IN INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ITA.No.2397/Ahd/2011 With CO No.95/Ahd/2015 Asstt. Year: 2008-2009 DCIT, Cir.2 Shri Rupesh R. Zaveri (HUF) Surat. Vs Prop. of M/s.Mitali Silk 217, Bhavani Chambers Salabatpura Surat 395 002. PAN : AAAHZ 0411 Q (Appellant) (Respondent) Revenue by : Shri G.C. Daxini, Sr.Dr. Assessee by : Shri M.J. Shah, AR Date of Hearing : 10/10/2016 Date of Pronouncement: 13/10/2016 ORDER Revenue is in appeal before Tribunal against order of ld.CIT(A)-II, Surat dated 4.7.2011 passed for Asstt.Year 2008-09. 2. In appeal, Revenue has raised following grounds: [1] On facts and circumstance of case and in law, Ld. CIT(A)- II, Surat has erred in deleting addition on account of G.P. addition of Rs.30,86,223/- in spite of various infirmities in books including failure to substantiate expenditures. [2] On facts and circumstance of case and in law, Ld. CIT(A)- II, Surat has erred in deleting addition of Rs.6,30,000/- on account of disallowance of twisting labour despite fact that expenses claimed by assessee were not allowable u/s. 37(1) of I.T. Act. ITA No.2397/Ahd/2011 with CO 2 [3] On facts and in circumstances of case, Ld. CIT(A) ought to have upheld order of Assessing Officer. [4] It is, therefore, prayed that order of CIT(A) may be set-side and that of Assessing Officer may be restored to above extent. 3. During course of hearing, Revenue has amended its grounds of appeal and excluded ground no.2. After exclusion of ground no.2, tax effect in Revenue s appeal would be less than Rs.10 lakhs. Since tax effect in Revenue s appeal is less than Rs.10 lakhs, therefore, by virtue of recent CBDT Instruction No. 21/2015 dated 10.12.2015, which is applicable with retrospective effect, appeal of Revenue is not maintainable, and accordingly rejected. 4. Now, we adjudicate Cross Objection of assessee. 5. Appeal of Revenue was received in Tribunal on 22.9.2011. Notice along with memorandum of appeal was sent to assessee, which according to assessee was received on 20.10.2011. assessee has filed CO on 10.6.2015, which is time barred by 1299 days. assessee has not filed any formal application under section 253(5) of Income Tax Act, 1961. He has filed affidavit of karta, Shri Rajesh R. Zaveri deposing therein as under: 1. There has been delay of approx. 1317 days in filing Cross Objection before Hon'ble Income Tax Appellate Tribunal for Asst. Year 2008-09. This delay has arisen because we were under impression on seeing grounds of appeal filed by Department, copy of which is received by us, that we have succeeded on both grounds against which Department had preferred appeal to Hon'ble Income Tax Appellate Tribunal being ITA No.2397/Ahd/2011. said appeal papers on matter being listed for hearing were sent to our Advocate, Shri Manish J. Shah, who on going through appeal papers pointed out to us that Department has by mistake taken Ground No.2 in its appeal as if learned C.I.T.(Appeals) has deleted ITA No.2397/Ahd/2011 with CO 3 addition of Rs.6,30,000/- on account of disallowance of twisting labour. We looked into said matter and realized that actually C.I.T.(Appeals) has disallowed our grounds of appeal and we ought to have taken Cross Objection before Hon'ble Income Tax Appellate Tribunal. It was because of grounds taken by Department in its appeal, we got misguided and were under bone; fide impression that we have actually succeeded on said ground while fact was to contrary. 6. ld.counsel for assessee took me through above explanation, and relied upon large number of decisions. Copies of these judgments have been placed on record. I do not deem it necessary to recite and recapitulate all these decisions on this point, because, it is suffice to say that core of these decisions is to effect that whenever expression sufficient cause employed in sub-section (5) of section 253 of Act falls for consideration, then, adjudicating authority should adopt liberal approach in construing explanation of assessee inferred from material. Reference can be made to decisions of Hon ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353. assessee has also placed on record copy of order passed in ITA No.3676 to 3683/A/2004 dated 21.6.2005 wherein delay of 13 years in fling of appeal was condoned. 7. On due consideration of above, I am of view that length of delay is immaterial. It is sufficiency of reasons that matters. If there is plausible reason, then, any amount of delay can be condoned. In present case also, I am not satisfied with bona fide of assessee, because, ld.CIT(A) has decided appeal of assessee on 4.7.2011. This order must have been served upon assessee within reasonable time. From stamp of date available on order of ld.CIT(A) it revealed that it was received by tax consultant of assessee i.e. ITP. perusal of this, assessee would have come to know about issue which has been decided partly against him. When ITA No.2397/Ahd/2011 with CO 4 assessee received notice from Tribunal on 20.10.2011 again he must have appraised himself about issue involved in appeal and how ld.CIT(A) had adjudicated them. There must be conscious decision to accept order of ld.CIT(A) when it was passed. Similarly, assessee was not in mood to challenge this order, when summons were issued to assessee for defending appellate proceedings before Tribunal. If Department has taken out one of grounds erroneously that would not persuade assessee to believe that ld.CIT(A) has decided both issues in favour of it. To my mind, assessee has declared loss of Rs.15,13,710/-. He was not going to be effected by marginal disallowance of Rs.6,30,000/-, and therefore, consciously, he never thought to challenge order of ld.CIT(A). When appeal before Tribunal came up for hearing, then realizing fact that assessee should be visited with penalty also, this CO might have been filed. But, really assessee was not fully aggrieved with impugned order of ld.CIT(A), because, there was no tax liability by virtue of such disallowance, and therefore, he never thought to challenge it in higher appellate forum. I do not find any plausible explanation to condone delay of more than three-and-half years. Accordingly, CO of assessee is dismissed, as being time barred. 8. In result, appeal of Revenue is dismissed and CO of assessee is also dismissed. Order pronounced in Court on 13th October, 2016 at Ahmedabad. Sd/- (RAJPAL YADAV) JUDICIAL MEMBER Ahmedabad; Dated 13 /10/2016 DCIT, Cir-2, Surat v. Rupesh R. Zaveri (HUF)