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Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI
Before: SH. R. K. PANDA & MS SUCHITRA KAMBLE
PER SUCHITRA KAMBLE, JM
This appeal is filed by the assessee against the order of the Commissioner of Income Tax [Appeals]-5, Ludhiana dated 26.02.2019 for Assessment Year 2015-16.
2. The Grounds of appeal
are as under:- 1. “That the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in dismissing the appeal of the appellant on the ground that reason for delay of 10 days in filing of the appeal is not supported by any affidavit, whereas as per the statutory requirement, appellant has duly given the reasons for delay in filing of the appeal at si. No. 14-15 of Form 35.
2. That the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in not condoning the delay of 10 days in filing of the appeal purely on technical consideration without appreciating that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred.
3. Without prejudice to the aforesaid ground, learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in dismissing of the appeal for want of the affidavit in support of the reason of delay without providing any opportunity what so ever as such, order of the learned Commissioner of Income Tax (Appeals) is unsustainable in law and is liable to set aside.
4. That the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in failing to appreciate that the addition made by the learned AO of Rs. 1,11,23,000/- by invoking section 56(2)(viib) of the Income Tax Act, 1961 is unsustainable in law. 5. That learned Commissioner of Income Tax (Appeals) having held that the appeal is invalid has grossly erred in issuing directions u/s 150(1) of the Act to the assessing officer to examine the share capital received in AY 2012-13 as such, directions were beyond the powers of section 251 of the Act.”
The assessee is a private Limited Company. During the F.Y. 2015-16 the assessee company issued share capital. The assessee issued 22800 shares of Rs.10 each at Rs.500 each consisting of Rs.10 on account of share capital and Rs.490 on account of share premium. The issued prices was calculated on the basis of fair market value of the company as on 31.03.2015 as defined Rule 11UA of the Income Tax Rules, 1962. The fair market value of unquoted equity shares was shown in the balance sheet. Following the provisions of this Rule the fair market value of shares of the company is calculated Rs.505.30 per share and the company issues its shares at Rs.500 each. The Assessing Officer vide is assessment order dated 12.12.2018 refused to accept the fair market value of shares calculated by the company on the basis of net worth of the company.
Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A) thereby stating that there is a 10 days delay in filing the appeal before the CIT(A). The CIT(A) dismissed the appeal on the ground that the appeal is time barred and not maintainable.
The Ld AR submitted that it is an admitted fact on record that there is a delay of 10 days in filing the appeal before the CIT(A). The Ld AR further submitted that at no point of time the CIT(A) has directed the assessee to file affidavit for condonation of delay. The Ld AR submitted that at the time of hearing before the CIT(A) the assessee has demonstrated that the delay was genuine and hence may be condoned. Thus the Ld AR submitted that the CIT(A) should have condoned the delay and should have decided the appeal on merit. Therefore, the Ld AR requested that the delay in filing the appeal before the CIT(A) be condoned and the appeal may be remanded back to the file of the CIT(A) for fresh adjudication.
The Ld DR relied upon the assessment order and the order of the CIT(A) the Ld DR submitted that since the affidavit stating therein the reasons for delay was not filed, the CIT(A) rightly dismissed the appeal of the assessee.
We have heard both the parties and perused all the relevant materials available on record. It is an admitted fact that there is a delay of 10 days in filing the appeal before the CIT(A). The assessee has explained the delay before the CIT(A) but no affidavit has been filed to that extent. The Ld AR at the time of hearing submitted the affidavit stating therein the genuine reason for delay in filing the appeal before the CIT(A). We, therefore, find it fit to condone the delay and remand back all the issues on merit to be decided by the CIT(A) afresh. Needless to say the assessee be given opportunity of hearing by following the principle of natural justice. The appeal of the assessee is partly allowed for statistical purposes.
In the result, appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the Open Court on 18th day of February, 2020.