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Facts
The Assessee filed an appeal before the Tribunal against the order of the CIT(A) which dismissed the appeal on grounds of limitation. The Assessee's first appeal before the CIT(A) was filed with a delay of over a month, attributed to technical glitches on the Income Tax portal. The CIT(A) dismissed the appeal without condoning the delay.
Held
The Tribunal condoned the delay in filing the first appeal by the Assessee, considering the circumstances including the COVID-19 pandemic and Supreme Court orders extending timelines. The Tribunal set aside the order of the CIT(A) and remanded the case back to the CIT(A) for fresh adjudication on merits.
Key Issues
Whether the delay in filing the first appeal before the CIT(A) should be condoned, and if so, whether the appeal should be remanded for fresh adjudication on merits.
Sections Cited
253, 246A, 250, 133A, 143(2), 142(i), 115BBE, 40(b)(ii), 36(1)(va), 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CHANDIGARH BENCH, ‘A’, CHANDIGARH
Before: SHRI VIKRAM SINGH YADAV & SHRI PARESH M. JOSHI
This is an appeal filed by the Assessee u/s 253 of the Income Tax Act, 1961 (herein referred to as ‘the Act’] before this Tribunal. The Assessee is aggrieved by the order bearing No. ITBA/APL/M/250/2022-23/1047478851(1)) dated 17.11.2022 [ passed in first appeal No. 10250/2017-18/CIT(A)-5,/Ldh/2021-22
724-Chd-2022 M/s Little Kanhya Knitwears, Ludhiana 2 which was preferred by the Assessee u/s 246A of the Act] of CIT(A) u/s 250(6) of the Act, which is herein after referred to as the “impugned order”. The relevant A.Y. is 2018-19 and the corresponding previous period is from 1.4.2017 to 31.03.2018.
Factual Matrix 2. 2.1 The Assessee Firm is engaged in the business of manufacturing of Hosiery goods, cloth and garments.
2.2 The Assessee firm had filed return of income for A.Y. 2018-19 on 30.9.2018 declaring income of Rs. 82,40,430/-. A survey u/s 133A of the Act was carried out at the business premises of the Assessee firm on16.3.2017. Notice u/s 143(2) was issued on 26.3.2019 and served on the Assessee electronically. Notice u/s 142(i) along with detailed questionnaire was issued on 6.1.2021 for 15.1.2021 and served upon the Assessee firm electronically. The Assessee in response to the notice (s) has submitted reply and that the same was examined and placed on record.
2.3 That by assessment order bearing No. ITBA/ASTG/3/2021- 22/10332021241_ dated 31.5.2021 the ld. A.O. computed the total income of the Assessee at Rs. 86,80,529/- which was including 75 lakh
724-Chd-2022 M/s Little Kanhya Knitwears, Ludhiana 3 to be taxed at special tax rate r.w.s. 115BBE of the Act. Additions were made.
2.4 That against the aforesaid assessment order dated 31.5.2021, received on 2.6.2021, the Assessee preferred first appeal u/s 246A of the Act before ld. CIT(A) on 28.8.2021 which was late by more than one month.
2.5 It is recorded in the impugned order on page 2 top that – “Nothing has been submitted by the AR on the issue of delay in filing the appeal. Moreover, during the appellate proceedings also, no document has been filed for condonation of delay. Hence the delay remains unsubstantiated and cannot be condoned.”
2.6 It is also recorded in the impugned order “In the result, the appeal is dismissed with both being barred by limitation and on merits also”.
2.7 The Assessee being aggrieved by the aforesaid impugned order has filed the present second appeal before this Tribunal and has raised following grounds of appeal against the impugned order which are as follows:
1. That there is one month delay in filing of appeal before Learned Commissioner of Income Tax (Appeals)-5 Ludhiana due to the technical glitches on 724-Chd-2022 M/s Little Kanhya Knitwears, Ludhiana 4 Income Tax Portal. Moreover, The Hon'ble Supreme Court by its Order dated 27/04/2021 in Miscellaneous Application No. 665/2021 in SMW(C) No. 3/2020 extended time limits as prescribed under any general or special laws prevailing in the country) in respect of all judicial or quasi-judicial proceedings, whether condonable or not, till further orders.
2. That the Learned Commissioner of Income Tax (Appeals)-5, Ludhiana has erred in passing the order which is illegal, against law and facts of the case as well and against the principles of natural justice. So the impugned order is liable to be quashed. Therefore, order passed by Learned Commissioner of Income Tax (Appeals)-5, Ludhiana is illegal, unwarranted and uncalled for and needs to be quashed.
3. That the Learned Commissioner of Income Tax (Appeals)-5, Ludhiana has erred in sustained the disallowance of Rs. 4,20,000/- u/s 40(b)(ii) of the Act on account of salary paid to working partners, made by the Learned Assessing Officer without considering the submissions and evidences submitted during the course of appellate proceedings as well as during the course of assessment proceedings. Therefore, disallowance made by the Learned Assessing Officer and sustained by the Learned Commissioner of Income Tax (Appeals)-5, Ludhiana is illegal, uncalled for unwarranted and needs to be deleted.
4. That the That the Learned Commissioner of Income Tax (Appeals)-5, Ludhiana has erred in sustained the disallowance of Rs. 20,099/- u/s 36(1((va) of the Act, 1961 on account sum received from employees as contribution to any provident fund or any fund set up under ESI Act i.e. Disallowance u/s 36(1) VA) on account of Delayed Payment! of PF of Rs. 16,899/-,
724-Chd-2022 M/s Little Kanhya Knitwears, Ludhiana 5 Delayed Payment of ESI of Rs. 1,455/- and Delayed Payment of Any Other Welfare Fund o Rs. 1,745/- by the Learned Assessing Officer.
That the assessee has paid the dues of the employees to PF and ESI after the due dates as per respective acts but before the filing of income tax return u/s 139(1) i.e. on 30/09/2018. That no disallowance should be made u/s 36(l)(va) of the Act, 1961 to the returned income of the assessee.
That the disallowance has been made without considering the submissions and evidences submitted during the course of appellate proceedings as well as during the course of assessment proceedings. Therefore, disallowance made by the Learned Assessing Officer and sustained by the Learned Commissioner of Income Tax (Appeals)-5, Ludhiana is illegal, uncalled for unwarranted and needs to be deleted.
That the Learned Commissioner of Income Tax (Appeals)-5, Ludhiana has erred in sustained the charging of Tax at Special Rates on account of excess stock of Rs. 75,00,000/ surrendered by the assessee during the course of survey proceedings by applying the provisions of 115BBE of the Income Tax Act, 1961, whereas provisions of 115BBE of the Act are not applicable on assessee firm.
That the tax at special rate has been charged without considering the submissions and evidences submitted during the course of appellate proceedings as well as during the course of assessment proceedings. Therefore, disallowance made by the Learned Assessing Officer and sustained by the Learned Commissioner of Income Tax (Appeals)-5,
724-Chd-2022 M/s Little Kanhya Knitwears, Ludhiana 6 Ludhiana is illegal, uncalled for unwarranted and needs to be deleted.
Record of Hearing. 3.
During the course of hearing held on 30.12.2024 the ld. AR pressed Ground No.1 hard and emphasized that ld. CIT(A) ought not to have dismissed the appeal of the Assessee on ground of limitation of time in preferring first appeal and that delay was slightly more than a month. By preferring late appeal that too very first appeal under the Act no serious prejudice is caused to the Revenue. The ld. CIT(A), therefore, ought to have condoned the delay even when no condonation of delay application was filed. The consequence of such rejection is more serious on Assessee than the Revenue. Such rejection on ground of limitation of time has resulted into deep hardship and prejudice to the Assessee herein. It was contended that it would be just fair and convenient and so also it would be in the interest of ends of justice that this Tribunal in exercise of its power be pleased to condone the delay, set-aside the impugned order and remand the case.
4.2 The ld. DR vide his letter dated 12.12.2023 addressed to CIT(A) Ludhiana sought necessary clarification and vide reply to ld. DR dated 15.12.2023 stated as under:-
724-Chd-2022 M/s Little Kanhya Knitwears, Ludhiana 7 “As per Column no. 14 of Form 35 of the appellant has mentioned that there is no delay in filing appeal. Also no reason was given for delay in filing appeal. No request for condonation was filed by the appellant. It is for the appellant to make a request for condonation of delay. As per record there was no request of appellant for condonation of delay. Hence there was no occasion with the CIT (Appeal) to issue letter for asking reason for delay”.
4.3 We observe that impugned order is dated 31.5.2021 which was received by the Assessee on 2.6.2021 whereas the appeal was filed on 28.2.2021. We have perused Circular No. 10/2021 dated 25.5.2021 of CBDT too.
4.4 Basis above premises we condone the delay on part of the Assessee in filing first appeal which delay according to us is not a belated or abnormal delay. Further second Covid Wave had gripped the country and that there was various orders of Hon'ble Supreme Court extending time, vide Suo Moto Writ Petition (Civil) No.3 of 2020 including order dated 8.3.2021 wherein limitation of time was extended till further orders. All this is incorporated in aforesaid CBDT Circular dated 25.5.2021. We, therefore, condone the delay and set aside the impugned order and remand the case back to the file of CIT(A).