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Income Tax Appellate Tribunal, “G” Bench, Mumbai
Before: Shri Manoj Kumar Aggarwal & Shri Ravish Sood
IN THE INCOME TAX APPELLATE TRIBUNAL “G” Bench, Mumbai Before Shri Manoj Kumar Aggarwal, Accountant Member and Shri Ravish Sood, Judicial Member 4003 to 4005/Mum/2019 (Assessment Years: 2008-09 to 2011-12) Symbyosys Integrated Solutions Income Tax officer 4(3)(4) Pvt.Ltd. Flat No. 1217, Room No. 637, Maker Chamber V, Vs. Aayakar Bhavan, Nariman Point, M.K. Road, Mumbai 400 021 Mumbai – 400 021 PAN – AAGCS4206B (Appellant) (Respondent) Appellant by: Shri Jayesh Dadiya, A.R Respondent by: Shri V. Vinod Kumar, Sr. D.R Date of Hearing: 15.10.2020 Date of Pronouncement: 19 .10.2020 O R D E R PER BENCH: The captioned appeals filed by the assessee are directed against the respective orders passed by the CIT(A)-9, Mumbai for A.Y. 2008-09, A.Y 2009-10, A.Y 2010-11 and A.Y 2011-12, which in turn arises from the respective orders passed by the A.O under Sec. 271(1)(c) of the Income Tax Act, 1961 (for short „Act‟) for the aforementioned years. As the issues involved in the captioned appeals are inextricably interlinked and in fact interwoven, the same are thus being taken up and disposed off together by way of a consolidated order. We shall take up the facts involved in the assessee‟s appeal for A.Y. 2008-09 as the lead case, and the adjudication of the same shall equally apply to the remaining three years. The assessee has assailed the impugned order on the following grounds of appeal before us:
“1. The ld. CIT(A) has erred in law and on the facts of the case in not condoning the delay in filing the appeal. The default was honest and not with malafide intentions and beyond the control of your Petitioners.
, 4003 to 4005/Mum/2019 A.Ys. 2008-09 to 2011-12 2 Symbyosys Integrated Solutions Pvt. Ltd. Vs. Income Tax Officer-4(3)(4)
The Ld. CIT (A) has erred in law and on the facts of the case in confirming the penalty levied by the Assessing Officer which is made on the basis of defective notice as the Assessing Officer has not specified under which limb penalty is being initiated.
The Ld. CIT (A) has erred in law and on the facts of the case in confirming the action of assessing officer levying penalty of Rs.3,32,016/- under section 271(1)(c) of the Income Tax Act. The action is unjustified and unwarranted. 4. Your Petitioners crave leave to add, amend, alter and / or withdraw any or all the aforesaid ground of appeal
.”
2. Briefly stated, the assessee company which is engaged in the business of providing financial services had filed its return of income for A.Y. 2008-09 on 25.09.2008, declaring its total income at Rs.4,81,757/-. The return of income filed by the assessee was initially processed as such under Sec. 143(1) of the Act. In the course of the assessment proceedings for A.Y. 2012-13, it was observed by the A.O that the assessee had wrongly claimed deduction for interest on borrowed funds while computing its income under the head house property. In the backdrop of the aforesaid facts, the A.O observing that similar state of facts prevailed in the case of the assessee for the year under consideration i.e A.Y. 2008-09, therein reopened its case for the year in question under Sec. 147 of the Act. In compliance to the notice issued under Sec. 148 of the Act, dated 23.03.2015, the assessee filed its return of income on 17.06.2015 withdrawing its earlier claim of deduction of interest on borrowed funds of Rs.11,06,722/-.The A.O framed the assessment vide his order passed under Sec. 143(3) r.w.s 147, dated 27.08.2015 and assessed the income of the assessee at Rs.16,27,500/-. The AO while culminating the assessment also initiated penalty proceedings under Sec. 271(1)(c) for concealment of income and also for furnishing inaccurate particulars of income. Notice under Sec. 271(1)(c) r.w.s 274, dated 27.08.2015 was served upon the assessee, therein calling upon it to explain as to why penalty under Sec. 271(1)(c) may not be imposed on it.
3. After the culmination of the assessment proceedings the A.O called upon the assessee to put forth an explanation as to why it may not be subjected to penalty under Sec.271(1)(c) of the Act. In reply, the assessee vide its letter dated 09.11.2015 tried to impress upon the A.O that no penalty under the aforesaid statutory provision was liable to be imposed in its hands. However, the A.O not finding favour with the explanation of the assessee rejected the same and imposed , 4003 to 4005/Mum/2019 A.Ys. 2008-09 to 2011-12 3 Symbyosys Integrated Solutions Pvt. Ltd. Vs. Income Tax Officer-4(3)(4)
penalty under Sec. 271(1)(c) of Rs.3,32,016/- for concealment of income/filing inaccurate particulars of income.
Aggrieved, the assessee assailed the order passed by the A.O under Sec. 271(1)(c), dated 18.02.2016 before the CIT(A). Observing, that the assessee had without any sufficient cause delayed the filing of the appeal by a period of 285 days, the CIT(A) declined to admit the appeal.
The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. Authorized Representative (for short „A.R‟) for the assessee at the very outset of the hearing of the appeal submitted that the delay in filing of the appeal before the first appellate authority was on account of an inadvertent lapse on the part of the assessee‟s Chartered accountant i.e Shri Nishit Dave, partner of M/s Jayesh Dadia and associates LLP. It was averred by the ld. A.R that though the assessee company had delivered the order passed by the A.O under Sec. 271(1)(c), dated 18.02.2016 to its chartered accountant i.e Shri Nishit Dave on 23.02.2016, however, the latter had inadvertently on account of an oversight failed to file the appeal within the stipulated time period with the CIT(A). It was submitted by the ld. A.R that it was only in the month of December, 2016, that Shri Nishit Dave on learning about his mistake had as on 03.01.2017 e-filed the appeal involving no further loss of time. In the backdrop of the aforesaid facts, it was submitted by the ld. A.R that the delay in filing of the aforesaid appeal was clearly attributable to the assessee‟s chartered accountant, and thus, the assessee should not be made to suffer for no fault on its part. In order to fortify the aforesaid factual position the ld. A.R took us through the „affidavit‟ of the director of the assessee company i.e Shri Ketan Gandhi. Also, our attention was drawn to the „affidavit‟ of the assessee‟s chartered accountant Shri Nishit Dave, partner of M/s Jayesh Dadia and associates LLP, wherein he had clearly admitted that the delay in filing of the appeal had occasioned on account of an inadvertent lapse on his part in filing the same within the stipulated time period. On the basis of the aforesaid facts, it was submitted by the ld. A.R that as no part of the delay in filing of the appeal could be related to the assessee company, which in fact, had crept in on account of a bonafide and an unintentional lapse on the part of its chartered accountant, the same may, therefore, in all fairness be condoned. In order to buttress his claim that delay in filing of an appeal that had occasioned on account of a bonafide lapse in all fairness ought to be , 4003 to 4005/Mum/2019 A.Ys. 2008-09 to 2011-12 4 Symbyosys Integrated Solutions Pvt. Ltd. Vs. Income Tax Officer-4(3)(4)
condoned, the ld. A.R relied on the judgment of the Hon‟ble Supreme Court in the case of Collector Land Acquisition Vs. Mst. Kathiji and Others (1987) 167 ITR 471 (SC) and the judgments of the Hon‟ble High Court of Bombay in the case of Bajaj Bhavan Owners Premises Co-op Society Ltd. Vs. ITAT, Mumbai (2014) 45 taxman.com 213 (Bom); and (ii) Prima Paper & Engineering Pvt. Ltd. Vs. CIT-V (2014) 41 taxman.com 24 (Bom). It was averred by the ld. A.R that in the latter case the Hon‟ble Jurisdictional High Court had condoned a delay of 515 days in filing of the appeal which had occasioned on account of a lapse on the part of a staff member of the assessee‟s consultant. Also, reliance was placed on the order of the ITAT, Amritsar in the case of Ram lal & Sons Vs. ITO (2006) 99 TTJ 63 (Asr) wherein a delay of 7 years was condoned by the Tribunal.
Per contra, the ld. Departmental Representative (for short „D.R‟) relied on the order of the CIT(A). It was submitted by the ld. D.R that as the assessee had failed to file the appeal with the CIT(A) within the stipulated time period, the same was thus rightly dismissed by the said appellate authority. It was submitted by the ld. D.R that the assessee had failed to substantiate that the delay in filing of the appeal before the CIT(A) had occasioned on account of bonafide reasons and not on account of lapses and laches on the part of the assessee. As such, it was submitted by the ld. D.R that as no infirmity did emerge from the order of the CIT(A), the appeal of the assessee, thus, being devoid and bereft of any force was liable to be dismissed.
We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements pressed into service by them to drive home their respective contentions. Admittedly, the appeal filed by the assessee company before the CIT(A) involved a delay of 285 days. As observed by us hereinabove, the CIT(A) being of the view that the assessee had failed to come forth with any sufficient cause leading to the aforesaid delay, had thus, dismissed the appeal as barred by limitation within the meaning of Sec. 249(3) of the Act. On a perusal of the order the CIT(A), we find, that he had declined to accept the explanation of the assessee leading to the delay in filing of the appeal, for two fold reasons, viz. (i). that it was beyond comprehension that the chartered accountant of the assessee company being a trained professional could act in such a negligent manner; and (ii). that the functionaries of the company could not have been expected to have adopted a , 4003 to 4005/Mum/2019 A.Ys. 2008-09 to 2011-12 5 Symbyosys Integrated Solutions Pvt. Ltd. Vs. Income Tax Officer-4(3)(4)
similar callous approach. In sum and substance, the CIT(A) was of the view that the assessee had merely came up with the casual explanation as regards the delay in filing of the appeal by trying to shift the same to its chartered accountant.
Admittedly, an appeal with a CIT(A) has to be filed within the stipulated time period as contemplated in sub-section (2) of Sec.249 of the Act. But then, the legislature in all its wisdom realising that there might be a situation where delay may be involved in filing of an appeal before the first appellate authority, had thus, in all fairness carved out an exception in sub-section (3) of Sec. 249 of the Act, which allows filing of an appeal beyond the stipulated time period, though, subject to a rider that the assessee comes up with a sufficient cause explaining the reasons leading to the delay in filing of the same. In our considered view, the fact that in the case before us the chartered accountant of the assessee company i.e Shri Nishit Dave, partner of M/s Jayesh Dadia and associates LLP, had filed an „affidavit‟, dated 15.02.2019, therein instils sufficient confidence as regards the genuineness and veracity of the explanation of the assessee pertaining to the reasons leading to the aforesaid delay in filing of the present appeal. On a perusal of the „affidavit‟ filed by the chartered accountant, it can safely or rather inescapably be gathered that he had in unequivocal terms admitted that the delay in filing of the appeal with the CIT(A) was attributable on account of an advertent omission on his part. We are unable to persuade ourselves to subscribe to the manner in which the CIT(A) had summarily rejected the „affidavit‟ of the chartered accountant and consequently dismissed the appeal of the assessee company by holding that de hors a sufficient cause, the delay in filing of the appeal could not be brought within the realm of the provisions of Sec. 249(3) of the Act. Apart from the aforesaid fact, we find, that Shri Ketan Gandhi, director of the assessee company had also in order to buttress the aforesaid factual position as regards the delay in filing of the appeal deposed the facts on the basis of clearly worded affidavit. On the basis of the aforesaid factual matrix, we are of a strong conviction that in the absence of any facts proving to the contrary, the claim of the assessee that the delay in filing of the appeal was attributable on account of an inadvertent lapse on the part of its chartered accountant could not have been summarily scrapped, specifically when the assessee‟s chartered accountant had filed an „affidavit‟ supporting the aforesaid factual position. As such, we are of the considered view that the delay in filing of the present appeal can safely be held to be , 4003 to 4005/Mum/2019 A.Ys. 2008-09 to 2011-12 6 Symbyosys Integrated Solutions Pvt. Ltd. Vs. Income Tax Officer-4(3)(4)
attributable on account of a lapse on the part of the chartered accountant, which in no way would suffice for justifying the declining of the admission of the appeal by the CIT(A). Our aforesaid conviction is further supported by the fact that as is discernible from the records, the assessee had acted in a responsible manner and had delivered the penalty order under Sec. 271(1)(c), dated 18.02.2016 to its chartered accountant on 23.02.2016. Our view as regards the bonafide conduct of the assessee is also fortified from the fact that now when involving identical facts the assessee had filed appeals before the CIT(A) for A.Y. 2012-13 and A.Y. 2014-15 on 03.06.2015 and 17.02.2017 i.e well within the stipulated time period, therefore, it is difficult to comprehend that it would had intentionally delayed the filing of the captioned appeal for the year under consideration. We are of considered view that keeping in view the judgment of the Hon’ble Supreme Court in the case of Ramnath Sao Vs. Gobardhan Sao [AIR 2002 Supreme Court 1201], it can safely be concluded that now when the explanation of the assessee in respect of the delay in filing of an appeal does not smack of malafides or a dilatory strategy on the part of the assessee, the said explanation cannot be merely turned down for the reason that delay is involved in filing of the appeal. We find that a similar view was earlier also taken by the Hon’ble Supreme Court in the case of Collector Land Acquisition Vs. Mst. Kathiji and others (1987) 167 ITR 471 (SC). The Hon‟ble Apex Court in the aforesaid case had concluded that a sufficient cause for the purpose of condonation of delay should be interpreted with a view to do even ended justice on merits in preference to an approach which scuttles a decision on merits. The delay as explained by the assessee had admittedly occasioned on account of failure on the part of its chartered accountant to file the appeal with the CIT(A) within the stipulated time period. We are of the considered view that as the assessee had came forth with a bonafide explanation as regards the delay in filing of the appeal before the CIT(A), therefore, the same did merit acceptance and ought not to have been summarily rejected by the first appellate authority. We may herein observe that the ld. D.R had failed to place on record any material which could persuade us to conclude that the explanation of the assessee as regards the delay in filing of the appeal before the CIT(A) was not to be accepted. We thus keeping in view the aforesaid facts condone the delay of 285 days involved in filing of the present appeal. Accordingly, in terms of our aforesaid observations, we herein „set aside‟ the order of the CIT(A), and therein restore the matter to his file with a direction to adjudicate the same on merits. , 4003 to 4005/Mum/2019 A.Ys. 2008-09 to 2011-12 7 Symbyosys Integrated Solutions Pvt. Ltd. Vs. Income Tax Officer-4(3)(4)
Needless to say, the CIT(A) in the course of the de novo proceedings shall afford a reasonable opportunity of being heard to the assessee appellant.
The appeal filed by the assessee is allowed for statistical purpose in terms of our aforesaid observations.
ITA Nos. 4003 to 4005/Mum/2019 AYs. 2009-10 to 2011-12 10. That as the facts and the issue involved in the captioned appeals remains the same as were there before us in the appeal of the assessee for A.Y. 2008-09 i.e , therefore, our order therein passed shall apply mutatis mutandis for the purpose of disposal of the aforementioned appeals for A.Y 2009-10 to A.Y. 2011-12 in to 4005/Mum/2019. Accordingly, in terms of our aforesaid observations recorded while disposing off the appeal of the assessee for A.Y. 2008-09, the delay of 285 days involved in filing of the abovementioned appeals for A.Y. 2009-10 to A.Y. 2011-12 before the CIT(A) are on the same terms condoned. The order passed by the CIT(A) is „set aside‟ and the matter is restored to his file with a direction to dispose off the aforesaid respective appeals on merits. Needless to say, the CIT(A) in the course of the de novo proceedings shall afford a reasonable opportunity of being heard to the assessee appellant.
The appeals filed by the assessee for A.Y. 2009-10 to 2011-12 viz. to 4005/Mum/2019 are allowed for statistical purpose in terms of our aforesaid observations.
Resultantly, the captioned appeals of the assessee company viz. 4003 to 4005/Mum/2019 for AYs. 2008-09 to 2011-12 are allowed for statistical purposes in terms of our aforesaid observations.
Order pronounced under rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963, by placing the details on the notice board.