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Facts
The assessee, engaged in event management, received contractual income of ₹15,03,557/- for AY 2010-11. The case was reopened under Section 148, and the AO added this income back, treating it as bogus after notices under Section 133(6) for verification parties were unserved. The assessee's appeal to the CIT(A) was dismissed in limine due to a delay in filing, and the condonation petition, citing a director's serious illness, was rejected by the CIT(A).
Held
The ITAT found that the assessee had a reasonable ground for the delay, considering the director's liver transplant, and noted that the CIT(A) had denied a reasonable opportunity by passing an ex-parte order. The ITAT set aside the CIT(A)'s order, directed the condonation of delay, and restored the matter to the CIT(A) for fresh adjudication on merits after providing a proper opportunity of being heard to the assessee.
Key Issues
Whether the CIT(A) was justified in rejecting the appeal on grounds of limitation without condoning the delay, and whether the assessment order was non-est as the company was struck off by the Registrar of Companies.
Sections Cited
Section 250, Section 144, Section 147, Section 148, Section 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “K(SMC
Instant appeal of the assessee was filed against the order of the 01. National Faceless Appeal Centre, Delhi [in short ‘the learned CIT (A)’], order passed under Section 250 of the Income-tax Act, 1961 (in brevity, ‘the Act’) for A.Y. 2010-11, date of order 6thFebruary 2024. The impugned order was emanated from the order of the learned Income Tax Officer, Ward 15(3)(1), Mumbai (in brevity, ‘the learned AO’), order passed under Section 144 read with section 147 of the Act, date of order 16thOctober, 2017.
“1. On the facts and in the circumstances of the case and as per the law the assessment order dated 16.10.2017 passed by the learned Income Tax Officer, 15(3)(1), Mumbai is non-est since the Appellant was struck off by the Registrar of the Company before and was not in existence on the aforesaid date of order. Thus, the assessment order dated 16.10.2017 and the Impugned Order dated 06.02.2024 may be quashed on this ground alone.
On the facts and in the circumstances of the case and as per the law, the National Faceless Appeal Centre/Commissioner of Income Tax (Appeals) ["the learned Commissioner (Appeals)] erred in not condoning the delay and dismissing the appeal in limine. Thus, the learned Commissioner (Appeals) may be directed to condone the delay and thereafterdeciding the appeal afresh after hearing the Appellant.
Without prejudice to the above, On the facts and in the circumstances of the case and as per the law, the learned Commissioner (Appeals) erred in reaching the conclusion that the Appellant was not interested in providing documents and filing submissions. The Appellant made detailed submissions before the learned Commissioner (Appeals). Thus, the order dated 06.02.2024 may be set aside and the case may be restored back to the file of the learned commissioner (Appeals) for fresh adjudication.
The Appellant craves leave to add, alter, rescind, or amend any of the above grounds of appeal.”
The brief fact of the case is that the assessee was running business of 03. event management and working in different projects. During the impugned assessment year, the assessee received contractual amount, amounting to ₹15,03,557/-. The assessee’s case was reopened under Section 148 of the Act. During the assessment proceedings the notice was issued under Section 133(6) of the Actfor verification parties but none of the notice was served. The learned AOreceived this professional income amounting to ₹15,03,557/- which was treated by the ld. AO as bogus and added back in the total income of the assessee.
Being aggrieved, the assessee filed an appeal before the learned CIT (A). But the learned CIT (A) has rejected the appeal on the ground of limitation for delay in filing of appeal and the condonation petition was rejected. Being aggrieved on the appellate order, the assessee filed an appeal before us.
“2. As per declaration in Form No.35, the order was served on 16.11.2017 and the appeal for A.Y. 2010- 11 was filed, belatedly, on 03.02.2018.
2.1. In the Form No. 35 the appellant has offered following comments seeking condonation of delay:
The Appellant Assessee has not been able to file the Appeal due to some Technical problem and ill health of the Director 2.2. Copies of medical bills and prescriptions were enclosed to justify the delay. I have carefully noted the dates of these bills and prescriptions, last one being dated 15/16.05.2016. Evidently, these have no connection with the delay in filing appeal, which took place in FY 2017- 18. Otherwise also, tax and related matters cannot get stalled in the case of a limited company due to director’s health. It is expected that for various compliances a company must be availing services of accountants and chartered accountants. In 2.3. It is also intriguing that the director, with his falling health, could manage to execute contracts during the concerned year and in the next year, i.e., in FY 010- 11, but failed to file returns of income in both the years. Under such circumstances, reasoning based on health grounds can never be accepted.
2.4. Thus, on both counts, viz., timing and reason for delay, justification given are unconvincing and uncompelling. Accordingly, delay is not condoned.”
The learned Departmental Representative argued and submitted that 06. the appellate authority had called remand report which was submitted on 26thJuly, 2023, but noneappeared. Accordingly, the learned CIT (A) passed an ex-parte order and rejected the appeal of the assessee. The learned Departmental Representative fully relied on the orders of the revenue authorities.
We have heard the rival submission and considered the documents 07. available on record. The appeal was filed with a delay but the condonation petition and the reason of the delay is duly filed by the assessee. One of the directors went through surgery for liver transplant during filing of the appeal and accordingly, the delay was happened. In our considered view, the assessee has reasonable ground for consideration of delay. The learned CIT (A) had called for remand report, but the assessee was unable to appear for reasonable cause. The reasonable opportunity is denied for the In the result, the appeal of the assessee bearing ITA 08. No.1763/Mum/2024, is allowed for statistical purposes.
Order pronounced in the open court on 16.07.2024.