MANIKANTA MINERALS ,ONGOLE vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1, ONGOLE

The assessee has raised the following grounds in his appeal and they are extracted herein below for reference:

In this case, Mr. K.A. Sai Prasad, FCA of Katrapati & Associates as well as Mr. Sashank Dundu, Advocate have filed the Power of Attorney to represent the case. During the course of appeal hearing, Mr. K.A. Sai Prasad has expressed no objection to represent the case by Mr. Shashank Dundu. Accordingly, Mr. Shashank Dundu is allowed to represent the appeal.

Ground No.1 is related to rejection of condonation of delay by the Ld. CIT(A). In this case, the assessment was completed U/s. 143(3) r.w.s 263 of the Act, by an order dated 10/03/2017 and the assessment order was served on the assessee on 13/3/2017. The assessee ought to have filed the appeal before the Ld. CIT(A) on or before 11th day of April, 2017 against which the assessee filed the appeal before the Ld. CIT(A) on 21/11/2018 with a delay of 553 days. Before the Ld. CIT(A), the assessee requested for condonation of delay by filing a letter dated 4/6/2019 stating that the appeal could not be filed before the due date as it was advised by the assessee’s Counsel that the appeal is required to be filed before the Income Tax Appellate Tribunal against the order passed u/s. 143(3) r.w.s 263, since, the order was giving effect to the order of Ld. PCIT. Accordingly, the assessee has stated that it has paid the appeal fees on 27/6/2017 and entrusted the case to the Ld. Counsel. On subsequent enquiry with the Ld. counsel regarding the status of appeal, the assessee came to know that the Advocate has not filed the appeal before the Tribunal and therefore the assessee has approached another advocate, who advised the assessee for filing the appeal before the Ld. CIT(A), thus, there was an inordinate delay in filing the appeal before the First Appellate Authority and hence requested the Ld. CIT(A) to condone the delay and decide the appeal on merits.

Ld. CIT(A) considered the submissions made by the assessee and found that there was an inordinate delay in filing the appeal and the assessee did not produce any letter from the Advocate from whom the appeal was entrusted. The assessee neither produced any evidence not furnished the sufficient cause for delay in filing the appeal and therefore the Ld. CIT(A) held that there was no reasonable cause for condoning the delay and hence refused to admit the appeal and accordingly dismissed the appeal in limine against which the assessee in appeal before us.

During the appeal hearing, Ld. AR reiterated the submissions made before the Ld. CIT(A) and requested to condone the delay in the interest of justice. Ld. AR further argued that the assessee is not going to get any benefit by not filing the appeal and there was no intention of delay in filing the appeal. The Ld.AR further argued that there is a good case for the assessee on merits and if the delay is not condoned, it would cause financial injury to the assessee and therefore requested to condone the delay and remit the matter back to the file of the Ld. CIT(A) for deciding the appeal on merits.

On the other hand, Ld. DR vehemently opposed for condoning the delay. The Ld. DR argued that in the absence of evidence for miscommunication or with regard to entrusting the appeal to the Advocate, there is no case for condoning the delay. The Ld. DR also submitted that each day of delay has to be explained by the assessee. In the instant case, there is no evidence for either handing over the appeal paper to the Advocate or misguidance given by the Advocate therefore, argued that there is no case for condoning the delay and no interference is called for in the order of the Ld. CIT(A).

We have heard both the parties carefully and perused the material on record. In the instant case, there was a substantial delay in filing the appeal before the First Appellate Authority. There was no dispute on this issue. The assessee has stated before the Ld. CIT(A) that the delay was due to mishandling the file by the Advocate who was not a regular Counsel for the assessee and also not willing to give letter to that effect. It was also stated that appeal filing fees was also paid on 27/06/2017 with a misunderstanding that the appeal required to be file before the ITAT and the Ld. Advocate has not filed before the ITAT as advised by him. Ultimately the appeal was neither filed before the CIT(A) nor before the ITAT. The fact that the appeal filing fees was paid on 27/06/2017 shows the intention of the assessee to file appeal and thus, we believe that there was a misguidance or misunderstanding by the assessee in filing the appeal. Though assessee was unable to submit the evidence we are of the considered view that there was some miscommunication with regard to filing the appeal and assessee should not suffer for the mistake of the counsel. The Hon’ble Supreme Court in the case of Esha Battacharjee vs. Managing Committee of Raghunthpur [2013] 5 CTC 547 laid down the principles for condoning the delay as under:

Hon’ble Supreme Court held that there should be a liberal, pragmatic, justice-oriented, non-pedantic approach while dealing with an application for condonation of delay. The Courts are not supposed to legalise injustice but are obliged to remove injustice. In the instant case, the assessee has not filed appeal against the order passed U/s. 263 of the Act and if the appeal of the assessee is not entertained against the order U/s. 143(3) r.w.s 263 of the Act also, it may cause financial injury to the assessee and may result into uncalled for injustice. Hence, We are of the considered view that the case of the assessee must be heard on merits and a speaking order is required to be passed against the additions made by the Assessing Officer in the order passed U/s. 143(3) r.w.s 263 of the Act. Therefore, in the interest of justice and respectfully following the principles laid down by the Hon’ble Apex Court in the case of Esha Bhattacharjee vs. Managing Committee of Raghunathpur (supra), we, condone the delay and remit the matter back to the file of the Ld. CIT(A) with a direction to decide the appeal on merits by passing a speaking order as per law.

In the result, appeal of the assessee is allowed for statistical purposes.