Case Law Details
P. Preetha Vs ITO (ITAT Chennai)
Introduction: In the intricate landscape of tax litigation, the recent judgment by the Income Tax Appellate Tribunal (ITAT) Chennai in the case of P. Preetha vs Income Tax Officer (ITO) provides valuable insights into the challenges faced by taxpayers in filing timely appeals and the exacting standards applied by the tribunal for condonation of delays. The case, involving P. Preetha, who is engaged in the hotel business and trading in stationary items, unraveled a complex web of facts, submissions, and the tribunal’s scrutiny.
Background: The saga began with a survey under section 133A of the Income-tax Act in 2014, revealing that although P. Preetha had taxable income, she had neither filed returns nor paid taxes. Subsequently, the assessment was reopened under section 147, and notices under section 148 were served. In response, Preetha filed returns of income. The assessments for the years 2010-11 to 2012-13 were completed on 29.03.2016, leading to an appeal by Preetha, which was initially dismissed by the Commissioner of Income Tax (Appeals), Puducherry. The matter was remitted back to the Commissioner by the ITAT Chennai, and upon reconsideration, the appeals were dismissed again.
The Crucial Delay: A significant facet of this case was the delay in filing appeals totaling 1040 days. The appeals, in ordinary circumstances, should have been filed on or before 18.09.2020, considering the appellate order dated 17.07.2020. However, they were submitted on 25.07.2023. The appellant attributed this delay to her deteriorating health conditions and the challenges posed by the COVID-19 pandemic.
Facts and Submissions: The appeals, covering the assessment years 2010-11, 2011-12, and 2012-13, were consolidated for convenience. The initial hearing pointed out the significant delay and the absence of a petition explaining the reasons for this delay. The counsel for the appellant, Mr. T. Vasudevan, Advocate, undertook to file a petition for condonation of delay and address the defects. The tribunal allowed this and scheduled the appeals for a subsequent hearing.
During the subsequent hearing, the counsel filed a petition along with an affidavit, citing the appellant’s health issues and the impact of the pandemic. The medical certificate, dated 08.11.2023, claimed that the appellant was advised rest from 01.07.2022 to 31.08.2023.
Tribunal’s Scrutiny: The tribunal, during the hearing, meticulously scrutinized the reasons provided by the appellant. It expressed skepticism about the genuineness of the appellant’s claims, questioning the lack of evidence, such as medical records and prescriptions, supporting the asserted health issues. The medical certificate produced was deemed vague and general in nature. The tribunal probed the absence of specifics regarding the appellant’s ailment, raising doubts about the bona fide nature of the reasons provided.
The Tribunal’s Decision: In its decision, the tribunal emphasized the legal principle that while rules of limitation are not intended to destroy parties’ rights, parties must seek remedies promptly. The burden lies on the assessee to explain each day of the delay, and the tribunal underscored that the appellant did not substantiate her claims adequately. The reasons for the delay were deemed not bona fide and reasonable, leading to the rejection of the appeal for condonation of delay.
Legal Insights: The tribunal’s decision aligns with the legal principle that timely filing of appeals is paramount in tax litigation. While rules of limitation are not meant to destroy parties’ rights, the burden of explanation lies squarely on the assessee. Concrete and substantiated reasons for any delay are essential, and vague or general claims may not suffice to convince the tribunal. This decision reinforces the need for meticulous documentation and adherence to procedural requirements in tax litigation.
Conclusion: The P. Preetha vs ITO case serves as a stark reminder of the complexities involved in navigating the intricate web of tax litigation. Taxpayers are expected to provide valid and substantiated reasons for any delay in filing appeals, and the tribunal’s stringent scrutiny underscores the importance of adhering to procedural requirements. As taxpayers traverse the labyrinth of tax disputes, this judgment stands as a beacon, emphasizing the significance of timely compliance and meticulous record-keeping.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
These three appeals filed by the assessee are directed against common the order passed by the learned Commissioner of Income Tax (Appeals), Puducherry, dated 17.07.2020 and pertains to assessment years 2010-11, 2011- 12 & 2012-13. Since, facts are identical and issues are common for the sake of convenience, these appeals filed by the assessee are heard together and are being disposed off, by this consolidated order.
2. The brief facts of the case are that, the assessee is engaged in hotel business and also trading in stationary items. A survey u/s. 133A of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) was conducted in the case of the assessee on 18.03.2014, which revealed that although the assessee had taxable income, she had neither filed return of income nor paid the tax. Therefore, assessment has been reopened u/s. 147 of the Act, and notice u/s. 148 of the Act, was served on the assessee. In response, the assessee has filed return of income. The assessment has been completed u/s. 143(3) r.w.s. 147 of the Act, for assessment years 20 10- 11 to 2012-13 on 29.03.20 16 and assessed total income of Rs. 49,38,425/-, Rs. 2,09,34,894/- and Rs. 1,89,58,008/- for the assessment years 2010-11, 2011-12 & 2012-13, respectively. The assessee has filed an appeal against the assessment order passed by the Assessing Officer for all three assessment years. The ld. CIT(A), by common order dated 27.11.2017 dismissed appeals filed by the assessee. The assessee preferred further appeal before the Tribunal and the ITAT, Chennai Benches vide their order dated 19.09.2018 in ITA Nos. 982, 983 & 984/Chny/2018, remitted the matter back to the file of the ld. CIT(A) to reconsider the case. In pursuant to the directions of the ITAT, the CIT(A) taken up the case for proceedings and issued show cause notice on 04.08.2017, 28.06.2017, 21.07.2017, 15.09.2017, 25.10.2017 and 23.01.2017. The assessee neither appeared nor filed any details. Therefore, the ld. CIT(A) decided the appeals on merits, on the basis of material available on record and sustained additions made by the AO and dismissed appeals filed by the assessee. Aggrieved by the ld. CIT(A) order, the assessee is in appeal before us.
3. The appeals filed by the assessee has been posted for hearing on 31.10.2013. At the time of hearing, it was noticed that the appeals filed by the assessee was time barred by 1040 days, for which no petition along with affidavit explaining reasons for delay has not been filed. The bench pointed out the defects of not filing condonation petition and affidavit for delay in filing the appeal, for which ld Counsel for the assessee Mr. T. Vasudevan, Advocate, undertake to file the petition for condonation of delay and remove the defects. Accordingly, appeals were posted for hearing on 09.11.2013. The appeals were once again taken up for hearing on 09.11.2013. At the time of hearing, ld. Counsel for the assessee has filed a petition and affidavit explaining reasons for delay in filing of appeal. The ld. Counsel for the assessee, referring to petition filed by the assessee for delay of 1040 days in filing the appeals submitted that the petitioner was suffering from serious health complications and was under treatment over the last two years. She had to undergo constant treatment and multiple visits to the gynaecologist. In the midst of her health problems, and during covid period, the order passed by the CIT(A) dated 17.07.2020 was received on 20.07.2020. The appeal should have been filed on or before 18.12.2020. However, due to ongoing Pandemic Covid-19, she could not able to file appeals. Further, even after Covid period, she could not file appeals mainly due to her ill-health. But, she had taken steps to file appeals immediately after recovery from the ailment and has filed appeals on 25.07.2023, which caused a delay of 1040 days. However, if the period covered under Covid-19 excluded, the actual delay is only 421 days. The delay in filing of appeals is neither intentional nor for wanton of any undue benefits, but purely beyond the control of the assessee. Therefore, in the interests of justice, the delay in filing of appeals may be condoned and appeals filed by the assessee may be admitted for hearing. To support her affidavit, the assessee has filed a certificate from Doctor dated 08. 11.2023.
4. The ld. DR, Shri. P. Sajit Kumar, JCIT, opposing petition filed by the assessee for condonation of delay submitted that, there is no merit in the reasons given by the appellant to file the appeal beyond the specified date. Assuming for a moment the claim of the appellant is correct that she was suffering from various ailments, but she should have filed a petition along with affidavit explaining reasons for delay, when the appeal was filed before the Tribunal. Further, her medical documents including Doctor certificate should have been related back to the date of filing of the appeal. But, she had filed a medical certificate from the Doctor, dated 08.11.2023 and further, said certificate is vague and general in nature without any specific observations with regard to ailment referred to by the appellant. Therefore, he submitted that the delay in filing of appeals should not be condoned.
5. We have heard both the parties and considered petition filed by the appellant for condonation of delay in filing of appeals. We have also carefully considered reasons given by the assessee for condonation of delay of 1040 days in filing of appeals. Admittedly, the appeals has been filed with a delay of 1040 days. Although, the assessee divided the period of delay into two parts, i.e., (i) before Covid period and (ii) after Covid period, but in total there is a delay of 1040 days in filing of appeals. As admitted by the appellant itself, the appellate order passed by the CIT(A), dated 17.07.2020 has been served on the appellant on 20.07.2020 itself. Ordinarily, the appeals should have been filed on or before 18.09.2020, but the appellant has filed appeal only on 25.07.2023, with a delay of 1040 days. The appellant claims that due to her ill-health, Doctor advised her to take rest and because of this, she could not attend any work including pending income-tax proceedings. The appellant has filed a medical certificate from Dr. M. Elangovan, dated 08.11.2023 and as per said medical certificate, the appellant was advised rest from 01.07.2022 to 31.08.2023. Accordingly, the appellant claims that there is a valid and reasonable cause for not filing appeals in time and thus, the delay in filing of appeals needs to be condoned in the interests of advancement of substantial justice.
6. We have given our thoughtful consideration to the reasons given by the appellant to explain the reasons for delay in filing of the appeals. Although, the appellant claims that she was under medical treatment over the last two years for various ailments including Gynaecology problems, but could not produce any evidence including medical records to prove her claim, except the certificate from Doctor dated 08.11.2023, which is much after the date of filing of appeals. Further, the ailment for which she was undergoing treatment is also general in nature and common in many women. The appellant has also failed to explain a specific ailment which is prevent her to attend day-to-day work. On the other hand, if you go through the medical certificate issued by the Doctor on 08.11.2023, which is vague and general in nature and does not specify any kind of medical problems for the assessee. Further, said medical certificate is not supported by any evidence including prescription, if any issued by the Doctor for last two years advising her to take various medicines, tests and treatment etc. The assessee could not file any evidence to prove that she had visited the Doctor for various treatment and consultation, except so called certificate issued by Doctor, which in our considered view is vague and general in nature. Therefore, we are of the considered view that, the reasons given by the appellant in her affidavit for delay in filing of appeals is not bonafide and reasonable. Further, the appellant could not substantiate the claim made in her affidavit with any evidences. Thus, we are of the considered view, that the reasons given by the appellant for condonation of huge delay of 1040 days in filing of the appeals is not bonafide and reasonable cause as defined under the Act and thus, rejected.
7. It is a well settled principle of law by the decisions of various courts, including the decision of the Hon’ble Supreme Court in the case of N. Balakrishnan vs M. Krishnamurthy reported in [1998] 7 sec 123 that rules of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. A similar view has been expressed by the Hon’ble Supreme Court in the case of Collector, Land Acquisition v. Katiji, reported in [1987] 2 sec 107, where although, the Hon’ble Supreme Court held that Courts must adopt liberal approach to condone the delay, but very categorically observed that it is for· the assessee to explain each and every day of delay in filing of the appeal. In the present case, although there is a huge delay of 1040 days in filing of these appeals, but the assessee could not explain the delay with valid reasons. Therefore, we are of the considered view that, the appellant has taken casual approach in pursuing her case before the appellate authority, even though she was aware that she need to file the appeals as per the provisions of the Act, within the limitation period provided under the statue. It is further fortified by the conduct of the assessee that, even in earlier round of proceedings, she had filed belated appeals and the Tribunal has condoned the delay to give an opportunity to the assessee to explain her case before the CIT(A). Even before the ld. CIT(A) in second round of litigation, the assessee did not appear inspite of various dates of hearing was provided to the appellant. From the above, it is undoubtedly clear that, the appellant is not serious in pursuing her case and also not honest in her approach to resolve the dispute with tax authorities.
8. In this view of the matter and considering facts and circumstances of the case, we are of the considered view that the assessee could not make out a case of reasonable and bonafide cause for condoning the delay of 1040 days in filing of these appeals and thus, we dismiss appeals filed by the assessee for all three assessment years as unadmitted.
9. In the result, appeals filed by the assessee for all three assessment years are dismissed.
Order pronounced in the Open Court on 09th November, 2023 at Chennai.
Author Bio
