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Income Tax Appellate Tribunal, “SMC” BENCH, BANGALORE
Before: Shri Chandra Poojari
IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, BANGALORE Before Shri Chandra Poojari, Accountant Member ITA No.2072/Bang/2019 : Asst.Year 2014-2015 Smt.Shilpa Gopala Reddy The Income Tax Officer No.28, Chandavi, 12th Main, Vs. Ward 3(3)(4) 1st Stage, BTM Layout Bangalore. Bangalore – 560 029. PAN : AHUPG3684P. (Appellant) (Respondent) Appellant by : Sri.Venkatesh Kumar Respondent by : Sri.Ganesh R.Ghale, Standing Council for DR Date of Date of Hearing : 20.01.2020 Pronouncement : 20.01.2020 O R D E R This appeal filed by the assessee is directed against the order of the CIT(A), dated 16.09.2019. The relevant assessment year is 2014-2015.
The assessee has raised the following grounds:-
The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence probabilities, facts and circumstances of the appellant's case. 2. The learned CIT(A) erred in law and on facts in dismissing the appeal of the Appellant by refusing to condone the delay of 491 days in filing the appeal before the learned Commissioner of Income-tax (Appeals) as per Section 249(3) of the Act without going into the merits of the case of the appellant. 3. The learned CIT(A) is not justified in holding that the explanation tendered by the appellant for the delay of 491 days in filing the appeal was not satisfactory and cannot be considered as 'sufficient cause' under the facts and circumstances of the appellant's case.
2 ITA No.2072/Bang/2019 Smt.Shilpa Gopala Reddy. 4. The learned CIT(A) ought to have appreciated the explanation tendered by the appellant that assessee was pursuing the matter with the AO by filing a rectification application under section 154 of the Act, based on the advice of the Chartered Accountant' under bonafide belief and neither deliberately or intentionally delayed in filing the appeal. 5. The learned CIT(A) failed to appreciate that the Appellant ought not have been denied remedy by way of appeal on mere technicalities in view of the landmark Supreme Court judgement in Collector, Land Acquisition vs. Mst. Katiji reported in 167 ITR 471 (1987) and ought to have exercised the discretion vested as per the provisions of section 249(3) of the Act in the most judicious manner to promote and uphold the substantial cause of justice on the facts and circumstance of the case. 6. Without prejudice to the above, the learned CIT(A) is not justified in not disposing off the grounds raised by the appellant with regard to the assessing a sum of Rs.19,95,736/- as income from Short Term Capital Gain without considering the fact that undivided share of land measuring 266 sq.ft. remains with the owner and it is long term capital asset in nature. 7. For the above and other grounds to be urged during the hearing of the appeal the Appellant prays that the appeal be allowed in the interest of equity and justice.” 3. The brief facts of the case are that there was a delay of 491 days in filing appeal before the CIT(A). The assessee explained the reasons for delay before the CIT(A) as follows:-
“The Appellant is enclosing Appeal u/s 246A of the I.T.Act, 1961 against the order of the AO Ward 3(3)(4), Bangalore passed u/s 143(3) dated 27.12.2016 relating to the A.Y. 2014- 15. It is submitted that after receiving the 143(3) orders, the appellant counsel did not advise them that an appeal should be filed against the said order before CIT(A) but appeal needs to be filed only against the order which the AO passes giving effect of rectification of mistake orders u/s 154 of the Act. Subsequently the AO passed an order of rectification u/s 154 of the Act dt. 06.06.2017. However, the said rectification order was posted by the department on 06.06.2017 but it was not received by the appellant. The assessee on realizing the same
3 ITA No.2072/Bang/2019 Smt.Shilpa Gopala Reddy. has filed application dated 08.11.2017 for seeking the certified copy of the 154 orders. It is further submitted that, as per the 154 order dated 06.06.2017, the appeal should have been filed on or before 05.07.2017, however it could not unfortunately be so filed because the order was not received by the appellant. As per the Income-tax Act, the Appeal should have been filed within 30 days from the receipt of the order, i.e., from the date assessee got knowledge of the same. In this case the appellant got knowledge about the same on 08.11.2017. After having the knowledge of the said 154 orders, the assessee has filed the appeal against u/s 154 orders of the AO before the CIT(A)-3, Bengaluru, vide ITA No.10178/2017-18, dated 23.11.2017. However, the said appeal was dismissed on 23.5.2018 as non- maintainable due to the fact that the issue involved in the appeal was debatable and therefore it is the original order passed u/s 143(3) by the learned AO dated 27.12.2016 should be challenged in the appeal. Immediately on realizing the `bona fide mistake’ & lack of professional guidance we here with filing the appeal against the 143(3) order passed by the AO dated 27.12.2016. In this context the appellant is filing this condonation application and requesting you to condone the delay on the ground that it was not willful and for bonafide reasons set out above and hence, the delay should be condoned. Reliance was placed on the decision of the Hon’ble Apex Court in the case of Collector, Land Acquisition v. Mst.Katiji & Ors. (1987) 167 ITR 471 and also in the case of Concord of India Insurance Co. Ltd. v. Smt.Nirmala Devi and Ors. 118 ITR 507. The Hon’ble Supreme Court in the case of Mst.Katiji (supra) has explained the principles that need to be kept in mind while considering an application for condition of delay. The Hon’ble Apex Court has emphasized that substantial justice should prevail over technical consideration. The Court has also explained that the litigant does not stand to benefit by lodging the appeal late. The Court has also explained that every day’s delay must be explained does not mean that a pedantic approach should be taken. The doctrine must be applied in a rational common sense and pragmatic manner. The Hon’ble Karnataka High Court in the case of CIT v. ISRO Satellite Centre, ITA No.532/2008 dated 28.10.2011 had condoned the delay of five years in filing appeal before them which was explained due to delay in getting legal advice from its legal advisors and getting approval from Department of Science and PMO.
4 ITA No.2072/Bang/2019 Smt.Shilpa Gopala Reddy.
Therefore, the appellant humbly prayer that the delay in filing of the appeal may be condoned and the appeal treated as filed within the allowed time in the interest of justice.”
The assessee has also submitted following details before the CIT(A):-
Application for condonation of delay Synopsis Date Events 27.12.2016 Assessment order passed u/s 143(3) 09.06.2017 Rectification petition u/s 154 filed. 08.11.2017 Application made for Certified copy of the 154 order. 10.11.2017 Received the Certified copy of the 154 order. 23.11.2017 Appeal filed before CIT(A)-3, Bengaluru 23.05.2018 CIT(A) has dismissed the appeal on the ground that it is debatable issue and thus outside the scope of Sec.154. 04.06.2018 Appeal filed before the CIT(A)-3, Bengaluru against the original AO order u/s 143(3) of the Act, 1961.
It is submitted that so far as those proceedings are concerned, i.e., rectification of mistake under section 154, debatable issue cannot be rectified and the issues raised by the assessee were in fact held to be debatable in nature, therefore the appellant was perusing the matter before the wrong forum, was bonafide action. Given the nature of grievance of the appellant, it was reasonable to expect that the remedy will be available under section 154 of the Act as well. Therefore, the delay in filing the appeal before the CIT(A) against the order u/s 143(3) may be condoned. In support of this contention the appellant is relying on the judgment of the Tribunal in the case of R.A.K. Ceramics, UAE v. Deputy Commissioner of Income Tax, International Taxation (2), Hyderabad (2019) 104 taxmann.com 330. In this context the appellant is filing this condonation application and requesting you to condone the delay on the ground that as the appellant was perusing his case before the wrong forum and therefore it was not willful and for Bona fide reasons act out above and hence, the delay may be condoned.”
5 ITA No.2072/Bang/2019 Smt.Shilpa Gopala Reddy. 4. The above reasoning by the assessee was rejected by the CIT(A) by observing that there was no reasonable cause for filing the appeal with such a delay. More so, the purpose of filing rectification petition u/s 154 of the I.T.Act was filed after five months was evidently that the assessee knew well that the time period of filing appeal against the assessment order was over and she was not having any bonafide reason to explain the delay. Accordingly, the CIT(A) dismissed the appeal as unadmitted.
Against this the assessee is in appeal before me.
The learned Departmental Representative relied on the judgment of the Hon’ble Supreme Court in the case of University of Delhi v. Union of India & Ors. [Civil Appeal Nos.9488-9489 of 2019 dated 17th December, 2019].
I have carefully perused the condonation petition filed by the assessee before the CIT(A). Admittedly, in this case, the assessee has filed rectification application u/s 154 of the Act on 08.11.2017 as against the assessment order dated 27.12.2016, passed u/s 143(3) of the Act. The reason for not condoning the delay by the CIT(A) was that the assessee has filed rectification petition u/s 154 of the Act with a delay of 5 months. However, I find that it was filed within the statutory time allowed to file rectification petition u/s 154 of the Act. Therefore, the CIT(A) cannot find fault with the assessee. In my opinion, herein the assessee exploring an alternate remedy by filing the petition u/s 154 of the Act before the A.O. and it was
6 ITA No.2072/Bang/2019 Smt.Shilpa Gopala Reddy. filed within the time limit allowed u/s 154 of the Act. The assessee has said to be not received the order passed u/s 154 by the A.O. Later on, the assessee had applied for certified copy of order passed u/s 154 of the Act by A.O., which was duly received by the assessee on 10.11.2017. Hence, the assessee filed appeal before the CIT(A) on 23.11.2017 with a delay of 491 days against the order passed by the A.O. u/s. 143(3) of the Act. Thus, there was a delay of 491 days in filing the appeal before the CIT(A). Accordingly, I find reasonable and sufficient cause for filing the appeal before the CIT(A) belatedly. I, therefore, condone the delay of 491 days in filing the appeal belatedly before the CIT(A) and direct the CIT(A) to admit the appeal and decide the same on merits.
In the result, the appeal filed by the assessee is allowed.
Order pronounced on this 20th day of January, 2020. Sd/- (Chandra Poojari) ACCOUNTANT MEMBER Bangalore ; Dated : 20th January, 2020. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT(A)-3, Bengaluru. 4. The Pr.CIT-3, Bengaluru. 5. The DR, ITAT, Bengaluru. 6. Guard File. Asst.Registrar/ITAT, Bangalore