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Facts
The assessee's appeals were filed against orders of the NFAC for Assessment Year 2013-14. The appeals were filed with a significant delay of 7 months, along with petitions for condonation. The CIT(A) rejected both the appeal petitions without considering the merits of the case, primarily on grounds of limitation.
Held
The Tribunal found that the delay in filing the appeals was partly covered by the Hon'ble Apex Court's decision in Suo Motu Writ Petition ‘Extension of Limitation' and that the right to file an appeal should not be extinguished. Therefore, the CIT(A) was directed to condone the delay and pass an order on the merits of the case.
Key Issues
Whether the CIT(A) erred in rejecting the appeals on grounds of limitation without condoning the delay and without considering the merits of the case, especially in light of recent Supreme Court judgments on extension of limitation due to the pandemic.
Sections Cited
250, 147, 144, 144B, 271(1)(c), 148, 151, 69, 115BBE, 68, 271(1)(b)
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Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRIAMARJIT SINGH & SHRI ANIKESH BANERJEE
PER ANIKESH BANERJEE, J.M:
Both the appeals of the same assessee were filed against the orders of theNational Faceless Appeal Centre, Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year2013-14, date of orders for both the years is 19.02.2024.The impugned ordersare emanated from the orders of the NFAC, Delhi (in short, ‘the A.O.’). Both the orders are passed under section 147 read with section 144 read with
2 ITA No.1116 & 1117 /Mum/2024 Kavita Milind Rannaware section 144B of the Act and 271(1)(c) of the Act, date of order 20/09/2021 and 21/01/2022, respectively.
When the appeals were called for hearing, none was present on behalf of the assessee, but the assessee filed an adjournment petition before the Bench. The ground of adjournment was not feasible. Accordingly, the petition is rejected and considering the fact and gravity of the case, we proceed to dispose of both the appeals exparte qua for assessee after hearing the ld.DR.
Grounds related to ITA 1116/Mum/2024
“1. That the Id.AO has erred in reopening the assessment u/s 147 rws 148 of the Income Tax Act, 1961 without jurisdiction.
That the Id.AO has erred in issuing notice u/s 148 of the Income Tax Act, 1961 without lawful sanction of competent authority u/s 151 of the Income Tax Act, 1961.
That the Id.CIT(A) has erred in passing the order in violation and ignorance to the CBDT Instruction No.20/2003 dated 23.12.2003 where the order should have been passed within fifteen days from the date of hearing, which in the present case the last date of hearing had been 26.12.20223 whereas the order has been passed on 19.02.2024.
That the order passed by the Id.CIT(A) has caused denial of justice to the appellant as the Id.CIT(A) has erred and failed to condone^ the delay caused, on account of reasonable cause and also failed to pass the order on the merit of the grounds of appeal on the basis of written submission and supporting documents filed during the appellate proceeding has resulted in miscarriage of justice.
That the Id.AO has erred in making addition of Rs.32,79,650/- on account of purchase of immovable property u/s 69 rws 115BBE of the Income Tax Act, 1961.
3 ITA No.1116 & 1117 /Mum/2024 Kavita Milind Rannaware 6. That the Id.AO has erred in making addition of Rs.26,50,000/- on account of purchase of time deposit u/s 69 rws 115BBE of the Income Tax Act, 1961.
That the Id.AO has erred in making addition of Rs. 6,32,472/- on account of Salary.
That the Id.AO has erred in making addition of Rs.9,00,000/- on account of cash deposit u/s 68 rws 115BBE of the Income Tax Act, 1961.
That the Id.AO has erred in making disallowance of Rs.44,344/- loss claimed under the head income from house property.
That the Id.AO has erred in making addition of Rs. 25,878 as interest income and Rs. 73,984/- as income from business and profession. 11. That the appellant craves leave to introduce, withdraw or modify any ground of appeal with your honours kind permission.” Grounds related to ITA 1117/Mum/2024
“1. That the Id.CIT(A) has erred in passing the order in violation and ignorance to the CBDT Instruction No.20/2003 dated 23.12.2003 where the order should have been passed within fifteen days from the date of hearing, which in the present case the last date of hearing had been 11.12.2023 whereas the order has been passed on 19.02.2024. 2. That the order passed by the Id.CIT(A) has caused denial of justice to the appellant as the Id.CIT(A) has erred and failed to condone the delay caused on account of reasonable cause and also failed to pass the order on the merit of the grounds of appeal on the basis of written submission and supporting documents filed during the appellate proceeding has resulted in miscarriage of justice. 3. That the Id.AO has erred in imposing penalty u/s 271(l)(c) of the Income Tax Act 1961 of Rs. 21,55,68/-- 4. That the quantum proceeding and penalty proceeding are both separate and independent proceeding, the Id.AO as well as Id.CIT(A) has erred in making addition and dismissing the appeal consequently denying the justice to the appellant. 5. That the appellant craves leave to introduce, withdraw or modify any ground of appeal with your honours kind permission.”
4 ITA No.1116 & 1117 /Mum/2024 Kavita Milind Rannaware 3. The brief facts of the case is that the assessment was completed under section 147 read with sections 144 and 144B of the act with a total addition of Rs.72,124,307/- related to purchase of immovable property amount to Rs.32,79,650/-, unexplained term deposit amount to Rs.26,56,000/- under section 69 read with section 115BBE of the Act, addition on account of salary Rs.6,32,472/-, addition on account of cash deposit under section 68 read with section 115BBE amount to Rs.9 lakhs, claim of loss under the head ‘Income from house property’ amount to Rs.44,344/- and interest income of Rs.25,878/- and Rs.73,984/- as income from business and profession. The penalty proceeding U/s 271(1)(c) of the Act is also initiated on assessee and penalty was levied amount to Rs. 21,55,681/-. The aggrieved assessee filed the appeals before the ld. CIT(A) with a delay of 7 months. Both the appeals are filed with a delay of 7 months alongwith petitions for the condonation of delay. The ld.CIT(A) rejected both the appeal petitions without considering the merit of the case. Being aggrieved on the appeal orders, the assessee filed an appeal before.
ITA No.1116/Mum/2024
We heard the submission of Ld.DR, considered the documents available on record and perused the orders of the revenue authorities. The assessment was completed under section 144 of the act on exparte basis. Further, the appellate authority was not satisfied with the submission of the assessee and rejected the appeal petition for filing appeal after 7 months from the date of due date. The Ld.CIT(A) rejected the appeal on ground of limitation without considering the merit of the case. The relevant paragraph of the appeal order is reproduced below:-
5 ITA No.1116 & 1117 /Mum/2024 Kavita Milind Rannaware “Thus, there exists no sufficient and good reason for the delay of a period of more than 7 months. Such delay cannot be condoned as condonation in the present case would not be in accordance with the exposition emanating out of the Hon'ble apex Court and Hon'ble jurisdictional High Court decisions. It will rather be grave prejudice to the Department.
In the present case, the delay of a period of more than 7 months cannot be simply condoned on the basis of the unsubstantiated claim of the assessee with the fact that the appellant filed one of appeals, as stated above, by delay of about 3 months . The seeker of justice must come with clean hands but in this case the appellant failed to come forth with any consistent reason that would justify condonation of the substantial delay in preferring of the appeal.
I therefore decline to condone the delay of a period of more than 7 months and dismiss this appeal of the appellant as barred by limitation without adverting to the merits of the case having relied upon the judgment dated 13.09.2023 passed by the ITAT , Raipur Bench in ITA No. 237/238/RPR/ 2023 in case of Suresh Kumar Gupta vs ITO. In view of the above discussion, the instant appeal is rendered as inadmissible , hence stands dismissed.”
We find that the assessee has taken ground related to the jurisdiction of the ld. CIT(A) for issuance of order beyond 15 days after the last hearing whichis contravening the CBDT Instruction No.20/2003 dated 23/12/2003. The assessee in the ground mentioned that the last date of hearing was 26/12/2003 whereas the order has been passed on 19/02/2024 which is in violation of CBDT circular No.20/2003 dated 23/12/2003. The assessee further mentioned in the delay in filing the appeal petition that the assessment order was passed on dated 20/09/2021 which covers the covid pandemic. WE respectfully relied on the order
6 ITA No.1116 & 1117 /Mum/2024 Kavita Milind Rannaware of the Hon’ble Supreme Court in Suo Motu Writ Petition ‘Extension of Limitation’ (2022) 441 ITR 722 (SC). So the Covid period should be considered during the disposal of condonation of delay. Further, considering the judgement of the Hon’ble Apex Court, the assessee partly covered by the limitation period from dated 15/03/2020 to dated 28/02/2022. All the issues are not considered by the ld. CIT(A) before rejecting petition for condonation of delay.
ITA No.1117/Mum/2024 : In this matter, the Ld.AO levied penalty on the basis of demand raised under section 144 on dated 20/09/2021. The penalty was levied amount to Rs.21,55,681/- and the assessee has challenged this penalty proceedings before the CIT(A). But the appeal petition was rejected on the ground of limitation. The observation of the Ld.CIT(A) is reproduced as below: -
“4.1 Decision: - I have examined the observation made and recorded by the NFAC in the impugned penalty order. The NFAC, has alleged that the appeal is of non- cooperative attitude and has failed to cooperate with the department the assessment proceedings for the A.Y 2013-14. The NFAC is of the view the appellant did not avail the opportunities of being heard and had failed to f the requisite evidence/documents in respect of her contention made towards the assessment/penalty proceedings.
This is a fact that the appellant did not avail the opportunities to be heard before the assessment authority. The appellant's submission regarding non communication between her and professional, is also noted.
The quantum appeal was filed by the appellant by an inordinate delay c period of more than 7 months before the appellate authority. The appellate authority has
7 ITA No.1116 & 1117 /Mum/2024 Kavita Milind Rannaware already dismissed the quantum appeal on the technical grot being inordinate delay. This is a fact that the quantum and penalty proceedings are independent and distinct proceedings. But in the instant case, the quantum appeal has i been decided on the merit but the technical ground being not qualified admission. The appellant has failed to maintain the consistency in filing appeals as these do vary from 3 months to more than 7 months. The appellate authority, while deciding the appeal against the penalty order u/s 271(1)(b), h considered and appreciated the reasonable delay in filing of appeal vide t appellate order dated 12.01.2024.
Considering the above, the appeal filed by the appellant against t penalty order dated 21.01.2022 is also dismissed.”
Considering the above facts, we find that there is a reasonable cause for delay as the assessee’s delay is partly covered by the order of the Hon’ble Apex Court in Suo Motu Writ Petition ‘Extension of Limitation’ (2022) 441 ITR 722 (SC). Further, we respectfully relied on the order of Cheniappa Mudaliar (1969) 74 ITR 41 (SC), wherein the right to file appeal cannot be extinguished as the appellant would be left remediless. Therefore, we remit the matter to the file of ld. CIT(A) and direct him to pass an order on merit. We direct the ld. CIT(A) to accept the condonation petition of assessee and condone the delay. The speaking order should be passed considering the merit of the case. Needless to say, the ld.CIT(A) shall provide proper and adequate opportunity of being heard to the assessee in set aside proceedings. The evidence / explanation submitted by the assessee in its defense shall be admitted by ld. CIT(A) and adjudicate the matter on merit, in accordance with law. We order accordingly.
8 ITA No.1116 & 1117 /Mum/2024 Kavita Milind Rannaware 7. In the result, both the appeals in ITA Nos 1116 & 1117/Mum/2024 are allowed for statistical purpose. Order pronounced in the open court on 25th day of July, 2024. Sd/- sd/- (AMARJIT SINGH) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,दिन ांक/Dated: 25/07/2024 Pavanan Copy of the Order forwarded to: अपील र्थी/The Appellant , 1. प्रदिव िी/ The Respondent. 2. आयकरआयुक्त CIT 3. दवभ गीयप्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, 4. Mumbai ग र्डफ इल/Guard file. 5.
BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Mumbai