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Facts
The assessee filed an appeal before the CIT(A) with a delay of 211 days, attributing it to wrong advice from their tax consultant. The CIT(A) dismissed the appeal due to the delay and lack of proper documentation, including an affidavit.
Held
The Tribunal noted that the assessee has presented an affidavit before them and has a strong case on merit regarding the claim for deduction under section 80IB(10), which has been allowed in previous years. The Tribunal also referred to High Court judgments emphasizing that meritorious cases should not be dismissed on technical grounds like limitation.
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned and the appeal should be adjudicated on merits.
Sections Cited
80IB(10)
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Income Tax Appellate Tribunal, ‘A BENCH : BANGALORE
Before: SHRI GEORGE GEORGE K & SHRI WASEEM AHMED
PER WASEEM AHMED, ACCOUNTANT MEMBER:
This is an appeal filed by the assessee against the order passed by the ld. CIT(A)–11, Bangalore dated 16/03/2024 in DIN No. ITBA/ APL/M/250/2023-24/1062754921(1) for the assessment year 2016-17.
There was a delay in filing the appeal by the assessee before the ld. CIT(A) for 211 days. It was explained by the assessee that the appeal was not filed due to the wrong advice of the Tax Consultant. However, once penalty proceedings were initiated, another Tax advisor was consulted who recommended filing the appeal on the quantum disallowance made by the AO. Thus, the assessee before the ld. CIT(A) prayed to condone the delay in filing the appeal, as it was done on the
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wrong advice of the Tax Consultant. Accordingly, the assessee should not be put to the hardship for the fault committed by the Tax Consultant. However, the ld. CIT(A) did not agree with the contention of the assessee on the reasoning that the condonation petition was self- explanatory and without any Affidavit/ declaration of the assessee. Furthermore, no correspondence with the consultant was furnished, who advised not to prefer any appeal before the ld. CIT(A). In the absence of any supporting documents, the ld. CIT(A) dismissed the appeal filed by the assessee holding it as non-maintainable.
Being aggrieved by the order of the ld. CIT(A), the assessee is in appeal before us.
The ld. AR before us filed an affidavit duly notarized of the Managing Director of the assessee and explaining the reason for delay in filing the appeal before the ld. CIT(A). The ld. AR further submitted that the assessee has strong case on merit, which could not be dismissed on account of technical lapse. As per the ld. AR, the assessee cannot be denied the claim for the deduction u/s 80IB(10) of the Act, since in all the earlier years, the claim of 80IB of the Act was admitted by the Revenue.
On the other hand, the ld. DR contended that there is no supporting document furnished by the assessee suggesting that the appeal was not preferred in time on account of wrong advice of the Tax Consultant. The ld. DR vehemently supported the order of the authorities below.
We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion, we note that the appeal filed by the assessee was not
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entertained by the ld. CIT(A) on account of delay in filing the appeal, which was not justified based on the documentary evidence. As such, it was also observed by the ld. CIT(A) that there is no Affidavit filed by the assessee for the condonation of the delay in filing the appeal. Now, the Affidavit of the assessee has been made available before us. Thus, it appears that now the assessee has made necessary compliances by filing the Affidavit, which certainly requires to be considered at the level of the ld. CIT(A).
6.1 However, before parting, we also note that the assessee has been claiming deduction u/s 80IB(10) of the Act for many years, which is verifiable from the details available before the AO. The year wise breakup of the deduction claimed by the assessee u/s 80IB(10) of the Act is extracted as under:-
6.2 Thus, prima-facie, it appears that the assessee has strong case on merit and, therefore, the assessee should not lose the same on account of technical lapse. Undeniably, the assessee has made a mistake in filing the appeal within the time and, therefore, it has to face the consequence. But the question arises how to determine the consequences for the fault committed by the assessee. In our
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Page 4 of 5
considered view, the consequence of the mistake committed by the assessee should be commensurate to the reasonableness. In other words, the assessee will be put to a great hardship for genuine claim, for which, it is entitled, if denied to him on account of technical reason.
6.3 We also note that the Hon’ble Gujarat High Court in the case of S.R. Koshti Vs. CIT reported in 276 ITR 165 has held as under: 18. The position is, therefore, that, regardless of whether the revised return was filed or not, once an assessee is in a position to show that the assessee has been over-assessed under the provisions of the Act, regardless of whether the over-assessment is as a result of assessee’s own mistake or otherwise, the CIT has the power to correct such an assessment under section 264(1) of the Act. If the CIT refuses to give relief to the assessee, in such circumstances, he would be acting de hors the powers under the Act and the provisions of the Act and, therefore is duty-bound to give relief to an assessee, where due, in accordance with the provisions of the Act.
6.4 From the above it is revealed that the income of the assessee should not be over assessed, even if there is a mistake made by the assessee. As such the legitimate deduction for which the assessee is entitled should be allowed while determining the taxable income.
6.5 We also note that the Hon’ble Gujarat High Court in the case of Vareli textile industry versus CIT reported in 154 Taxman 33 wherein it was held as under: It is equally well-settled that where a cause is consciously abandoned (as in the present case) the party seeking condonation has to show by cogent evidence sufficient cause in support of its claim of condonation. The onus is greater. One of the propositions of settled legal position is to ensure that a meritorious case is not thrown out on the ground of limitation. Therefore, it is necessary to examine, at least prima facie, whether the assessee has or has not a case on merits.
6.6 In view of the above and after considering the facts in totality, we are of the view that it is a fit case where the delay in filing the appeal by
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the assessee before the learned CIT-A deserves to be condoned. Accordingly, we set aside the finding of the learned CIT-A and restore the issue to the file of the ld. CIT-A for fresh adjudication as per the provisions of law. Hence, the ground of appeal of the assessee is allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in court on 22nd day of July, 2024 Sd/- Sd/- (GEORGE GEORGE K) (WASEEM AHMED) Vice President Accountant Member Bangalore, Dated, 22nd July, 2024 vms Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore
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