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Income Tax Appellate Tribunal, G BENCH, MUMBAI
order : 04.01.2023 O R D E R Per Rahul Chaudhary, Judicial Member: 1. By way of the present appeal the Appellant has challenged the order, dated 29.01.2019, passed by the Ld. Commissioner of Income Tax (Appeals)-8, Mumbai [hereinafter referred to as „the CIT(A)‟] for the Assessment Year 2003-04, whereby the Ld. CIT(A) had dismissed the appeal against the Assessment Order, dated 08.03.2006, passed under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟).
The Appellant has raised following grounds of appeal:
1. The Ld. CIT (A) erred in law and on facts in rejecting the appeal of the assessee without appreciating that the appeal was filed by the assessee within the due time of receipt of the certified true copy of the order from the Assessment Year: 2003-04 Assessing Officer as the original assessment order was never served on the assessee. Thus, the appeal of the assessee should be heard on merits.
2. Without prejudice to the above, the Ld. CIT (A) erred in law and on facts in not condoning the delay in filing the appeal, even if it is considered that the assessment order was served on the Chartered Accountant of the assessee without appreciating the submissions made by the assessee in the appellate proceedings. Thus, the appeal of the appellant should be heard and the alleged delay in filing of appeal should be condoned.
3. The Ld. CIT (A) erred in law and on facts in not considering the appeal of the assessee on merits and rejected the appeal of the assessee on the ground of no condonation of delay is allowed.
4. The Ld. CIT (A) erred in law and on facts in not appreciating that the Ld. AO erred in law in treating the business loss suffered by the assessee of Rs. 7,11,67,045/- on trading in shares and securities of the assessee as speculation loss instead of business loss. Thus, the said loss should be treated as business loss.”
Brief facts of the case are that the Appellant filed return of income for the Assessment Year 2003-04 on 01.12.2003 declaring business loss of INR 7,30,51,332/- and unabsorbed depreciation of INR 6,05,682/-. The case of the Appellant was selected for scrutiny and assessment under Section 143(2) of the Act was framed on the Appellant vide Assessment Order dated 08.03.2006. The Assessing Officer treated the loss of INR 7,25,31,404/- claimed by the Appellant as business loss as speculative loss.
The Appellant filed appeal against the aforesaid order dated 08.03.2006 before CIT(A) on 17.02.2017. In Ground No. 2 raised before CIT(A), it was contended by the Appellant that 2
Assessment Year: 2003-04 the Chartered Accountant engaged by the Appellant did not handover the copy of the Assessment Order to the Appellant. The Appellant filed the appeal before CIT(A) immediately after obtaining a certified copy of the Assessment Order for the Assessment Year 2003-04. In the subsequent Assessment Years 2006-07, 2007-08 and 2008-09, similar claim of the Appellant was allowed by the Assessing Officer as assessment was completed by treating loss claimed by the Appellant as business loss and therefore, it escaped the attention of the management of the Company to follow up for the Assessment Order for the Assessment Year 2003-04. A reference was also made to letter dated 07.06.2017, written by Deputy Commissioner of Income Tax-3(3)(1) [hereinafter referred as „the DCIT-3(3)(1)‟] in response for a letter written by the Appellant requesting for proof of service of the Assessment Order for the Assessment Year 2003-04, whereby the Appellant was informed that the information sought for by the Appellant could not be furnished as the record was old. In view of the aforesaid, the Appellant sought condonation of delay of around 11 years in filing the appeal. The Appellant also filed additional evidences before the CIT(A) in respect of which a Remand Report, dated 28.02.2018, was also submitted by the Assessing Officer. The CIT(A) vide order dated 29.01.2019 rejected request for condonation of delay and dismissed Ground No. 2 raised by the Appellant before CIT(A). Thus, dismissing the appeal preferred by the Appellant before CIT(A) on the ground of limitation without examining the merits.
Being aggrieved, the Appellant has preferred the present appeal.
Assessment Year: 2003-04 6. The Ld. Authorised Representative for the Appellant appearing before us submitted that, in effect, there was no delay in filing the appeal and therefore, the CIT(A) was not justified in dismissing the appeal by holding the same to be barred by limitation. He submitted that a copy of the Assessment Order was never served on the Appellant. The Appellant had requested for proof of service of the Assessment Order. However, the same was denied by the Assessing Officer. Per Contra the Ld. Departmental Representative supported the order passed by the CIT(A) and submitted that there was delay of 11 years in filing the appeal which Appellant failed to explain the same. The Appellant was being represented by the Chartered Accountant in the assessment proceedings. It would be reasonable to conclude that order would have been given to the Chartered Accountant.
We have considered the rival submissions and perused the material on record. The CIT(A) has dismissed the appeal preferred by the Appellant as being barred by limitation. The contention of the Appellant is that there was no delay in filing the appeal as the Assessment Order was not served upon the Appellant. We note that the vide letter dated 01.02.2017, the Appellant had requested for a copy of the Assessment Order from the DCIT stating that the Appellant has not received a copy of the Assessment Order. In response the DCIT, vide letter dated 07.02.2017, provided a certified copy of the Assessment Order for the Assessment Year 2003-04 along with notice of demand issued under Section 156 of the Act. On 17.02.2017, the Appellant filed appeal before CIT(A) against the Assessment Order dated 08.03.2006. Thereafter, vide letter, dated 28.02.2017, the Appellant requested for evidence/proof 4
Assessment Year: 2003-04 of delivery of the original Assessment Order on the Appellant. Vide letter dated 07.06.2017, the DCIT reply that the case records were old and therefore, the information regarding proof of service of the Assessment Order could not be furnished. Even during the present appellate proceedings the revenue was granted time to furnish proof of service of the Assessment Order for the Assessment Year 2003-04. However, the same could not be traced by the revenue as the records were old. A letter, dated 16.09.2022, written by the Assistant Commissioner of Income Tax-3(3)(1), to ITO-3(3)(1), Mumbai to furnish the relevant record was also placed on record. Thereafter, vide order, dated 19.09.2022, the hearing was adjourned at the request of the Ld. Departmental Representative for producing the relevant records. However, nothing was placed on record to show service of the Assessment Order for the Assessment Year 2003-04. Thus, there was nothing on record to controvert the averment made by the Appellant that the assessment order was not served upon the Appellant which was also supported by an affidavit of the Chartered Accountant representing the Appellant during the assessment proceedings, sworn on 05.10.2018 and filed before the CIT(A), stating that he has also not been served with the Assessment Order for the Assessment Year 2003-04. Section 249(2)(b) of the Act provides that the appeal before CIT(A) is to be presented within 30 days from the date of service of notice of demand relating to the assessment. As per material on record, the demand notice issued under Section 156 of the Act for the Assessment Year 2003-04 was first served upon the Appellant as a document enclosed with letter dated 07.02.2017 written by the DCIT to the Appellant. The Assessment Year: 2003-04 Appeal was presented before CIT(A) by the Appellant on 17.02.2017. Accordingly, we hold that the appeal was filed within time specified in Section 249 of the Act and is not barred by limitation. Accordingly, we overturn the decision of CIT(A) and remand the appeal back to the file of CIT(A) for adjudication on merits. Ground No. 1 and 3 raised by the Appellant are allowed whereas Ground No. 2 to 4 are disposed off as being infructuous.
In the result, the present appeal is allowed.
Order pronounced on 04.01.2023.