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Facts
The assessee, a charitable trust, filed its return for AY 2016-17 and claimed income of Rs. 2,11,600. The return was processed under Section 143(1) on 02.01.2019, but the assessee claims it never received the intimation. The assessee discovered the adjustment on 17.02.2023 when a refund for a later year was adjusted against the demand for AY 2016-17. The appeal before the CIT(A) was dismissed for being filed beyond the statutory period.
Held
The Tribunal held that the intimation under Section 143(1) was likely never communicated to the assessee, and there was no intentional or deliberate delay in filing the appeal before the CIT(A). The Tribunal condoned the delay. Since the CIT(A) did not adjudicate on the merits of the appeal, the matter was restored to the Assessing Officer for a fresh adjudication.
Key Issues
Whether the CIT(A) erred in dismissing the appeal for delay without affording adequate opportunity and whether the delay in filing the appeal was reasonable and should be condoned.
Sections Cited
143(1), 250, 154, 245
AI-generated summary — verify with the full judgment below
Date of Hearing – 24/03/2025 Date of Order – 25/03/2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMEBR; 1. The appeal by the assessee is directed against the order passed by the Addl./JCIT(A), Jodhpur/ National Faceless Appeal Centre(NFAC)/ CIT(A) dated 08.11.2024 passed under section 250 of the Income Tax Act, 1961 (“the Act”) for the assessment year 2016-17. The assessee has raised the following grounds of appeal:
The Learned CIT Appeals erred in not condoning the delay for reasons beyond the assesses control as the order u/s. 143(1) was received in the spam folder.
The Learned CIT Appeals erred in not granting enough opportunity of being heard and not issuing Show Cause Notice for rejecting the condonation of delay.
3. The Learned Assessing Officer at CPC Bangalore erred in assessing total income of Rs. 20,21,370/- instead of Rs. 2,11,600/- as represented by the assessee. 4. The Learned Assessing Officer at CPC Bangalore erred in granting reduced deductions in respect of amount accumulated or finally set apart of Rs. 3,68,800/- instead of Rs. 12,60,414/- . 5. The Learned Assessing Officer at CPC Bangalore erred in incorrectly calculating the accumulation restricted to 15% of voluntary contributions at Rs. 3,68,800/- (Rs. 24,58,668/- *15%) instead of Rs. 12,60,414 being 15% of total receipts (Rs. 84,02,757/-*15%).” 2. Rival submissions of both the parties have been heard and record perused. The learned authorised representative (ld AR) of the assessee submitted that assessee is a charitable trust, filed its return of income for assessment year 2016-17 on 13.09.2017 declaring income of Rs.2,11,600/-. The return was processed by Central Processing Centre (CPC) under section 143(1) on 02.01.2019. However, the order / intimation dated 02.01.2019 was not communicated to the assessee either through e-mail or by way of registered post in physical form. In fact, the assessee was not aware about the adjustment made by CPC in its order dated 02.01.2019. The assessee came to know about such order / adjustment on 17.02.2023 when refund of A.Y. 2021-22 was adjusted against the demand of A.Y. 2016-17. The trustee / office bearer immediately referred the matter for taking necessary action to their Chartered Accountant (CA) for taking recourse of law. As per advice, the assessee-institution filed rectification application under section 154 of Income Tax Act (Act) in A.Y. 2020-21 as well as in A.Y. 2016-17. Application for rectification under section 154 was allowed/ accepted in A.Y. 2020-21 and demand was made ‘Nil’. However, rectification in A.Y. 2016-17 was not considered as it was beyond four years from the date of order. The assessee filed appeal before CIT(A), but is was dismissed by holding that it was filed beyond statutory period of 30 days for filing appeal before the CIT(A). The learned CIT(A) before dismissal of the appeal has not given any show cause notice on the issue of condonation of delay. The learned CIT(A) has not considered the grounds of appeal on merit. The learned AR submits that there was a reasonable cause for not filing appeal immediately on passing the order by CPC, as it was never come to the notice of assessee. The e-mail may have gone in a spam folder and the assessee only came to know when notice under section 245 dated 17.02.2013 was received. The learned AR of the assessee submitted that the assessee has good case on merit and is likely to succeed, if assessee is given one more opportunity to contest its case on merit. It was argued that when technical considerations are kept against the cause of substantial justice, the cause of substantial justice may be preferred. To support its contention that when the delay is not mala fide, it may be condoned. Natthi Singh vs. ITO, in dated 26.04.2023 (ITAT Jaipur), Ravindra Singh vs. ITO, in dated 03.12.2024 (ITAT AGRA), Mrs. Sanjana R. Jain vs. ITO, in ITA No.1111/MUM/2022, dated 23.12.2022 (ITAT Mumbai), Nagendra Shrivastava vs. ITO, in ITA No.53/JAB/2021, dated 21.01.2022 (ITAT Jabalpur), Tirupati Prasad Sahu vs. ITO, in ITA No.184/CTK/2024, dated 24.06.2024 (ITAT Cuttack).
On the other hand, learned Sr.DR for the Revenue submits that assessee has not explained the delay properly. The approach of assessee is casual. The assessee is relying upon self-serving story without any corroborative evidence. The affidavit placed on record is also based on self-serving story.
We have considered the rival submissions of both the parties and have gone through the orders of the lower authorities. We have also deliberated on various case laws relied by the ld AR of the assessee. On perusal of the record, we find that the learned CIT(A) in the impugned order nowhere has mentioned whether any show cause notice before dismissal of the appeal on the issue of condonation of delay was served or not. However, we find from record that assessee in response to notice dated 3rd October, 2023 sought adjournment and ultimately filed various response as reflected on the acknowledgment of ITBA Portal, copy of which is placed on record, however, facts remain the same that such submissions of assessee was not accepted by the learned CIT(A). We find that the case of assessee throughout the proceeding either before CIT(A) or before Tribunal is that intimation under section 143(1) was never communicated to the assessee. We find that when intimation issued by CPC on 02.01.2019, the practice of serving order through e-mail was not much common. Considering the fact that primary contention of the learned AR of the assessee that intimation of CPC under section 143(1) was not communicated to the assessee, is not controverted by Revenue except the plea of the assessee that assessee is relying upon self-serving story. We find that higher courts in a series of decisions have held that when technical consideration are kept against the cause of natural justice, the cause of natural justice may be preferred, the assessee is not going to be benefited by filing appeal belatedly. Rather, from the conduct of assessee, we find that assessee is in fact, is interested in perusing their appeal on merit, therefore, considering peculiar facts of the case, we are of the view that there is no intentional or deliberate delay in filing appeal before ld CIT(A), which we condoned. Considering the fact that there is no adjudication on merit by ld CIT(A) on various grounds of appeal raised by assessee, therefore, matter is restored back to the file of the Jurisdictional Assessing Officer (AO), instead of ld CIT(A). The matter is restored to the file of AO by keeping in view of the facts that in the event of restoring the matter to the file of ld CIT(A) he may require verification of fact by calling remnd report of AO, thus, to avoid such eventuality, the matter is restored to jurisdictional AO to pass an order afresh. The AO is directed to give fair and reasonable opportunity to the assessee before passing the order afresh. The assessee is also directed to be more vigilant in future and to make timely compliance and not to take any adjournment without any valid reasons. In the result, the grounds of appeal
raised by the assessee are allowed for statistical purpose.
5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 25/03/2025.