A.K. EXPORTERS,KOLKATA vs. ACIT, CIR. -32, KOLKATA

These assessee’s appeals are time barred by 122 days and the petition seeking condonation of delay has been filed stating that the delay in filing of these appeals were attributable to the restrictions imposed due to Covid-19 pandemic. We have heard both the sides and find that there is reasonable cause for delay in filing of these appeals on time. Hence we condone the delay and admit these appeals for hearing.

At the outset it has been brought to our notice that facts & law pertaining to both appeals are same (except difference in amount ). Since both sides agree, we take up appeal of AY 2013-14 as lead case, which result will be followed for AY 2012-13. According to the Ld. A/R of the assessee in this case, the Assessing Officer has passed an order u/s 263/143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’) vide order dt. 04/11/2016 for Assessment Year 2013-14. The Assessing Officer while computing the total income had disallowed the deduction u/s 35(1)(ii) of the Rs.50,00,000/- (125% of the donation) in respect of donation made to M/s. Herbicure Health Care Bio Herbal Research Foundation. Aggrieved by this order of the Assessing Officer dt. 04/11/2016 u/s 263/143(3) the assessee

Meanwhile, when the appeal of assessee was pending before the Ld. CIT(A), the Assessing Officer took up the case and passed a rectification order u/s 154 of the Act vide order dt. 22/11/2016 against the order passed by him on 04/11/2016 (original assessment), wherein the Assessing Officer was pleased to disallow Rs.20,00,000/- more ie, Rs 70,00,000/- (175% of the donation). Since being aggrieved by this order of the Assessing Officer dt. 22/11/2016 passed u/s 154 of the Act, the assessee preferred another appeal before the Ld. CIT(A) challenging the enhancement of disallowance from 125% to 175% of the donation. This appeal of assessee has been disposed off by the Ld. CIT(A) by passing the impugned order, without adjudicating/disposing of the appeal preferred by the assessee against the re-assessment order of the Assessing Officer dt. 04/11/2016 passed u/s 263/143(3) of the Act. This impugned action of the Ld. CIT(A) has been assailed before us by pointing out that since the order passed u/s 154 of the Act by the Assessing Officer dt. 22/11/2016 was emanating from the re-assessment order dt. 04/11/2016 passed u/s 263/143(3) of the Act, the initial appeal preferred by the assessee ought to have been also disposed off along with the appeal preferred by the assessee against the rectification order passed u/s 154 of the Act on 22/11/2016. We find force in the contention of the assessee, that since the rectification order u/s 154 of the Act d. 22/11/2016 stems from the re- assessment order dt. 04/11/2016, it would stand to logic that both the appeals of the assessee ought to have been clubbed together and the Ld. CIT(A) ought to have adjudicated the same together. Therefore, we set aside the impugned order of the Ld. CIT(A) and direct the Ld. CIT(A) to club both the appeals filed by the assessee against the order dt. 04/11/2016 passed by the Assessing Officer u/s 263/143(3) as well as the order of AO dt. 22/11/2016 passed u/s 154 of the Act for Assessment Year 2013-14 and thereafter to adjudicate the grounds of appeal together. Since similar action has been taken by the Ld. CIT(A) in the other appeal also, the direction given above will apply mutatis mutandis to that appeal also. Thus both the appeals of the assessee are set aside back to the file of the Ld. CIT(A) with the aforesaid directions as stated.