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Case Law Details

Case Name : Raveendra M. Madrak Vs ITO (ITAT Bangalore)
Appeal Number : ITA No. 670/Bang/2019
Date of Judgement/Order : 10/02/2022
Related Assessment Year : 2014-15

Raveendra M. Madrak Vs ITO (ITAT Bangalore)

The case of Raveendra M. Madrak vs. ITO (ITAT Bangalore) revolves around the condonation of a 310-day delay in filing an appeal. Despite the taxpayer’s claim of reliance on professional advice, the ITAT ruled against condoning the delay. This article provides a detailed analysis of the case and its implications.

 The taxpayer sought condonation of a 310-day delay in filing an appeal, citing advice from their Chartered Accountant (CA) to engage an Advocate for the appeal. However, the delay was attributed to the Advocate’s failure to file the appeal on time. The taxpayer provided a confirmation letter from the Advocate admitting the delay, but the ITAT found insufficient evidence regarding the CA’s advice and the timeline of events.

The ITAT emphasized the taxpayer’s responsibility to act diligently in prosecuting the appeal. Despite the confirmation letter, the lack of evidence regarding the CA’s advice and the Advocate’s actions raised doubts about the taxpayer’s bona fides. The ITAT referred to legal precedents highlighting the principle that ignorance of the law is not an excuse for failing to comply with statutory timelines.

In conclusion, the ITAT ruled against condoning the delay in filing the appeal, emphasizing the taxpayer’s duty to act diligently. The case underscores the importance of maintaining clear documentation and adhering to statutory timelines in legal proceedings. Taxpayers must ensure they have sufficient evidence to support their claims for condonation of delay to avoid adverse rulings.

FULL TEXT OF THE ORDER OF ITAT BANGALORE

This appeal by the assessee is directed against the order dated 30.3.2018 of the CIT(Appeals), Kalaburagi for the assessment year 2014-15 on the following grounds:-

Sl. No. Grounds of appeal Tax effect relating to each ground of appeal (see note below)
1. The order of the Hon’ble Commissioner of Income Tax (Appeals), Kalaburagi, is opposed to law and facts of the case.
2. The Hon’ble Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs.11,55,000/- made under the head undisclosed rent. Rs.3,81,150/-
3. The Hone Commissioner of Income Tax Appeals), Kalaburagi, erred in upholding the addition of Rs.6,61,930/- made under the Head: Undisclosed income from Profession. Rs.2.18,437/-
4. The Hon’ble Commissioner of Income Tax (Appeals) failed to appreciate that no part of income under the Head: Property (Rent) and Profession, had accrued to the appellant during the financial year. Rs.5,99,587/-
5. The Hon’ble Commissioner of Income Tax (Appeals), Kalaburagi, ought to have appreciated that in tennis of the Deed of Termination and Sale of Equipment entered between the parties, the appellant was obliged to return the sum of Rs.52,00,000/- and was not entitled to any rent or professional fees. Rs.5,99,587/-
6. The appellant craves for leave to add to, delete from or amend the grounds of appeal.

2. At the outset, it was observed that there was a delay of 310 days in filing this appeal before the Tribunal. The assessee filed petition for condonation of delay along with affidavit stating that his CA, Shri Sharangouda Patil advised to file an appeal against the order of the Commissioner of Income Tax (Appeals) before the Income Tax Appellate Tribunal and to engage the services of Mr. Prakash R. Badiger, Advocate, Dharwad. Accordingly, Advocate was handed over the appeal papers to file the appeal.

3. Badiger, Advocate initially informed that the appeal is filed before the Appellate Tribunal, Panaji Bench, Goa, but much later, in mid March 2019 Mr. Badiger expressed his inability to file the appeal as he is not familiar with the Income Tax Laws. Thereafter, all records/documents were collected from his office and the assessee approached M/s. K.R. Prasad, Advocates Bengaluru for preparation and filing of the appeal. The advocates accordingly prepared the appeal memo and filed the appeal due to which there was a delay, which was beyond the control of the assessee and there was absolutely no negligence on the assessee’s part in the filing the appeal. Further, he filed a confirmation letter dated 12.02.2021 from Mr. Prakash, R. Badiger, Advocate, Dharwad, his earlier counsel to the effect the delay in filing the appeal was from his end, which is reproduced below:-

“TO WHOMSOEVER IT MAY CONCERN I am practicing as an Advocate, presently having my office at Dharwad. I am enrolled in the Karnataka State Bar Council in the year 2012 and my Enrolment Number is KAR/454/2012. I am mainly handling civil related litigation matters such as Motor Vehicles, Injunction Suits etc. Sometime in the year 2018, I received an Income Tax matter of Dr. Raveendra Madraki. That was my first Income Tax brief. I was genuinely interested in accepting new cases. But, unfortunately, I found it difficult to file an appeal. Therefore, I was constrained to return the file. I understand that Dr. Madraki is prosecuting his appeal before the Income Tax Appellate Tribunal, Bengaluru. I was told that the appeal filed by Dr. Madraki is barred by limitation. I wish to inform you that, the delay is only because of my mistake in keeping the brief with me. In my eagerness or immaturity, I accepted the Income Tax brief, which I was notable to deliver. Hence, there was delay from my end, for which Dr. Madraki should not suffer.”

4. Thus, according to the assessee, the delay was caused on account on the failure on the part of his earlier counsel, Mr. Prakash R. Badiger, Advocate to take steps to file appeal before the Tribunal. The delay is not attributable to the assessee. The ld. AR referred to various decisions of courts and submitted that in similar circumstances, the courts have held that wrong advise given by a professional constitutes a sufficient and reasonable cause for condonation of delay in filing the appeal. Accordingly, the ld. AR prayed that the delay of 310 days in filing the appeal may be condoned.

5. On the other hand, the ld. DR submitted that the assessee failed to make out a sufficient and reasonable cause for condonation of delay. There is no merit in the arguments of the assessee that the appeal was not filed in time before the Tribunal on the advise of earlier professional. He submitted that the assessee is well aware of the fact that the appeal is to be filed within 60 days from the date of receipt of the order of the CIT(Appeals) and he has taken a conscious decision not file appeal before the Tribunal. All of a sudden, the assessee wanted to file appeal, as such the documents so created are self-serving documents which cannot be relied upon to condone the delay.

6. We have heard both the parties and gone through the petition filed by the assessee, his affidavit and also the confirmation letter filed by Advocate, Mr. Prakash R. Badiger. The assessee explained the delay of 310 days on the reason that on the advise of his CA, he handed over the appeal papers to Prakash R. Badiger, Advocate, Dharwad who failed to take necessary steps to file appeal before this Tribunal and thereafter he engaged M/s. K.R. Prasad, Advocates, Bangalore to file appeal. The assessee also furnished a confirmation letter from Mr. Prakash R. Badiger, Advocate, Bangalore stating that due to eagerness or immaturity, he accepted the income tax brief, but not able to deliver and there was a delay from his end.

7. However, the assessee has not produced any evidence of his CA, Mr. Sharanagouda Patil who advised assessee to contact Mr. Badiger, Advocate. Further, there is no evidence to suggest about the date of handing over the documents to Advocate and it is not mentioned what are the papers given to Mr. Badiger for preparation of filing of appeal and what is the advise given to the assessee during this 310 days. There is no material to suggest to suggest the professional charges so as take up filing of appeal before the Tribunal. The assessee has failed to bring any material on record to prove his bonafide attempt in filing the appeal. The assessee merely furnished one letter from Mr. Badiger, Advocate for seeking condonation of delay in filing the appeal along with affidavit. Except these, the assessee has not brought out any other material to prove his bonafide attempts to file the appeal. In our opinion, the assessee has not acted with due diligence in prosecuting the appeal. On the other hand, the assessee was negligent in his attitude in taking steps to file the appeal. In the absence of any evidence to prove the bonafides of the assessee, except the self-serving documents, the inordinate delay of 310 days in filing the appeal before the Tribunal cannot be condoned. There are 3 persons involved in this case viz., the assessee, his CA Shri Sharanagouda Patil and Shri Prakash R. Badiger, Advocate, who are required to explain the delay. They are not illiterate and they very well know the law. Ignorance of law is no excuse. We may refer to the judgment of the Hon’ble Supreme Court in the case of The Swadeshi Cotton Mills Co. Ltd. v. The Govt. of UP & Ors. (1975) 4 SCC 378 wherein it was held as follows:-

“….. But we are in agreement with the High Court on the other two grounds. As mentioned earlier, the impugned assessments were made in 1949. The writ petition was filed in 1956. The explanation given by the petitioner for this long delay is that he did not know the correct legal position and he came to know about the same after the decision of the Allahabad High Court in the Commissioner of Sales Tax, U.P. Vs. Modi Food Products Ltd. Every individual is deemed to know the law of the land. He courts merely interpret the law and do not make law. Ignorance of law is not an excuse for not taking appropriate steps within limitation. Therefore the argument that the appellant did not know the true legal position is not one that can be accepted in law. ….”

8. Further, in the present case, there is no denial on the part of the assessee about the service of the order on the assessee and after receipt of the order of the CIT(Appeals), to whom the assessee wants to entrust the work of filing appeal before the Tribunal is his own concern and this explanation does not constitute sufficient ground to condone the delay. Therefore we find no merit in the application for condonation of delay. Accordingly, we are of the considered view that the assessee has failed to make out a sufficient and reasonable cause for condonation of delay and reject the petition for condonation of delay. Being so, we refrain from going into other grounds of appeal on merits.

9. In the result, the appeal of the assessee is dismissed in limine.

Pronounced in the open court on this 10th day of February, 2022.

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