MARUDHAR STOCK TRADING PRIVATE LIMITED,KALBADEVI vs. ASSISTANT DORECTOR OF INCOME TAX CPC, CPC BENGALURU

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ITA 1496/MUM/2024Status: DisposedITAT Mumbai11 September 2024AY 2011-124 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the delay of 3712 days in filing the first appeal before the CIT(A) should be condoned. The Tribunal noted that the assessee's director's affidavit, stating that the intimation under Section 143(1) was not received until February 22, 2023, was unrebutted and deserved to be treated as a bonafide and sufficient cause. Citing the Supreme Court's judgment in Sambhaji and Ors V Gangabai and Ors, the Tribunal emphasized that procedural law is subservient to justice and should not prevent parties from participating in the dispensation of justice. To advance the cause of justice, the Tribunal condoned the delay on the condition that the assessee pays a cost of Rs. 10,000/- to the Prime Minister's National Relief Fund within 30 days and files proof of payment with the CIT(A). The impugned order of the CIT(A) was set aside, and the matter was restored to the CIT(A)'s file for a fresh decision on merits, ensuring compliance with the principles of natural justice.

What were the facts?

The assessee, Marudhar Stock Trading Private Limited, filed its return of income for Assessment Year 2011-12 on September 29, 2011, declaring a total loss. The return was processed under Section 143(1) of the Income-tax Act, 1961, with an adjustment of Rs. 11,09,420/- made via intimation dated January 20, 2012. The assessee filed a first appeal before the CIT(A) on April 24, 2023, which was dismissed due to a delay of 3712 days. The CIT(A) rejected the assessee's prayer for condonation of this delay. The assessee's appeal before the ITAT challenges the CIT(A)'s order for dismissing the appeal by not condoning the delay. The assessee's director stated in an affidavit that the intimation under Section 143(1) was not received until an email regarding outstanding demand was received on February 16, 2023. The assessee's CA obtained a copy of the intimation on February 22, 2023, which caused the delay.

What were the issues?

1. Whether the learned CIT(A) erred in dismissing the assessee's appeal by rejecting the prayer for condonation of delay of 3712 days, contrary to the principles of natural justice and the object of procedural law? Assessee's Contention: The assessee argued that the delay was caused due to non-receipt of the intimation under Section 143(1) dated January 20, 2012. The assessee only became aware of the outstanding demand upon receiving an email on February 16, 2023, and subsequently obtained the intimation on February 22, 2023. This constituted a sufficient cause for the delay. The assessee relied on the Supreme Court's decision in Sambhaji and Ors V Gangabai and Ors, which emphasizes that procedural law should aid justice and not be an obstruction. Revenue's Contention: The learned DR supported the impugned order passed by the CIT(A). No specific arguments or precedents were recorded for the revenue.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 250,Section 249(2),Section 249(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH

Before: SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT & SHRI SUNIL KUMAR SINGH

(Assessment Year : 2011–12) Marudhar Stock Vs. Assistant Director of Trading Private Income Tax Limited CPC, Post Bag No 2, 413-F, Vasant Wadi, Electronic City Post Office, Ground Floor, Karnataka, Office No. 4, 460100. Kalbadevi Road, Maharashtra, 400002. PAN/GIR No. AAECM0643A (Appellant) .. (Respondent) Assessee by None Revenue by Shri. R. R. Makwana, Sr. DR Date of Hearing 05/09/2024 Date of Pronouncement 11/09/2024 आदेश / O R D E R PER SUNIL KUMAR SINGH (J.M): 1. This appeal has been preferred against the impugned order dated 29.01.2024 passed in Appeal no. NFAC/2010-11/10243128 by the Ld. Commissioner of Income–tax(Appeals)/ National Faceless Appeal Centre (NFAC) [hereinafter referred to as the “CIT(A)”] u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as "Act"] for the Assessment year 2011-12, wherein learned CIT(A) has dismissed assessee’s appeal upon rejection of its prayer for the condonation of delay.

Marudhar Stock Trading Private Limited 2. The brief facts speak that the assessee, e-filed return of income for A.Y. 2011-12 on 29.09.2011, declaring total loss of Rs. 69,089/-, which was processed u/s. 143(1) of the Act & an adjustment of Rs. 1109420/- was made vide intimation u/s. 143(1) dated 20.01.2012.

3.

Aggrieved by the assessment order, assessee filed first appeal, which was dismissed by learned CIT(A) upon rejection of assessee’s prayer for the condonation of delay of 3712 days.

4.

Aggrieved by the impugned order, assessee has filed this second appeal on the ground that learned CIT(A) has erred in dismissing the appeal by treating no sufficient cause for the condonation of delay.

5.

None responded for the appellant. Heard learned DR and perused the material available on record.

6.

Learned DR has supported the impugned order.

7.

We notice that the appellant assessee did neither appear today nor prior here to, keeping the nature of proceedings in view, we proceed to decide on merit.

8.

Perusal of the impugned order discloses that Mr. Sanjay Jain, director of the assessee, filed an affidavit before the first appellate authority stating that intimation u/s. 143(1) dated 20.01.2012 was not received. Appellant received e-mail from the Income Tax Department on 16.02.2023 in respect of outstanding demand of Rs. 3,75,875/- for the A.Y. 2011-12. Subsequent upon the receipt of e-mail, appellant’s CA Mr. Sushil Modi sent a request to CPC for the grant of copy of intimation u/s. 143(1) to ascertain the reasons for the outstanding demand, which was received by the appellant only on 22.02.2023. Due to this reason the delay of 3712 days was caused.

Marudhar Stock Trading Private Limited 9. It is pertinent to mention that the first appeal was instituted on 24.04.2023. The limitation period for filing an appeal before learned CIT(A) u/s. 249(2) of the Act is 30 days. However section 249(3) of the Act empowers the first appellate authority to condone the delay if satisfied that appellant had sufficient cause for not presenting it within that period. In the instant case, learned CIT(A) was not satisfied to condone the said delay in filing the first appeal on 24.04.2023 against the intimation order u/s. 143(3) dated 20.01.2012.

10.

Hon’ble Supreme Court in Sambhaji and Ors V Gangabai and Ors, Civil Appeal no. 6731/2008 (arising out of SLP(C) No. 14562 of 2006) vide judgment dated 20.11.2008, has held that the object of prescribing procedure is to advance the cause of justice. In an adversial justice system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Unless compelled by express and specific language of the statute, the procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extra ordinary situations in the ends of justice. Justice is the goal of jurisprudence. Procedural law is always subservient to and is in aid to justice. Any interpretation which eludes or frustrates the recipient of justice is not to be followed. Processual law is not to be tyrant but a servant, not an obstruction but an aid to justice. A procedural prescription is the handmaid and not the mistress, lubricant, not a resistance in the administration of justice.

11.

In the instant case the deponent’s affidavit in respect of the receipt of intimation on 22.02.2023, being unrebutted, deserves to be treated as bonafide-cum-sufficient cause. We accordingly deem it just and Marudhar Stock Trading Private Limited proper, with a view to advance the cause of justice, condone the said delay of 3712 days with a condition that appellant assessee shall make payment of cost of Rs. 10,000/- in the Prime Minister’s National Relief Fund account within 30 days from the date of communication of this order to the appellant assessee and shall file the copy of the receipt before the first appellate authority. The said delay is accordingly condoned on payment of cost in above terms.

12.

In the result, the appeal is allowed. The impugned order dated 29.01.2024 is set aside. The delay in filing the first appeal before first appellant authority i.e learned CIT(A) stands condoned as stated above. We restore the matter back to the file of learned CIT(A) for passing order afresh on merit in accordance with law. Needless to say that the first appellate authority shall ensure the substantial compliance of the principles of natural justice. Order pronounced on 11.09.2024.

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