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Facts
The assessee, a trust registered under section 12A, filed its return of income. The AO disallowed expenses claimed as capital application and depreciation, disallowing a claim of Rs. 1,74,10,471/-. The assessee's appeal before the CIT(A) was dismissed due to a delay of 988 days.
Held
The Tribunal condoned the delay in filing the appeal, citing the exclusion of the COVID period and the demise of the tax consultant. The Tribunal admitted additional evidence and remitted the issue to the AO for denovo consideration, with a cost of Rs. 20,000/- to the assessee.
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned considering the COVID period and the death of the tax consultant, and whether additional evidence should be admitted for denovo assessment.
Sections Cited
12A, 142(2), 142(1), 11(6), 29
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 25/03/2025 in respect of the A.Y. 2018-19.
The brief facts of the case are that the assessee is a trust registered u/s. 12A of the Act and filed their return of income on 11/10/2018. Subsequently, the AO had issued notices u/s. 142(2) and 142(1) and sought for the details for the expenses claimed in the return of income and also the proof for capital application and details of depreciation claimed u/s. 11(6) of Act. The assessee furnished the audited financials on 28/01/2021 and thereafter the assessee furnished some documents on 03/03/2021. The AO not satisfied with the response, had disallowed the expenses claimed as capital application. Similarly, the AO had disallowed the claim of depreciation of Rs. 1,74,10,471/-. As against the said order, the assessee filed an appeal before the Ld.CIT(A). The assessee filed the said appeal with a delay of 988 days and also filed an application to condone the said delay. The Ld.CIT(A) had not accepted the reasons as sufficient cause and dismissed the appeal on the ground of limitation.
As against the said order, the present appeal has been filed before this Tribunal.
At the time of hearing, the Ld.AR filed a paper book in which the copy of the application to condone the delay in filing the appeal was also furnished. The Ld.AR further submitted that because the notices were sent to the tax consultant, who has not informed about the said hearings and therefore the assessee was not able to appear before the Ld.CIT(A). The Ld.AR further submitted that the said tax consultant was also expired because of the post covid complications. The Ld.AR further submitted that if the covid period commencing from 15/03/2020 to 28/02/2022 were excluded, then there will not be any inordinate delay in filing the appeal and therefore prayed that an opportunity may be granted to appear before the AO.
The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal.
We have heard the arguments of both sides and perused the materials available on record.
The Ld.CIT(A) had rejected the appeal on the ground of limitation by saying that there was no sufficient cause for condoning the said delay. We have perused the application to condone the said delay and in the said application, the assessee had explained that all the notices from the AO were sent to the email ID of the tax consultant and the said tax consultant was also died after the covid period and therefore the assessee had no knowledge about the assessment proceedings made by the AO. We have also considered the fact that the Hon’ble Supreme Court had directed to exclude the period from 15/03/2020 to 28/02/2022 for the purpose of calculating the period of limitation. If the said period was excluded for calculating the period of limitation and the tax consultant’s demise was considered, the delay would be a reasonable one. Considering the said facts and circumstances, we are inclined to set aside the order of the Ld.CIT(A) by condoning the said delay.
We have also perused the assessment order in which the additions were made based on the fact that the assessee had not submitted the details for the claims made. The assessee submitted that all the matters were looked after by the tax consultant and therefore the assessee could not be able to file the required details as sought for by the AO. Before us, the assessee in the paper book filed the tax audit report in form 10B, computation of income, etc. The assessee also filed an application under Rule 29 of the Tribunal Rules, 1963 and prayed to accept the documents in support of the capital expenditure claimed by them and also the summary of the fixed assets, invoices to show that the assessee had claimed the depreciation properly. Since the AO had made the assessment on the ground that the assessee had not furnished the documents and considering the documents now filed before us, in the interest of justice, we are admitting the additional evidences.
Considering the fact that the AO had no occasion to verify the said documents, we are inclined to remit the issue to the file of the AO for denovo consideration. We also made it clear that the assessee should co-operate with the department and finalise the assessment at the earliest. We also made it clear that we are giving the concession to appear before the AO on Rs. 20,000/- by way of cost to the income tax department within a period of 8 weeks from the date of receipt of this order and produce the said receipt before the AO at the time of passing the order on remand. With the above directions, we set aside the order of both the authorities.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 07th November, 2025.