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Facts
The assessee challenged an assessment order that made an addition of Rs. 35.85 lakhs under Section 68 for unexplained cash credit and applied a higher tax rate under Section 115BBE. The Ld. CIT(A) dismissed the assessee's first appeal due to a 225-day delay, without addressing the merits, which the assessee attributed to medical reasons and the extended limitation period by the Supreme Court.
Held
The ITAT condoned the delay in filing the appeal, finding sufficient reasonable cause due to the assessee's medical condition and the Supreme Court's directives on limitation. As the merits of the case (addition under Section 68 and Section 115BBE tax rate) were not examined by the lower authorities, the ITAT restored the matter to the Assessing Officer for a fresh assessment, directing a fair opportunity to the assessee.
Key Issues
Whether the delay in filing appeal before Ld. CIT(A) should be condoned based on medical grounds; validity of addition under Section 68; correct tax rate under Section 115BBE.
Sections Cited
254(1), 144, 68, 115BBE
AI-generated summary — verify with the full judgment below
2017-18) (Hybrid hearing) Jaimin S. Patel ACIT – Circle – 3(1)(1) Room No. 607, 6th Floor 135 Patel Faliyu, Itkala Valid Bharuch Aayakar Bhavan, M.K. Gujarat – 393135 Vs Road, Mumbai- 400020 PAN. AIOPP 2429 E Maharashtra Appellant (RESPONDENT) Assessee Represented by : Shri Rasesh Shah FCA & Shri Brijesh Vyas Department Represented by : Ms. Pradnya Gholap, Sr. DR Date of Conclusion of hearing : 17.04.2025 Date of Pronouncement of Order : 30.04.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER;
The appeal by the assessee is directed against order of National Faceless Appeal Centre (NFAC) / CIT(A) dated 21.11.2024 for the A.Y. 2017-18. The assessee has raised the following grounds of appeal: -
1. On the basis of facts and circumstances of the case as well as the law on subject, the Ld. CIT (A) has erred in not condoning the delay in filing of appeal before Ld. CIT (A).
2. On the facts and circumstances of the case as well as the law on subject, the learned assessing officer has erred in making addition of Rs.35,85,170/- on account of alleged unexplained cash credit u/s. 68 of the IT Act, 1961.
3. On the facts and circumstances of the case as well as law on the subject, the learned assessing officer has erred in taxing the addition by taking the rate @77.25% by attracting S. 115BBE instead of normal tax rate. The addition if any that maybe confirmed should be taxed as business income.
4. On the facts and circumstances of the case as well as law on the subject, the assessing officer has erred in taxing the income u/s 115BBE Jaimin S. Patel @ 77.25% in a retrospective manner by applying the duly substituted S. 115BBE inserted retrospectively instead of taxing it at 35.54% as per the old provisions of S. 115BBE.
5. It is therefore prayed that the addition made by the Assessing Officer may please be deleted.
6. Appellant craves to add, alter or delete any grounds) either before or in the course of hearing of the appeal.”
2. Rival submissions of both the parties have been heard and record perused. The Learned Authorised Representative (Ld.AR) of the assessee fairly submitted that assessment order under section 144 of the Act was passed on 29.06.2019 and first appeal before Ld.CIT(A) was filed on 18.11.2021, thus there was a delay of 225 days in filing said appeal. The Ld. AR of the assessee submits that majority of time period of delay is covered from the decision of Hon’ble Supreme Court in Suo Moto Writ Petition(Civil) No. 3 of 2020, wherein the time period for taking the recourse of law was excluded from March, 2020 to till May, 2022. The Ld.AR further submits that assessee was suffering from “HTN TIA Dyslipidemia L4 L5 and Covid-19 compression disease” and Doctor advised him for complete isolation / bed rest at home. Copy of medical certificate is filed. Before Ld.CIT(A), assessee in the statement of fact explained such facts and also submitted that assessee could not appear before Assessing Officer due to medical problem. The Ld. CIT(A) instead of taking a lenient view dismissed the appeal of the assessee for the want of delay, resultantly no order on merit was passed. The ld.AR of the assessee submits that assessee is really interested in pursuing appeal on merit. The assessee is not going to be benefited by filing the appeal belatedly. There in is no intentional or deliberate delay but for the Jaimin S. Patel reasonthat assessee was unable to move due to medical condition. The ld.AR submits that assessee has good case on merit and is likely to succeed, if he is given one more opportunity to contest the case on merit.
3. On merit, Ld.AR of the assessee submitted addition in the assessment order was made on account of cash deposit during demonetization period. Assessee has good case on merit and is likely to succeed if he is allowed to contest the case on merit.
4. On the other hand, learned senior departmental representative (Sr. DR) for the revenue supported the order of Ld.CIT(A) on the issue of limitation in filing appeal before him. Learned Sr. DR for the revenue submitted that Ld.CIT(A) in Para No. 4 of his order clearly specified the reason that assessee failed to give sufficient reason for filing the appeal. On merit, Ld. Sr. DR for the revenue submitted that since the issue has not been examined by lower authorities on merit, in case the delay is condoned, the matter may be restored back the file of Ld. CIT(A) for adjudicating the issue on merit.
5. I have considered the rival submissions of both the parties and perused the orders of the lower authorities carefully. First, I shall consider the plea of assessee on condonation of delay before Ld.CIT(A). I find that assessment order was passed on 29.06.2019 assessment was completed under section 144 of the Act for the want of reply by assessee. The assessee filed appeal before Ld.CIT(A) on 18.11.2021, thus there is delay of 225 days in filing appeal before Ld.CIT(A). Further I find that in the statement of facts in Form No. 35 assessee stated that due to medical condition that “HTN TIA Jaimin S. Patel Dyslipidemia L4 L5 and Covid-19 compression disease” assessee was unable to attend the hearing. The assessee pleaded similar plea for condoning the delay. I find that assessee has taken a consistent view that he was suffering from “HTN TIA Dyslipidemia L4 L5 and thereafter Covid-19 compression disease” and was advised complete isolated rest, to support such view the assessee has filed medical certificate. On considering all the facts and the submissions of ld AR of the assessee, find that the assessee had shown reasonable cause for condoning delay in filing appeal before ld CIT(A). Further, by filing the appeal belatedly the assessee is not going to be benefited rather there is always a chance that appeal may not be admitted due to technical reason. The circumstances of the present case suggest that assessee is really interested in pursuing his case. Thus, keeping in view the principle of law on limitation that when technical consideration is pitted against the case on substantial justice, case of substantial justice may be preferred. Thus, delay in filing appeal before Ld.CIT(A) is condoned.
Now adverting to the Merits of the case, I find that neither the Assessing Officer nor Ld.CIT(A) has considered the fact on merits as the Assessing Officer has passed assessment under section 144 of the Act and Ld.CIT(A) dismissed the appeal as unadmitted. Thus, keeping in view the principle of natural justice, matter is restored back to the file of Assessing Officer to pass the assessment order afresh. Needless to direct that before passing the assessment order afresh the Assessing Officer shall provide fair and reasonable opportunity to the assessee. The assessee is also directed to be more vigilant in future in making timely compliance and not to take Jaimin S. Patel adjournment without any valid reasons. With these observations, appeal of the assessee is allowed for statistical purposes. In the result, the grounds of appeal raised by the assessee are allowed for statistical purpose.