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Facts
The assessee's appeal against the CIT(A)'s order was dismissed in limine due to a delay of 1132 days. The assessee claimed they were unaware of the intimation under Section 143(1)(a) until a recovery notice was received, attributing the delay to an email change due to a copyright suit.
Held
The Tribunal held that while the CIT(A) had not condoned the delay due to lack of proper reasoning, the assessee should be given another opportunity. The case was remitted back to the CIT(A) to consider the condonation petition and the merits of the case.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal without condoning the significant delay in filing, and whether sufficient grounds existed for condonation.
Sections Cited
250, 143(1)(a), 43B, 433, 115BBE, 234B, 234C, 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI ANIKESH BANERJEE, JM &
(Assessment Year: 2018-19) Stans Buildtech Life Spaces, DCIT-41(4)(1), 15B Sagar Tower, Aqsa Masjid Road, Kautilya Bhavan, Bandra Kurla Jogeshwari (West), Vs. Complex, Bandra East, Mumbai-400102. Mumbai-400051. PAN: AAOFB6579P Appellant) : Respondent) Appellant /Assessee by : Ms. Neha Paranjpe, AR Revenue / Respondent by : Shri Swapnil Choudhary, Sr. DR : 09.06.2025 Date of Hearing : 18.06.2025 Date of Pronouncement O R D E R
Per Padmavathy S, AM:
This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)-11, Delhi (in short "CIT(A)") dated 09.01.2025 passed under section 250 of the Income Tax Act, 1961 (the Act) for Assessment Year (AY) 2018- 19. The assessee raised the following grounds: “
The order dated 09.01.2025 passed by the CIT(A) refusing to condone delay in filing of appeal is unjustified
1. The Ld.CIT(A) has erred in passing the order dated 09.01.2025 dismissing the appeal of the Assessee. The Assessee was not aware of the intimation issued under Stans Buildtech Life Spaces Section 143(1)(a) of the Income Tax Act, 1961. The assessee came to know of the intimation only when he received the recovery notice for income tax arrears dated 30.08.2022. Upon receipt of the recovery notice, the assessee immediately reviewed the records available on the Income Tax Department's website and identified the intimation issued under Section 143(1)(a). Recognizing the urgency and importance of the matter, the assessee took prompt action and filed an appeal against the demand on 02.09.2022. Hence, there was a time gap of 1132 days between date of intimation under Section 143(1)(a) of the Income Tax Act, 1961 and filing of the appeal against the said intimation. Hence, it is requested that the delay in filing the appeal be condoned and order passed by the CIT(A) may be set aside and the grounds submitted by the Assessee may be heard. The addition made in the intimation under section 143(1) of the Act is erroneous on the following grounds:
The Ld.CIT(A) has erred in disallowing in the intimation under section 143(1) of Rs. 71,79,822/- to the total assessed income on account of GST, Service Tax and VAT payable under section 433.
The Ld.CIT(A) has erred in disallowing under section 43B and making addition of Rs. 71,79,822/- to the total assessed income on account of GST, Service Tax and VAT payable, though the said amount is not debited to Profit and Loss Account of the previous year.
4. The Ld.CIT(A) has erred in disallowing under section 43B and making addition of Rs. 71,79,822/- to the total assessed income on account of GST Service Tax and VAT payable, though the said amount is not debited to Profit and Loss Account of the previous year and the same is clearly mentioned in the Audit Report filed in Form 3CD under Clause 26iBb under the clause state whether sales Tax, goods and service tax, customs duty or any other indirect tax, levy, cess, impost, etc is passed though the Profit and Loss account, it is mentioned NO.
The Ld.CIT(A) has erred in disallowing under section 43B and making addition of Rs. 71,79,822/- to the total assessed income on account of GST Service Tax and VAT payable, though the appellant has correctly mentioned as NIL in the return of income under Schedule BP and Schedule OI.
The Ld.CIT(A) has erred in levying tax of Rs. 522,364/- on deemed income chargeable under section 115BBE.
The Ld.CIT(A) has erred in levying interest of Rs. 531,435/- under section 234B.
The Ld.CIT(A) has erred in levying interest of Rs. 178,916/- under section 234C.” 2. The assessee filed the return of income for AY 2018-19 on 29.09.2018 declaring a total income of Rs. 73,30,280/-. The return was processed under section 143(1) of the Act wherein the AO has disallowed a sum of Rs. 71,79,822/- under section 43B of the Act. The said disallowance is arising out of the GST, Service Tax and VAT not debited to the P&L A/c as reported in the Audit Report in Form 3CB. Aggrieved the assessee filed further appeal before the CIT(A). There was a delay of 1132 days in filing the appeal before the CIT(A). The assessee filed submissions before the CIT(A) in response to the deficiency letter dated 18.02.2024 stating that the assessee was not aware of the disallowance made in the intimation under section 143(1)(a) and that while checking the reason for the demand, the assessee realized that a disallowance has been made while processing the return under section 143(1) of the Act. The assessee accordingly prayed for condonation of delay. The CIT(A) did not accept the submission of the assessee and accordingly dismissed the appeal in limine without condoning the delay. The assessee is in appeal before the Tribunal against the order of the CIT(A).
3. We heard the parties and perused the material on record. The ld. AR before us submitted that the email id of the company has undergone change pursuant to Commercial Intellectual Property Rights Suit before Hon'ble Bombay High Court as per the consent term dated 10.04.2019 and accordingly the word "Buildtech" got changed to "Stans Buildtech". The ld. AR submitted that the assessee updated the email id in the Income Tax portal subsequently post which a recovery notice dated 30.08.2022 was received. The ld. AR further submitted that only after receipt of the recovery notice the assessee came to know that the return has been processed under section 143(1) of the Act where the impugned disallowance has been made. The ld. Stans Buildtech Life Spaces AR submitted an affidavit from the assessee in this regard. From the perusal of the CIT(A)'s order we notice that the CIT(A) has not condoned the delay for the reason that the assessee has not provided a proper reasoning for seeking condonation of delay and that there is no sufficient cause. During the course of hearing the ld. AR fairly conceded that the affidavit explaining the reasons for the delay in filing the appeal along with petition seeking condonation was not filed before the CIT(A). Further on perusal of merits of the issue, we notice that the disallowance has been made under section 43B towards amount debited to P&L A/c whereas the claim of the assessee is that the impugned amount is not debited to the P&L A/c. We also notice that there has been a change in the email id of the assessee as a result of a copyrights suit and that the previous email id has become defunct. Considering these facts and circumstances of the case, we are inclined to give one more opportunity to assessee to file a proper petition of condonation of delay before the CIT(A) stating the reasons for delay in filing the appeal before the CIT(A) and also to represent the case on merits. Accordingly we remit the appeal back to the CIT(A) to consider the condonation petition to be filed by the assessee and take a lenient view in the light of the facts peculiar to assessee's case. The CIT(A) is further directed to consider the issue of merits post condoning the delay and allow the claim in accordance with law. The assessee is directed to file a proper petition for condonation along with affidavit containing the reasons for delay in filing the appeal and also to file the necessary details with regard to the merits of the issue. It is ordered accordingly.
In result the appeal of the assessee is allowed for statistical purpose.