SMART CUBE INDIA PRIVATE LIMITED,PUNE vs. ASSISTANT DIRECTOR OF INCOME-TAX, CPC, BENGALURU

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ITA 4221/MUM/2024Status: DisposedITAT Mumbai11 October 2024AY 2021-225 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee had demonstrated sufficient cause for the delay in filing the appeal. The reasons provided, including the change in ownership and the subsequent transition and oversight by the tax team, were considered valid. The Tribunal found that the delay was neither willful nor deliberate and that the assessee had not intended to give up its right of appeal. Consequently, the Tribunal decided to condone the delay of 285 days. The impugned order of the learned Addl./Joint CIT(A), which dismissed the appeal solely on the ground of delay without adjudicating the merits, was set aside. The matter was restored to the file of the learned Addl./Joint CIT(A) to be decided on merits after condoning the delay. The Tribunal emphasized that no order should be passed without affording a reasonable and adequate opportunity of hearing to the parties. The other grievances raised by the assessee were not adjudicated at this stage, as the matter was being remanded. The grounds raised by the assessee were allowed for statistical purposes.

What were the facts?

The assessee, Smart Cube India Private Limited, filed an appeal before the learned Addl./Joint Commissioner of Income Tax (Appeals) for assessment year 2021-22. The appeal was filed with a delay of 285 days. The assessee sought condonation of this delay, citing a change in ownership of its parent company, The Smart Cube Limited (UK) to WNS Global Services (UK) Limited, effective December 16, 2022. The assessee contended that during the transition period, the filing of the appeal was inadvertently missed. The learned Addl./Joint CIT(A) dismissed the appeal in limine on the grounds that the assessee had not shown 'sufficient cause' for the delay. The assessee is now before the Income Tax Appellate Tribunal (ITAT) challenging this order.

What were the issues?

1. Whether the learned Addl./Joint CIT(A) erred in dismissing the appeal in limine, thereby violating principles of natural justice and the e-Appeals Scheme 2023, by not affording an opportunity of personal hearing. (Question of law and fact, concerning principles of natural justice and e-Appeals Scheme 2023). 2. Whether the learned Addl./Joint CIT(A) erred in not admitting the request to condone the delay of 285 days in filing the appeal under section 249(3) of the Income Tax Act, 1961, on the alleged ground that the appellant did not show 'sufficient cause' for failure to file within the time prescribed under section 249(2). (Question of law and fact, concerning Section 249(3) and 'sufficient cause'). 3. Whether the learned Addl./Joint CIT(A) erred in not appreciating that the addition made in the intimation order passed under section 143(1) of the Act is without jurisdiction and bad in law. (Question of law and fact, concerning Section 143(1)). 4. Whether the learned Addl./Joint CIT(A) erred in not appreciating that the intimation issued under section 143(1) during the pendency of scrutiny assessment under section 143(2) is beyond jurisdiction, illegal, and bad in law. (Question of law and fact, concerning Section 143(1) and Section 143(2)). 5. Whether the learned Addl./Joint CIT(A) erred in not appreciating that the addition/adjustment made in the intimation under section 143(1) is beyond the scope of permissible adjustments and therefore without jurisdiction, illegal, and bad in law. (Question of law and fact, concerning Section 143(1)). 6. Whether the learned Addl./Joint CIT(A) erred in not appreciating that the addition/adjustment of Rs. 2,45,93,463 on account of alleged inconsistency in 'Proforma credits, drawbacks, refund of duty of customs or excise or GST' is erroneous and ought to be deleted. (Question of law and fact). 7. Whether the learned Addl./Joint CIT(A) erred in not appreciating that the GST refund of Rs. 2,45,93,463 is in the nature of reimbursement and not chargeable to tax. (Question of law and fact). 8. Whether the learned Addl./Joint CIT(A) erred in not appreciating that the addition of Rs. 2,45,93,463 represents the refund of GST paid on inputs, received by an Export Oriented Unit engaged in export of services outside India, which does not constitute taxable income. (Question of law and fact). 9. Whether the learned Addl./Joint CIT(A) erred in not appreciating that the CPC erred in levying interest under sections 234B and 234C of the Act. (Question of law and fact, concerning Section 234B and Section 234C). Assessee's Contentions: The assessee argued that the delay was due to a change in ownership and transition under new management, leading to the inadvertent omission of filing the appeal. The tax manager in charge at the time failed to act, and the current tax team discovered the issue upon taking handover. The assessee claimed the delay was neither willful nor deliberate and that they did not intend to forgo their right of appeal. They relied on the discretion vested in the authority under section 249(3) for condonation. The assessee also raised substantive grounds regarding the invalidity of the section 143(1) intimation and the incorrect addition of GST refunds. Revenue's Contentions: The judgment records no specific contentions for the revenue regarding the delay or the substantive issues.

Which sections of the Income-tax Act were involved?

Section 250,Section 249(3),Section 249(2),Section 143(1),Section 143(2),Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G BENCH, MUMBAI

Before: SHRI AMARJIT SINGHSHRI SANDEEP SINGH KARHAIL

For Appellant: Shri Neeraj Jain, Advocate, Ms. Sofiya Shanmugam, Advocate
For Respondent: Shri BhangepatilPushkaraj Ramesh, Sr.DR

PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee challenging the impugned order dated 26/06/2024 passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Addl./Joint Commissioner of Income Tax (Appeals)-1, Chandigarh [“learned Addl./Joint CIT(A)”], for the assessment year 2021-22.

2.

In this appeal, the assessee has raised the following grounds: - “

1.

1. 1. That the Additional/Joint Commissioner of Income Tax (Appeals), National Faceless Appeal Centre ['JCIT(A)"] erred on facts and in law in dismissing the appeal filed by the appellant in limine. Re: Rejection of request for condonation of delay/ violation of principles of Natural justice

2. That the JCIT(A) erred on facts and in law in not admitting the request of the appellant to condone the delay of 285 days in filing of appeal under section 249(3), on the alleged ground that the appellant did not show 'sufficient cause' for failure to file the appeal within the time limit prescribed under section 249(2) of the Income Tax Act, 1961 (‘the Act').

3. That the JCIT(A) erred on facts and in law in dismissing the appeal ex- parte, without affording opportunity of personal hearing to the appellant thereby violating the principles of natural justice and not complying with the e-Appeals Scheme 2023. Re: Intimation order passed under section 143(1) of the Act is without jurisdiction and invalid

4. That the JCIT(A) erred on facts and in law in not appreciating that the addition made in the intimation order passed under section 143(1) of the Act is without jurisdiction and bad in law, therefore ought to be deleted.

5. That the JCIT(A) erred on facts and in law in not appreciating that the intimation issued under section 143(1) of the Act, during the pendency of scrutiny assessment under section 143(2) of the Act, was beyond jurisdiction, illegal and bad in law.

6. That on the facts and circumstances of the case and in law, the addition/ adjustment made in intimation issued under section 143(1) of the Act is beyond the scope of permissible adjustments and is, therefore, without jurisdiction, illegal and bad in law.

7. That the JCIT(A) erred on facts and in law in not appreciating that the Centralized Processing Center ('CPC") crred in re-computing/ determining total income of the appellant at Rs.5,95,75,359 as against the income of Rs.3,49,81,896 returned by the appellant, in the intimation order passed under section 143(1) of the Act. Re: Addition made in the intimation order is bad in law

8. Without prejudice to the above, that the JCIT(A) erred on facts and in law in not appreciating that the addition/ adjustment made by the CPC of Rs.2,45,93,463 on account of alleged inconsistency in the amount of "Proforma credits, drawbacks, refund of duty of customs or excise or GST" as reported in the Form 3CD and income tax retum (ITR) form is erroneous and ought to be deleted.

9. Without prejudice to the above, that the JCIT(A) erred on facts and in law in not appreciating that the GST refund of Rs. 2,45,93,463 being in the nature of reimbursement and thereby not chargeable to tax.

10. Without prejudice to the above, that the JCIT(A) erred on facts and in law in not appreciating that the addition of Rs. 2,45,93,463 represents the refund of GST paid on inputs, received by the appellant being an Export Oriented Unit engaged in export of services outside India, which does not constitute taxable income.

11.

Without prejudice to the above, that the JCIT(A) erred on facts and in law in not appreciating that the CPC erred in levying interest under section 234B and 234C of the Act.”

3. We have considered the submissions of both sides and perused the material available on record. In the present case, at the outset, it is evident that the learnedAddl./Joint CIT(A) has passed the impugned order dismissing the appeal filed by the assessee on the ground of delay without adjudicating the grounds raised by the assessee against the intimation 22/09/2022 issued under section 143(1) of the Act.From the perusal of the impugned order, we find that the assessee requested for condonation of delay in filing the appeal and also explained the circumstances leading to a delay of 285 days in filing its appeal before the learned Addl./Joint CIT(A). The reasons stated by the assessee before the learned Addl./Joint CIT(A) for seeking condonation of delay in filing the appeal are as follows: -

“The applicant, along with its other group companies, previously held by The Smart Cube Limited (United Kingdom) were acquired by WNS Global Services (UK) Limited with effect from 16 December 2022. Kindly refer copy of press release dated16 December 2022 evidencing the transfer of applicant's parent company. The applicant, during the time when appeal filing was due in October 2022, was transitioning under new management/ ownership, and therefore, appropriate remedial action of filing appeal against the intimation order was inadvertently missed from being undertaken. The tax manager in charge of the applicant at that time, Mr. Tarun Chaddha, was advised to file a rectification application against the intimation order, which he failed to do. The tax work was recently transitioned to the tax team of WNS in April 2023 and the earlier tax manager, Mr. Tarun

Chadha left the applicant company on 10 May 2023. It is only when the current tax team took handover of the ongoing tax matters andoutstanding taxdemand, it was discovered that no action was taken against theimpugned intimation. The applicant has now been legally advised that an appeal be filed against the intimation under section 143(1) of the Act. It is in the aforesaid circumstances; electronic appeal is being filed by the applicant on 03 August 2023 against the intimation dated 22September 2022 passed by the CPC is delayed by 9 months and 12 days (from 22October 2022). It is in the aforesaid facts and circumstances that the delay in filing the present appeal, it is respectfully submitted, is neither willful nor deliberate. It is further submitted that; it was never the intention of the applicant not to agitate the intimation order issuedby CPC under section 143(1) of the Act in appeal and the applicant did not want to give up its valuable right of appeal. The applicant, it is respectfully submitted, does not stand to gain from delay in filing the appeal; on the contrary, the applicant is prejudicially affected. It is, therefore, humbly urged that the delay in filing the appeal may kindly be condoned and the appeal may be taken up and decided on merits in view of the discretion vested in your Honour under section 249(3) of the Act.”

4.

As is evident from the impugned order, the learned Addl./Joint CIT(A) did not agree with the submissions of the assessee and held that the assessee had failed to prove that there was sufficient cause for condonation of delay in filing the appeal. Accordingly, the learned Addl./Joint CIT(A) dismissed the appeal filed by the assessee on the ground of delay. During the hearing, no material was brought on record to controvert the submission of the assessee made before the learned Addl./Joint CIT(A) seeking condonation of delay.

5.

In view of the facts and circumstances of the present case, as noted above, we are of the considered view that the assessee has proved sufficient cause for not filing the appeal before the learned Addl./Joint CIT(A) within the prescribed limitation period. Accordingly, we are of the view that the said delay should be condoned. Hence, we deem it appropriate to set aside the impugned order and restore the matter to the file of the learned Addl./Joint CIT(A) for consideration on merits, as per law, after condoning the delay in filing the appeal by the assessee. We order accordingly.Needless to mention no order shall be passed without affording the reasonable and adequate opportunity of hearing to the parties. The assessee is directed to appear before the learned Addl./Joint CIT(A) on all the dates of hearing as may be fixed without any default. As the matter is being restored to the file of the learned Addl./Joint CIT(A) for adjudication on merits, the other grievances raised by the assessee in the present appeal do not call for adjudication at this stage. Accordingly, grounds raised by the assessee are allowed for statistical purposes.

6.

In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 11/10/2024

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