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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL
PER MAHAVIR SINGH, VICE PRESIDENT: First, we will deal with ITA No.1415/Chny/2019. 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:
I submit that the petitioner is carrying on the construction business and assessed to Income tax on the file of the respondent herein in PAN No. AADFN6812G and the petitioner is also assessed under the Goods and Service TaX. I submit that the for the Assessment Year 2009-2010, the respondent assessed the petitioner on Total Income of Rs.15,87,70,663/- as against the admitted income of the petitioner of Rs.3,80,04,299/-. I submit that the case was selected for the scrutiny under CASS and a notice was issued u/s. 143 of Income Tax Act to the petitioner on 19.10.2010 and the order was passed under u/s. 143(2) of Income Tax Act on 30.12.2011 by making addition of Rs. 10,29,123/- and Rs, 3,03,050/- towards disallowance of sundry expense. The Total Income was determined at Rs. 3,93,36,470/-.
I submit that the respondent after the perusal of the record came to conclusion, that the petitioner offered a sum of Rs. 1,08,34,53,846/- as Total Contract receipt and a sum of 59,05,99,557/- was debited to the profit and loss account towards related contract receipt for the Assessment year. I submit that the respondent after the verification came to conclusion, the worklist of percentage completion method as per AS-7 cannot be accepted and ultimately total income was determined as Rs.15,87,70,663/- by an order dated 30.12.2016.
I submit that the petitioner preferred an appeal before the commissioner of Income Tax(Appeal), challenging the assessment made in ITA/253/16- 17-CIT-(A)-1/ (Trichy). I submit that the commissioner of Income Tax Appeal was pleased to dismiss appeal by an order dated 08.03.2017. I submit that as against the order of the commissioner of Income tax Appeals dated 08.03.2017, an appeal ought to be filed within 60 days from the date of receipt of the order.
I submit that the petitioner father was diagnosed with "LEFT CEREBELLAR GLIOBLASTOMA GRADE IV" and was admitted to SIIMS hospital Chennai on 10-11-2016, underwent a "MIDLINE SUBOCCIPITAL CRANIOTOMY AND ECISION OF TUMOR" surgery on 12.11.2016 and got discharged on 20.11.2016, again he was admitted to hospital on 05.12.2016, was diagnosed with OBSTRUCTIVE HYDROCEPHALUS STATUS POST PO-CEREVELLAR GBM" and 6 to 47/Chny/2021 & 1415/Chny/2019 underwent a procedure RIGHT FRONTAL (KOCHERS) CODMANNS MEDIUM PRESSURE BACTISEAL CATHETER VP SHUNT" and got discharged on 15.12.2016. I submit that Again on 03.04.2017 he was admitted in SIIMS Chennai, was diagnosed with "SHUNT MALFUNCTION WITH SLIT VENTRICILE AND SUBDURAL HYGROMA IN STATUS POST OP LEFT CEREBELLAR GBM GRADE- IV, TYPE 2 DIABETIC MELLITUS and SYSTEMATIC HYPERTENSION" and underwent a procedure " SHUNT REVISION WITH PROGRAMMABLE CODMANNS HAKKIM VP SHUNT WITH BACTISEAL CATHETER (PRESSURE 140) and percutaneous Endoscopic Gastrotomy" and got discharge on 21.04.2017. I submit that again he was admitted to Apollo hospital on 17.06.2017 and was diagonised with" LEFT CEREBERLLAR GBM- POST, OPERATIVE/ RADIOTHERAPY/CHEMOTHERAPY RECURRENT TUMOR IN LEFT LATERAL VENTRICLE SUBEPENDYMAL REGION" and was discharged on 21.06.2017. Again on 05.07.2017 he was admitted in SIIMS Chennai , was diagonised with" CEREBELLAR GB UROSEPSIS AND ELECTROLYTE IMBALANCE" thereafter he was discharged on 26.07.2017. I submit that again he was admitted to Apollo hospital on 12.03.2018, was diagnosed with "LEFT CEREBELLAR GLIOBLASTOMA MULTIFORME S/P SURGERY, RADIOTHERAPY AND CHEMOTHERAPY S/P VP SHUNT (09.12.2016) AND SHUNT REVISION DONE (11.04.2017) RECURRENT TUMOR IN LEFT VENTRICLE SUBEPENCYMAL REGION, S/P RADIATION TO METASTATIC LESION, PROGRESSIVE DISEASE ON SALVAGE CHEMOTHERAPY, DIABETES MELLITUS, HYPERTENSION" and was under treatment as inpatient and got discharged on 13.03.2018. Again he got admitted on 26.04.2018 was diagnosed with "LEFT CEREBELLAR GLIOBLASTOMA MULTIFORME S/P SURGERY, RADIOTHERAPY AND CHEMOTHERAPY S/P VP SHUNT (09.12.2016) AND SHUNT REVISION DONE (11.04.2017) RECURRENT TUMOR IN LEFT VENTRICLE SUBEPENCYMAL REGION, S/P RADIATION TO METASTATIC LESION, PROGRESSIVE DISEASE ON SALVAGE CHEMOTHERAPY, DIABETES MELLITUS, HYPERTENSION" and got discharged on 02.05.2018. Immediately again 10.05.2018 he was hospitalized and was diagnosed with "LEFT CEREBELLAR GLIOBLASTOMA MULTIFORME S/P SURGERY, RADIOTHERAPY AND CHEMOTHERAPY S/P VP SHUNT (09.12.2016) AND SHUNT REVISION DONE (11.04.2017) RECURRENT TUMOR IN LEFT
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.
I submit that the petitioner mother Mrs. Krishnammal was admitted to hospital on 30.10.2019 and diagnosed with "GROWTH FROM OLFACTORY GROOVE- MALIGNANT WITH BLEED AND CEREBRAL EDEMA, ACCELERATED HYPERTENSION, SEIZERS, HYPOTHYROIDISM" and got discharged on 06.112019. Subsequently, again she was admitted on 08.11.2019 and diagnosed with "BASIFRONTAL SPACE OCCUPYING LEISON, OLFACTORY GROOVE MENINGIOMA, SYSTEMIC HYPERTENSION, HYPO THYROIDISM" and discharged on 13.11.2019. Again, 24.01.2020 was admitted and diagnosed with "OLFACTORY GROOVE ATYPICAL MENINGIOMA WHO GRADE II, SYSTEMIC HYPERTENSION, BRONCHIAL ASTHMA, HYPOTHYROIDISM" and underwent a surgery on 30.01.20 for "BICORONAL CRANIOTOMY AND TOTAL EXCISION OF LESION" and got discharged on 18.02.2020 and is in medication.
I submit that thereafter a nationwide lockdown was implemented in the month of march, 2020 and all business activities came to standstill and there were very less business activity going around due to less ease in the restriction on lockdown, and entire business was in the state of crunching. I submit that the above narrated facts would establishes reasons for the petitioner for not filing the appeal within the specified time, thus the delay in filing the above appeal is neither wanton nor willful. I submit that unless the delay is condoned the petitioner would be put irreparable loss and injury whereas no prejudice will be caused to the respondent.
I submit that prima facie it is established that orders passed by the lower authorities are exparte as the petitioner have been suffered serious tragedies in the family. I submit that sufficient cause is shown by the petitioner for non-appearance, thus nonappearance may be considered sympathetically and an opportunity may be given to this appellant.
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.
In the facts and circumstances of the case and the conduct of assessee in non furnishing of books of accounts, ledgers, and other details called for, and keeping in view the remand report sent by the AO the appeal of the assessee is hereby dismissed.”
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.
In the result, the appeal filed by the Revenue in and the appeals filed by the assessees in ITA Nos.45, 46 & 47/Chny/2021 are allowed for statistical purposes.
Order pronounced in the open court on 15th December, 2022 at Chennai.