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Facts
The assessee's appeal against an order u/s 154 for AY 2014-15 was dismissed by the CIT(A) due to a six-year delay in filing. The assessee contended that the original order was not communicated, her tax consultant died, and she had a bona fide belief that a rectification request was pending. The underlying dispute involved a demand of Rs.17,99,230/-, arising from the assessment of house property income where her ownership was incorrectly considered 100% instead of 50%.
Held
The ITAT found reasonable cause for the delay, attributing it to the death of the tax consultant, lack of communication of the order, and the assessee's bona fide belief that a rectification application was pending. The delay in filing the appeal before the CIT(A) was condoned, and the matter was restored to the CIT(A) for fresh adjudication on merits, ensuring the assessee receives a reasonable opportunity of being heard.
Key Issues
Whether there was reasonable cause for the six-year delay in filing the appeal before CIT(A), and whether the CIT(A) erred in dismissing the appeal without considering the merits of the case, particularly regarding the correct ownership percentage for house property income.
Sections Cited
Section 250, Section 154, Section 249(2), Section 221(1), Section 220(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, ‘E’: NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI BRAJESH KUMAR SINGH
Date of Hearing 05.08.2024 Date of Pronouncement 22.08.2024 ORDER PER BRAJESH KUMAR SINGH, AM,
This appeal by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), New Delhi, dated 13.03.2024 pertaining to Assessment Year 2014-15.
The grounds of appeal raised by the assessee reads as under:-
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in dismissing the appeal on the grounds of "not being filed on time and no reasonable reason given for such delay of six years" while issuing the order u/s 250 of the Income-tax Act, 1961.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) further erred in concluding that the issue on the merit of this case is not required to be discussed' while passing the impugned order.
On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in upholding the addition of income amounting to Rs.37,07,905 without considering the facts of the case.
4. On the facts and in the circumstances of the case and in law, the said order of the Ld. CIT(A) is arbitrary and bad in law and hence, deserves to be struck down.
5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in issuing the order u/s 250 of the Income-tax Act, 1961 without offering adequate opportunity of being heard to the assessee which is against the principle of natural justice.” 3. Brief facts of the case: The appeal filed before the ld. CIT(A)
emanated from an order u/s 154 of the Act dated 27.12.2022. However, the Ld. CIT(A) held that there was a delay of six years in filing the appeal before the ld. CIT(A) by taking note of the fact that the original order u/s 154 of the Act was passed on 13.01.2016 raising a demand of Rs.17,99,230/-. The ld. CIT(A) did not agree with the explanation of the assessee for the delay in filing of the appeal and the condonation for delay was rejected by the ld. CIT(A). The Ld. CIT(A) held that the present appeal was not maintainable in view of the provision of section 249(2) of the Act and dismissed the appeal of the assessee.
3.1. In the appellate proceedings, the assessee submitted a synopsis and a sequence of events with respect to the facts of the case and the development thereafter as under:-
3.3. During the appellate proceedings, the AR filed a copy of death certificate dated 26.01.2015 of the assessee’s tax consultant CA Brij Bhushan Tandon, who passed away on 24.01.2015. It was submitted by the ld. AR that Shri Brij Bhushan Tandon advised the assessee on tax related matters and his e-mail address [returns.btitr@yahoo.com] was mentioned in the ITR of the assessee and the u/s 154 order dated 13.01.2016 raising the demand of Rs.18,52,190/- was neither e-mailed or otherwise communicated to the assessee. It was further submitted that the assessee was served the demand notice on 04.01.2023 with a demand notice dated 27.12.2022 for Rs.16,70,027/-. Thereafter, the assessee filed an appeal before the ld. CIT(A) on 10.02.2023 against the order u/s 154 dated 27.12.2022. Prior to that the assessee had filed a rectification request u/s 154 of the Act dated 02.07.2019 upon receipt of notice u/s 221(1) of the Act dated 20.06.2019. It was submitted that the assessee was under bonafide belief that the rectification application filed on 02.07.2019 was pending before the AO and was hopeful of relief and the vacation of the demand. It was further submitted that on merits, the assessee had filed return of income showing income from house property at Rs.46,92,023/-, which was processed at Rs.83,99,928/-. It was submitted that demand was raised due to the mistake in the order u/s 154 dated 13.01.2016, wherein, the assessee’s ownership in respect of the house property was taken at 100%, whereas, the assessee’s ownership was only 50%. It was submitted that the delay of filing in appeal before the ld. CIT(A) may kindly be condoned and the matter may be restored back to the file of the ld. CIT(A) for consideration of the facts on merits.
3.4. The ld. DR relied upon the orders of the authorities below.
We have heard both the parties and perused the material available on record. We have considered the facts of the case and the reasons for the delay in filing the appeal. In view of the fact of the death of the tax consultant of the assessee during the material period and the assessee’s bonafide belief that its petition u/s 154 dated 02.07.2019 was still pending, we are satisfied that there was a reasonable cause for the delay in filing of the appeal. Hence, we condone the delay in filing the appeal before the Ld. CIT(A) and restore the matter to the file of the ld. CIT(A) to decide the appeal on merits. The ld. CIT(A) will give reasonable opportunity of being heard to the assessee before deciding the appeal.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 22nd August, 2024.