M/S. XENTRIX STUDIOS PRIVATE LIMITED,BENGALURU vs. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 1(2), BANGALORE
What did the Tribunal hold?
The Tribunal condoned the delay in filing the appeal before the CIT(A) based on the assessee's explanation and the Supreme Court's judgment in Collector, Land Acquisition Vs. MST. Katiji. The matter was remanded to the CIT(A) for a decision on merits.
What were the facts?
The assessee's return was selected for scrutiny, leading to an addition of Rs. 48,61,712/-. The assessee paid the tax but filed an appeal before the CIT(A) belatedly due to a misunderstanding that no further appeal was needed after paying the assessed tax.
What were the issues?
Whether the delay in filing the appeal before the CIT(A) should be condoned due to a bona fide misunderstanding by the assessee.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
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- Collector, Land Acquisition v. Mst. Katiji3,926 citing167 ITR 471 · 1987 · SC
Income Tax Appellate Tribunal, “B’’ BENCH: BANGALORE
Before: SHRI GEORGE GEORGE K & SHRI LAXMI PRASAD SAHU
PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order DIN: ITBA/APL/M/250/2022-23/1050867142(1) dated 20.3.2023 passed by the CIT(Appeals)-11, Bangalore for the assessment year 2015-16 dismissing the appeal by not condoning the delay in filing the appeal before him and without going into the merits.
The brief facts of the case are that the assessee filed return of income and the case was selected for scrutiny under CASS to examine the larger amount claimed in the P&L account at higher rate and mismatch in amount paid to unrelated person u/s 40A2(b) of the Act reported in the income-tax return. The income was declared in the return at Rs.6,52,360/. However, during the course of scrutiny assessments, the AO made addition of Rs.48,61,712/- and assessed income at Rs.55,14,0072/- and completed the assessment. The assessee paid tax on the assessed income and did not file appeal before the CIT(A) within the time. The assessee subsequently received penalty order on 28/06/2018 for Rs.15,02,269/-. Thereafter, the assessee obtained legal advice and filed appeal before the CIT(A) against the 143(3) order belatedly.
There was a delay of 195 in filing the appeal before the CIT(A). The assessee filed application for condonation of delay. However, the ld.CIT(A) did not condone the delay in filing the appeal and dismissed the appeal without going into the merits of the case of the assessee. Hence the assessee is in appeal before the Tribunal.
The ld. AR submitted that the assessee requested for condonation of delay on the reasons that the assessee was under the impression that once tax has been paid on regular assessment, thereafter no further appeal is to be preferred before the appellate authority against the order passed u/s 143(3) of the Act. This was the sole reason for not filing the appeal within the due date before the CIT(A) and in this regard, the assessee has also field Affidavit. Therefore, the assessee had sufficient reason for filing appeal belatedly and the delay should have been condoned by the ld. CIT(A). In this regard, he relied on the judgment of Hon’ble Supreme Court in the case of Collector, Land Acquisition Vs. MST. Katiji and Others (198) 167 ITR 471 and certain other judgments.
The ld.DR relied on the orders of the lower authorities.
After hearing rival contentions and perusing the material available on record, we note that the case of the assessee was selected for scrutiny and assessment was completed on 22/12/2017 and assessed the income on regular assessment at Rs.55,14,072/-. Accordingly there was a tax demand of Rs.13,77,538/- and it was paid by the assessee on 22/01/2018 but did not file appeal before the CIT(A) against the order u/s. 143(3). When the penalty order was received by the assessee, the assessee sought for legal advice and accordingly filed appeal before the CIT(A) belatedly and requested for condonation of delay explaining the reasons for the delay. But the CIT(A) did not condone the delay and dismissed the appeal without examining the merits. On going through the facts of the case and the reasons for delay explained by the ld. AR, we note that there was sufficient cause for not filing the appeal before the CIT(A) against the order u/s. 143(3) within due time, therefore, relying on the judgment of the Hon’ble Supreme Court in the case of Collector, Land Acquisition Vs. MST. Katiji and Others (supra), we condone the delay in filing the appeal before the CIT(A). In the interest of justice, we remand the matter to the ld. CIT(A) for decision on merits of the case.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 19th July, 2023.
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