ORDER
Abdul Razack, Judicial Member
1. Whether the order/decision of the Tribunal can constitute a reasonable cause for condonation of delay in filing the cross-objections is the issue to be decided at the first instance before we admit and entertain and decide the cross-objections, filed by the assessee, on merits.
2. Being aggrieved against the orders passed by the Assessing Officer relating to assessment years 1984-85 and 1985-86, the assessee preferred appeals before the first appellate authority which were disposed of on 8-8-1988. The department not being satisfied with the order passed by the CIT (Appeals) preferred appeals before the Tribunal on 15-11-1988 being IT Appeal Nos. 2868 & 2869/Ahd/1988. The assessee received copies of the appeal papers from the Tribunal on 17-11-1990 and according to the provisions of Sub-section (4) of Section 253 of the Income-tax Act, 1961, the assessee was entitled to file memorandum of cross objections within 30 days from the date of receipt of the appeal papers from the Tribunal. However, the cross-objections were filed on 18-5-1992, Thus, there is a delay of 518 days in filing the cross -objections. The cross-objections mainly dispute the disallowance under Section 37(3B) in respect of expenditure on running and maintenance of motor car and expenditure on Diwali cards and posters considered as sales promotion expenses for the purpose of disallowance under Section 37(3A) of the Act. The appeals filed by the revenue as well as the cross-objections filed by the assessee were fixed for hearing on 23-8-1993. While the appeals filed by the revenue were heard and disposed of, the cross objections being barred by time were not heard on merits and the counsel appearing on behalf of the assessee was directed to advance arguments regarding the causes for the delay in filing the cross objections. The assessee’s counsel Shri S.N. Soparkar submitted that the assessee came to know from the order of the ITAT Ahmedabad Bench in IT Appeal No. 1410/Ahd/1988 for assessment year 1984 85 reported, in Ahmedabad CA Journal 1991 at page 510 that the expenditure on running and maintenance of motor-cars cannot be taken into account for the purpose of computing disallowance under Section 37(3A), read with Section 37(3B), of the Income-tax Act. It was further contended that the assessee-company after having come to know of the aforesaid order of the Ahmedabad Bench of the Tribunal consulted its legal advisor, who advised it to file cross objections though it was late. Later on 24-8 1993 the assessee-company also filed an application for condonation of the delay mentioning therein the abovementioned submissions made by the assessee’s counsel. According to the assessee’s counsel, this constituted a reasonable cause and, therefore, the Tribunal should condone the delay of 518 days in filing the cross objections and admit, hear and dispose of the cross objections on merits and in accordance with law. To support the submissions, the assessee’s counsel relied on the judgment of Supreme Court as well as various High Courts, the citations of which are given as under:
(i) Karamchand Premchand (P.) Ltd. v. CIT [1975] 101 ITR 46 (Guj.)
(ii) State of Andhra Pradesh v. Venkataramana Chuduva & Muramura Merchant [1986] 159 ITR 59 (AP)
(iii) CIT v. Sothla Mining & Mfg. Corpn. Ltd. [1990] 186 ITR 182 (Cal.) (iv) Collector, Land Acquisition v. Mst. Katiji [1987] 167 ITR 471 (SC).
3. The departmental representative appearing for the revenue vehemently opposed the submissions made by the assessee’s counsel and submitted that the assessee has not come out with reasonable causes requiring any condonation by us and, therefore, the cross-objections filed belatedly by 518 days should be dismissed.
4. The arguments of the contesting parties were heard. The cases relied upon by the assessee’s counsel were also examined and studied in detail by us. We have also on our own looked into the decided case laws on the subject to arrive at a fair conclusion. The decisions relied upon by the assessee’s counsel, in our view, cannot come to its rescue for condoning the delay. We have carefully examined the facts of the cases relied upon by the assessee’s counsel. In the case of Karamchand Premchand (P.) Ltd. (supra), which was before the Hon’ble Gujarat High Court, a revision petition was filed before the Commissioner of Income-tax after decision of the Supreme Court touching upon the grievance affecting the assessee. The revision petition was belatedly filed and the Commissioner of Income-tax declined to condone the delay and dismissed the revision petition. Being aggrieved, the assessee-company filed a writ petition before the Hon’ble Gujarat High Court averring that the assessee became aware of the true legal position in respect of its grievance only after the pronouncement of judgment by the Supreme Court and since the decision of the Supreme Court amounted to declaration of law as per article 141 of the Constitution of India and such declaration having retrospective effect in law, the assessee was entitled to get its grievance redressed through revision proceedings under Section 264 of the IT Act before the Commissioner and the Commissioner ought to have condoned the delay on this ground. The Hon’ble Gujarat High Court after considering the facts and the merits of the case held as under:
The decision of the Supreme Court amounted to a declaration of law as contemplated by article 14.1 of the Constitution of India. This declaration of law had retrospective effect and rendered the assessment of the expenditure in connection with the debentures illegal, because that assessment was passed on a wrong view that the expenditure in question was capital expenditure. This apparent illegality crept into the assessment and became quite apparent only because of the decision of the Supreme Court. It was, therefore, only after the decision of the Supreme Court that the petitioner had reason to move the Commissioner in revision. It was obviously because the real legal position appeared to be settled that the petitioner did not keep the question ‘alive’. Therefore, for the purpose of decision whether the petitioner had sufficient cause for not preferring the revision application in time, the fact that it did not keep the question alive by preferring appeals, which were likely to prove infructuous, did not make any difference.
4.1 In the case of Venkataramana Chuduva & Muramura Merchant (supra), which was before the Andhra Pradesh High Court, the first appellate authority declined to admit and entertain the appeal of the assessee which was belatedly filed after decision of the Supreme Court. In that case also, Their Lordships of the Andhra Pradesh High Court held as under:-
That one of the remedies open to the assessee was to prefer an appeal or revision, as the case may be, along with the petition for condoning the delay, on the ground that in view of the position of law obtaining on the date of receipt of the impugned order, they decided not to file an appeal, but that since the subsequent decision of the Supreme Court established that assumption to be incorrect and further that the tax had been illegally collected from them, they were subsequently preferring the appeal and that that should constitute ‘sufficient cause’ for delay within the meaning of the proviso to Sub-section (1) of Section 19, or Sub-section (2) of Section 21 or the proviso to Sub-section (1) of Section 22 of the Act, as the case may be. Further, in view of article 265 of the Constitution, a subsequent decision of the High Court or the Supreme Court, which changed the position, the interpretation or the understanding of law, constituted sufficient cause for condoning the delay in filing the appeal or revision, as the case may be, where it was established that on the date of receipt of the impugned order, the filing of an appeal or revision would be an empty formality, having regard to the position of law then obtaining. That would be so, whether the assessee raised the dispute before the authority, or paid the tax under a mutual mistake. Therefore, the Tribunal was right in holding that, the assessees had sufficient cause for not filing the appeals within the time prescribed, and in. holding that the delay ought to have been condoned.
4.2 Similar view was taken by the Calcutta High Court in the case of Sothia Mining & Mfg. Corpn. Ltd. (supra) that after decision of the Supreme Court if an appeal is preferred, then the delay has to be condoned for this reason. The Supreme Court while deciding the case of Mst Katiji (supra) has laid down as under:
Making a justice oriented approach from this perspective, there Was sufficient cause for condoning the delay in the institution of the appeal. The fact that it was the ‘State’ which was seeking condonation and not a private party was altogether irrelevant. The doctrine of equality before law demands that all litigants, including the State as a litigant, are accorded the same treatment and the law is administered in ah even-handed manner. There is no warrant for according a step-motherly treatment when the ‘State’ is the applicant braying for condonation of delay. In fact, experience shows that on account of an impersonal machinery (no one is charge of the matter is directly hit or hurt by the judgment sought to be subjected to appeal) 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 a litigant non grata status.
5. It is transparent from the judgments of the Supreme Court as well as other High Courts that the delay in filing the appeal has to be condoned if the same is filed after the decision of the Supreme Court which amounts to pronouncement and declaration of law of the land as enumerated in article 141 of the Constitution of India. This Tribunal is a creature of the statute namely, the Income-tax Act, 1961. The decisions rendered by the Tribunal do neither pronounce nor declare the law and they are only binding between the contesting/litigating parties before the Tribunal. In the appeal the Tribunal being creature of the statute and a final fact finding authority under the provisions of Section 254 of the Income -tax Act, 1961, the decisions rendered are binding on all income-tax authorities which are functioning under the Income-tax Act. In order to maintain uniformity in decisions, it has been laid down by several High Courts as well as the Supreme Court the different Benches of the Tribunal should follow and adopt the orders passed by other coordinated Benches. This is necessitated in order to maintain judicial discipline and to avoid chaos and anarchy in the administration of justice in so far as the tax related appeals are concerned. The decisions of the Tribunal are neither precedents nor the Tribunal is a court of record; though as per decision of the Supreme Court in the case of Union of India v. Paras Laminates (P.) Ltd. [1990] 186 ITR 722, the Tribunal functions as a court within the limits of its jurisdiction yet it has not been laid down till now by any High Court or the Apex Court that the orders/decisions of the Tribunal lay down, declare or pronounce the law. Of course the decisions of the Tribunal do, in most cases, lead to a path way towards the Supreme Court and High Court where law is declared and laid down, but the decisions of the Tribunal by itself do not lay down or propovind law. The Tribunal only acts as a medium or instrument under the relevant, provisions of the tax laws for declaration of law by Supreme Court or for that matter by the appropriate jurisdictional High Court. If the delay is condoned in the instant case on the strength of an earlier decision of Ahmedabad Bench of the Tribunal as stated in the condonation petition and if at a later stage, the same is upset or reversed either by the jurisdictional High Court or by the Apex Court, then it will amount to condonation of delay without there being a reasonable cause and the opposite side will be prejudiced on account of this act of the Tribunal. The Gujarat, Andhra Pradesh and Calcutta High Courts in the cases refened to above have laid down that after the decision of the Supreme Court, an assessee is entitled to file appeal or revision petition though belatedly before the concerned authorities, because the decision/judgment of the Supreme Court amounts to declaration of law of the land as per article 141 of the Constitution of India. Same cannot be said about the decisions rendered by this Tribunal though it is a judicial body and performs the judicial functions of the State in vetting, deciding and adjudicating the disputes brought before it in accordance with the provisions of the relevant tax statutes.
6. It is a settled law that in order to get the delay condoned or excused in pursuing the remedies available to the assessee under the direct tax laws, the assessee has to explain the delay to the satisfaction of the Tribunal. In deciding what is sufficient cause for delay in filing the appeal, the true guide is whether the appellant has acted with reasonable diligence in prosecution of his appeal (see Asi Bai v. Gomathi AIR 1979 Mad. 115 at page 116). As laid down by the Supreme Court in the case of Ramlal v. Rewa Coalfields Ltd. AIR 1962 SC 361, 364, in the case of Sitaram Ramchandra v. M.N. Nagrashana AIR 1960 SC 260, 265, 266 and in the case of Mrs. Sandhya Rani Sarkar v. Smt. Sudha Rani Debi AIR 1978 SC 537, the appellant has to show sufficient cause for not filing the appeal on the last date of the limitation and must explain the delay made thereafter day by day till the actual date of the filing of the appeal. In other words, the whole of the delay must be explained. The Madras High Court in the case of Andal Sweet Stall & Tippo Dining Hall v. State of Tamil Nadu [ 1981 ] 48 STC 551 have laid down that a judgment or pronouncement by a court long after the period of limitation cannot be taken advantage for filing of appeal with a petition to excuse the delay in filing the appeal.
7. It is true that the parties are entitled to wait until the last date of the limitation for filing of the appeal, but when it allows the limitation to expire and come forward with an explanation enumerating reasonable causes for not filing the appeal within the time prescribed under the statute, then the causes so shown must establish that because of some event or circumstances arising before limitation expired, he/it was not able to file the appeal within the stipulated time mandated in law. Any event, cause or circumstance arising after the expiry of the limitation period cannot constitute a sufficient cause. There may be events or circumstances subsequent to the expiry of the limitation period which may further delay in filing of the appeal, but the limitation has been allowed to expire when the appeal being filed must be traced to a cause arising within the period of limitation. We are fortified in saying so on the strength of the decision of the Hon’ble Supreme Court in the case of Ajit. Singh Thakur Singh v. State of Gujarat AIR 1981 SC 733. The assessee’s counsel has taken strong aid from the decision of the Supreme Court in the case of Mst Katiji (supra) which has laid down that it is not necessary that every day’s delay must be explained and a pedantic approach should not be taken while considering a case for condoning the delay in filing the appeal. In our view, this case cannot come to the rescue of the assessee, because in that case the State of Jammu & Kashmir preferred an appeal late before the High Court by four days and Their Lordships of the Supreme Court have observed that the State as a litigant does not stand to gain by filing the appeals beyond the prescribed period of limitation. This decision supports more the case of the revenue than that of the assessee. Nonetheless the observations of Their Lordships of the Supreme Court in Mst. Katiji’s case (supra) are registered in our mind but at the same time, we cannot remain passive or oblivious to the other judgments rendered by the Apex Court in relation to the condonation of delays in pursuing the remedies available in an enactment particularly, a special enactment like the Income-tax Act, 1961 or the other related direct tax laws namely, the WT Act and GT Act.
8. After due consideration of the facts and circumstances brought out for condonation of the delay and from the discussions made by us above, we are of the considered view that the assessee has not been able to explain satisfactorily the delay of 518 days in filing the present cross-objections. The same are, therefore, dismissed as barred by time.