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Facts
The assessee filed an appeal before the CIT(A) with a delay of 100 days, citing reasons related to their understanding of tax liability and communication issues with their tax consultant and the Income Tax Department. The CIT(A) rejected the appeal as unadmitted due to the delay, stating insufficient cause.
Held
The Tribunal held that the assessee had sufficient cause for the delay in filing the appeal, considering legal precedents and the principles of substantial justice. The CIT(A) had not adjudicated the case on merits, leading the Tribunal to set aside the CIT(A)'s order.
Key Issues
Whether the CIT(A) was justified in rejecting the appeal on the ground of delay without sufficient cause, and whether the appeal should be admitted for adjudication on merits.
Sections Cited
234A, 234B, 249, 69C, 148, 151A, 144B
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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI OM PRAKASH KANT, AM & SHRI RAHUL CHAUDHARY, JM
O R D E R Per Om Prakash Kant, A M:
This appeal by the assessee is directed against order dated 08.08.2024, passed by the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) for Assessment Year (‘A.Y.’ for short) 2015- 16, raising following grounds:
(A) 1.1. On the facts and circumstances of the case the learned CIT(A) ought not to have rejected my appeal ex-parte against the Assessing Officer's order. I have submitted the application to Condon the delay in filing appeal before CIT(A). Along with filing appeal and in reply to defection notice issued by CIT(A). The CIT(A) rejected without taking into consideration of my application at all. As if I have not reply at all. 1.2 The learned CIT(A) issued notice of deficiency i.e. and asked for submission of application for condo nation in delay in filing the appeal by about 100 days. I have promptly relied the same with exhaustive reply with supporting case laws. The learned CIT(A) rejected the same without considering my reply at all. The learned CIT(A) has violated the principle of equity and natural justice. They appeal be admitted. (B) On Technical Grounds (A.Y.2015-16) Anand Govind Parab vs. ITO 2.1 The notice u/s 148 r.w.s. 151A issued on 25/04/2022 is time barred. In view of various high court decision and Bombay High Court decision. 2.2 The Notice U/s 148 is issued on 25th April, 2022 by the jurisdictional Assessing Officer i.e. Ward 34(1) (1). The Notice u/s 148 as per CBDT circular/instruction dated 29th March, 2022[(2022) 442 ITR St. 198] as well as Bombay High Court decision in (2024) 464 ITR 433 i.e. Hexaware Technologies Ltd. Ought to have been issued by the faceless Assessing Officer. The notice issued by jurisdictional AO is invalid and all 148 proceedings be dropped. (C) On merit of the case 3.1 The appellant has purchased ownership flat in Sierra Enclave, Kamohte, Navi Mumbai for Rs. 25,00,000/- whose stamp duty value is Rs. 27,65,500/-. The appellant entered into agreement to sale on 30th May, 2014 and when full payment made on compulsion of lender the conveyance/sale deed of same flat was registered with authority on 25th August, 2014 for the same property. The AO ought not have treated two separate transaction of sale at all. (Actually it is purchase of residence by the appellant.) 3.2 The Assessing Officer did not understand this legal formally and he took two purchase of property of i.e. on 30/05/2014 Rs. 27,65,500/- and 25/08/2014 again Rs. 27,65,500/- where added in the hands of the assessee. The treating as sale transaction and treating as short term capital gain. 3.3 The AO took purchase of property as sale of two property and treated Rs. 55,31,000/- as short term capital gain in facts and circumstances it is only one purchase of property vide agreement to sale dated 28/05/2014 which was registered on 30/05/2014 and there is no sale transaction.
4. The Appellant has sold his old flat situated at Gayati C.H.S.Ltd sanpada on 28/05/2014 for a total consideration of Rs. 60,00,000/- (whose stamp duty value is Rs. 40,00,000/-) the appellant had purchased the said flat on 10th June 2009 for Rs. 21,00,000/- whose indexed cost comes to Rs.35,78,491/-. The appellant has earned long term capital gain of Rs. 24,21,509/- which he has invested an purchase of other residence for Rs. 25,00,000/-. The appellant is entitled to the benefit of section 54 and be granted.
5. Interest charged under se. 234A of Rs. 21,21,867/- and interest charged u/s 234B Rs. 23,14,784/- be deleted.
6. The AO made addition u/s69C i.e. credit card payment through declared bank HDFC Rs. 2,29,666/- be deleted.
At the outset, we find that the ld. CIT(A) has not admitted the appeal filed by the assessee against the impugned assessment order passed by the learned Assessing Officer ('ld. A.O.' for short) on 08.03.2024 in terms of section 147 r.w.s. 144B of the Income Tax Act, 1961 (‘the Act’ for short). Under the provision of section 249(2) of the Act, the assessee was required to file appeal before the ld. CIT(A) within 30 days from the service days.
Before the ld. CIT(A), the assessee submitted that he is an employee in the Call Centre and educated upto 12th standard only and not conversant with the accounts and taxation. He further submitted that during the year only transaction was of sale of a property and consequent another purchase of a flat. The assessee was advised by the Tax Consultant that his income was below the threshold limit and, therefore, there would be no tax liablity. The assessee submitted before the ld. CIT(A) that he engaged one Tax Consultant Shri Prashant Yerunkar who had filed his return of income and complied the notices issued by the ld. A.O. He was under the impression that his submissions and contentions were duly accepted by the AO and in view of the total income below the threshold for taxability, no tax liability would be there. Further, he submitted that in view of the news of the various frauds prevalent asking for PAN and Aadhar Card in relation to fraud income tax refunds, therefore, he did not look into his emails from the Income- tax department and only when the Tax Consultant opened his email in the last week of June, 2024, then he found the huge demands raised in his case. Accordingly, on the advice of the Tax Consultant, he filed the appeal before the ld. CIT(A) with a delay of 100 days. The ld. CIT(A) referred to section 249(3) of the Act which prescribe that the Commissioner (Appeal) may admit an appeal after the expiry of the limitation period, if he satisfies that the appellant has sufficient cause for not presenting it within the stipulated period. The ld. CIT(A) referred to various decisions and held that the assessee the appeal of the assessee as unadmitted.
Before us, the ld. Counsel for the assessee reiterated the submissions which are made before the ld. CIT(A) and submitted that the delay was due to the bona fide reasons and there was no intention on the part of the assessee in delaying the filing of the appeal.
He submitted that the delay occurred mainly for the reason that no physical copy of the order of the ld. CIT(A) was received by the assessee. The ld. Counsel relied on the various decisions including the decision of the Hon’ble Supreme Court in the case of Collector of Land Acquisition v. Katiji AIR (1987) 167 ITR 471 (SC).
We have heard the rival submissions of the parties and perused the relevant materials on record. The limitation of period for filing of the appeal before the ld. CIT(A) u/s. 249(2) of the Act is within 30 days from the service of the notice of the demand for the assessment, but section 249(3) of the Act empowers the ld. CIT(A) to condone the delay, if he satisfies that the assessee had sufficient cause for not presenting the appeal within the limitation period. For evaluating sufficient cause for condonation of the delay, the Hon'ble Supreme Court in the case of Collector of Land Acquisition v. Katiji AIR (supra) has laid down following six principles:
(i) Ordinarily, a litigant does not stand to benefit by lodging an appeal late. (ii) Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. (iii) "Every day's delay must be explained" does not mean that a pedantic approach should be taken. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common common-sense pragmatic manner. (iv) When substantial justice and technical considerations are pitted against each otheother, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non deliberate delay. non-deliberate (A.Y.2015-16) Anand Govind Parab vs. ITO (v) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (vi) It must be grasped that judiciary is respected not on account of its power to legalize ical grounds but because it is capable of removing injustice and is injustice on technical expected to do so."
We have considered the submission of the assessee regarding sufficient cause for non filing of the appeal on time. In our opinion, the assessee was prevented by sufficient reasons for not presenting the appeal on time. Further, we note that the co-ordinate bench of the Tribunal in the case of Bajaj Hindustan Ltd. v. JCIT (2005) 92 ITD 11 has condoned the delay for one of the reason that the Revenue had not filed any counter affidavit opposing the application for condonation of the delay. In the instance case also no such counter affidavit on behalf of the Revenue opposing the condonation of the delay has been filed. The Hon'ble Supreme Court in the case of Sandhya Rani Sarkar v. Sudha Rani Debi AIR 1978 SC 537 held that non filing of affidavit in opposition to an application for condonation of the delay may be sufficient cause for condonation of the delay. The Hon'ble Madras High Court in the case of Sreenivas Charitable Trust v Dy.
CIT [2006] 154 Taxman 377/280 ITR 357 held that in order to advance substantial justice which is of prime importance, the expression "sufficient cause" should receive a liberal interpretation. The Hon'ble Supreme Court in the case of OP Kathpaliya v. Lakhmir Singh AIR 1984 SC 1744 has held that refusal to condone the delay results in grave miscarriage of justice. The Hon'ble Bombay High Court in the case of Ornate Traders (P.) Ltd. v. ITO (2008) 312 ITR 193 (Bombay) held that expression 'sufficient cause' will always have relevancy to reasonableness and actions, which can be condoned by Court and it should fall within realm of normal human conduct or normal conduct of a litigant.
In the case of Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi (1979) 118 ITR any taint of mala fide or element of recklessness or ruse and if neither is present, legal advice honestly sought and actually given, must be treated as sufficient cause for condoning the delay. The Hon'ble Supreme Court in the case of Ram Nath Sao v.
Gobardhan Sao, AIR 2002 SC 1201 held that by taking a pedantic or hyper-technical technical view, the explanation furnished by the assessee for condonation of delay should not be rejected particularly where assessee had arguable points of law on merits and refusal for condonation of delay will cause erroneous loss and irreparable injury to the aggrieved party by terminating at the inception.
The object of prescribing the time period for filing of the appeal is to expedite the proceedings before the concerned authorities and advance the cause of the substantial justice. In view of ratio of the decisions referred above and uncontroverted affidavit filed by the assessee, we feel it appropriate to condone the delay of 100 days in filing the appeal before the ld. First Appellate Authority. Further, we find that the Ld. CIT(A) has not adjudicated the issue in dispute on the merit, therefore, we feel it appropriate to set aside the order of the ld. CIT(A) and restore the matter back to him for deciding the issue afresh after providing adequate opportunity of being heard to both the parties, i.e., the assessee and the Revenue.
In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 07.11.2024.