ACIT CIRCLE 3(1), TRICHY vs. N.S.K.BUILDERS, TRICHY

PER MAHAVIR SINGH, VICE PRESIDENT: First, we will deal with . This appeal by Revenue is arising out of the order of the Commissioner of Income Tax (Appeals)-1, Trichy in 1/TRY dated 25.02.2019. The assessment was framed by the ACIT, Circle III, Range-III, Trichy for the assessment year 2008-09 u/s.144 r.w.s. 147 of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 31.03.2014.

2. The only issue in this appeal of Revenue is against the order of CIT(A) allowing higher rate of depreciation on earth moving vehicles like Tippers, JCB, etc., at the rate of 30% as against allowed by AO at 15% without any evidence or details to prove that the assets were used by the assessee in the business and running them on hire.

3. At the outset, the ld.CIT-DR took us through the order of CIT(A) and stated that the CIT(A) has not at all discussed the issue

3 to 47/Chny/2021 & 1415/Chny/2019 and simpliciter relying on the decision of Hon’ble Kerala High Court in the case of M/s. Durga Construction Company, 255 Taxman 449, M/s. Gaylord Constructions, 190 Taxman 406 (Kerala) allowed the claim of depreciation at the rate of 30%. When this was pointed out to ld.counsel for the assessee, she could not state that what is discussed in the order of CIT(A) and where is the evidence that the assessee is eligible for claim of higher depreciation @ 30% as against allowed by AO at 15%. Even, it is noticed that the assessee failed to appear despite many opportunities and in absence of assessee, ex-parte assessment was framed by AO by allowing depreciation @ 15% instead of 30% claimed by assessee. We noted that neither the AO nor the CIT(A) has discussed any of the facts in regard to the claim of depreciation by assessee on earth moving vehicles like Tippers, JCB, etc. The order of CIT(A) is totally cryptic and non-speaking. Hence, we remit the appeal of Revenue back to the file of the CIT(A) for fresh adjudication. The appeal of the Revenue is allowed for statistical purposes.

, 46 & 47/Chny/2021 4. These three appeals by the assessee (assessee’s firm and company) are arising out of different orders of Commissioner of 4 to 47/Chny/2021 & 1415/Chny/2019 Income Tax (Appeals)-1, Trichy in ITA Nos.253/2016-17/CIT(A)- 1/TRY, 300/2014-15/CIT(A)-1/TRY & 299/2014-15CIT(A)-1/TRY, all dated 01.07.2019, 24.08.2018 & 31.07.2018. The assessment for the assessment year 2009-10 was framed by the DCIT, Circle 3(1), Trichy u/s.143(3) r.w.s. 147 of the Act vide order dated 30.12.2016. The assessments for assessment year 2011-12 in ITA Nos.46 & 47/Chny/2021 were framed by the JCIT, Range-1, Chennai u/s.144 of the Act, vide orders of even date 06.03.2014.

5. At the outset, it is noticed that in all these three appeals in 46 & 47/Chny/2021, there is a delay of 546 days, 830 days and 874 days respectively. Date of receipt Date of filing Appeal No. of order of of appeal Assessee Delay (ITA No.) CIT(A) as per before the Form 36 Tribunal 45/Chny/2021 NSK Builders 546 days 11.07.2019 26.02.2021 46/Chny/2021 NSK Builders Pvt. Ltd. 830 days 20.09.2018 26.02.2021 47/Chny/2021 NSK Builders 874 days 07.08.2018 26.02.2021 The reasons stated in the delay condonation petition by assessee are same and identical. The affidavit, as filed in assessment year 2009-10 reads as under:- I, N.S.K. Karunai Raja, S/o. of N. Selvaraj, Hindu, Aged 44 years, residing at 73/12-A, Annamalai Nagar, Trichy- 620 018, temporarily come down to Chennai, do hereby solemnly affirm and sincerely state as follows:

7 to 47/Chny/2021 & 1415/Chny/2019 VENTRICLE SUBEPENCYMAL REGION, S/P RADIATION TO METASTATIC LESION, PROGRESSIVE DISEASE ON SALVAGE CHEMOTHERAPY, DIABETES MELLITUS, and got discharged 28.05.2018. Again on 04.07.2018 was hospitalized and diagnosed with above stated disease and underwent treatment as in patient and got discharged on 08.09.2018 and his father health got worsened and died on 26.03.2019 in Starkims Hospital, Trichy.

Therefore it prayed that this Hon'ble Tribunal may be pleased to condone the delay of 1382 days in filing the appeal as against the order dated 08.03.2017 passed by the Commissioner of Income Tax Appeals authority in ITA/253/16-17-CIT-(A)-1/(Trichy) before the Hon’ble Tribunal and admit the appeal and thus render justice.

5.1 Now, before us the ld.counsel for the assessee argued that erstwhile Managing Director and father of the assessee Director was suffering from cancer and consequently he died on 26.03.2019. It was stated that assessee Director’s mother Smt. Krishnammal was also suffering from unscramble or not in proper state of mind to pursue the income-tax matters, thereby there was a delay and part of months i.e., majority falls under Covid exemption. Let us take, example of assessment year 2009-10. The order of CIT(A) was served on assessee on 11.07.2019 and appeal was filed on 26.02.2021. It means that Covid started in March, 2020 and order of CIT(A) on assessee was served on 11.07.2019 and appeal is to be filed before the Tribunal on 10.09.2019. From 10.09.2019, the delay is almost six months and after the delay occurred due Covid- 19 restrictions. When these facts were pointed out to ld.CIT-DR, he opposed the condonation of delay and stated that the assessee could not explain the delay with reasonable cause but could not controvert the contents of the affidavit or the fact that the assessee

9 to 47/Chny/2021 & 1415/Chny/2019 Director’s father died in hospital due to cancer on 26.03.2019. Even the mother of the assessee was suffering from cancer and admitted to hospital on 30.10.2019. These facts clearly show that there is reasonable cause and hence, we admit these three appeals of assessee and adjudicate on merits.

6. The ld.counsel for the assessee stated that these appeals were not represented and CIT(A) has dismissed these three appeals for non-prosecution, simpliciter and there is no adjudication of issues at all. She took us through the orders of CIT(A) and we noted that the CIT(A) simpliciter dismissed the appeals and finding given in assessment year 2011-12 in the case of NSK Builders reads as under:- “12. Assessee has claimed that accounts were audited and that full details were available, and yet no such details were furnished before the AO, leading to assessment of income u/s 144 of the Income Tax Act, 1961. Even now, after lapse of over two years, no details have been furnished, either to AO, nor to this office, and assessee has shown himself to be unreliable and contumacious. Estimate of income at 8% of gross contract receipts meets the ends of justice.

10 to 47/Chny/2021 & 1415/Chny/2019 7. Similar are the findings in other years. We noted that the order of CIT(A) is totally non-speaking order and ex-parte. Owing by the circumstances in the family of the Director’s of the assessee company, we are allowing one more opportunity to assessee and hence, set aside the orders of CIT(A) in all these three appeals and remand the matter back to the file of the CIT(A) for fresh adjudication. These appeals of the assessees are allowed for statistical purposes.

Order pronounced in the open court on 15th December, 2022 at Chennai.