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Income Tax Appellate Tribunal, MUMBAI BENCHES “E, ‘MUMBAI
Before: SHRI C.N. PRASAD, HON’BLE & SHRI RAJENDRA, HON’BLE
Assessee by : Mrs. Vasanti Patel – Adv. Department By : Shri N. Sathya Moorthy - DR Date of hearing : 20/07/2016. Date of pronouncement : 18/10/2016. O R D E R PER C.N. PRASAD, JUDICIAL MEMBER
This appeal is filed by the assessee against the order of the ld.CIT(A)-9, Mumbai dated 13/12/2012 for the Assessment Year 2005-06.
The assessee has raised the following concise grounds:- “Dismissal of appeal in liminie
The CIT(A) erred in failing to appreciate the fact that hearing of the appeal was adjourned on several occasions as remand report was called for from the Assessing Officer (AO) and the same was awaited.
Completion of assessment proceedings without valid notice
2. The CIT(A) erred in failing to adjudicate on the additional grounds of appeal No 7 and 8 in which it was mentioned that the order passed under section 143(3) of the Income-tax Act, 1961 (the Act) is null and void and bad-in-law as the notice under section 143(2) was issued and served on the appellant beyond the last date for the same.
Addition of Rs.50,00,000/- under section 68 of the Act being increase in unsecured loan as alleged unexplained cash credit
3. The CIT(A) erred in failing to appreciate that details of unsecured loans taken by the appellant were adequately disclosed and fully explained by the records filed by the appellant and which were available with the AO when he passed the assessment order for the said year.
Disallowance of Rs.38,32,000/- being prior period expenditure
4. The CIT(A) erred in failing to appreciate that prior period figure of RS.12.46 lacs is the netted off figure of prior period expenditure of Rs.25.89 lacs and prior period income of RS.13.43 lacs, and thus action of AO has resulted in double taxation of prior period income of Rs.13.43 lacs.
Disallowance of Rs.40,00,000/- lacs on account of write off of bad debts
5. The CIT(A) erred in failing to appreciate that after amendment to section 36(1 )(vii) of the Act the only requirement is that the debt written off is to be debited to the profit & loss account of the appellant and it is not necessary for the appellant to establish that the debt, in fact, has become irrecoverable.
Disallowance of Rs.15,50,000/- on account of foreign commission paid
6. The CIT(A) erred in failing to appreciate that details of foreign commission paid by the appellant were adequately disclosed and fully explained by the records filed by the appellant and which were available with the AO when he passed the assessment order for the said year.
Disallowance of Rs.10,30,119/- being deduction under section 350 of the Act
7. The CIT(A) erred in failing to appreciate that eligibility of the appellant to claim deduction under section 350 of the Act and the amount of the said deduction allowable to the appellant has been accepted by the AO.
Disallowance of Rs.18,78,740/- being employee's contribution to PF & ESIC
8. The CIT(A) erred in failing to appreciate that contribution deposited after the due date but before the close of the accounting year cannot be added to the income of the appellant.
The aforesaid grounds of appeal are without prejudice to one another. The appellant craves leave to amend, to modify, to alter, to substitute and / or to delete all or any of the aforesaid grounds of appeal at or before the hearing.”
The Authorized Representative of the assessee at the outset submitted that there is a delay of 87 days in filing the appeal before the Tribunal. She submits that condonation application along with affidavit of the Whole-time Director of the assessee company explaining the reasons for delay is filed by stating as under:-
“1. I am a whole-time Director of Sabero Organics Gujarat Limited (Sabero) since December 2011.
2. The order of the CIT(A) - 9, Mumbai dated 13.12.2012 for assessment year 2005-06 was served on Sabero on 6.03.2013. As such, the due date for filing the said appeal was 5.05.2013. Hence, there is a delay of about two months in filing the said appeal. The main issue in the appeal preferred by Sabero for the said year is that the order passed under section 143(3) of the Income-tax Act, 1951 (the Act) is null and void and bad-in-law as the notice under section 143(2) was issued and served on Sabero beyond the last date for the same. Further, a remand report on the said issue was called for by the CIT(A) and the same was awaited and in the mean time the CIT(A) dismissed Sabero's appeal in liminie. 3 There was change in ownership of Sabero and the same was taken over by Murugappa Group in December 2011.
The matters relating to assessment and appellate Sabero under the Income-tax Act were being handled by Vinay H. Punjabi & Associates a firm of Chartered Accountants in Mumbai for the last several years.
After the change in ownership and management of the company it was decided to change the chartered accountants of the company handling tax matters. However, it took some time for the new management to come to grips with the various issues involved and to take a decision as to the future course of action to be taken.
6. Having decided to change its Chartered Accountants, the process .of retrieving papers from the earlier Chartered Accountants office and briefing the new Chartered Accountants took time and the process was completed very close to the due date of filing appeal. Thereafter, we had a meeting with our Chartered Accountant and the Counsel and we were advised that the appeal should be filed against the said order of CIT(A) before the Hon'ble ITAT, Mumbai.
It is submitted that the last day of filing the present appeal was 25.05.2013. But on account of circumstances narrated above, the appeal could not be filed earlier, but now the same is being filed In the aforesaid circumstances and from the dates and events stated above, it would be seen that on account of aforesaid reasons, the appeal is being filed only after a delay of about two months.”
4. For the reasons stated in the affidavit, Authorized Representative of the assessee submitted that the delay may be condoned and further submitted that this appeal may be remitted back to the file of the ld.CIT(A), who dismissed the appeal in limini without giving proper opportunity of hearing to the assessee.
5. The Departmental Representative has no serious objection in remitting the matter back to the file of the ld. CIT(A).
We have considered the submissions, perused the reasons in affidavit for delay in filing the appeal. We are of the view that the assessee has a reasonable cause in not filing the appeal before the stipulated time of 60 days. Thus, we condone the delay in filing the appeal and the appeal is admitted for hearing.
7. Coming to the additions sustained by the ld. CIT(A), we find from the order of the ld. CIT(A), who passed exparte order applying the decision of the Delhi Tribunal in the case of CIT v. Multiplan India Ltd. (1991) 38 ITD 320 (Del). In the interest of justice, we restore the matter back to the file of the ld. CIT(A) for fresh adjudication on merits in accordance with law. The assessee shall cooperate in the proceedings before the ld. CIT(A) without taking adjournments without cause.
In the result, appeal of the assessee is allowed for statistical purpose.