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Income Tax Appellate Tribunal, “SMC – A” BENCH : BANGALORE
Before: SHRI N. V. VASUDEVAN
This appeal is against the order of the CIT(Appeals)-11, Bengaluru, dated 30.03.2022 for the Assessment Year 2017-18. 2. The only issue arising out of the various grounds raised by the assessee is non-condonation of the delay of 32 days in filing the appeal before the CIT(A). 3. The assessee, a company, filed its return of income for AY 2017-18 on 07.02.2018 declaring a total income of NIL. The case was selected for scrutiny calling for various details. The Assessment Officer completed the assessment under section 143(3) after making an addition of Rs.5,62,187 invoking section 41(1) of the Income Tax Act, 1961 (‘the Act’). Aggrieved the assessee preferred an appeal before the CIT(A). There was a delay of 32
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days in filing the appeal before the CIT(A) and in that regard the assessee made the following submissions before the CIT(A):-
“5. It is submitted that the appellant could not file the appeal within the statutory time permitted by the statute for the reason that the appellant was advised by his authorized representative who appeared before the learned assessing officer in the scrutiny assessment proceedings to accept the order of assessment passed in which the addition of Rs. 5,62,187/- was made on the basis of erroneous declaration by one Sri. D A Srinivas during the course of search conducted in sworn statement made u/s. 132 (4) during the search & seizure operations. 6. The authorised representative who represented before the learned assessing officer in the scrutiny assessment proceedings was of the opinion that the additions made by the learned assessing officer based on the statement made u/s.132(4) during the search & seizure operations cannot be challenged even if the admission is erroneous and there is no scope for contesting the additions made in the order of assessment passed. Going by the opinion given by the learned authorized representative the appellant did not prefer an appeal before this Hon'ble Authority within the statutory time of 30 days as envisaged in the statute i.e. the appellant ought to have filed appeal on or before 25/01/2020. 7. That, the appellant approached the present counsel Sri V. Chandrasekhar, Advocate on certain other professional advice and during the discussion the appellant discussed about the impugned order of assessment passed under section 143 [3] of the Act. The present counsel went through the complete files and advised the Appellant that there was no bar in law in filing an appeal on the erroneous declaration made during the course of search by Sri. D. A. Srinivas, and having regard to the said position of taw, it was advised by the present counsel, that the appellant has a very good and prima facie case on merits of the matter and hence, advised the appellant to file an appeal against the order of the learned Assessing Officer passed under section 143[3] of the Act before the
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Hon'ble Commissioner of Income-Tax [Appeals] seeking condonation of delay. 8. The Appellant submits that immediately after obtaining proper professional advice from the present counsel, the Appellant within a reasonable time has made all the efforts to file this present appeal with the help of the present counsel challenging the order passed by the learned Assessing Officer under section 143[3] of the Act before your Honour's. 9. In view of the above fact the Appellant could not file the Appeal before this Hon'ble appellate authority in time as per the scheme of the Act and by the time the Appellant received the present counsel's advice to file an appeal, there arose a delay of about 32 days in filing this present appeal before this Hon'ble appellate authority.”
In this regard, the assessee placed reliance on the following cases: (i) Collection, Land Acquisition Vs. Mst. Katiji and Others [1987] 167 ITR 147 (SC). (ii) Concord of India Insurance Co. Ltd., Vs. Smt. Nirmala Devi and Others 118 ITR 507 (SC). (iii) Radha Krishna Rai Vs. Allahabad Bank and Others (2000) 9 SC cases 733.
The CIT(A) dismissed the appeal without condoning the delay by stating that the delay is nothing but negligence and inaction on the part of the assessee and that there exists no sufficient / good reason for condoning the delay. Aggrieved, the assessee is in appeal before the Tribunal.
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We heard the rival submissions and perused the material on record. We notice that the assessee was initially advised by the authorized representative who appeared before the AO not to file an appeal as the addition as made on the basis of declaration of the director Shri. D. A. Srinivas during the course of search. The assessee when approached the current Counsel Shri. V. Chandrasekar, was advised that there is no bar in law for filing an appeal on the against declaration made during the course of search and that the assessee has a good case prima facie on merits. The submission of the learned AR is that the assessee was under a bonafide belief that there is no scope for contesting the addition since it is done based on the sworn statement recorded under section 132(4) of the Act during search proceedings. The assessee immediately on receiving the advise that there is prima facie good case on merits, filed the appeal before the CIT(A) with a delay of 32 days. The delay was not intentional and due to wrong professional advise which the assessee rectified immediately. 7. We notice that the coordinate Bench of this Tribunal in the case of M/s. Raghavendra Constructions in ITA No.425/Bang/2012 dated 14.12.2012, “13. We have considered the rival submissions. At the outset, we observe that the Hon'ble Supreme Court, in the case of Mst. Katiji (supra), has explained the principles that need to be kept in mind while considering an application for condonation of delay. The Hon'ble Apex Court has emphasized that substantial justice should prevail over technical considerations. The Court has also explained that a litigant does not stand to benefit by lodging the appeal late. The Court has also explained that every day's delay must be explained does not mean that a pedantic approach should be taken. The doctrine must be applied in a rational common sense and pragmatic manner. In the case of Shakuntala Hegde, UR of R.K. Hegde v. ACIT, ITA No.2785/Bang/2004 for the A.Y. 1993-94, the Hon'ble Tribunal condoned the delay of about 1331 days in filing the
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appeal wherein the plea of delay in filing appeal due to advice given by a new counsel was accepted as sufficient. The Hon'ble Karnataka High Court in the case of C1T v. ISRO Satellite Centre. 1TA No. 532/2008 dated 28.10.2011 has condoned the delay of five years in filing appeal before them which was explained due to delay in getting legal advice from its legal advisors and getting approval from Department of Science and PMO. In the aforesaid decision, the Hon’ble Court found that the very liability of the assessee was non- existent and therefore condoned the delay in filing appeal.
Keeping in mind the aforesaid principles, we shall consider the claim of the assessee in the present case. Admittedly the advice was given by the counsel who appeared on behalf of the Assessee before the Hon'ble High Court. The decision of the Hon'ble High Court was rendered or 28.2.2012. The appeal has been filed by the Assessee before the Tribunal on 26.3.2012. Hence, we find that there has been no willful neglect on the part of the Assessee. In such matters the advice of the professional would be the point of time at which the Assessee would begin to explore the option of exhausting all legal remedies. We are also of the view that by condonation of delay there is no loss to the revenue as legitimate taxes payable in accordance with law alone would be collected. We therefore accept the reason given for condonation of delay in filing the appeal. The delay in filing the appeal is accordingly condoned.”
In view of the above discussion and the judicial pronouncements, we are of the view that the assessee had sufficient cause for the delay in filing the appeal and that number of days of delay being 32 days shows that the delay is not intentional and caused only due to the professional advise assessee received. We therefore condone the delay in filing the appeal before the CIT(Appeals) and remit the issue back to the CIT(Appeals), with a direction to consider the issue on merits afresh in accordance with law, after giving reasonable opportunity of being heard to the assessee.
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In the result, appeal of the assessee is allowed for statistical purposes.
Pronounced in the open court on this 28th day of July, 2022.
Sd/- (N. V. VASUDEVAN) Vice President
Bangalore, Dated, the 28th July, 2022. /Desai S Murthy /
Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR 6. Guard file By order
Assistant Registrar, ITAT, Bangalore.