The Pay and Accounts Officer (East) v. The Pay and Accounts Officer (West) & Ors.

In the High Court of Judicature at MadrasDated : 08.07.2008Coram :-The Honourable Mr.Justice K.RAVIRAJA PANDIANandThe Honourable Mr.Justice P.P.S.JANARTHANA RAJATax Case (Appeal) Nos.745 to 748 of 2008The Pay and Accounts Officer (East)Chepauk, Chennai – 600 005. .. Appellant in T.C.(A)No.745 of 2008The Pay and Accounts Officer (West)Secretariat, Chennai – 600 009. .. Appellant in T.C.(A)No.746 of 2008The Pay and Accounts Officer (South)485,Anna Salai, NandanamChennai – 600 035. .. Appellant in T.C.(A)No.747 of 2008The Pay and Accounts Officer (North)32, Singaravelar Maligai,Rajaji Salai, Chennai-1. .. Appellant in T.C.(A)No.748 of 2008Vs.The Income Tax OfficerTDS III, Chennai...Respondent in all T.CsTAX CASE (APPEALS) in T.C.(A) Nos.745 to 748 of 2008 are filedunder Section 260A of the Income Tax Act against the order of theIncome Tax Appellate Tribunal Madras 'C' Bench dated 4.4.2007 inI.T.A.Nos.17 to 20/Mds/2004 for the assessment year 2000-2001against the order of the commissioner of the Income Tax (Appeals) X,Chennai in ITA Nos.108/2001-2002, 107/2001-2002, 106/2001-02 and109/2001-02 dated 28.11.01, 5.12.01, 28.11.01 and 5.12.01respectively against the order of the Income Tax Officer, TDS III,Chennai-34 in ITO III/2000-2001 in Tax deduction Account No.P.0222Fdated 12.2.01, Tax deduction Account number CHEP00206D dated 12.2.01,Tax deduction Account No Nil dated 12.2.01, Tax deduction AccountNo.P0223G dated 12.2.01 respectively. https://hcservices.ecourts.gov.in/hcservices/ For Appellants : Mr.H.Nazirudeen For Respondents : Mr.J.Nareshkumar Sr.Standing Counsel for Income-tax Dept.JUDGMENTJUDGMENT OF THE COURT WAS DELIVERED BY K.RAVIRAJA PANDIAN,JThese appeals are filed against the order of the Income TaxAppellate Tribunal Madras 'C' Bench dated 4.4.2007 in I.T.A.Nos.17to 20/Mds/2004. The relevant assessment year is 2000-2001. Thecommon substantial questions of law formulated in these appeal are asfollows:-"1. Whether in the facts andcircumstances of the case, the Tribunal hasascertained its discretion in refusing tocondone the delay in filing appeal in a properlegal perspective?2. Whether in the facts and circumstancesof the case, the Tribunal has committed a legalerror in not appreciating and applying thedecision of the Supreme Court in 2005(3) SCC 752rendered in identical circumstance?3. Whether in the facts and circumstancesof the case, the Appellate Tribunal has rightlyapplied the test of liberal and pragmaticapproach as to the sufficiency of case involvingred tapism in the matter of condonation of delayunder Section 5 of Limitation Act?2. As the issue involved in these appeals is one and thesame, these appeals are taken together and are disposed of by thiscommon order. Tax case (Appeal) No.745 of 2008 is taken as atypical case, the facts of which are as follows:The Income-tax Officer issued a show cause notice dated29.12.2000 calling upon the appellant as to why interest ofRs.1,16,614/- should not be charged under Section 201(1-A) of the Actin respect of the employees shown in the list annexed for failure todeduct tax out of their salary disbursement and consequentlyresulting in short deduction in tax by way of TDS under Section 192,201(1) and 201(1-A) of the Act. The Income-tax Officer passed anorder on 12.2.2001 under Section 201(1-A) raising a demand ofRs.1,16,614/- as interest for failure to deduct tax fully at source https://hcservices.ecourts.gov.in/hcservices/ in the case of 98 individuals even though those individuals remittedthe balance of tax by self-assessment. While so, by G.O.Ms.No.114dated 27.3.2002 the Government accorded sanction for payment ofdemand raised by the Income Tax Department under protest even whilepursuing the remedy of further appeal to the Tribunal and accordinglya sum of Rs.1,16,614/- was remitted to the Income tax Department.Being aggrieved by the order passed by the Income-tax Officer, anappeal was preferred before the Commissioner of Income Tax (Appeals),who upheld the levy of interest under Section 201(1A) of the Act anddismissed the appeal by order dated 28.11.2001 on the finding thatthe disbursing authority ought to have deducted the tax on the basisof the previous year's account and other facts which would normallyprovide an idea of the tax amount payable by an employee during afinancial year and that therefore it is not the concerned employeebut the disbursing authority who should decide the amount of monthlyTDS for the employees concerned. A further appeal was filed by theappellant to the Income Tax Appellate Tribunal with a delay of 708days. Similarly appeals had been filed by the other appellants withpetition to condone the delay in filing the appeal. The Tribunal by acommon order dated 4.4.2007 dismissed all the appeals on the groundof delay without going into the merits involved in the appeals. 3. Learned counsel appearing for the appellant submits that thereis no deliberate inaction, lack of bonafides or guilt of laches ornegligence on the part of the appellants. The appellate Tribunalought to have adopted a liberal approach in exercising the discretionas the entire demand had been remitted thereby causing no prejudiceto the revenue. The Appellate Tribunal failed to appreciate thecase of the appellants in the light of the ratio laid down by theSupreme Court in the case of State of Nagaland Vs. Lipk AO andothers, 2005(3) SCC 752. 4. Learned counsel appearing for the Income-tax Department arguedfor sustaining the order impugned.5. We heard the arguments of the learned counsel on either side. 6. The law of limitation has been enacted only to give a finalityto a proceedings and not destroy the statutory appellate remedy. TheCourt can condone the delay in spite of the fact the delay is veryenormous, if the Court is satisfied, with the reason stated in theaffidavit. At the same time, even a short spell of delay may stare atthe appellant if the appellant is not able to give a cogentacceptable reason for the delay. It is also equally well settled thatwhen technicalities and substantial justice are pitted against eachother, the Court will always lien in favour of substantial justice.Hence, we are of the view that the delay can be condoned as theappellant has already remitted the entire demand. https://hcservices.ecourts.gov.in/hcservices/

7. Further, in the case of COLLECTOR, LAND ACQUISITION, ANANTNAGAND ANOTEHR VS. MST.KATIJI AND OTHERS, 1987(28) ELT 185, the SupremeCourt held that the legislature has conferred the power to condonedelay by enacting Section 5 of the Indian Limitation Act of 1963 inorder to enable the Courts to do substantial justice to parties bydisposing of matters on merits. The expresson "sufficient cause"employed by the legislature is adequately elastic to enable thecourts to apply the law in a meaningful manner which subserves theends of justice – that being the life-purpose for the existence ofthe institution of Courts. 8. In the case of STATE OF HARYANA VS. CHANDRA MANI AND OTHERS,AIR 1996 SUPREME COURT 1623, the Supreme Court held thus:"When the State is an applicant, praying forcondonation of delay, it is common knowledge that onaccount of impersonal machinery and the inheritedbureaucratic methodology imbued with the note-marking,file-pushing, and passing-on-the buck ethos, delay on thepart of the State is less difficult to understand thoughmore difficult to approve, but the State representscollective cause of t the community. It is axiomatic thatdecisions are taken by offices/agencies proverbially atslow pace and encumbered process of pushing the files fromtable to table and keeping it on table for considerabletime causing delay intentional or otherwise is a routine.Considerable delay of procedural red tape in the processof their making decision is a common feature. Therefore,certain amount of latitude is not impermissible. If theappeals brought by the State are lost for such default noperson is individually affected but what in the ultimateanalysis suffers, is public interest. The expression"sufficient cause" should, therefore, be considered withpragmatism in justice-oriented approach rather than thetechnical detection of sufficient cause for explainingevery day's delay. The factors which are peculiar to andcharacteristic of the functioning of the Governmentalconditions would be cognizant to and requires adoption ofpragmatic approach in justice-oriented process...."9. Further, the law of limitation is enshrined in the maximinterest reipublicae ut sit finis litium (it is for the generalwelfare that a period be put to litigation). Rules of limitation arenot meant to destroy the rights of the parties, rather the idea isthat every legal remedy must be kept alive for a legislatively fixedperiod of time. (vide of BHARAT AUTO CENTER VS. COMMISSIONER OFINCOME-TAX AND ANOTEHR, reported in (2006) 282 ITR 366(Allabahad). https://hcservices.ecourts.gov.in/hcservices/

10. In the case of VEDABAI ALIAS VAIJAYANATABAI BABURAO PATIL VS.SHANTARAM BABURAO PATIL AND OTHERS (2002) 253 ITR 799, this Courtheld thus:"In exercising discretion under section 5 of theLimitation Act, 1963, to condone delay for sufficient causein not preferring an appeal or other application within theperiod prescribed, courts should adopt a pragmatic approach.A distinction must be made between a case where the delay isinordinate and a case where the delay is of a few days.Whereas in the former consideration of prejudice to theother side will be a relevant factor and calls for am orecautious approach, in the latter case no such considerationmay arise and such a case deserves a liberal approach. Nohard and fast rule can be laid down in this regard. TheCourt has to exercise its discretion on the facts of eachcase keeping in mind that in construing the expression"sufficient cause" the principles of advancing substantialjustice is of prime importance. The expression "sufficientcause" should receive a liberal construction."11. Further, some sort of latitude must be given wherever thepetitions are filed by the Governmental organisation, as theGovernment being impersonal taking longer time in moving judicialforum, vide, UNION OF INDIA VS. TATA YODOGAWAVA LIMITED, 1988(88) ELT739.12. In the present appeals, the appellant i.e., the Pay andAccounts Officer is representing the Government of Tamil Nadu. It isan admitted fact that interest imposed on the appellant under Section201(1A) has been paid by the appellant on protest and pursued theappellate remedy by obtaining necessary sanction from the Governmentin G.O.Ms.No.114 dated 27.3.2002. Thus there is a delay of 701 days,which is explained as administrative delay. The said reason cannot berejected as it is not sufficient cause. In the facts of the presentcase, every day's delay cannot be explained and as such the pedanticapproach should not be made. The doctrine must be applied in arational common sense pragmatic manner. The delay in this case cannotbe regarded as occasioned deliberately or on account of negligence oron account of malafides. A litigant does not stand to benefit byresorting to delay, but he runs a serious risk. Courts are notrespected on account of its power to legalise injustice on technicalgrounds but because it is capable of removing injustice and isexpected to do so. (See 2005(3) SCC 752). Making a justice orientedapproach from this perspective, there is sufficient cause forcondoning the delay. https://hcservices.ecourts.gov.in/hcservices/

13. For the fore-going reasons and in the light of the abovejudgments, the order dated 4.4.2007 made by the Income-tax AppellateTribunal, Chennai Bench C in I.T.A.Nos.17 to 20/Mds/2004 is setaside and the matter is remitted back to the Income-tax AppellateTribunal for fresh consideration on merits.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.To1.The Assistant Registrar, Income-Tax Appellate Tribunal, IIIFloor, Rajaji Bhavan, Besant Nagar, Madras 90 (with records fivecopies).2. The Commissioner of Income Tax (Appeals)-X, Chennai3. The Income-tax Officer, TDS-III, Chennai4. The Pay and Accounts Officer (East)Chepauk, Chennai – 600 005. 5. The Pay and Accounts Officer (West)Secretariat, Chennai – 600 009. 6. The Pay and Accounts Officer (South)485, Anna Salai, Nandanam, Chennai – 600 035. 7. The Pay and Accounts Officer (North)32,Singaravelar Maligai, Rajaji Salai, Chennai – 600 001.+ 1 CC To M/s.Pushya Sitaraman, Advocate SR NO.35657+ 1 CC to Spl. Government Pleader (Taxes) SR NO.35548 Tax Case (Appeal) Nos.745 to 748 of 2008KGK {CO}TP/24.7.08