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Facts
The assessee filed its Return of Income for AY 2010-11 on 26.09.2010. An intimation order u/s 143(1) was passed on 23.02.2011, raising a tax demand of Rs. 23,42,150/-. The assessee filed an appeal before the CIT(A) on 25.12.2024, which was beyond the prescribed time limit. The CIT(A) dismissed the appeal for want of sufficient cause for the delay.
Held
The Tribunal held that the assessee failed to prove any sufficient cause for the inordinate delay of almost 13 years in filing the appeal. The reason provided, the death of the Chartered Accountant, occurred long after the due date for filing the appeal, and the name of the CA was not even mentioned in the affidavit. Therefore, the delay could not be condoned.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was condonable due to the death of the Chartered Accountant, and if sufficient cause was shown.
Sections Cited
250, 143(1), 246A, 139(1), 154
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Income Tax Appellate Tribunal, PUNE BENCHES “B” :: PUNE
Before: MS.ASTHA CHANDRA & DR.DIPAK P. RIPOTE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal is filed by the Assessee against the order of ld.Addl./Joint Commissioner of Income Tax(Appeal)-1, Gurugram passed under section 250 of the Income Tax Act, 1961 for A.Y.2010-11, dated 22.01.2025 emanating from Assessment Order u/s.143(1) of the I.T.Act, dated 23.02.2011. The assessee has raised following grounds of appeal :
“Being aggrieved by an order passed by the ld.CIT(A)-NFAC (hereinafter referred for short as the „ld.CIT(A)‟) U/sec.250 dated 22.01.2025, your appellant submits following „Grounds of Appeal‟ among others, without prejudice to each other:
1. On the facts and circumstances of the case and in law, the dismissal of an appeal by the ld.CIT(A) resulted in gross injustice to the appellant by not condoning delay in filing the same when sufficient reasons for the delay were explained in an affidavit of the Director of the appellant. Which has resulted in gross injustice on the appellant since on merits of the case there was no justification for demand raised by CPC, Bengaluru while passing an order U/Sec.143(1) of the Income Tax Act.
Appellant prays that an order passed by the ld.CIT(A) may be vacated and Hon'ble Tribunal may direct the ld.CIT(A) to admit the appeal by condoning the delay and decide the appeal o9n merit else, Hon'ble Tribunal may admit the appeal and decide the same on merits of the case since the tax demand raised on the appellant on passing an order U/Sec.143(1) is not sustainable on facts of the case.
2. Appellant prays that the ld.A.O. may be directed to restore income returned by the appellant while filing the „Return of Income‟ U/Sec.139(1) and delete the tax demand raised on the appellant amounting to Rs.23,42,150/-.
3. Your appellant craves leave and reserves its right to add/ alter/ withdraw any of the above grounds of appeal
during appeal proceedings or before an appeal order is passed.” Submission of ld.AR :
2. Ld.Authorised Representative(ld.AR) for the Assessee submitted that the Ld.CIT(A) has not condoned the delay, there was sufficient reason for delay, hence ld.CIT(A) may be directed to 2 condone the delay and decide the appeal on merits.Ld.AR read affidavit filed before the ld.CIT(A).
2.1 In the Affidavit, Assessee submitted as under : “1 That said company filed its 'Return of Income on 26.09.2010 for A.Y.2010-11 which carries an acknowledgement no. 160670741260910. Said 'Return of Income was based on audited final accounts of the company for A.Y.2010-11.
That the 'Return of Income stated in para 1 above was subject to an intimation order passed U/Sec.143(1) dt. 23.02.2011 carrying document identification no. CPC/1011/16/1008334248. Said order resulted in tax demand amounting to Rs.23,42,150/- carrying demand identification number 2011201037006436633C as per an order passed U/Sec. 143(1) dt. 23.02.2011.
That the Chartered Accountant attending company's tax matters for A.Y. 2010-11 passed away on 03/02/2018.
That as of date, the company doesn't have past records ie. whether advance intimation was made by CPC asking the company why adjustment to the returned income should not be made before passing an order U/Sec.143(1). Hence, I am unable to make any comment on this aspect but fact remains that the adjustment to returned income resulting into a tax demand which is unacceptable to the company remained to be contested either in appeal or for correction to restore income returned by the company for A.Y.2010-11-
5. That the tax demand raised on the company on passing an order 3 U/Sec. 143(1) remained to be referred for making appropriate correction before the tax authorities by clarifying that there was no error while reporting chargeable income in the 'Return of Income submitted by the company for A.Y.2010-11 based on its "Statement of Total Income. It is seen that while passing an order U/Sec. 143(1) the chargeable income is increased by Rs. 59,53,655/- because of which a tax demand amounting to Rs. 23,42,150/- was raised on the company for A.Y.2010-11.
That recently the company submitted an application for a 'Tax Residency Certificate in Form 10FA' from the assessing officer in connection with earnings associated with export of services where the foreign party asked for such certificate from the company. The acknowledged copy of said application (by Income Tax Department) may be referred at "Annexure-A' to this affidavit. On making said application, the company was informed by the Assessing Officer that, there is an outstanding tax demand for A.Y.2010-11 amounting to Rs.23,42,150/- and unless said tax demand is cleared/ paid the Income Tax Department is unable to entertain company's application for issuing certificate desired by it.
That then, for the first time company learned that it exists with a tax demand as stated in para 6 above.
That as of date the time limit for filing an appeal U/Sec.246A against an order passed U/ Sec.143(1) (resulting in tax demand as stated above) as well as, time limit for filing a rectification application U/Sec. 154 of the Income Tax Act has lapsed. Hence, company is left with only option to file belated appeal U/Sec 246A of the Income Tax Act against an order passed U/Sec.143(1) for A.Y.2010-11 which will enable the company to contest in appeal an erroneous tax demand raised on it. 4
That what is stated in para 8 above exists with a rationale since, while filing the "Return of Income the system generated acknowledgment affirming receipt of "Return of Income" submitted by the company shows taxable income, position of prepaid taxes, position of tax due matching with the 'Statement of Total Income based on which said "Return of Income was submitted by the company in the past i.e. for AY 2010-11 Hence, the company has reason to believe that it has correctly reported its chargeable income while filing the Return of Income though, while processing said 'Return' U/Sec. 143(1), it appears, the CPC hay used a different programme/ logic because of which there is deviation in income returned by the company and income assessed by CPC while passing an order U/Sec.143(1) as stated in para 5 and 6 above.
That to overcome with said unjust tax demand raised on the company now, it is left with only option to file a belated appeal against an order passed U/Sec.143(1) for A.Y.2010-11. While doing so the company is required to pray for condoning delay in filing an appeal with a further request to the appellate authority to admit the appeal belatedly in the interests of justice.
That facts stated above clearly show that due to demise of a Chartered Accountant attending the Income Tax Act related matters of the company and the requirement of obtaining a 'Tax Residency Certificate in Form 10FA'from Income Tax Department the company realised about past outstanding tax demand referred above.
This affidavit is made for filing belatedly an appeal against an order passed U/Sec.143(1) for reasons stated above.
I hereby state on oath that, what is stated in this affidavit represents nothing beyond facts and same are true and correct to the best of my knowledge and belief.
This affidavit is made on 10th day of December of 2024 and also accompanied with "Annexure-A" stated above.”
Submission of ld.DR : 3. Ld.DR for the Revenue vehemently opposed the submission of Ld.AR.Ld.DR relied on the order of the Ld.CIT(A) and Assessing Officer(AO).
Findings &Analysis : 4. We have heard both the parties and perused the records. In this case, Assessee company had filed a Return of Income on 26/09/2010 for AY 2010-11. The Order u/s 143(1) of the Act was passed on 23/02/2011. Aggrieved by the Order u/s 143(1) of the Act the Assessee company filed an Appeal u/s 246A of the Act before Commissioner of Income Tax (Appeal) on 25/12/2024 which was beyond the time allowed for filling appeal.
4.1 Ld.Addl.Commissioner of Income Tax(Appeal) held that there was no sufficient cause for Delay, hence he dismissed the appeal. Aggrieved by the Order u/s.250of the Act passed by the 6 ld.Addl.Commissioner of Income Tax(appeal), the Assessee has filed appeal before this Tribunal.
4.2 In this case the Assessee had filed an Affidavit before the ld.Commissioner of Income Tax(Appeal) stating the reasons for delay.Ld.AR filed copy of the said Affidavit before us during the proceedings. Ld.AR took us through the Affidavit and pleaded that the Chartered Accountant attending the case died on 03/02/2018, hence the company could not get past records.
4.3 On perusal of the Affidavit filed by Assessee, it is noted that the main Reason pleaded by the Assessee for delay was that its Chartered Accountant died on 03/02/2018. 4.4 We have tabulated the basic facts of the case as under : Date of Order u/s 23 February 2011 143(1) Date of Service of the 23 February 2011 As admitted by the Order Assessee in Form 35 Time Limit to file 25 March 2011 appeal before CIT(A) (Within 30 days of u/s 246A receipt of the impugned order) Date of Filling Appeal 25 December 2024 before CIT(A) Date of Death of CA 03/02/2018 4.5 From the above chart one can understand that the Chartered Accountant died on 03/02/2018 but the due date for filling appeal was 25/03/2011. Thus, the Chartered Accountant died almost 7 years after the due date of filling the Appeal.
4.6 It means on the Due date of Filling the Appeal before the ld.Commissioner of Income Tax(Appeal) the Chartered Accountant attending the Tax matters of the Assessee company was alive. There for there was no valid and sufficient reason for the Delay.
4.7 We specifically asked the Ld.AR to explain the Delay from 25/03/2011 to 03/02/2018 which is almost Seven Years. The Ld.AR could not give any reason.
4.8 In the Affidavit filed by the Assessee, NO reason has been provided for the Delay from 25/03/2011 to 03/02/2018. The Chartered Accountant died on 03/02/2018 however assessee could not explain the reason for delay prior to the period of death of the Chartered Accountant.That delay is almost Seven years. Therefore, we are of the opinion that there was no sufficient reason for delay.
4.9 In the Affidavit, the Assessee has pleaded that the Chartered Accountant Attending the case died on 03/02/2018, however, name of the Chartered Accountant is not mentioned in the Affidavit.
During the proceedings, we specifically asked the Ld.AR, the name of the Chartered Accountant who was attending the case of the assessee. He could not answer the question. Though during the hearing, the Ld.AR consulted two individuals who were seating with him in the court room, BUT none of them could inform us the name of the Chartered Accountant claimed to have been attending the case for AY 2010-11. 5.1 It is important to mention here that no copy of any Death Certificate has been filed.
5.2 Ld.AR also pleaded that Income Tax department had not issued any notice for recovery hence Assessee was not aware about the outstanding tax amount. This reason is blatantly incorrect as the order u/s.143(1) was admittedly received by the assessee. Hence the Assessee was aware about the Order u/s.143(1) and the demand mentioned in the order.
5.3 Even after the death of the Chartered Accountant the actual appeal has been filed by the Assessee after almost Five years few months. No reason has been given by the Assessee for such an inordinate delay.
5.4 In these facts and circumstances of the case, we are of the considered opinion that Assessee has failed to prove that there was any cause for delay leave apart sufficient cause. Thus, there was no sufficient cause for delay in filling the Appeal before the ld.Commissioner of Income Tax(Appeal) u/s.246A of the Act.
5.5 We find support from the Order of the Hon’ble Supreme Court. The Hon’ble Supreme Court in the case of Esha Bhattacharjee vs Managing Committee of Raghunathpur Nafar Academy and others Civil Appeal Nos.8183 to 8184 of 2013 vide order dated 13/09/2013 has laid down following principles for deciding Condonation Application: Quote,“ 15. From the aforesaid authorities the principles that can broadly be culled out are: i) There should be a liberal, pragmatic, justice-oriented pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice. ii) The terms “sufficient cause” should be understood in their proper 10 spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact- situation. ii) iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis. iii) iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of. iv) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact. v) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice. vi) The concept of liberal approach has to encapsule the conception of reasonableness and it cannot be allowed a totally unfettered free play. vii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation. viii) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach. ix) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation. x) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation. xi) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception. The State or a public body or an entity representing a collective cause should be given some acceptable latitude. ”Unquote (emphasis supplied) 5.6 Thus, the Hon’ble Supreme Court (supra) has specifically stated that distinction should be made between INORDINATE DELAY 11 and Dealy of short duration. In the case of the assessee company there is INORDINATE DELAY of almost 13 YEARS. No sufficient reason has been given by the assessee to explain such a delay of13 years.
5.7 In these facts and circumstances, we uphold the Order of the Commissioner of Income Tax (appeal).
5.8 Accordingly,Ground No.1 raised by the assessee is dismissed.Since we have upheld the order of the ld.CIT(A) for elaborate reason discussed,the Ground No.2 is dismissed too.