Shri. J.N. Chandrashekar vs The Income Tax Officer
2021 Latest Caselaw 988 Kant

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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.,)
                                ---

      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. 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

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

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

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.

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