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Facts
The assessee filed appeals against orders of the CIT(A) which dismissed their appeals due to delay in filing. The original intimation u/s 143(1) regarding disallowance of provision for gratuity was allegedly not served on the assessee.
Held
The Tribunal held that the assessee's claim of non-service of the intimation needs verification and the issue of condonation of delay requires a decision by the First Appellate Authority. The appeals were set aside for fresh adjudication.
Key Issues
Whether the delay in filing the appeal before the First Appellate Authority was justifiable due to non-service of the original intimation, and whether the assessee was denied natural justice.
Sections Cited
143(1), 250, 143(1)(a)
AI-generated summary — verify with the full judgment below
Order under section 254(1) of Income Tax Act PER ARUN KHODPIA, ACCOUNTANT MEMBER: These appeals are filed by the assessee against the separate but identical orders of Commissioner of Income Tax Appeals, ADDL/JCIT (A)-7, NFAC, Delhi (in short ‘Ld. ADDL/JCIT(A)’) dated 11.06.2025, for the Assessment Year 2019-20 and 2020-21, which in turn arises from and 4854/MUM/2025 Intellect Bizware Services Private Limited the intimation u/s 143(1) of the Income Tax Act, 1961 (in short ‘the Act’) passed by Central Processing Cell(CPC), Bangaluru, dated 17.09.2020 and 24.12.2021, respectively.
The appeal is filed to raise the identical contentions as per ground of appeal
on records. For the sake of adjudication, grounds for ITA 4853/MUM/2025 for AY 2019-20 are extracted here under:
1. Learned Commissioner of Income Tax (Appeals) erred in confirming the adjustment made to Total Income of the Appellant company in the Intimation passed u/s 143(1) of the Act by Learned Centralized Processing Centre, Income Tax Department to the tune of Rs. 26,86,378/-being Provision for Payment of Gratuity. Appellant company submits that in view of the facts and circumstances of the case as well as in law, the said adjustment to Total Income of the Appellant company to the tune of Rs. 26,86.378/- is bad in law and ought to be allowed in full while passing Intimation u/s 143(1) of the Act.
2. Learned Commissioner of Income Tax (Appeals) erred in passing Order u/s 250 of the Act, dismissing the appeal filed by the appellant company on the plea that appeal was not filed within the time limit provided without granting opportunity of being heard to the appellant company and 4854/MUM/2025 Intellect Bizware Services Private Limited Appellant company submits that in view of the facts and circumstances of the case as well as in law, appeal was very much filed duly on time as per the time. Accordingly, order of CIT(A) dismissing the appeal on said ground is bad in law & deserves to be quashed.
3. Learned Commissioner of Income Tax (Appeals) erred in passing Order u/s 250 of the Act, dismissing the appeal filed by the appellant company on the plea that appeal was not filed within the time limit provided, without affording opportunity of being heard to the appellant company to explain as to whether appeal was filed in time or not. Appellant company submits that in view of the facts and circumstances of the case as well as in law, Learned Commissioner of Income Tax (Appeals) ought to have provided appellant company opportunity of being heard for explaining appeal filing on time before, dismissing the appeal on the said ground.
4. Learned Commissioner of Income Tax (Appeals) erred in confirming the adjustment made to Total Income of the Appellant company in the Intimation passed u/s 143(1) of the Act by Learned Centralized Processing Centre, Income Tax Department to the tune of Rs. 26,86,378/-which are not primafacie adjustment in nature. Appellant Company submits that in view of the facts and circumstances of the case as well as in law, the said adjustment made to the Total Income of the Appellant Company is not in the nature of primafacie adjustment. Appellant Company submits that in view of the facts and circumstances of the case as well as in law, Order passed u/s 250 of the Act, confirming disallowance and 4854/MUM/2025 Intellect Bizware Services Private Limited made in Intimation u/s 143(1) of the Act issued by Learned Centralized Processing Center, Income Tax Department is bad in law and deserves to be quashed.
5. Learned Commissioner of Income Tax (Appeals) erred in confirming the adjustment made to Total Income of the Appellant company in the Intimation passed u/s 143(1) of the Act by Learned Centralized Processing Centre to the tune of Rs. 26,86,378/- without serving a Communication of Proposed Adjustment u/s 143(1)(a) of the Act. Appellant Company submits that in view of the facts and circumstances of the case as well as in law, no adjustments shall be made directly in Intimation u/s 143(1) of the Act, unless, an opportunity of being heard is given to the Appellant Company by giving an Intimation of proposed adjustments u/s 143(1)(a) of the Act either in writing or in electronic mode as required by FIRST PROVISO to section 143(1)(a) of the Act. Appellant Company submits that in view of the facts and circumstances of the case as well as in law, order passed u/s 250 of the Act, confirming the adjustment made to Total Income of the Appellant company in the Intimation passed u/s 143(1) of the Act by Learned Centralized Processing Centre to the tune of Rs.26,86,378/- without issuing a Communication of Proposed Adjustment u/s 143(1)(a) of the Act, is bad in law and deserves to be quashed. Appellant company prays for appropriate relief. Each of the above grounds of Appeal is without prejudice to one another. and 4854/MUM/2025 Intellect Bizware Services Private Limited Appellant company craves leave, to add, alter, amend or withdraw any of the above Grounds of Appeal.”
3. Briefly stated, the return of assessee for both the aforesaid years have been processed u/s 143(1) of the Act and an identical disallowance of provision for gratuity claimed by the assessee has been made by the CPC for Rs. 13,11,389/- and Rs. 26,86,378/- for AY 2019-20 and AY 2020-21, respectively.
Being aggrieved the assessee preferred appeals before the First Appellate Authority, but are dismissed on the count of delay in filing of appeal for 1235 days and 710 days.
The assessee being dissatisfied with the dismissal, filed the present appeals challenging the appellate orders passed by Ld ADDL/JCIT(A).
At the outset, Ld. Authorized representative of the assessee submitted that the impugned orders passed by the Ld ADDL/JCIT(A) are in violation of principle of natural justice, as the appeals are and 4854/MUM/2025 Intellect Bizware Services Private Limited dismissed treating the same as not maintainable on account of limitation itself, without any show cause to the assessee to enquire or to clarify on the issue of delay in filing of appeal. It is further clarified by the Ld. AR that the appeal filed by the assessee were actually filed in time with no delay. To substantiate such contention Ld. AR submitted that the intimation u/s 143(1) for the AY 2019-20 was issued on 17-09-2020, however it was not served to the assessee. The assessee thereafter had made a petition on ASK portal on 29-11-2023, which was responded by the Ld. AO with copy of intimation u/s 143(1) on 04-12-2023 through email. Accordingly, the assessee had filed the appeal before first appellate authority on 03-01-2024 and had the conviction that the appeal is filed within the stipulated time permissible of 30 days, with no delay in filing of appeal. As per the date wise sequence of events furnished before us, the assessee also furnished a submission before the Ld. ADDL/JCIT on 29.02.2024, but on perusal of the impugned order, we do not find any whisper about the same, neither a copy of the same has been placed before us by the assessee. Based on aforesaid facts and submissions, it was the prayer by Ld. AR that there was no delay in filing of appeal by the assessee before the first appellate authority, so the and 4854/MUM/2025 Intellect Bizware Services Private Limited appeals are filed validly within the stipulated time period, the matter therefore, needs to remitted back for fresh adjudication to the files of Ld. First Appellate Authority.
Per contra Ld Sr DR from department supported the order of Ld. ADDL/JCIT(A) and submitted that the intimations are invariably uploaded in the ITBA portal, email to the assessee as well informed though SMS also. The claim of assessee that appeal is filed in time is based on receipt of copy of order on its request on ASK portal, the same therefore, cannot be considered the date of service of order. However, if the matter is remitted to the file of Ld. ADDL/JCIT(A), he would not have any objection.
We have considered the rival submissions, perused the material available on records and contentions of the assessee/revenue. Admittedly there was a delay in filing of appeal by the assessee from the date of issuance of intimation u/s 143(1) of the Act. However, the claim of assessee that the intimation was not validly served to it, needs to be proved by the assessee. Assessee’s plea that the order was first time and 4854/MUM/2025 Intellect Bizware Services Private Limited received in the month of December 2023 cannot be considered to be sacrosanct, since the impugned order u/s 143(1) was provided to it on request on ASK portal, there was no evidence before us to establish that the intimation u/s 143(1) was never served upon the assessee in regular course of service, such facts needs verification and accordingly the condonation of delay in filing of appeal has to be be dealt with. If the revenue is unable to prove that the validity of service in the month of September 2020 (for AY 2019-20) and December 2021 (for AY 2020- 21) itself, though prescribed methods of service as mandated in law, when the intimation was issued, the delay can be condoned. Further, the assessee should have been provided with opportunity to clarify its stand qua the delay and substantiate the same with sufficient cause beyond its control, which had prevented it from the filing the appeal in time. We, therefore, are of the considered opinion that the captioned appeals deserve to be set aside to the files of Ld. ADDL/JCIT(A) to decide afresh after considering the submissions of assessee on the issue of delay as well as on the merits of the case. As requested by ld. AR, the communication to assessee shall be made on email ID sanjayshah@scsassociates.in and Mobile No. 9594058873.
Needless to say, the assessee shall be provided with reasonable opportunity of being heard in the set aside appellate proceedings. The assessee is also directed to assist proactively in the set aside appellate proceedings, failing which the First Appellate Authority would be at liberty to decide the appeals in accordance with the mandate of law.
Resultantly both appeals of assessee, stands allowed for statistical purposes, in terms of our aforesaid observations.
Order pronounced in open court on 17.09.2025.