In the High Court of Judicature at Madras Dated : 08.07.2008 Coram :- The Honourable Mr.Justice K.RAVIRAJA PANDIAN and The Honourable Mr.Justice P.P.S.JANARTHANA RAJA Tax Case (Appeal) Nos.745 to 748 of 2008 The Pay and Accounts Officer (East) Chepauk, Chennai – 600 005. .. Appellant in T.C.(A) No.745 of 2008 The Pay and Accounts Officer (West) Secretariat, Chennai – 600 009. .. Appellant in T.C.(A) No.746 of 2008 The Pay and Accounts Officer (South) 485,Anna Salai, Nandanam Chennai – 600 035. .. Appellant in T.C.(A) No.747 of 2008 The Pay and Accounts Officer (North) 32, Singaravelar Maligai, Rajaji Salai, Chennai-1. .. Appellant in T.C.(A) No.748 of 2008 Vs. The Income Tax Officer TDS III, Chennai ... Respondent in all T.Cs TAX CASE (APPEALS) in T.C.(A) Nos.745 to 748 of 2008 are filed under Section 260A of the Income Tax Act against the order of the Income Tax Appellate Tribunal Madras 'C' Bench dated 4.4.2007 in I.T.A.Nos.17 to 20/Mds/2004 for the assessment year 2000-2001 against the order of the commissioner of the Income Tax (Appeals) X, Chennai in ITA Nos.108/2001-2002, 107/2001-2002, 106/2001-02 and 109/2001-02 dated 28.11.01, 5.12.01, 28.11.01 and 5.12.01 respectively against the order of the Income Tax Officer, TDS III, Chennai-34 in ITO III/2000-2001 in Tax deduction Account No.P.0222F dated 12.2.01, Tax deduction Account number CHEP00206D dated 12.2.01, Tax deduction Account No Nil dated 12.2.01, Tax deduction Account No.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. JUDGMENT JUDGMENT OF THE COURT WAS DELIVERED BY K.RAVIRAJA PANDIAN,J These appeals are filed against the order of the Income Tax Appellate Tribunal Madras 'C' Bench dated 4.4.2007 in I.T.A.Nos.17 to 20/Mds/2004. The relevant assessment year is 2000-2001. The common substantial questions of law formulated in these appeal are as follows:- "1. Whether in the facts and circumstances of the case, the Tribunal has ascertained its discretion in refusing to condone the delay in filing appeal in a proper legal perspective? 2. Whether in the facts and circumstances of the case, the Tribunal has committed a legal error in not appreciating and applying the decision of the Supreme Court in 2005(3) SCC 752 rendered in identical circumstance? 3. Whether in the facts and circumstances of the case, the Appellate Tribunal has rightly applied the test of liberal and pragmatic approach as to the sufficiency of case involving red tapism in the matter of condonation of delay under Section 5 of Limitation Act? 2. As the issue involved in these appeals is one and the same, these appeals are taken together and are disposed of by this common order. Tax case (Appeal) No.745 of 2008 is taken as a typical case, the facts of which are as follows: The Income-tax Officer issued a show cause notice dated 29.12.2000 calling upon the appellant as to why interest of Rs.1,16,614/- should not be charged under Section 201(1-A) of the Act in respect of the employees shown in the list annexed for failure to deduct tax out of their salary disbursement and consequently resulting 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 an order on 12.2.2001 under Section 201(1-A) raising a demand of Rs.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 remitted the balance of tax by self-assessment. While so, by G.O.Ms.No.114 dated 27.3.2002 the Government accorded sanction for payment of demand raised by the Income Tax Department under protest even while pursuing the remedy of further appeal to the Tribunal and accordingly a sum of Rs.1,16,614/- was remitted to the Income tax Department. Being aggrieved by the order passed by the Income-tax Officer, an appeal was preferred before the Commissioner of Income Tax (Appeals), who upheld the levy of interest under Section 201(1A) of the Act and dismissed the appeal by order dated 28.11.2001 on the finding that the disbursing authority ought to have deducted the tax on the basis of the previous year's account and other facts which would normally provide an idea of the tax amount payable by an employee during a financial year and that therefore it is not the concerned employee but the disbursing authority who should decide the amount of monthly TDS for the employees concerned. A further appeal was filed by the appellant to the Income Tax Appellate Tribunal with a delay of 708 days. Similarly appeals had been filed by the other appellants with petition to condone the delay in filing the appeal. The Tribunal by a common order dated 4.4.2007 dismissed all the appeals on the ground of delay without going into the merits involved in the appeals. 3. Learned counsel appearing for the appellant submits that there is no deliberate inaction, lack of bonafides or guilt of laches or negligence on the part of the appellants. The appellate Tribunal ought to have adopted a liberal approach in exercising the discretion as the entire demand had been remitted thereby causing no prejudice to the revenue. The Appellate Tribunal failed to appreciate the case of the appellants in the light of the ratio laid down by the Supreme Court in the case of State of Nagaland Vs. Lipk AO and others, 2005(3) SCC 752. 4. Learned counsel appearing for the Income-tax Department argued for 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 finality to a proceedings and not destroy the statutory appellate remedy. The Court can condone the delay in spite of the fact the delay is very enormous, if the Court is satisfied, with the reason stated in the affidavit. At the same time, even a short spell of delay may stare at the appellant if the appellant is not able to give a cogent acceptable reason for the delay. It is also equally well settled that when technicalities and substantial justice are pitted against each other, the Court will always lien in favour of substantial justice. Hence, we are of the view that the delay can be condoned as the appellant has already remitted the entire demand. https://hcservices.ecourts.gov.in/hcservices/ 7. Further, in the case of COLLECTOR, LAND ACQUISITION, ANANTNAG AND ANOTEHR VS. MST.KATIJI AND OTHERS, 1987(28) ELT 185, the Supreme Court held that the legislature has conferred the power to condone delay by enacting Section 5 of the Indian Limitation Act of 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on merits. The expresson "sufficient cause" employed by the legislature 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 for the existence of the 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 for condonation of delay, it is common knowledge that on account of impersonal machinery and the inherited bureaucratic methodology imbued with the note-marking, file-pushing, and passing-on-the buck ethos, delay on the part of the State is less difficult to understand though more difficult to approve, but the State represents collective cause of t the community. It is axiomatic that decisions are taken by offices/agencies proverbially at slow pace and encumbered process of pushing the files from table to table and keeping it on table for considerable time causing delay intentional or otherwise is a routine. Considerable delay of procedural red tape in the process of their making decision is a common feature. Therefore, certain amount of latitude is not impermissible. If the appeals brought by the State are lost for such default no person is individually affected but what in the ultimate analysis suffers, is public interest. The expression "sufficient cause" should, therefore, be considered with pragmatism in justice-oriented approach rather than the technical detection of sufficient cause for explaining every day's delay. The factors which are peculiar to and characteristic of the functioning of the Governmental conditions would be cognizant to and requires adoption of pragmatic approach in justice-oriented process...." 9. Further, the law of limitation is enshrined in the maxim interest reipublicae ut sit finis litium (it is for the general welfare that a period be put to litigation). Rules of limitation are not meant to destroy the rights of the parties, rather the idea is that every legal remedy must be kept alive for a legislatively fixed period of time. (vide of BHARAT AUTO CENTER VS. COMMISSIONER OF INCOME-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 Court held thus: "In exercising discretion under section 5 of the Limitation Act, 1963, to condone delay for sufficient cause in not preferring an appeal or other application within the period prescribed, courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former consideration of prejudice to the other side will be a relevant factor and calls for am ore cautious approach, in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The Court has to exercise its discretion on the facts of each case keeping in mind that in construing the expression "sufficient cause" the principles of advancing substantial justice is of prime importance. The expression "sufficient cause" should receive a liberal construction." 11. Further, some sort of latitude must be given wherever the petitions are filed by the Governmental organisation, as the Government being impersonal taking longer time in moving judicial forum, vide, UNION OF INDIA VS. TATA YODOGAWAVA LIMITED, 1988(88) ELT 739. 12. In the present appeals, the appellant i.e., the Pay and Accounts Officer is representing the Government of Tamil Nadu. It is an admitted fact that interest imposed on the appellant under Section 201(1A) has been paid by the appellant on protest and pursued the appellate remedy by obtaining necessary sanction from the Government in 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 be rejected as it is not sufficient cause. In the facts of the present case, every day's delay cannot be explained and as such the pedantic approach should not be made. The doctrine must be applied in a rational common sense pragmatic manner. The delay in this case cannot be regarded as occasioned deliberately or on account of negligence or on account of malafides. A litigant does not stand to benefit by resorting to delay, but he runs a serious risk. Courts are not respected on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so. (See 2005(3) SCC 752). Making a justice oriented approach from this perspective, there is sufficient cause for condoning the delay. https://hcservices.ecourts.gov.in/hcservices/ 13. For the fore-going reasons and in the light of the above judgments, the order dated 4.4.2007 made by the Income-tax Appellate Tribunal, Chennai Bench C in I.T.A.Nos.17 to 20/Mds/2004 is set aside and the matter is remitted back to the Income-tax Appellate Tribunal for fresh consideration on merits. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. To 1.The Assistant Registrar, Income-Tax Appellate Tribunal, III Floor, Rajaji Bhavan, Besant Nagar, Madras 90 (with records five copies). 2. The Commissioner of Income Tax (Appeals)-X, Chennai 3. The Income-tax Officer, TDS-III, Chennai 4. 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 2008 KGK {CO} TP/24.7.08 https://hcservices.ecourts.gov.in/hcservices/