High Court of KeralaDivision Bench2022-04-01Appeals allowed

Avathar Jewellers v. Deputy Commissioner of Income Tax, Central Circle, Thrissur

Case / Petition Number:ITA Nos.45/2019, 47/2019, 50/2019, 51/2019

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: S. V. Bhatti
Basant Balaji
Judgment Date: 2022-04-01
Court Decision / Holding: Tribunal to condone the delay and decide the appeals on merits within three months from receipt of a copy of this judgment; ITA Nos. 45/2019, 47/2019, 50/2019, 51/2019 allowed.
Final Disposition: Appeals allowed

Parties to the Case

Appellants / Petitioners

Avathar Jewellers

Respondents

The Deputy Commissioner of Income Tax, Central Circle, Thrissur

Legal Representation & Advocates

Counsels for Petitioners

• Anil D. Nair
• Sri.Sreejith R. Nair
• Sri.Achyut K PadmaraJ
• Sri Arya Anil
• Sri NilooFar O. Nizam
• Shri.Gokulraj L.

Counsels for Respondents

• Sri.P.K.Ravindrath a Menon (Sr.)
• Jose Joseph, SC, for Income Tax

Case Synopsis & Summary

Avathar Jewellers, a partnership firm engaged in the jewellery business, challenged four cross-appeals before the Kerala High Court arising from assessments under Section 143(3) read with Section 153C of the Income Tax Act for AY 2009-10 and 2010-11, as adjudicated by the ITAT Cochin Bench in ITA Nos. 580/Coch/2017, 582/Coch/2017 and 583/Coch/2017. The ITAT dismissed the delay condonation petitions and the appeals, noting the absence of a satisfactory explanation for the late filing. The appellant contends that the delay—217 days in aggregate—was occasioned by the Managing Partner’s police custody, which prevented him from signing documents required to file the appeals; Annexure-D in the memorandum of appeal explains the circumstance. Relying on Supreme Court jurisprudence starting with Esha Bhattacharjee, the appellant argues a liberal, justice-oriented approach to condonation of delay and asserts that substantial justice should prevail over strict technicalities. The respondents contend the delay was excessive and not adequately explained, and that the Tribunal’s refusal to condone it was correct. The High Court agrees with the appellant that the Tribunals misapplied the law and that the delay should be condoned in view of the bonafide circumstances. Accordingly, it sets aside the ITAT orders, condones the delay, and directs the ITAT to decide the appeals on merits within three months from receipt of a copy of the judgment. The appeals are allowed.

Provisions of Law Cited

Section 143(3) read with Section 153C of the Income Tax Act

Legal Doctrines & Maxims

Liberal, pragmatic, justice-oriented, non-pedantic approach to condonation of delay

Submissions & Arguments

Contentions of Appellants / Petitioners

The applicant contends that there was a delay of 217 days in filing ITA Nos. 580/Coch/2017, 582/Coch/2017 and 583/Coch/2017 before the ITAT due to the Managing Partner’s police custody, which prevented signing of documents required to file the appeals. Annexure-D explains the circumstance. Relying on the Supreme Court’s liberal approach to condonation of delay (beginning with Esha Bhattacharjee), the applicant argues that substantial justice should prevail over rigid technicalities and that a genuine bonafide reason warrants condonation. The Tribunal’s contrary finding on the explanation for delay is urged to be erroneous, and the matter is urged to be remanded for merits consideration. The appellant seeks a liberal interpretation of “sufficient cause” to ensure the appeals can be adjudicated on merits.

Contentions of Respondents

The respondent contends that the delay of 217 days is excessive and was not adequately explained, and that the ITAT correctly refused to condone it. The respondents urge adherence to procedural timelines and caution against diluting time-lines on generic pleas of bonafide circumstances. They rely on the Tribunal’s order which attributed lack of proper explanation for condoning the delay. The respondent argues that condonation would undermine the integrity of the appellate process and set a precedent for improper filings or delays.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Esha v. Committee of Bhattacharjee Managing Raghunathpur Nafar Academy and others	[(2013) 12 SCC 649]	Positive	The High Court relied on this Supreme Court decision to adopt a liberal, justice-oriented approach to condonation of delay, holding that substantial justice prevails over technicalities.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE S.V.BHATTI`** ## **`&`** ``` THE HONOURABLE MR.JUSTICE BASANT BALAJI FRIDAY, THE 1[ST] DAY OF APRIL 2022 / 11TH CHAITHRA, 1944 ``` ## **`ITA NO. 45 OF 2019`** ## **`ITA 580/2017 OF I.T.A.TRIBUNAL,COCHIN BENCH`** ## **`APPELLANT/S:`** ``` AVATHAR JEWELLERS ALWA TOWERS,EDAPPAL,MALAPPURAM REPRESENTED BY ITS MANAGING PARTNER MR.U.ABDULLA. ``` ``` BY ADVS. ANIL D. NAIR SRI.SREEJITH R.NAIR SRI.ACHYUT K PADMARAJ SMT. ARYA ANIL SMT. NILOOFAR O. NIZAM SHRI.GOKULRAJ L. ``` ## **`RESPONDENT/S:`** ``` THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE,THRISSUR. BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) JOSE JOSEPH, SC, FOR INCOME TAX ``` ``` THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 01.04.2022, ALONG WITH ITA.51/2019, 47/2019 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` ITA NO. 45, 47, 50 & 51 OF 2019 ``` -2- # **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI`** ``` & ``` ``` THE HONOURABLE MR.JUSTICE BASANT BALAJI FRIDAY, THE 1[ST] DAY OF APRIL 2022 / 11TH CHAITHRA, 1944 ITA NO. 51 OF 2019 ``` ## **`ITA 581/2017 OF I.T.A.TRIBUNAL,COCHIN BENCH`** ## **`APPELLANT/S:`** ``` M/S.AVATHAR JEWELLERS ALWA TOWERS, EDAPPAL, MALAPPURAM REPRESENTED BY ITS MANAGING PARTNER, MR.U.ABDULLA BY ADVS. ANIL D. NAIR SRI.SREEJITH R.NAIR SRI.ACHYUT K PADMARAJ SMT. ARYA ANIL SMT. NILOOFAR O. NIZAM SHRI.GOKULRAJ L. ``` ## **`RESPONDENT/S:`** ``` THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, THRISSUR-680 001 BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) JOSE JOSEPH, SC, FOR INCOME TAX ``` ``` THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 01.04.2022, ALONG WITH ITA.45/2019 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` ITA NO. 45, 47, 50 & 51 OF 2019 ``` -3- # **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT`** ``` THE HONOURABLE MR.JUSTICE S.V.BHATTI ``` ``` & ``` ``` THE HONOURABLE MR.JUSTICE BASANT BALAJI FRIDAY, THE 1[ST] DAY OF APRIL 2022 / 11TH CHAITHRA, 1944 ITA NO. 47 OF 2019 ``` ``` ITA 582/2017 OF I.T.A.TRIBUNAL,COCHIN BENCH ``` ## **`APPELLANT/S:`** ``` M/S.AVATHAR JEWELLERS ALWA TOWERS,EDAPPAL, MALAPPURAM,REPRESENTED BY ITS MANAGING PARTNER. M.U.ABDULLA. BY ADVS. ANIL D. NAIR SRI.SREEJITH R.NAIR SRI.ACHYUT K PADMARAJ SMT. ARYA ANIL SMT. NILOOFAR O. NIZAM ``` ## **`RESPONDENT/S:`** ``` THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE,THRISSUR-680001. BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) JOSE JOSEPH, SC, FOR INCOME TAX ``` ``` THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 01.04.2022, ALONG WITH ITA.45/2019 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` ITA NO. 45, 47, 50 & 51 OF 2019 ``` -4- # **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT`** ``` THE HONOURABLE MR.JUSTICE S.V.BHATTI ``` ``` & ``` ``` THE HONOURABLE MR.JUSTICE BASANT BALAJI FRIDAY, THE 1[ST] DAY OF APRIL 2022 / 11TH CHAITHRA, 1944 ITA NO. 50 OF 2019 ``` ## **`ITA 583/2017 OF I.T.A.TRIBUNAL,COCHIN BENCH`** ## **`APPELLANT/S:`** ``` AVATHAR JEWELLERS ALWA TOWERS, ALWA TOWERS, EDAPPAL, MALAPPURAM, REPRESENTED BY ITS MANAGING PARTNER MR U. ABDULLA ``` ``` BY ADVS. ANIL D. NAIR SREEJITH R.NAIR ACHYUT K PADMARAJ ARYA ANIL NILOOFAR GOKULRAJ L. ``` ## **`RESPONDENT/S:`** ``` THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, THRISSUR - 680001 BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) JOSE JOSEPH, SC, FOR INCOME TAX ``` ``` THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 01.04.2022, ALONG WITH ITA.45/2019 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` ITA NO. 45, 47, 50 & 51 OF 2019 ``` -5- ## **S.V.BHATTI & BASANT BALAJI, JJ.** ## `[ITA Nos.45/2019,51, 47 AND 50/2019]` ## **`JUDGMENT`** (Dated this the 1[st] day of April 2022) Basant Balaji J., I.T.A.Nos.45, 47, 50 and 51 of 2019 are filed by the assessee, a partnership firm engaged in jewellery business, against the orders of the Income Tax Appellate Tribunal, Cochin Bench, Cochin in I.T.A. Nos.580/Coch/2017, 582/Coch _/_ 2017 _,_ 583 _/_ Coch/2017 and 582/Coch/2017 respectively. 2. The appellant’s business premises was searched and in the search certain documents were recovered and the assessment was completed under Section 143(3) read with Section 153C of the Income Tax Act as per the Assessment order dated 31.3.2014. Aggrieved by the said assessment ``` ITA NO. 45, 47, 50 & 51 OF 2019 ``` -6- order, the appellant filed statutory appeal before the Commissioner of Income Tax (Appeals) and the appellate authority, by order dated 27.12.2016 dismissed the appeal. The appellant filed second appeal before the Income Tax Appellate Tribunal, Cochin Bench as I.T.A. Nos.580 to 583/Coch/2017. The appeals filed by the appellant were not in time and hence, the application to condone the delay of 217 days in filing the appeal was also filed along with the appeal memorandum. Annexure – D, petition to condone the delay, was filed through the power of attorney holder of the Managing Partner. The Tribunal, by the impugned order, dismissed the delay petition holding that the appellant failed to give proper explanation for condoning the delay. Aggrieved by the said order, these appeals are filed. 3. Annexure-D is the petition to condone the delay in filing the appeal, which was filed along with the appeals before the Appellate Tribunal. In the said application, the ``` ITA NO. 45, 47, 50 & 51 OF 2019 ``` -7- appellant has specifically stated that he was in police custody for few months and only after releasing from the custody, he could sign the requisite documents and hence, the delay occurred in filing the appeal. 4. Heard Shri.Anil D.Nair, learned counsel for the appellant and Shri.Jose Joseph, learned counsel for the respondent. 5. It is a fact that that the appeal was filed with a delay of 217 days, which was sought to be condoned by filing Annexure – D application. The reasons stated in the petition to condone the delay was that he was not physically present to sign the requisite documents to file the appeal as he was in police custody. The person, who is physically not able to sign the documents for filing the appeal because he was in police custody, is a genuine and _bonafide_ reason for condoning the delay. Laches cannot be attributed against him. Moreover, the finding of the Tribunal that there is no proper explanation for condoning ``` ITA NO. 45, 47, 50 & 51 OF 2019 ``` -8- the delay, according to us, is not correct. 6. The learned counsel for the appellant relied on the decision of the honourable Supreme Court reported in **Esha v. Committee of Bhattacharjee Managing Raghunathpur Nafar Academy and others [(2013) 12 SCC 649]** , to contend that in dealing with delay petitions, the court should take liberal approach. The Apex Court held in the said decision that:- “(i) there should be a liberal, pragmatic, justice – oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are to remove obliged injustice. (ii) The terms “sufficient cause” should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms basically elastic and are to be applied in to be fact – proper perspective obtaining situation. (iii) Substantial justice being paramount and ``` ITA NO. 45, 47, 50 & 51 OF 2019 ``` -9- pivotal the technical consideration should not be given undue and uncalled for emphasis.” 7. The Honourable Apex Court in a _catena_ of decisions held that in dealing with delay petitions, a liberal view has to be taken and _lis_ has to be decided on the basis of its merits rather its technicalities. According to us, since the physical movement of the appellant was curtailed, since he was in the police custody, we are of the considered opinion that the Tribunal ought to have condoned the delay, and an opportunity to the assessee/appellant to contest the case on merits is afforded. In view of the matter, we set aside the order of the Income Tax Appellate Tribunal in I.T.A. Nos.580 to 583/Coch/2017. Taking note of the circumstances of the case and the explanation offered by the appellant to condone the delay in filing the appeal as well as the dictum laid down by the honourable Apex Court in the decision cited **Esha Bhattacharjee (supra),** we condone the delay ``` ITA NO. 45, 47, 50 & 51 OF 2019 ``` -10- of 217 days in filing the appeal before the Tribunal. The Tribunal is directed to pass final orders in the appeals filed by the appellant on merits within a period of three months from the date of receipt of a copy of this judgment. In the result, Income Tax Appeals are allowed as above. ## SD **S.V.BHATTI, JUDGE** SD **BASANT BALAJI, JUDGE** _dl/_ ``` ITA NO. 45, 47, 50 & 51 OF 2019 ``` -11- ## **`APPENDIX OF ITA 51/2019`** ``` PETITIONER ANNEXURES ANNEXURE-ATRUE COPY OF THE ASSESSMENT ORDER DATED 31.03.2014 FOR THE A.Y.2010-11 ANNEXURE-BTRUE COPY OF THE APPELLATE ORDER DATED 28.1.2016 OF THE COMMISSIONER OF INCOME TAX (APPEALS) ANNEXURE-CTRUE COPY OF THE APPEAL MEMORANDUM BEFORE INCOME TAX APPELLATE TRIBUNAL ANNEXURE-DTRUE COPY OF THE PETITION FOR DELAY CONDONATION BEFORE TRIBUNAL ANNEXURE-ETRUE COPY OF THE ORDER OF THE INCOME TAX TRIBUNAL DATED 27/09/2018 ``` ``` ITA NO. 45, 47, 50 & 51 OF 2019 ``` -12- ## **`APPENDIX OF ITA 47/2019`** ``` PETITIONER ANNEXURES ANNEXURE -ATRUE COPY OF THE ASSESSMENT ORDER DATED 31.03.2014. ANNEXURE -BTRUE COPY OF THE APPELLATE ORDER DATED 29.12.2016. ANNEXURE -CTRUE COPY OF THE APPEAL MEMORANDUM BEFORE TRIBUNAL. ANNEXURE -DTRUE COPY OF THE PETITION FOR DELAY CONDONATION BEFORE TRIBUNAL. ANNEXURE -ETRUE COPY OF THE ORDER OF THE INCOME TAX TRIBUNAL DATED 27.09.2018. ``` ``` ITA NO. 45, 47, 50 & 51 OF 2019 ``` -13- ## **`APPENDIX OF ITA 50/2019`** ``` PETITIONER ANNEXURES ANNEXURE ATRUE COPY OF THE ASSESSMENT ORDER DATED 31.03.2014 ANNEXURE BTRUE COPY OF THE APPELLATE ORDER DATED 29.12.2016 ANNEXURE CTRUE COPY OF THE APPEAL MEMORANDUM BEFORE TRIBUNAL ANNEXURE D TRUE COPY OF THE PETITION FOR DELAY CONDONATION BEFORE TRIBUNAL ANNEXURE E TRUE COPY OF THE ORDER OF THE INCOME TAX TRIBUNAL DATED 27.09.2018 ``` ``` ITA NO. 45, 47, 50 & 51 OF 2019 ``` -14- ## **`APPENDIX OF ITA 45/2019`** ``` PETITIONER ANNEXURES ANNEXURE -ATRUE COPY OF THE ASSESSMENT ORDER DATED 31.3.2014 FOR THE a.y. 2009-10. ANNEXURE -BTRUE COPY OF THE APPELLATE ORDER DATED 27.12.16 OF THE COMMISSIONERE OF INCOME TAX (APPEALS). ANNEXURE -CTRUE COPY OF THE APPEAL MEMORANDUM BEFORE INCOME TAX APPELLATE TRIBUNAL ANNEXURE -DTRUE COPY OF THE PETITION FOR DELAY CONDONATION BEFORE TRIBUNAL. ANNEXURE -ETRUE COPY OF THE ORDER OF THE INCOME TAX TRIBUNAL DATED 27.9.2018. ```