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Facts
The assessee company filed its return of income and claimed a refund. Subsequently, the CPC issued an intimation adjusting the refund due to a mismatch between the Tax Audit Report and ROI. The assessee claimed the intimation was received late due to an email going into the SPAM folder, leading to a significant delay in filing an appeal before the CIT(A).
Held
The Tribunal condoned the delay in filing the appeal before the CIT(A), holding that the assessee's failure to notice the intimation was not deliberate or intentional due to the email being in the SPAM folder. The Tribunal directed the CIT(A) to admit the appeal and pass a speaking order on the merits.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was intentional or due to unavoidable circumstances, and if the delay should be condoned.
Sections Cited
143(1)(a), 250(6)
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER ABY T. VARKEY, JM:
This is an appeal preferred by the assessee company against the order of the Learned Commissioner of Income Tax (Appeals)/Addl./JCIT(A), Udaipur, (hereinafter referred to as “the Ld.CIT(A)”), dated 17.10.2024 for the Assessment Year (hereinafter referred to as "AY”) 2021-22.
At the outset, the Ld.AR of the assessee brought to our notice that the Ld.CIT(A) has not admitted the appeal of the assessee by taking note that there was a delay of ‘662’ days in filing of the appeal before him and dismissed the same, without adjudicating the merits of the grounds of appeal raised before him by the assessee. In this regard, the Ld.AR brought to our notice that the assessee company is wholly owned subsidiary of Trimble Inc USA, and is primarily running software development services, IT enabled services, etc. In the year under consideration, the assessee had filed its return of income (RoI) for the relevant AY on 11.03.2022 within the due date, declaring total income at Rs.35,34,38,410/- and paid the tax liability on it to the tune of Rs.8,89,53,379/- by way of TDS amounting to Rs.54,48,060/-, the tax collected at source (TCS) amounting to Rs.17,212/- and advance tax of Rs.9,70,00,000/- and thus, claimed that it was eligible for refund of Rs.1,35,11,890/-. Subsequently, a communication u/s.143(1)(a) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) was issued to the assessee whereby the variance amounting to Rs.5,25,45,953/- towards mismatch in amounts reported in Tax Audit Report (TAR) and RoI was proposed to be adjusted. Pursuant to it, the assessee responded by disagreeing to the proposed adjustment on June 20, 2022. However, according to the assessee, the CPC, Bengaluru, didn’t consider the online response filed by the assessee and issued an intimation dated November 13, 2022, u/s.143(1) of the Act (the Intimation) after making adjustments aggregating to Rs.5,25,45,953/- which resulted in a refund of Rs.2,11,090/- as against the refund of Rs 1,35,31,800/- claimed in the RoI. Aggrieved, the assesse preferred appeal before Ld CIT(A) which was not admitted citing delay of 662 days in filing of Appeal. Explaining the delay in filing of appeal before Ld CIT(A), the assessee submitted that though intimation was received by the assessee via email on November 14, 2022, it was noticed by the assessee only on September 26, 2024, as the email from the CPC even though sent to the registered email ID of the Company had gone into the SPAM folder. The assessee realized the issuance of the aforesaid intimation only on September 26, 2024, while preparing a refund tracker and reconciling the amount of refund as claimed in the RoI with the actual receipt of refund for AY 2021-22.
1. Immediately thereafter, the assessee filed an appeal before the Ld.CIT(A) on 07.10.2024 i.e. within the ‘30’ days of knowledge about the intimation passed u/s.143(1) of the Act by the CPC. According to Ld AR, since the assessee was in the dark about the intimation order passed u/s.143(1) of the Act dated 13.11.2022 and came to know about it only on 06.09.2024, the delay in filing the appeal before the Ld.CIT(A) can’t be said to be deliberate. According to the Ld.AR, taking note that the assessee had filed its return within the due date and has also paid taxes on it and its refund only got reduced by the intimation, prayed for condoning the delay in filing of the appeal before the Ld.CIT(A) and prayed for an opportunity before the Ld.CIT(A).
Per contra, the Ld.DR doesn’t want us to give one more innings to the assessee.
Having heard both the parties and after perusal of the records, we note that the assessee company has filed its RoI on 11.03.2022 within the prescribed due date declaring total income at Rs.35,34,38,410/- and paid taxes on it and claimed refund of Rs.1,35,11,890/-. Later, the case of the assessee was processed by the CPC u/s.143(1) of the Act and assessee received a notice from the CPC pointing out variance amounting to Rs.5,25,45,953/- [towards mismatch in amount reported in TAR and the RoI] and therefore, proposed adjustment accordingly. Pursuant to the show cause notice, the assessee is noted to have objected to the proposed adjustment by letter dated 20.06.2022. However, the CPC has brushed aside the same and issued intimation dated 13.11.2022 u/s.143(1) of the Act after making adjustment of Rs.5,25,45,953/- which resulted in refund of Rs.2,11,090/- as against the refund claimed by assessee of Rs.1,35,11,890/- in its RoI. It has been brought to our notice that the intimation dated 13.11.2022 was received by the assessee in its e-mail on 14.11.2022 but was found to have delivered in the SPAM account of the assessee company; and only on 06.09.2024, the assessee came to know about the existence of the intimation order and in that process, there was a delay of more than ‘600’ days in filing of the appeal before the Ld.CIT(A). From the aforesaid facts, assessee’s action of not noticing about the intimation dated 13.11.2022 can’t be said to be deliberate or intentional. The assessee doesn’t gain by not filing the appeal before the Ld.CIT(A). The assessee has been able to show by placing material on record that the intimation order was delivered in the SPAM account of the assessee company. Hence, according to us, the assessee can’t be faulted for not filing the appeal within the stipulated time; and further the assessee is noted to have filed the appeal immediately after knowing about the intimation order on 26.09.2024. In such a scenario, we are inclined to condone the delay of ‘663’ days in filing of appeal before the Ld.CIT(A) and set aside the impugned order of the Ld.CIT(A) and direct him to admit the appeal and pass order on grounds of appeal raised by the assessee in accordance with sub-section (6) of section 250 of the Income Tax Act, 1961 after hearing the assessee. The assessee is directed to file all the relevant documents/written submissions in support of its grounds of appeal and to be diligent in appearing before the Ld.CIT(A). The Ld.CIT(A) is directed
In the result, appeal filed by the assessee is allowed for statistical purposes.