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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 16TH DAY OF JANUARY 2021
PRESENT
THE HON'BLE MR. JUSTICE ALOK ARADHE
AND
THE HON'BLE MR. JUSTICE NATARAJ RANGASWAMY
I.T.A. NO.81 OF 2017
BETWEEN:
SHRI. J.N. CHANDRASHEKAR
C/O JNC COFFEE LINKS
MADAPUR ROAD, SUNTIKOPPA
MADIKERI-571237.
.... APPELLANT
(BY MR. V. CHANDRASHEKAR, ADV., FOR
MR. M. LAVA, ADV.,)
AND:
THE INCOME TAX OFFICER
WARD-1, SRIVALLI BUILDING
CHICKPET, MADIKERI-571201.
... RESPONDENT
(BY MR. E.I. SANMATHI, ADV.,)
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THIS I.T.A. IS FILED UNDER SEC. 260-A OF INCOME TAX
ACT 1961, ARISING OUT OF ORDER DATED 31.08.2016 PASSED
IN ITA NOS.843 & 844/BANG/2016 FOR THE ASSESSMENT YEAR
2007-08 & 2008-09, PRAYING TO:
(i) FORMULATE THE SUBSTANTIAL QUESTION OF LAW
STATED ABOVE AND ANSWER THE SAME IN FAVOUR OF THE
APPELLANT.
(ii) ALLOW THE APPEAL AND SET ASIDE THE FINDINGS TO
THE EXTENT AGAINST THE APPELLANT IN THE ORDER PASSED BY
THE ITAT, BENGALURU 'C' BENCH, BENGALURU IN ITA NOS.843 &
844/BANG/2016 DATED 31.08.2016 FOR THE ASSESSMENT YEARS
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2007-08 & 2008-09 RESPECTIVELY VIDE ANNEXURE-A. PASS
SUCH OTHER ORDERS, AS THIS HON'BLE COURT DEEMS FIT AND
PROPER TO MEET THE ENDS OF JUSTICE.
THIS I.T.A. COMING ON FOR HEARING, THIS DAY,
ALOK ARADHE J., DELIVERED THE FOLLOWING:
JUDGMENT
This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act', for short) has been filed by the assessee. The subject matter of the appeal pertains to the Assessment Years 2007-08 and 2008-09. The appeal was admitted by a Bench of this Court vide order dated 07.11.2017 on the following substantial questions of law:
"1. Whether the Tribunal was justified in law in not condoning the delay, when the appellant has demonstrated that the lapses were not voluntary and there was reasonable cause for the delay on the facts and circumstance of the case?
2. Whether the Tribunal was justified in law in not condoning the delay by misunderstanding the facts and consequently passed a perverse order on the facts and circumstances of the case?3
3. Whether the Tribunal is right in not adjudicating the grounds on the merits raised by the Appellant?
4. Where the Tribunal is right in law in not considering the Additional grounds of appeal raised by the Appellant in respect of Assessment year 2007-08 which pertain to the very validity of the assessment order?"
2. Facts leading to filing of this appeal briefly stated are that the appellant is an agriculturist and is also a coffee commission agent. The assessee filed his return of income for the Assessment Years 2007-08 and 2008-09 declaring the total income of Rs.1,67,206/- and Rs.1,46,211/-, respectively. The return of income for the Assessment Year 2008-09 was processed. However, subsequently, the return was selected for scrutiny and notices under Section 143(1) of the Act were issued calling for the records. The assessee filed the records before the Assessing Officer. The Assessing Officer, on scrutiny of books of accounts, made additions of cash deposits in savings bank accounts on the ground that the cash deposits constituted income of the assessee. The Assessing Officer, by an order dated 31.12.2010, completed 4 the assessment for the Assessment Years in question by making additions of Rs.13,23,754/-.
3. Thereupon, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who by an order dated 09.03.2015, partly allowed the appeal. The assessee thereupon filed an appeal before the Income Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal' for short) on 22.04.2016 along with an application for condonation of delay. The condonation of delay of 338 days was sought on the ground that the assessee's son was appearing for the board exams and the assessee was required to stay at Hassan to facilitate the studies of his son and therefore, he could not seek professional advice in time, with regard to the course of action which was to be taken in the light of the order passed by the Commissioner of Income Tax (Appeals). The Tribunal, by an order dated 31.08.2016, dismissed the application for condonation of delay preferred by the assessee on the ground that the assessee has failed to establish sufficient cause for condonation of delay. In the result, the appeal preferred by the assessee was also 5 dismissed. In the aforesaid factual background, the revenue has approached this Court.
4. Learned counsel for the assessee submitted that the Tribunal ought to have appreciated that the expression 'sufficient cause' should receive liberal interpretation so as to advance the cause of justice. On the other hand, learned counsel for the revenue submitted that in the facts and circumstances of the case, the Tribunal has rightly held that the assessee has failed to make out the sufficient cause and therefore, the order passed by the Tribunal does not call for any interference.
5. We have considered the submissions made on both sides and have perused the record. It is well settled in law that the expression 'sufficient cause' should receive liberal consideration so as to advance the cause of justice and the same should not be used as a penal statute to punish the erring parties. (See: 'PERUMON BHAGAVATHY DEVSWOM V. BHARGAVI AMMA (DEAD) BY LRS' 2008 (8) SCC 321, KATARI SURYANARAYANA VS. KPOISETTI SUBBA RAO AND ORS AIR 2009 SC 2907 and ASSISTANT 6 COMMISSIONER (CT) LTU, KAKINADA & ORS. V. M/S GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED, 2020[36] G.S.T.L. 305).
6. In the backdrop of the aforesaid well settled legal position, the facts of the case on hand may be seen. The assessee is admittedly an agriculturist and is required to closely monitor the agricultural activity in the field. The son of the assessee was preparing for board exam and assessee was required to stay in Hassan to ensure that his son attends extra classes. Therefore, the assessee was unable to contact his counsel for the reasons which were beyond his control. Thus, in the fact situation of the case, the Tribunal should have taken a liberal view with regard to the cause shown by the assessee seeking condonation of delay.
7. In view of aforesaid enunciation of law, we hold that the finding recorded by the Tribunal that in the fact situation of the case, sufficient cause for condonation of delay was not made out by the assessee, is perverse.
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8. In the result, the substantial question of law No.2 is answered in favour of the assessee and against the revenue. Accordingly, the order dated 31.08.2016 passed by the Tribunal is hereby quashed and the delay in filing the appeal before the Tribunal is condoned. The Tribunal is directed to decide the appeal preferred by the assessee on merits after affording an opportunity of hearing to the parties. Since we have already answered substantial question of law No.2 in favour of the assessee, therefore, it is not necessary for us to deal with the remaining substantial questions of law.
In the result, the appeal is disposed of.
Sd/-
JUDGE Sd/-
JUDGE RV