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Facts
The appellant, a builder and developer, filed its return for AY 2017-18, which was assessed under Section 143(3). The PCIT subsequently initiated revisionary proceedings under Section 263, finding the assessment erroneous and prejudicial to the revenue due to the AO's failure to inquire into Section 80IB(10) deduction and depreciation claims on house property. The PCIT set aside the assessment for de novo proceedings, against which the appellant filed an appeal with a delay of 338 days.
Held
The Tribunal found that the appellant's explanation for the 338-day delay in filing the appeal, citing the demise of a Managing Partner, was not satisfactory. It noted that the impugned order was passed after the demise, and the firm was actively involved in proceedings before the PCIT. The Tribunal concluded that the reasons for delay were not adequately explained and appeared to be an afterthought, thus refusing to condone the delay.
Key Issues
Whether there was sufficient cause to condone the 338-day delay in filing the appeal against the PCIT's revisionary order under Section 263.
Sections Cited
263, 143(3), 80IB(10)
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI SOUNDARARAJAN K., JM
O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the Principal Commissioner of Income Tax-1, Kochi (PCIT), dated 30.03.2022 passed u/s. 263 of Income Tax Act, 1961 (hereinafter "the Act") for Assessment Year (AY) 2017-18.
Brief facts of the case are that the appellant is a partnership firm engaged in the business of builder and developer. The return of income for AY 2017-18 was filed on 29.10.2017 and the same was Desai Homes revised on 30.10.2018 declaring total income of Rs. 14,44,88,400/-. Against the said return of income, the assessment was completed by the ACIT, Non-corporate Circle-2(1), Kochi (hereinafter called "the AO") vide order dated 31.12.2019 passed u/s. 143(3) of the Act at a total income of Rs. 14,68,26,420/-.
Subsequently, on examination of the assessment records, the learned PCIT opined that the assessment order is erroneous and prejudicial to the interests of Revenue for the reason that the AO had failed to enquire about the applicability of clause (f) to section 80IB(10) of the Act while allowing the deduction u/s. 80IB(10) and also the appellant claimed depreciation on house property in respect of which income was offered to tax under the head “income from house property”. Accordingly, PCIT issued notice us 263 dated 23.11.2021 calling upon the appellant to show cause as to why the assessment order should not be set aside. After considering the submissions made by the appellant the learned PCIT set aside the assessment order to the file of the AO for de novo assessment in accordance with law.
Being aggrieved, the appellant is in appeal before us in the present appeal.
At the outset we find that there is a delay in filing the present appeal by 338 days. The appellant filed application seeking condonation of delay wherein it is stated that the delay had occurred Desai Homes on account of sudden demise of the Managing Partner, Shri V.R. Desai on 7th January, 2022. Further, during the reconstitution of the firm subsequent upon the demise of the Managing Partner there was change in the senior employees looking after the management and taxation of the firm. The fact that non-filing of the appeal against the order passed u/s. 263 was realised only while preparing the appeal against the order passed u/s. 143(3) r.w.s. 263 of the Act.
On a careful perusal of the averments made in the petition seeking condonation, we are of the considered opinion that the petition does not explain the reason for the delay. It is noticed that the erstwhile Managing Director of the firm, Shri V.R. Desai expired on 7th January, 2022 whereas the impugned order came to be passed by the learned PCIT on 30.03.2022. During the proceedings before the PCIT the appellant had put up appearance and filed detailed explanation in response to the show cause notice issued u/s. 263 of the Act. This would only show that the demise of the erstwhile Managing Partner of the firm Shri V.R. Desai had no impact on the business operations and functioning of the firm. Further, the affidavit is bereft of the details such as the names of the employees who left the firm who are responsible for filing the appeal. Similarly, the fact that the appellant could realise the non- filing of appeal against the order u/s. 263 till the time of appeal before the CIT(A) against the order passed u/s. 143(3) on 21.03.2023 also does not really explain the reasons for the delay in
In the result, appeal filed by the assessee stands dismissed.
Order pronounced in the open court on 11th March, 2025.