Loading judgment…
Facts
The assessee, IEI Shareholding (General Assistance-1991) Trust, earned dividend income of Rs. 99,080/-. The income was erroneously offered to tax under section 167B as an Association of Persons (AOP) at the maximum marginal rate. The assessing officer processed the return under section 143(1) of the Act, raising a demand. An appeal was filed before the CIT(A) after a delay of 255 days, which was dismissed by the Addl/JCIT(A) without sufficient opportunity to explain the delay.
Held
The Tribunal noted that the delay in filing the appeal was due to a mistaken belief about tax liability and seeking legal advice. The Tribunal considered the rival submissions and decided to restore the matter to the file of the Addl. CIT(A)-1, Jaipur.
Key Issues
Whether the Addl/JCIT(A) erred in dismissing the appeal without sufficient opportunity to explain the delay and whether the delay should be condoned.
Sections Cited
167B, 143(1), 250, 164(1)
AI-generated summary — verify with the full judgment below
Before: SHRI SANDEEP SINGH KARHAIL & SMT. RENU JAUHRI
Appellant by : Shri Motichand Gupta Respondent by : Shri R. R. Makwana Date of Hearing 29.07.2024 Date of Pronouncement 27.08.2024 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Additional/Joint Commissioner of Income-tax (Appeals)-1, Jaipur /National Faceless Appeal Centre, Delhi [hereinafter referred to as “Addl/JCIT(A)”] dated 14.02.2024 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2022-23.
The assessee has raised following grounds of appeal:
1. That on the facts and in the circumstances of the case, the Ld Assessing Officer erred in facts as well as in law by treating the appellant as an Association of Person.
2. That on the facts and in the circumstances of the case, the Ld Assessing Officer erred in facts as well as in law by determining the tax liability of the Appellant at Maximum Marginal Rate (MMR).
3. That on the facts and in the circumstances of the case, the Ld Assessing Officer has erred in facts as well in law, in computing the tax liability of the Appellant by applying section 167B of the Act, without appreciating the fact that the appellant is not an Association of Person and merely acting as a representative.
4. That on the facts and in the circumstances of the case, the Ld Assessing Officer has erred in facts as well in law, in not computing the tax liability of the Appellant under section 164(1) of the Act read with proviso (iv), at the slab rates.
5. That on the facts and in the circumstances of the case, the Ld. Addl/JCIT(A) has erred in holding the delay in filing of the appeal by the Appellant as 'inordinate' and without 'sufficient cause', and dismissing the appeal without any discussion on merits.
6. That on the facts and in the circumstances of the case, the Ld. Addl/JCIT(A) has erred in disposing off the appeal without granting the Appellant Trust an opportunity of being heard.”
3. Brief facts of the case are that the assessee is a trust settled by M/s. Ion Exchange (India) Limited with the objective of providing benefit to the employees of the Company in unforeseen difficulties and calamities, including illness, accidents etc. During the year under consideration, the appellant earned dividend income of Rs. 99,080/-. The same was erroneously offered to tax u/s 167B in the status of an Association of Persons (AOP) in the return and was accordingly charged at maximum marginal rate. The return was processed u/s Page 2 of 4 143(1) of the Act by the CPC on 16.03.2023 and a demand of Rs. 4050/- was raised.
4. Subsequently, an appeal before the Ld. CIT(A) was filed after a delay of 255 days on 05.06.2023 which the appeal was transferred to the Addl/JCIT(A)- 1, Jaipur under “e-Appeal scheme-2023”. The same was dismissed without providing sufficient opportunity to the assessee of being heard in particular to explain the reasons of delay.
Before us, it has been pointed out that the delay occurred on account of the fact that initially the assessee was under mistaken belief that it was liable to tax at maximum marginal rate only. Subsequently, after the issue was examined by the CFO of the company, legal advice was sought and based on the same, an appeal was filed on 05.01.2024. The delay of 255 days occurred on account of above procedure followed by the assessee company. It was further submitted by the Ld. AR that there is no malafide in delayed filing of appeal and the same should be condoned as otherwise the assessee would suffer irreparable financial loss.
We have heard the rival submissions. We deem it proper to restore the matter to the file of Ld. Addl CIT(A)-1, Jaipur with directions to consider the explanation related to the delay and passed an appropriate order. The assessee
Page 3 of 4 is also directed to comply and furnish explanation of delay properly before appellate authority. 7. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 27.08.2024.