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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI PAVAN KUMAR GADALE
IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA No. 2952 & 2951/Mum/2023 (A.Y: 2014-15 & 2015-16) Dhanesh Jyotindra Vs. ITO (IT) – 3(1)(1), Kothari,A-Wing, Flat No. Air India Bldg, 6, Mahavir Krupa, Nariman Point, Vallabh Baug Lane, Mumbai-400021. Extn. Ghatkopar (E), Mumbai-4000077 PAN/GIR No. : ADAPK9004H Appellant .. Respondent Appellant by : Shri.Kirit.S.Sanghvi.AR Respondent by : Shri. G.J.Ninawe. Sr. DR Date of Hearing 01.11.2023 Date of Pronouncement 03.11.2023 आदेश / O R D E R PER PAVAN KUMAR GADALE JM: These two appeals are filed by the assessee against the separate orders of the National Faceless Appeal Centre (NFAC)/CIT(A) passed u/sec 147 r.w.s 144C and U/sec 250 of the Act.
Since the issues involved in these two appeals are common and identical, hence are clubbed, heard and a consolidated order is passed. For the sake of convenience, shall take up the ITA No. 2952/Mum/2023 for A.Y 2014-15
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as lead case and facts narrated. The assessee has raised the following grounds of appeal
Delay not condoned The learned CIT(A) erred on facts and in law in not condoning the delay in filing the appeal before him without appreciating that the appellant had a bona fide reason which caused delay in filing the appeal Relief claimed The delay in filing the appeal before CIT(A) be condoned. 2 No disposal of First Appeal on merits The learned CIT(A) erred on facts and in law in not disposing of the appeal on merits. 3 Order of ITO wrongfully confirmed The learned CIT(A) erred in law and on facts in impliedly confirming the Order of the AO holding the hardship allowance received from the developer to be revenue in nature, and in adding Rs.3,50,438/-. 3. The brief facts of the case are that, the the assessee is a non resident and has filed the return of income for the A.Y 2014-15 on 21.07.2014 disclosing a total income of Rs. 9,64,750/-.Whereas the Assessing Officer (A.O) has received the information from the DDIT (I&CI), Mumbai that the assessee received Corpus fund from developer M/s. Dharmi Properties Pvt Ltd in the F.Y 2013-14, the
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Assessing Officer(A.O) after recording the reasons for reopening of assessment has issued notice u/s 148 of the Act. In compliance to notice, the assessee has filed the return of income for A.Y 2014-15 on 21.07.2014 disclosing a total income of Rs.9,64,750/-.Subsequently the notice u/sec 143(2) and U/sec142(1) of the Act were issued. In compliance to the notice, the assessee has filed the submissions along with the computation of income, bank statement and other details in support of return of income filed. Whereas the AO has dealt on the facts of corpus fund received from the developer by the assessee of Rs.4,59,506/- and claimed as capital receipt. The A.O has issued show cause notice dated 5-03-2022 and the assessee has filed the reply vide letter dated 16-03-2022 referred at Para5.2 of the order. Whereas the A.O was not satisfied with the explanations on the disputed issue and relied on the judicial decisions and ruling of AAR and Finally made the addition of Rs,4,59,506/-and assessed the total income of Rs. 14,24,260/- and passed the order u/s 147 r.w.s 144C(3) of the Act dated 28.04.2022.
Aggrieved by the order, the assessee has filed an appeal before the CIT(A),whereas the CIT(A) has issued notice and there was compliance by the assessee and there was
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delay of 21 days in filling the appeal and the CIT(A) has not condoned the delay and dismissed the assessee appeal. Aggrieved by the CIT(A)order, the assessee has filed an appeal before the Hon’ble Tribunal.
At the time of hearing, the Ld. AR submitted that the CIT(A) has not considered the facts that the assessee has received the A.O order and has filed the appeal before appellate authorities and the delay was not a wanton act. Further the Ld.AR emphasized that the assessee has good case on merits and prayed for an opportunity to substantiate with the material evidences before the lower authorities. Contra, the Ld. DR supported the order of the CIT(A).
Heard the rival submissions and perused the material on record. Prima-facie, the CIT(A) has passed the order considering the fact that there is no proper compliance by the assessee in spite of providing adequate opportunity of hearing and the delay in filling the appeal was not explained with the reasonable cause. Whereas the assessee has raised grounds of appeal challenging the addition by the A.O and there could be various reasons for no proper compliance. The Ld. AR emphasized that there are genuine
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reasons of the assessee for not filling the appeal before the CIT(A) in time and the delay was not wanton Act. The Ld.AR substantiated the facts with the application U/sec 249(3) of the Act for condonation of delay in filling before the CIT(A) as under:
“The appeal against the Assessment Order dated 28th April,2022 is late by till 21 days when the prescribed period of 30 days for filing appeal is applied in reckoning the delay We respectfully submit that the delay in filing the appeal occurred on account of the following reasons:
1 The appellant is a non-resident residing in Switzerland. Therefore, the appellant is not accustomed to dealing with periodical e-mails received from the Department. Therefore, the appellant claims that he never received Assessment Order in his mail box, we yet submit that it is his unfamiliarity with the tax procedures that may have made the assessment order escape his attention.
While surfing the I.T. Portal and particularly the appellant's account, we noticed a notice dated 15th June, 2022. A copy of the said letter is enclosed. This letter brought to our notice that Assessment Order was passed on 28 April,2022.
Therefore, we searched the appellant's account on e-portal, and under the section, "E- Proceedings", under minor head "For your Information", found the Assessment Order. 4. Thus, it was the letter of recovery that alerted us to the fact of Assessment Order having been passed.
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We further respectfully submit that the only issue involved in dispute is about Corpus Fund' received from re-developer of the building and its taxability On this issue, there are several decisions of ITAT. Under such circumstances, no taxpayer would deliberately delay in filing his appeal, for he will not join anything, but will have a lot to lose. 6. It may be appreciated that it was on 18th June, 2022 that the letter for recovery was noticed, and it is on the same day that the appellant files the appeal, i.e., without losing any time’’. 7. Considering the facts, provisions and the contents of the application found that there is a reasonable cause explained and there is no benefit is derived in causing delay in filing appeal before the CIT(A). Whereas the Hon’ble Supreme Court in case of B. Madhuri Goud v. B. Damodar Reddy (2012) 12 SCC 693, has held that the following principles must be kept in mind while considering the application for condonation of delay;
(i) There should be a liberal, pragmatic, justice oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice. (ii) The terms “sufficient cause” should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact- situation.
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(iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis. (iv) No presumption can be attached to deliberate cause of delay but, gross negligence on the part of the counsel or litigant is to be taken note of. (v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact. (vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice. (vii) The concept of liberal approach has to encapsulate the conception of reasonableness and it cannot be allowed a totally unfettered free play. (viii)There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation. (ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach. (x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such litigation. (xi) It is to be borne in mind that no one gets away with fraud, is representation or interpolation by taking recourse to the technicalities of law of limitation.
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(xii) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception. (xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude.”
The Hon'ble supreme court in the case of Collector, Land Acquisition Vs. MST Katiji & others (167 ITR 471) (SC) has observed as under : “ The legislature has conferred the power to condone delay by enacting s. 5 of the Limitation Act of 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on "merits". The expression "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 of the existence of the institution of Courts. The doctrine of equality before law demands that all litigants, including the State as a litigant, are accorded the same treatment and the law is administered in an even-handed manner. There is no warrant for according a step-motherly treatment when the "State" is the applicant praying for condonation of delay. In fact, experience shows that on account of an impersonal machinery (no one in charge of the matter is directly hit or hurt by the judgment sought to be subjected to appeal) and the inherent bureaucratic methodology imbued with the note-making, file- pushing, and passing-on-the-buck ethos, delay on its part is less difficult to understand though more difficult to approve. In any event, the State which represents the collective cause of the community does not deserve a litigant non grata status. The Courts, therefore, have to be informed of the
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spirit and philosophy of the provision in the course of the interpretation of the expression "sufficient cause". So also the same approach has to be evidenced in its application to matters at hand with the end in view to do even-handed justice on merits in preference to the approach which scuttles a decision on merits.” 9. Respectfully follow the observations and ratio of the decisions of Hon’ble Supreme Court and find that the delay in filing the appeal before the CIT (Appeals) by the assessee is supported with sufficient cause and pragmatic approach should be considered for condonation of delay and accordingly the delay is condoned. Hence considering the principles of natural justice shall provide with one more opportunity of hearing to the assessee to substantiate the case along with the evidences. Accordingly, set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh on merits. The assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of appeal and allow the grounds of appeal of the assessee for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
ITA No. 2951/Mum/2023, A.Y 2015-16.
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As the facts and circumstances in this appeal is identical to ITA No 2952/Mum/2023, for the A.Y 2014-15 (except variance in figures) and the decision rendered in above paragraph would apply mutatis mutandis for the appeal also. Accordingly allow the grounds of appeal of the assessee for statistical purposes.
In the result, both the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open court on 03.11.2023.
Sd/- (PAVAN KUMAR GADALE) JUDICIAL MEMBER
Mumbai, Dated 03.11.2023
KRK, PS Copy of the Order forwarded to : The Appellant 1. The Respondent 2. 3. The CIT (Judicial) The PCIT 4. DR, ITAT, Mumbai 5. 6. Guard File आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// 1.
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( Asst. Registrar) ITAT, Mumbai