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Facts
The assessee, a builder and developer, filed an appeal against the CIT(A)'s orders related to assessment year 2018-19. There was a significant delay in filing the appeal against the assessment order under Section 143(3), but a smaller delay in filing the appeal against the penalty order under Section 270A.
Held
The Tribunal noted that the CIT(A) dismissed the appeal against the assessment order without condoning the delay, while condoning the delay for the penalty appeal but upholding the penalty. The Tribunal decided to give the assessee one more opportunity, remitting both appeals for de novo consideration.
Key Issues
Whether the CIT(A) erred in dismissing the appeal without condoning the delay, and whether the issues on merits require reconsideration.
Sections Cited
143(3), 270A, 14A, 43CA
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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY, JM &
Appellant /Assessee by : Shri Bharat Kumar Rajpurohit, AR Revenue / Respondent by : Shri Surendra Meena, Sr. DR Date of Hearing : 29.01.2025 Date of Pronouncement : 04.02.2025 O R D E R Per Bench: These appeals by the assessee are against the separate orders of the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi [for short 'the CIT(A)] both dated 12.09.2024 for the AY 2018-19 passed against the order of the Assessing Officer (AO) under section 143(3) of the & 5809//Mum/2024 Siroya Developers Pvt. Ltd. Income Tax Act, 1961 (the Act) dated 15.04.2021 and under section 270A of the Act dated 10.02.2022.
The assessee is a private limited company and engaged in the business of builder and developer. The assessee filed the return of income for AY 2018-19 on 31.10.2018 declaring a loss of Rs. 33,01,169/-. The case was selected for scrutiny and statutory notices were duly served on the assessee. The AO completed the assessment by making various additions/disallowances to arrive at the assessed income of Rs. 2,15,19,475/-. The AO also initiated penalty proceeding under section 270A of the Act for the reason that the assessee has under reported its income in consequence to misreporting of the income. The assessee preferred further appeal before the CIT(A) against both the orders of the AO on 17.02.2023. There was a delay of 320 days (after excluding the period allowed by the Hon'ble Supreme Court during Covid Pandemic) in filing the appeal against the order under section 143(3) of the Act dated 15.04.2021. Similarly there was a delay of 18 days in filing the appeal against the order of penalty under section 270A of the Act.
The assessee filed a common petition for condonation of delay in filing both the appeals before the CIT(A). The CIT(A) dismissed the appeal against the order under section 143(3) of the Act without condoning the delay. However the CIT(A) while adjudicating the appeal against the penalty order condoned the delay but confirmed the penalty levied by the AO on merits.
With regard to the quantum appeal the ld. AR submitted that the CIT(A) did not consider the case on merits and has dismissed the appeal ex-parte without condoning the delay. Accordingly, the ld. AR prayed for one more opportunity to represent the case properly before the CIT(A) by filing the revised petition for & 5809//Mum/2024 Siroya Developers Pvt. Ltd. condonation of delay and also to represent the case on merits. With regard to the penalty appeal, the ld. AR prayed that the appeal may be remitted back to be decided along with the quantum appeal based on merits.
The ld. DR on the other hand vehemently submitted that the delay in filing the appeal against the order under section 143(3) is inordinate and the assessee in the petition filed before the CIT(A) has not given any valid reason for the delay. Accordingly, the ld. DR prayed that the order of the CIT(A) be upheld.
We heard the parties and perused the material on record. The AO while completing the assessment has made disallowance under section 14A, addition under section 43CA, and addition towards estimated profit on the addition made under section 43CA. From the perusal of the assessment order we notice that the disallowance under section 14A is made, for the reason that the assessee has invested in a partnership firm which according to the AO is capable of earning exempt income. We further notice that the AO while making the disallowance did not consider the submissions of the assessee and not recorded any findings on merits. The AO has merely applied 1% of the investment towards the disallowance. Similarly the addition under section 43CA is made for the reason that the assessee has not filed any details pertaining to the difference between the sale value and the stamp duty value of the flats sold during the year. The AO further estimated 8% profit on the amount added under section 43CA.
We notice that the CIT(A) has dismissed the quantum appeal [appeal against the order under section 143(3)] in limine without condoning the delay for the reason that the petition filed by the assessee does not justify the reasonable cause for the delay. The ld AR during course of hearing brought to our attention that the & 5809//Mum/2024 Siroya Developers Pvt. Ltd. company is continuously incurring losses and due to employee turnover the assessee has struggling to manage the business affair. We notice from the perusal of the CIT(A)'s order emanating from the penalty order under section 270A, that the assessee did not respond to the various notices issued by the CIT(A) and did not represent the case before the CIT(A). Therefore the CIT(A) has confirmed the penalty ex parte after condoning the delay. Considering these facts peculiar to the present case, we are inclined to give one more opportunity to the assessee in the interest of natural justice and fair play. Therefore we are remitting both the appeals filed against the order of the CIT(A) for a de novo consideration. The CIT(A) is directed to consider the issue of condoning the delay in filing appeal against the order under section 143(3) afresh and the assessee is directed to file a revised petition for condonation delay. The CIT(A) is further directed to call for the relevant details required for considering the impugned issues on merits after deciding the issue of condoning the delay in accordance with law. Further, we also levy a cost of Rs. 10,000/- in the appeals since considerable time and efforts have been spent by the Exchequer and for the reason that the assessee being delinquent before the lower authorities. The assessee is directed to pay the said amount to Prime Minister Relief Fund within 30 days from the date of this order. The assessee is also directed to file the details as may be called for by the CIT(A) without seeking unnecessary adjournments and cooperate with appellate proceedings. It is ordered accordingly.
In result, the appeals of assessee are allowed for statistical purposes.