TEXCEL MARKETING CORPORATION,BANGALORE vs. THE INCOME TAX OFFICER, WARD-3(2)(2), BANGALORE

The solitary issue that is raised is whether the CIT(A) has erred in dismissing the appeal in limine without condoning the delay of 121 days.

The brief facts of the case are as follow: The assessee e-filed its return on 10.10.2018 declaring income of Rs.46,15,690. The intimation u/s 143(1) of the I.T.Act was issued on 19.10.2019 by making disallowance of Rs.1,06,314 u/s 36(1)(va) of the I.T.Act in respect of provision for employees contribution to PF / ESI. The assessee filed rectification application against the intimation u/s 143(1) of the I.T.Act. The rectification application was rejected vide order dated 18.02.2020.

Aggrieved by the intimation issued u/s 143(1) of the I.T.Act in making disallowance of Rs.1,06,314 u/s 36(1)(va) of the I.T.Act, the assessee preferred an appeal to the first appellate authority. There was a delay of 121 days in filing the appeal before the CIT(A). It was contended that on merits, the issue in question is covered by the judgment of the Hon’ble jurisdictional High Court in the case of Pr.CIT v. Beverage Corporation Limited. As regards the delay in filing the appeal before the CIT(A), it was submitted that the assessee was pursuing remedy of rectification u/s 154 of the I.T.Act and since CPC / ITO rejected the application to rectify the intimation, the assessee has filed appeal before the CIT(A) belatedly by 121 days. The CIT(A) dismissed the appeal of the assessee in limine without condoning the delay of 121 days.

Aggrieved by the order of the CIT(A), the assessee has preferred this appeal before the Tribunal. None was present on behalf of the assessee. However, I proceed to dispose of the appeal on merits after hearing the learned Standing Counsel.

I have perused the relevant material. Admittedly, the assessee was pursuing an alternative remedy u/s 154. Therefore, it cannot be stated that there was negligence on the part of the assessee in not filing the appeal on time. The Hon’ble Apex Court in the case of Collector, Land Acquisition v. Mst.Katiji & Others, reported in 167 ITR 471 had established the salutary principle that a meritorious case shall not be defeated on the ground of technicality. It was held by the Hon’ble Apex Court that when substantial justice is pitted

M/s.Texcel Marketing Corporation against the technicalities, the substantial justice should prevail. In holding so, the Hon’ble Apex Court held that when delay is condoned, there is no prejudice caused to either of the parties because the appeal is only going to be heard on merits. The Hon’ble Karnataka High Court in the case of KSFD Corporation v. ACIT (TDS) 196 taxman 445 had also taken a similar view in condoning the delay of 368 days. For the aforesaid reasoning and the judicial pronouncements cited supra, I condone the delay of 121 days in filing the appeal before the CIT(A). Since the CIT(A) has not decided the issue on merits, I restore the case to the CIT(A) for his decision on merits. It is ordered accordingly.

In the result, the appeal filed by the assessee is allowed for statistical purposes.