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Facts
The assessee, a member of an AOP, incorrectly included his exempted share of AOP income under Section 86 in his total income, claiming a tax rebate instead of exemption. His rectification petition was not entertained, and a subsequent appeal to the CIT(Appeals) was filed with a delay of 1091 days, which the CIT(Appeals) refused to condone.
Held
The ITAT condoned the 1091-day delay, deeming it necessary for natural justice to allow the case to be heard on its merits. The matter was remitted back to the Addl./JCIT(Appeals) to dispose of the appeal without prejudice, with a direction for the assessee to cooperate.
Key Issues
Whether the delay in filing an appeal should be condoned for a substantive error regarding the treatment of AOP income, and if so, whether the appeal should be heard on its merits.
Sections Cited
86, 143(1), 154
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Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
The present appeal is directed at the instance of assessee against the order of ld. Additional/Joint Commissioner of Income Tax (Appeals)-10, Delhi dated 3rd March 2025 passed for Assessment Year 2017-18.
(A.Y. 2017-2018) Saraj Dam 2. The appeal is time barred by 1091 days in filing the appeal by the assessee before the ld. CIT(Appeals). Though the assessee filed a condonation petition before the ld. CIT(Appeals) and prayed to condone the delay. The ld. CIT(Appeals) did not condone the delay on the ground that there was no sufficient cause for condonation of the delay in filing of the appeal as well as negligent attitude on the part of the appellant.
Brief facts of the case are that the assessee was a member of an AOP, PSS Enterprise assessed at the maximum marginal rate of tax. His share from AOP was exempted under section 86 of the Act, but the assessee has shown his share of income of Rs.20,01,118/- in his computation of total income and claimed tax rebate under section 86, which was a mistake from record. The assessee filed his return of income at the total income of Rs.23,70,419/- including share from AOP of Rs.20,01,118/-. Tax rebate under section 86 had been claimed for Rs.4,56,179/- instead of claiming the share income from AOP itself as exempted income. The assessee should not have included his share of income from AOP in his computation of total income, but should have claimed the same as exempted income. As the mistake was apparent from record, the assessee preferred a rectification petition under section 143(1)/154 on 20.04.2022 but the same has not been entertained by the ld. Assessing Officer because of the pending of rectification petition mentioning error description that the return income was sought to be changed. The assessee has not filed appeal before the ld. CIT(Appeals), therefore, the delay of 1091 days was occurred.
(A.Y. 2017-2018) Saraj Dam
The contention of the ld. Counsel for the assessee is that the ld. Addl./JCIT(Appeals) dismissed the appeal of the assessee without proper appreciation of reason for the delay as the assessee failed to explain any facts or to submit any documents/evidences to support/substantiate its claim. The ld. Counsel argued that the ld. Addl./JCIT(Appeals) dismissed the appeal without considering the issue on merit as well as without condoning the delay. Therefore, he pleaded to set aside the order of ld. Addl/JCIT(Appeals).
On the other hand, ld. Departmental Representative submitted that sufficient opportunity was being provided to the assessee. Therefore, the ld. Addl./JCIT(Appeals) has no other option except dismissing the appeal without proper appreciation of reason for the delay and he pleaded to uphold the order passed by the ld. Addl./JCIT(Appeals).
I have heard both the sides and perused the material available on record. By considering the totality of the facts and circumstances of the case, I am inclined to condone the delay. Therefore, in order to ensure the principle of natural justice, I am of the view that it is a fit case to provide one more opportunity to the assessee to decide the case on merit. Therefore, I remit the matter back to the file of ld. Addl./JCIT(Appeals) with a direction to dispose of the appeal without any inference on the observations of earlier order passed by him. At the same breath, I also hereby caution the assessee to promptly co-operate with the proceedings (A.Y. 2017-2018) Saraj Dam before the Ld. Addl./JCIT(Appeals) failing which the Ld. Addl./JCIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits of the case, based on the materials available on the record. Thus, the grounds raised by the assessee in the appeal are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 26/06/2025.