MR.DEVANG VIJAY MEHTA,MUMBAI vs. ITO WARD 17(1)(3), MUMBAI

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ITA 692/MUM/2019Status: DisposedITAT Mumbai02 August 2019AY 2013-143 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The tribunal condoned the delay in filing the appeal, finding reasonable cause. On merits, the tribunal held that since the assessee did not claim any exempt income, no disallowance under Section 14A of the Act was permissible.

What were the facts?

The assessee filed an appeal with a delay of 152 days, attributing it to pursuing a rectification application before the CIT(A) due to a cryptic order. The CIT(A) disposed of the rectification application, and the assessee filed the appeal to the tribunal shortly thereafter.

What were the issues?

Whether the delay in filing the appeal can be condoned due to the assessee pursuing a rectification application. Whether disallowance under Section 14A is applicable when no exempt income is claimed.

Which sections of the Income-tax Act were involved?

Section 14A,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D”, BENCH

Before: SHRI M.BALAGANESH, AM & SHRI AMARJIT SINGH, JM

For Appellant: Shri Dinkle Hariya
For Respondent: Shri D.G. Pansari
Hearing: 30/07/2019Pronounced: 02/08/2019

आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in A.Y.2013-14 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-55, Mumbai in appeal No.CIT(A)-55/ITO-17(1)(3)/IT-429/2017-18 dated 19/06/2018 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 14/03/2016 by the ld. Income Tax Officer-17(1)(3), Mumbai (hereinafter referred to as ld. AO).

2.

At the outset we find that there is a delay of 152 days in filing of appeal by the assessee. The assessee in his affidavit has stated that he was pursuing the rectification application before the ld. CIT(A) as the order of the ld. CIT(A) was very cryptic and had been passed without due consideration of Hon’ble Jurisdictional High Court on the impugned issue. The rectification application was disposed off by the ld. CIT(A) on 22/01/2019 and assessee had preferred appeal to the appellate Tribunal on 07/02/2019. We find lot of force in the argument of the ld. AR that the delay in filing of appeal before this Tribunal had occurred in view of the fact that assessee was pursuing alternative remedy by preferring the rectification application before the ld. CIT(A) and from the date of rectification order passed by the ld. CIT(A), the assessee has filed the appeal before us within 15 days thereon. In these peculiar facts and circumstances, we find that assessee was prevented by reasonable cause in not filing the appeal before this Tribunal in time and accordingly, we are inclined to condone the delay and admit the appeal of the assessee for adjudication.

3.

The only effective issue raised by the assessee is with regard to the fact that assessee had not earned any exempt income and hence, no disallowance u/s.14A of the Act would operate on the same. We find from the order of the lower authorities that the assessee had not claimed any exempt income in the return of income. This fact is not disputed. Once there is no claim of exempt income, there cannot be any disallowance u/s.14A of the Act. This issue is now settled by various decisions of Hon’ble Jurisdictional High Court and also by Hon’ble Supreme Court. Accordingly, the grounds raised by the assessee on merits are allowed.

1.

3.1. In view of the aforesaid observation, the adjudication of ground No.1 raised by the assessee on violation of principles of natural justice becomes academic in nature. Accordingly, the grounds raised by the assessee are allowed.

4.

In the result, appeal of the assessee is allowed. Order pronounced in the open court on this 02/08/2019

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