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Facts
The assessee filed its income tax return, and after processing by CPC under section 143(1), an order was passed. The assessee filed a rectification application which was pending. The assessee also filed an appeal against the CPC's intimation.
Held
The Tribunal held that the assessee had a reasonable cause for delay in filing the appeal due to the pending rectification application and the period of Covid-19. Therefore, the delay should have been condoned.
Key Issues
Whether the delay in filing the appeal should be condoned given the pending rectification application and the Covid-19 period, and whether the appeal should be decided on merits.
Sections Cited
143(1), 115JB, 143(3), 249, 250, 251
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Income Tax Appellate Tribunal, PUNE “B” BENCH : PUNE
Before: SHRI RAMA KANTA PANDA & MS. ASTHA CHANDRA
This appeal filed by the Assessee is directed against the order dated 27.08.2024 of the learned Addl./JCIT(A)-2, Jaipur, for assessment year 2018-2019.
Facts of the case, in brief, are that the assessee is engaged in the business of manufacturing and sale of pulp, paper and of trading, marketing of paper and hygiene products. It filed it’s return of income on 04.10.2018 declaring normally computed total income of Rs.9,17,46,840/- with a tax payable thereon at Rs.3,03,34,258/-. The assessee also declared total book profit income of Rs.26,99,27,039/- u/s.115JB of the Act with tax payable thereon at 2 ITA.No.2079/PUN./2024 Rs.5,76,06,748/-. The CPC while processing the return of income u/sec.143(1) made certain disallowances and an order was passed u/sec.143(1) of the Act dated 22.11.2019 determining the total income at Rs.9,17,85,800/- under normal provisions.
3. Against the said intimation, the assessee filed an appeal before the Ld. CIT(A) on 24.04.2021 which was dismissed by the Addl./JCIT(A) on account of delay in filing of appeal by observing as under :
“Decision on Condonation of Delay:- The facts of the case and the grounds raised by the appellant have been considered carefully. It is noticed that there is a delay in filing of appeal. The appeal is to be filed within 30 days of the date of the service of the order. During the appellate proceedings, it is found from the Form No.35 that the appellant filed the present appeal on 24.04.2021 whereas the date of order u/s.143(1) was on 22.11.2019 and as
per Form No.35, the date of service of order was
22.11.2019. As per the dates given in Form 35, it appears that the appeal is filed beyond the prescribed due date.
The reason stated by appellant that it had filed rectification application before Jurisdictional A.O. is not acceptable as filing of appeal and filing of rectification application are two separate legal processes and filing of rectification application cannot prevent appellant to file the 3 ITA.No.2079/PUN./2024 appeal in time. The reasons stated by the appellant have been perused but are not found to be tenable as the appellant has failed to demonstrate sufficient cause or any other hardship for delay in filing of the present appeal and hence, the same cannot be condoned. Considering no hardship or sufficient cause for delay in filing of this appeal, the delay condonation request of appellant is rejected. The above view has also been taken by Hon'ble High Court of Madras in the case of Siva Industries & Holdings Ltd. Vs Assistant Commissioner of Income-tax, Company Circle VI(3), Chennai [2023] 153 taxmann.com 354 (Madras) in a recent decision.
Thus, the appeal filed by appellant is not maintainable as the same is filed beyond the time limit permitted u/s.249 of the I.T. Act for filing of appeal and there is no sufficient cause for delay in filing of appeal, which can be condoned.
Accordingly, the appeal of the appellant is treated as dismissed u/s.250 r.w.s.251 of the Act without considering the merits of the appeal filed.
4. In the end, the present appeal is treated as dismissed.”
Aggrieved with such order of the Addl./JCIT(A), the assessee is in appeal before the Tribunal by raising the following grounds :
4 ITA.No.2079/PUN./2024 “The following grounds are taken without prejudice to each other - On facts and in law,
1. The Learned CIT(A) erred in holding that the appeal filed
by the assessee was not maintainable since the said appeal was filed beyond the prescribed time limit and there was no sufficient cause on the part of the appellant for the delay in filing the appeal.
2. The learned CIT(A) failed to appreciate that the appellant
had filed the rectification application against the intimation order passed u/s.143(1) and as the appellant was pursuing an alternate remedy, there was a sufficient cause on the part of the appellant in not filing the appeal within the stipulated time limit and accordingly, the delay in filing the appeal should have been condoned.
The learned CIT(A) failed to appreciate that there was a sufficient cause on the part of the appellant in not filing the appeal within the prescribed time limit and therefore, the delay in filing the appeal should have been condoned and the appeal should have been decided on merits.
4. The appellant craves leave to add, alter, amend or delete
any of the above grounds of appeal.”
5 ITA.No.2079/PUN./2024
Learned Counsel for the Assessee, at the outset, drew the attention of the Bench to the chronology of events mentioned at page-71 of the paper book, the details of which, are as under :
5.1. He submitted that against the intimation passed by the CPC, the assessee filed a rectification application which is still pending. However, the Assessing Officer in the order passed u/sec.143(3) dated 08.04.2021, copy of which, is placed at pages-46 to 64 of the paper book, determined the total income of the assessee at Rs.10,90,73,260/- wherein he made certain additions to the income determined as per order u/sec.143(1) dated 22.11.2019 at Rs.9,17,85,800/- instead of the returned income. He submitted that since the assessee was pursuing alternative remedy before CPC for rectification of the order and since no order was passed by the CPC before completion of the assessment proceedings u/sec.143(3),
6 ITA.No.2079/PUN./2024 therefore, the assessee after such order passed u/sec.143(3) filed the appeal immediately. Therefore, the Ld. CIT(A) was not justified in not condoning the delay especially when a part of such delay was during the Covid period and has to be excluded in view of decision of Hon’ble Supreme Court and there was a reasonable cause for the balance delay. He accordingly submitted that the matter may be restored to the file of Addl./JCIT(A) with a direction to condone the delay and decide the appeal on merits.
The Learned DR, on the other hand, has fairly considered that the facts submitted by the Learned Counsel for the Assessee are correct.
We have heard the rival arguments made by both the sides and perused the material available on record. We find the Addl./JCIT(A) dismissed the appeal filed by the assessee on account of delay in filing of the appeal, the reasons of which, have already been reproduced in the preceding paragraphs. We find a part of the delay is to be condoned which was during the Covid period and has to be excluded from the total number of days of delay in view of the decision of Hon’ble Apex Court in the case of Cognizance for Extension of Limitation, In re 438 ITR 296 (SC) read with judgment in Cognizance for Extension of Limitation, In re 432 ITR 206 (SC) dated 08.03.2021 and 421 ITR 314, excluding
7 ITA.No.2079/PUN./2024 the covid-19 pandemic outbreak period for all intents and purposes under the limitation law. Further, it is also an admitted fact that against the intimation passed by the CPC, the assessee filed a rectification application which was pending till the time of passing of the order u/sec.143(3) and the Assessing Officer in the order passed u/sec.143(3) has started computation portion on the basis of the total income as per order u/sec.143(1) of the Act dated 22.11.2019 and not as per the returned income, the details of which, are as under:
7.1. Under these circumstances, we find merit in the arguments advanced by the Learned Counsel for the Assessee that when the rectification application was pending before the CPC and the Assessing Officer completed the assessment taking the figure of income determined as per the order u/sec.143(1) dated 22.11.2019, therefore, when the assessee filed an appeal before the Addl./JCIT(A), he should have condoned the delay since there was a reasonable cause for not 8 ITA.No.2079/PUN./2024 filing the appeal in time. We, therefore, set aside the order of the Addl./JCIT(A) and restore the issue back to his file with the direction to condone the delay and decide the appeal on merit. We hold and direct accordingly. Grounds raised by the assessee are accordingly allowed.
In the result, appeal of the assessee is allowed.
Order pronounced in the open Court on 03.01.2025.