Kapoor Singh Vs ITO (ITAT Chandigarh)
Introduction: The article delves into the legal proceedings of the case “Kapoor Singh Vs ITO” before the Income Tax Appellate Tribunal (ITAT) Chandigarh. It primarily focuses on the delay in filing appeals, the reasons behind it, and the subsequent arguments made by the appellant’s representative.
Detailed Analysis:
The Legal Representative’s Argument: The authorized representative (AR) argued that the delay in filing appeals was due to the illiteracy of the agriculturist assessees, who were unaware of the dismissal of their appeals by the CIT(A). The AR highlighted the Delay Condonation Applications, emphasizing the unintentional delay and the lack of knowledge about tax laws.
Judicial Precedents and Principles: The AR cited the Hon’ble Apex Court’s opinion in N.Balakrishnan Vs. M. Krishnamurthy, stressing that a court should consider condoning delay unless there is deliberate inaction or lack of bonafide. The principle of “sufficient cause” under Section 5 of the Limitation Act was emphasized, advocating a liberal construction for substantial justice.
Conclusion: Considering the applications for condonation of delay and applying the principles laid down by the Hon’ble Apex Court, the ITAT Chandigarh decided to condone the delay in filing the appeals. The article concludes by highlighting the need for substantial justice and the restoration of the appeals to the Ld. First Appellate Authority for further adjudication on merits.
The Ld. AR submitted that the delay in filing the captioned appeals was for the reason that all the assessees were agriculturists and were illiterate and they had no knowledge about the intricacies of the Income Tax Law and, therefore, the appeals could not be filed in time and these assessees were also unaware that the appeals on merits already had been dismissed by the Ld. CIT(A). The Ld. AR drew our attention to the Delay Condonation Applications alongwith Affidavits filed in all the appeals and submitted that the assessees came to know of the dismissal of their appeals only on receipt of notices of demand u/s 221 of the Income Tax Act, 1961 and it was only after that the assessees took suitable steps for filing the appeals before the Tribunal. It was submitted that no assessee would stand to benefit from late filing of the appeals and if the assessees are not permitted to be heard on merits because of the delay in filing of the appeals, there will be gross miscarriage of justice. The Ld. AR also submitted that the Ld. CIT(A) had not followed the order of the jurisdictional Bench of the ITAT i.e. ITAT Chandigarh, which was in favour of the assessee, and, therefore, the assessees had merits covered in their favour but the same could not be argued, if the delay is not condoned. The Ld. AR prayed that the appeals of the assessee be admitted on merits by condoning the delay which was both unintentional as well as due to lack of knowledge of the correct procedure of law by the assessees.
Hon’ble Apex Court in the case of N.Balakrishnan Vs. M. Krishnamurthy, vide Judgement dated 03.09.1998, opined that a Court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the Court is always deliberate. The Court went on to opine that in every case of delay there can be lapse on the part of the litigants concerned but that alone is not enough to turn down his plea and shut the door against him. The Hon’ble Apex Court further held that if the explanation does not smack of mala fides or it is not put forth as a part of a dilatory strategy, the court should show utmost consideration to the suitor. It was further held that there is no presumption that the delay in approaching the court is always deliberate and the words “sufficient cause” u/s 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice.
Therefore, on the facts of the present cases and keeping in view the applications submitted by the captioned assessees for the condonation of delay and respectfully applying the principles laid down by the Hon’ble Apex Court, as stated in the preceding paragraphs, we are of the considered opinion that on the facts and circumstances of the cases, the explanation for delay offered by the assessees cannot be said to smack of mala fides or that it was put forth as a part of dilatory strategy.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
These five appeals filed by the captioned assessees are having identical issues and, therefore, were heard together and are being disposed off by this common order for the sake of convenience.
2.0 For the sake of convenience, ITA No. 1479/Chd/2019 in the case of Sh. Kapoor Singh is taken as the lead case. In this case, the return of income was filed declaring an income of Rs. 28,56,450/- for assessment year 2011-12 and subsequently the case was selected for scrutiny under CASS. The assessee had declared income from interest on land compensation. Thereafter, a detailed questionnaire was issued and it was seen during the course of assessment proceedings that the assessee had declared interest on enhanced compensation by declaring Rs. 28,56,449/- as taxable u/s 34 of the Income Tax Act, 1961 (hereinafter called ‘the Act’) and further an interest of Rs. 1,87,79,455/- was claimed as exempt. The assessee had claimed refund of Rs. 14,31,330/-. It further noticed by the Assessing officer that the assessee, alongwith his family had received Rs. 10,34,32,945/- as principal amount and Rs. 10,81,79,525/- as interest out of which the assessee’s share came to Rs. 2,06,86,589/- as principal and Rs. 2,16,35,905/- as interest on land compensation. The assessee was required to explain as to why the interest received amounting to Rs. 2,16,35,905/- may not be taxed in terms of provisions of section 56(2)(iii) of the Act. The assessee relied on the judgement of the Hon’ble Apex Court in the case of CIT Vs. Ghanshyam HUF 315 ITR 1 (SC) and submitted that in view of that judgement computation had been made and refund had been claimed and that further no tax was imposable. However, the Assessing officer did not accept the assessee’s contention and completed the assessment at a total income of Rs. 1,10,51,268/-.
2.1 On identical reasoning, the assessment of four other assessees were completed as under:-
