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Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SHRI PRAKASH CHAND YADAV
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This Appeal by assessee is directed against order of CIT(A)-15, Bangalore dated 25.3.2024. The assessee raised following grounds: 1. “The appellate order passed by the learned Commissioner of Income-tax [Appeals] - 15, Bengaluru, under Section 250 of the Act dated 25/03/2024, in so far as it is against the Appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case, may be quashed. 2. The learned Commissioner of Income-tax [Appeals] is not justified in not condoning the delay in filing the appeal preferred by the appellant without properly appreciating the facts and reasons leading to delay in filing the appeal, by not appreciating that the delay in filing was not intentional or negligence or deliberate but it is due to the reasons beyond the control of the appellant, on the facts and circumstances of the case. 3. The learned Commissioner of Income-tax [Appeals] ought to have condoned the delay in filing the appeal and admitted the appeal and thereby ought to have adjudicated the grounds raised by the appellant in the interest of justice and equity, on the facts and circumstances of the case.
ITA No.894/Bang/2024 M/s. Multi Tek Interior Solutions, Bangalore Page 2 of 8
The appellant denies itself liable to be assessed on a total income of Rs. 2,20,06,316/- as determined by the learned assessing officer as against the total income declared and returned by the appellant of Rs. 65,98,740/-, on the facts and circumstances of the case. 5. The learned Commissioner of Income-tax [Appeals], failed to appreciate that the learned assessing officer is not justified in making an addition of Rs. 1,51 ,07,577/-, wherein the profit of the appellant was estimated at 10% on the total turnover which is not just and proper, on the facts and circumstances of the case, 6. The learned Commissioner of Income-tax [Appeals], ought to have appreciated that the appellant has maintained proper books of accounts and the same are subject to audit under section 44AB of the Act for the impugned assessment year 2020-21 and the profit declared by the appellant in the return of income is O just and proper and consequently no addition was warranted on account of alleged declaration of lower profit which is against the principles of taxation without rejecting the books of accounts maintained by the appellant, on the facts and circumstances of the case. 7. Without prejudice, the learned Commissioner of Income-tax [Appeals], failed to appreciate that the estimation of income at 10% made by the learned assessing officer is substantially higher and the learned assessing officer ought to have adopted and assessed proper income by considering the comparable cases and assessed the income of the appellant, on the facts and circumstances of the case. 8. The learned Commissioner of Income-tax [Appeals] and the learned assessing officer ought to have appreciated that that consent does not confer jurisdiction and taxes are to paid in accordance with the scheme of the act and no tax can be collected without the authority of law and not based on an erroneous admission made during the course of survey, on the facts and circumstances of the case. 9. Without prejudice though not conceding the estimation of profit at 10% by the learned assessing officer is on a very higher side and the same requires to be reduced substantially, on the facts and circumstances of the case. 10. The learned Commissioner of Income-tax [Appeals] is not justified in not holding that the learned assessing officer was not justified in making a disallowance of a sum of Rs. 3,00,000/- by invoking the provisions of- section 40[b] of the Act, on the facts and circumstances of the case. 11. Without prejudice, to the right to seek waiver as per the parity of reasoning of the decision of the Hon'ble Apex Court in the case of
ITA No.894/Bang/2024 M/s. Multi Tek Interior Solutions, Bangalore Page 3 of 8 Karanvir Singh 349 IT R 692, the Appellant denies itself liable to be charged to interest under section 234 A, 234 B and 234 C of the Income Tax Act on the facts and circumstances of o the case. The appellant contends that the levy of interest under section 234 A, 234 B and 234 C of the Act is also bad in law as the period, rate, quantum and method of calculation adopted by the learned assessing officer on which interest is levied are not discernible and are wrong on the facts of the case. 12. The appellant craves leave to add, alter, amend, substitute or delete any or all of the grounds of appeal urged above. 13. For the above and other grounds to be urged during the course of hearing of the appeal the Appellant prays that the appeal be allowed in the interest of equity and justice.
The first issue for our consideration is that ground Nos.2 & 3 with regard to dismissal of appeal by ld. CIT(A) in limine without condoning the delay of 182 days in filing the appeal. Before the ld. CIT(A), there was a delay of 182 days in filing the appeal. The assessee explained the delay by way of condonation petition stating as follows: 1. “An order of assessment under section 143 [3] of the Income Tax Act, 1961 was passed on 28/02/2022 for the Assessment Year 2020-21 by the Deputy Commissioner of Income-tax, Central Circle - 2[2], Bengaluru. Since the appellant is not sure about the correct date of receipt of the impugned order of assessment, for the purpose of limitation the date of passing the impugned order of assessment i.e. 28/02/2022 is considered as the date of receipt of the impugned assessment order and as per the provisions of the Act the statutory appeal under 246A of the Act against the said order of assessment ought to have been filed on or before 30/03/2022 i.e. within 30 days from the date of receipt of the order. 2. The Appellant is a registered partnership firm carrying on the business of turnkey projects and interiors for corporates. The said business of the appellant is carried on in the name and style M/S. Multi Tek Interior Solutions.
A survey under section 133A of the Act was conducted in the premises of the appellant on 10/02/2020. The appellant during the course of statement recorded under section 131 of the Act had without any basis had inadvertently declared and estimated the profit from the business of the appellant at 10% of the total turnover achieved during the previous assessment years. i.e. 2018-19 & 2019-20. It is further submitted that for the impugned assessment year i.e. 2020-21 the
ITA No.894/Bang/2024 M/s. Multi Tek Interior Solutions, Bangalore Page 4 of 8 appellant during the course of survey had agreed to offer of the profit since the appellant was handicapped with the status of the accounts maintained and consequently the appellant at the time of survey accepted to offer 8% of the as profits on the turnover achieved.by it. 4. It is submitted that during the impugned assessment year 2020-21, the appellant had maintained proper books of accounts and all supporting documents and evidences in support of the claims made in the books of accounts. The appellant though in the statement recorded during the course of survey had inadvertently declared the profit from the business at 8% on the total turnover, the appellant after verifying the records declared the actual business profit as per the books which worked out to Rs. 11,29,130/- as against the erroneous declaration made by the appellant at 8% on the total receipt during the course of survey. 5. The appellant for the impugned assessment year 2020-21, filed its return of income on 31/03/2021 reporting a proper and correct total income of Rs. 165,98,740/-. The said return of income filed by the appellant was processed under section 143 [1] of the Act. The appellant for the impugned assessment year i.e. 2020-21 had maintained proper and regular books of accounts and the said books of accounts maintained by the appellant was subject to statutory audit under section 44AB of the Act. 6. Being aggrieved by the impugned order of assessment passed by the learned assessing officer under section 143[3] of the Act the appellant has preferred an appeal before your Honour as per the provisions of section 246A of the Act, which is beyond time and the reasons for the delay in filing the appeal are set-out hereinafter. 7. It is submitted that the appellant could not file the appeal within the statutory time permitted by the statute for the reason that soon after the impugned order of assessment was received by the appellant, the appellant had instructed his accountant to approach the counsel Sri. V. Chandrasekar, Advocate to consult as regard to the next course of action as against the additions made in the impugned order passed by the learned assessing officer. The said accountant due to oversight he did not follow the instructions of the appellant and it skipped the mind of the said accountant as well as the appellant and could not meet the learned counsel. The appellant was under a bonafide belief that the said accountant has met the counsel and an appeal has been preferred. 8. It is submitted that the order of penalty under section 270A of the Act was passed and the same was sent to the appellant. The appellant entrusted the accountant to meet Sri. V. Chandrasekhar and take his opinion as regard to the next course of remedy available as against the order of penalty passed under section 270A of the Act. This
ITA No.894/Bang/2024 M/s. Multi Tek Interior Solutions, Bangalore Page 5 of 8 occasion the said accountant met the counsel Sri. V. Chandrasekhar, Advocate and place the copy of the order of penalty passed under section 270A of the Act. 9. That, Sri V. Chandrasekhar, Advocate went through the files and enquired about the status of the order of assessment passed by the learned assessing officer and only at that particular point of time the said accountant realized that the appellant had instructed to meet and consult the present counsel to seek advice as regard to the impugned order of assessment passed under section 143[3] of the Act which was completely lost sight of the said accountant. Then the said accountant apprised to the appellant about the situation and appellant along with the accountant met the learned counsel and it was advised by the present counsel to file an appeal against the order of the learned Assessing Officer passed under section 143[3] of the Act before the Hon'ble Commissioner of Income-Tax [Appeals], by stating the facts and circumstances which the appellant was prevented from filing the present appeal within the statutory limitation period for filing the appeal and seeking condonation of delay. 10. In view of the above fact the Appellant could not file the Appeal before this Hon'ble appellate authority in time as per the scheme of the Act and there was a delay of about 182 days in filing this present appeal before this Hon'ble appellate authority. The delay in filing the present appeal is due to the facts brought out in the earlier paragraphs and not deliberate. The appellant would not gain anything by not filing the appeal rather it loses its rights by not filing the appeal, thus the delay in filing the present appeal was circum-stances beyond the control of the appellant, which fact requires to be appreciated by your Honour. 11. It is humbly prayed that the Hon'ble Commissioner of Income-tax [Appeals] takes lenient and compassionate view and condone the delay of about 182 days in filing the present appeal against the order of the learned Assessing Officer under section 143[3] of the Act dated 28/02/2022 and humbly pray your Honour to hear the same on merits for the advancement of substantial cause of justice. 12. It is humbly submitted that if this application for condonation of delay in filing the appeal is not allowed, the appellant / Petitioner would be put to great hardship and irreparable injury and on the other hand no hardship or injury would be caused to the Respondent if this application of condonation of delay is allowed. Reliance is placed on the decision of the Hon'ble Apex Court in the case of Collector, Land Acquisition vs. MST. Katiji and Others [1987] 167 ITR 471 and also in the case of Concord of India Insurance Co. Ltd., vs. Smt. Nirmala Devi and Others 118 ITR 507. Further the Appellant relies on another decision of the Hon'ble Apex Court in the case of Radha Krishna Rai vs. Allahabad Bank & Others [2009] 9 SCC 733.
ITA No.894/Bang/2024 M/s. Multi Tek Interior Solutions, Bangalore Page 6 of 8 13. Wherefore the appellant / Petitioner once again humbly pray before your Honour to kindly condone the delay in filing of about 182 days in filing the present appeal and hear the same on merits of the matter for the advancement of substantial cause of justice.”
2.1 The ld. CIT(A) was of the opinion that there was no good and sufficient reason in filing the appeal belatedly before him. Accordingly, she dismissed the appeal in limine to adjudicate the grounds raised by assessee on merits. Against this assessee is in appeal before us. 2.2. The ld. A.R. reiterated the submissions made by him before the ld. CIT(A). 2.3 On the other hand, ld. D.R. relied on the order of ld. CIT(A). 3. We have carefully gone through the reason advanced by the assessee for delay in filing the appeal before ld. CIT(A). It was the submission of the ld. A.R. that the assessee has handed over the impugned assessment order to his accountant to hand over the same to the assessee’s counsel Shri V. Chandra Sekhar, Advocate, Bangalore. However, the said accountant has not handed over the assessment order to Shri V. Chandra Sekhar for further action. The assessee was of the bonafide belief that the accountant has handed over the impugned assessment order to Shri V. Chandra Sekhar. The assessee came to know about the failure on the part of his accountant of handing over the impugned assessment order to assessee’s advocate only on receipt of the penalty order u/s 270A of the Income Tax Act, 1961 (in short “The Act”). After enquiring the accountant, once again assessee made arrangement to consult with him and consulted the present advocate and thereafter the present advocate has taken steps to file appeal before the ld. CIT(A) and the present counsel has filed the appeal with a condonation petition before ld. CIT(A). Hence, there was a delay of 182 days in filing the appeal before the ld. CIT(A). 3.1 In our opinion, the explanation given is bona fide and it is a good and sufficient reason to condone the delay in filing the appeal
ITA No.894/Bang/2024 M/s. Multi Tek Interior Solutions, Bangalore Page 7 of 8 before the first appellate authority. In these circumstances, it cannot be said that assessee is very callous in its approach in filing the appeal before the ld. CIT(A). 3.2 At this stage, it is appropriate to refer to the judgement of Hon’ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471), Hon’ble Supreme Court laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder: “(1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late. (2) Refusing to condone delay can result in a meritorious matter being thrown 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. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner. (4) When substantial justice and technical consideration are pitted against each other, the 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 nondeliberate 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 by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.
3.3 Being so, when substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of non-deliberate delay. In our opinion, this is a fit case to condone the short delay of
ITA No.894/Bang/2024 M/s. Multi Tek Interior Solutions, Bangalore Page 8 of 8 182 days in filing the appeal before ld. CIT(A). Accordingly, the delay is condoned. 3.4 After condoning the delay, in our opinion, it is appropriate to remit the issue in dispute with regard to merit of the addition made by ld. AO to the file of ld. CIT(A) as he failed to adjudicate the same. Accordingly, the issue in dispute is remitted to the file of ld. CIT(A) for fresh adjudication. 4. In the result, appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 24th June, 2024
Sd/- Sd/- (Prakash Chand Yadav) (Chandra Poojari) Judicial Member Accountant Member
Bangalore, Dated 24th June, 2024. VG/SPS
Copy to:
The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order
Asst. Registrar, ITAT, Bangalore.