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The Limitation Act, 1963
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Income Tax Appellate Tribunal - Ahmedabad
P.B. Patel & Co.,, Ankleshwar vs Assessee on 13 April, 2007

IN THE INCOME TAX APPELLATE TRIBUNAL

'C' BENCH - AHMEDABAD

(BEFORE S/SHRI BHAVNESH SAINI, JM AND A. N. PAHUJA, AM)

ITA No. 2557/Ahd/2008

A. Y.: 2003-04

M/s. P. B. Patel & Co., Vs The Income Tax Officer, D/S-33, Sardar Patel Complex, Ward 4,

Station Road, GIDC, Bharuch

Ankleshwar - 393 002

(Appellant) (Respondent)

Appellant by Shri S. N. Soparkar, AR

Respondent by Shri K. M. Mahesh, DR

ORDER

PER BHAVNESH SAINI: This appeal by the assessee is directed against the order of the learned CIT(A) -VI, Baroda dated 13-04-2007 on the following grounds:

"1. The present appeal is filed against the order dated 13.04.2007 of the Ld. CIT(A)- VI, Baroda which was served to the appellant on 24-04-2007. The appeal was required to be filed on or before 23-06-2007 and, therefore, there is a delay of 383 no. of days in filing of the present appeal. The delay being bonafide,

inadvertent and on account of wrong advice of the legal counsels, the present appeal may please be allowed to be admitted by condoning the delay.

2. The Ld. CIT(A)-VI, Baroda has erred in law and in facts in confirming the addition of Rs.16,91,123/- made by the Ld. A. O. alleging the suppression of contract receipts during the year. The addition of Rs.16,91,123/- being erroneous in facts and in law deserves to be deleted.

3. The Ld. CIT(A)-VI, Baroda has erred in law and in facts in enhancing the addition made by the Ld. A. O.

alleging the suppression of contract receipts by a further ITA No.2557/Ahd/2008 2 M/s. P. B. Patel & Co. VS ITO, W-4, Bharuch

amount of Rs.54,599/-. The enhancement of

Rs.54,599/- made in the first appeal being erroneous in facts and in law deserves to be deleted".

2. According to the office, the appeal is time barred by 383 days. The date of communication of the order appealed against is stated to be 24-04-2007, whereas the present appeal is filed in the office of the Tribunal on 10-07-2008. Therefore, it was noted the appeal is time barred.

3. Briefly, the facts of the case are that return of income was field showing total income of Rs.96,700/-. The assessee is a partnership firm engaged in the business of providing labour to industrial and commercial organizations mainly ONGC Ltd. On verification of the profit & loss account and TDS certificate filed along with return of income it was noticed by the AO that the total receipts as per TDS certificate worked out to Rs.2,06,07,860/- whereas it accounted for Rs.1,89,16,737/- in the profit & loss accounts. Thus, the difference of Rs.16,91,123/- on contract receipt was proposed to be added by show cause notice addressed to the assessee. However, no response was received from the assessee, therefore, the AO made addition of Rs.16,91,123/-. It was submitted before the learned CIT(A) that the assessee is involved in supply of labour mainly to ONGC Ltd. and that the assessee did not have the date wise break-up of receipts reflected in the TDS certificate of ONGC Ltd. Further, the assessee's Accountant has left the job. It was submitted by the learned Counsel for the assessee that they were agreeable to the said addition in case the details reflected in the TDS certificate in deed exceeded the amount declared in the return. The learned CIT(A) called for the assessment record and also discussed the matter with the AO and from perusal of the details in the assessment record, it was found that the total receipts of Rs.2,06,62,459/- was shown in the TDS certificate filed along with the return of income by the assessee ITA No.2557/Ahd/2008 3 M/s. P. B. Patel & Co. VS ITO, W-4, Bharuch

which is reproduced at page 3 of the impugned order. The learned CIT(A), therefore, noted that further addition is to be enhanced by Rs.54,599/-. Accordingly, the learned Counsel for the assessee was informed and photocopy of the TDS certificates as well as the summary noted in the impugned order was provided to the learned Counsel for the assessee who was asked to show cause why such enhancement should not be carried out to the total income. Shri Bakul Parikh, learned Counsel appearing for the assessee after perusing the documents provided by the learned CIT(A) admitted for enhancement in writing in note sheet and also admitted that he did not wish to make any further submission with regard to difference in the contract receipts shown in the return and those reflected in the TDS certificate. The learned CIT(A), therefore, enhanced the addition by Rs.54,599/- and confirmed the addition in a sum of Rs.17,47,522/-.

4. The learned Counsel for the assessee referred to the affidavit of Smt. Pravina Patel, partner in the assessee firm for the purpose of condoning the delay in filing of the appeal and submitted that the appeal was filed before the learned CIT(A) on the advice of Shri Kishore Surti, Chartered Accountant and the appeal proceedings were attended by Shri Bakul Parikh, Advocate. The assessee approached Shri Kishore Surti, Chartered Accountant but he advised that there is no merit in the appeal of the assessee. The learned Counsel for the assessee submitted that on receipt of the penalty order dated 06-06-2008 the assessee approached M/s. Mukund & Rohit, Chartered Accountants who have advised that they should have preferred the appeal against the order of the learned CIT(A) before the Tribunal. The learned Counsel for the assessee, therefore, submitted that due to wrong advice there was a delay of 3836 days in filing the appeal. The learned Counsel for the assessee submitted that the delay in filing of the appeal is inadvertent, bona fide and purely on account of wrong advice of the legal counsels. He has, therefore, ITA No.2557/Ahd/2008 4 M/s. P. B. Patel & Co. VS ITO, W-4, Bharuch

prayed that delay may be condoned. He has relied upon the order of the ITAT Delhi Bench in the case of ITO Vs Second Leasing (P) Ltd. 18 SOT 557 in which it was held that "the advice of the Counsel not to prefer cross objections was held to be reasonable cause" and delay was accordingly condoned. He has also relied upon the decision of the Hon'ble Supreme Court in the case of Improvement Trust. Lidhiana Vs Ujagar Singh & Ors. Civil Appeal No.2395 of 2008 dated 09-06-2010 in which it was held "It is pertinent to point out that unless malafides are writ large on the conduct of the party, generally as a normal rule, delay should be condoned. In the legal arena, an attempt should be made to allow th4e mater to be contested on merits rather than to throw it on such technicalities". He has also relied upon the decision of the Hon'ble Supreme Court ion the case of Collector, Land Acquisition Vs Mst. Katiji And Others 167 ITR 471 and the decision of the Hon'ble Allahabad High Court ion the case of Auto Centre Vs State of Uttar Pradesh 278 ITR 291. The learned Counsel for the assessee, therefore, submitted that due to wrong advice of the Counsel there was a delay in filing the appeal and the same may be condoned.

5. On the other hand, the learned DR submitted that the learned Counsel for the assessee admitted the addition before the learned CIT(A) because of the details reflected in the TDS certificate which exceeded the amount declared in the return of income. The learned DR submitted that even in the reply to the show cause for enhancement in respect of the total receipt, the assessee's Counsel did not submit any explanation and accepted the claim of the AO that the addition is to be made further. The learned DR, therefore, submitted that there is no question of giving wrong advice by the counsel who was appearing for the assessee. The learned DR relied upon the decision of the Hon'ble Delhi High Court in the case of Haro Singh Vs Ajay Kumar Chawla & Ors in CR NO.810/2001 dated 14-12-2004 in which the Hon'ble High Court ITA No.2557/Ahd/2008 5 M/s. P. B. Patel & Co. VS ITO, W-4, Bharuch

considering its earlier decision held that "the counsel must disclose the circumstances in which incorrect advice was given and it is not sufficient to make a perfunctory and general statement that the wrong advice was given bona fide". The learned DR submitted that since in that case no sufficient cause for delay has been shown and no complaint was filed against the advocate who purportedly gave wrong advice. Therefore, the petitioner of the petition was dismissed being time barred. The learned DR therefore, submitted that it is not a case of wrong advice, therefore, delay should not be condoned in the matter and that there is no merit in the appeal of the assessee. Therefore, the delay should not be condoned and the appeal of the assessee may be dismissed being time barred.

6. We have considered the rival submissions and the material available on record. According to section 253(5) of the IT Act the appellate Tribunal may admit an appeal after expiry of the relevant period, if it is satisfied that there was sufficient cause for not presenting it within that period. Sufficient cause would mean a cause which is beyond the control of the assessee. Sufficient cause means which prevents a reasonable man of ordinary prudence acting under normal circumstances without negligence or inaction or want of bona fide. The learned Counsel for the assessee submitted that due to wrong advice of the Counsel for the assessee not to prefer appeal against the impugned order of the learned CIT(A) before the Tribunal, no appeal was preferred within time. Therefore, delay in filing the appeal was inadvertent, bona fide and due to wrong advice. However, we do not agree with the submissions of the learned Counsel for the assessee. The authorities below have specifically noted in the impugned orders that the receipts shown in the TDS certificate filed along with return of income has exceeded the amount in question. The AO found total receipts as per TDS certificate worked out to Rs.2,06,07,860/- but the assessee in the profit ITA No.2557/Ahd/2008 6 M/s. P. B. Patel & Co. VS ITO, W-4, Bharuch

& loss account accounted for total receipts in a sum of Rs.1,89,16,737/-. Thus, there was a difference in the total receipts in a sum of Rs.16,91,123/-. The assessee did not respond to the show cause notice of the AO and no discrepancy was explained. Therefore, the AO made addition of Rs.16,91,123/-. The assessee's Counsel admitted before the learned CIT(A) that the assessee did not have date wise break-up of the receipts reflected in the TDS certificate of ONGC Ltd. and he has agreed to the addition made by the AO as reflected in the TDS certificate. When the matter was taken up in appeal before the learned CIT(A), the learned CIT(A) further verified the record and further found that the total receipts shown in the TDS certificate filed along with the return of income by the assessee are in fact Rs.2,06,62,459/- as against noted by the AO at Rs.2,06,07,860/- and as such further addition is to be enhanced in a sum of Rs.54,599/-. The learned CIT(A) issued notice for enhancement of the addition in the above amount. The learned Counsel for the assessee appearing before the learned CIT(A) admitted to such enhancement in writing and submitted that he did not wish to make further submission in the mater. The above facts would show that the assessee's counsel agreed to the addition made by the AO and further agreed to the enhancement proposed by the learned CIT(A). The above facts would show that the total receipts shown in the TDS certificate have exceeded the receipts accounted for in the profit & loss account and that the assessee has no explanation for the same. In view of the above facts, it is clear that the learned Counsel for the assessee who had been appearing before the AO and the learned CIT(A) has rightly advised the assessee that there is no merit in the case of the assessee and that no further appeal is to be preferred in the matter. The above facts noted in the impugned orders show that the assessee agreed to the addition and to the enhancement of the addition. Therefore, even no appeal would be maintainable before the Tribunal because the assessee was not at all aggrieved against the order of the learned CIT(A). Therefore, there is no ITA No.2557/Ahd/2008 7 M/s. P. B. Patel & Co. VS ITO, W-4, Bharuch

question of giving wrong advice to the assessee in the matter. The explanation of the assessee thus is factually incorrect, wrong and without any substance.

7. It would be appropriate to refer to some of the judicial pronouncements on the issue of delay in filing the appeals/cross objections. In the case of Hind Development Corpn., Vs. ITO (1979) 118 ITR 873, the Calcutta High Court held that a Tribunal can condone the delay if there was sufficient cause for the delay in the submission of the appeal/cross objection. In the case of Vedabhai alias Vijayanatabai Baburao Patil Vs. Shantaram Baburao Patil (2002) 253 ITR 798 (SC), where it was held that while exercising discretion under section 5 of the Limitation Act, 1963, to condone delay for sufficient cause in not filing the appeal within the period prescribed, Courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where delay is of a few days. The Court observed that whereas in the former consideration of prejudice to the other side will be relevant factor and calls for a more cautious approach. In the latter case no such consideration may arise and such a case deserves a liberal approach. Now in the present case delay is not of a few days but of 383 days. Besides, there is absolutely no valid explanation/reason for the delay. In the case of CIT V. Ram Mohan Kabra (2002) 257 ITR 773, the Hon'ble Punjab & Haryana High Court has held and observed that where the Legislature spells out a period of limitation and provides for power to condone the delay as well, such delay can only be condoned only for sufficient and good reasons supported by cogent and proper evidence. It is a settled principle of law that provisions relating to the specified period of limitation must be applied with their rigour and effective consequences. In this case delay for filing the appeal late for only a few days was not condoned. In the case of Asstt. CIT V. Taggas Industries Development Ltd. (2002) 80 ITD ITA No.2557/Ahd/2008 8 M/s. P. B. Patel & Co. VS ITO, W-4, Bharuch

21 (Cal), Tribunal, Calcutta Bench, Calcutta, did not condone the delay for filing the appeal late by 13 days because the delay was not due to sufficient cause.

8. Considering the above discussions, we hold that the assessee has failed to explain any sufficient cause for not presenting the appeal within the period of limitation. The decisions cited by the learned Counsel for the assessee would not support the case of the assessee, in view of the facts noted above. We accordingly hold that the appeal of the assessee is time barred and is accordingly dismissed.

9. As a result, the appeal of the assessee is dismissed being time barred.

Order pronounced in the open Court on 09-09-2010

Sd/- Sd/-

(A. N. PAHUJA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER Date : 09-09-2010

Lakshmikant/-

Copy of the order forwarded to:

1. The Appellant

2. The Respondent

3. The CIT concerned

4. The CIT(A) concerned

5. The DR, ITAT, Ahmedabad

6. Guard File

BY ORDER

Dy. Registrar, ITAT, Ahmedabad