Areva T and D India Ltd. vs Joint Commissioner of Income Tax

P.D. Dinakaran, J.—The assessee has preferred this appeal against the order of the Tribunal, Bench-A, Chennai dt. 24th May, 2005 made

in ITA No. 1555/Mad/2000 raising the following substantial questions of law:

Whether, on the facts and circumstances of the case, the Tribunal was right in dismissing the appeal on the point of limitation without

appreciating the reasons stated in the affidavit filed by the appellant ?

Whether, on the facts and circumstances of the case, the Tribunal was right in law in insisting for an affidavit from the counsel when there was an

affidavit from the director of the company stating the reasons for the delay ?

The assessment year with which we are concerned is 1997-98. The assessee is the appellant which is a limited company. In view of the short

point involved in this appeal, we need not go into the facts in detail.

Against the order of the CIT(A) dt. 11th Nov., 1999, the assessee preferred an appeal before the Tribunal with a delay of 231 days. The

Tribunal refused to take the appeal on file on the ground that the appeal is barred by limitation, observing as follows:

The assessee is said to have been advised as under:

The petitioner was advised that insofar as the order of prima facie adjustment was followed up by an assessment u/s 143(3), wherein identical

issues were involved, the petitioner could agitate the issues in appeal against the order of CIT(A) confirming the prima facie adjustment u/s 143(1)

(a), before the Tribunal would involve multiplicity of proceedings which would not serve any purpose. On the aforesaid basis, the appellant did not

file an appeal against the order of the CIT(A) before the Tribunal.

The name of the counsel was stated at the Bar by the representative to be Shri V. Ramachandran (senior advocate). We find that the above

reasoning itself is based on too much surmises to be cogent enough. Nevertheless the learned representative of the assessee was asked to submit

an affidavit from the concerned counsel in this regard. The learned representative submitted that the concerned counsel has declined to give any

such affidavit. Having regard to facts and circumstances of the case and also noting the stature of the assessee-company, we find the reason

advanced for the delay are neither convincing nor properly evidenced. Hence the appeal of the assessee is liable to be dismissed on account of

limitation.

It is apparent on the face of the record that the appellant/assessee could not prefer the appeal within the time on account of the advice alleged to

have been given by his counsel, and the assessee could not get an affidavit from the counsel, as insisted by the Tribunal. But, at the same time, it is

not in dispute that the director of the assessee-company has sworn to an affidavit. The Tribunal has not given any reason for not believing the

affidavit sworn to by the director of the assessee-company.

It is a well-settled law that in exercising discretion u/s 5 of the Limitation Act the Courts should adopt a pragmatic approach. A distinction must

be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration

of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration

may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The Court has to exercise the

discretion on the facts of each case keeping in mind that in construing the expression ""sufficient cause"", the principle of advancing substantial justice

is of prime importance, vide Vedabai alis Vaijayanatabai Baburao Patil Vs. Shantaram Baburao Patil and Others, .

A Division Bench of this Court in which one of us was a party (P.D. Dinakaran, J.) in Sreenivas Charitable Trust Vs. The Deputy Commissioner

of Income Tax, Exemptions III, has also held that no hard and fast rule can be laid down in the matter of condonation of delay and the Courts

should adopt a pragmatic approach and the Courts should exercise their discretion on the facts of each case keeping in mind that in construing the

expression ''sufficient cause'' the principle of advancing substantial justice is of prime importance and the expression, ''sufficient cause'' should

receive a liberal construction.

If that be so, the Tribunal ought to have given a finding whether the assessee has given sufficient cause in the affidavit sworn to by the director of

company, instead of refusing to accept the affidavit itself. In the absence of any finding by the Tribunal as to the ""sufficient cause"" for the alleged

delay, we are convinced that the Tribunal has erred in refusing to exercise the discretion u/s 5 of the Limitation Act. We are of the view that the

Tribunal was not correct in dismissing the appeal on account of limitation without giving a finding that there was no sufficient cause for the delay.

Hence, we answer the first question of law in favour of the assessee.

In view of the answer to the first question of law, no orders are required to be passed on the second question of law.

In the result, the appeal stands allowed and the order of the Tribunal is set aside. The matter is remitted back to the Tribunal for disposal of the

same on merits and in accordance with law.