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Facts
The assessee, a company engaged in manufacturing and sales of Agro-based products, filed its return for AY 2004-05 declaring a loss. The case was selected for scrutiny, and the Assessing Officer (AO) completed the assessment under Section 144 due to the assessee's failure to provide required details. The CIT(A) dismissed the assessee's appeal. The present appeal before the tribunal is filed after a delay of 5638 days.
Held
The Tribunal held that the delay in filing the appeal was extraordinary and not sufficiently explained. The assessee's contention of contesting other legal matters and a bonafide belief that earlier issues would be re-examined was not accepted. The Tribunal dismissed the application for condonation of delay, consequently dismissing the appeal as unadmitted.
Key Issues
The primary issue is whether the assessee has provided sufficient reasons to condone the inordinate delay of over 5600 days in filing the appeal before the Tribunal.
Sections Cited
144, 143(3), 153C, 250, 132, 40(a), 69
AI-generated summary — verify with the full judgment below
PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by assessee is directed against the order of learned CIT(A)-V, Mumbai dated 20th February 2009 for assessment year 2005-06. The assessee has raised following grounds of appeal;
“1. The Ld. CIT(A) has erred in law and in facts in dismissing the appeal filed by the appellant against the assessment order u/s 144(1)(c) of the Act and wrongly confirming addition of Rs. 3,45,64,115/- in the hands of the appellant.
2. The Ld. CIT(A) has erred in law and in facts in dismissing the appeal without granting sufficient opportunity of hearing to the appellant.
The Ld. CIT(A) has erred in law and in facts in confirming the disallowance made by the Ld. Assessing Officer on account of custom duty amounting to Rs. 5,09,892/-.
4. The Ld. CIT(A) has erred in law and in facts in confirming the disallowance made by the Ld. Assessing Officer on account of miscellaneous expenses written off amounting to Rs. 1,20,069/-.
The Ld. CIT(A) has erred in law and in facts in confirming the disallowance made by the Ld. Assessing Officer on account of depreciation amounting to Rs. 56,31,329/-.
6. The Ld. CIT(A) has erred in law and in facts in confirming the disallowance made by the Ld. Assessing Officer on account of manufacturing and other expenses amounting to Rs. 12,91,478/-.
7. The Ld. CIT(A) has erred in law and in facts in confirming the addition made by the Ld. AO u/s 69 of the Act on account of borrowed funds amounting to Rs. 12,65,525/-.
The Ld. CIT(A) has erred in law and in facts in confirming the addition made by the Ld. Assessing Officer on account of loan written back by the appellant amounting to Rs. 2,57,20,229/-.
The ld. CIT(A) ought to have appreciated that the disallowance made u/s 40(a) of the Act on account of TDS not deposited amounting to Rs. 25,593/- is incorrect.
The appellant craves leave to add to, amend, alter or delete all or any of the foregoing grounds of appeal.”
Brief facts of the case as gathered from the orders of lower authorities are that assessee is a company, and is engaged in the business of manufacturing and sales of Agro-based products. The assessee filed its return of income for assessment year (AY) 2004-05 on 31st October 2005, declaring loss of Rs. 28,42,787/-. The case was selected for the scrutiny. The assessing officer in para-3 of assessment order recorded that initially authorised representative of the assessee attended and filed details. However, on subsequent dates the assessee failed to furnish require details and explanation called by assessing officer. The assessing officer completed the assessment under section 144.
The assessing officer made various additions in the assessment order for the want of necessary explanation and evidence from assessee. The assessing officer while passing the assessment order made seven different additions /disallowance as mentioned in para-12 the assessment order dated 28th December 2007.
3. Aggrieved by the additions in the assessment order, the assessee filed before appeal before learned CIT(A). The appeal of assessee was dismissed by learned CIT(A) vide order dated 20th February 2009. The learned CIT(A) while dismissing the appeal of assessee confirmed all the additions/disallowances made in the assessment order. The ld CIT(A) before deciding the appeal issued three notices under section 250 of Income Tax Act (Act) however, neither the assessee filed written submissions nor any adjournment was sought. The ld CIT(A) adjudicated the appeal on the basis of material available on record. Further aggrieved, the assessee has filed present appeal before Tribunal only on 1st October 2024. The registry of this Tribunal issued defect memo pointing out delay of 5638 days of delay in filing present appeal.
We have heard the submission of learned authorised representative (ld AR)
of the assessee and the learned senior departmental representative (Sr DR) of the revenue. The ld AR of the assessee submits that the assess-company has filed application for condonation of delay which is supported with the affidavit of Yogesh Vasudeo Agre, Director of the assessee-company and the chart showing chronology of dates and events. The learned AR of the assessee submits that in and around 1996, there were certain labour problems in the assessee company, which resulted into a strike and non- functioning in the factory premises. The assessee company could not furnish necessary evidence and information before assessing officer during the assessment proceeding due to strike and various such legal proceeding which were being defended by them, thus assessment was completed in absence of any information. The learned CIT(A) also dismissed the appeal of assessee vide order dated 20th February 2009. The assessee was facing financial crisis and the creditors of assessee filed winding up proceedings and file Company Petition before Hon’ble Bombay High Court wherein a winding up order was passed on 10 January 2008. However, the order passed by Hon’ble Bombay High Court was set aside vide order dated 5th June 2008 & 12th June 2008. At the time of passing such order by High Court of Bombay, the proceedings before learned CIT (A) were pending. A search action under section 132 was carried out at the premises of Temptation Foods Ltd on 24 September 2009, pursuant to which the case of Temptation Food Limited was reopened. The impact of said search action also devolved on Assessee Company and the assessee group was informed that all the cases of group will be centralised and proceeding would be conducted in case of various group concern including of the assessee company. The assessee company was advised that if as assessment shall take place even in case of assessee company and the additions made in earlier orders will be re-examined in the fresh assessment proceeding which is initiated pursuant to search action. Fresh assessment proceeding under section 143(3) rws section 153C was concluded on 21 December 2011 determining total income at ₹ 3.17 crore. In the fresh assessment order, certain new additions were made and the additions in original assessment order remained unchanged. The assessee company was advised to file appeal against the subsequent assessment order completed under section 153C. The said appeal was dismissed by learned CIT(A) on 31 August 2012. The order dated 31 August 2012 was further challenged before Mumbai Tribunal. However, the Tribunal restored the matter back to the CIT(A). The learned CIT(A) while adjudicating the appeal held that addition challenged in the appeal cannot be adjudicated as the same do not arise out of the assessment order dated 21 December 2011 passed under section 143(3) read with section 153C. The assessee was pursuing proceeding under section 153C under the impression that addition in the original assessment would be re-examined and no fruitful purpose would be served by challenging the order passed in earlier proceeding. The assessee has no deliberate or melafide intention, rather the assessee was pursuing such subsequent proceeding in a bonafide manner. After dismissal of appeal by learned CIT(A) on 29.08.2024, the assessee was advised to filed separate appeal against the order of ld. CIT(A) passed in 2009. The learned AR of the assessee submits that assessee is good case on merit and is liable to be succeed, if the assessee is given one more opportunity to contest the case on merit. The period of delay is not relevant rather the sufficiency of reason or bonefidies has to be considered while considering the application for condonation of delay in filing appeal. To support submission the learned AR of the assessee has relied upon the following decision. Collector of Land Acquisition vs Mst. Katiji and Ors. 167 ITR 471 Vijay Vishin Meghani vs DCIT and Anr 398 ITR 250 N. Balakrishnan vs M. Krishnamurthy 7 SCC 123 Concord of India Insurance Co. Ltd. vs Smt. Nirmala Devi and Ors 118 ITR 507 Phoenix Mills Ltd. vs ACIT (ITA No. 6240/M/2007 dated 23.03.2010) CIT vs Phoenix Mills Ltd. (ITA No. 5596 of 2010 dated 09.12.2011)
Dr. (Mrs.) Sudha S. Trivedi vs ITO 125 TTJ 42 DCIT vs Chhattisgarh State Electricity Board 2226 TTJ 861 Chirag P. Thummar vs PCIT 159 taxmann.com 1628 5. On merit, the learned AR of the assessee submits that assessing officer as well as learned CIT(A) passed ex-parte order therefore in the interest of justice, the matter may be restored back to the file of assessing officer for passing the order afresh. He undertakes on behalf of assessee to be more vigilant in future in making timely compliance before lower authorities and will not make any default in future. Only one opportunity may be allowed to the assessee to contest the case on merit before assessing officer.
6. On the other hand the learned senior departmental representative (ld. Sr.
DR) for the revenue submits that there is huge and inordinate delay. The delay is not in days, rather in years. The assessee has not explained the delay in a proper manner. The assessee is a corporate entity. The assessee is having a full-fledged legal team which is contesting various legal issues in different judicial forms. The assessee has prepared a self-serving story. The appeal is filed only after order giving effect by assessing officer vide his order dated 09.09.2024, wherein brought forward losses is allowed. The present appeal is filed, with sole intention to take the benefit of brought forward losses.
We have considered the rival submissions of both the parties and have gone through the lower authorities carefully. We have also deliberated on various case laws relied by ld. AR of the assessee. We find that order by ld. CIT(A), which is challenged before us was passed on 19.02.2009. The present appeal is filed on 03.10.2024. Thus, there is a huge delay of 5638 days that is about sixteen years. Though, the assessee in its application for condonation of delay has contended for exclusion of Covid period from 16.03.2020 to 28.02.2022. Such period is not liable to be excluded. The exclusion of time period is available only to those applicants who are facing limitation period in between 16.03.2020 to 28.03.2022. The delay in present appeal is not ordinary but an extra ordinary delay. The assessee is relying on his contention that under bonafide advise, the assessee was contesting all the issues arising out of assessment order dated 28.02.2007 in appeal against the subsequent assessment order passed under section 153C dated 21.11.2011, passed in pursuance of search action. The assessee is a corporate entity having a team of expert Chartered Accountant and Advocates as the assessee is contesting litigation in various judicial forms including before Bombay High Court. The assessee is regularly filing return of income and their case is selected either in his scrutiny or completed after search action on the group. The plea raised by assessee does not inspire confidence. The ratio of various case laws relied by ld. AR of the assessee is not applicable on the facts of the present case. The ratio of such decisions is applicable only on showing a reasonable or a convincing reason in not filing appeal in time. As noted above, the assessee is contesting or defending various legal actions in different judicial forms. The assessee failed to show any bonefidies or the sufficient reasons which prevented the assessee from filing appeal within time. On careful perusal of order giving effect dated 09.09.2024, we find convincing force in the submission of ld. Sr. DR for the revenue that the present appeal is filed only after order giving effect to avail the benefit of set off of brought forward losses, which was not matching with the computation of total income in assessment order dated 18.12.2007.
Hence, application for condonation of delay is dismissed. Considering the fact that we have dismissed the application for condonation of delay, therefore, the appeal of assessee is dismissed as unadmitted.
In the result, the appeal of assessee is dismissed.
Order pronounced in the open Court on 23/07/2025.