PROMINENT BUILDERS & INVESTORS (P) LTD. v. INSPECTING ASSISTANT COMMISSIONER
[Citation -1984-LL-0730-7]

Citation 1984-LL-0730-7
Appellant Name PROMINENT BUILDERS & INVESTORS (P) LTD.
Respondent Name INSPECTING ASSISTANT COMMISSIONER
Court ITAT
Relevant Act Income-tax
Date of Order 30/07/1984
Assessment Year 1977-78, 1979-80
Judgment View Judgment
Keyword Tags appropriate authority • bona fide belief • legal profession
Bot Summary: These appeals were heard and decided by the Tribunal on 6-8-1982, holding that appeals should have been filed before the Commissioner. The Tribunal dismissed the appeals in limine on the ground that such appeals were incompetent. The learned Commissioner was of the view that the assessee was not justified in filing the appeals before the Tribunal against the penalty orders passed under section 272A(2). The contention of the learned counsel of the appellant was that in view of the provisions of section 253(1)(a) read with section 272A(3) of the Act, the assessee was under the bona fide belief that appeals against the order passed under section 272A(2) could be filed directly before the Tribunal. According to the learned counsel, where a person believing in good faith that an appeal filed before the Tribunal or before the appropriate authority and in pursuance of such belief presented the appeal before the Tribunal or appropriate authority, it could be successfully argued that there were sufficient causes for not filing the appeals before the appropriate authority. The assessee filed the appeals before the Tribunal against the impugned penalty orders on 2-6-1981. Before the Tribunal also, the contention of the learned counsel for the appellant was that according to his interpretation, in view of the provisions of section 253(1)(a), appeals could be filed directly before the Tribunal against the section 253(1)(a), appeals could be filed directly before the Tribunal against the penalty orders passed by the IAC under section 272A(2).


These appeals are by assessee, pertaining to assessment years 1977-78 to 1979-80. point in issue in all appeals is identical. So all appeals are being disposed of by common order. 2. assessee is private limited company. In assessment years 1977-78, 1978-79 and 1979-80, IAC imposed penalties of Rs. 11,050, Rs. 6,400 and Rs. 2,750 under section 272A(2) of Income-tax Act, 1961 (' Act '), respectively. 3. Being aggrieved with penalty order, assessee filed appeals before Tribunal on 2-6-1981. These appeals were heard and decided by Tribunal on 6-8-1982, holding that appeals should have been filed before Commissioner (Appeals). Consequently, Tribunal dismissed appeals in limine on ground that such appeals were incompetent. assessee was served with Tribunal's order on 13-9-1982. Before orders were served, assessee filed appeals before learned Commissioner (Appeals) on 13-8- 1982. 4. After hearing patties, Commissioner (Appeals) was of view that appeals should have been filed before him within 30 days of service of penalty orders. There was delay of 15 months in filing appeals before him. learned Commissioner (Appeals) was of view that assessee was not justified in filing appeals before Tribunal against penalty orders passed under section 272A(2). Consequently, learned Commissioner (Appeals) held that there were no sufficient causes, which prevented assessee from filing appeals within time. Thus, he dismissed all appeals in limine on ground that they were barred by time. 5. Before Tribunal, contention of learned counsel of appellant was that in view of provisions of section 253(1)(a) read with section 272A(3) of Act, assessee was under bona fide belief that appeals against order passed under section 272A(2) could be filed directly before Tribunal. In any view of matter, learned counsel contended that on basis of advice of counsel, he was under bona fide belief that proper forum for filing appeals against order passed by IAC under section 272A(2) was Tribunal. In this connection, it was submitted that Tribunal dismissed appeals on 6-8-1982 in limine and before order could be served on 13-9-1982, appeals were filed before Commissioner (Appeals). According to learned counsel, where person believing in good faith that appeal filed before Tribunal or before appropriate authority and in pursuance of such belief presented appeal before Tribunal or appropriate authority, it could be successfully argued that there were sufficient causes for not filing appeals before appropriate authority. Reliance was placed on decisions in cases of Firm Bishan Das Brij Lal v. Firm Brij Mohan Lakshmi Narain AIR 1935 Lahore 844, Noor Beg v. Ch. Abdul Rahman AIR 1944 Oudh 193 and decision of Supreme Court in case of Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi [1979] 118 ITR 507. 6. On behalf of revenue, it was contended that there were no sufficient causes in present case for not filing appeals originally before learned Commissioner (Appeals) against penalty orders passed by IAC under section 272A(2). According to revenue, by no stretch of imagination against order passed under section 272A(2), appeals could be filed before Tribunal. Thus, it was submitted that there were no sufficient causes, which prevented assessee from filing appeals before appropriate authority within time. 7. We have considered rival submissions and perused entire material on record. Before discussing contentions of parties in detail, we would like to point out that ITO imposed penalties under section 272A(2) against assessee in respect of assessment years 1977-78 to 1979-80. orders were served on 25-4-1981. Before Commissioner (Appeals), appeals should have been filed within 30 days from date of penalty order. assessee filed appeals before Tribunal against impugned penalty orders on 2-6-1981. It means nearly about 39 days after service of penalty order, appeals were filed before Tribunal. He may also point out that appeals were heard in detail by Tribunal and they were dismissed in limine on 6-8-1982. Before Tribunal also, contention of learned counsel for appellant was that according to his interpretation, in view of provisions of section 253(1)(a), appeals could be filed directly before Tribunal against section 253(1)(a), appeals could be filed directly before Tribunal against penalty orders passed by IAC under section 272A(2). Tribunal decided matter on 6-8-1982, holding that appeals were incompetent. Tribunal's order was served on 13-9-1982 but appeals before Commissioner (Appeals) were filed on 13-8-1982. 8. From aforesaid facts, it comes out that assessee filed appeals at original stage before Tribunal on advice of his counsel and it is also clear that advice of counsel given to his client was bona fide one. From aforesaid facts, it is also clear that appellant has acted all along with reasonable diligent in prosecuting appeals before Tribunal. Under circumstances, it should be accepted that assessee took up matter before Tribunal in good faith and as such, time taken in prosecuting appeals before Tribunal should be excluded for purpose of computing period of limitation. Before Tribunal's order was served upon assessee, he filed appeals before competent authority. So from this point of view also, bona fides of assessee are proved. 9. We may point out that legal advice given by members of legal profession may sometimes be wrong even as pronouncement on question of law by Courts are sometimes wrong. amount of latitude is expected in such cases, for to err is human and laymen, as litigants are, may legitimately lean on expert counsel in legal as in other departments without probing professional competence of advice. Court and Tribunal must, of course, see whether in such cases, there is any taint of mala fides or element of recklessness or ruse. If neither is present, legal advice honestly sought and actually given, must be treated as sufficient cause for condoning delay for purpose of computation of limitation. In support of this conclusion, we are fortified by ratio of decision of Supreme Court in case of Concord of India insurance Co. Ltd. 10. Looking to aforesaid facts and entirety of circumstances, we are of view that there were sufficient causes which prevented assessee from filing appeals before Commissioner (Appeals) within time. So delay in filing appeals before Commissioner (Appeals) is condoned. Let matter should go back to learned Commissioner (Appeals) for deciding same on merits. 11. For statistical purposes, all appeals are allowed. *** PROMINENT BUILDERS & INVESTORS (P) LTD. v. INSPECTING ASSISTANT COMMISSIONER
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