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Facts
The assessee challenged an assessment order from AY 2018-19, leading to an appeal before the CIT(A). The CIT(A) dismissed this appeal as time-barred, citing an 85-day delay. The assessee argued that their appeal was timely, considering the extensions granted for limitation periods during COVID-19 by the Supreme Court and clarified by CBDT Circular No. 10/2021.
Held
The ITAT found that the assessee's appeal to the CIT(A) was indeed filed within the extended limitation period, which was applicable until 28-02-2022 due to the Supreme Court's orders. Therefore, the ITAT concluded that there was no delay in filing. The ITAT directed the CIT(A) to treat the appeal as filed within time and to admit it for adjudication on its merits.
Key Issues
Whether the CIT(A) correctly dismissed the appeal as time-barred, given the extensions of limitation periods due to COVID-19, and whether the CIT(A) should have adjudicated the appeal on its merits.
Sections Cited
Section 143(3), Section 144B, Section 40A(7), Section 234B, Section 234C, Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
Before: SH. S. RIFAUR RAHMAN & SH. SUDHIR KUMAR
Assessment Year: 2018-19 Refreshment Product Vs. ACIT Service India Private Circle – 19 (1) Limited, B-91, Mayapuri New Delhi Industrial Area, Phase-1, New Delhi PAN No.AAGCR4112D (APPELLANT) (RESPONDENT) Appellant by Sh. Sachit Jolly, Advocate Sh. Abhyudaya Shankar Bajpai, Advocate Sh. Aditya Rathore, Advocate Respondent by Ms. Shashi Kajle, Sr. DR Date of hearing: 12/08/2024 Date of Pronouncement: 16/08/2024 ORDER PER SUDHIR KUMAR, JM:
This appeal by the assessee is directed against the order of the CIT(Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “NFAC”] vide order dated 23.02.2024 pertaining to A.Y.2018-19 and arises out of the assessment order dated 20.04.2021 under section 143(3) read with section 144B of the IT Act 1961 [hereinafter referred as ‘the Act’].
The assessee has raised the following grounds of appeal :-
1. Ground No.1 – General That on the facts and circumstances of the case and in law, the order passed by Ld. CIT(A) dismissing the appeal due to delay in filing of the appeal, without even giving an opportunity of being heard to the Appellant is against the principles of natural justice is bad in law and is liable to be quashed.
2. Ground no. 2- No delay in filing of appeal That on the facts and circumstances of the case and in law, the Ld. CIT(A) has grossly erred in dismissing the appeal filed by the Appellant on account of being filed beyond the period prescribed under the Act, without considering the Circular no 10 of 202 dated 25.05.2021 issued by CBDT, wherein the limitation period for filing of appeal before CIT(Appeals) was extended till further orders by Hon'ble Supreme Court, is bad in law and is liable to be quashed,
3. Ground no. 3-Not considering the issue on merits That on the facts and circumstances of the case and in law, the Ld CIT(A) has erred in not adjudicating the issue on merits, relating to not considering the additional claim of allowance by the Ld AO for an amount of Rs 19,85,169/-being Payment of Gratuity inadvertently skipped to be claimed by the Appellant Company in its return of income and that the said amount was already disallowed at the time of making the Provision for Gratuity as per the provisions of Sec 40A(7) of the Act in the 3 previous year(s) This results in taxing the same amount to twice which is against the basic principles of taxation.
Ground no. 4-Inadvertent levy of Interest u/s 234B and 234C of the Act. That on the facts and circumstances of the case and in law, the Ld CIT(A) has erred in not deciding the appeal on the grounds raised by the Appellant, wherein the Ld AO while passing the order has erred in charging excess interest aggregating to Rs 5,47,211/- under section 234B and 234C of the Act.
The brief facts of the case are that the assessee is engaged in the business of providing information technology related supplementary services to Coca Cola group entities in relation to designing of software, development, deployment and implementation solutions. The assessee company has filed the return of income declaring of Rs 3,8521,040/- for the A.Y.2018- 2019. The case was selected for scrutiny u/s 143(2) of the Act through face less mechanism by the National e-Assessment Centre. The AO raised the tax demand of Rs 9,29,797/-on the assessee. Aggrieved by the order of the AO the assessee has filed the appeal before the Ld CIT(A) who vide his order dated 23-02-2024 has dismissed the appeal on account of time barred.
The Ld. CIT(A) in his order has observed as under :-
4 “7. Thus, it is trite in law that the appellant must show that he was diligent in taking proper steps and the delay was caused notwithstanding his due diligence. It is for the appellant to explain the reason for the delay and it is not the function of authorities to find the cause for delay. The Appellate authority has to examine whether the sufficient cause has been shown by the appellant for condoning the delay and whether such cause is acceptable or not. Even though substantial justice should not be defeated by technicalities but that does not mean that any plea without any possible or acceptable basis and even without hearing, semblance or rationality has to be accepted and delay has to be accepted and condoned which shall be against the very spirit of law. The time prescribed for filing the appeal will become meaningless in such an event. Merely because substantial justice is to be done law of limitation cannot be ignored and that also when there is no sufficient and reasonable cause for such inordinate delay.
7.1. The appellant, in the present situation, appears to be guilty of latches or negligence and does not take appropriate steps to peruse the remedy till about 85 days and thus does not take appropriate action in 5 filing the appeal within the prescribed time. In the light of the above discussion and considering the facts and position of the law on this issue, I find that there is no sufficient cause for condoning the delay in the institution of appeal by the appellant and thus condonation of delay is hereby rejected.
7.2 Since the appeal is being dismissed on account of being filed beyond the period prescribed under the Act, therefore, I am not expressing any opinion on merit of the case.
7.3 The appeal of the appellant is dismissed for statistical purpose.”
The Ld. Counsel for the assessee submitted that the assessee has filed the appeal within time as the Hon’ble Supreme Court has extended the time limit for filing the appeal during the COVID-19. He has further submitted that CBDT has also issued the Circular dated 25th May, 2021 regarding clarification the limitation time for filing of appeals before the CIT(Appeals) under the Income-Tax Act,1961. The CBDT circular reproduced as under :-
7 6. Per contra the DR relied on the orders of the lower authorities and sought for dismissal of the Appeal filed by the assessee.
We have heard rival submission of the parties and issue- 7. in-dispute and perused the relevant material on record on the issue of condonation of delay in filing appeal before the Ld. CIT(A).
On perusal of the order of the Ld.CIT(A) reveals that the assessment was passed on 20-04-2021 and appeal to be filed within 30 days but has been filed on 13-08-2021 i.e after the delay of 85 days. The assessee in form no 35 has not furnished any reasons for delay in filing the appeal before Ld CIT(A). The Hon’ble Supreme Court has extended the limitation time till 28-02-2022 for filing the appeal during the COVID-19. The assessment order was passed on 20-4-2021 and appeal was filed on 13-08-2021 within the extended time limit. There was no delay in filing of the appeal for that reason assessee has not moved any formal application for condonation of delay. The Ld CIT(A) should have treated the appeal within time and should have decide the appeal on merits. Accordingly, we direct the Ld. CIT(A) to treat the appeal within time and admit the appeal for adjudication on merit in accordance with law after considering the submission of the assessee. The grounds of appeal by the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 16.08.2024.