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Income Tax Appellate Tribunal, “H”, BENCH, MUMBAI
Before: SHRI RAJENDRA, AM & SHRI RAM LAL NEGI, JM
आदेश / O R D E R
PER RAM LAL NEGI, JM
This appeal has been preferred by the assessee against order dated 01/07/2016 passed by the Ld. CIT (A), 54, Mumbai pertaining to the Assessment Year 2009-10, whereby the Ld. CIT (A) dismissed the appeal filed by the assessee against Assessment Order passed by Assessing Officer u/s 143 (3) of the Income Tax Act, 1961 (‘for short the Act’).
Brief facts of the case are that the assessee company filed its return of income for the relevant assessment year declaring the total income as Rs. Nil.
The return of income was processed u/s 143 (1) of the Act. The case was identified for scrutiny and accordingly Assessment Order u/s 143 (3) of the Act was passed determining the total income of the assessee at Rs. Nil after making addition of Rs. 24,02,674/- i.e. 0.5% of average value of investments u/s 14A of the Act, r.w.s. Rule 8D of the Income Tax Rules.
Aggrieved, the assessee challenged the Assessment Order before the CIT (A) raising the following grounds of appeal:-
1. “The Commissioner of Income Tax (Appeals) – 54 (hereinafter referred to as the CIT (A) erred in not condoning the delay in filing the appeal against the order of the Assistant Commissioner of Income Tax – Central Circle 38, Mumbai (hereinafter referred to as the Assessing Officer).
The appellants contend that on the facts and in the circumstances of the case and in law, the CIT (A) in the interest of justice, ought to have condoned the delay of only 37 days in filing the appeal against the order of the Assessing Officer.
2. The CIT (A) erred in not disposing of the following grounds of appeal on merits- (a) Assessing Officer erred in making disallowance u/s 14A of Rs. 24,02,674/- whereas the appellant has not earned any dividend income or exempted income during the year.
(b) Assessing Officer should not have evoked provisions of Section 14A of I.T. Act 1961 r.w. Rule 8D of I.T. Rules 1962. The appellants crave leave to add, to, alter or amend the above stated ground of appeal. The appellants crave leave to add, to, alter or amend the above stated ground of appeal.”
Before us, the Ld. Counsel for the assessee submitted that the Ld. CIT (A) has wrongly dismissed the appeal filed by the assessee by rejecting the application for condonation of delay in filing the appeal against the Assessment Order and since the case has not been heard on merits great injustice has been done to the assessee. The Ld. Counsel further submitted that delay in filing of appeal was not intentional but it had happened due to the reasons mentioned in the application duly supported by the affidavits sworn by the concerned persons. The Ld. Counsel further submitted that the impugned order may be set aside and the appeal of the assessee may be allowed.
On the other hand the Ld. Departmental Representative (DR) submitted that the Ld. CIT (A) has rightly rejected the application for condonation of delay and dismissed the appeal of the assessee, as the assessee has filed to furnish the sufficient cause of delay in filing appeal against the Assessment Order.
We have heard the rival submissions and perused the material placed on record. We notice that the assessee appellant had filed an application for condonation of delay along with the appeal. The contents of which read as under:-
“The appellant is a private limited company engaged in business as share broker and is trading member of various stock exchanges viz. NCDEX, MCX, NMCE, NSEL, ACE & ICEX. The relevant assessment year for application of condonation is A.Y. 2009-10. The return of income was processed u/s 143 (1). Then case was selected for scrutiny and the assessing officer has completed the assessment u/s 143 (3) with disallowance u/s 14A of Rs. 24,02,674/- vide his order dtd. 16.12.2011. “The assessment orders were received by the accountant Mr. Narendra Kothari who is in employment of appellant as an Accountant since many years. He was handling all the work in respect of accounting and income tax including co-ordination with chartered accountant for filing return of income as well as a reply to notices and preparation of details of assessments etc. on receipt of assessment order same were sent to our Chartered Accountants, M/s Sundarlal, Desai & Kanodia. The firm of chartered accountants verified the order and asked Mr. Narendra Kothari for verification of tax calculation, credits of taxes paid. He was asked to revert back with the details of variance in income, disallowance to be disputed etc. in consultation with director for preparation of the appeal. These papers were not put up before director discussed any time by said employee Mr. Narendra Kothari. Recently, Mr. Mukul Desai Partner of our Chartered Accountants M/s Sundarlal, Desai & Kanodia was called upon by the assessing officer to inquire about the details of payment of the demand created on completion of assessment and then these orders came to knowledge of director who immediately followed up with our Chartered Accountants M/s Sundarlal, Desai & Kanodia. We were advised that appeal needs to be filed against the assessment order passed by assessing officer. Thus it was at this time on inquiry for outstanding arrear the appellant came to know about the orders which appeal was required to be prepared and filed. Thus company was not aware of the fact that appeal was not prepared and filed on due date. In view of above fact the appellant plead before your honour to kindly condone the delay in filing appeal before your honour and may accept the appeal which involves points of law. The order appealed against also involves the demand needs to be replied for. Considering all this circumstances we request once again to your honour to condone the delay in filing the appeal.”
The Ld. CIT (A) rejected the request for condonation of delay in filing the appeal and dismissed the appeal holding that appellant has not made out any case that it was prevented by reasonable cause for not filing appeal within the statutory time limit. We further notice that the assessee also submitted affidavits sworn by Sh. Harendra D. Shah, Director of the assessee Company, Shri Narender Kothari, Group Accountant and Sh. Mukul Desai, Partner M/s. Sunderlal Desai & Kanodia Chartered Accountants in support of the application for condonation for delay.
The law of limitation is prescribed by the Act, under section 249(3) which envisages that there should have been a sufficient cause for not presenting the appeal within the prescribed period and where the appellant fails to show sufficient cause for condonation of delay the application for condonation of delay is liable to be rejected. From the contents of the application it does not appear that the delay is prolonged and the assessee has failed to show that the delay had occurred in spite of exercise of due attention and diligence. Hon’ble Supreme Court in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353 has laid down the parameters to be followed while deciding the application for condonation of delay in filing an appeal. The relevant part of the judgment reads as under: “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 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. 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 common sense pragmatic manner. 4. 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 by 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.”
In view of the principles of law laid down by the Hon’ble Supreme Court, we are of the considered opinion that the delay in filing the appeal was neither intentional nor due to negligence on his part and the assessee was prevent from filing the appeal within limitation period due to the circumstances beyond his control. Therefore, in the interest of justice the assessee should get an opportunity to present his case on merits. We therefore, set-aside the impugned order passed vide which the Ld. CIT(A) rejected the application of the assessee for condonation of delay and dismissed the appeal, and send the appeal back the Ld. CIT(A), to decide the same on merits after affording reasonable opportunity of being heard to the assessee.
In the result, the appeal filed by the assessee for the assessment year 2009-10 is allowed for the statistical purpose.
Order pronounced in the open court on 22nd February, 2017.