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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & MS ASTHA CHANDRA
Gaurav Raja Pathak DCIT, Circle 1(1), Pune B-2, 2nd Floor, Minar Apt, Vs. Cts No.124-1, Law College Road, Erandwana, Pune – 411004 PAN: ALEPP5132D (Appellant) (Respondent) Assessee by : Shri Kishor B Phadke Department by : Shri Ramnath P Murkende Date of hearing : 05-11-2024 Date of pronouncement : 07-11-2024 O R D E R PER R.K. PANDA, VP :
This appeal filed by the assessee is directed against the order dated 28.05.2024 of the Addl/JCIT(A), Jaipur relating to assessment year 2021-22.
Facts of the case in brief, are that the assessee is an individual and filed his return of income for the impugned assessment year on 30.12.2021 declaring total income of Rs.65,47,900/-. The assessment proceedings were completed on 22.03.2022 vide order u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) wherein the CPC disallowed the set off of Rs.35,95,270/- being remainder of current year capital loss.
2 3. The assessee filed an appeal before the Addl/JCIT(A), who vide order dated 28.05.2024 dismissed the same on account of delay in filing of the appeal by observing as under: “Decision on Condonation of Delay: The facts of the case and the grounds raised by the appellant have been considered carefully. It is noticed that there is a delay in filing of appeal. The appeal is to be filed within 30 days of the date of the service of the order. During the appellate proceedings, it is found from the Form No. 35 that the appellant filed the present appeal on 04.10.2022 whereas the date of order u/s 143(1) was on 22.03.2022 and as per Form No. 35, the date of service of order was 22.03.2022. As per the dates given in Form 35, it appears that the appeal is filed beyond the prescribed due date. The appellant has stated that he had filed rectification application before CPC and waited for its outcome before filing the appeal and hence, the delay in filing of appeal. The reason stated by the appellant that he had filed rectification u/s 154 is not acceptable as filing of appeal and filing of rectification application are two separate legal processes and filing of rectification application cannot prevent appellant to file the appeal in time. The reasons stated by the appellant have been perused but are not found to be tenable as the appellant has failed to demonstrate sufficient cause or any other hardship for delay in filing of the present appeal and hence, the same cannot be condoned. The above view has also been taken by Hon'ble High Court of Madras in the case of Siva Industries & Holdings Ltd. Vs Assistant Commissioner of Income-tax, Company Circle VI(3), Chennai [2023] 153 taxmann.com 354 (Madras) in a recent decision. Thus, the appeal filed by appellant is not maintainable as the same is filed beyond the time limit permitted u/s 249 of the IT Act for filing of appeal and there is no sufficient cause for delay in filing of appeal, which can be condoned. Accordingly, the appeal of the appellant is treated as dismissed u/s 250 r.w.s.251 of the Act without considering the merits of the appeal filed.”
Aggrieved with such order of the Addl/JCIT(A), Jaipur, the assessee is in appeal before the Tribunal by raising the following grounds:
1. General ground of appeal The learned ADDL/ JCIT (A)
2. Jaipur, erred in law and on facts in confirming the disallowance of set-off losses of Rs. 35,95,270 (being the current year's capital loss u/s 112 against the long-term gains from the sale of residential House Property) thereby increasing the returned income by Rs. 35,95,270/-.
3 2. Non-Condonation of the Delay Learned ADDL/JCIT (A)-2 Jaipur erred in law and on facts in rejecting the appellant's appeal on account of a delay of 166 days in filing an appeal memo. Learned AO ought to have condoned the genuine delay of 166 days caused due to the pursuance of the wrong remedy of filing a rectification application, filing of grievances, following up with CPC etc 3. Technical Ground of appeal-
No Power to CPC for disallowance u/s 143(1) The learned ADDL/ JCIT (A)-2 Jaipur erred in law and on facts in confirming the disallowance of set-off losses of Rs. 35,95,270 made by learned DCIT, CPC, Bengaluru in intimation order u/s 143(1), assessee contents that the adjustment made by the CPC in its intimation u/s.143(1) is not permissible since as per section 143(1)(a) the learned CPC does not have power to disallow the set-off of losses.
4. Merits of the case The appellant contends that, the learned AO ought to have granted a set-off of Rs. 35,95,270 being the remainder of the current year's capital loss u/s 112 against the long-term gains from the sale of residential House Property as he possesses all the required documents to justify the genuineness of losses claimed in the ITR.
5. Appellant craves leave to add/alter/modify/amend/delete all or any of the grounds of appeal.
The Ld. Counsel for the assessee at the outset submitted that after receipt of the order, the assessee had filed an application u/s 154 of the Act before the CPC, Bangalore, who vide order dated 22.07.2022 rejected the same. The assessee was subsequently advised by a Senior Counsel that the proper course of action is filing of an appeal before the first appellate authority. Accordingly, the assessee filed the appeal before the CIT(A) with a delay of 166 days. Referring to the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) and various other decisions, he submitted that the delay should have been condoned by the Addl/JCIT(A) and he should have 4 decided the appeal on merit. He accordingly submitted that he has no objection if the matter is restored to the file of the Addl/JCIT(A) with a direction to condone the delay and decide the appeal on merit.
The Ld. DR on the other hand heavily relied on the order of the Addl/JCIT(A).
We have heard the rival arguments made by both the sides and perused the orders of the Assessing Officer and the Ld. Addl/JCIT(A). We find the Addl/JCIT(A) dismissed the appeal filed by the assessee on account of delay in filing of the same by 166 days. It is an admitted fact that the assessee after receipt of the intimation from the CPC, Bangalore had filed the rectification application which was also dismissed and thereafter the assessee filed an appeal before the Addl/JCIT(A) with a delay of 166 days.
We find the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay 5 is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.
Respectfully following the decision of the Hon'ble Supreme Court cited (supra) and considering the fact that the delay in filing of the appeal by the assessee was not deliberate but a technical defect, we restore the issue to the file of the Addl/JCIT(A) with a direction to condone the delay in filing of the appeal and decide the issue on merit as per fact and law after providing due opportunity of being heard to the assessee. The assessee is also hereby directed to submit the requisite details before the Addl/JCIT(A) on the appointed date without seeking any adjournment under any pretext, failing which the Addl/JCIT(A) is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.