Vs.commissioner Of Income Taxcity Ii Mumbai v. Commissioner Of Income Taxcity Iii Munbai

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.345 OF 2005 M/s Deepak Fertilisers& Petrochemicals Corpn Ltd ..Appellant Vs.Commissioner of Income taxCity II Mumbai... Respondentwith INCOME TAX APPEAL NO.346 OF2005M/s Deepak Fertilisers & PetrochemicalsCorpn Ltd.. Apellant Vs Commissioner of Income taxCity III Munbai.. Respondent Mr.B.V.Zhaveri for AppellantMr.Vimal Gupta with Mr.P.S.Sahadevan forRespondent CORAM : Dr.S.Radhakrishnan andA.V.Nirgude, JJDATE : 23rd June, 2008. P.C. 1. Heard learned counsel for the appellant andlearned counsel for the respondent. 2. Mr.Gupta learned counsel appearing for therespondents states that Mr.Sahadevan will filevakalatnama within a period of two weeks fromtoday. Undertaking accepted. 3. By this appeal, learned counsel for theappellant seek to raise the following questions oflaw: (a) Whether on the facts and in thecircumstances of the case the Tribunal wasright in law in dismissing the appeal of the appellant holding that the appellantwas negligent in filing the appellate eventhough the tribunal held that no malafidescould be ascribed to the appellant norcould it be said that the delay wasdeliberate ? (b) Whether on the facts and in thecircumstances of the case the Tribunal wasright in law in not condoning the delay inpreferring the appeal against payment oftax at source in respect of payments madeto the foreign collaborator even thoughthe appellant was prevented by sufficientcause in not filing the appeal within thetime prescribed under the Act ? (c) Whether on the facts and in thecircumstances of the case the Tribunal wasright in law in dismissing the appeal ofthe appellant on the ground of delay eventhough the appellant was made to suffertax on payments made to the foreigncollaborator which was not liable to taxin India in view of the Double Taxationavoidance agreement between India andUnited Kingdom ? (d) Whether the Third Member of theAppellate Tribunal was justified in notfollowing the decision of the Apex Courtwhich is binding on him wherein the ApexCourt condoned the delay of 554 days andawarded exemplary costs of Rs.50,000/- tobe paid to the opposite side on the groundthat he, the Third Member had limitedjurisdiction to approve one of the twoviews presented in the two differing viewsof two different members only and not toapply the ratio of the decision of theApex Court referred to by him ? 4. In substance, Mr.Zhaveri submitted that thequestions of law sought to be raised in the aboveappeal whether the tribunal was justified inrejecting the appeal and refusing to condone the delay. The tribunal agreed with the C.I.T. inrefusing to condone the delay of 6 1/2 to 9 yearsin preferring the appeal pertaining to Assessmentyears 1991-92, 1992-93, 1993-94, 1994-95. 5. We have perused the tribunal’s judgment dt.21.10.2004 where the tribunal has clearly remarkedas under : " The undisputed fact is that the delayranges from 6 1/2 years to 9 years. It isalso not indispute that the main reasonadduced for the delay is that the assesseecame to learn about the non-deductibilityof TDS only through a tribunal’s decisionin the case of DCM Ltd reported in 29 ITD123 which was decided way back in 1989.Let us examine the issue in the light ofthese facts. " We have also perused the tribunal’s finding inpara 8 : "Certainly it is not a case wheremalafides can be ascribed to the asseeseenor can it be said that thedelay wasdeliberate,. But, it is a case ofinaction and sheer negligence. TheSupreme Court has asked the lower courtsto adopt a rational and pragmatic approachwhere there is some cause for the delaybut not in cases where there is no causeat all. A negligent assessee is notentitled to such a benevolence. " We have also perused the tribunal’s finding inpara 8 : "Certainly it is not a case wheremalafides can be ascribed to the asseeseenor can it be said that thedelay wasdeliberate,. But, it is a case ofinaction and sheer negligence. TheSupreme Court has asked the lower courtsto adopt a rational and pragmatic approachwhere there is some cause for the delaybut not in cases where there is no causeat all. A negligent assessee is notentitled to such a benevolence. " 6. From the above, it is clear that the appellanthad not disputed that the appellant/assessee filesappeal only after having coming to know about thenon-deductibility of TDS only through a tribunal’s decision in the case of DCM Ltd reported in 29 ITD123. The tribunal’s categorical finding that inthe instant case, it is a clear case of inactionand sheer negligence, It is only a matter offinding of fact. Hence, appeal is totally devoid of merits. Thesame stands dismissed. {A.V.Nirgude, } (Dr.S.Radhakrishnan, J} (Dr.S.Radhakrishnan, J}