Loading judgment…
Facts
The appeals by the assessee challenged orders related to quantum proceedings and penalty imposition for AY 2016-17. Both appeals were filed belatedly with significant delays, for which the assessee sought condonation due to circumstances related to a partner's father's illness and death.
Held
The Tribunal condoned the delay, finding reasonable cause. It held that the First Appellate Authority erred in dismissing the appeal in limine without adjudicating on merits, especially concerning the jurisdictional issue of the assessment order being against a non-existent entity.
Key Issues
Whether the delay in filing appeals before the First Appellate Authority was justifiable, and whether the assessment order passed against a non-existent entity was valid.
Sections Cited
271(1)(c), 139(1), 147, 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, VP & SHRI GIRISH AGRAWAL, AM
O R D E R Per Saktijit Dey, VP: Aforesaid appeals have been filed by the assessee, challenging two separate orders passed by National Faceless Appeal Centre (NFAC), Delhi. While of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (‘the Act’ for short).
However, both the appeals pertain to assessment year (A.Y.) 2016-17.
Before we proceed to deal with the appeals on merit, it is necessary to put on record that both the appeals have been filed belatedly. While has been has filed applications seeking condonation of delay supported by Affidavit. It is the say of were communicated, belonged to one of the partners of the assessee. It is submitted, the father of the concerned person was suffering from Ischemic heart disease since May, 2024 and ultimately died on 25.03.2025. It is submitted, due to illness of his father, the concerned partner was unable to manage the affairs of the firm and even did not regularly access the email-id, for which the orders passed by the A.O. escaped attention, resulting in delay in filing the appeals. Thus, it is submitted on behalf of the assessee that the delay in filing the appeals not being deliberate, should be condoned and the appeals be decided on merit.
The learned Departmental Representative ('ld. DR' for short) opposed condonation of delay.
Having considered rival submissions and perused the materials available on record, we are satisfied that the delay in filing the appeals was due to reasonable cause. Hence, we are inclined to condone the delay and admit the appeals for adjudication on merit. is concerned, the basic grievance of the assessee is against dismissal of the appeal in limine by learned First Appellate Authority without condoning the delay. The relevant facts are, the assessee is a limited liability partnership firm (LLP) and successor to M/s. Akola Trading Company Private Limited.
For the assessment year under dispute, as alleged by the A.O., the assessee did not file any return of income u/s. 139(1) of the Act. However, information was available with the A.O. that in the year under consideration the assessee had earned income through renting out house property and contractual receipts. Based on such information, the A.O. reopened the assessment u/s. 147 of the Act. As it appears from the assessment order, there was no proceedings. Hence, the A.O. proceeded to complete the assessment to the best of his judgement invoking the provision of section 144 of the Act. While doing so, he made couple of additions, resulting in determination of total income at Rs.94,20,090/-.
Against the assessment order so passed, the assessee preferred an appeal before learned First Appellate Authority.
However, there was delay of more than 10 months in filing the appeal. Though, the assessee requested for condonation of delay in filing the appeal, however, being unsatisfied with the reasons for delay shown by the assessee, learned First Appellate Authority dismissed the appeal in limine without condoning the delay.
We have heard the parties and perused the materials available on record. Before us, ld. Counsel appearing for the assessee has explained the reasons for which the assessee could not file the appeal in time before learned First Appellate Authority. The ld. Counsel has further submitted before us that the assessment order is invalid as it has been passed in the name of a non-existent entity. After taking note of the factual matrix and the circumstances which prevented the assessee from filing the appeal before learned First Appellate Authority in time, we are of the considered opinion that there was justifiable reasons for not filing the appeal in time. In our view, learned First Appellate Authority has failed to appreciate the facts in right perspective. Moreover, in our view, the jurisdictional issue raised by the assessee challenging the validity of the assessment order merits consideration. Since, the assessee did not get opportunity to make its submissions on merits before learned First Appellate Authority due to dismissal of the appeal in limine, in our to set aside the impugned order and restore the issue to learned First Appellate Authority for adjudication on merits, after providing due and reasonable opportunity of being heard to the assessee.
271(1)(c) of the Act is concerned, in view of our decision above, we set aside the order of learned First Appellate Authority and restore the issue of imposition of penalty to the file of the A.O. for consideration afresh, if warranted, depending upon the outcome of the quantum proceeding pending before learned First Appellate Authority.
In the result, both the appeals are allowed for statistical purposes.
Order pronounced in the open court on 19.08.2025 Sd/- Sd/- (Girish Agrawal) (Saktijit Dey) Accountant Member Vice President Mumbai; Dated : 19.08.2025 Roshani, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT - concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER,