T.R. Sood, A.M. - (1.) AT the outset of hearing, both the parties pointed out that issues involved in revenue's appeal as well as assessee's cross-objections are identical, therefore, only one appeal i.e. ITA No. 345/Ind/95 and corresponding cross-objection No. 32/Ind/2000 against the same may be heard and decision applied to all other appeals and cross-objections. It was further pointed out by the Ld. AR that cross-objection be heard first and if that issue is decided, appeal will not survive at all. The Bench acceded to this request and proceeded to hear the cross-objection first. C.O. No. 32/IND/2000 Cross-objection as well as appeals earlier were heard on 16/09/2002. During that hearing, no argument was advanced by Ld. AR in respect of condonation of delay in filing of cross-objection. AT the time of dictation, it was noticed that cross-objection had been filed late by 1623 days. It was further noticed that a letter dated 05/06/2000 giving some vague reasons for filing of cross-objection late was filed. The contents of the same are as follows:- (i) The abovementioned appeal is fixed for hearing before the Tribunal on 19/06/2000. (ii) Please find attached hereto a copy of certain grounds the assessee wishes to urge against the order of the Commissioner of Income-tax(Appeals) alongwith Form No. 36A duly executed by way of abundant caution. (iii) The assessee says that the issues raised by it go to the very root of the assessment itself and the true and proper meaning of the agreement for avoidance of Double Taxation between India and Malaysia as applied in view of the provisions of the Income-tax Act. The appellant says that a number of High Courts, Benches of the Tribunal and other appellate authorities have held that in view of the provisions of the DTAA income by way of dividends declared by a Malaysian Co. cannot be taxed in the hands of the recipient thereof in India In view of the same the entire assessment of such dividend is contrary to law and ought to be deleted. The assessee says that this contention goes to the very root of the assessment and hence the assessee ought to be permitted to urge the same. (iv) The assessee says that, some of the authorities and decisions of the High Courts in this regard are recent decisions and have now come to its notice. The assessee says that this letter is being filed well before the date of hearing of the appeal. The assessee says therefore that no prejudice will be caused to the Income-tax Department by permitting the same to be urged while on the contrary if it is not permitted to urge the same an assessment which is contrary to the law of Indian will be made and tax not due from an assessee will be collected from it. (v) The assessee says therefore that it is in the interest of justice that it may be permitted to urge the grounds abovementioned. (vi) Kindly place a copy of the same before the Hon'ble members and send a copy to the DR. (vii) The appellant says with respect that in its view it is entitled to urge the contentions set out in the grounds without any further being submitted, and the same ought to be considered and appropriate order/ directions ought to be passed thereon by the Tribunal. The appellant says that by way of abundant caution it has filed the same as a cross objection with an application for condonation of delay. From this application, as is clear from the above noted contents, it becomes clear that assessee had not given any reason for late filing of cross-objection. Even no prayer was made for condonation of delay. In these circumstances, it was felt that delay could not be condoned. However, in the interest of justice, the case was released for fresh hearing so that reasons, if any, for delay in filing could be understood. The case was finally heard on 25/04/2003.
(2.) In the meantime, assessee had filed another application dated 16/03/2003 received on 25/03/2003 for condonation of delay which is reproduced as below:- (i) The above-mentioned matters were listed for hearing and were partly heard from time to time. The company says that according to its records the issue of condoning delay if required, in respect of the Cross Objections filed was heard on 07/12/2001 and 16/09/2002. The appeals and cross objections were finally fully heard on their merits by the Hon'ble Income-tax Appellate Tribunal (the Tribunal) on 16/09/2001. Thereafter it appears that there is a noting on the Tribunal's file that some clarifications are required in so far as the condonation of delay, if required, is concerned and the matters are listed for hearing on 28th March, 2003. The company says that this letter is being filed by way of abundant caution as will be explained hereinafter. (ii) The facts set out hereinafter are in respect of the Assessment year 1992-93 which was the year, which was argued before the Tribunal. The issues arising there from are identical for all the assessment years and the material facts for all the assessment years are similar in nature and hence what is set out hereinafter applies with equal force for all the assessment years in question. (iii) The assessed is an investment company. The assessor's entire income arises from the business of investment in shares and securities of various companies. The nature of income is dividends, interest etc. which is routine from year to year and as a consequence the company decided to only make claims and assertions in their returns of income which are well settled in nature and which, with respect, really do not involve disputed legal issues. (iv) The return of income for the assessment year 1992-93 was filed on 23/10/1992 and the income of the assessee company during the relevant previous year included dividend received from a Malaysian Company 'PAN Century Edible Oils SDN'. At the time of filing the said return, although there was a line of argument, which contended that dividend income received from a Malaysian company would not be subjected to tax at all in India, there was no authoritative pronouncement or binding authority in this regard. It will be appreciated that such a claim is based on the interpretation of the Double Taxation Agreement between India and Malaysia to the extent that it overrides the Indian Income-tax Act. 1961. Certainly lesser case law is available on the terms of the said treaty or any other treaty with similar provisions. Accordingly the assessee company claimed only deemed credit of tax paid on the dividend received in its return of income, which is clear on a mere plain reading of the relevant provision. The alternate claim of non-taxability of the dividend in the hands of the assessee was not explicitly set out in the return of income for the reasons afore mentioned. The assessee says that at this stage is difficult to exactly pinpoint a reason for the same and an inadvertent omission also cannot be ruled out. (v) The assessing Officer vide his order under Section 143(3) of the Act dated 24/03/1994 rejected the claim of the assessee by merely following his earlier orders which themselves also only dealt with the question of granting credit for deduction of lax at source even if such deduction was exempted on other grounds (deemed deduction) and did not allow credit for the deemed TDS on dividend. (vi) As a result of the manner in which the assessment order was framed (i.e. dealing only with the rejection of the claim for deemed credit) and the other reasons set out above when the assesses filed an appeal against the said assessment order on 19/04/1994 it did not raise a specific ground on this aspect. The assessee says that inadvertence apart, the first High Court decision on the subject was published in 1993 but the same was not binding in the state of Madhya Pradesh. (vii) The appellant says that a perusal of the order of the CIT(A) dated 16/02/1995 will show that during the hearing of the said appeal a decision of a high Court in favour of the assessee's contention was cited. However, ultimately the said appeal was decided in favour of the Appellant on the question of allowing credit for deemed taxes deducted. (viii) The department filed an appeal to the Tribunal against the said order of the CIT(A). At the time the appeal memo was served on the assessee, the company merely noted that the appeal was only of the department and it appeal's that the assessee lost sight of the, fact that by way it abundant caution it ought to also file a cross objection to the Tribunal on the question of non-taxability of the dividend income. (ix) The assessee in or about the year 2000 received notice of fixation of the said appeals. Immediately thereafter, the matters were discussed in conference with Counsel who was briefed to appear on the assessee's behalf, who advised the company that the correct legal position was that income from dividends received from the Malaysian Company could not be taxed in India and as a matter of abundant caution the company ought to file cross objections making this clear although it was open to the company to urge this contention even without the same. (x) Immediately thereafter on 7th June 2000 the assesses file Cross objections in all the above mentioned matters setting out the salient features of the matter along with a covering letter which was intended to serve as an application for condonation of any delay assuming that it was held necessary to have filed one. (xi) The assessee says that the cross objections raise a pure point of law going to the root of the matter and the very jurisdiction of the assessing officer and/or other authorities under the Income-tax Act, 1961 to assess as it's income dividends received from a Malaysian company. The assessee says no investigation into facts are required and every material fact necessary to dispose of the issue raised in the cross objection is on the record of the assessing authorities and the Tribunal. (xii) The assessee says that this application is filed by way of abundant caution for condonation of delay since as mentioned above, with due respect the assesses contends that it has the right to urge the ground set out in the memo of cross objection without the said application. (xiii) The assesses applicant therefore prays that: a) If it is held that memos of cross objections were required to be filed in order to enable it to urge that dividends received from the Malaysian company was not taxable in its hands for the assessment years 1989-90 to 1995-96 then any delay that has occurred in filing the same may be condoned, and/or b) That the Tribunal may pass further or other orders as it deems fit granting appropriate relief as it deems necessary. In para 1 of this application, it has been mentioned that issue of condoning delay was heard on 07/12/2001 and 16/09/2002. We would like to take strong objection to the averment that issue regarding condonment of delay was heard on 07/12/2001 and 16/09/2002. First of all, as borne out from records, on 07/12/2001, these cases were never heard and simply adjourned on the basis of adjournment application moved by the revenue. This is clear from our log books because on the same very day, Ld. Counsel for the assessee was representing another appeal in the case of Shri O.P. Rungta, ITA No. 925/Ind/95, which was argued in detail for about 21/2 hours and finally heard. We have gone through our log books for 16/09/2002 very carefully and find that there is no argument in respect of delay in filing of cross-objection. Further, no objection was raised on behalf of department. So, Bench could not take cognizance that cross-objection was filed late. However, despite of all this, as mentioned above, the Bench decided to release the cases for re-hearing so that reasons for delay could be explained by the assessee . After this, appeals were taken up for hearing on 28/03/2003 when same were partly heard and Ld. Counsel for the assessee was specifically made aware that he should explain reasons for delay in filing of cross-objections as even application dated 16/03/2003 was not specific. Finally on 25/04/2003, Ld AR advanced his arguments in respect of condonation of delay. He contended that no condonation of delay was required, as issue raised in cross-objection was also raised before CIT(A) who has discussed this matter in para 2 and specific reference has been made to the decision of CIT v. S.R.M. Firm, 208 ITR 400. Though finally no verdict has been pronounced on this issue, it should be presumed that same has been decided against the assessee. Then he referred to the decision of Assam Co. (India). Ltd. v. CIT, 256 ITR 423. While referring to the various paras of the decision, he submitted that it was clearly held by Gauhati High Court that Section 254(1) of the Act confer wide powers to the Tribunal. The Rules made by the Tribunal embody the principle of procedure to be followed by the Tribunal for discharging of its function. The scheme of the rules read as a whole does not suggest that the rules have the effect of curtailing or circumscribing the powers, authority and jurisdiction of the Tribunal in dealing with matters at its disposal. He contended that Hon'ble Court after referring to the Rule 11 and Rule 27 observed that there was no prohibition in these rules totally precluding the Tribunal from considering any ground beyond those mentioned in the Memorandum of Appeal filed by a party whether the assessee or the department, in the absence of an appeal or cross-objection by the other side projecting the new ground. The Court has further observed that this view was reinforced by the Rule 11 which does not require that Tribunal to be confined to the ground set forth in the Memorandum of Appeal or taken by the leave of the Tribunal provided the party who may be effected thereby had sufficient opportunity of being heard on that ground. There cannot be any estoppel against the law. It is permissible on the part of the Tribunal to entertain a ground beyond those incorporated in the Memorandum of Appeal though the party urging the said ground had neither appealed before it nor had filed a cross-objection in the appeal filed by the other party as long evidentiary facts in support of the new ground are available on record He further relied on Assam Carbon Product Ltd. v. CIT, 224 ITR 57 and Amines Plasticisers Ltd. v. CIT, 223 ITR 173.
(3.) ON condonation of delay, he referred to the decision of apex Court in Collector of Land Acquisition v. Mast. Katiji and Ors., 167 ITR 471 where Hon'ble Supreme Court had observed that the expression 'sufficient cause' employed in Section 5 of Limitation Act, 1963 is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice that being the life purpose of the existence of the institution of Courts while reiterating that liberal approach should be adopted in the matters of condonation of delay, he also referred to guidelines issued by Hon'ble Supreme Court and pointed out that from these guidelines it becomes clear that very liberal approach has to be adopted for condoning of delay.;