ANAND CHHAYA CO OPERATIVE HOUSING SOCIETY LIMITED ,MUMBAI vs. ITO WARD 22(1)(6), MUMBAI

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: These four appeals filed by the assessee are against the order of Ld. CIT(A), Kolkata, vide order nos.

2. Common issues are involved in all the four appeals and therefore are taken up together by passing a consolidated order. We take up appeal for Assessment Year 2013-14 as lead case to draw facts for the issue under consideration. Since identical grounds are raised in all the four appeals, grounds raised

in appeal for Assessment Year 2013-14 are reproduced. “1. In rejecting the appellant's request for condoning the delay in filing the appeal without giving proper opportunity and considering the delay to be unreasonable, the appeal as invalid and therefore dismissing the same.

2. (a). In arriving at an erroneous conclusion that the intimation u/s 143(1) must have been served on the appellant, which is based on surmises and not on any documentary evidences of service of intimation on the appellant and in forming the subjective opinion on presumption and ignoring that the service of intimation through portal on computer system was not in knowledge of the appellant.

3. In dismissing the appellant's appeal only on the ground of technicalities and ignoring the vital aspect of substantial justice.

4. (a). In upholding CPC's act of allowing the deduction u/s 80P at Re. 1 as against the eligible deduction u/s 80P(2) (c) of Rs. 50,000 and u/s 80P(2) (d) of Rs. 3,00,263 aggregating to Rs. 3,50,263 claimed by the appellant in the return of Income, and in ignoring that the adjustment made by CPC in the claim of deduction u/s 80P is not legitimate and is beyond the scope of the provisions of the Law, and is against the permitted adjustments u/s 143(1)(a) of the Income Tax Act, 1961

(b). In ignoring the fact that such adjustments cannot be made without giving prior opportunity to the appellant of being heard.”

3.1. Ld. CIT(A), dismissed the appeal by holding that there is a delay of 3257 days in filing of appeal. In this respect, assessee had furnished petition for condonation of delay explaining its case which led to such a long delay in filing. The impugned intimation u/s.143(1) was passed on 03.06.2014, which according to the assessee was never received by it, either in physical form or through email. In this respect, an affidavit is placed on record from the office bearer of the society, i.e., Treasurer, who claims to be taking care of income-tax matters for the assessee. The averments contained in the said affidavit, explaining the delay in filing the appeal before ld. CIT(A) are extracted below:

“I had registered my personal email ID namely "narkarchetan0811@gmail.com" in the society profile with the Income Tax Department maintained in the income tax portal for the purpose of communication relating to the Income Tax matters connected with the affairs of the society.

I had never received on my above given email ID any communication in the electronic form Le via Email from the income tax department in connection with the intimation u/s 143(1) nor any physical intimation/notice/ order was ever received at the registered address of the Society office at Anand Chhaya Cooperative Housing Society Ltd, P Balu Mary, Prabhadevi, Mumbai-400025 for the AYs 2013-14, 2014-15, 2015-16 & 2016-17.

The returns of Income for Assessment years 2013-14, 2014-15, 2015-16 & 2016-17. were filed as per the advice of Practicing Chartered Accountant Mr. Ashok Kesaria and that the said Chartered Accountant had never communicated / intimated to me about the processing of the Income Tax returns by CPC u/s 143(1) and the outstanding income tax demands that have arisen and the reasons for the same. The society had no knowledge of the outstanding demands raised by CPC until 03.03.2023.

For the first time, I had received electronic communication via email about Outstanding Demand(s) from Demand Facilitation Centre, Income Tax Department on 03.03.2023 as per the new initiative started by the Income tax department to approach the tax payers, showing the demands.

In order to obtain the details of outstanding demands, requests to provide the intimations passed u/s 143(1) of the Income Tax Act, 1961, were filed on the income tax portal and the intimations for AY 2013-14 & 2014-15, signed by CPC on 10.03.2023 and for AY 2015-16 & AY 2016-17, signed by CPC on 09.03.2023, were provided by the CPC of the Income Tax department

The Chartered Accountant, Mr. Kesaria was approached with the above referred intimations passed u/s 143(1) showing significant tax demands and to 600/MUM/2025 Anand Chhaya Coop Hsg. Soc. Ltd., AYs 2013-14 to 2016-17 his advice was sought on the matter. However, the said tax consultant did not respond and hence the society management had to approach a new tax consultant to advise on further action in the matter

Due to non-communication of the demands raised, through physical notice to the address of the society as well as in electronic form on the email ID registered on the income tax portal, and engagement of new tax advisor due to delay in response of earlier tax advisor for the mentioned four assessment years the appeals could not be filed within the stipulated time limit

Even after receiving the intimations for AY 2013-14 & 2014-15, signed by CPC on 10.03.2023 and for AY 2015-16 & AY 2016-17, signed by CPC on 09.03.2023, provided by the CPC of the Income Tax department, the appeal before CIT(A) could not be filed within 30 days of receipt of the intimations, due to the further reasons cited herein below. My elder real sister Mrs. Dipti Dinesh Todankar, Nee Miss Shubhada Trivikram Narkar, at the age of 59 years was diagnosed with malignant cancer in March 2022 and underwent two surgeries at Nanavati Hospital, Mumbai in April 2022 & July 2022. In her second surgery, she suffered a heart attack on the operation table. Thereafter, she had to be treated with sessions of CT scans, blood tests and chemo therapy at PD Hinduja Hospital, Mahim, Mumbai on regular basis. During the chemo treatment, urinary stent had to be administered. From February 2023 onwards her condition deteriorated further and on 22.07.2023 she passed away after a losing battle with cancer. (Death certificate attached). Annexure 1. I attach reports/prescriptions of gynae-onco surgeon, oncologist and urologist, in support of my statement. Annexure 2. (Page nos. 2.1 to 2.25) Being my real sister, I was deeply affected by her complicated medical condition. I was constantly accompanying her for her medical treatment The time and attention as well as moral support that I was giving her, had left me deeply disturbed. Due to the physical & mental stress that I was undergoing plus my diabetic condition, I could not devote the required time to the task of filing the income tax appeal (within the prescribed time limit) & the affairs of the Society. As a result, there was a delay in filing the appeal, from the date of receipt of the intimation. I state that there was neither ulterior motive nor mala fide intention and the delay in filing of the appeal was genuine and bona-fide.”

3.2. To corroborate the averments given by the office bearer of the assessee, copy of email received from the Demand Facilitation Centre of the Income-tax Department from the mail ID ‘taxdemand@cpc.incometax.gov.in’ dated 03.03.2023 is placed on record which list down outstanding demand payable by the assessee to 600/MUM/2025 Anand Chhaya Coop Hsg. Soc. Ltd., AYs 2013-14 to 2016-17 alongwith interest for the past several years. Further to this, copy of intimation u/s.143(1) received through an email from CPC, Bengaluru, dated 10.03.2023 with the email ID of ‘intimation@cpc.incometax.gov.in’ is also placed on record. This email contains a pdf version of intimation u/s. 143(1), dated 03.06.2014 whereby disallowance u/s.80P has been made and claim has been restricted to Re.1/-. Intimation received by the assessee through this email of 10.03.2023 forms the basis for filing of appeal by the assessee. In addition to the above, assessee has also placed on record documentary evidences in the form of medical records and death certificate referred to in the affidavit.

3.3. On the above delay, ld. CIT(A) has observed that intimation dated 03.06.2014 must have been served either physically or through online mode within few days which is assumed after 10 days, i.e., 13.06.2014. Thus, ld. CIT(A) has by way of a presumption, computed the due date of filing of appeal before him on or before 13.07.2014 by taking into account 30 days available for filing the delay. For the delay in filing the appeal after the receipt of the intimation u/s.143(1) by email, dated 10.03.2023 on the request of the assessee, the said delay has also been not condoned though it relates to medical issues explained by the assessee at its end relating to the office bearer for which an affidavit is placed on record.

4. We have considered the submissions made before us by the assessee explaining the long inordinate delay of 3257 days in filing the first appeal before the ld. CIT(A). Assessee has furnished corroborative documentary evidences to establish its factual position of having not received copy of intimation, either physically or by email when it was passed on 03.06.2014. It is only on account of receipt of email from to 600/MUM/2025 Anand Chhaya Coop Hsg. Soc. Ltd., AYs 2013-14 to 2016-17 the Demand Facilitation Centre pointing out outstanding demands for past several years that assessee came to know about the processing of its return for which due request was made to CPC, Bengaluru immediately and was supplied with the copies of the intimation by email dated 10.03.2023. Assessee took necessary steps after the receipt of email from CPC, Bengaluru containing soft copy of intimation u/s.143(1) for filing the appeal before ld. CIT(A) claiming for allowability of deduction u/s.80P and condoning the delay by explaining the facts relating thereto. Though the delay is inordinate but has been explained along with corroborative documentary evidences. It is noted that ld. CIT(A) has proceeded on the basis of presumption of delivery/receipt of impugned intimation without bringing anything cogent on record to dismiss the appeal on account of the delay.

4.1. To address the issue in hand before us, we need to delve into the understanding of the expression “sufficient cause”. Sub-section 3 of Section 249 contemplates that the CIT(A) may admit an appeal after expiry of relevant period, if he is satisfied that there was a “sufficient cause” for not presenting it within that period. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon'ble High Courts as well as before the Hon'ble Supreme Court, then, Hon'ble Courts were unanimous in their conclusion that this expression is to be used liberally.

4.2. We may make reference to the following observations of the Hon'ble Supreme Court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353:

"1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.

4.3. Similarly, we would like to make reference to authoritative pronouncement of Hon'ble Supreme Court in the case of N.Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under:

"Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss."

4.4. We do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Hon'ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the delay, then such reasons are to be construed with a justice oriented approach.

4.5. In light of the above, if we examine the facts then it would reveal that there is a delay of 3257 days in filing of the first appeal by the assessee before the ld. CIT(A). In its submissions before the ld. CIT(A), assessee has explained the reasons which prevented him in filing the appeal withing the prescribed limitation. Therefore, for the just decision of the controversy, it is appropriate on our part to condone

5. On the merits of the case, ld. Counsel for the assessee pointed out that similar issue arose in the case of assessee for Assessment Year 2021-22, wherein also same disallowance was made by CPC, Bengaluru while processing the return. In this year also, assessee had earned interest from Co-operative banks amounting to Rs.5,04,468/- which was disallowed. On appeal before ld. CIT(A), it was held that such a disallowance could not be made under the provisions contained in section 143(1)(a). According to the ld. CIT(A), clauses contained in section 143(1)(a) did not permit making of such disallowance at the end of CPC, Bengaluru and thus the claim of the assessee was allowed.

6. In the present case before us, we note that assessee is claiming for deduction u/s.80P(2)(d) and 80P(2)(c), however, the same has not been adjudicated upon on merits by the ld. CIT(A). Furthermore, there are no factual submissions at the end of the assessee to corroborate the claim so made by furnishing the details and documentary evidences in that regard. Accordingly, in the interest of justice and fair play, we find it appropriate to remit the matter to the file of Jurisdictional Assessing Officer for the limited purpose to verify the claim of the assessee from the submissions and consider for allowing the same in accordance with the provisions of law, taking into consideration the first appellate order for Assessment Year 2021-22, wherein the claim has been allowed and accepted by the Department since, there is no second appeal against the same before the Tribunal. Needless, to say that assessee be given reasonable opportunity of to 600/MUM/2025 Anand Chhaya Coop Hsg. Soc. Ltd., AYs 2013-14 to 2016-17 being heard to substantiate its claim. Accordingly, grounds taken by the assessee are allowed for statistical purposes.