisions of Section 124(3) of the ITAct to point out that no objection to jurisdiction could have been raisedin these matters after the conclusion of the assessment proceedings underSection 153C of the IT Act. She submitted that the condonation ofdelay might have resulted in depriving the Revenue of resorting to analternate remedy, assuming that the ITAT was to hold that there was nojurisdiction to proceed under Section 153C of the IT Act. She submitsthat the assessees were advised by several legal professionals and the pleaof incorrect legal advice was rightly rejected by the ITAT in the facts andcircumstances of the present case. She relied on Commissioner ofIncome Tax, Gujarat Vs Vijaybhai N. Chandrani12, MunicipalCommissioner, Calcutta and others Vs Salil Kumar Banerjee andothers13, and Commissioner of Income Vs Ng Technologies Ltd.14 insupport of her contentions. 21.Ms. Linhares further submitted that in the event this Courtwere to hold that the Appellants did not need to file any cross-objectionsto raise the issue of jurisdiction to support the CIT (Appeals) order or ifthis Court were to condone the delay in filing cross-objections then thematter would have to be remanded to the ITAT because the departmental representative had made it clear before the ITAT that theadditional material will be produced to establish the fulfillment ofconditions prescribed under Section 153C of the IT Act. 22.Ms. Linhares submitted that for all the aforesaid reasons,these appeals be dismissed. 23.The rival contentions now fall for our determination. 24.According to us, it will be appropriate to consider theadditional substantial question of law as framed by us in our order dated30.03.2021 together with the substantial question of law No.4 sinceboth these questions concern the issue of very jurisdiction to proceedunder Section 153C of the IT Act against the Appellants/Assessees. Asnoted earlier, such a jurisdictional issue was not permitted to be raisedbefore the ITAT, inter alia on the ground that there was a necessity offiling cross-objections expressly raising such a jurisdictional issue andbecause there was no sufficient cause shown for condoning the delay of248 days in raising such jurisdictional issue by filing cross-objections. 25.At this stage, therefore we are not concerned with the issue asto whether the jurisdictional parameters for invoking the provisions ofSection 153C of the IT Act were fulfilled or not. However, at this stage,we are concerned with the issue as to whether the ITAT was right andjustified in preventing the Appellants/assessees from raising thisjurisdictional issue either for want of cross-objections or because thedelay in filing the cross-objections was not sufficiently accounted for. 26.To begin with therefore we propose to consider the issue asto whether there was any necessity for the Appellants/assessees to filecross-objections before the ITAT to raise the jurisdictional issue ofcompliance with jurisdictional parameters before any proceedings couldbe initiated under Section 153C of the IT Act. 25.At this stage, therefore we are not concerned with the issue asto whether the jurisdictional parameters for invoking the provisions ofSection 153C of the IT Act were fulfilled or not. However, at this stage,we are concerned with the issue as to whether the ITAT was right andjustified in preventing the Appellants/assessees from raising thisjurisdictional issue either for want of cross-objections or because thedelay in filing the cross-objections was not sufficiently accounted for. 26.To begin with therefore we propose to consider the issue asto whether there was any necessity for the Appellants/assessees to filecross-objections before the ITAT to raise the jurisdictional issue ofcompliance with jurisdictional parameters before any proceedings couldbe initiated under Section 153C of the IT Act. 27.In this case, admittedly, the CIT (Appeals) had decided thematters in favor of the assessees and even set aside the orders made by theAssessing Officers. Therefore, the assessees did not have to institute anyfurther appeals to the ITAT. The Revenue in this case had appealed tothe ITAT against the orders made by the CIT (Appeals). Therefore, theissue is, whether the assessees could have raised the issue of non-compliance with jurisdictional parameters set out under Section 153C ofthe IT Act, before the ITAT, even without filing any cross-objectionsbefore the ITAT. 28.At least, prima facie, non-compliance with jurisdictionalparameters set out under Section 153C of the IT Act, if established, willgo to the root of the matter and even nullify the very action initiatedunder Section 153C of the IT Act. Based on the material furnished tothe assessees, it was the case of the assessees that what was found in thecourse of search proceedings under Section 132 of the IT Act in thepremises of the said firm and the said company, were the books ofaccounts belonging to the said firm and the said company. It is the caseof the assessees that no books of accounts belonging to the assessees i.e.Peter Vaz and Edgar Afonso were found in the search proceedings under Section 132 in the premises of the said firm and the said company.Therefore, it was the case of the assessees that no proceedings underSection 153C of the IT Act could ever have been initiated against theseassessees. 29. Mr. Pardiwala stressed that the provisions of Section 153C asamended up to the year 2013 required the Assessing Officer to besatisfied that the books of the accounts belonging to the assessees whowere proposed to be proceeded with under Section 153C ought to havebeen found, as a precondition for any action under Section 153C of theIT Act. For this purpose, he compared the provisions of Section 153C asamended up to 2020, in which, there is a significant departure. Amendedprovisions, which did not apply to the present case, provided that theaction under Section 153C was competent even if the books of accounts“pertaining to” and not belonging to the assessee were found during thesearch under Section 132 upon a person not referred to in Section 153Aof IT Act. He submitted that this was an issue of law and therefore, theITAT should have permitted the assessees to raise this issue even withoutthe necessity of filing any cross-objections. He referred to Rule 27 of theAppellate Tribunal Rules, 1963 to contend that this Rule gives a right tothe Respondent in an appeal before the ITAT to support the orderappealed against on any of the grounds decided against him, even thoughhe may not have appealed against the order. 30.Rule 27 of the Appellate Tribunal Rules, 1963 reads asfollows:- “Respondent may support order on grounds decided. against him 27. The respondent, though he may not have appealed, maysupport the order appealed against on any of the groundsdecided against him.” 31. 30.Rule 27 of the Appellate Tribunal Rules, 1963 reads asfollows:- “Respondent may support order on grounds decided. against him 27. The respondent, though he may not have appealed, maysupport the order appealed against on any of the groundsdecided against him.” 31. 31.In this case, the assessees merely wanted to support the ordermade by the CIT (Appeals), which was entirely in their favor. Theassessees wished to raise an issue, that was at least prima facie going tothe root of jurisdiction to initiate proceedings under Section 153C of theIT Act. Having regard to the provisions of Rule 27 referred to above, theITAT in our opinion should have permitted the assessees who wereRespondents before it, to support the orders of CIT (Appeals) on thisground, even without the necessity of filing any cross-objections. 32.In Dahod Sahakari Kharid Vechan Sangh Ltd. (supra), theDivision Bench of Gujarat High Court was deciding whether, on thefacts and in the circumstances of the case, the Tribunal was right in lawin holding that the assessee needed to file cross-objections despite fullysucceeding in appeal and therefore, being unable to challenge the findingof the CIT (Appeals) that the assessee was guilty of concealment ofincome and/or furnishing inaccurate particulars. 33. In the above case, the CIT (Appeals) recorded a finding thatthe assessee had concealed particulars of his income or furnishedinaccurate particulars of his income but for detailed reasons set out, theCIT (Appeals) quashed the penalty imposed upon the assessee underSection 271 of the IT Act. In the appeal filed by the Revenue before the ITAT, the assessee sought to assail the finding of concealment but theITAT did not permit the assessee to do so, on the ground that theassessee had failed to file any cross-objections. 34. The Division Bench of Gujarat High Court however held thatthe ITAT committed an error in law in not permitting the assessee toassail the finding of the concealment without filing cross-objections. TheCourt held that the ITAT apparently lost sight of the fact that theassessee had succeeded before the CIT (Appeals) that had allowed theassessee's appeal and even set aside the penalty in its entirety. Therefore,the assessee did not have to appeal. The position in law is well settledthat the cross-objections, for all intents and purposes, would amount toan appeal and the cross objector would have the same rights which anappellant has before the Tribunal. Since the assessee did not have toappeal, the ITAT could not have insisted upon the filing of cross-objections as a precondition for permitting the assessee to assail thefinding of concealment. 35.The Division Bench referred to the provisions of Section 253of the IT Act and after analyzing the scheme held that on a plain readingof the provision, it transpires that the party had been granted an optionor a discretion to file cross-objections. In case a party having succeededbefore the CIT (Appeals) opts not to file cross-objection even when anappeal is preferred by the other party, from that, it is not possible to inferthat the said party had accepted the order or the part thereof which wasagainst the respondent. Since the ITAT drew such an inference that was not supported by the plain language of Section 253, the High Court heldthat the ITAT was clearly in error. 35.The Division Bench referred to the provisions of Section 253of the IT Act and after analyzing the scheme held that on a plain readingof the provision, it transpires that the party had been granted an optionor a discretion to file cross-objections. In case a party having succeededbefore the CIT (Appeals) opts not to file cross-objection even when anappeal is preferred by the other party, from that, it is not possible to inferthat the said party had accepted the order or the part thereof which wasagainst the respondent. Since the ITAT drew such an inference that was not supported by the plain language of Section 253, the High Court heldthat the ITAT was clearly in error. 36.The High Court then referred to Rule 27 quoted above andheld that if the inference drawn by the ITAT is accepted as a correctproposition, then, it would render Rule 27 of the Appellate TribunalRules, 1963 redundant and nugatory. The High Court held that it is notpossible to interpret the provision in such a manner. Any interpretationplaced on a provision has to be in harmony with the other provisionsunder the Act or the connected Rules and interpretation which makesother connected provisions otiose has to be avoided. Rule 27 of theAppellate Tribunal Rules is clear and unambiguous. The right granted tothe respondent by the said Rule cannot be taken away by the Tribunal byreferring to the provisions of Section 253(4) of the IT Act. The ITATwas, therefore, in error in holding that the finding recorded by the CIT(Appeals) remained unchallenged since the assessee had not filed cross-objections. 37.The reference in this regard can also be made to theprovisions of Section 260A(7) of the IT Act which provides that save asotherwise provided in this Act, the provisions of the Code of CivilProcedure, 1908, relating to appeals to the High Court shall, as far asmay apply in the case of appeals under this Section. Now in the contextof the provisions of Order XLI Rule 22 of the CPC dealing with thecross-objections, the Hon'ble Supreme Court in the case of S. NazeerAhmed (supra) has held that the High Court was clearly in error in holding that the appellant not having filed a memorandum of cross-objections in terms of Order XLI Rule 22 of the Code, could notchallenge the finding of the trial Court that the suit was not barred byOrder II Rule 2 of the Code. The respondent in an appeal is entitled tosupport the decree of the trial Court even by challenging any of thefindings that might have been rendered by the trial Court againsthimself. For supporting the decree passed by the trial Court, it is notnecessary for the respondent in the appeal, to file a memorandum ofcross-objections challenging a particular finding that is rendered by thetrial Court against him when the ultimate decree itself is in his favor. Amemorandum of cross-objections is needed only if the respondent claimsany relief which had been negatived to him by the trial Court and inaddition to what he has already been given by the decree underchallenge. The Hon'ble Supreme Court, therefore, held that therespondent in the appeal had every right to canvas the correctness of thefinding on the bar of Order II Rule 2 rendered by the trial Court. 38.In the present case, it is not as if the issue of non-fulfillmentof jurisdictional parameters of Section 153C was raised but rejected bythe CIT (Appeals). Such an issue was not raised before the CIT(Appeals). Having regard to the provisions of Rule 27 of the AppellateTribunal Rules, 1963 as also the provisions of Section 260A(7) read withOrder XLI Rule 22 of CPC as interpreted by the Hon'ble SupremeCourt in S. Nazeer Ahmed (supra) we think that the ITAT should nothave precluded the assessees from raising the issue in the appealsinstituted by the Revenue, even without the necessity of filing any cross- objections. Accordingly, the additional substantial question of law isrequired to be answered in favor of the Appellants/assessees and againstthe Revenue. 38.In the present case, it is not as if the issue of non-fulfillmentof jurisdictional parameters of Section 153C was raised but rejected bythe CIT (Appeals). Such an issue was not raised before the CIT(Appeals). Having regard to the provisions of Rule 27 of the AppellateTribunal Rules, 1963 as also the provisions of Section 260A(7) read withOrder XLI Rule 22 of CPC as interpreted by the Hon'ble SupremeCourt in S. Nazeer Ahmed (supra) we think that the ITAT should nothave precluded the assessees from raising the issue in the appealsinstituted by the Revenue, even without the necessity of filing any cross- objections. Accordingly, the additional substantial question of law isrequired to be answered in favor of the Appellants/assessees and againstthe Revenue. 39.Even otherwise in the context of the substantial question oflaw No.4, we think that sufficient cause was made out by the Appellantsto seek condonation of delay of 248 days in filing cross-objections. Theapplication for condonation of delay was accompanied by an affidavitand there was no necessity of filing an affidavit of a legal advisor orChartered Accountant to the effect that they had tendered someincorrect advice to the assessees. Besides, if the impugned judgment andorder made by the ITAT is perused, then, it is apparent that the ITAThas not focused on the issue of whether there was sufficient cause forexplaining 248 days delay in instituting cross-objections, but rather theITAT has faulted the assessees for not raising the issue of non-compliancewith jurisdictional parameters, either soon after they received noticesunder Section 153C of the IT Act or before the Assessing Officer in thefirst instance. According to us, these were not relevant considerations atthe stage of deciding whether sufficient cause was shown to explain 248days delay in instituting cross-objections. 15the Hon'ble 40.In N. Balakrishnan Vs M. Krishnamurthy15the Hon'bleSupreme Court has held that as long as the conduct of the applicant doesnot, on the whole, warrant to castigate him as an irresponsible litigant,generally, the delay can be condoned. The Hon'ble Supreme Court has 15 (1998) 7 SCC 123 observed that during these days when everybody is fully occupied withhis avocation of life an omission to adopt such extra vigilance need notbe used as a ground to depict him as a litigant not aware of hisresponsibilities and to visit him with drastic consequences. 41. The Hon'ble Supreme Court has also held that it isaxiomatic that the condonation of delay is a matter of discretion andSection 5 of the Limitation Act does not say that such discretion can beexercised only if the delay is within a certain limit. The length of thedelay is no matter, acceptability of the explanation is the only criterion. 42. The Hon'ble Supreme Court has reasoned that the primaryfunction of the Court is to adjudicate the dispute between the partiesand to advance substantial justice. The time limit fixed for approachingthe Court in different situations is not because on the expiry of such timea bad cause would transform into a good cause. Rules of limitation arenot meant to destroy the right of parties but they are meant to see thatparties do not resort to dilatory tactics. The Hon'ble Supreme Court hasalso held that in every case of delay there can be some lapse on the partof the litigant concerned. However, that alone is not enough to turndown his plea and to shut the door against him. If the explanation doesnot smack of malafides or it is not put forth as part of a dilatory strategythe Court must show utmost consideration to the suitor. 43. The ITAT in the present matters, has not deferred to theabove principles explained by the Hon’ble Supreme Court in considering 43. The ITAT in the present matters, has not deferred to theabove principles explained by the Hon’ble Supreme Court in considering applications for condonation of delay. This was a case where the finalorder made by CIT(appeals) was entirely in favor of the assesses. Theyhad nothing to gain by delaying the filing of cross-objections. Accordingto us, even without filing cross-objections, the assesses could havesupported the order appealed by the revenue by urging an issue mainly oflaw that, at least prima facie went to the root of jurisdiction. All theseaspects were not taken into account by the ITAT while refusing tocondone the delay in filing the cross-objections. 44.The ITAT with respect has misconstrued the provisions ofSection 124 of the IT Act. Sections 120 to 124 of the IT Act no doubtrefer to the jurisdiction of the Income Tax Authorities. However, fromthe scheme of these provisions, it is apparent that reference is to theterritorial jurisdiction of the authorities. Section 124(1) refers todirection or order issued under Section 120 vesting with jurisdiction inthe Assessing Officer over any area, limits of an area, etc. Section 124(2)provides that where a question arises under this Section as to whether theAssessing Officer has jurisdiction to assess any person, the question willhave to be determined by the authorities specified which will include, ina given case the Board. Section 124(3) then provides that no person shallbe entitled to call in question the jurisdiction of an Assessing Officer,where an action has been taken under Section 132 or 132A after theexpiry of one month from the date on which he was served with a noticeunder Section 153C or after the completion of the assessment, whicheveris earlier. Now, this provision refers to mainly the territorial jurisdictionof the Assessing Officer. This provision cannot be interpreted to mean that an assessee is left without a remedy where the Assessing Officerinvokes the provisions of Section 153C of the IT Act without fulfillmentof the jurisdictional parameters prescribed therein. 45.In Vijaybhai N. Chandrani (supra), the Hon'ble SupremeCourt held that the High Court must not ordinarily entertain the writpetitions against notices under Section 153C of the IT Act when theassessees have the remedy of filing response before the Assessingauthorities and thereafter appealing against the decision of Assessingauthority, should be the same adverse to the assessee. This decision,therefore, is not authority for the proposition that the jurisdictional issuecannot be raised in an appeal before the ITAT, without such issue beingraised before the Assessing Officer in the first instance. This decision, infact, indicates the jurisdictional issue was specifically kept open by theHon’ble Supreme Court so that the same could be raised at theappropriate stage before the appropriate forum. 46.In Municipal Commissioner, Calcutta (supra), the objectionraised was to the constitution of the Tribunal itself after the party took itschance of securing a favorable order before the very Tribunal. Such issueis not involved in the present matter and therefore, this decision does notapply to the present matter. 47.In Ng Technologies Ltd. (supra), the Division Bench of theDelhi High Court, in the context of levy of penalty under Section 271 ofthe IT Act held that legal opinion of Chartered Accountant cannot be 46.In Municipal Commissioner, Calcutta (supra), the objectionraised was to the constitution of the Tribunal itself after the party took itschance of securing a favorable order before the very Tribunal. Such issueis not involved in the present matter and therefore, this decision does notapply to the present matter. 47.In Ng Technologies Ltd. (supra), the Division Bench of theDelhi High Court, in the context of levy of penalty under Section 271 ofthe IT Act held that legal opinion of Chartered Accountant cannot be put forward as a smoke-screen and facade to avoid penalties when it isestablished that the claims or entries made were contrary to elementaryand well-known basic principles of accountancy. Again, no such issuearises in the present case. The condonation of delay, in the presentmatters, was applied for on the ground that the legal advisor had advisedthe assessees to prefer cross-objections after omitting to raise thejurisdictional issue before the CIT (Appeals). This is a case where theCIT (Appeals) order was entirely in favor of the assessees. In terms ofRule 27 of the Appellate Tribunal Rules as well, the assessees wereentitled to support this order before the ITAT even without the necessityof filing any cross-objections. 48.The ITAT, in this case, has failed to advert to the principleslaid down by the Hon'ble Supreme Court in N. Balakrishnan (supra)and misinterpret the provisions of section 124 of the IT act. For all thesereasons even the substantial question of law No.4 is required to beanswered in favor of the assessees and against the Revenue. This isassuming that there was any necessity of filing the cross-objections toraise a jurisdictional issue only to support the order of CIT(appeals) thatwas entirely in favor of the assesses. 49.Mr. Pardiwala then submitted that this Court should go intothe issue of fulfillment or otherwise of the jurisdictional parametersunder Section 153C of the IT Act and if the same is found to bewanting, to quash the proceedings under Section 153C of the IT Act.Ms. Linhares, however, contended that this may not be the appropriate course of action to adopt because before the ITAT the departmentalrepresentative had expressly retained liberty to produce the material tosatisfy the Tribunal that the jurisdictional parameters of Section 153Chad in fact been fulfilled should the tribunal consider admitting thecross-objections. She submits that the Revenue should, therefore, not bedeprived of this opportunity. 50.In paragraph 27 of the impugned judgment and order madeby the ITAT, there is a reference to the ITAT specifically inquiring withthe departmental representative to produce the satisfaction note recordedby the Assessing Officer of the person searched. The order records thatthe departmental representative submitted that the assessment files arenot immediately available, but in the event, the Tribunal was pleased toadmit the cross-objections, then, the same will be produced as the fileswere split and were at the office of the Assessing Officer at CentralCircle as also the Assessing Officer of the assessees. The impugned orderof the ITAT also refers to verification of certain facts in the context ofaction under Section 153C of the IT Act. 51.Having regard to the aforesaid, we agree with Ms. Linharesthat the matter will have to be remanded to the ITAT for freshconsideration of appeals instituted by the Revenue after permitting theassessees to raise the issue of non-compliance with the jurisdictionalparameters of Section 153C of the IT Act. 51.Having regard to the aforesaid, we agree with Ms. Linharesthat the matter will have to be remanded to the ITAT for freshconsideration of appeals instituted by the Revenue after permitting theassessees to raise the issue of non-compliance with the jurisdictionalparameters of Section 153C of the IT Act. in so far as it concerns the present assessees and remand the matters tothe ITAT with a direction to permit the assessees to raise the issue ofcompliance or non-compliance with the jurisdictional parametersnecessary to initiate action under Section 153C of the IT Act. At thesame time, we make it clear that all contentions of all parties, including,other contentions raised in these appeals are expressly kept open and maynot be deemed to have been decided by us one way or other. The onlyreason we have not adverted to the other issues is that if the jurisdictionalissue is ultimately upheld by the ITAT, then it may not be necessary todecide the other issues. The parties to now appear before the ITAT on 26[[th]] April 53.The parties to now appear before the ITAT on 26[[th]] April2021 at 11.00 a.m. and file authenticated copy of this order. We requestthe ITAT to dispose of such appeals as expeditiously as possible bygranting a full opportunity to both the assessees as well as the Revenue. 54.These appeals are disposed of in the aforesaid terms.However, in the facts and circumstances of the present case, there shall beno order as to costs. 55.The Misc. Civil Applications, if any, pending are alsodisposed of in the aforesaid terms. SMT. M.S. JAWALKAR, J. M.S. SONAK, J. at*