TaxTMI 
TaxTMI 
2006 (8) TMI 660
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....ble jurisdictional High Court decision in CIT v. Sundarm Fasteners Ltd. In this case, it was held that excise duty and sales-tax have to be excluded from turnover for the purposes of Section 80HHC. Respectfully following the precedent, we decide the issue in favour of the assessee and against the Revenue. 4. The next issue raised is that the CIT(A) erred in exclusion of 90 per cent of the miscellaneous receipts from profit for the purpose of computation of deduction under Section 80HHC. 5. We find that the aforesaid issue was neither raised before the learned CIT(A) nor adjudicated by him. As such, the issue is not emanating out of the CIT(A)'s order. Hence, the same is dismissed. 6. In the result, assessee's appeal is partly allowed. 7. Assessee's appeal : ITA No. 1509/Mds/1999; Asst. yr. 1995-96 At the threshold of the proceedings before us, it was observed that there was a delay in filing of the appeal by 310 days. The condonation petition dt. 21st Sept., 2005 filed by the director of the company states the reason for the delay as under: I state that after receiving the CIT(A)'s order, I kept the same for taking further action. But the pap....
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....ression sufficient cause', the principle of advancing substantial justice is of prime importance. (underlined, italicised in print, by us) 10. In the above case, the apex Court was considering a case where the application for condonation was for a delay of 7 days in filing the appeal against the order of the trial Court. In the same case, the Hon'ble jurisdictional High Court also cited recent decision of Hon'ble Allahabad High Court in Ganga Sahai Ram Swamp and Anr. v. ITAT and Ors.. In this case, it was held that it was not in dispute that there was only a delay of 12 days in filing the appeal. A liberal view ought to have been taken by the authority as the delay was only for a very short period and the appellant was not going to gain anything from it. 11. It is also to be noted here that in the landmark decision on the issue of condonation by the apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. wherein the Hon'ble apex Court has given guidelines that Courts should have a liberal and practical approach in exercising the power of condonation of appeal, the context was dismissal as time barred for 4 days. 12. In the sam....
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....atute must not be construed so liberally that it would have the effect of taking away the benefit accruing to the other party in a mechanical manner. Where the legislature spells out a period of limitation and provides for power to condone the delay as well, then such delay can be condoned only for sufficient and good reasons supported by cogent and proper evidence. Now, it is a settled principle of law that the provisions relating to specified period of limitation must be applied with their rigour and effective consequences. 17. In view of the aforesaid discussion and exposition, we are of the opinion that in the present case, the cause of substantial justice would not be served by condoning the inordinate delay of 310 days for which no cogent reason has been given. 18. In the result, the assessee's appeal is dismissed. 19. Revenue's appeal : ITA No. 1897/Mad/1999; Asst. yr. 1996-97 In this appeal by the Revenue, there was a delay of 20 days in filing the appeal. The reason for the delay has been attributed by the Department that there were some administrative reasons for this small delay. Considering the circumstances and hearing the counsel, we condo....
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....he purpose of computing deduction under Section 80HHC. Therefore, the issue raised by the assessee on merit stands squarely covered by the above judgements of the jurisdictional High Court in favour of the assessee. 3. Therefore, on merit the issue is in favour of the assessee. But there is a technical defect in the appeal since the appeal was not filed within the period of limitation. The assessee filed an affidavit saying that the CIT(A)'s order was misplaced and the same was mixed with some other papers. The Revenue has not filed any counter-affidavit to deny the allegation made by the assessee. While considering a similar issue the apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. laid down six principles. For the purpose of convenience, the principles laid down by the apex Court are reproduced hereunder: (1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late (2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merit....
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....thority of law. In this case, the IT Act enacted by Parliament as interpreted by the jurisdictional High Court in categorical term says that the excise duty and sales-tax cannot form part of total turnover for the purpose of deduction under Section 80HHC. Therefore, if we refuse to condone the delay, that would amount to legalise an illegal and unconstitutional order passed by the lower authority. Therefore, in my opinion, by preferring the substantial justice, the delay of 310 days has to be condoned. 5. The next question may arise whether 310 days was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT v. K.S.P. Shanmugavel Nadai and Ors. considered the delay of condonation and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing ....
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....or condonation of delay may be a sufficient cause for condonation of delay. In this case, the Revenue has not filed any counter-affidavit opposing the application of the assessee, therefore, as held by the apex Court, there is sufficient cause for condonation of delay. The Supreme Court observed that when the delay was of short duration, a liberal view should be taken. "It does not mean that when the delay was for longer period, the delay should not be condoned even though there was sufficient cause. The apex Court did not say that longer period of delay should not be condoned. Condonation of delay is the discretion of the Court/Tribunal. Therefore, it would depend upon the facts of each case. In my opinion, when there is sufficient cause for not filing the appeal within the period of limitation, the delay has to be condoned irrespective of the duration/period. In this case, the non-filing of an affidavit by the Revenue for opposing the condonation of delay itself is sufficient for condoning the delay of 310 days 8. In case the delay was not condoned, it would amount to legalise an illegal and unconstitutional order. The power given to the Tribunal is not to legalise an injustic....
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....6 1. Since there is a difference of opinion, the following questions of difference are referred to the Hon'ble President for nominating Third Member to resolve the issue: 1. Whether, in the facts and circumstances of the case, there is sufficient cause on the part of the assessee for not filing the appeal within the period of limitation? 2. Whether, in the facts and circumstances of the case, the delay of 310 days requires to be condoned in order to advance the substantial cause of justice since the issue on merit is admittedly, covered in favour of the assessee? 2. We direct the registry to place the files before the Hon'ble President for nominating the Third Member. Shamim Yahya, A.M. 26th April, 2006 1. Since there is a difference of opinion, the following question of difference is referred to President for nominating Third Member to resolve the issue: Whether, in the facts and circumstances of the case, there is sufficient cause on the part of the assessee for not filing the appeal within the period of limitation? 2. The Registry is directed to place the files before the Hon'ble President for nominating the Third Member. ....
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....the appeal and filed belatedly on 13th Oct., 1999. 5. I state that the delay is neither wilful nor deliberate but due to the reasons explained above. 6. It is hereby prayed that the delay of 310 days in filing the above appeal may be condoned and the appeal may be taken on record and decision may be rendered on merits of the case and thus render justice. The aforesaid delay of 310 days as per the affidavit was attributed to the misplacement of the CIT(A)'s order. 3. There is nothing on record to indicate as to what functions were assigned to Mr. M.L.S. Rao and whether he dealt with the tax matters. As per the letter of authorization filed before the Revenue authorities, copy of which was filed before the Tribunal, Shri A. Sivasailam, managing director of the company, appointed five employees of the company, namely, Mr. P.B. Sampath, Mr. T.V.V. Narayanan, Mr. V. Srimvasan, Mr. V.V. Ganesan and Mr. S. Rajagopalan as the Authorized Representatives in tax matters. 4. The learned Counsel for the assessee vehemently relied on the decision of the apex Court rendered in the case of Collector, Land Acquisition v. Mst. Katiji and Ors., wherein it was held that ....
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....he case of Vedabai Alias Vaijayanatabai Baburao Patil v. Shantaiam Baburao Patil (2002) 173 CTR (SC) 300 : (2002) 253 ITR 798 (SC) . In this case it was held that in exercising discretion under Section 5 of the limitation Act the Courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The Court has to exercise the discretion on the facts of each case keeping in mind that in considering the expression 'sufficient cause', the principle of advancing substantial justice is of prime importance. 6. It is pertinent to note that in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (supra) the delay was only four days. In the case of VedaJbai Alias Vaijayanatabai Baburao Patil v. Shantaram Baburao Patil (supra) there was a delay of seven days in filing the appeal. In....