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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI GIRISH AGRAWAL
आदेश /O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in order no. ITBA/NFAC/S/250/2020- 21/1037006752(1) dated 17.11.2021 against the intimation issued u/s. 143(1) of the Income-tax Act, 1961 (herein after referred to as “the Act”) dated 16.10.2019 passed by DCIT, CPC, Bengaluru.
2 Kongoor Textiles Process ITA No. 26/Chny/2022 AY: 2018-19 2. The grounds of appeal taken by the assessee are reproduced as here under: “1. The order of the Hon'ble Commissioner of Income Tax (Appeals) is opposed to law and contrary to the facts of the case and against equity and principles of natural justice. 2. a) The Hon'ble Commissioner of Income Tax (Appeals) erred in dismissing the appeal merely on technical ground. b) The Hon'ble Commissioner of Income tax (Appeals) ought to have accepted the condonation petition filed by the Appellant and decided the case on merits. 3. a) The Hon'ble Commissioner of Income tax (Appeals) failed to appreciate that, the delay in filing the appeal from 25.11.2019 to 21.04.2020 was only on the bonafide belief that, the issue could be sorted out through the alternate remedy of making rectification petition. b) The Hon'ble Commissioner of Income tax (Appeals) failed to appreciate that, the need to file the appeal would not have arisen if the petition for rectification was accepted. Only after the rejection of the petition for rectification, the Appellant was required to file the appeal with the Hon'ble Commissioner of Income tax (Appeals).”
Brief facts of the case are that the assessee filed its return of income u/s. 139(1) of the Act reporting total income of Rs. 77,64,140/- which was processed by CPC, Bengaluru u/s. 143(1) of the Act vide intimation dated 16.10.2019. While processing the return, CPC Bengaluru has disallowed the claim of the assessee made u/s. 80IA of the Act for an amount of Rs. 55,56,579/-. The said disallowance of deduction u/s. 80IA of the Act is on the ground that the audit report in Form 10CCB was not filed on or before the due date of filing the return of income, though said audit report was made available on the portal of the Income Tax Department on 31.03.2019.
3 Kongoor Textiles Process ITA No. 26/Chny/2022 AY: 2018-19 By adopting the alternate remedy, assessee had filed an application u/s. 154 of the Act for rectification of mistake apparent from record by submitting that the audit report in Form 10CCB for claim of deduction u/s. 80IA of the Act was placed on record before the issue of intimation u/s. 143(1) of the Act. The rectification application was made on 21.04.2020 which was rejected vide order dated 14.07.2020. Aggrieved, the assessee went into appeal before the Ld .CIT(A). The Ld. CIT(A) dismissed the appeal of the assessee as not maintainable on technical ground by holding that there is a delay in filing the appeal. The observations and decision given by the Ld. CIT(A) while disposing of the appeal is reproduced as under:
“ 4. Decision: Delay condonation vide co. 12 & 13 of Form 35, the appellant has accepted the delay in filing appeal and also stated the reasons for the said delay. It is claimed by the appellant that after intimation order u/s. 143(1) dated 16.10.2019, the rectification application was filed on 21.04.2020 which was rejected by CPC on 14.07.2020. Thereafter, due to covid 19 pandemic and consequent lockdown, the appeal could the filed on 19.03.2021. Based on these fact, the appellant had claimed the delay in filing appeal due to bonafide reasons and requested for condonation of the delay. After going through the intimation order u/s. 143(1) dated 16.10.2019, it is noticed that the rectification application before the AO was filed only on 21.04.2020. The prescribed due date for filing of appeal against order u/s. 143(1) dated 16.10.2019 will fall on 25.11.2019 as the date of service of said intimation order through email is found to be 26.10.2019. The appellant did not show any bonafide reason for non- filing of appeal against intimation order u/s. 143(1) dated 16.10.2019 served on 26.10.2019. There was no covid 10 pandemic during the periods from 26.10.2019 to fill 25.11.2019 (prescribed due date for filing appeal against the intimation order dated 16.10.2019). In view of these facts, I don’t find any bonafide reasons for condoning the delay in filing this appeal against order u/s. 143(1) dated 16.10.2019 served on
4 Kongoor Textiles Process ITA No. 26/Chny/2022 AY: 2018-19 26.10.2019. Hence, this appeal is hereby dismissed as non-maintainable on technical grounds. 5. In the result, the appeal of the assessee is Dismissed.”
Before us Mr. N.V. Lakshmi, Advocate represented the assessee and Mr. AR V Sreenivasan, Addl. CIT represented the Department.
At the outset, Ld. Counsel of the assessee submitted before us to direct the Ld. CIT(A) to condone the delay in filing of the appeal of 481 days and decide the appeal on merits of the case. Ld. Counsel submitted that the assessee was pursuing alternate remedy by way of filing rectification application u/s. 154 of the Act in respect of disallowance made in processing of return by CPC, Bengaluru u/s. 143(1) of the Act which was on the ground that the audit report in Form 10CCB was not filed on or before the due date of filing of the return which in fact was made available on the Income Tax Portal on 31.03.2019, much before the date of issuing of intimation u/s. 143(1) of the Act. Ld. Counsel further submitted that filing of audit report in Form 10CCB is a procedural defect and is directory in nature. Compliance of the same was made by the assessee before the completion of the processing of return and it was available on record with the Department. The delay in filing of appeal before the Ld. CIT(A) is attributable to the alternate remedy which was resorted to by the assessee and which was subsequently rejected by the CPC,
5 Kongoor Textiles Process ITA No. 26/Chny/2022 AY: 2018-19 Bengaluru. Further, the delay is attributable to the Pandemic of Covid- 19 and the lockdown during the period when the rectification application was made and was rejected. All these facts were placed before the Ld. CIT(A) to explain the bonafides of the assessee in filing the appeal. However, Ld. CIT(A) dismissed the appeal as not maintainable on technical ground of delay in filing of appeal. Per contra, the ld. Sr. DR relied on the order of the Ld. CIT(A).
We have heard the rival contentions and perused the material on record. We note that the intimation u/s. 143(1) of the Act was issued on 16.10.2019. Instead of filing of appeal against this intimation, the assessee took the alternate remedy of filing a rectification application u/s. 154 of the Act on 21.04.2020. Section 154 of the Act provides limitation of 4 years for filing an application under the said section from the end of the financial year in which the order sought to be amended was passed. The said rectification application was rejected by CPC, Bengaluru on 14.07.2020. It is noted that the due date for filing of appeal against the order passed u/s. 154 of the Act was 14.08.2020. However, the appeal before the Ld. CIT(A) was filed on 19.03.2021. The delay in filing this appeal from 14.08.2020 to 19.03.2021 was attributable to the Pandemic of Covid-19 and the lockdown relating to it.
6 Kongoor Textiles Process ITA No. 26/Chny/2022 AY: 2018-19 7. From the decision of the Ld. CIT(A), we note that he has considered the filing of appeal against the intimation u/s. 143(1) of the Act which was served to the assessee through e-mail on 26.10.2019. Ld. CIT(A) noted that the assessee could have filed its appeal against the intimation u/s. 143(1) of the Act on or before 25.11.2019 during which there was no Covid-19 pandemic situation. From these set of facts, we note that there are two different delays which have been dealt in the appeal before the Ld. CIT(A). First one being delay in filing of appeal against the order passed u/s. 154 of the Act which was solely attributable to the Covid-19 Pandemic situation. The second delay is in respect of filing of appeal by the assessee against the intimation u/s. 143(1) of the Act as noted by the Ld. CIT(A) when the assessee considered adopting the alternate remedy u/s. 154 of the Act. We note that the issue before the Ld. CIT(A) was in respect of order passed u/s. 154 of the Act and the delay in filing the appeal against the said order was attributable to the situation of Covid-19 Pandemic and the disposal of the appeal as non-maintainable on technical grounds of this delay is purely misconceived. This delay ought to have been condone and the appeal ought to have been disposed off meritoriously by passing a speaking order. We also find that reference made by the Ld. CIT(A) in not filing the appeal by the assessee against the intimation u/s. 143(1) of the Act which could
7 Kongoor Textiles Process ITA No. 26/Chny/2022 AY: 2018-19 have been filed on or before 25.11.2019 is misplaced vis-à-vis the alternate remedy taken by the assessee by filing rectification application u/s. 154 of the Act. More importantly the sole issue involved in the appeal relates to disallowance of deduction claimed by the assessee u/s. 80IA of the Act on the ground that audit report in Form 10CCB was not filed on or before the due date for filing of the return which in fact was made available on the Income Tax portal on 31.03.2019 i.e., much before the date of issue of intimation u/s. 143(1) of the Act. It is a settled position of law that the deduction cannot be denied merely for non-adherence of directory provisions for filing of certain forms in respect of the claims made. The powers of first appellate authority are co-terminous with the powers of the Assessing Officer. What the AO can do, can be done by the Ld. CIT(A). Further, section 250 of the Act provides for procedure in appeal and section 251 of the Act provides for adequate powers to the CIT(A) in disposing the appeal before him.
Considering the facts and circumstances of the case of dismissal of appeal by Ld. CIT(A) as non-maintainable on technical ground, issue in the present appeal relating to disallowance of claim u/s. 80IA of the Act for non filing of audit report in Form 10CCB on or before the due date of filing of return, situation arising out of Covid-19 Pandemic and
8 Kongoor Textiles Process ITA No. 26/Chny/2022 AY: 2018-19 the settled position of law condoning the procedural defect of filing of Form 10CCB in respect of disallowance so made, we find it proper to remit the matter back to the file of the Ld CIT(A) for reconsidering the issue meritoriously by passing a speaking order. Needless to say, adequate opportunity be given to the assessee for being heard and to make all of its submissions. The assessee is also directed to comply with the notices issued by the Ld. CIT(A) in this respect. Accordingly, the appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on 26th May, 2022 at Chennai. Sd/- Sd/- (िगरीश अ�वाल) (महावीर �सह ) (GIRISH AGRAWAL) (MAHAVIR SINGH) लेखा सद�य /ACCOUNTANT MEMBER उपा�य� /VICE PRESIDENT
चे�ई/Chennai, �दनांक/Dated, the 26th May, 2022 JPV आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु� (अपील)/CIT(A) 4. आयकर आयु� /CIT 5. िवभागीय �ितिनिध/DR 6. गाड� फाईल/GF.