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Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal by assessee is directed against order of NFAC dated 18.1.2023 for the assessment year 2013-14. The assessee has raised the grounds in this appeal as follows:-
The order of the learned Commissioner of Income-tax [Appeals], National Faceless Appeal Center [NFAC], Delhi, passed under Section 250 of the Act dated 18/01/2023, in so far as it is against the Appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case, may be quashed. 2. The appellant denies itself liable to be assessed on total income of Rs. 1,44,85,920/- as determined by the learned assessing officer and upheld by the learned Commissioner of Income-tax [Appeals], as against the income returned and reported by the appellant of Rs. 1,00,06,510/-, on the facts and circumstances of the case.
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The learned Commissioner of Income-tax [Appeals] is not justified in dismissing the appeal of the Appellant by refusing to condone the delay of about 86 days delay in filing the appeal as per the provisions of Section 249 [3] without going into the merits of the case of the Appellant which is against the principles of natural justice, on the facts and circumstances of the appellant's case.
3.1. The learned Commissioner of Income-tax [Appeals] failed to appreciate, the sufficient cause for delay in filing the appeal by the appellant under Section 249[3] of the Act, in the correct perspective on the facts and circumstances of the case.
3.2 The learned Commissioner of Income-tax [Appeals] failed to appreciate the bonafide reasons given by the appellant for not preferring the statutory appeal in time and denied the appellant of being heard on its merits merely on grounds of technicalities, which is against the principles of natural justice and ought to have admitted the appeal and heard on merits of the matter, on the facts and circumstances of the case. 3.3 The learned Commissioner of Income-tax [Appeals] failed to appreciate that the Appellant ought not have been denied remedy by way of appeal on mere technicalities in view of the landmark Apex Court judgement in the case of Collector, Land Acquisition Vs. Mst. Katiji reported in 167 ITR 471 [1987] and Ram Nath Sao Alias Ram Nath Sahu& Others Vs. Gobardan Sao & Others, [2002] 3 SCC 195, ought to have exercised the discretion vested as per the provisions of section 249[3] of the Act in the most judicious manner to promote and uphold the substantial cause of justice, on the facts and circumstances of the case. 4. Without Prejudice the learned Commissioner of Income-tax [Appeals] is not justified in not adjudicating all the grounds raised by the Appellant on merits which is in grave violation of principles of natural justice on the facts and circumstances of the case. (i) The learned Commissioner of Income-tax [Appeals] failed to appreciate that the learned assessing officer is not justified by making a disallowance of Rs. 26,670/- by holding that the said payment of bonus, is not allowable to the appellant as per the provisions of section 36[1][ii] of the Act on the facts and circumstances of the case. (ii) The learned Commissioner of Income-tax [Appeals] failed to appreciate that the learned assessing officer is not justified in disallowing a sum of Rs. 3,59,9337- by invoking the provisions of section 40A[3] of the Act on the facts and circumstances of the case.
(iii) The learned Commissioner of Income-tax [Appeals] failed to appreciate that the learned assessing officer is not justified in disallowing a sum of Rs. 2,37,4607- by invoking the provisions of section 40[a][ia] of the Act on the facts and circumstances of the case.
ITA No.152/Bang/2023 M/s. Desai and Company, Hubballi Page 3 of 7 (iv) The learned Commissioner of Income-tax [Appeals] failed to appreciate that the learned assessing officer is not justified in making an addition amounting to Rs. 6,69,375/- [i.e. Rs.6,55,8337- Plus Rs. 13,5427-] being the difference between 26AS and as per the books of account of the appellant, on the facts and circumstances of the case. (v) The learned Commissioner of Income-tax [Appeals] failed to appreciate that the learned assessing officer is not justified in disallowing a sum of Rs. 50,000/- being the legal expenses paid by the appellant for the reason that the appellant has not deducted TDS on such payment made by invoking the provisions of section 40[a][ia] of the Act on the facts and circumstances of the case. (vi) The learned Commissioner of Income-tax [Appeals] failed to appreciate that the learned assessing officer is not justified in disallowing under section 36[1][va] of the Act a sum of Rs. 18,4747- being the delay in remittance of employees contribution to Provident Fund, on the facts and circumstances of the case. (vii) The learned Commissioner of Income-tax [Appeals] failed to appreciate that the learned assessing officer is not justified in disallowing a sum of Rs. 30,97,9937- being the discounts given by the appellant to its customers as not allowable without appreciating that the said discounts debited by the appellant in its books are all genuine and are for the purposes of business of the appellant, on the facts and circumstances of the case
Without prejudice, to the right to seek waiver as per the parity of reasoning of the decision of the Hon'ble Apex Court in the case of Karanvir Singh 349 ITR 692, the Appellant denies itself liable to be charged to interest under section 234 B of the Income Tax Act on the facts and circumstances of the case. The appellant contends that the levy of interest under section 234A,-234 B& 234Cof the Act is also bad in law as the period, rate, quantum and method of calculation adopted by the learned assessing officer on which interest is levied are not discernible and are wrong on the facts of the case. 6. The appellant craves leave to add, alter, amend, substitute or delete any or all of the grounds of appeal urged above.
For the above and other grounds to be urged during the course of hearing of the appeal the Appellant prays that the appeal be allowed in the interest of equity and justice.
Facts of the issue are that the assessee went in appeal before the NFAC challenging the following:-
ITA No.152/Bang/2023 M/s. Desai and Company, Hubballi Page 4 of 7 1) “Unpaid bonus disallowed Rs.26,670/- u/s.43B - Request to be considered u/s.37. 2) Cash payments disallowed Rs.3,59,933/- u/s.40A(3) - Beneficiaries do not have bank account hence to be considered u/s.37. 3) Non deduction of TDS of Rs.2,37,460/- u/s.40a(ia) - Certificate will be produced from the beneficiary. 4) Differences Form 26AS Rs.6,55,833/-- Request to consider u/s.37. 5) Fringe benefit tax disallowed 23,370/-. 6) Legal Expenses disallowed Rs.50,000/- - Certificate from the beneficiary will be produced. 7) Donation paid disallowed 9,676/- 8) EPF Contribution disallowed Rs.18,474/-. Request to be considered u/s 37 9) Trade discounts disallowed Rs.30,97,993/-. Request to be considered u/s 37.”
2.1 The NFAC observed that as per column 14 in Form No.35, there was a delay of 86 days in filing the appeal before NFAC. The assessee explained the delay that the assessee’s Chartered Accountant Shri S.N. Kulkarni aged about 61 years has been suffering from frozen shoulder. According to the NFAC, the reason is not substantiated by relevant documents and he observed that there was no supporting document filed by the assessee before NFAC. Thus, it was observed that the assessee needs to justify the delay in filing appeal. Only after convincing reasons along with documentary evidence one can condone the delay. In the absence of evidence, the reasons stand to be rejected. It is not just and proper at this stage to raise the issue after a gap of more than 86 days. It is for general welfare that a period be put on litigation. Further, it is a general principle of law that law is made to protect only diligent and vigilant people. Equity aids the vigilant and not the indolent. Law will not protect people who are not careful about their rights. (Vigilantibus non
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domientibusjur A subventiunt). Moreover, there should be certainty in law and matters cannot be kept in suspense indefinably. It is, therefore, provided that Courts of Law cannot be approached beyond fixed period. In civil matters, the limit is provided in Limitation Act, 1963. Thus, it has dismissed the appeal of the assessee without deciding the issue raised by assessee on merit of the additions. Against this assessee is in appeal before us on both condonation of delay as well as merit of the additions made by AO sustained by NFAC.
At the outset, the ld. A.R. submitted that there was a short delay of 86 days in filing the appeal before NFAC. The delay has been explained by assessee that assessee’s Chartered Accountant was suffering from right frozen shoulder as per medical certificate issued by Vivekanand General Hospital, Hubballi dated 18.4.2016. The assessee’s CA was directed to take rest and he enclosed a copy of medical certificate as below:
ITA No.152/Bang/2023 M/s. Desai and Company, Hubballi Page 6 of 7 3.1 The ld. D.R. relied on the order of NFAC and submitted that there was no reasonable cause to file the appeal belatedly before NFAC.
We have heard the rival submissions and perused the materials available on record. In our opinion, there was a delay of 86 days in filing the appeal before NFAC, which has been explained by the assessee that assessee’s CA Shri S.N. Kulkarni aged about 61 years was suffering from right frozen shoulder and suggested physiotherapy. Thus, it caused short delay of 86 days in filing the appeal before NFAC. In our opinion, this certificate was not produced before NFAC and they have no occasion to examine the same and NFAC has not decided the issues on merit. Being so, in our opinion, it is appropriate to remit the entire issue in dispute to the file of NFAC to re-examine the delay in the light of medical certificate produced by assessee before us. At this stage, we are not expressing anything on the merit of the condonation of delay or merit of the additions made by AO sustained by NFAC. The whole issue is kept open before NFAC to take a decision after giving opportunity of hearing to the assessee.
In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 1st May, 2023
Sd/- Sd/- (Beena Pillai) (Chandra Poojari) Judicial Member Accountant Member
Bangalore, Dated 1st May, 2023. VG/SPS
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Copy to:
The Applicant 2. The Respondent 3. The CIT 4. The CIT(Judicial) 5. The DR, ITAT, Bangalore. 6. Guard file By order
Asst. Registrar, ITAT, Bangalore.