KAUSHIK HARISHBHAI SHAH,MANDVI vs. ACIT CIRCLE, GANDHIDHAM, GANDHIDHAM

The Grounds of appeal raised by the assessee are as under: “1. The learned ADDL/JCIT (A)-7, Delhi erred in dismissing the appeal of the Assessee in limine by failing to appreciate that the delay in filing the appeal by 489 days before the CIT(A) constitute sufficient and/OR reasonable cause.

The appeal filed by the assessee before the Ld.CIT(A), was barred by limitation by 489 days. However, Ld.CIT(A)) counted the delay in filing the appeal before him at 503 days. The assessee moved a petition for condonation of delay before the Ld.CIT(A), citing the reasons to condone the delay. The petition for condonation of delay filed by the assessee, is reproduced by the Ld.CIT(A) in its appellate order on pg. nos.2 to 9 of the order of the Ld.CIT(A).

The Ld. Counsel for the assessee submitted that assessee has explained sufficient cause to condone the delay before the Ld.CIT(A), however, the Ld.CIT(A) did not condone the delay and the Ld.CIT(A) also did not adjudicate the issue on merit. The appeal of the assessee was dismissed, on account of delay only, by ld.CIT(A). The Ld. Counsel also submitted that an Affidavit was also furnished before the Ld.CIT(A), citing the reasons for delay. The Ld.Counsel stated that the reasons of delay were mainly on account of mistake committed by Tax Consultant of the assessee and the second reasons of delay was that during the assessment proceedings some notices issued by the assessing officer were not served on the assessee and consequently the final assessment order was not received by the assessee, on time. Apart from this, the assessee was feeling illness, during the relevant period. The learned Counsel stated that because of these several reasons, the delay of 489 days has resulted, which may be condoned in the interest of justice.

On the other hand, the Ld. DR for the revenue submitted that such huge delay should not be condone merely that there was mistake of the assessee’s Tax Consultant. It was the personal duty of the assessee to handle the case. In this case no "sufficient cause" was shown by the assessee to explain the huge/unreasonable delay in filing of appeal. Rather, this is a clear case of deliberate inaction or negligence on the part of the assessee. Period of delay is a factor to be considered while considering a delay condonation application, since the law assists those that are vigilant with their rights, and not those that sleep thereupon, hence, appeal of the assessee should be dismissed.

I have heard, both the parties on this preliminary issue. I note that the assessee submitted an Affidavit and the petition for condonation of delay before the Ld.CIT(A), citing the reasons for delay, however, the Ld.CIT(A) did not consider the petition for delay in right perspective. The Ld. Counsel pointed out that because of mistake committed by the Tax Consultant, the assessee should not be penalised. For that, Reliance is also placed on the decision of I.T.A.T., 'C' Bench, Kolkata in the case of M/s. Garg Bros. Pvt. Ltd. & Others vs. DCIT [ITA Nos.2519 to 2521/Kol/2017, order dated 18.04.2018], wherein under similar set of facts and reasons, the Hon'ble Tribunal was pleased to condone the delay of 211 days by holding as under: "3. We have heard both the parties on this preliminary issue. Having regard to the reasons given in the application for condonation of delay, we are of the considered opinion that assessee was under a bona fide belief that the impugned order of Pr. CIT was not appealable before this Tribunal since they were not advised by their Tax Consultants about this legal right. Later on, when a Senior Lawyer advised them to file an appeal, the assessees immediately took steps to file the appeals. Therefore, the delay caused. We note that delay was occurred because of the wrong advice of the Tax Professional for which assessees cannot be penalized. For the ends of justice, we condone the delay and admit the appeal for hearing.

On professional advice, I note that the Courts and Tribunals have consistently held that in the matter of condonation of delay, pragmatic and liberal approach should be taken. The Hon'ble Supreme Court also held the same in case of Investment Trust v. Ujagarsingh observing that unless malafide or negligence writ large, delay should be condoned and appeals should not be rejected on technical ground of delay and they should be ordinarily decided on merits. I note that the Hon'ble Gujarat High Court has also considered this aspect of condonation of delay in case of Gujarat State Fertilizers & Chemicals Ltd. (283 ITR 149) and held as follows: "The position in law is well settled that an assessee should be granted due relief where it is due without standing on technicalities and the revenue must bear the established legal position in mind while dealing with applications seeking condonation of delay. It is necessary that liberal approach is adopted in such a matter so as to ensure that substantive rights are not defeated on the basis of technicalities or limitation. "

I note that the reasons given in the affidavit for condonation of delay were convincing and these reasons would constitute reasonable and sufficient cause for the delay in filing the appeal before ld.CIT(A). Having heard both the parties and after having gone through the affidavit as well the delay condonation, application, I am of the considered opinion that in the interest of justice, the delay deserves to be condoned. I, accordingly, condone the delay, in filing the appeal before the learned CIT( A).

Since, I have condoned the delay before the Ld.CIT(A) and I have also noted that the Ld.CIT(A) did not adjudicate the issue on merit. The Ld. Counsel submitted before the Bench that assessee’s appeal may be allowed partly by making ad-hoc estimated addition @ 8% on the addition sustained by the assessing officer. The Ld. Counsel further stated that before the assessing officer, the assessee submitted the entire documents and evidences. Therefore, the assessee’s appeal may be allowed by making an estimated addition. However, I note that the assessee’s appeal has never been admitted by the Ld.CIT(A) and there is no adjudication by the Ld.CIT(A), on merit. Hence, the first condition is that the assessee’s appeal should be admitted by the lower authorities, by condoning the delay, and then after the adjudication on merit should be possible. Hence, considering the circumstances, I note that the Ld.CIT(A) did not discuss the assessee’s appeal on merit, and did not consider the evidences referred by the assessing officer in the assessment order. Therefore, I am of the view that one more opportunity should be given to the assessee to plead his case before the Ld.CIT(A). Before this Tribunal, the impugned order is the order of the Ld.CIT(A), which does not contain adjudication on merit and the appeal of the assessee was dismissed by Ld.CIT(A), on account of delay. I note that assessee has not been heard by Ld.CIT(A) on merit. Therefore, I note that it is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving much deeper into the merits of the case, in the interest of justice, I restore the matter back to the file of Ld.CIT(A) for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee, who in turn, is also directed to contest his stand forthwith. It is needless to say that the assessee will be at liberty to adduce any evidences as deemed relevant before the Ld.CIT(A) at the time of proceedings in consequence to this order and the Ld.CIT(A) shall, allow the assessee adequate opportunity of being, heard and to make relevant submissions, and then pass a speaking order which is fair and judicious. For statistical purposes, the appeal of the assessee is treated to be allowed.

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