Loading judgment…
Facts
The assessee, an employee of Maharashtra State Power Generation Company Ltd., initially filed a return declaring total income of Rs. 22,66,880, claiming full exemption for gratuity and leave encashment. Later, a revised return was filed declaring Rs. 9,15,490 and claiming higher exemption for leave encashment. The Assessing Officer disallowed the higher exemption, disallowing Rs. 16,51,392 and adding it back.
Held
The CIT(A) dismissed the assessee's appeal due to a delay of 186 days without deciding on merits. The Tribunal noted that the CIT(A) failed to provide reasons for the decision as required by law. Relying on the Supreme Court's judgment in Collector, Land Acquisition vs. MST Katiji, the Tribunal condoned the delay.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal solely on the grounds of delay without adjudicating the merits of the case. Whether the delay in filing the appeal should be condoned in the interest of substantial justice.
Sections Cited
10(10), 10(10AA), 143(3), 142(1), 144B, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH : NAGPUR
Before: SHRI V. DURGA RAO
ORDER PER V. DURGA RAO, J.M. : This appeal has been filed by the Assessee against the order dated 30.07.2024, of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC”], Delhi, relating to assessment year 2020-2021. 2. Facts of the case, in brief, are that the assessee is an individual, employee of Maharashtra State Power
2 ITA.No.468/NAG./2024 Generation Company Ltd., During the year under consideration, the assessee filed his original return of income on 09.08.2020 declaring total income of Rs.22,66,880/- by claiming full exemption of gratuity amount of Rs.17,73,900/- u/sec.10(10) of the Act and leave encashment of Rs.3 lakhs u/sec.10(10AA) of the Act. The assessee, later on, filed revised return of income declaring total income of Rs.9,15,490/- and in the revised return the assessee claimed full exemption of leave encashment of Rs.16,51,392/- as against of Rs.3 lakhs claimed by him earlier. Therefore, the case of the assessee has been selected for limited scrutiny u/sec.143(3) to verify the issue. The Assessing Officer accordingly issued statutory notices u/sec.143(2), 142(1) as well as show cause notice. In response thereto, the assessee filed his reply. Being not satisfied with the explanation offered by the assessee, the Assessing Officer after examining Form- 16, original ITR and revised ITR, confirmed the original return of income filed by the assessee wherein he had declared total income of Rs.22,66,880/- by disallowing the exemption of leave encashment of Rs.16,51,392/- u/sec.10(AA) of the Act
3 ITA.No.468/NAG./2024 as against Rs.3 lakhs offered by the assessee in it’s original return of income and added the differential sum of Rs.13,51,392/- on account of misreporting/excess sum, vide order dated 09.09.2022 passed u/sec.143(3) r.w.s.144B of the Act.
Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the learned CIT(A) with a delay of 186 days. The learned CIT(A) dismissed the appeal of assessee on account of delay, without deciding the matter in issue on merits.
On being aggrieved by the order of the learned CIT(A), the assessee carried the matter in appeal before the Tribunal.
During the course of hearing, the Learned Counsel for the Assessee, at the very outset, submitted that the learned CIT(A) was not justified in not considering the reasons for the delay of 186 days in filing appeal before him. He further submitted that the learned CIT(A) has not decided the appeal on merits and therefore, he pleaded that the matter may be restored back to the file of learned CIT(A) by 4 ITA.No.468/NAG./2024 condoning the delay 186 days in filing appeal before him and with a direction to decide the matter in issue afresh in the interest of substantial justice.
The Learned DR on the other hand strongly relied on the orders of the authorities below.
I have heard the arguments of both the sides and perused the material on record. I find that the learned CIT(A) has dismissed the appeal of assessee on the ground of delay and not decided the matter in issue on merits. I note that the assessee is a Government Employee in Maharashtra State Power Generation Company Ltd., and offered gratuity sum and leave encashment sum for exemption under the respective sections of the Act. However, the learned CIT(A) had dismissed the appeal only on account of delay, without deciding the issue on merits. In this connection, it is relevant to quote the Judgment of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs., MST Katiji [1987] 167 ITR 471 (SC) wherein it has been held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for 5 ITA.No.468/NAG./2024 the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. It has further been held that refusing to condone delay can result in a meritorious matter being thrown-out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. I further note that the learned CIT(A) has not decided the matter in issue on merits as contemplated u/sec.250(6) of the Act, according to which, the learned CIT(A) has to give reasons for decision and adjudication thereof, even if the assessee did not appear before him. In view of the above decision of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs., MST Katiji (supra), considering the totality of the facts and circumstances of the case and in the larger interest of substantial justice, the delay of 186 days in filing the appeal before learned CIT(A) is condoned with a direction to decide the appeal on merits, by providing adequate opportunity of being hear to the assessee. Needless to say, it is for the assessee to plead and prove his case before
6 ITA.No.468/NAG./2024 the learned CIT(A) by furnishing all the requisite documents as called for in consequential proceedings. I hold and direct accordingly. 8. In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 05.02.2025.
Sd/- (V. DURGA RAO) JUDICIAL MEMBER Nagpur, Dated 05th February, 2025 VBP/- Copy to 1. The appellant 2. The respondent 3. The CIT, Nagpur concerned 4. The D.R. ITAT, Nagpur SMC-Bench, Nagpur 5. Guard File. //By Order// //True Copy//
Sr. Private Secretary : ITAT : Nagpur Bench NAGPUR.