ITAT MUMBAI BENCHES “A”, MUMBAI
ITA No.: 3297/Mum/2012
Assessment Year: 2006-07
Shri Kunal Surana, vs. The ITO
Date of hearing : 14.03.2013
Date of pronouncement : 19.04.2013
Summary of the Case Law
Out of the reasons given by the appellant for condonation of delay, it is to be looked into whether the appellant had acted with reasonable diligence in prosecuting his appeal and whether he was prevented by sufficient cause for not filing his appeal within the period of limitation as prescribed by law. We may observe that the explanation put forth by the learned AR does not constitute sufficient cause for delay. It has been submitted in the said letter that the assessment order dated 16.12.2008 was duly served upon the assessee on 06.01.2009. It has been further explained that due to some personal work the said representative of the assessee went outside Mumbai and the said work of preparation and submission of appeal was given by him to his assistant Mr. Anand Kanse. However, the said assistant kept the papers in his drawer and failed to take necessary action in the matter. On his resumption of office, the said assistant did not inform the AR about the pendency of appeal. It was only when the penalty notice was received on 30.05.2009, he came to know about the non-submission of above appeal and on further enquiry the papers were found in his drawer and left without taking any action. It has been further explained that as stated above, it was due to oversight and unintentional mistake that the appeal could not be submitted in time.
This type of explanation given by the representative of the assessee is vague and evasive and does not constitute sufficient cause as is required to condone the delay under the law of limitation. There is no explanation as to on which date the papers were handed over by the assessee to his representative Shri Sirsalewala and on which date he went out of Mumbai and on which date he resumed office. There is no explanation as to why he did not enquire about the preparation or filing of appeal from his assistant. There is no mention as to whether the assessee ever enquired from his representative about the filing or non-filing, pendency or date of hearing of appeal. Neither any affidavit of the assessee nor any affidavit of the learned representative was produced before the learned CIT(A). The case is of gross negligence and inaction on the part of the assessee as well as his representative. The learned CIT(A) has rightly observed that the said letter is dated 27.06.2008, which was filed along with form no.35 on 05.06.2009, however, the assessment order is dated 16.12.2008 and the appeal has been filed on 05.06.2009 and the said letter which is prior to the assessment order cannot be related to the appeal against the said assessment order. All these facts show sheer negligence, carelessness and non-application of mind on the part of the learned representative of the assessee. No doubt, courts adopt liberal view while condoning delay on the principle that technicalities when pitied against the cause of justice, the latter should prevail. However, it can be observed that it does not mean that the litigants should take the courts for granted to ignore the gross negligence and carelessness on their part while appealing for condoning of delay. As observed earlier, non-filing of appeal within the limitation period creates a substantive right in favour of the other party and cannot be defeated with a taken for granted attitude. A perusal of the letter dated 27.06.2008, relied upon by the learned AR reveals that the representative of the assessee did not even prepare the appeal papers, what to say of its filing. He handed over the papers for preparation of appeal to his assistant which means the appeal in question was never drafted. It has not been explained whether the representative’s assistant Mr. Anand Kanse was competent and qualified to prepare and file the appeal for the assessee. After handing over the paper to his assistant, he never bothered to enquire as to what happened to those papers thereafter. It was the duty of the learned representative not only to enquire about the papers given by him to his assistant for filing of appeal but also to prepare draft, sign the same and present it . before the competent authority. He never bothered to look into the matter. There is also total inaction and gross negligence on the part of the assessee himself also. After handing over the papers to his representative, he also never bothered to enquire as to whether the appeal was filed and what was the next date of hearing or whether his signatures on the duly prepared appeal were required or not. Neither the assessee nor his representative cared in this respect. Even the conduct of the assessee shows that he always remained careless and negligent in pursuing his case before the AO also. A perusal of the assessment order reveals that the assessee never bothered to attend the proceedings before the AO. He did not give any explanation or reply to various opportunities granted to him by the learned AO to answer his queries. When the assessee did not turn up to answer the enquiries and the assessment was going time barred on 31.12.2008 only then the assessment order was passed by the AO. Again a perusal of the order under appeal reveals that the learned CIT(A) has categorically mentioned that on the stipulated dates of hearing, neither the assessee nor his representative appeared even after adjourning the case for several times. Lastly, the learned representative of the assessee appeared on 16.03.2012 and the case was heard on merits. A perusal of the assessment order as well as the order of the CIT(A) reveals that the assessee and his representative always remained careless and negligent in pursuing their case. The explanation put forward is vague and evasive and does not constitute any sufficient cause for condonation of delay. Faced with somewhat similar situation, Hon’ble Punjab & Harayana High court in the case of Krishan Dev Dhiman vs. Mahesh Bhatia and others [RSA No.3142 of 2006 decided on 08.04.2008] has observed as under:
“Even otherwise, the only ground for condonation of delay is contained in paragraph 3 of the application wherein it is stated that the brief was misplaced by the clerk of the counsel who has now left the service and on finding the file, the same has been filed now. Even otherwise, no details are given as to when the Clerk of the counsel has misplaced the file, when he had left the service of the counsel for the applicant-appellant and when the file has been found.Online GST Certification Course by TaxGuru & MSME- Click here to Join
Learned counsel appearing for the applicant-appellant has stated that it was due to the fault of the Clerk that delay has been caused.
I am not impressed by this argument. It is the duty of the party also to follow his/her case. It cannot be believed that the applicant-appellant has not bothered to enquire about his case for a period of more than four years. If he has not taken any interest, it is sheer negligence on the part of the applicant-appellant. In the absence of there being any details about the misplacing of the file and finding the same, when the Clerk of the counsel left the service and when the new Clerk/counsel found the file, the grounds urged in paragraph 3 of the C.M.Application cannot be taken on his face value.
For condonation of delay, two questions are required to be seen (i) whether there is sufficient cause and it depends from case to case whether in given circumstances, sufficient cause has been established or not? (ii) Whether the law of limitation has to be enforced or the question of limitation should be taken only as a mere formality.
In the present case, it is not the case of the applicant-appellant that after the file was misplace any effort was made by the learned counsel or his clerk to trace the file. Even the applicant-appellant (client) did not bother to enquire about his case from his counsel. This is a case of total callousness and negligence on the part of the applicant/appellant. Even affidavit accompanying the application contains no cogent details about the delay. I am not inclined to accept the explanation particularly when the applicant-appellant has misrepresented in paragraph 2 of the application that case was lastly refilled on 21.09.2004 whereas the file was returned to him on 21.09.2004 with some objections and the same was refilled lastly on 04.07.2006.
It is settled law that rigour of limitation must apply where the statute so provides. Limitation cannot be condoned on the ground of compassion or equitable considerations or where the party seeking condonation appears to be callous or negligent. My view is fortified with the following judgments of the Hon’ble Apex Court:-
In the case of P.K.RAMACHANDRAN Vs. STATE OF KERALA AND ANOTHER (1997) 7, Supreme Court Cases, 556, wherein it has been held as under:-
“The law of limitation may harshly affect a party particular party but it has to be applied with all its rigour when the statute so prescribes and the courts have no power to extend the period of limitation on equitable grounds. The discretion exercised by the High Court was, thus, neither proper nor judicious. The order condoning the delay cannot be sustained. This appeal, therefore, succeeds and the impugned order is set aside. Consequently, the application for condonation of delay filed in the High Court would stand rejected and the miscellaneous first appeal shall stand dismissed as barred by time.”
In the case of Municipal Corporation of Delhi and others Vs. International Security and Intelligence Agency Ltd. (2004) 3 Supreme Court Cases, 250 the Hon’ble Supreme Court has held as follows:-
“21…………. It has to be remembered that law of limitation operates with all its rigour and equitable considerations are out of place in applying the law of limitation. The cross-objector ought to have filed appeal within the prescribed period of limitation calculated from the date of the order if he wished to do so. Having allowed that opportunity to lapse he gets another extended period of limitation commencing from the date of service of the notice of the appeal enabling him putting in issue for consideration of the appellate court the same grounds which he could have otherwise done by way of filing an appeal. This extended period of limitation commences from the date of service of the notice of appeal and such notice ought to be in a valid or competent appeal.”
In similar circumstances, in the case of Bhagwna Vs. Tara Chand and others (CM No.11634 –C of 2007 in RSA No.4122 of 2007) decided on 18.01.2008, condonation of delay in refilling the appeal has been dismissed.”
The Hon’ble Supreme Court of India in the case of G Ramegowda, Major vs Special Land Acquisition 1988 AIR 897, 1988 SCR (3) 198 has held that there is, it is true, no general principle saving the party from all mistakes of its counsel. If there is negligence, deliberate or gross inaction or lack of bona fides on the part of the party or its counsel there is no reason why the opposite side should be exposed to a time-barred appeal. Each case will have to be considered on the particularities of its own special facts. In another authority of Hon’ble Orissa High Court styled as Mohan Prasad Singh Deo vs Ganesh Prasad Bhagat And Ors AIR 1952 Ori 168, His Lordship Narasimham J; has observed as under .
“. It is well known that on many difficult questions of law there is a conflict of decisions and it is difficult for any Counsel to anticipate what view a Judge would take. No amount of care or diligence on his part would therefore suffice and in such circumstances there may be a good case for condoning the delay. Similarly mistake of fact if it is committed while acting in good faith may be a sufficient cause. But a mistake of fact arising out of negligence cannot be said to be committed in good faith.
20. In ‘AMBIKA RANJAN v. MANIKGANJ LOAN OFFICE’, 55 Cal 798 and ‘SURENDRAMO-HAN v. MAHENDRANATH’, 59 Cal 781 the question as to how far a party would suffer for the negligence of his legal adviser was considered and reliance was placed on the following observations of Brett M. R. in ‘HIGHTON v. TREHERNE’, (1879) 48 L J Ex 167.
“In cases where a suitor has suffered from the negligence or ignorance or gross want of legal skill of his legal adviser he has his remedy against that legal adviser, and meantime the suitor must suffer. But where there has been a bona fide mistake, not through misconduct nor through negligence nor through want of reasonable skill but such as a skilled person might make, I very much dislike the idea that the rights of the client should be thereby forfeited.” In the present case I cannot hold that the legal adviser of the petitioner was not guilty of negligence bearing in mind the definition of ‘good faith’ given in the Limitation Act.”
So in view of the law laid down by the Higher Courts, there is no merit in the case of the assessee for condonation of delay. It is a case of gross negligence, inaction and laches not only on the part of the appellant but also on the part of his representative. Neither the appellant nor his representative have acted with reasonable diligence in prosecuting the appeal before the CIT(A) and as observed above, even they remained reluctant to attend or answer the reasonable queries in the assessment proceedings before the AO. The appellant has to suffer for not filing appeal within the period of limitation when he was not prevented from any sufficient cause as the courts of law cannot be taken for granted. In our view, the learned CIT(A) has rightly dismissed the application for condonation of delay and thereby appeal of the assessee being barred by limitation. The finding of the learned CIT(A) in respect of the matter is hereby upheld.