M/S VAKRATHUNDA HOLDINGS PVT LTD,BANGALORE vs. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-12(5), BANGALORE

This is an assessee’s appeal which is directed against the order of ld. CIT (A)- 7, Bangalore dated 23.02.2017 for Assessment Year 2011-12.

The grounds raised by the assessee are as under:-

It was submitted by ld. AR of assessee that in the present case, return of income was filed by the assessee which was assessed by the AO as per assessment order dated 10.03.2014 and the assessment order was served on the assessee on 13.03.2014. Thereafter, the assessee moved an application for revision u/s. 264 of IT Act before the CIT. It is also submitted that an application for withdrawal of application filed u/s. 264 of IT Act was submitted before the CIT on 05.02.2015 and thereafter on 06.02.2015, the assessee filed an appeal before the CIT (A) and subsequently on 09.02.2015, the ld. CIT has dismissed the application of assessee u/s. 264 as withdrawn. Thereafter he submitted that in the impugned order, it was held by CIT (A) that since the assessee has opted to select the route of filing petition before the CIT u/s 264, the assessee has waived its right to file the appeal and the same cannot come back and on this basis, it was held by him as per Para no. 7.7 of the impugned order that the appeal filed before the CIT (A) is not maintainable. In this regard, he placed reliance on judgment of Hon’ble Madras High Court rendered in the case of M. Jayabalan Vs. CIT as reported in 40 taxmann.com 218 (Madras). He submitted a copy of this judgment and pointed out that as per this judgment, it was held that the filing of revision petition cannot be a bar for filing of the appeal by the assessee before the appropriate authorities as per the relevant provisions of law.

On the second aspect of the matter regarding condonation of delay in filing the appeal before the ld. CIT (A), he submitted that it is held by CIT (A) as per the impugned order that there is delay of 331 days which is an extraordinary delay in filing of this appeal and the assessee is required to explain the reason for delay on day-to-day basis. He held that the assessee has not been able to discharge its onus. On this aspect of the matter, he placed reliance on the judgment of Hon’ble Apex Court rendered in the case of Collector, Land Acquisition Vs. MST. Katiji and Others as reported in 167 ITR 471 and pointed out that as per this judgment, it was held that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred.

Regarding the reasons for delay, he submitted that the assessee had earlier preferred an alternative remedy available and therefore, there was sufficient and reasonable cause for delay in filing appeal before the CIT (A). In this regard, he placed reliance on following judicial pronouncements. a) CIT Vs. K.S.P. Shanmugavel Nadar and Others, 153 ITR 596 (Madras) b) CIT Vs. Sharma and Company, 153 ITR 605(Raj) c) J.M. Bhasali and Others Vs. The State of Madras, 21 STC 411(Madras)

We have considered the rival submissions. We are of the considered opinion that in view of the judgment of Hon’ble Madras High Court rendered in the case of M. Jayabalan Vs. CIT (supra) wherein it is held that the appeal filed by the assessee before CIT (A) after withdrawal of the revision petition u/s. 264 is maintainable and it cannot be said that after filing the revision petition u/s. 264, the assessee cannot file the appeal before the CIT (A) even after withdrawal of the said revision petition. On this aspect, we decide the issue in favour of the assessee by respectfully following this judgment of Hon’ble Madras High Court.

Regarding the condonation of delay of 331 days in filing appeal before the CIT (A), we find force in the submissions of ld. AR of assessee that in view of this fact that the assessee was pursuing an alternative remedy available under the law and the delay for that reason should be condoned if it is found that such action of the assessee was bonafide. He has placed reliance on the judgment

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