M/S. RAO COMPUTERS CONSULTANTS PVT. LTD,BENGALURU vs. INCOME TAX OFFICER, WARD-5(1)(2), BENGALURU

This is an appeal filed by the assessee agsint the order dated 11/8/2017 of Commissioner of Income-tax (Appeals) - V Bengaluru relating to assessment year 2013-14.

The assessee is a company engaged in the business of providing infrastructure for IT companies. An order of assessment dated 24/3/2016 was passed by the AO u/s 143(3) of the Act (Act) for assessment year 2013-14 determining the total income of the assesse at Rs.68,96,068/- as against the income declared by assessee at Rs.64,72,980/-.

Aggrieved by the addition made in the order of assessment, assessee preferred an appeal before the CIT(A).

There was a delay of about 209 days in filing the appeal before the CIT(A). In support of its application for condonation of delay in filing the appeal, the assessee submitted that it was ignorant of the provisions of law and was not advised by the Tax Consultant properly to file appeal against the order of the AO. The CIT(A) was of the view that there was no reasonable cause for the delay in filing the appeal belatedly. He held that the assessee, a corporate Assessee assisted by the qualified professionals and cannot plead ignorance of law or wrong advise of professionals. The CIT(A) therefore refused condonation of delay in filing the appeal.

Aggrieved by the order of the CIT(A), the assessee has preferred the present appeal before the Tribunal.

Before us, the ld counsel for the asssesee relied on certain judicial pronouncements in support of the assessee’s claim that the delay in filing the appeal ought to have been condoned by the CIT(A). These decisions are – 1) N Balakrishnan Vs. M Krishnamurthy AIR 1998 SC 3222 2) Auto Centre Vs. State of Uttar Pradesh 278 ITR 291 (All) 3) Phoenix Mills Ltd. Vs. ACIT in the decision of Mumbai ‘A’ Bench in 2007 order dated 23/3/2010.

The ld DR relied on the order of the CIT(A).

We have considered the rival submissions. The Assessee derives income from letting of constructing and letting out building on rent to IT and ITES companies with all infrastructural facilities. The income from such letting out of property, according to the Assessee, should be assessed under the head “Income from Business” and not under the head “Income from house property”, even though such income was offered by the Assessee under the head “Income from House Property”. In fact the dispute between the Assessee and the department in this regard was pending before the appellate authorities for AY 2009-10 to 2012- 13. The CIT(A) passed an order dated 29.12.2016 rejecting the claim of the Assessee for AY 2009-10 to 2012-13. The order of the AO for the AY in this appeal viz., AY 2013-14 was passed on 24.3.2016. The appeal of the Assessee was filed before CIT(A) on 30.11.2016. Thus the plea of the Assessee in the statement of facts filed before CIT(A), that the dispute regarding head of income under which rental income from letting out buildings with infrastructure for IT and ITES companies has to be assessed, had not attained finality and at that stage when the AO passed order of assessment on 24.3.2016 sustainability of such claim was in doubt and therefore the Assessee was dependant on legal advice of counsel whether to file appeal or not, is highly probable. The Hon’ble Supreme Court in the case of N.Balakrishnan Vs. M.Krishnamurthy (supra) took the view that if an explanation for delay in filing appeal is acceptable then the length of delay is not relevant. If there is no material to show malafide or deliberate delay as a dilatory tact, court should normally condone the delay.

The reasons given for delay in filing the appeal, in our view, are acceptable. We are therefore of the view that the CIT(A) ought to have condoned the delay the delay in filing the appeal. For the reasons given above, We condone the delay in filing the appeal by the assessee before the CIT(A). Since the CIT(A) has not decided the appeal of the Assessee, We direct the CIT(A) to decide the appeal of the assessee on merits after affording opportunity to the assessee of being heard. The appeal is treated as allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes.