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Facts
The assessee filed appeals against the orders of the Ld. CIT(A) which dismissed their appeals due to delay in filing. The delay was attributed to the previous counsel's negligence and the Covid-19 pandemic. The assessee also claimed a wrong exemption provision in the original return.
Held
The Tribunal condoned the delay in filing the appeals, citing sufficient cause due to the counsel's professional diligence and the pandemic. On merits, the Tribunal held that a lawful claim should not be denied due to a wrong claim in the return.
Key Issues
Whether the delay in filing the appeal before the first appellate authority is condonable. Whether a lawful claim can be denied due to a mistake in filing the return.
Sections Cited
143(1), 10(23C)(vi), 10(23C)(iiiad), 154
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िनधा"रती क" ओर से/Assessee by : Shri Jatinder Sharma, C.A राज"व क" ओर से/ Revenue by : Shri Vivek Vardhan, Addl.CIT सुनवाई क" तारीख/Date of Hearing : 07/01/2025 उदघोषणा क" तारीख/Date of Pronouncement : 09/01/2025 आदेश/Order PER VIKRAM SINGH YADAV, AM These are two appeals filed by the Assessee against the respective orders of the Ld. CIT(A) Addl/JCIT(A)-5, Mumbai each dt. 11/06/2024 pertaining to Assessment Year 2018-19 & 2021-22 respectively.
Both these appeals were heard together and are being disposed off by this consolidated order.
With the consent of both the parties, the appeal in for the A.Y. 2018-19 was taken up for discussion. During the course of hearing, the Ld. AR submitted that the assessee has filed the appeal before the Ld. Addl. CIT against the intimation under section 143(1) dt. 40/03/2020 passed by the CPC, Bangalore and the said appeal has been dismissed by the Ld. Addl. CIT on account of delay in filing the appeal. It was submitted that the reason why the appeal was filed late was for the reason that the intimation order was sent on the email id which belongs to the previous Counsel and he neither informed the assessee nor acted upon the intimation order. Further, due to outbreak of Covid 19 pandemic, the intimation order was not delivered physically to the assessee. In this regard an Affidavit duly executed by the authorized signatory of the assessee society alongwith written application for condonation of delay was submitted before the Ld. Addl. CIT. It was submitted that during the course of video conferencing hearing, the Ld. Addl CIT asked for the Affidavit from the previous Counsel which was duly submitted wherein he has admitted that the intimation was delivered on the said email id and unfortunately the same remain unattended. It was submitted that the previous Counsel has not disowned the said email id rather the said email id is registered on departmental portal by the previous Counsel only. It was submitted that only when the assessee received a telephonic call from the jurisdictional AO regarding the recovery of the outstanding demand, it came to know that previous Counsel has not taken any action against the intimation order so passed under section 143(1) of the Act. It was accordingly submitted that the delay caused was purely a mistake on the part of previous Counsel and the assessee could not be blamed for the negligence or inaction on the part of the previous Counsel. It was accordingly submitted that the delay so happened in filing the appeal before first appellate authority be condoned and the matter be heard on merits and in support, reliance was also placed on the findings of Coordinate Delhi Bench in case of SMC Capitals Ltd., New Delhi Vs. Assessee, Delhi in ITA No. 1342/Del/2010.
It was further submitted that the previous Counsel who has filed the return of income has selected the wrong exemption provisions under section 10(23C)(vi) instead of Section 10(23C)(iiiad) of the Act. In this regard, it was submitted that the assessee society is a charitable educational institution existing solely for education purpose and not for the purpose of profit and having the gross receipts of Rs. 78,83,619/- which are less than the limit prescribed under section 10(23C)(iiiad) of the Act. It was accordingly submitted that since the wrong exemption provision have been stated by the previous Counsel while filing the return of income, the CPC Bangalore has determined the tax amounting to Rs. 72,321/- as the approval details were not filed in the return of income. It was further submitted that for the A.Y. 2019-20 , 2022-23 and 2023-24, the assessee has claimed exemption under section 10(23C)(iiiad) of the Act and which has been duly allowed while processing the return of income by CPC Bangalore. In this regard, it was submitted that the assessee has filed rectification application under section 154 alongwith the revised computation chart and revised Income Tax Return with Jurisdictional AO Ward-1, Barnala on 28/03/2023 which is still pending with the jurisdictional AO. It was submitted that similar fact pattern exist for the assessee’s appeal in pertaining to assessment year 2021-22. It was accordingly submitted that both the subject matters may be remitted to the file of the AO with appropriate directions and the assessee shall attend to the proceedings and ensure in timely completion thereof.
Per contra, the Ld. Dr is heard who has relied on the intimation so passed by the CPC and it was submitted that basis the return filed by the Assessee, the CPC Bangalore has processed the return of income and determined the tax liability and it is for the assessee to demonstrate that it qualifies for exemption under section 10(23C)(iiiad) and it was further submitted that since there were substantial delay in filing the appeal before the Ld. Add. CIT, the appeal has been rightly dismissed by the Ld. Addl. CIT on account of delay in filing the appeal in absence of any reasonable cause shown by the assessee.
I have heard the rival contentions and purused the material available on record. As far as delay in filing the appeal, I find that the assessee has the sufficient cause for the delay in filing the appeal due to lack of professional diligence on part of its Counsel and on account of Covid pandemic and the affidavit of the assessee as well as the Counsel of the assessee has been placed on record and the contents of which remain unrebutted before me. In the result, the delay is hereby condoned. On merits, the assessee claims to be eligible for exemption under Section 10(23C)(iiiad) of the Act instead of Section 10(23C)(vi) as so stated wrongly in the return of income. It is a settled legal proposition that lawful claim of the assessee which the assessee is otherwise eligible cannot be denied to the assessee merely basis the wrong claim while filing the return of income and it is incumbent on the part of the Assessing officer to assist and guide the assessee in making the rightful claim which the assessee is eligible for. Given that there is no finding on merits of the case and the assessee has already approached the JAO, I deem it appropriate that both these matters are set-aside to the file of the JAO to decide the same afresh as per law after providing reasonable opportunity to the assessee.
In the result, both the appeals of the Assessee are allowed for statistical purposes.