SUDHA DHOOT,KOLKATA vs. AO WARD 40 (4), KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA BEFORE SHRI SONJOY SARMA, JUDICIAL MEMBER AND SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No.127/KOL/2024 Assessment Year: 2018-19

Sudha Dhoot AO, Ward-40(4), Kolkata. 29B, Rabindra Sarani, 3rd Vs Floor, Room No. 10E, West Bengal-700001. (PAN: ADWPD2538F) (Appellant) (Respondent)

Present for: Appellant by : Shri Ram Avtar Dhoot, CA Respondent by : Smt Ranu Biswas, Addl. CIT, DR Date of Hearing : 25.06.2024 Date of Pronouncement : 03.07.2024 O R D E R PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Ld. Addl./JCIT(A)-12, Mumbai [hereinafter referred to as “the Ld. CIT(A)”] passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2018-19 dated 16.10.2023 passed against the intimation u/s. 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) by the DCIT, CPC, Bangalore (hereinafter referred to as the “AO”) dated 06.11.2017.

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2.1. It was observed during the course of the appeal that the appeal suffers from several defects so much so that even the Power of Attorney

3 ITA No. 127/Kol/2024 Sudha Dhoot, AY: 2018-19 was not enclosed. The assessee has also filed an application along with Memo of Appeal in Form No. 36 along with an affidavit which is reproduced as under:

“I SUDHA DHOOT W/O of Ram Awatar Dhoot residing at Shree Shyam Garden 12, Haridutt Rai Chamaria Road 3rd Floor Howrah (North) West Bengal India, do here by solemnly affirm and declare as under: Condonation of Delay under section 250 of the income Tax Act 1961 in filing of Form No. 36 for Assessment Year 2018-19. 1. In exercise of the powers conferred under section 250 of the Income Tax Act, 1961 (hereinafter referred to as act) the central Board of Direct taxes (CBDT) authorized the commissioners of Income Tax to admit application of condonation of delay in filing From No. 36 for AY. 2. Further to the power delegated to commissioner of Income Tax discussed above the CBDT here by directs that where there is delay of beyond 60 days in filling Form No. 36 for Assessment year. 2018-19 of for any subsequent Assessment year. The Pr. chief commissioner and applications of condonation of delay under section 250 of the Act, and decide on merits. 3. Firstly, there was a mistake in challan of Rs. 10000/- it was paid under 400. ITAT said it need to be paid in code 300. So we had to change entire set ITAT paper Book. Again there was mistake in uploading Form No. 36. So Rectification took some time. Hence kindly condone the delay of 60 days and oblige. 4. That in this respect your petitioner would like to cite the judgement of Supreme Court of India passed in the matter M/s Collector of Anantnag -VS- Master Kataji & Ors (STC 66, dated 01/08/1987, page 242 (S.C) wherein it has been held that each day's delay need not be explained and further the procedural law should not defeat the substantive justice deserved by the Appellant. 5. That under the facts and in the circumstances of the case, and considering the judgement cited above it is most humble requested that the delay in submission of the relevant appeal petition may be condoned and the relevant appeal petition may be directed to be heard on merits. 6. The Bombay High Court in India has condoned a 838-day delay in filing an appeal by an accused person against an NIA Court order. The Court held that Appellate Court have the language of the Act. The judge stated that access to justice is a fundamental right and that the word "shall" in the proviso should be read as may. They also criticized that contradictory stand taken by the NIA in different High Court. MUMBAI: Observing that access to justice is part and parcel of right to life in India and in all civilised societies the Bombay High Court on Thursday Condoned 838 day's delay in filing of appeal by an accused against an national Investigation Agency (NIA) court order refusing him bail.

4 ITA No. 127/Kol/2024 Sudha Dhoot, AY: 2018-19 Justice Revati Mohite-Dere and Gauri Godse held that appellate court have power to condone delay beyond 90 days despite the language of second proviso to section 21 (1) (appeal from special court to HC) of NIA Act that no appeal shall be entertained after expiry of 90 days. Thus, an application seeking to condone delay beyond 90 days in filing an appeal against the judgment, sentence, order, not being an interlocutory order passed by a special court is maintainable on sufficient cause being shown ... the word shall in the second proviso be read down to read as may and hence directory in nature," they added. The judges said, "if the proviso were to be held mandatory despite sufficient cause being shown by the accused the doors of justice will be shut leading to travesty of justice which cannot be permitted by courts of law." The verdict came on the accused Faizal Mirza's plea to condone delay in filing appeal. He was booked under unlawful Activities (Prevention) Act. His bail was rejected on March 9,2020. His advocate Mateen shaikh said due to Covid - 19 pandemic, he could not file the appeal. Article 14 of the Indian Constitution provides that, "The State shall not deny to any person equality before the law and the equal protection of the laws within the territory of India". This implies a right in every individual within the territory of India, and a duty on State to ensure that legal protection is accessible to all irrespective of social or economic constraints. To quote Martin Luther King "Injustice anywhere is a threat to justice everywhere". Access to justice is a basic right that guarantees protection of law to all. It is integral to rule of law. No one is above the law, not even the State. Everyone should be able to seek protection of the laws and legal redress for their grievances. Verification Verified that the contents of my above affidavit are true and best of my knowledge and belief nothing concealed therein. Verified at Kolkata 12th June, 2024.” 2.2. Although the appeal is liable to be dismissed on account of delay, however, in the interest of justice, the delay in filing the appeal is being condoned as the assessee seemed to have erred in following the procedure as per the letter dated 07.02.2024.

“1. That the Ld. Assessing Officer has disallowed the amount of Brought Forward losses amounting to Rs.43,97,351/- mentioning that the return of 2017 was uploaded after due date but it was not uploaded after due date. The due date for filing Return of audited account is 31.10.2017 and we have filed the return within due date, i.e. on 05.08.2017. Addition by the Ld. AO proved that there was no tangible material to believe and neither there was not any application of mind and without any basis and ground. 2. That the Appellant craves leave to add, alter, adduce or amend any grounds of appeal or before or in course of hearing.”

5 ITA No. 127/Kol/2024 Sudha Dhoot, AY: 2018-19 4. Brief facts of the case are that the assessee had filed the return of income showing total income on 30.07.2018 of Rs.2,10,595/- based on audited accounts. The said return was processed u/s. 143(1) of the Act without any variation of income. However, the claim for brought forward losses amounting to Rs.4,29,735/- of the last year was not allowed. It was claimed that the due date of filing the return of income was 31.10.2017 and the assessee filed the return within the due date i.e. 06.08.2017. The Ld. CIT(A) raised certain query and dismissed the appeal by holding as under:

“3.2. From the above, it is clear that the CPC had disallowed brought forward losses amounting to Rs.43,97.351/- stating that the appellant did not file the return of AY 2017 -18 (previous year to AY 2018-19) within the due date. 3.3. In order to verify the fact whether the appellant had filed the return of AY 2017 -18 within due date, a request was sent to the appellant on 06.10.2023 with request to submit documentary proof whether the audit report (TAR) for both the assessment years, i.e., AY 2017-18 & 2018-19 were submitted along with the return within due date for the relevant years. 3.4. The appellant in reply vide submission dated 11.10.2023 has stated that the ITR for A.Y. 2018-19 was uploaded within due date, i.e. on 30.07.2018. The appellant has stated that TAR was not applicable to her in AY 2018-19. 3.5. However, the appellant has chosen to remain silent on whether the ITR and the TAR for AY 2017-18 was uploaded within due date. She has also not submitted any tangible material to prove whether the ITR and TAR for AY 2017-18 was uploaded within due date. 3.6. As per records the appellant has filed ITR for AY 2017-18 on 26.10.2017 while the due date for filing ITR was 05.08.2017. 3.7. In this regard, the press release dated 31.07.2017 o CBDT regarding extension of date of filing income-tax returns was perused. The press release has stipulated that the return for AY 2017-18 could be filed up to 05.08.2017. 3.8. The appellant has clearly filed the ITR late: 3.9. Any loss can be carried forward only if the return of income/loss of the year in which loss is incurred is furnished on or before the due date of furnishing the return as prescribed u/s 139(1).

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3.10. Further, in the case of Checkmate Services Private Limited, the Hon'ble Supreme Court of India had held that- One of the rules of interpretation of a tax statute is that if a deduction or exemption is available on compliance with certain conditions, the conditions are to be strictly complied with. This rule is in line with the general principle that taxing statutes are to be construed strictly, and that there is no room for equitable considerations. That deductions are to be granted only when the conditions which govern them are strictly complied with. 3.11. Therefore, as the appellant had not complied with statutory requirement of filing the ITR of AY 2017-18 within due date, she has lost the opportunity to carry forward the losses and thus, the CPC had rightly denied her the carry forward of losses for the AY 2018-19. 3.12. Therefore, no interference is needed in the order of the CPC. In view of this, Ground Nos. 1 & 2 are dismissed. 4. In the result appeal of the appellant is dismissed.”

7 ITA No. 127/Kol/2024 Sudha Dhoot, AY: 2018-19 the provisions of section 80, the claim for carry forward and set off of carried forward loss was not allowed. Now, the assessee claims that the return was filed within time and the Tax Audit Report was also filed in the course of the appeal before us. However, the Ld. AR was advised to file the application under rule 29 of the IT(AT) Rules, 1963 so that the additional evidence could be admitted. It is reiterated that the appeal relates to the AY 2018-19 while the claim of loss was to be determined in AY 2017-18 and in case the assessee was aggrieved with the intimation issued for the AY 2017-18, the proper course of action was to file an appeal against the intimation u/s. 143(1) issued for AY 2017-18. For AY 2018-19, only the loss which has been determined in earlier years can be allowed to be set off and in case the same has not been determined in accordance with the law, the remedy available to the assessee is either to file an appeal for AY 2017-18 or move an application for rectification u/s. 154 before the AO and once the loss is determined to be carried forward, the request for adjustment of the said loss against the income of the assessee can be entertained. The tax audit report which was neither filed before the AO nor before the Ld. CIT(A) being an additional piece of document, ought to have been filed before the Ld. CIT(A). Since in the order of the Ld. CIT(A) there is no error as the loss has not been set off because it was not determined in the AY 2017-18, therefore, the appeal is liable to be dismissed. However, the assessee may file the tax audit report being filed now before the AO for rectification of the intimation u/s. 143(1) and if the assessee is not satisfied with the same, he has the option of filing the appeal before the Ld. CIT(A) u/s. 250 of the Act. On the facts as narrated in the

8 ITA No. 127/Kol/2024 Sudha Dhoot, AY: 2018-19 preceding paragraphs, the appeal for the AY 2018-19 is not maintainable and is hereby dismissed.

Order pronounced in the open court on 3rd July, 2024. Sd/- Sd/- (Sonjoy Sarma) (Rakesh Mishra) Judicial Member Accountant Member Dated: 3rd July, 2024 JD, Sr. P.S. Copy to: 1. The Appellant: 2. The Respondent. 3. CIT(A)- 4. The CIT, 5. DR, ITAT, Kolkata Bench, Kolkata //True Copy// By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata