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Facts
The assessee's appeal against the CIT(A)'s order for AY 2017-18 was delayed by 339 days. The delay occurred because the assessee had filed a rectification petition u/s 154 which was rejected. The CIT(A) rejected the appeal as time-barred due to the delay.
Held
The Tribunal held that the delay was sufficiently explained, as the assessee had pursued a rectification petition before filing the appeal. The Tribunal also noted that the issue of whether the income was business income or house property income had not been properly addressed.
Key Issues
Whether the delay of 339 days in filing the appeal before the CIT(A) was justifiable, and whether the income from paying guest accommodation should be treated as business income or house property income.
Sections Cited
250, 143(1), 154, 143(2), 234B, 234C
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Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SHRI SOUNDARARAJAN K.
PER SOUNDARARAJAN K., JUDICIAL MEMBER:
This appeal by assessee is directed against the order of CIT(A), Chandigarh for the assessment year 2017-18 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”) dated 17.1.2024. The assessee has raised following grounds of appeal: 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The learned Addl/JClT [A] is not justified in refusing to condone the delay in filing the appeal under the facts and in the circumstances of the appellant's case.
2.1 The learned Addl/JCiT[A] failed to appreciate that the delay in filing the appeal was due to the fact that the appellant was pursuing a bonafide alternate remedy available under the Act, which IS reasonable cause and therefore, the delay in filing the appeal ought to have been condoned
ITA No.473/Bang/2024 Surya Adiga, Bangalore Page 2 of 4 3. Without prejudice to the above, the learned Addl/JClT [A] is not justified in not disposing of the ground raised with reference to the addition of a sum of Rs.12,68,949/- as income from House property in the Intimation u/s. 143[1] of the Act simply relying upon the deduction of tax at source u/s. 1941B of the Act without appreciating that the appellant had reported the said income under the head “Business" as he was engaged in running a paying guest accommodation and hence, the said income was liable for assessment under the head "Business" under the facts and in the circumstances of the appellant's case.
The learned Addl/JClT [A] ought to have considered the ground raised by the appellant that the learned DCIT, CPC ought not to have passed the Intimation u/s. 143[1] of the Act without dealing with the objections of the appellant and setting forth reasons for non- acceptance of the claim for assessment of income under the head 'Business" and therefore, the Intimation so passed by the learned DClT, CPC is contrary to law and facts of the appellant's case and therefore, the assessment of income under the head "House Property" deserves to be deleted. 5. The learned Addl/JClT[A]ought to have appreciated that the same income has been taxed twice under different head of income and hence, the Intimation passed is opposed to law and facts of the appellant's case. 6. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies himself liable to be cha7ged to interest u/s. 234B and 234C of the Act, under the facts and in the circumstances of the appellant's case deserves to be cancelled 7. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.
Even though several grounds were raised by the assessee on merits, the main grievance of the assessee is that the ld. CIT(A) had not condoned the delay of 339 days in filing the appeal against the intimation given u/s 143(1) of the Act. The assessee contended that the delay has been occurred since the assessee had filed a rectification petition u/s 154 of the Act on 6.12.2019 against the intimation dated 10.1.2019, which was finally rejected on 16.12.2019 and thereafter only, the assessee preferred this appeal
ITA No.473/Bang/2024 Surya Adiga, Bangalore Page 3 of 4 before the ld. CIT(A). On that basis, the assessee prayed to condone the delay in order to decide the issue on merits. 3. The ld. CIT(A) in his order dated 17.1.2024 had discussed the issue in detail and relied on the various judgements and came to the conclusion that there is no sufficient cause for condoning the delay of 339 days in filing the appeal before him and therefore, rejected the appeal as time barred. 4. We have heard the rival submissions and perused the materials available on record and found that admittedly the assessee had filed the rectification petition before the ld. AO for rectifying the mistake occurred in the intimation dated 10.1.2019. Unfortunately, the same was rejected on 16.12.2019 and therefore there was a delay in filing the appeal. Further, the Act prescribed a time limit of 4 years for filing the rectification petition u/s 154 of the Act to rectify any errors occurred in the orders. Therefore, the assessee diligently filed the rectification petition and sought for rectifying the error occurred in the order, which was negatived by the ld. AO on a later date. Thus, the delay of 339 days has been occurred. 4.1 At this stage, it is also to be noted that the assessee had filed the return of income declaring the paying guest accommodation charges received by him as the “business income”, whereas the ld. AO had assessed the same under the head “income from house property” without issuing any notice u/s 143(2) of the Act. Therefore, this matter should be decided based on the documents submitted by the assessee to find out whether the income is a “business income” or “income from house property”? There is no opportunity available for the assessee to place the records before the ld. AO or before the first appellate authority and therefore, we are of the view that the appeal should not be rejected solely on the ground that there is a delay, which, in our opinion, was also property explained by the assessee. Hence, in the interest of justice, we set aside the order of the ld. CIT(A) by condoning the delay of 339 days in filing the appeal
ITA No.473/Bang/2024 Surya Adiga, Bangalore Page 4 of 4 before him and remit the same to the file of ld. AO to consider the issue afresh and pass appropriate orders in accordance with law. 5. In the result, appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 17th Apr, 2024
Sd/- Sd/- (Chandra Poojari) (Soundararajan K.) Accountant Member Judicial Member
Bangalore, Dated 17th Apr, 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.