Loading judgment…
Facts
The assessee challenged an order by the CIT(A) which dismissed his appeal on grounds of limitation. The assessee cited personal issues, including implication in a criminal case and mental distress, as reasons for the delay in filing the appeal. The assessee also pointed to a history of being a regular complier of tax filings, with only one year's return being delayed.
Held
The Tribunal condoned the delay in filing the appeal before the CIT(A) by liberally construing the expression 'sufficient cause'. The Tribunal restored the matter to the AO for decision on merits after providing a fair opportunity of hearing to both parties.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was sufficient to warrant condonation, and if so, whether the matter should be remanded for a decision on merits.
Sections Cited
250, 144, 271F, 271AAC, 119(2)(b), 23(4), 29A, 12A, 138
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH MUMBAI
Before: HON’BLE SHRI SANDEEP GOSAIN & HON’BLE SMT. RENU JAUHRI
Date of Hearing 18.03.2025 Date of Pronouncement 21.03.2025 आदेश / ORDER PER SANDEEP GOSAIN, JM:
The present appeals have been filed by the assessee challenging the impugned order 27.12.2024 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi / CIT(A), for the A.Y 2017- 18. 2. Both the appeals are pertaining to the same assessee hence they have been clubbed, heard together and consolidated order is being passed for the sake of convenience and brevity. We shall take as lead case and facts narrated therein.
3. At the very outset, we noticed that Ld. CIT(A) had rejected the appeal of the assessee on the ground that the same was not filed within the prescribed period of limitation.
We have heard the counsels for both the parties, perused the material placed on record and the orders passed by the revenue authorities.
5. From the records, we noticed that assessee has filed a detailed explanation thereby explaining the reason for seeking ‘condonation of delay’. The assessee has mentioned reasons for non compliance before the CIT(A) in affidavit as under:
1. The Assessee,an individual, was regularly filing his income tax return before the year under consideration.In the AY.2017- 18, due to personal problems, he could not file his return of Income in time. The Appellant was running a prop. concern in the name of M/s A. S. Electronics and that entity was engaged in the business of Mobile accessories and others. In Para 5 of Assessment order Ld. Assessing officer has admitted the fact earlier and the subsequent years.
Following tabular chart would reveal that except for the year under appeal the appellant was regularly filing his return of income.
Due to business rivalry the Appellant was implicated in a false criminal matter.
Not only this, he was also arrested by the Police in the month of April, 2017 in the case of alleged rape. Considering the entire circumstantial and documentary evidences, the Hon'ble Session Court Dhindosi granted him bail and the same was confirmed by the Hon'ble High Court of Bombay. 4. Hon'ble Court also observed that accused did not cooperate for medical examination which clearly shows it was false case against the assesse.
Appellant, being a highly reputable person, had very good image in social circle. So, the above unfortunate incident tormented him and he went to his native place leaving Mumbai in the depressed mental state. In his absence, one of his loyal employee looked after his business. In these abnormal and unfortunate circumstances, the appellant could not file his return of income for the year under consideration.
During the assessment proceedings, Ld. AO from Faceless Centre sent an e- mail message about assessment proceedings on pgtaxaudit345@gmail.com,but the said e-mail address was not valid for the year under appeal. In the A Y 2018-19 ,the appellant had shared his new email id (ie. aselectronics.singh@gmail.com) to the department while filing his return on income.
7. The Ld. A.O. has mentioned that the appellant was carrying out business of trading of electronic goods and that he had made various transactions through banking channels, that he was maintaining account with HDFC Vasai Vikash Sahakari Bank, that total credit entries in bank account amounted to Rs. 15,50, 68,763/-,that after deduction of cash deposit during demonetization i.e. Rs. 51,69,000/- remaining credit during the whole year amounted to Rs. 14,98,99,763/- (15,50,68,763/- minus 51,69,000/-), that deemed as income of appellant, from business activities, can be estimated @8% of the However, an addition of Rs. 1,19,91,981/- has been made by the Ld.AO on 21/12/2019 u/s. 144 of the Act. The Id. AO also imposed penalty u/s. 271F, 271 AAC of the Act.
First of all it is submitted that During the period when he was struggling with the psychological and mental issues of the loss of reputation, he approached to one of the tax consultant at his native place Mr. Bharat Shain and asked him to look after the tax matters.
He was informed by Mr. Bharat Shain that no assessment order for the year under appeal was received and that he would do the needful. Later on he came to know that Mr. Bharat Shain had wrongly informed that assessment order was not passed and that in reply the penalty notice.
10. Mr. Bharat Shain had sent a letter to the CBDT for condonation for delay in filing of return of income.
11. Coincidentally, the appellant met CA Bharat Kumar through a common friend with regard to some other tax issue and it was found Mr. Bharat Shain had not challenged the assessment order passed by the AO u/s.144 of the Act and that condonation application was also filed before a wrong forum.
In these circumstances, the appellant asked Mr. Bharat Kumar to do needful for assessment matters. He was informed that there was delay of 1368 days in filing of appeal your honour.
In the chart given below reasons for the above delay have been explained – Particular Date Remark Delay Assessment 21.12.2019 to From date of 145 days order passed 14.05.2020 assessment delay on 21.12.2019 order to apex court decision extending period of limitation Apex Court 15.05.2020 to Covered by 654 days extension 28.02.2022 Apex Court delay decision for extending period of limitation Supported by 01.05.2022 to Covered 569 days affidavit 27.011.2023 affidavit Total delay 1368 days 14. There was no malafide intention in filing the appeal so late. The delay of 799 days covered by Hon'ble Apex court decision of period of limitation.
15.I would like to refer the order of Hon'ble apex court in Suo Motu Writ Petition (C) NO. 3 OF 2020 which is held as under.
Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions:
The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasijudicial proceedings.
II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.
IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.
Therefore delay of 799 covered by Hon'ble Apex court decision. Balance Delay of 569 to bonafide belief that earlier Tax Consultant would have to take appropriate action. But rather than filing appeal he filed his reply against the penalty reply which would like to reproduce as under.
Dated:02nd September, 2021 The Central Board of Direct Taxes, Government of India, Income Tax Department, National Faceless assessment Centre, Delhi. Sub: Petition for condonotion of delay in fling Return and drop the proposed penalty proceeding initiated u/s 271F, Ref :INSIGH PAN-BUMPS2066M, F.Y.2016-2017/ Α.Υ.2017-2018-SULTAN SINGH. : ITBA/AST/ S/156/2019-20/1022804067(1) DATED 21/12/2019. ITBA/PNL/F/271F/2021-22/1033330219(1) DATED 08/06/2021. : ITBA/PNL/ F/17/2021-22/1034984887(1) DATED 19/08/2021. VER/02/SERVICE_LETTER/2016- 17/4916101440330001 DATED 24/08/2021. Respected Sir, I Shri Sultan Singh, falling under jurisdiction of Income Tax, Ward 1, Jalore, Rajasthan as per the above mentioned PAN.
My Business place is situated at Oshiwara, Andheri West Mumbai- Maharashtra-400053. I have been assessed to Tax as a Proprietorship frm M/s. A.S. ELECTRONICS regularly as per IT Act 1961 since Establishment of Firm till AY 2020-2021 except for the F.Y. 2016-2017. During the above mentioned F.Y. I had dispute with my consultant and he did'nt fle my IT return and I was unaware of the same.
Also, I am not so educated that I could understand reminder E- mails/ Letters sent by the department time to time.
I am reguler taxpayer and fled all the ITR's within the stipulated time and as per IT act except only FY 2016-2017. My new Tax Consultant tell us that there is another option to file ITR even if the last date of fling has been lapsed, as per Section 119 (2)(b) which provides that CBDT can authorize income tax authority to admit an application for condonation of delay for an unavoidable circumstances. As there was no malafde intention to concealment of Income of F.Y. 2016-17. please give us the opportunity to fle my pending ITR and also drop the penalty Proceeding U/s 271F. I understand that as the prescribed time limits have long been passed for the reasons beyond our control. You are requested to give an opportunity to fle the return. I would be ever grateful to you. Anticipating a favorable response.
Thanking you, Yours Faithfully, (Sultan Singh)
Prop:A.S.Electronics
The above reply clear cut shows that assesse case was not property represented by the assesse tax consultant. He is not educated and not well verse income tax proceedings.
Therefore there is delay in filing appeal. This delay was not intentional but rather a consequence of circumstances beyond assessee control. The delay in filing this application is entirely genuine and was caused solely by the reasons mentioned above. There is no malafide intent or negligence on his part.
Hon'ble Supreme Court in the case of Collector, Land Acquisition Vs. Mst. Katiji&Ors.(1987) 167 ITR 471 (SC), wherein it was first laid down that sufficient cause should exist for condonation of delay; secondly, it was also held that the issueof sufficient cause should be interpreted with a view to do even-handed justice and most importantly it was held that where substantial justice was pitted against technicality of non-deliberate delay, then cause of substantial justice was to be preferred.
That the applicant humbly submits that the Honorable Court may kindly consider the applicant's age, peculiar situation, financial condition, and lack of knowledge about legal intricacies as sufficient cause for condoning the delay for filing the appeal.
21.1 would like to stated Hon'ble Court Finding for reason given by court is reproduced as under.
I have gone through investigation papers i.e. chargesheet. On perusal of it, it shows that applicant has been charged for offences punishable u/s 376, 366, 509, 323 of IPC. Thus, investigation is already completed. There is reference in the chargesheet that the I.O. could not carry out medical examination of victim as she has not given any cooperation and though she was intimated to remain present on number of times, she preferred to remain absent. There is also reference in it that though the I.O. made an attempt to record the statements of witnesses Khan Saheb, however, he preferred to remain absent and switched of his phone whenever contacted. In this background the I.O. has filed the charge sheet.
As investigation is already complete, custody of applicant is not required. Therefore, I am inclined to release the applicant on bail. Hence,1 answer point nos.l and 2 accordingly, and proceed to pass following order.
Therefore assesse life is already disturbed and he was faced due to belief on tax consultant and there is not benefit to assesse for not filing appeal. When assesse return filing tract records if clear there is no failure except one years, It is requested your honours to take lenient view to restore life of assesse in interest of the justice.
6. Considering the detailed tabular chart which manifestly reveals that except for the year under consideration the assessee was regularly filing his return of income i.e before and after the year under consideration which goes to show that appellant a ‘compliance assessee’, The assessee has mentioned the reasons for delay in filing the appeal on account of the fact of implicating in a criminal case in which he was arrested and later released on bail. Therefore considering the entire factual position as explained before us and also keeping in view the principles laid down by Hon’ble Supreme Court in the case of Land Acquisition Collector Vs. Mst. Katiji & Ors., [1987] AIR 1353 (SC), wherein it has been held that where substantial justice is pitted against technicalities of non deliberate delay, then in that eventuality substantial justice is to be preferred. In our view the principles of advancing ‘substantial justice’ is of prime importance. Hence considering the explanation put forth by the assessee by justifiably and properly explaining the delay, which occurred in filing the appeal before Ld. CIT(A) and construing the expression “sufficient cause” liberally, we are inclined to condone the delay in filing the appeal before Ld. CIT(A). Thus the same is accordingly condoned.
Since we have already condoned the delay, therefore we restore the matter back to the file of AO as the assessee was ex-parte. Therefore AO is directed to decide the same on merits after providing fair opportunity of hearing to both the parties. The assessee shall be at liberty to file documents as called for by AO and shall not seek any adjournment on frivolous grounds and shall remain cooperative during the course of proceedings.
Before parting, we make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute which shall be adjudicated by the AO independently in accordance with law.
In the result the appeal filed by the assessee is allowed for statistical purposes. A.Y 2017-18
As the facts and circumstances in these appeals are identical to A.Y 2017-18 (except variance in figures) and the decision rendered in above paragraph would apply mutatis mutandis for this appeal also. Accordingly, the grounds of appeal of the present appeal also stands allowed for statistical purposes.
In the result, both the appeals filed by the assessee allowed for statistical purposes.