ORDER
Shamim Yahya, Accountant Member
1. These appeals by the assessee and revenue are directed against the respective orders of Commissioner of Income-tax (Appeals) for assessment years 1995-96 and 1996-97. Since the appeals were heard together and issues are related, the same are being consolidated and disposed off together for the sake of convenience.
2. Assessee’s appeal: I.T.A. No.l916/Mds./99 A.Y. 1996-97
The first issue raised is that the Commissioner of Income-tax (Appeals) erred in confirming the addition of excise duty and sales tax to the turn over for the purpose of computation of deduction under Section 80HHC.
3. It transpires that this issue is covered in favour of the assessee by the Hon’ble jurisdictional High Court decision in CIT v. Sundaram Fasteners Ltd. . In this case, it was held that excise duty and sales tax have to be excluded from turn over 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 Commissioner of Income-tax (Appeals) 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 Commissioner of Income-tax (Appeals) nor adjudicated by him. As such, the issue is not emanating out of the Commissioner of Income-tax (Appeals)’s order. Hence, the same is dismissed.
6. In the result, assessee’s appeal is partly allowed.
7. Assessee’s appeal I.T.A. No. 1509/Mds./99 A.Y. 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 dated 21-9-2005 filed by the Director of the company states the reason for the delay as under:
I state that after receiving the Commissioner of Income-tax (Appeals) order, I kept the same for taking further action. But the paper was misplaced with some other papers and I had forgotten about the order. When I sorted out the unwanted papers, I found that no steps had been taken. Immediately, I contacted our Advocate and prepared the appeal and filed belatedly on 13-10-1999.
Thus, this delay of 310 days was attributed to the misplacement of the papers.
8. We find that Hon’ble Jurisdictional High Court has considered the issue of condonation of delay and expounded as under in Sreenivas Charitable Trust v. Dy. CIT .
No hard and fast rule can be laid down in the matter of condonation of delay and courts should adopt a pragmatic approach and should exercise their discretion on the facts of each case keeping in mind that in construing, the expression “sufficient cause” the principle of advancing substantial justice is of prime importance and the expression “sufficient cause” should receive a liberal construction.
Held, that it was stated in the petition filed by the assessee for condonation of delay that the order copy was misplaced and thereafter it was found and sent to counsel for preparing the appeal and then, the appeal was prepared and filed before the Tribunal and in that process, the delay of 38 days occurred. The Tribunal was not right in dismissing the appeal as barred by limitation. The delay in filing the appeal before the Tribunal had to be condoned.
9. In the aforesaid case, the delay was that of 38 days and in considering the issue, the jurisdictional High Court had considered the following decision of the Apex Court:
The Supreme Court in Vedabai alias Vaijayanatabai Baburao Patil v. Shantaram Baburao Patil 2002 253 ITR 798 : 122 Taxman 114. held as under (page 799):
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 construing the expression ‘sufficient cause’, the principle of advancing substantial justice is of prime importance.
[Emphasis supplied]
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 Swarup v. ITAT . 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.
[Emphasis supplied]
11. It is also to be noted here that in the land mark decision on the issue of condonation by the Apex Court in the case of Collector Land Acquisition v. Mst. Katigi 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.
[Emphasis supplied]
12. In the same case, the Apex Court had also held that doctrine of Equality Before Law is applicable to all litigants including the State as a litigant. They are accorded the same treatment and the law is administered in an even handed manner.
13. It is also a well settled judicial principle that words or lines out of a decision should not be exported to be interpolated as precedent with complete disregard of the context.
14. Considering the present case on the anvil of aforesaid expositions, we find that delay of 310 days on account of misplacement of the documents is undoubtedly an inordinate delay. As we find in Oxford English Dictionary, the term “inordinate” is an adjective meaning “unusually large, excessive”. It is seen from the above expositions that the pragmatic approach to condonation of delay has always been advocated when the delay is short. By no means, the aforesaid exposition means, that in construing the expression, ‘sufficient cause’ while advancing the cause of ‘substantial justice’, the period of delay has to be absolutely ignored. This is more so when the cause attributable for the delay is misplacement of record.
15. Moreover, as regards the issues raised, for one issue of inclusion of sales tax and excise duty in total turn over for the purposes of deduction under Section 80HHC, it has been claimed that the same is covered by Jurisdictional High Court decision. It is noted here that at the time of adjudication on that issue by the Commissioner of Income-tax (Appeals) or up to the time of filing the appeal, no High Court decision covering the issue in favour of assessee was there.
16. Considering the aforesaid, we are of the opinion that an inordinate delay of 310 days cannot be condoned on the plea that the documents were misplaced. As the condonation in the present case would not be in accordance with the exposition emanating out of the Hon’ble Apex Court & Hon’ble Jurisdictional High Court decisions cited supra. It will rather be grave prejudice to the revenue. As already expressed by the Apex Court in the case cited supra that the State is also a litigant and need not be given a step motherly treatment. In this context, the decision of Hon’ble Punjab & Haryana High Court in the case of CIT v. Ram Mohan Kabra is relevant, which reads as unden:
The provisions relating to prescription of limitation in every statute 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 arc 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: I.T. A. No.l897/Mds./99 A.Y. 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 counsels, we condone the appeal.
20. The issue raised in the appeal is that the Commissioner of Income-tax (Appeals) has erred in deleting the disallowance made under Section 43B in respect of PF and ESI.
21. In this case, the payments were made within the grace period allowed under the respective enactments. We find that the same is covered in favour of the assessec by the Hon’ble Jurisdictional High Court decision in CITv. Shri Ganapathy Mills Co. Ltd. .
22. In the result, the revenue’s appeal is dismissed.
23. Hence, assessee’s appeals, I.T.A. No. 1916/Mds./99 is partly allowed and I.T.A. No. 1509/Mds./99 is dismissed and revenue’s Appeal No. 1897/Mds./99 is dismissed.
N.R.S. Ganesan, Judicial Member
1. I had the benefit of going through the draft order prepared by learned brother the Accountant Member. I entirely agree with his reasoning and conclusion in respect of I.T.A. Nos. 1897(Mds.)/99 and 1916 (Mds.)/99. However, I am unable to persuade myself to agree in respect of his reasoning and conclusion in I.T.A. No. 1509(Mds.)/99. Therefore, I am constrained to pass a separate and dissenting order.
2. In this case, admittedly, there is a delay of 310 days in filing the appeal. The assessee filed an affidavit explaining the reasons and prayed for condonation of delay. The reason stated by the assessee is misplacement of papers with some other papers. Therefore, we have to consider whether the misplacement of papers with some other papers is sufficient cause for condoning the delay. The Madras High Court considered an identical issue in the case of Sreenivas Charitable Trust v. Dy. CIT and held that mixing up of papers with other papers are sufficient cause for not filing the appeal in time. The Madras High Court further observed that the expression “sufficient cause” should be interpreted to advance substantial justice. Therefore, advancement of substantial justice is the prime factor while considering the reasons for condoning the delay. In this case on our hand, the issue arises for consideration on merit is regarding inclusion of excise duty and sales tax in the total turnover for the purpose of computing deduction under Section 80HHC. Admittedly, the Madras High Court in the case of Sundaram Fasteners Ltd. (supra), and in the case of CIT v. Wheels India Ltd. has considered an identical issue and held that excise duty and sales tax should not be included in the total turnover for the purpose of computing deduction under Section 80HHC. Therefore, the issue raised by the assessee on merit stands squarely covered by the above judgments 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) 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 Mst. Katiji (supra) 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 merits after hearing the parties.
(3) “Every day’s delay must be explained” does not mean that a pedantic approach should be made. Why not every hour’s delay, every second’s delay? The doctrine must be applied in a rational, common sense and pragmatic manner.
(4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.
(5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk.
(6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.
4. When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of non-deliberate delay. In the case on our hand, the issue on merit regarding inclusion of excise duty and sales tax in the total turnover was covered in favour of the assessee by the binding judgment of the jurisdictional High Court. Moreover, no counter-affidavit was filed by the revenue denying the allegation made by the assessee. It is not the case of the revenue that the appeal was not filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalise injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalising an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorised by an authority of law. In this case, the Income-tax 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 Nadar
. 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 the appeal. When compared to 21 years, 310 days cannot be considered to be inordinate or excessive. This judgment of the Madras High Court is binding on this Tribunal. Furthermore, this Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEPS) v. ITO in I.T.A. Nos. 1757, 1758 to 1761 (Mad.) of 2004 condoned more than six hundred days delay. I am also one of party to the above-said order of this Tribunal.
6. I have also carefully gone through judgment of the Madras High Court in the case of Sreenivas Charitable Trust (supra). The Madras High Court held that there was no hard and fast Rule can be laid down in the matter of condonation of delay and the court should adopt a pragmatic approach and the court should exercise their discretion on the facts of each case keeping in mind that in construing the expression “sufficient cause” the principle of advancing substantial justice is of prime importance and the expression “sufficient cause” should receive a liberal construction. Therefore, this judgment of the Madras High Court clearly says that in order to advance substantial justice which is of prime importance, the expression “sufficient cause” should receive a liberal construction. In this case, the issue on merit regarding inclusion of excise duty and sales tax in the total turnover is covered in favour of the assessee by the judgment of the jurisdictional High Court. Therefore, for the purpose of advancing substantial justice which is of prime importance in the administration of justice, the expression “sufficient cause” should receive a liberal construction, in my view, this judgment of the jurisdictional High Court is also squarely applicable to the facts of this case. A similar view was taken by the Madras High Court in the case of Venkatadri Traders Ltd. v. CIT 2001 118 Taxman 622.
7. The Mumbai Bench of this Tribunal in the case of Bajaj Hindusthan Ltd. v. Jt. CIT has condoned the delay of 180 days when the appeal was filed after the pronouncement of the judgment of the Apex Court. Furthermore, the revenue has not filed any counter-affidavit opposing the application of the assessee for condonation of delay. The Apex Court in a reported case in Mrs. Sandhya Rani Sarkarv. Smt. Sudha Rani Debi held that non-filing of affidavit in opposition to an application for 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 short duration, a liberal view should be taken. It does not mean that when the delay was 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 injustice on technical ground but to do substantial justice by removing the injustice. The Parliament conferred power on this Tribunal with the intention that this Tribunal would deliver justice rather than legalise injustice on technicalities. Therefore, when this Tribunal was empowered and capable of removing injustice, in my opinion, the delay of 310 days has to be condoned and the appeal of the assessee has to be admitted and disposed of on merit.
9. In view of the above, I condone the delay of 310 days in filing the appeal and admit the appeal.
10. Now coming to merit of the case, the first ground of appeal is regarding inclusion of excise duty and sales tax in the total turnover for the purpose of deduction under Section 80HHC. Admittedly, the jurisdictional High Court in the case of Sundaram Fasteners Ltd. (supra) and Wheels India Ltd’s. case (supra) elaborately considered this issue and held that excise duty and sales tax should not be included in the total turnover for the purpose of deduction under Section 80HHC. Therefore, by respectfully following the judgment of the jurisdictional High Court, the orders of the lower authorities are set aside and the Assessing Officer is directed to exclude the excise duty and sales tax from the total turnover for the purpose of deduction under Section 80HHC.
11. The assessee has raised one more ground regarding exclusion of 90 per cent of miscellaneous receipts from profit for the purpose of computation of deduction under Section 80HHC. The learned Counsel for the assessee submitted that the assessee has raised specific ground before the CIT(A) in ground No. 14. However, the same was not disposed of. When the assessee has raised a specific ground of appeal, it is the duty of the CIT(A) to dispose of the same on merit in one way or other. Since the CIT(A) has not disposed of the ground No. 14 raised before him, in my opinion, the matter has to be remitted back to the file of the CIT(A) with the direction to dispose of the same on merit. Accordingly, this issue is remitted back to the file of the CIT(A) with the direction to dispose of ground No. 14 before him on merit after giving reasonable opportunity to the assessee.
12. In the result, I.T.A. No. 1509(Mds.)/99 stands allowed. However, there will be no order as to costs.
ORDER UNDER SECTION 255(4) OF THE INCOME-TAX ACT
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?
We direct the registry to place the files before the Hon’ble President for nominating the Third Member.
ORDER UNDER SECTION 255(4) OF THE INCOME-TAX ACT
Since there is a difference of opinion, the following question of difference is referred to Hon’ble 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.
ORDER
M.K. Chaturvedi, Vice-President
1. This appeal came before me as a Third Member to express my opinion on the following questions:
Questions as proposed by the Judicial Member.- 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?
Question as proposed by the Accountant Member.-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?
At the outset to resolve the controversy on the setting of the questions I heard both the parties. On question No. 1 there is no controversy. Both the learned Members referred the same question. In my opinion the issue involved in the present appeal can be adjudicated with reference to the first question only. I, therefore proceed to decide the first question.
2. Admittedly there was a delay in filing the appeal by 310 days. In explaining the delay Shri M.L.S. Rao, Director of the assessee-company filed an affidavit dated 28-9-2005, which reads as under:
I, M.L.S. Rao, son of Sri M.N. Lakshmana Rao, Hindu, residing at 7/1, Aaddler Road, Kilpauk, Chennai-600 010 do hereby solemnly and sincerely state as follows:
1. I am the Director of the Appellant and am well acquainted with the facts of the case.
2. I state that the original order of the first Appellate Authority was received on 8-10-1998. I state that appeal against that order ought to have been filed before the ITAT within 60 days, i.e., on or before 7-12-1998. But the appeal was filed on 13-10-1999 belatedly by 310 days.
3. I state that the delay is neither wilful nor deliberate but due to unavoidable circumstances.
4. I state that after receiving the CIT(A) order, I kept the same for taking further action. But the paper was misplaced with some other papers and I had forgotten about the order. When I sorted out the unwanted papers, I found that no steps had been taken. Immediately I contacted our Advocate and prepared the appeal and filed belatedly on 13-10-1999.
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 Commissioner (Appeals)’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. Srinivasan, 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 Mst. Katiji (supra), wherein it was held that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay. In this case an appeal preferred by the State of Jammu & Kashmir arising out of a decision enhancing compensation in respect of acquisition of lands for a public purpose to the extent of nearly 14 lakhs rupees by making an upward revision of the order of 800 per cent which also raised important questions as regards principles of valuation was dismissed as time barred being 4 days beyond time by rejecting an application for condonation of delay. Hence the Collector of Land Acquisition filed appeal by special leave before the Apex Court. The Hon’ble Supreme Court held that there is no warrant for according a step-motherly treatment when the State is the applicant praying for condonation of delay. In fact experience shows that on account of an impersonal machinery and the inherited bureaucratic methodology imbued with the note-making, file-pushing, and passing-on-the-buck ethos, delay on its part is less difficult to understand though more difficult to approve. In any event, the State which represents the collective cause of the community, does not deserve litigant non-grata status. The courts, therefore, have to be informed of the spirit and philosophy of the provision in the course of the interpretation of the expression ‘sufficient cause’. So also the same approach has to be evidenced in its application to matters at hand with the end in view to do even-handed justice on merits in preference to the approach which settles a decision on merits. On facts it was found that there existed sufficient cause for the delay. Therefore, the order of the High Court dismissing the appeal before it as time barred was set aside and the delay of 4 days was condoned.
5. In the case of Sreenivas Charitable Trust (supra) the assessee was a charitable trust. The copy of the order served on the assessee was misplaced and thereafter it was found and sent to the counsel for preparing the appeal and then the appeal was prepared and filed before the Tribunal and in that process the delay of 38 days occurred. The delay of 38 days was condoned by the Apex Court in view of the decision of the Apex Court rendered in the case of Vedabai alias Vaijayanatbai Baburao Patil (supra). 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 Mst. Katiji(supra) the delay was only four days. In the case of Vedabai alias Vaijayanatabai Baburao Patil (supra) there was a delay of seven days in filing the appeal. In this case the Apex Court clearly laid down that a distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. The law assists those who are vigilant, not those who sleep over their rights. This principle is embodied in the dictum: vigilantibus non dormientibus jura subveniunt.
7. The delay cannot be condoned simply because the appellant’s case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay it must be proved beyond the shadow of doubt that the appellant was diligent and was not guilty of negligence whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. The Hon’ble Supreme Court in the case of Ramlal v. Rewa Coalfields Ltd. has held that the cause for the delay in filing the appeal which by due care and attention could have been avoided cannot be a sufficient cause within the meaning of the limitation provision. Where no negligence, nor inaction, or want of bona fides can be imputed to the appellant a liberal construction of the provisions has to be made in order to advance substantial justice. Seekers of justice must come with clean hands.
8. In the present case I find that the assessee justified the delay only with reference to the affidavit of Shri M.L.S. Rao, Director of the company. In the said affidavit Mr. Rao stated that the Commissioner (Appeals)’s order was misplaced and forgotten. It was found while sorting out the unwanted papers. Thereafter steps were taken for the preparation of the appeal. Consequently the delay was caused. This clearly shows that the delay was due to the negligence and inaction on the part of the assessee. The assessee could have very well avoided the delay by the exercise of due care and attention. In my opinion there exists no sufficient and good reason for the delay of 310 days. I, therefore, concur with the reasonings adduced by the learned Accountant Member.
9. The matter will now go before the regular Bench for deciding the appeal in accordance with the majority opinion.
ORDER
Shamim Yahya, Accountant Member
1. In this case, there was a difference of opinion amongst the Members of the Bench and the following question was answered by the Third Member:
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 Hon’ble Vice President, Shri M.K. Chaturvedi sitting as Third Member vide his order dated 11-8-2006 has concurred with the view of the Accountant Member. Therefore, in accordance with the majority view, the issue is decided against the assessee and the appeal of the assessee is dismissed.