2016 (2) TMI 1325 - AT - Income Tax

Tribunal allows appeal delay, supports extra deduction for export business, and validates rectification petition.

M/s. Devi Marine Food Exports P. Ltd Versus The Income Tax Officer, Company Circle I (4), Chennai

The Tribunal directed the Commissioner of Income Tax (Appeals) to condone the delay in filing the appeal, emphasizing a liberal interpretation of ... Condonation of delay - sufficient cause of delay - HELD THAT:- A casual or a negligent litigant who has acted with utter irresponsible attitude, cannot claim the condonation of delay in law when the right has accrued to the other side. The expression 'sufficient cause' will always have relevancy to reasonableness. The actions which can be condoned by the Court should fall within the realm of normal human conduct or normal conduct of a litigant. It is neither expected nor can it be a normal conduct of a public servant or a litigant that they would keep the files unmoved, unprocessed for months together on their tables. How the power of condonation of delay is to be exercised, has been explained by the Apex Court in the case of Collector, Land Acquisition v Mst. Katiji And Others. [1987 (2) TMI 61 - SUPREME COURT] We considering the factual aspects of the case, the delay in filing the appeal was not a wonton act as sworn in the affidavit by the director of the assessee company that they were under bonafide belief that Sec.154 petition was filed and the assessee is praying remedy u/sec154 with a hope that the matter will be solved but the ld.Assessing Officer rejected petition for various reasons observed in his order We as a quasi judicial body draw support from the decision of Supreme Court in the case of Mela Ram & Sons [1956 (2) TMI 5 - SUPREME COURT] and we found there is sufficient cause considering the factual circumstances in the interest of justice, we direct the Commissioner of Income Tax (Appeals) to condone the delay and admit the appeal and adjudicate the grounds on merits after giving adequate opportunity of hearing to the assessee. Appeal of the assessee is partly allowed for statistical purpose. Issues Involved:1. Delay in filing the appeal.2. Calculation of deduction under Section 80HHC of the Income Tax Act.3. The validity of the rectification petition under Section 154.Issue-Wise Analysis:1. Delay in Filing the Appeal:The assessee raised grounds against the Commissioner of Income Tax (Appeals) for not condoning the delay in filing the appeal. The delay was of 309 days, attributed to the assessee's belief that a rectification petition under Section 154 would resolve the issue. The Commissioner of Income Tax (Appeals) dismissed the condonation petition, citing that the assessee failed to show sufficient cause for each day of delay and did not act with reasonable diligence. The Tribunal, however, referred to the Supreme Court's decisions in N. Balakrishnan v. M. Krishnamurthy and State of West Bengal v. Administrator, Howrah Municipality, which emphasized that 'sufficient cause' should receive a liberal construction to advance substantial justice. The Tribunal found the delay was not a wonton act and directed the Commissioner of Income Tax (Appeals) to condone the delay and admit the appeal.2. Calculation of Deduction under Section 80HHC:The assessee, engaged in the export of seafood, claimed a deduction under Section 80HHC of Rs. 60,52,478. The Assessing Officer initially calculated the deduction as nil, following the provisions of Section 80HHC. This decision was contested by the assessee, and the Commissioner of Income Tax (Appeals) confirmed the exclusion of 90% of additional sale consideration. The Tribunal later granted relief to the assessee, allowing further deduction under Section 80HHC, which was then calculated at Rs. 60,52,478. However, the Department's appeal led to a revision order restricting the deduction to Rs. 27,19,344. The Tribunal noted that the Assessing Officer did not comply with its earlier directions and thus the calculation of deduction remained contested.3. Validity of the Rectification Petition under Section 154:The assessee filed a rectification petition under Section 154, pointing out an apparent mistake in the calculation of the deduction under Section 80HHC. The Assessing Officer rejected this petition, stating that the computation in the revision order was in line with the original assessment, which was not contested in earlier appeals. The Tribunal found that the assessee's belief in the rectification process was bonafide and supported by the Supreme Court's judgment in Mela Ram & Sons v. CIT, which allowed for the rectification of apparent mistakes. The Tribunal directed that the Commissioner of Income Tax (Appeals) consider the rectification petition and the grounds of appeal on their merits.Conclusion:The Tribunal concluded that the delay in filing the appeal was justified and directed the Commissioner of Income Tax (Appeals) to condone the delay and adjudicate the appeal on its merits. The Tribunal emphasized the need for a liberal interpretation of 'sufficient cause' to ensure substantial justice and directed that the grounds related to the calculation of deduction under Section 80HHC and the rectification petition under Section 154 be thoroughly examined. The appeal was partly allowed for statistical purposes, ensuring that the assessee's grounds were heard and decided upon appropriately.