THE BENGAL CHAMBER OF COMMERCE & INDUSTRY,KOLKATA vs. ITO(E), WARD 1(3), KOLKATA,, KOLKATA

The facts in brief are that the assessee filed its original return of income in ITR 7 on 31.10.2017 declaring gross income of Rs.1,11,15,332/-. The return was processed by CPC on 30.03.2019 and exemption claimed by the assessee was allowed as per Income Tax Act disallowing ineligible losses of current year of Rs.79,93,201/-. In the processing, TDS credit of Rs.20,22,621/- was only allowed out of total TDS claimed of Rs.27,05,552/-. Being dissatisfied, the assessee filed rectification petition dated 30.03.2019 being dissatisfied with intimation passed under section 143(1) and the issues raised in the rectification petition have been examined and verified. Necessary rectification order was passed by the ld. Assessing Officer under section 154 of the Income Tax Act, 1961 on 26.07.2022 with total income of Rs.70,28,681/- . In this order, a refund of Rs.1,15,471/- was determined to the assessee. However, the said refund was not credited to the account of the assessee due to some technical glitches in the system. The assessee filed grievance for issuance of refund. The ld. Assessing Officer passed order under section 154/143(1) dated 05.09.2023 determining the refund amount of Rs.1,15,471/-. Thereafter, the ld. Assessing Officer passed rectification order denying the deduction of deficiency/deficit claimed of Rs.39,06,550/- in terms of section 44A of the Income Tax Act, 1961 being the amount received during the previous year falls short of the expenditure incurred during the previous year resulting to excess amount

The appeal filed before the ld. Addl./JCIT(Appeals) is delayed by 415 days. The appellant has not sought condonation of delay in Form 35 with documentary evidence. The ld. Addl./JCIT(Appeals) was of the opinion that in absence of any substantiation, the grounds for condonation of delay as mentioned by the assessee, is merely a bald assertion without any basis, which is not supported by cogent and proper evidence and the same would not, as such, constitute ‘sufficient cause’ within the meaning of section 249(3) of the Act. The ld. Addl./JCIT(Appeals) did not condone the delay and without condoning the delay dismissed the appeal of the assessee and without going into merits of the case as there was no sufficient cause for condonation of the delay in filing of the appeal as well as negligent attitude on the part of the appellant by mentioning that this case is not fit for condonation of delay within the specified time limit before him. Moreover, after considering the submissions made by the assessee, the ld. CIT(Appeals) observed that the original cause of action in the present case had arisen at the stage of the proceedings under section 143(1) and not under section 154. The appellant was trying to make a back-door entry by filing an appeal against the order under section 154. Therefore, the ld. CIT(Appeals) opined that this issue cannot be adjudicated upon in the present appeal, and dismissed the grounds raised by

The assessee filed additional grounds of appeal before the Tribunal, which read as under:- (i) That on the facts of the case and in law, the ld. AO CPC in the intimation issued u/s 143(1) of the Act dated 30.03.2019 erred in not following the mandat4e as required by first proviso to section 143(1) of the Act, which says that no such adjus4tment shall be made unless an intimation is given to the assessee of such adjustment either in writing or in electronic mode. (ii) That on the facts of the case and in law, the petition filed by the assessee u/s 154 of the Act dated 05.01.2022 seeking to recall the intimation passed u/s 143(1) of the Act dated 03.03.2019 wherein impugned variations were made, being in harmony with the adjustment made in the intimation u/s 143(1) of the Act, was unfairly rejected by the lower authorities”.

At the time of hearing, it was the submission of the ld. Counsel for the assessee that the ld. CIT(Appeals) dismissed the appeal of assessee for not furnishing satisfactory explanation before him within the stipulated period of time. The appellant had demonstrated sufficient cause i.e. the cessation of employment of the Head of Finance who exclusively managed tax matters, and the delay was neither deliberate nor negligent. The CIT(Appeals) just simply upheld the order of ld. Assessing Officer and without going into merit of the case. The ld. Counsel for the assessee also pleaded that the ld. Assessing Officer in making the impugned adjustment while processing the return under section 143(1) of the Act without issuing any notice or intimation as mandated in first proviso to section 143(1)(a) thereby rendering the adjustment arbitrary, illegal and which is liable to be deleted. The ld. Counsel relied on

At the time of hearing, it was the submission of the ld. Departmental Representative that the assessee failed to offer any explanation/supporting documents in respect of the grounds of appeal raised by it before the ld. Assessing Officer as well as ld. CIT(Appeals). The assessee also not filed any documentary evidence in support of delay in filing appeal before the ld. CIT(Appeals) and for this reason, ld. CIT(Appeals) dismissed the appeal of assessee for not furnishing satisfactory explanation before him for delay within the stipulated period of time. He also contended that the ld. CIT(Appeals) dismissed the appeal filed by the assessee saying for lack of two conditions, i.e. (i) proven absence of negligence and (ii) presence of satisfactory levels of diligence and by relying on the following decisions:- (i) Rankak & Ors. -vs.- Rewa Coalfields Ltd. AIR 1962 SC 361 and JCIT -vs.- Tractors & Farm Equipments Ltd. (ITAT, Chennai-TM) 104 ITD 149;

We have heard both the sides and perused the material available on record. We find that the AO-CPC passed intimation order under section 143(1) of the Act making certain adjustments to the returned income. The assessee filed appeal before the ld. Addl/JCIT(Appeals) with a delay of 415 days. The assessee due to non-availability of accounts, remained unaware of the intimation under section 143(1) of the Act having been passed. Ultimately the assessee came to know about the demand and thereafter steps were taken and an appeal was filed with a delay of 415 days. The claim of the assessee is that since no statutory notice was ever served and the entire proceedings were conducted ex-parte without its knowledge, the delay in filing the appeal arose from circumstances entirely beyond its control, constituting sufficient cause under section 249(3) of the Act, which hindered the appellant to access the impugned order and failed to substantiate its claim by uploading relevant documents. Due to that reason, the