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Before: SHRI G.D. AGRAWAL, HON’BLE & SHRI SUDHANSHU SRIVASTAVA
ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER: The present appeal has been preferred by the assessee against the order dated 27.02.2014 passed by the Ld. CIT (A) – IV, New Delhi for AY 2007- 08 and challenges the impugned action of the First appellate Authority in dismissing the appeal filed by the assessee against order passed u/s 143(3) of the Income Tax Act, 1961 as being barred by limitation and hence not maintainable.
2. The assessee is said to be dealing in export of garments, both fabric as well as ready-made. The return of income was e-filed declaring NIL income. The case was selected for scrutiny. It has been the assessee’s contention that due to heavy losses, the business of the company had been closed and the Registered Office of the company was taken over by the bank and sold to settle the outstanding due to the bank and it is for this reason that the notices issued by the Department were never received by the assessee company. Subsequently, the assessment was completed u/s 144 of the Act at an income of Rs. 2,52,14,400/-. Aggrieved, the assessee carried the matter before the First Appellate Authority. It is a matter of record that the appeal was filed after almost three years from the passing of the assessment order. In its application for condonation of delay before the Ld. CIT (A), the assessee filed an affidavit stating that no notice was ever received by the assessee company or its directors as the registered office of the company was taken over and sold by the Indian Overseas Bank. It was also submitted that the assessee became aware of the ex-parte assessment through the AO only in December 2012 and a copy of a certified assessment order was received only on 15th February, 2013. However, on perusal of the assessment records, the Ld. CIT (A) noticed that one Shri Pramod Sharma, the AR of the assessee, had applied for a copy of the certified assessment order on 31.10.2011 and the certified copy was supplied to the assessee on 11.01.2012 itself. The appeal was filed on 14.03.2013 and thus there was a delay of 399 days in filing the appeal. The Ld. CIT (A) required the assessee to explain the delay but no explanation was forthcoming from the assessee.
The Ld. CIT (A) has also noted that the fact regarding change in the Registered Office of the company was not intimated to the AO and that the change of address in PAN data was also not undertaken. Accordingly, the Ld. CIT (A) dismissed the appeal of the assessee as barred by limitation.
Aggrieved, the assessee has approached the Tribunal and has raised the following grounds of appeal:
1. That on the facts and circumstances of the case the ld. CIT(Appeals) has erred in law while holding the three appeals filed against the assessment order u/s 143(3)/144, penalty order u/s 271(1)(b) and Penalty Order u/s 271(1)(c) being barred by limitation and therefore, not maintainable.
2. That on the facts and circumstances of the case the ld. CIT (Appeals) has erred in law while ignoring the Remand Report of the AO which supports the claim of the appellant company.
3. The Ld. AR submitted that an application under Rule 46A was filed before the Ld. CIT (A) for admission of evidence relating to the additions made in the assessment order and the Ld. CIT (A) had also called for a remand report from the AO on the issue which was duly responded to by ITO Ward 1(1), New Delhi vide communication dated 17.01.2014 and the assessee also submitted a rejoinder to the remand report. However, without going into the merits, the Ld. CIT (A) dismissed the assessee’s appeal as barred by limitation. It was further submitted that the entire delay occurred due to the negligence of the AR of the assessee, who after obtaining a certified copy of the assessment order, due to inadvertence/oversight/negligence failed to file the appeal within the prescribed time limit and had to subsequently apply for another copy of the certified order. It was submitted that the delay could not be attributed to any mala fide on the part of the assessee and hence the assessee should not be denied the benefit of contesting the case on merits.
4. The Ld. DR vehemently objected to the assessee’s plea and submitted that there was a gross negligence on the part of the assessee which does not deserve condonation. It was submitted that the assessee’s explanation was a mere cover-up and not sufficient to warrant condonation of the delay.
We have heard the rival submissions and perused the material on record.
We do agree with the submissions of the Ld. DR that the assessee has been very careless and negligent in keeping track of the income tax proceedings.
However, at the same time, we are of the considered opinion that the facts of the case do not suggest that the assessee has acted in a mala fide manner or the reason explained is only a device to cover an ulterior motive. It is a settled proposition of law that a lenient view should be taken in matters pertaining to condonation of delay. The Hon’ble Apex High Court has opined in Collector, Land Acquisition vs. MST Katiji and Others 167 ITR 471 (SC) as under: “1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.
Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.
Every day’s delay must be explained does not maenthat a pedantic approach should be made. Why not every hour’s delay, every second’s delay? The doctrine must be applied in a rational common sense pragmatic manner.
When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit be resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.”
On the facts and circumstances of the case and respectfully following the dicta of the Hon’ble Apex Court in the case of Collector, Land Acquisition vs. MST Katiji and Others (supra) we allow the assessee’s appeal and direct the Ld. CIT(A) to admit and adjudicate the appeal on merits after giving the assessee due opportunity of being heard. We also hasten to add that the assessee is expected not to seek unnecessary adjournments and to extend all co-operation in an early disposal of the appeal.
In the result, the appeal of the assessee is allowed.