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Facts
The assessee, engaged in trading metal scraps, filed a return of income for AY 2018-19. The AO made additions for alleged bogus purchases based on Commercial Tax Department information. The assessee filed an appeal before the CIT(A) with a delay of 89 days, citing COVID-19 lockdown and Supreme Court orders excluding a period for limitation. The CIT(A) rejected the delay condonation application.
Held
The Tribunal held that the CIT(A) erred in rejecting the delay condonation application without considering the Supreme Court's order regarding the exclusion of the COVID period for calculating limitation. The Tribunal condoned the delay of 89 days and remitted the issue back to the CIT(A) for deciding on merits.
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned considering the Supreme Court's directions on exclusion of COVID period for limitation calculation.
Sections Cited
37
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI, VICE – & 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 15/01/2025 in respect of the A.Y. 2018-19 and raised the following grounds: “1. The Learned CIT (A) / NFAC erred in dismissing the appeal in limine though it is covered by COVID period as per judgement of Supreme Court in Suo Moto Writ Petition (Civil) No. 3 of 2020, 6th May of 2020, 10th July of 2020, MA 665 of 2021, Suo Moto Writ Petition 3 of 2020, 27th April 2021, MA No. 2021-22 as per which the period from 15-03-2020 to 28-02-2022 shall stand excluded as such NFAC, New Delhi.
2. On merit the Assessing Officer erred in making addition solely on the basis of information received by Commercial Tax, Karnataka at Rs. 55,54,490/- as bogus purchase without providing proper opportunity of hearing to the assessee. The same is the position with the addition of Rs. 86,143/- being difference between profit disclosed in Profit & Loss Account and Tax Audit report.
3. Without prejudice to the above ground, reasonable estimation of income to be made at the net profit declared by appellant in past Assessment Years as this basis of past history of appellant is best basis for determining income of appellant.
That the appellant craves leave to add to, alter, and amend modify, substitute, delete and or rescind all or any of the grounds of appeal on or before the final hearing, if necessary, so arises. Your appellant humbly prays that the appeal may be allowed and Justice rendered.”
2. The brief facts of the case are that the assessee is an individual and he is in the business of trading metal scraps. The assessee filed his return of income on 31/10/2018. Thereafter his case was selected for scrutiny and various notices were issued. The AO in the show cause notice had pointed out that the Commercial Tax Department of Karnataka State had sent a report that the sellers of the assessee M/s. Bharath Enterprises and Indian Steels had raised bogus invoices and claimed input tax credit under the GST Act and therefore proposed to treat the said purchases as not genuine. The assessee filed all the documents to show that the purchases made by him are genuine. The AO not accepted the submissions made by the assessee and disallowed the said purchases u/s. 37 of the Act. As against the said order, the assessee filed an appeal before the Ld.CIT(A) with a delay of 89 days. The assessee filed an application before the Ld.CIT(A) and submitted that the assessee was not able to access the income tax portal during the period of covid and also submitted that he was not able to file the appeal in time because of lockdown imposed by the Government. The assessee also relied on the order passed by the Hon’ble Supreme Court in suomoto W.P. (Civil) No. 03/2020 and the various orders passed in M.A. numbers in which Hon’ble Supreme Court had excluded the period from 15/03/2020 to 28/02/2022 for the purpose of calculating the limitation and if the said period has been excluded, there was no delay in filing the appeal before the Ld.CIT(A).
The Ld.CIT(A) had rejected the said delay condonation application for the reason that there is no sufficient cause for not presenting the appeal within the prescribed period. As against the said order, the assessee is in appeal before this Tribunal.
4. At the time of hearing, the Ld.AR submitted that the assessee had given valid reasons for not presenting the appeal in time and also pointed out that the covid pandemic was the reason and also relied on the Hon’ble Supreme Court order in the above said suomoto writ petition and submitted that the Ld.CIT(A) had not at all considered the said application on merits but dismissed the same as there was no sufficient cause for the said delay. The Ld.AR submitted that the Ld.CIT(A) had not considered the reasons as sufficient reasons and therefore prayed that the said delay may be condoned and remitted back to the file of the Ld.CIT(A) for denovo consideration.
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.
We have perused the assessment order which is dated 08/06/2021 during which period the covid pandemic was in existence. Further, the Hon’ble Supreme Court also in Suo moto Writ Petitions had excluded the period from 15/03/2020 to 28/02/2022 for the purpose of calculating the limitation. In the present case, the assessment order was passed on 08/06/2021 and the appeal was filed on 04/09/2021. Therefore if the period excluded by the Hon’ble Supreme Court from 15/03/2020 to 28/02/2022 was taken into consideration, there is no delay in filing the present appeal before the Ld.CIT(A). But unfortunately, the Ld.CIT(A) had not considered the submissions made in the delay condonation petition as well as the order of the Hon’ble Supreme Court made in the above Suo moto writ petition but blindly refused to condone the said delay of 89 days as without sufficient cause. The said approach of the Ld.CIT(A) is not correct and also not in accordance with the judgment of the Hon’ble Supreme Court and therefore we have no hesitation to condone the said delay of 89 days in filing the appeal and remit the issue to the Ld.CIT(A) for deciding the issue on merits after hearing the assessee.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 25th July, 2025.