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Facts
The assessee filed its return of income, and the CPC passed an intimation with disallowances under Section 143(1). The assessee's appeal to the CIT(A) was dismissed due to a delay of about 475 days. The delay occurred during the COVID-19 pandemic period, and the assessee argued that it was not within their control, citing Supreme Court extensions.
Held
The Tribunal noted that the delay in filing the appeal before the first appellate authority was due to the COVID-19 pandemic and could not be attributed to the assessee. The Tribunal decided to remit the appeal back to the lower authorities.
Key Issues
Whether the delay in filing the appeal due to the COVID-19 pandemic should be condoned, and whether adjustments made under Section 143(1) without proper intimation or opportunity to be heard are valid.
Sections Cited
143(1)
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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SMT. BEENA PILLAI & SMT. RENU JAUHRI
Per: Smt. Beena Pillai, J.M.: The present appeal filed by the assessee arises out of order dated 21/03/2025 passed by ADDL/JCIT(A)-3, Ahmedabad for assessment year 2020-21 on following grounds of appeal : “I. Dismissal of the appeal on the ground of non-filing of the condonation of delay application 2 ITA 3174/Mum/2025; A.Y. 2020-21 Osho Developers
1. The National Faceless Appeal Centre (NFAC) failed to appreciate that the appeal was filed within 30 days of downloading the intimation, hence, there is no delay in filing the appeal, and the appeal may be decided on merits.
2. The National Faceless Appeal Centre (NFAC) failed to appreciate that the intimation was not served on the appellant, being aware of the passing of the intimation only on 21/11/2021. The appellant downloaded the intimation and has filed the appeal within 30 days; hence, as there is no delay in the filing of the appeal, the appeal may be decided on merits.
3. Without prejudice to the above, the intimation was passed during the COVID-19 pandemic period, i.e., between 15/03/2020 and 28/02/2022. The Hon'ble Supreme Court of India, in Re: Cognizance for Extension of Limitation [2022] 441 ITR 722 (SC) (Suo Motu Writ Petition, dated 10/01/2022), took cognizance of the disruption caused by the global pandemic and ordered the exclusion of the period from 15/03/2020 to 28/02/2022 for computation of limitation. Further, where the limitation expired during this period, a fresh limitation period of 90 days or the remaining period, whichever is longer, would commence from 01/03/2022. The effective delay period, if any, after excluding the COVID grace period of 1019 days, is only 204 days, which was beyond the appellant's control; hence, the delay may be condoned and the appeal may be decided on merits. Without prejudice to the above, On merits:
1. 1. Adjustments made under Section 143(1), without following the due process of law, resulted in a reduction of business losses by Rs.20,56,596/-; the said adjustments may be directed to be deleted.
4. On the facts and circumstance of the case, the first proviso to Section 143(1) of the Act mandates that no adjustments shall be made unless an intimation is given to the appellant of such adjustments, either in "writing" or "through electronic mode", and that "any response received from the appellant" must be duly considered before making such adjustments. However, the Learned Centralized Processing Centre (CPC) has not adhered to the said provision of the Act. Therefore, the adjustment made in the intimation under section 143(1) is not valid and is liable to be deleted.
3 ITA 3174/Mum/2025; A.Y. 2020-21 Osho Developers II. The TDS payment of Rs.20,57,063/- made before the due date i.e.30/06/2020, which is the extended due date (as per Relaxation of Certain Provisions ordinance dated 31/03/2020), hence the adjustment made in intimation u/s.143(1) may be directed to be deleted.
The Learned National Faceless Appeal Centre (NFAC) erred in confirming the adjustment of Rs.20,56,596/- concerning TDS payment, without appreciting that, during the period of Covid-19 Pandemic, the Ministry of Finance, vide Press Release dated 31/03/2020 has issues Taxation and Other laws (Relaxation of Certain Provisions) Ordinance, 2020, wherein the date of payment of TDS was extendend to 30/06/2020. However, the appellant has made a payment of TDS of Rs.20,57,063/- on 24/06/2020 to the government treasury for the month of March 2020, which was before the due date. Hence, the adjustment made by the CPC u/s. 143(1) may be directed to be deleted.
Without prejudice to the above, the adjustment of TDS of Rs 20,56,596/-made by the Assessing Officer without giving an intimation, hence the adjustment is bad in law, hence, the adjustment made by the Assessing Officer may be directed to be deleted.
The appellant craves leave to add, amend, alter, or delete any of the above grounds of appeal
” Brief facts of the case are as under:
2. The assessee is a firm and filed its return of income on 27/12/2020. The CPC on 30/07/2021 passed the intimation u/s.143(1) of the Act by making various disallowances. Aggrieved by the intimation so passed, the assessee preferred appeal before the Ld.CIT(A) on 19/12/2022. The Ld.CIT(A) dismissed the appeal as there was delay of about 475 days in filing the appeal. Aggrieved by the order of the Ld.CIT(A) the assessee is in appeal before this Tribunal. 2.1 The Ld.AR before us submitted that, the intimation was passed during the COVID 19 pandemic period. He also informed 4 ITA 3174/Mum/2025; A.Y. 2020-21 Osho Developers that the same was not sent by e-mail or by post to the assessee. It is submitted that, the assessee downloaded the intimation on 21/11/2022 and immediately filed appeal before the Ld.CIT(A). The Ld.CIT(A) dismissed the appeal without granting opportunity of being heard. The Ld.AR emphasised that during COVID pandemic, Hon’ble Supreme Court had extended the limitation under the statute and therefore the delay in filling the appeal before the Ld.CIT(A) cannot be attributed to the assessee being with malafide. The Ld.AR prayed for an opportunity to present its case on merits and place on record necessary evidences in support of its claim. 2.2 On the contrary, the Ld.DR relied on the orders passed by the authorities below, though he could not controvert the submissions of the assessee. We have perused the submissions advance by both sides in the light of record placed before us.
3. It is noted that, the assessee was precluded from filing the appeal before the first appellate authority within the period of limitation due to the ongoing pandemic of COVID 19 period. The delay therefore cannot be attributed to the assessee. 3.1 We are thus inclined to remit the appeal back to authorities below. It is noted that the addition/disallowance was made in an intimation passed by the CPC. We therefore remit the issue to the Ld.AO to consider the claim of the assessee having regard to the evidences filed in support. Needles to say that proper opportunity of being heard must be granted to the assessee. Accordingly the grounds raised by the assessee stands partly allowed for statistical purposes.
5 ITA 3174/Mum/2025; A.Y. 2020-21 Osho Developers In the result the appeal filed by the assessee stands partly allowed for statistical purposes.
Order pronounced in the open court on 30/06/2025