Power to condone the delay with the Tribunal can only be exercised if it is specifically provided in the Statute itself. As we have already examined so far as Income-tax Act is concerned and in respect of Tribunal it is with regard to appeals and cross‑objections only, such power is given if the Tribunal is satisfied about the sufficiency of reasons about such delay as enshrined in clause (5) of section 253 of the Act. But so far as section 254(2) of the Act is concerned, there is no express power conferred on the Tribunal by the Legislature in the Statute where the Tribunal can condone the delay beyond the relevant period prescribed in the Statute therein.
Inordinate delay in filing of MAs is not a fit case for condonation, more so, because there is no specific provision in the realm of section 254(2) of the Act to provide for such condonation of delay in case of MAs.
FULL TEXT OF THE ITAT JUDGEMENT
There are three Miscellaneous Applications and corresponding three condonation of delay petitions filed before us by the assessee.
2. In this regard, at the very outset, ld. Counsel for the assessee invited our attention to the Writ Petition No.1529 of 2020 filed before the Hon’ble Bombay High Court, Nagpur Bench, Nagpur, wherein the operative para 4 reads as under:‑
“4. In view of above, we issue the following directions:
All the applications of the petitioner including application for condonation of delay and application for restoration of appeal shall be heard as soon as possible and disposed of in accordance with law by respondent no.3 latest by 24/3/2020, if the petitioner deposits with respondent no.2 an amount of rupees twenty-five lakhs latest by 23/3/2020. If any amount is determined to be in excess of the amount liable to be assessed to the petitioner under the scheme, same shall be refunded to the petitioner. The auction sale shall stand deferred for a period of eight weeks from the date of order.”
3. It is evident from the above directions of the Hon’ble High Court that these applications i.e. 3 MAs and 3 condonation of delay petitions of the assessee have to be heard by the Tribunal as soon as possible and dispose of within 24.03.2020, subject to the assessee depositing with the Tax Recovery Officer an amount of Rs.25 lakhs within 23.03.2020. The ld. Counsel for the assessee submitted that he will deposit the aforesaid amount within due date, however, requested us to hear these applications on the present date.
4. The ld. DR fairly conceded to the request of assessee.
5. After hearing both the parties and observing the directions of Hon’ble High Court, Nagpur Bench, we proceed to hear all the applications of the assessee filed before us. From the facts on record, it is evident that all the three MAs are time barred and there is delay of 2 years 11 months in filing these MAs. The order of Tribunal was pronounced on 01.02.2013 and MAs should have been normally filed within period of 4 years from 01.02.2013 i.e. on or before 01.02.2017. However, these applications were filed by the assessee on 30.12.2019 causing the said delay of 2 years 11 months. The ld. Counsel for the assessee wants us to condone this delay of 2 years 11 months u/s 254(2) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act). It is the argument of ld. Counsel that if the delay is condoned and the orders are recalled by allowing MAs of assessee, in that event they will go for Vivad Se Vishwas Scheme. The assessee placed heavy reliance on the decision of the Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. MST. Katiji 85 Ors. in Civil Appeal No. 460 of 1987 reported in (1987) 167 ITR 471 (SC). Per contra, ld. DR submitted that the power conferred u/s 254(2) of the Act to the Tribunal is very specific and MAs should be filed within due period of 4 years and if there is any delay, the Legislature does not confer power of condonation in case of MA to the Tribunal. The ld. DR strongly referring to clause (5) of section 253 of the Act, submitted that it is in case of appeal or cross-objection only that the Tribunal even after expiry of relevant period, may admit an appeal or permit the filing of Memorandum of cross-objection, if it is satisfied that there is sufficient cause for not presenting the said appeal or cross-objection within the due time. But in case of section 254(2) of the Act i.e. MA, there is no such power or provision given to the Tribunal for condonation of delay if the application is filed after the relevant period.
6. Both the parties heard. We have perused MAs and condonation of delay petitions and have given considerable thought to the various judicial pronouncements placed before us. In this case of assessee, as evident from record, the order of Tribunal dated 01.02.2013 was duly served on the assessee on 26.02.2013. This service was done as evident from Form No.36 on the address given by assessee to the Tribunal, which is as follows:
“Daryapur Shetkari Sahakari Ginning & Pressing Factory Ltd., Banosa, Tq. Daryapur, Dist. Amravati”
7. However, in the condonation of delay petition, the assessee in paras 7 to 11 has contended that the said order of Tribunal was not at all served on the assessee and they were also not aware that any order was passed by the Tribunal till 30.12.2019. The ld. Counsel for the assessee could not give any convincing reasons for such an inordinate delay in filing these MAs irrespective of the fact that they were served with the order of Tribunal within due time. All the reasons recorded in the condonation of delay petition by the assessee are general in nature and they have referred to internal disputes between the members of assessee concerned. However, these reasons cannot categorically be said to be sufficient for not filing applications in due time. The law is very much supportive of a vigilant assessee and more so, for a bonafide one. In this case, the order of Tribunal was duly served on the assessee and they could not establish their bonafideness and the genuineness of such delay through any evidences on record filed before us. All while, the ld. Counsel has made oral submissions which in any way cannot be said to be genuine and bonafide. Even in the first round before the Tribunal, in the order pronounced on 01.02.2013 as evident from para 2 of the said order, no one had appeared either in person or on behalf of the assessee and therefore, ex-parte order was passed by the Tribunal dismissing the case of assessee for non-prosecution. We extract the relevant part of the order accordingly.
“2. During the course of hearing, from the careful perusal of the record, it is noticed that on 6.12.2012 none appeared on behalf of the assessee. Again notice was served on the assessee. However, none appeared on behalf of the assessee which means that assessee is not interested in prosecuting these appeals. Therefore, we find no reason to send another notice. In view of the facts and circumstances and in view of the decision in the case of Multiplan India Ltd. 38 ITD 320 (Del.) we dismiss the appeals of the assessee in limini. However, these appeals can be recalled if assessee files a miscellaneous application explaining the reason for the non-appearance on the date of hearing. We order accordingly.”
8. Therefore, the attitude of assessee is always to avoid the authorities and more so, the assessee is not vigilant about his own cause. Thereafter, the assessee comes up with certain reasons for late filing of MAs but all these reasons are not supported by any evidence and the assessee was simply sleeping over the order of Tribunal for more than 2 years. That further, the judgment of the Hon’ble Supreme Court which is strongly relied on by the assessee i.e. Collector, Land Acquisition vs. MST. Katiji 85 Ors. (supra) is substantially distinguishable on facts with that of the case of assessee. In the case before the Hon’ble Supreme Court, it is with regard to compensation in respect of acquisition of land for public purpose and there was delay of only 4 days. Per contra, in the present case of the assessee, it is with regard to MAs admission in spite of delay of 2 years 11 months and whether the Tribunal has got power to condone the said delay u/s 254(2) of the Act. We agree with the submissions of ld. DR highlighting provision of clause (5) of section 253 of the Act, wherein it is specific that in case of appeal or cross-objection, the Tribunal has power to condone the delay, if there is sufficient reasons provided before it, but on the other hand, in case of MAs u/s 254(2) of the Act, no such specific power has been provided to the Tribunal. Even at the time of hearing, ld. Counsel could not produce any order of the Hon’ble High Court or Hon’ble Apex Court where the delay u/s 254(2) of the Act has been condoned. We also find in the decision of Pune Tribunal in the case of TDK Electronics AG Vs. ACIT in ITA No.1810/PUN/2019 for A.Y. 2015-16, order dated 26.02.2020, wherein it has been held that power to condone the delay with the Tribunal can only be exercised if it is specifically provided in the Statute itself. As we have already examined so far as Income-tax Act is concerned and in respect of Tribunal it is with regard to appeals and cross‑objections only, such power is given if the Tribunal is satisfied about the sufficiency of reasons about such delay as enshrined in clause (5) of section 253 of the Act. But so far as section 254(2) of the Act is concerned, there is no express power conferred on the Tribunal by the Legislature in the Statute where the Tribunal can condone the delay beyond the relevant period prescribed in the Statute therein. This view is fortified in the decision of Pune Bench Tribunal and the operative para is extracted as under:-
“3. We have heard the rival submissions and gone through the relevant material on record. Section 144C of the Act with the marginal note ‘Reference to dispute resolution panel’ provides through sub-section (1) that the AO, in the first instance, shall forward a draft of the proposed order of the assessment to the eligible assessee if he proposes to make any variation in the income returned. at-section (2) of section 144C states that: ‘On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order, – (a) …………. . (b) file his objections, if any, to such variation with, -(i) the Dispute Resolution Panel; and (ii) the Assessing Officer’. The Income-tax (Dispute Resolution Panel) Rules, 2009 lay down the procedure for filing objections through Rule 4. at-rule (1) provides that ‘the objections, if any, of the eligible assessee to the draft order may be filed in person or through his agent within the specified period in Form 35A’. These rules do not spell out any meaning of the term ‘specified period’ for filing of Form 35A and as such, the term takes its genesis from section 144C(2) of the Act. Ergo, it becomes overt that an assessee, on receipt of the draft order, is obliged to file objections, if any, to the variation in the income before the DRP/AO within 30 days of the receipt of the draft order.
4. Before proceeding further, let us have a quick look at the following relevant dates of the case under consideration, which are material for our decision:-
|Date of the Draft order||21.12.2018|
|Date on which Draft order was received by assesse||24.12.2018|
|Date on which objections filed before DRP||24.01.2019|
|Date of the DRP direction||27.09.2019|
|Date of the final assessment order u/s 144C(13)||24.10.2019|
5. As the draft order in this case was admittedly received by the assessee on 24.12.2018, the period of 30 days for filing Form No. 35A, in terms of sub-section (2) of section 144C, expired on 23.01.2019. As against this, the assessee actually filed Form No.35A on 24.01.2019, thereby causing a delay of one day in raising objections against the draft order. The DRP has canvassed a view that it has no power to condone the delay in as much as such power is absent in section 144C or Income-tax (DRP) Rules, 2009. The DRP fortified its view in dismissing the objections filed by the assessee in limine by mainly relying on the judgment of Hon ‘ble Bombay High court in CIT Vs. Grasim Industries Ltd. (2009) 319 ITR 154 (Bom) in which the Hon ‘ble High Court has held that it has no power to condone the delay in filing appeal u/s. 260A of the Income-tax Act. Under these circumstances, the moot question is whether the DRP was justified in not condoning the delay of one day and consequently dismissing the objections raised by the assessee at the entry level without delving into their merits.
6. It is trite that filing of an appeal or an application under any Act is a right provided by the concerned statute. This right carries certain obligations including adhering to the time limit prescribed in the statute for filing of such an appeal or application. In the context of the Income-tax Act, 1961, an appeal can be filed before the CIT(A) within 30 days as prescribed u/s. 249(2) of the Act. In the same manner, an appeal can be filed before the Tribunal within 60 days as prescribed u/s. 253(3) of the Act and before the Hon ‘ble High Court within 120 days as per section 260A(2) of the Act. Apart from the appeals, an application u/s. 264 for revision can be filed by the assessee within one year as per section 264(3) of the Act. In the same manner, certain other time limits have also been outlined in the Act for moving applications etc. One of such instances is section 144C(2), which obligates an assessee to file objections against the draft order before the DRP within 30 days.
7. Sometimes the relevant statute carves out exceptions by granting the competent authority/forum a power to entertain an appeal or application beyond the prescribed period on sufficient cause. It is in the hue of such an express authorization that the concerned authority/forum can exercise its discretion and condone the delay, if satisfied with the reasonableness of the cause in late presentation. Although section 249(2) of the Act requires the filing of an appeal before the CIT(A) within 30 days, sub-section (3) empowers the CIT(A) to admit an appeal after the expiry of the said period if he is satisfied that the appellant had sufficient cause for not presenting the appeal within the period.
8. Similarly albeit section 253(3) requires the filing of an appeal before the Tribunal within sixty days, sub-section (5) empowers the Tribunal to admit an appeal after the expiry of the period of sixty days. As against the power of the Tribunal to admit an appeal belatedly after the expiry of relevant period in terms of sub-section (5) of section 253A, no specific provision has been enshrined empowering the Tribunal to entertain a Miscellaneous Application u/s. 254(2) of the Act beyond the period of six months from the end of the month in which the order was passed.
9. Prior to the insertion of sub-section (2A) of section 260A by the Finance Act, 2010 with retrospective effect from 01-10.1998, no specific provision was there in the Act empowering a High Court to admit an appeal after the expiry of period of 120 days as referred to in subsection (2) of section 260A. In the period pre-insertion of sub-section (2A), there was a cleavage of opinion as to whether a High Court can condone the delay beyond the period prescri bed i n sub-section (2) of section 260A. The full Bench of Hon ‘ble Bombay High Court in CIT Vs. Velingkar Brothers (2007) 289 ITR 382 (Bom.) (FB) observed that sub-section (2) of section 260A does not make section 29(2) of the Limitation Act, 1963 inapplicable and accordingly held that the power to condone delay in filing appeal must be read to be existent. Thereafter, the Hon ‘ble Supreme Court had an occasion to consider this issue in the context of Excise Act in Commissioner of Central Excise and+ Customs Vs. Hongo India (P) Ld. and Another (2009) 223 CTR 225 (SC) in which it held that a High Court has no power to condone the delay in filing reference applications beyond the prescribed period. Similar issue once again came up for consideration before the Hon ‘ble Bombay High Court in CIT Vs. Grasim Industries Ltd. (2009) 319 ITR 154 (Bom.) in which the Revenue sought condonation of delay by relying on the earlier Full Bench judgment of the Hon ‘ble Bombay High Court in Velangkar Brothers (supra). Considering the later judgment of the Hon ‘ble Supreme Court in Hongo India (P) Ld. and Another (supra), the Hon ‘ble Bombay High court held that the earlier view of the Full Bench in Velingkar Brothers (supra) was not a good law in view of the later judgment of the Hon ‘ble Supreme Court. It is this judgment of the Hon ‘ble Bombay High Court in Grasim Industries Ltd. (supra) which has been chiefly relied by the DRP in not condoning the It is the Finance Act, 2010 which has retrospectively inserted sub-section (2A) to section 260A permitting the filing of appeal belatedly on showing sufficient cause. Now with the aid of sub-section (2A) of section 260A, a High Court has also been empowered to entertain an appeal filed beyond the period prescribed in section 260A(2) of the Act in case sufficient cause for the delay is established.
10. In the same manner, although sub-section (3) of section 264 empowers an assessee to file revision petition within one year, proviso to sub-section (3) enables the Pr. CIT to accept a revision application u/s. 264 beyond the prescribed period if he is satisfied that the assessee was prevented by sufficient cause from making an application within that period.
11. It follows from the above discussion that whenever the parliament intended to empower the competent authority/forum to condone the delay and accept an appeal or an application beyond the stipulated time, it expressly stated so by inserting a specific provision in the Act. In the absence of such an enabling provision, no competent authority/forum can usurp the statutory power and bestow upon itself the power to condone the delay. The fortiori is that any application moved after the prescribed period, in the absence of an express provision in this regard, is liable to be dismissed as ti me barred.
12. Section 144C(2) of the Act provides a period of 30 days for filing of objections before the Unlike certain other provisions empowering the respective competent authorities/forums to condone the delay, no empowerment has been endowed upon the DRP to condone the delay and accept Form No. 35A beyond the prescribed period of 30 days. at-section (2) of section 144C not only uses the word ‘shall’ requiring the assessee to file objections before the DRP within 30 days but also does not contain any provision authorizing the DRP to condone the delay. In the absence of such an express power to condone the delay, in our considered opinion the DRP rightly held itself to be incompetent to condone the delay.
13. One needs to appreciate that either the power to condone the delay exists or does not It cannot be a hybrid situation in the sense of conferring a bridled power of condoning the delay in favour of the competent authority/forum so that the delay may be condoned if it is up to a specific length of time. We have noted above that sub-section (2) obligates an assessee to file objections against the draft order in Form No. 35A within a period of thirty days. SLID-section (12) of section 144C places an embargo of limitation on the DRP not to issue any direction u/s. 144C(5) after nine months from the end of the month in which the draft order is forwarded to the eligible assessee. If we accept the contention of the assessee that the DRP was empowered to condone the delay of one day in filing objections and countenance the same, there may be a case in which such a delay is for one year instead of one day and such a delay may also be on a sufficient cause. The logic is that if delay of one day can be condoned on sufficient cause then there can be no reason for not condoning the delay of one year equally on sufficient cause. If such a hypothetical delay of one year is allowed to be condoned, the DRP will run out of time to issue direction under sub-section (5) within a period of nine months from the end of the month in which the draft order is forwarded to the eligible assessee in terms of section 144C(12) of the Act. It is in view of such inter-weaving of the time limits that the legislature did not confer any power on the DRP to condone the delay in accepting the objections from the assessee beyond the prescribed period. The sequitur is that in the absence of any express provision, non-condonation of delay by the DRP in the facts of the extant case has to be held as perfectly justified. We, ergo, approve the action of the DRP in this regard.”
9. That further, in the case of Collector, Land Acquisition vs. MST. Katiji 85 Ors. (supra), relied strongly by the assessee, the Hon’ble Apex Court has referred to sufficient cause for the purpose of condonation of delay. This sufficient cause needs to be established by the assessee through evidences and in this case, the assessee has failed to do so. In view of the above examination of facts and law, we are of the considered opinion that this inordinate delay in filing of MAs is not a fit case for condonation, more so, because there is no specific provision in the realm of section 254(2) of the Act to provide for such condonation of delay in case of MAs. Therefore, all the condonation of delay petitions are dismissed. Since at the threshold itself the condonation of delay petitions are dismissed, MAs become academic and therefore, they are also dismissed.
10. In the result, all the condonation of delay petitions and MAs are dismissed.