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Facts
The assessee company filed its return of income, which was processed by the CPC leading to certain adjustments. The assessee filed an appeal before the CIT(A) with a significant delay of 506 days. The CIT(A) dismissed the appeal without condoning the delay, citing insufficient reasons.
Held
The Tribunal noted that a portion of the delay was attributable to the Covid-19 period, which should be excluded. The remaining delay was due to the assessee's bona fide belief that the intimation under Section 143(1) was part of the scrutiny proceedings. Therefore, the matter was restored to the CIT(A) for a fresh decision.
Key Issues
Whether the CIT(A) was correct in dismissing the appeal for delay without condoning it, and whether the assessee had sufficient cause for the delay.
Sections Cited
115JB, 143(1), 143(2), 250
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Income Tax Appellate Tribunal, BANGALORE “A” BENCH, BANGALORE
MAF Clothing Pvt. Ltd. DCIT, Central Circle-1(4) 21st Km Tumkur Road Bangalore Adakamaranahalli Makali Post vs. Karnataka 562123 PAN – AAFCM8114M (Appellant) (Respondent) Assessee by: Shri Suresh Muthukrishnan, CA Revenue by: Shri Chinmay Anand Jain, JCIT- Date of hearing: 01.07.2024 Date of pronouncement: 02.07.2024 O R D E R Per: Prakash Chand Yadav, J.M. This appeal filed by the assessee challenges the order of the CIT(A)-11, Bangalore dated 22.03.2024 passed under Section 250 of the Income Tax Act, 1961 (the Act) in respect of Assessment Year (AY) 2020-21.
The brief facts of the case are that the assessee is, a private limited company engaged in the business of manufacturing and sale of readymade garments and apparels, filed its return of income on 18.01.2021 declaring a nominal income of Rs.6.38 crores and booked profit u/s. 115JB of the Act amounting to Rs.10.40 crores. The return of income was processed u/s. 143(1) of the Act on 23.12.2021. While processing the return of income the CPC, Bangalore (Assessing Officer) (AO) has made certain adjustments and additions.
Aggrieved with the order of the AO the assessee filed appeal before the ld. CIT(A) with a delay of 506 days. The ld. CIT (A) dismissed the appeal of the assessee in limnee without condoning the delay in filing the appeal, on the ground that the reasons explained by the assessee are not sufficient for condoning the delay. 4. Now the assessee has come up in appeal before us. The ld. Counsel of the assessee pointed out though there are 9 grounds of appeal in the present appeal, the issue is whether the ld. CIT (A) was correct in holding that there was no MAF Clothing Pvt. Ltd. sufficient cause for filing the appeal belatedly. To point out the factual scenario, the ld. Counsel of the assessee drew the attention of the Bench towards the petition for condonation of delay filed before the ld. CIT(A). He contended that in this case notice u/s 143(2) was issued to the assessee on 29.06.2021, and thereafter on 23.12.2021 the CPC has made certain adjustments u/s 143(1) of the Act. The ld. Counsel submitted that the assessee was under the bona fide belief that 143(1) intimation, is also a part of notice of 143(2) proceedings and the assessee would contest these adjustments in assessment proceedings. And hence he remained silent for challenging the action of CPC before CIT(A) in time.
The learned D.R., on the other hand, relied upon the orders of the authorities below.
After considering the rival submissions we observe that in this case there was a delay of around 506 days in filing the appeal out of which 127 days would pertains to the Covid-19 period. Therefore, in view of the CBDT guidelines and the directions of the Hon'ble Supreme Court the covid period is to be excluded from the total delay. The remaining delay of 397 days would be attributable on the bona fide belief of the assessee that s. 143(1) proceeding / intimation are also the notice of scrutiny proceedings and hence they did not file any separate appeal. Considering the totality of the facts and circumstances of the case we are of the view that the matter may be restored to the file of the ld. CIT(A), in the interest of justice, for deciding afresh in accordance with law. The ld. CIT(A) would provide a meaningful opportunity to the assessee before passing any order.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 2nd July, 2024.