BOMBAY GASLIGHT STORES,VISAKHAPATNAM vs. DCIT ,ACIT, CIRCLE 3(1),, VISAKHAPATNAM

I have gone through the condonation petition filed by the assessee and find that the assessee was prevented by a reasonable cause to file the appeal belatedly. Hence, I condone the delay and admit the appeal for hearing.

Brief facts of the case as submitted by the assessee are that the assessee is a partnership firm, being assessed to tax with the same status and same PAN for the past three decades. However, the assessee found that the allotted PAN is indicating the status as AOP instead of partnership and the same was brought to the notice of the income tax department and also to the notice of the assessing officers several times, but no action was taken, despite of many reminders given by the assessee. Assessment during the impugned assessment year was completed in the status of AOP and the CPC has disallowed deductions u/s 40(b)(iv) of the Act in respect of interest and remuneration paid to the partners and made addition of the same.

Aggrieved by the intimation u/s 143(1) of the Act, the assessee preferred an appeal before the CIT(A) with the delay of 1008 days and filed condonation petition. Relying on various judicial precedents, the Bombay Gaslight Stores, Visakhapatnam Ld.CIT(A) rejected the condonation petition filed by the assessee, holding that there is no sufficient cause to file the delayed appeal and accordingly dismissed the appeal of the assessee .

Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal and raised the following grounds : Incorrect PAN Designation: The Income Tax Department erroneously designated our entity as an Association of Persons (AOP) instead of a partnership firm due to a technical mistake in the PAN number issued. Historical Assessment: For the past three decades, our firm has consistently been assessed for income tax as a partnership firm, with assessments completed by the department reflecting this status. Documentation: All official records, including the PAN card issued by the department, corroborate our status as a registered partnership firm. The issuance of the PAN card was based on partnership deed documentation, further affirming our classification. Lack of AOP Existence: There is no evidence or documentation indicating the existence of an Association of Persons related to our entity. The assessment completed by the Central Processing Centre (CPC) solely relied on the technical discrepancy in the PAN number, overlooking the substantive legal status of our firm. Repeated Notifications: Despite multiple notifications to the department highlighting the error in our PAN designation and requesting correction, no action was taken by the assessing officers. Unilateral Assessment: The sudden completion of the assessment by the CPC, treating us as an AOP, without due consideration of our documented status as a partnership firm, is unjust and constitutes a breach of fair assessment practices.

Per contra, the Ld.DR submitted that even before covid pandemic, the assessee failed to file the appeal and he has not given any sufficient reason for the delay of five months prior to the covid pandemic and also Bombay Gaslight Stores, Visakhapatnam even after covid pandemic, the assessee failed to give any sufficient cause which prevented the assessee to file the appeal in time but to file the appeal beyond the period of 8 months. The Ld.DR, therefore submitted that there is no valid reason to condone the delay of 1008 days and pleaded to uphold the order of the Ld.CIT(A) and dismiss the appeal of the assessee.

I have heard both the parties and perused the material placed on record. In the instant case, the assessment order was passed and served on the assessee on 03.09.2019, therefore, the assessee ought to have filed appeal within 30 days before the Ld.CIT(A) from the date of receipt of the assessment order i.e. on or before 02.10.2019 and considering 02.10.2019 being a national holiday, the assessee ought to have filed the appeal by 03.10.2019. Lockdown during covid pandemic started in March 2020 and there is a delay of 5 months even before the lockdown started, from the date from which the assessee ought to have filed the appeal before the Ld.CIT(A). Covid pandemic pacified in March, 2022 and the assessee preferred appeal before the Ld.CIT(A) in November 2022, which means the assessee did not prefer appeal for eight months even after covid. The assessee has not given any valid reasons for non filing of the appeal even after covid pandemic for about eight months. The Ld.AR