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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI C.N. PRASAD, JM & SHRI MANOJ KUMAR AGGARWAL, AM
Per Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year [AY] 2011-12 contest the order of the Ld. Commissioner of Income-Tax (Appeals)-1 [CIT(A)], Mumbai, Appeal No.CIT(A)-I/IT/E-II (189)/2015-16 dated 12/08/2016 by raising various grounds of appeal, which broadly read as under:-
Athashri Foundation Assessment Year-2011-12 GROUND NO.I: As regards condonation of delay in filing of appeal before the CIT(A) GROUND NO.II: Disallowance of Depreciation amounting to Rs. 68,911/- GROUND NO III: As regards non-allowance and carry forward of deficit: The assessment for impugned AY was framed by Ld. Assistant Director of Income Tax–II(2), Mumbai [AO] u/s 143(3) of the Income Tax Act,1961 on 11/03/2014 wherein the income of the assessee has been assessed at Rs.65.24 Lacs as against deficit of Rs.7,701/- filed by the assessee on 29/09/2011 along with income and expenditure account, balance sheet and audit report in form No.10B. As evident from quantum assessment order, the assessee is a Trust duly registered u/s 12A of the Income Tax Act as well as an entity incorporated u/s 25 of the Companies Act, 1956.
The assessee, in the quantum assessment, has been denied depreciation against fixed assets since the purchase thereof was allowed as an application of income. Secondly, the set-off of deficit of earlier years has also been disallowed for reasons stated in the quantum assessment order.
Aggrieved, the assessee contested the same without any success before Ld. CIT(A) vide impugned order dated 12/08/2016 wherein the appeal of the assessee has been dismissed on technical ground for want of condonation of delay of approx. 18 months in filing the appeal. The matter has been concluded by the Ld. First appellate authority in the following manner:-
Athashri Foundation Assessment Year-2011-12 5. The contention of the appellant has carefully been considered. The appellant has failed to explain as to what effort was made by it during these 18 months. It appears that the appellant failed even to check from the acknowledgment received that appeal has wrongly been filed by it in some other office. This shows carelessness and negligence on part of the appellant. Further, the authorized representative or the staff has not confirmed this statement of the appellant. Under these circumstances, I am not satisfied that the appellant had sufficient cause for not presenting his appeal within a period of 30 days permitted u/s.249(2). In the case of Rankak & Others vs. Reva Coal Fields Ltd [AIR 1962 (SC) 361], the Hon’ble Apex Court have held that the party has to show reason for delay on the last date of limitation and thereafter for each day since condonation is not a matter of right. In the case of Ornet Properties vs. ITO [312 ITR 193] and CIT vs. Reliance Capital Ltd [322 ITR 252], it was held by Hon’ble Bombay High Court that inordinate delay in filing appeal are not condoned since dormant claims cannot be given new life. The Hon’ble High Court further clarified that those who sleep over their rights for a prolonged period cannot claim equity in justice. Further in the case of Airlines Rotables Ltd. 54 taxmann. Com 288 Hon’ble Bombay High Court held that if the explanation is found to be concocted or demonstrates thorough negligence in prosecuting the cause, then, it would be a legitimate exercise of discretion not to condone the delay. Also, in the case of Venkatesh Paper & Boards vs. DCIT [98 ITD 200], the Hon’ble Chennai ITAT have held that for condonation of delay, appellant has to prove that there has been diligence on its part and was not guilty of negligence whatsoever and further the cause for delay in filing appeal which by due care and attention could have been avoided cannot be sufficient cause within the meaning of these provisions. Similar, observations were made by Hon’ble ITAT, Chennai Bench, in the case of DCIT vs. Jaya Publications [309 ITR (AT) 245]. Accordingly, I do not find any force in this contention of the appellant and the delay in filing appeal is not condoned resulting into non admission of the appeal. Aggrieved, the assessee is in further appeal before us.
The Ld. Authorized Representative for the assessee [AR], Shri Yogesh Thar drawing our attention to the documents placed in the paper book explained the circumstances which led to late filing of the appeal before Ld. first appellate authority. Per contra, Ld. Departmental Representative [DR], Sh. Rajesh Kumar Yadav, submitted that the assessee was negligent in filing the appeal before appropriate authority and therefore, the stand of Ld. CIT(A) was reasonable under the circumstances.
Athashri Foundation Assessment Year-2011-12 5. We have carefully heard the rival contentions and perused relevant material on record including documents placed in the paper book. The fact that the appeal has been filed with a delay of approx. 18 months is not in dispute. However, from the documents placed on record, it is evident that the quantum assessment order was passed on 11/03/2014 which is stated to be received by the assessee on 26/03/2014. The appeal before Ld. CIT(A) has been filed on 15/10/2015. As pointed out by Ld. AR which is also evident from material on record, It is noted that the assessee, by mistake, filed the appeal before Ld. AO itself i.e. ADIT (E)-II(2) on 10/04/2014 along with Form No. 35 and other requisite documents with payment Challan (CIN No. 02314330904201431956) for Rs.1,000/- towards appeal filing fees. Later on, upon discovering the aforesaid mistake, the assessee preferred appeal before the appropriate authority i.e. Ld. CIT(A) on 15/10/2015 along with requisite documents and affidavit of the director explaining the circumstances which led to erroneous filing of appeal before Ld. AO. In the aforesaid affidavit, the mistake has been attributed to inadvertent error on the part of the staff in filing appeal before wrong authority and the said fact got overlooked by authorized representative of the assessee. Upon discovering aforesaid mistake subsequently, the appeal was filed before appropriate authority i.e. Ld. CIT(A).
The above facts, in our opinion, prove the bona fides of the explanation furnished by the assessee. The same, in our view, was plausible explanation in view of the fact that appeal filing fees was paid by Athashri Foundation Assessment Year-2011-12 the assessee within time and the appeal was also filed albeit to wrong authority. However, undisputedly the same was within time. Therefore, upon consideration of factual matrix and keeping in view the principle of natural justice, the delay deserves to be condoned. We order so. This ground of appeal
stand allowed.
7. So far as the merits of the case are concerned, Ld. AR has contended that the case of the assessee is squarely covered by certain judicial pronouncements of higher court. However, since Ld. CIT(A) has not dealt with the same, without delving into the merits, the matter stand remitted back to the file of Ld. first appellate authority to consider the assessee’s submissions on merits. This ground stand allowed for statistical purposes.
8. Resultantly, the assessee’s appeal stand partly allowed in terms of our above order. Order pronounced in the open court on 11th July, 2018 Sd/- Sd/- (C.N.Prasad) (Manoj Kumar Aggarwal) �ाियकसद� / Judicial Member लेखासद� / Accountant Member मुंबई Mumbai; �दनांकDated : 11.07.2018 Sr.PS:-Thirumalesh