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Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SRI PRADIP KUMAR CHOUBEY & SRI RAKESH MISHRA
order
: November 22nd, 2024 ORDER
Per Pradip Kumar Choubey, Judicial Member:
This appeal filed by the assessee pertaining to the Assessment Year (in short ‘AY’) 2010-11 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the ‘Act’) by ld. Commissioner of Income-tax (Appeals)- NFAC, Delhi [in short ld. ‘CIT(A)’] dated 26.03.2024 arising out of the assessment order framed u/s 147/143(3) of the Act dated 27.12.2017. 1.1. The brief facts of the case of the appellant are that the assessee being a private limited company filed its return of income for the AY 2010-11 declaring total income of Rs. 280/-. Subsequently, an information received from the office of the investigation wing that the appellant had been benefitted from I.T.A. No.: 821/KOL/2024 Assessment Year: 2010-11 Himadri Vinimay Pvt. Ltd. high value transaction of Rs. 53 Lakh during the FY 2009-10, the sources of which are not explained. On the basis of above information case of the assessee has been reopened and notice u/s 142(1) of the Act was issued to the assessee but there was no compliance on the part of the assessee hence, the Assessing Officer (hereinafter referred to as ld. 'AO') has added the income of Rs. 53 Lakh as unexplained. The said order has been placed by the assessee before the ld. CIT(A) wherein appeal of the assessee has been dismissed on the ground of delay of 91 days.
Being aggrieved and dissatisfied with the impugned order, the present appeal has been preferred.
1.2. Ld. Counsel for the assessee challenges the impugned order thereby submitting that the ld. CIT(A) did wrong by not condoning the delay though appellant has submitted a reasonable cause of delay of 17 days. The ld. Counsel for the assessee submits that in fact, there was a delay of only 17 days in filing of appeal as could be seen from Form-35, the date of service of notice of demand was 20.04.2018 and appeal was filed on 06.06.2018. Ld. CIT(A) only on the submission of the Counsel of the appellant has stated that there was a delay of 91 days and dismissed the appeal. Ld. Counsel for the assessee filed a chart before us which is as follows:
Sl. No. Dates Events 1. 30.09.2010 Return filed by the assesses in regular course under section 139(1) of the Act. 2. 31.03.2017 Notice under section 148 issued by the Ld. ITO, Ward- 1(1), Kolkata with the approval of Ld. Pr. CIT, Kolkata - 1. 3. 07.08.2017 Without any order under section 127 of the Act, notice under section 142(1) was issued by the Ld. ITO, Ward - 12(1), Kolkata issued requiring the assesses to furnish response to various queries raised therein. 4. 05.10.2017 Reminder to the earlier notices issued on 31.03.2017 and 07.08.2017 was issued by the Id. ITO. Ward-I2(i), Kolkata. 5. 17.10.2017 Returned filed in compliance to notice issued under section 148 of the Act & on 17.10.2017. Copy of the letter filed by the assessee informing the Ld. 23.10.2017 ITO, Ward-12(1), Kolkata about compliance of the notice issued under section 148 of the Act. ...... . 6. 07.11.2017 Notice under section 142(1) issued by the Ld. ITO, Ward- 12(1), Kolkata requiring the assessee to furnish response to the queries raised earlier vide notice dated 07.08.2017. 7. 14.11.2017 Notice under section 142(1) was once again issued by the Ld. ITO, Ward (1), Kolkata requiring the assessee to submit the response to the same. 8. -- Complete response filed in compliance to notice dated 07.08.2017 before the Ld. ITO, Ward-i2(i), Kolkata.
Page 2 of 7 I.T.A. No.: 821/KOL/2024 Assessment Year: 2010-11 Himadri Vinimay Pvt. Ltd. 9. 27.12.2017 Assessment order under section 147/ 143(3) of the Act was passed by the Ld. ACIT (OSD), Ward - 1(1), Kolkata wherein addition of Rs.53,00,000/- was made by him after invoking section 68 of the Act, by alleging that the explanation with the investments sold by the assessee during the year under consideration could not be provided by the assessee. In pursuance of such assessment order demand of Rs.31,60,860/- was created against the assessee. 10. 06.06.2018 Appeal filed by the assessee against the assessment order dated 27.12.2017 passed under section 147/ 143(3) of the Act before the First Appellate Authority challenging the addition of Rs.53,00,000/- made by the Id. ACIT (OSD) Ward-1(1), Kolkata by invoking section 68 of the Act. 11. 14.06.2018 Copy of the appeal filed by the assessee was received in the office of the Id. Ld. Assessing Officer on 14.06.2018. 12. 29.01.2019 Notice under section 154 issued by the Ld. ACIT(OSD), Ward-(i), Kolkata for the mistake in not levying interest under section 234A of the Act and proposing for rectification of the same. 13. 13.02.2019 Order passed under section 154 / 147 143(3) of the Act by the Ld. ACIT(OSD), Ward-i(i), Kolkata rectifying the assessment order dated 27.12.2017 by levying interest under section 234 of the Act by observing as under; “In the instance case order u/s. 147/143(3) of the I. T. Act for the AY 2010- 11 was passed on 27.12.2017, with assessed income of Rs. 53,00,280/- and raising demand of Rs. 31,60,860/-. Later, verification of the record revealed that at the time of computation interest u/s 234A of the IT Act, was not levied. Though the assessee was liable to pay interest u/s 234A since the Return of Income in compliance to notice u/s 148 of the IT Act, was filed after the period allowed to file. Here, the notice u/s 148 of the IT Act was issued on 31.03.2017 allowing the assessee 30 days to file the return but Return was filed on 17.10.2017. Therefore the interest u/s 234A/3) was leviable. ” in pursuing of such rectification order demand against the assessee was enhance of Rs.32,59,120/- as against the original demand of Rs.31,60,860/-. 14. 30.12.2020 Letter issued from the office of National Faceless Appellate Authority (NFAC) reporting deficiency in the appeal filed by the assessee on account of delay in filing the same. 15. 24-12.2022 Comprehensive rely vide letter dated 24.12.2022 was filed by the assessee in compliance to the letter dated 30.12.2020 explaining the reason for delay in filing the appeal by the assessee. 16. 01.11.2022 After filing response in support of delay occurred in filing the appeal, letter received from the office of the Appellate Authority informing that the communication window on the e-portal has been enabled. 17. 05.06.2023 Notice under section 250 of the Act was issued by NFAC requiring the assessee to submit its response in the appeal filed by it, by stating as under; “In support of your Grounds of Appeal, you are requested to furnish or cause to be furnished Groundwise written submission, along with supporting documentary evidence(s) and/or documents as specified in the attached Annexure, if any ” 18. 12.06.2023 Comprehensive response filed by the assessee raising the issue of jurisdiction as no notice under section 143(2) of the Act has been issued in the present case after filing of the return by the assessee on 17.10.2017, therefore, entire proceedings are vitiated being without jurisdiction. 19. 17.10.2023 Again notice under section 250 of the Act was issued by NFAC requiring the assessee to submit its response in the appeal filed by it. 20. 25.10.2023 Notice under section 250 of the Act was issued by NFAC requiring the assessee to submit its response in the appeal filed by it. Annexure to this notice specifies as under;
Page 3 of 7 I.T.A. No.: 821/KOL/2024 Assessment Year: 2010-11 Himadri Vinimay Pvt. Ltd. “It is hereby requested to file your submissions, if any, in support of your claim made in the grounds of appeal
. This may be treated as final opportunity.” 21. 27.10.2023 Reply filed by the assessee before the First Appellate Authority explaining why the proceedings against it is invalid on various counts, further, issue was raised that the assessee has not been provided with the copy of reasons recorded and other information before invoking reassessment proceedings against it. 22. 02.01.2024 Notice under section 250 of the Act was issued by NFAC requiring the assessee to submit its response in the appeal filed by it. 23. 06.01.2024 Comprehensive submission made by the assessee once again reiterating the very validity of proceedings against it. Further, issue relating to the amount credited during the year in its regular books of account was duly explained alongwith supporting documents. It was stated that the transaction is not in the nature of cash credit as envisaged in section 68 of the Act. Once again assessee stated that the proceedings against it is void-ab-initio as no notice under section 143(2) of the Act once issued upon it after filing of its return in compliance to notice under section 148 of the Act. 24. 20.02.2024 Notice under section 250 of the Act was issued by NFAC requiring the assessee to submit its response in the appeal filed by it. 25. 22.02.2024 Communication made to the appellate authority stating that full response has already been made by the assessee in the appellate proceedings before the First Appellate Authority the same may be considered by him for deciding the appeal. Copy of the reply dated 06.01.2024 alongwith acknowledgments of the earlier response were attached with this response. 26. 22.03.2024 Notice under section 250 of the Act issued by NFAC stating that; “The documents which you have uploaded on 22.02.2024 in response to the previous notice dated 20.02.2024 are unable to open. Therefore kindly upload the documents which can be accessed without any issue. This may be treated as final opportunity. ” 27. 23.03.2024 Once again response was made by the assessee before the First Appellate Authority in compliance to the notice dated 22.03.2024. 28. 26.03.2024 Order passed by the First Appellate Authority dismissing the appeal filed by the assessee on account the delay by not condoning the delay in filing the appeal by observing that there is lack of diligence and inaction on its part which could have been avoided by the appellant with due care and attention, there being valid and cogent reasons. The issues on legal grounds as also on merits was not decided by him.
29. After the delay having been explained vide response filed by the assessee on 24.12.2022, the communication window was opened by the first appellate authority vide communication dated 01.11.2022 and opportunity was given by the appellate authority vide various notices issued under section 250 of the Act as stated above, requiring the assessee to furnish or cause to be furnished Ground-wise written submission, along with supporting documentary evidence(s) and/or documents as specified in the attached Annexure, if any. In response to the said notices, responses have been filed by the assessee on each and every occasion as stated above. After calling for the response in support of the grounds of appeal, the appellate authority should not have a u-turn by not deciding the appeal on the grounds raised in the memo of appeal and rejecting the appeal on account of delay, which too has been very elaborately explained, atleast no objection was ever raised during the entire appellate proceedings by the appellate authority after 24.12.2022, rather the communication window was opened to respond on merits. 1.3. On the contrary, the ld. D/R supports the impugned order.
Page 4 of 7 I.T.A. No.: 821/KOL/2024 Assessment Year: 2010-11 Himadri Vinimay Pvt. Ltd.
On perusal of the order of ld. AO as well as the ld. CIT(A) it appears to us that the ld. AO has passed the order when there was no compliance on the part of the assessee. Further, before ld. CIT(A) appeal of the assessee has been dismissed on the ground of delay. On perusal of Form-35 it is apparent that the date of service of notice of demand was 20.04.2018 and there was no dispute that appeal had been filed on 06.06.2018. In this way there is a delay of only 17 days in filing of the appeal. 2.1. In this context, we have perused the several decisions of the Hon'ble Apex Court and find that in Shakuntala Devi Jain v. Kuntal Kumari [AIR 1969 SC 575], the Court reiterated the following classic statement from Krishna vs. Chathappan [1890 ILR 13 Mad 269]: "... Section 5 gives the courts a discretion which in respect of jurisdiction is to be exercised in the way in which judicial power and discretion ought to be exercised upon principles which are well understood; the words `sufficient cause' receiving a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bona fides is imputable to the appellant." 2.2. In N.Balakrishnan v. M.Krishnamurthy [1998 (7) SCC 123], this Court held:
It is axiomatic that condonation of delay is a matter of discretion of the court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to a want of acceptable explanation whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient, it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in revisional jurisdiction, unless the exercise of discretion was on wholly untenable grounds or arbitrary or perverse. But it is a different matter when the first court refuses to condone the delay. In such cases, the superior court would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even untrammeled by the conclusion of the lower court. The primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice...... Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. Page 5 of 7 I.T.A. No.: 821/KOL/2024 Assessment Year: 2010-11 Himadri Vinimay Pvt. Ltd. A court knows that refusal to condone delay would result in foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice.”
Going over the above chart for the delay as submitted by the assessee it appears to us that delay having been properly explained by the assessee and further, keeping in view the settled principle of Hon'ble Apex Court that a case should be decided on merit and sufficient cause u/s 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice, therefore, the delay is condoned as there was sufficient cause for the delay of 16 days. Further, we are of this view that the assessee should be given an opportunity to argue and submit his case before ld. CIT(A). Accordingly, the order of ld. CIT(A) is hereby set aside, delay is hereby condoned. The assessee is directed to place his case before the ld. CIT(A). Case is restored in the file of ld. CIT(A) for fresh decision.