VAAGAI BUSINESS SERVICES AND EDUCATION PRIVATE LIMITED,CHENNAI vs. ITO CORPORATE WARD 3(4), CHENNAI

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -11, Chennai, dated 05.02.2019 and pertains to assessment year 2013-14.

Shri R.K.V. Sundar, the Ld.counsel for the assessee submitted that there was a delay of 29 months in filing the appeal before the CIT(Appeals). According to the Ld. counsel, the assessee was in the business of skill development and training in computerized accounting. All the activities of the assessee were closed and the company became dormant. According to the Ld. counsel, the assessee-company had to dispose of the computers and furniture in order to settle the rental arrears for the premises occupied by it. There was no staff in the company, hence, the appeal could not filed within the prescribed time. Therefore, the Ld.counsel submitted that the delay of 29 months in filing the appeal may be condoned and the matter may be remitted back to the file of the CIT(Appeals).

On the contrary, Shri Sanath Kumar Raha, the Ld. Departmental Representative, submitted that there is no reason for not filing the appeal within the prescribed time. There was inordinate delay of 29 months in filing the appeal. The assessee could not justifiably explain the delay in filing the appeal. Therefore, according to the Ld. D.R., the CIT(Appeals) has rightly refused to condone the delay.

Having heard the Ld.counsel for the assessee and the Ld. D.R., this Tribunal finds that the assessee-company closed its business and became dormant. This fact is not in dispute. The company had to sell its computers and furniture for payment of rental arrears for the premises occupied by it. In those circumstances, there was a financial crisis in the assessee- company for performing the day-to-day activities. The financial crisis has prevented the assessee from filing the appeal before the CIT(Appeals) within the prescribed time. Therefore, this Tribunal is of the considered opinion that there was reasonable cause for not filing the appeal before the CIT(Appeals). Accordingly, the delay of 29 months in filing the appeal before the CIT(Appeals) is condoned. Now the appeal of the assessee is restored on the file of the CIT(Appeals). The CIT(Appeals) is directed to dispose the appeal on merit after giving a reasonable opportunity to the assessee.

In the result, the appeal filed by the assessee is allowed.