SUPERMAX INTERNATIONAL P. LDD,MUMBAI vs. ACIT CEN CIR 38, MUMBAI

Assessee by : Dr. Prayag Jha (AR) Revenue by : Shri Suman Kumar (DR) Date of hearing : 07.11.2017 Date of Pronouncement : 29.11.2017 Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: These two appeal by assessee u/s.253 of the Income Tax Act are directed against the order of Ld. Commissioner of Income Tax [ld. CIT(A)] (Appeals)-54, Mumbai dated 08.09.2016 for Assessment Years (AY) 2009-10 & 2010-11. In both the appeal, the assessee has raised the identical ground of appeal that ld. CIT(A) erred in dismissing the assessee’s appeal by not condoning the delay in filing the appeal. For appreciation of fact, we are referring the fact for AY 2009- 10.

2. Brief facts of the case are that the assessment order for AY 2009-10 was completed on 31.12.2010 under section 143(3) in the assessment order the Assessing Officer (AO) made addition on account of Long Term Capital Gain (LTCG) by invoking the provision of section 50C and initiated the penalty. The AO levied the penalty under section 271(1)(c) of the Act for Rs. 27,93,525/- vide order dated 04.03.2013. The assessee filed appeal before the ld. CIT(A) on 19.10.2015. Along with the appeal, the appellant filed application for condonation of delay of 902 days in filing appeal. The application for condonation of delay was dismissed by ld CIT(A), resultantly the appeal of the assessee was not admitted and for hearing and dismissed in limine. Thus, further aggrieved by the order of ld. CIT(A), the assessee has filed the present appeal before us.

3. We have heard the ld representatives of the parties and have gone through the order of the ld CIT(A). The ld. Authorized Representative (AR) of the assessee argued that the assessee has good case on merit. The application for condonation of delay in filing the appeal was not allowed by ld. CIT(A), hence, the appeal of the assessee was not admitted. The ld. AR of the assessee argued that the delay in filing the appeal was due to the fact that there was dispute among the Directors of the company. One of the Director Shri Rajinder Kumar Malhotra filed Company Petition before the Company Law Board, Mumbai against the certain hostile Directors of Oppression, and mismanagement with the prayer to remove the hostile Director. The Company Law Board vide order dated 31.01.2013 allowed the share holder to remove the hostile Director and to appoint new Board of Director. The matter was further gone in appeal before the Hon’ble Bombay High Court and the order of Company Law Board was upheld on 20.08.2014. As there was dispute between hostile Director who have handed over the books of account and document including the Income-tax proceedings, the assessee had shown sufficient cause for condoning the delay. The ld. AR of the assessee further prayed that delay in filing the appeal before the ld. CIT(A) may be condoned and the matter may be restored to the file of AO for decision on merit.

4. On the other hand, the ld. DR for the Revenue supported the order of ld. CIT(A). It was argued that as per the assessee’s own version explained before the ld. CIT(A), the assessee failed to explain the delay after January 2015 till the filing of appeal in October 2015. The assessee has not explained the cause of delay for that period from October 2015. The ld. DR for the Revenue prayed for dismissal of the appeal. In the rejoinder argument, the ld. AR of the assessee argued that the certified copy of impugned order passed by ld CIT(A) was received by the assessee only on 12.10.2015 and the appeal was filed immediately without wasting any further time. It was further argued that the addition made in the quantum assessment has been restored to the file of AO by the Tribunal in dated 21.02.2017.

4. We have considered the rival submission of the parties and have gone through the order of ld. CIT(A). The appellant/assessee filed an application for condonation of delay before the ld. CIT(A). The assessee has placed on record the copy of the application for condonation of delay and the affidavit in support thereof. We have perused the contents of the application for condonation of delay. In the application the assessee has explained that there was dispute among the majority share-holder and Shri Rajinder K. Malhotra Group. In February 2012, Shri Rajinder Kumar Malhotra filed a Company Petition before the Company Law Board. The Company Law Board passed order in favour of Shri Rajinder K. Malhotra on 31.03.2013 and allowed to remove the hostile Director and to appoint new Board of Director. Against the order of Company Law Board, the appeal was filed before the Hon’ble Bombay High Court. The order of Company Law Board was upheld on 12th /20th of August 2014. During the assessment proceeding, P.B. Vyas (Hostile Director) of assessee-company and Shri Rajinder K. Malhotra attended before the AO. The hostile Director was requested to hand over the document to the new Director. The documents were not handed over. Shri Rajinder K. Malhotra again filed application before the Company Law Board for seeking recovery of record and for taking charge of the asset of the company. The Company Law Board vide order dated 06.01.2015 passed the order directing hostile Director to hand over to record. The assessee-company newly appointed Board of Director, thereafter after taking certified copy of the penalty order filed the appeal before ld CITA) and filed affidavit of Gordhandas D Arora. We have seen that the delay in filing the appeal was sufficiently explained. The assessee has shown sufficient cause for condonation of delay in filing the appeal. In our view the ld CIT(A) ought to have condone the delay. Considering the peculiar fact of the case as explained by the assessee, there was sufficient cause for not filing appeal within the prescribed period of limitation. In the result the ground No.1&2 of the appeal are allowed. Considering the facts that we have allowed the appeal of the assessee the ld CIT (A) is directed to consider the case of the assessee on merit in accordance with law and the decision of the Tribunal in dated 21.02.2017. Needless to say that before deciding the case the ld CIT(A) shall provide the sufficient opportunity to the assessee.