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Facts
The assessee filed an appeal before the CIT(A) against an assessment order. Subsequently, the assessee requested withdrawal of the appeal to file a revision application under Section 264 of the Income Tax Act. The CIT(A) dismissed the appeal as withdrawn.
Held
The Tribunal held that the CIT(A) was justified in dismissing the appeal as withdrawn, as the assessee voluntarily sought to pursue an alternative remedy. The Tribunal further noted that the delay in filing the present appeal before it was due to the assessee's own actions and not a reasonable cause.
Key Issues
Whether the delay in filing the appeal can be condoned, and whether the CIT(A) erred in dismissing the appeal as withdrawn instead of on merits.
Sections Cited
147, 144, 250, 264, 139(1), 142(1), 253, 251, 11
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
This appeal at the instance of the assessee pertaining to the A.Y. 2018-19 is directed against the order dated 24.04.2024 passed by NFAC, Delhi u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) arising out of Assessment Order dated 28.03.2023 passed u/s.147 r.w.s.144 of the Act.
Registry has informed that there is delay of 268 days in filing the appeal before this Tribunal. Application for condonation of delay has been filed by the assessee stating as under :
“This is with reference to the Order passed u/s 250 of the Income Tax Act, 1961 ("the Act") dated April 24, 2024. Vide the said order the Appeal filed by the Appellant was dismissed on the basis of request filed by the Appellant for the withdrawal of Appeal.
Being aggrieved and dissatisfied by the said order, we beg to prefer the Appeal before the Income Tax Appellate Tribunal ("ITAT").
The Firm was formed in November 2012 to act as a promoter builder for residential projects, township projects and commercial projects and other Real estate services. However, the Appellant has never commenced any project under the name of the Firm.
The Appellant has received the Assessment order framed under Section 147 r.w.s. 144 of the Income Tax Act, 1961 ("the Act") with DIN- ITBA/AST/S/147/2022-23/1051462955(1) dated March 28, 2023 which was served on the Assessee on March 30, 2023 wherein the Addition of Rs. 3,12,09,030/- was made and demand was raised of Rs. 5,18,44,211/-.
The Appellant has entered into the Joint Development Agreement on December 27, 2017. However, due some disputes the said project is not yet executed.
The Appellant has only paid advance for conducting the Joint Development Agreement which was paid through Capital Introduction of Partners.
Aggrieved and dissatisfied by the addition made vide the order framed under section 147 r.w.s. 144 of the Act, the Appellant has filed an Appeal before the Commissioner of Income Tax (Appeal).
Subsequently, the Appellant has decided to file the Application under section 264 of the Act and filed the application for the withdrawal of the Appeal.
The Commissioner of Income Tax (Appeals), NFAC has passed the order under section 250 of the Act. dated April 24, 2024 and dismissed the Appeal by stating that the Appeal is dismissed on the request of the Appellant for the withdrawal.
The order under section 264 of the Act was passed by the Principal Commissioner of Income Tax("PCIT"), Pune-2 on January 29, 2025 and the revision application filed by the Appellant was rejected and the order passed under section 147 r.w.s 144 of the Act was restored.
The Appellant was hopeful for revision of the order under the application filed under section 264 of the Act. The consultant of the Appellant has also of the opinion that there is no need to file the ITAT Appeal as the matter is pending before the PCIT and the Appellant will get the relief. However, due to adverse decision given by the PCIT the Appeal was dissatisfied.
As the order framed under section 264 of the Act was passed beyond the date of ITAT Appeal to be filed against the order framed under section 250 of the Act, the Appellant could not able to file the Appeal within the statutory timeline.
Universal Reality From the above, it can be observed that, the delay in filing the Appeal is due to misguidance of the consultant and belief of the Appellant to get the relief in the proceeding under section 264 of the Act. There was no intention to jeopardize the interest of the revenue by delaying the filing of the Appeal. We also submit that no intentional or deliberate delay is caused in filing the ITAT Appeal. We are also enclosing the Affidavit in support of our condonation Petition. In view of the above, we would like to beg your Honour to accept the request of condonation of delay and admit our Appeal in respect of above-mentioned matter. We trust your Honour shall accede to our request and oblige for which we express our best thanks in advance.”
On the other hand, Ld. Departmental Representative opposed the above request for condonation of delay stating that there is no ‘reasonable cause’ mentioned in the condonation application and only because the assessee failed to succeed in the proceedings u/s.264 of the Act, assessee is in appeal before this Tribunal and therefore such delay should not be condoned.
We have heard both the sides and gone through the averments made in the condonation application. We notice that the assessee which is a partnership firm filed the appeal before the ld.CIT(A) against the addition made by ld. Assessing Officer but subsequent to filing of appeal the assessee thought to opt for the window available u/s.264 of the Act but to file the revision application u/s.264 of the Act assessee had to withdraw the appeal filed before ld.CIT(A). Assessee has duly withdrew the appeal but then failed to succeed in the revision application filed u/s.264 of the Act. Assessee was left with the only option to file a Writ before the Hon’ble Jurisdictional High Court against the order u/s.264 of the Act. However, assessee planned to file the instant Universal Reality appeal against the order of ld.CIT(A) dismissing the assessee’s appeal as withdrawn before this Tribunal. Delay of 268 days was only on account of time spent by the assessee in the proceedings carried out u/s.264 of the Act. The facts discussed above demonstrate that it is not a case where the delay has arisen due to the reasons beyond the control of the assessee but it is a clear case of intentional delay as the assessee was very well aware that it has not been able to succeed and just took a chance to prefer the appeal before this Tribunal.
Various Hon’ble Courts normally takes a liberal approach where there is a delay for ‘reasonable cause’ and with an intention to provide substantial justice and for non- deliberate delays, the delay in filing the appeal is condoned. But in the present set of facts, we find that it is not a meritorious matter which will be thrown out at the very threshold and cause of justice will be defeated because it is a case of intentional delay and the assessee was very well aware about the appeal proceedings. We therefore reject the assessee’s plea for condonation of delay and the appeal is dismissed in limine being barred by limitation.
Though we have already dismissed the assessee’s appeal being barred by limitation, still for academic purpose we proceed to deal with the merits of the case.
After hearing both the sides and examining the facts of the case, we notice that the assessee is a partnership firm, did not file the return of income for A.Y. 2018-19 u/s.139(1) of the Act but thereafter based on the information and the reason to believe that income to the extent of Universal Reality Rs.3,12,09,030/- has escaped assessment, notice u/s.148 of the Act issued and duly served upon the assessee and proceedings u/s.147 of the Act were carried out. However, assessee failed to make any compliance to various notices issued u/s.142(1) of the Act and since the assessee made no submissions/appeared through Authorised Representative ld. Assessing Officer invoked section 144 of the Act and framed best judgment assessment making addition of Rs.3,12,09,030/-. Against the assessment order u/s.147 r.w.s.144 dated 28.03.2023, assessee preferred appeal before ld.CIT(A) on 28.04.2023. During the course of appellate proceedings before ld.CIT(A) assessee gave an application for withdrawal of the appeal stating that the assessee wants to apply to ld. PCIT u/s.264 of the Act for the revision of the assessment order and such application could be filed only after withdrawing the appeal pending before ld.CIT(A). Ld.CIT(A) observing that the assessee wants to opt for section 264 of the Act for the revision of assessment order, accepted the assessee’s application and dismissed the appeal as withdrawn. Since the assessee had itself requested for withdrawal of the appeal, ld.CIT(A) was not required to deal with the merits of the case.
Thereafter, assessee filed an application before ld.PCIT u/s.264 of the Act on 08.02.2024 for revision of the assessment order passed u/s.147 r.w.s.144 of the Act. In the order u/s.264 of the Act dated 29.01.2025 the facts are narrated in the body of the order itself that that the assessee previously filed the appeal before ld.CIT(A) but the same was allowed to be withdrawn vide CIT(A)’s order dated 24.04.2024 and thereafter the revision petition is admitted for consideration. However, even though the assessee made detailed submissions before ld.PCIT but failed to get any relief and the revision application u/s.264 of the Act filed by the assessee was rejected.
Now once the assessee has lost in the application filed u/s.264 of the Act the only option left with the assessee was to file a Writ before the Hon’ble Jurisdictional High Court because the order u/s.264 is not appealable before this Tribunal in terms of provisions of section 253 of the Act. Assessee only took a alternate remedy to again make the proceedings u/s.250 of the Act alive and filed the appeal against the order u/s.250 of the Act passed by ld.CIT(A) on 24.04.2024 before this Tribunal with a delay of 268 days. Grievance of the assessee before this Tribunal is that ld.CIT(A) ought to have adjudicated the issues on merits. For the sake of reference, grounds of appeal raised by the assessee are reproduced below :
“1) The Commissioner of Income Tax (Appeals) erred in dismissing the Appeal without considering the merits of the case and without providing a reasoned order. 2) As the opportunity to present the case was not given to the Appellant, the principal of natural justice is violated. 3) The Commissioner of Income Tax (Appeals) failed to verify the facts and discuss the issue involved while framing the order, and hence, the order passed is void ab initio and without any merits and bad in law. 4) The Appellant had valid grounds for Appeal, and the Commissioner of Income Tax (Appeals) should have been decided the matter on merits instead of summary dismissal. 5) The Appellant prays that the delay be condoned, and the Appeal should be taken up for hearing. 6) The Appellant craves leave to add, alter, amend, modify and or delete any or all of the grounds of appeal mentioned herein above.” Universal Reality
10. From the above grounds of appeal, it is manifest that the only grievance of the assessee is that ld.CIT(A) ought to have decided the matter on merits instead of summary dismissal. We fail to find any merit in the grounds of appeal raised by the assessee because in case the assessee did not appear before ld.CIT(A) or details filed by the assessee are not sufficient, then in such situation also ld.CIT(A) cannot dismiss the appeal in limine for non-filing of details but he is required to deal with the merits of the case and pass a speaking order as contemplated u/s.250(6) of the Act. But the situation in the instant case is different because assessee has itself approached before ld.CIT(A) for withdrawal of the appeal as it wanted to avail the remedy available u/s.264 of the Act for revision of the assessment order. Once the assessee itself has applied for withdrawal of the appeal, there remains no justification for ld.CIT(A) to deal with the merits of the case. Only recourse available with the ld.CIT(A) was to accept the assessee’s application for withdrawal of the appeal and give way to the assessee to file an application u/s.264 of the Act. Ld.CIT(A) was right in dismissing the appeal accepting the request of the assessee for withdrawal of the appeal. Therefore, there is no merit in the grounds of appeal raised by the assessee. Under similar set of facts and circumstances, Coordinate Bench, Kolkata in the case of The Cricket Association of Bengal Vs. DCIT – to 277/Kol/2023, order dated 21.08.2023 has held as under :
“9. We have heard rival contentions and perused the material placed before us. We observe that the assessee has been denied exemption u/s 11 of the Act for AYs 2013-14, 2014-15 and 2018- 19 and aggrieved with the said action of the ld. AO, grounds of appeal challenging the validity of the assessment proceedings as well as the additions made, were raised before the ld. CIT(A). During the course of pendency of the appeal before the ld. CIT(A), the assessee suo-moto requested to withdraw the appeal because it wanted to opt for the window of Section 264 of the Act and since the same was getting time barred, on assessee's request the ld. CIT(A) dismissed the appeal is as withdrawn.
10. In the decisions referred to by the ld. Senior counsel for the assessee, there is no such issue where the assessee in order to apply for the petition u/s 264 of the Act, has withdrawn the appeal pending before the ld. CIT(A).
10.1. In the case of Rai Bahadur Hardutroy Motilal Chamaria (supra), the issue was that assessee filed the appeal before the appellate Asst. Commissioner and then withdrew the appeal without quoting any reason and such application of the assessee was with an intention to stop the appellate proceedings. Hon'ble Court found that the machinery of the act was set into motion the moment when the assessee filed the appeal and then complete assessment records of the assessee were open before the learned appellate Asst. Commissioner and in case The Cricket Association of Bengal of any issues which the Assessing Officer had not noticed and prejudice may have been caused to the revenue then under such circumstances the appellate Asst. Commissioner has to carry out the proceedings for ascertaining and settling the real sum to be assessed. However, in the instant case the facts are different and it is a case where the proceedings have just been shifted from ld. CIT(A) to ld. CIT(E) and similar grounds have been raised in the petition u/s 264 of the Act and, therefore, the judgement of the Hon'ble Supreme Court (supra) is not applicable in the case of the assessee.
10.2. Similar are the facts in the case of M. Loganathan (supra), wherein the assessee made a declaration under the Voluntary Disclosure Scheme, 1997, but declaration was rejected on the ground that the tax was not paid within three months. Aggrieved by the same, the assessee went on appeal before the Commissioner of Income Tax (Appeals)-XII, Chennai and in the meantime, the assessee moved to the Settlement Commission under Section 245C of the Income Tax Act for settlement of the assessment and thus the assessee wanted to reduce its tax liability. This fact is also missing in the instant appeal and, therefore, the same is not applicable in the case of the assessee. 10.3. So far as the remaining two decisions are concerned i.e., CIT vs. Premkumar Arjundas Luthra (HUF) reported in [2016] 69 taxmann.com 407 (Bom.) and M/s. Deekay Gears vs. ACIT in AY 2009-10, order dt. 16/01/2019, in both these cases the ld. CIT(A) dismissed the assessee's appeal in limine without dealing with the merits of the case and since this is also not the fact of the instant case before us, these two decisions are also not applicable as the facts are distinguishable.
Before proceeding ahead we would like to go through the provisions of Section 251 of the Act, which read as follows:-
"Powers of the 63[***] 64[Joint Commissioner (Appeals) or the]65[Commissioner (Appeals)].
66 251. (1) In disposing of an appeal, the 63[***]*65[Commissioner (Appeals)] shall have the following powers— (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or 67annul the assessment 68[***]; 69[(aa) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment;] (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case, he may pass such orders in the appeal as he thinks fit. 70 [ (1A) In disposing of an appeal, the Joint Commissioner (Appeals) shall have the following powers— (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or 67 annul the assessment; (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case, he may pass such orders in the appeal as he thinks fit. ] (2) The 71[***] 72[Joint Commissioner (Appeals) or the]73[Commissioner (Appeals)] 72[, as the case may be,] shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction.
Explanation.--In disposing of an appeal, the 74[***] 75[Joint Commissioner (Appeals) or the]76[Commissioner (Appeals)], may consider and decide 77any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the 74[***] 75[Joint Commissioner (Appeals) or the]76[Commissioner (Appeals)] 75[, as the case may be,] by the appellant."
12. Now, as per the provisions of section 251 of the Act, the ld. CIT(A) has the power to confirm, reduce, enhance or annul the assessment as provided in Section 251(1A)(a) of the Act and Clause (c) of the Section 251(1A)(c) of the Act provides that in any other case, he may pass such orders in the appeal as he thinks fit.
Now in the instant appeals, we notice that the assessee after filing the appeal before the ld. CIT(A) moved an application for withdrawal of the appeals stating the reason that it wants to file a petition u/s 264 of the Act. This application of the assessee was towards adopting an alternative remedy provided under the Act by way of Section 264. Now if, the ld. CIT(A) had refused to accept such application, then also assessee would have been aggrieved for not having been given the recourse for section 264 of the Act. The ld. CIT(A) in this case dismissed the appeal has withdrawn considering the application of the assessee opting for an alternative remedy and the issues raised before him will again be the subject matter of adjudication before the ld. CIT(E).
We further notice that in the order u/s 264 of the Act, ld. CIT(E) has referred to the judgement of the Hon'ble Jurisdictional High Court in the case of Vikas Nagelia vs. CIT reported in [2022] 145 taxmann.com 317 (Cal.), wherein the Hon'ble Court held as under:-
"10. With regard to the averments that no instruction was given by the appellant to withdraw the appeal to the earlier consultant etc., are of self-serving statement of the appellant of which we cannot take any cognizance. Nevertheless, we are convinced that the conduct of the appellant cannot be stated to be so bad to hold that he had slept over his rights. The appellant had been prosecuting the matter before a wrong forum. In any event, the appellant should not be left remediless and should not be non-suited even to avail the revisional remedy, more particularly when the appellant chose not to avail a statutory appeal before the first appellate authority against the assessment. Therefore, the only remedy available to the appellant is to file a revision petition under section 264 of the said Act, which was done by the appellant and such revisional application was made as early as on 5th March, 2012."
14.1. Now, on going through the above judgement, we notice that the assessee should not be left remediless. In this case had the assessee been able to get any relief in the proceedings u/s 264 of the Act, then the instant appeal must have been withdrawn or not pressed by the assessee but because the assessee did not get any relief in the proceedings u/s 264 of the Act, this action of the assessee is like taking chance again before the ld. CIT(A). The issues which were raised before the ld. CIT(A), had been raised before the ld. CIT(E) and the same has been decided against the assessee. Now the order u/s 264 of the Act, is the subject matter of the appeal before the Hon'ble Jurisdictional High Court.
Under these given facts and circumstances, we are of the considered view that the application made by the assessee for withdrawal of appeal before the ld. CIT(A), was a conscious effort towards getting relief by taking recourse to Section 264 of the Act and the ld. CIT(A) has just acted within the four corners of law in order to provide remedy to the assessee, for which it is eligible, u/s 264 of the Act, and he gave the assessee a way for doing the same Universal Reality because without doing so proceedings u/s 264 of the Act could not be initiated in terms of provision of Section 264(4)(b) of the Act. Therefore, by doing so the ld. CIT(A) has acted well within the powers provided u/s 250 of the Act. In view of the above discussion, we fail to find any infirmity in the action of the ld. CIT(A) dismissing the appeals of the assessee has withdrawn and not dealing with the merits of the case in pursuance to the application for withdrawal filed by the assessee to take recourse u/s 264 of the Act and uphold the same. Thus all the grounds of appeal
commonly raised for Assessment Year 2013-14, 2014-15 and 2018-19 are dismissed.”
11. The above decision is squarely applicable on the facts of the instant case and we therefore fail to find any infirmity in the finding of ld.CIT(A) in the impugned order. In view thereof, all the grounds of appeal raised by the assessee are dismissed.
In the result, appeal of the assessee is dismissed.
Order pronounced on this 29th day of May, 2025.