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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SHRI GEORGE GEORGE K. & Ms. PADMAVATHY S
Per Padmavathy S., Accountant Member
1. This appeal is against the order dated 16.3.2022 of the CIT(Appeals)-11, Bangalore relating to assessment year 2016-17.
The main issue in this appeal through various grounds raised by the assessee is regarding non-condonation of delay in filing the appeal by the CIT(Appeals).
During the year under consideration, the assessee filed return of income on 1.10.2016 declaring a total income of Rs.3,02,24,130. The return was processed by the CPC u/s. 143(1) of the Income-tax Act, 1961 [the Act] on 4.2.2017 accepting the income of the assessee. There was a search conducted u/s. 132 of the Act on 6.8.2015 at the residence of the partners of the assessee and in the ocurse of search a sum of Rs.29,14,980 in cash was found, out of which Rs.19,84,980 was received back and the balance of Rs.9,30,000 was seized. The returned income resulted in a tax payable of Rs.10,29,214 u/s. 140A of the Act. The assessee vide letter dated 30.9.2016 requested for adjustment of the seized amount of Rs.9,30,000 towards tax payable u/s. 140A and paid the balance of Rs.99,210. The assessee also furnished an undertaking from the partners of the firm in whose name the amount was seized to the effect that they have no objection to the adjustment of the amount seized against the tax payable u/s. 140A of the Act.
In the intimation received u/s. 143(1) dated 4.2.2017, there was a demand raised for a sum of Rs.9,76,020 wherein the amount seized was not adjusted against the tax payable u/s. 140A. In response to the intimation, the assessee filed a letter dated 21.3.2017 on 7.4.2017 with the DCIT, Central Circle 1(4), seeking adjustment of the cash seized with the department and to rectify the demand. The assessee did not receive any reply to the rectification application u/s. 154 and therefore the assessee preferred a appeal before the CIT(Appeals) where there was a delay of 1309 days in filing the appeal. The assessee filed a condonation petition as follows:-
“The petitioner had received an intimation u/s. 143(1) dated 04.02.2017 of the I.T. Act, 1961.
2. For the year, the petitioner had filed the return of income electronically on 01.10.2016 vide e-filing acknowledgement No.476049521011016 declaring income of Rs.3,02,24,130/- .
3. For the year, search was conducted u/s. 132 of the act on 06.08.2015 at the residence of partners Sri.Arvind Dadu and Smt.Manju Dadu. In the course of search a sum Rs.9,30,000/-was seized from residence of partners of the firm.
4. As per the return filed a sum of Rs. 10,29,214/- was payable as tax u/s. 140A by the petitioner. Accordingly. the petitioner had requested for adjustment of amount seized of Rs.9,30,000/- towards the tax payable of Rs. 10,29,214/- u/s. 140A vide letter dated 30.09.2016 filed on even date with DCIT, CC-1(4), Bangalore and paid the balance Rs.99,210/- u/s. 140A on 30.09.2016 vide challan serial no 61166 and BSR code 6360218. 5. In the intimation passed, income as returned by the petitioner of Rs. 3,02,24,130 has been accepted. However credit for cash seized of Rs. 9,30,000/- was not given against tax payable the petitioner. 6. In response to the intimation passed, the petitioner filed a letter dated 21.03.2017 on 07.04.2017 with DCIT, CC-1(4), Bangalore seeking rectification of intimation. 7. However no action has been taken by the assessing officer till date. 8. On discussing this matter with the auditors. the petitioner was advised to file an appeal against the intimation passed u/s. 143(1) of the Act. 9. Immediately arrangements were made to file appeal against the intimation passed u/s. 143(1) of the Act. In the normal course, the appeal against the above was to be filed before the Commissioner of Income tax (Appeals) should have been filed within 30 days of receipt of intimation. The appeal is now filed. 10. An affidavit to this effect is enclosed. 11. The petitioner submits that the delay in filing the appeal is due to reasonable and sufficient cause and therefore prays
that the appeal may be taken on records and admitted for hearing.” 12. The Petitioner prays accordingly.” 5. The CIT(Appeals) dismissed the appeal without condonation of delay stating that it must be proved beyond the shadow of doubt that the assessee was diligent and not guilty of negligence and the reasons advanced by the assessee did not show any good and sufficient reason for condonation of delay. Aggrieved, the assessee is in appeal before the Tribunal.
Before us, the ld. AR submitted that the assessee had filed a letter for rectification requesting adjustment of cash seized against the tax payable u/s. 140A of the Act. In spite of several follow-up with the AO, the assessee did not get any reply and the assessee therefore had not option, but to file an appeal before the CIT(Appeals) by which time there occurred a delay of 1309 days in filing the appeal. The ld. AR submitted that the assessee was awaiting a response from the AO against the rectification application u/s. 154 filed by it and on advise an appeal was filed before the CIT(Appeals) which caused the delay and therefore the assessee was prevented from a sufficient cause in filing the appeal within time. It was therefore prayed that the delay in filing the appeal before the CIT(Appeals) be condoned.
The ld. DR opposed the condonation of delay.
We have considered the rival submissions and perused the material on record. The Hon’ble Supreme Court, in the case of Collector, Land Acquisition v. MST. Katiji, 167 ITR 471 (SC), 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. It was also observed 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, L/R of R.K. Hegde v. ACIT, for the A.Y. 1993-94, the Tribunal condoned the delay of about 1331 days in filing the 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 CIT v. ISRO Satellite Centre, ITA 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. In condoning the delay in filing the appeals, the expression ‘sufficient cause’ should receive liberal construction and advancement of substantial justice is of prime importance. Discretion of condoning the delay has to be exercised on the facts of each case.
Keeping in mind the aforesaid principles, in the instant case, we find that the explanation of the assessee for delay in filing the appeals put forth before the CIT(Appeals) was that the assessee filed a rectification application u/s. 154 before the AO for adjustment of seized cash lying with the department towards tax payable by the assessee u/s. 140A and for revision of the demand accordingly. Despite several meticulous follow up action on the same, there was no response. This fact is evident from the various letters filed before the AO which is placed on record. In such circumstances, the assessee was advised to file appeal and accordingly the appeal came to be filed before the CIT(Appeals) belatedly. In our considered view, the explanation given by the assessee for delay in filing the appeal before the CIT(Appeals) are bonafide and genuine reasons which constitute sufficient and reasonable cause for the delay. We therefore condone the delay in filing the appeal before the CIT(Appeals) and restore the appeal to the CIT(Appeals) for adjudication on merits.
In the result, the appeal by the assessee is allowed for statistical purposes.
Pronounced in the open court on this 7th day of July, 2022..