M/S. MFAR HOLDINGS PVT LTD vs. THE DEPUTY COMMISSIONER OF INCOME TAX

The question as afore is presented for consideration in the light of the following undisputed facts, and these facts apply to the assessment year 2006-07. The scrutiny assessment proceedings are begun under Section 144(3) of the Income Tax Act, 1961 [for short, 'the IT Act'] resulting in certain disallowances vide the assessment order dated 30.12.2008. A search is conducted in the premises of a third person on 20.02.2009 resulting in the proceedings under Section 153C read with Section 143(3) of the IT Act and culminating in the assessment order dated 30.12.2010. This assessment order under Section 153C read with Section 143(3) of the IT Act is a reiteration of disallowance in the scrutiny assessment order dated 30.12.2008. 3. The appellant has filed an appeal against the order on 30.12.2008 in ITA No.517/CIT(A)VI/2008-09 [Annexure-E]. This appeal is dismissed on 28.03.2013 observing that the

This appeal in No. CIT(A)- 11/BNG/Tr.10103/2010-11 is rejected by the order dated 02.02.2022 observing that the appellant's grievance as against disallowance must be decided in any appeal that is filed as against the scrutiny assessment order dated 30.12.2008 while also observing that the appellant's appeal as against such order dated 30.12.2008 could not have been dismissed on the ground that such order has merged with the assessment order dated 30.12.2010 under Section 153C read with Section 143(3) of the IT Act.

The appellant contends that it was not aware of the order dated 02.02.2022 No. CIT(A)- 11/BNG/Tr.10103/2010-11 until it received an email communication from its consultant on 08.03.2024 and that the appeal in ITA No.1670/2024 is filed immediately thereafter calling in question this order dated 02.02.2022 setting forth the afore reasons as sufficient cause for condonation of delay. It is during the pendency of this appeal, the appellant, as is stated before this Court in reiteration of its case, has filed the next appeal in ITA No.2089/2024 against the order dated 28.03.2023 in ITA No.517/CIT(A)VI/2008-09.

The Tribunal has dismissed the appeal in ITA/2089/Bang/2024 [as against the order dated order dated ITA No.517/CIT(A)VI/2008-09], recording that why the appellant has filed separate appeals as against the orders dated 28.03.2013 and 02.02.2022 is a moot question, has opined that the appellant's

Sri K K Chythanya and Sri Y.V. Raviraj are categorical on the aspects viz., [a] that with the search on 20.02.2009 the scrutiny assessment [on 30.12.2008] abated as all aspects had to be re- examined depending on the outcome in the search initiated; [b] that because no incriminating material was found, the search reassessment order dated 30.12.2010 is just a reiteration of the scrutiny assessment order dated 30.12.2008; [c] that the appellant's grievance as against disallowance in the

This Court must observe that these assertions have their merit in view of the decision of the Apex Court in Principal Commissioner of Income Tax, Central - 3 vs. Abhisar Buildwell Pvt. Ltd.1. The Apex Court in this decision has reiterated the exposition by the Delhi High Court in Commissioner of Income Tax (Central)- III v. Kabul Chawla2. The exposition by the Delhi High Court is that the assessment/ reassessment pending on the date of the search abates and in the absence of incriminating material the abated assessment and reassessment is reinstated [subject to any appeal]. As against this exposition, the CIT [A] has dismissed the appeal in ITA No.517/CIT(A)VI/2008-09 holding that the scrutiny assessment order dated 30.12.2008 has merged with the search assessment order dated

This Court, in the light of the afore is of the view, that the Tribunal should have examined whether the appellant has made out a case for condonation of delay in availing the appellate remedy as against the orders dated 28.03.2013 and 02.02.2022 and decided on the merits of the order dated 28.03.2013 for compete adjudication on the appellant's grievance as against disallowance. The Tribunal has not considered these aspects, which would have enabled a complete adjudication on the appellant's grievance against disallowance in the scrutiny assessment order dated 30.12.2008.

On the ground of delay, the appellant's specific case is that it was not served with the order dated 02.02.2022 in CIT(A)-11/BNG/Tr.10103/2010- 11 and that it has known about this order only when it received an e-mail dated 08.03.2024 by the consultant engaged for due diligence, and insofar as the delay in filing the appeal as against the order dated 28.03.2013, the appellant's case, as recorded by the Tribunal and reiterated before this Court, is that it was under a bona fide and genuine belief that its grievance would be addressed in the appeal pending in CIT(A)-11/BNG/Tr.10103/2010-11 against the order dated 30.12.2010.

The reason offered to explain the delay in filing the appeal in No.1670/2024 is not contested and reason for the corresponding delay in filing the appeal as against the order dated 28.03.2013 is examined in the light of the fact that the afore decision by the Apex Court is of the year 2021 and