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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) – IV, Chennai, dated 08.09.2014 and pertains to assessment year 2007-08.
Sh. T. Banusekar, the Ld. representative for the assessee, submitted that there was a delay of 505 days in filing the appeal before this Tribunal. According to the Ld. representative, the assessee claims deduction under Section 54F of the Income-tax Act, 1961 (in short 'the Act'). However, the Assessing Officer disallowed the claim of the assessee on the ground the assessee was having more than one house. Referring to the order of the Commissioner of Wealth Tax (Appeals), for the assessment year 2007-08, the Ld. representative submitted that in the wealth-tax proceeding, the very same property at 52, Beemanna Mudali Garden Street, Chennai, was taken as commercial asset and it was exempt from Wealth-tax Act. Therefore, the commercial asset cannot be taken as house of the assessee for considering the disallowance under Section 54F of the Act. The Ld.counsel has also filed a letter of Tamil Nadu Electricity Board showing that the building in question is used for commercial purpose. The letter said to be obtained from Corporation Chennai under Right to Information Act was also filed before this Tribunal to show that the property was used for commercial purpose. In view of these facts, according to the Ld. representative, there was reasonable cause on the part of the assessee in not filing appeal before this Tribunal.
Referring to the petition for condoning the delay, the Ld. representative for the assessee submitted that the assessee could not file appeal in time. When the assessee met Shri P.S.
Prabhakar, Chartered Accountant, in connection with penalty proceedings, it was brought to his notice that an appeal against the order of the CIT(Appeals) was not filed before this Tribunal even though the same property was treated as commercial property in wealth-tax proceeding. Therefore, according to the Ld. representative, there was a reasonable cause on the part of the assessee for not filing the appeal within the time provided. The Ld. representative further submitted that when the property was treated as commercial property under the wealth-tax proceeding, the same property cannot be treated as house property under the income-tax proceeding. In view of this conflicting finding of authorities below, the matter needs to be resolved by this Tribunal, therefore, the assessee has a merit in the appeal. Hence, a lenient view needs to be taken for condoning the delay.
We have heard Shri Supriyo Pal, the Ld. Departmental Representative also. According to the Ld. D.R., there was no reasonable cause for not filing the appeal before this Tribunal within the stipulated period, therefore, the delay cannot be condoned.
We have considered the rival submissions on either side and perused the relevant material available on record. It is not in dispute that there was a delay of 505 days in filing the appeal.
From the material available on record it appears that Commissioner Wealth Tax (Appeals) by an order dated 26.11.2015, found that the property at 52, Beemanna Mudali Garden Street, Chennai was used for business of the assessee, therefore, it is exempted from the purview of Wealth Tax Act. The assessee appears to have one Shri P.S. Prabhakar, Chartered Accountant in respect of penalty proceeding initiated under Section 271(1)(c) of the Act. At that time it was brought to the notice of the assessee that Shri P.S.
Prabhakar has not filed appeal against the order of the CIT(Appeals). Therefore, this Tribunal is of the considered opinion that when the property was found to be used in the business of the assessee under the wealth-tax proceeding, how the very same property can be considered as house property while claiming exemption under Section 54F of the Act needs to be examined.
Since the assessee could not file the appeal against the order of the CIT(Appeals) and the fact of non-filing of the appeal was brought to the notice of the assessee by Shri P.S. Prabhakar, Chartered Accountant, in the course of penalty proceeding under Section 271(1)(c) of the Act, this Tribunal is of the considered opinion that there was reasonable cause on the part of the assessee for not filing the appeal within the stipulated time. Accordingly, the delay of 505 days in filing the appeal is hereby condoned and the appeal of the assessee is admitted.
Now coming to the merit of the appeal, the assessee has filed copies of order of the Commissioner of Wealth Tax (Appeals)- 14, Chennai, the letter of the Tamil Nadu Electricity Board and also from the Corporation of Chennai. These documents were not available before the Assessing Officer. Therefore, this Tribunal is of the considered opinion that the matter needs to be reconsidered by the Assessing Officer. Accordingly, the orders of the authorities below are set aside and the issue of claim of exemption under Section 54F of the Act is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the issue afresh in the light of the material available on record and that may be filed by the assessee and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 28th October, 2016 at Chennai.