M/S PETRONET LNG LTD.,NEW DELHI vs. DCIT, NEW DELHI

PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER

1. This is an appeal file by the assessee directed against the order of the Commissioner of Income Tax (A) dated 28.1.2011 for the assessment year 2004-05 on the following grounds :-

1. “That the learned Commissioner of Income Tax (Appeals) has erred both on law as well as on facts in dismissing the appeal in limine.

2. That the learned Commissioner of Income Tax (Appeals) ought to have condoned the alleged delay in filing the appeal, which appeal had been filed on 30.08.2010 against the order of assessment dated 27.09.2006, which order was served, without notice of demand under section 156 of the Act on assessee on 21.11.2006, despite the fact that, it had not been disputed that no Notice of demand had been served on assessee in Petronet LNG Ltd. vs. DCIT respect of the said order of assessment and time to file an appeal commences with the service of notice of demand and no valid appeal could be filed without a notice Of) demand.

3. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that no appeal could have been filed without a notice of demand and in the absence of notice of demand it was advised by the Chartered Accountant to file appeal as and when, the notice of demand is served. In fact it was only when the Chartered Accountant advised when the matter was reviewed about the pending appeals for the instant assessment year after the order of the Tribunal was received and an application was filed on 13.08.2010 for the service of notice of demand and thereafter an appeal was filed on 30.8.2010 as such it could not be held that the appeal filed was belatedly filed.

4. That the learned Commissioner of Income Tax (Appeals) has further failed to appreciate that merely because the assessee didn't request the AO to serve a copy of notice of demand u/s 156 prior to 13.08.2010, could not be regarded as a valid ground for holding that there was a delay in filing appeal and further the purported delay if any occurred could not be condoned.

5. That the learned Commissioner of Income Tax (Appeals) failed to appreciate that the Apex Court in the case of Collector, Land Acquisition vs Mst. Katiji And Others reportedin 167 ITR 471, wherein it has been held that no prejudice would be caused to entertain an appeal though filed belatedly.

6. That the learned Commissioner of Income Tax (Appeals) failed to appreciate that assessee has not slept over the matter and the judgment relied on by him are totally inapplicable.

7. That the learned Commissioner of Income Tax (Appeals) further failed to appreciate that the addition made to income of Rs. Rs. 2,33,91,260/- otherwise is untenable in law as had been held by Hon'ble ITA T and Hon'ble HC for the preceding years where similar additions made have been deleted, and as such the addition made of Rs. 2,33,91,260/- as interest income ought to have been deleted . “

2. Ld. CIT(A) had dismissed the appeal of the assessee by rejecting the application for condonation of delay in filing of the appeal by 47 months.

3. Aggrieved the assessee is in appeal.

4. Ld. Counsel for the assessee Shri C.S. Aggarwal, Senior Advocate, submitted that :

a) The assesee is a PSU Company; b) It was not served with a notice of demand and hence, it did not filed the appeal, as it was under bonafide belief that no appeal can be filed without the notice of demand; c) The assesee company had not filed appeal within 30 days from the date of service of the order of assessment, since it did not receive the notices of demand and as it was so advised by its Chartered Accountant Shri Mahesh ; d) Rule 45, of the Income Tax Rules, prescribes memo of appeal in form No. 35 and requires that this should be accompanied by, the order appealed against and the notice of ; e) The period to file the appeal should be taken, as an when notice of demand u/s 156 of the Income Tax Act, 1961 is served and that such a notice of demand has not been served till date, despite request made to the AO on 13.8.2010; f) The company executive Shri R.K. Goel filed a duly sworn affidavit confirming these facts that the delay of 45 months was caused on account of sufficient cause i.e. non receipt of notice of demand u/s 156; g) That there is no finding of the Ld. CIT(A) that the notice of demand was served on the assessee and the period of limitation to prefer an appeal is to be counted after such notice of demand is served; h) That the issue involved in the instant appeal is identical to the issue that arose in the preceding assessment years and the Hon’ble ITAT has adjudicated all the issues in favour of the assessee and under those circumstances, no motive can be attributed to the assessee for not filing the appeal in time. i) That the assessee had a bonafide belief that the appeal can be filed, only on receipt of the demand notice and such bonafide belief was due to a professional opinion and hence there is reasonable cause for condonation of delay. He relied on the following case laws :-

He filed copies of letter of ACIT range XIX, New Delhi dated 8.7.2015, wherein a letter of the Deputy Commissioner of Income Tax, Circle XIX, New Delhi dated 8.7.2015 was enclose and copy of the income tax computation form and notice of demand u/s 156 of the Income Tax Act and copy of speed post acknowledgement date 17.11.2006 was filed. He argued that the AO has confirmed that copy of the assessment order along with the computation form and demand notice showing nil demand was dispatched by speed post on 17.11.2006 to the assessee. He argued that these papers are being filed on the directions of the bench and the entire base on which the assessee rested its case is demolished by these papers. He further submitted as follows :- a) At page 43 of the assessee’s paper book a letter dated 12th August,2006 is addressed to Deputy Commissioner of Income Tax requesting for notice of demand alongwith the income tax assessment order and this was filed only on 13th August, 2010. He submits that this shows absolute negligence on the part of the assessee and that no explanation is given at any stage of the proceedings before the CIT(A) on this discrepancy. b) The assessment resulted in NIL demand, after adjustment of taxes. Issuing notice of NIL demand cannot be a basis for not filing an appeal. c) A delay of four months is an abnormal delay and the assessee was negligent and hence not demonstrated reasonable cause.

Petronet LNG Ltd. vs. DCIT d) The affidavit filed by one of the officer of the company Shri R.K. Goel, Senior

Manager mentioned that Shri Mahesh Gupta Chartered Accountant had advised the company to await for the notice of demand and whereas there is no independent confirmation from Shri Mahesh Gupta. e) That the assessee states that he has not received notice of demand and that an appeal cannot be filed without a notice of demand and that he has asked for the notice of demand. At the same time, the assessee filed an appeal without notice of demand on 30.8.2010. What the assessee has done now could have been done earlier.

5.1. He distinguished the decisions relied upon by the Ld. Counsel for the assessee and submitted that the issue of condonation of delay is a factual matter and the circumstances on each case are different.

7. Rival contentions heard. On careful consideration of the facts and circumstances of the case and a perusal of the papers on record and the orders of the authorities below as well as case law cited, we hold as follows.

8. The revenue in this case has stated that the notice of demand u/s 156 was served on the assessee along with the assessment order and computation form.

Evidence of dispatch of the same through speed post on 17.11.2006 is produced before us. The assessee denies the receipt of the same, but is unable to controvert the documentary evidence produced by the revenue. When the document is sent by speed post and when the same is not returned to the sender by the postal department, the presumption is that it has been served on the assessee. Hence we presume that the notice of demand u/s 156 was served on the assessee along with the assessment order and computation form. Ld.Counsel for the assessee wanted the Bench not to take cognizance of these documents filed by the Revenue. We are unable to accept this submission. Ld. DR pointed out that these are filed only on the direction of the bench. We see no reason as to why these papers filed by the revenue have to be rejected. Thus the entire basis on which the assessee based his argument for condonation of delay is devoid of merit.

The assessee stated in his letter dated 27th January, 2011 addressed to the 10.

Commissioner of Income Tax (A) that it was only after it received the order of the Tribunal on 30.7.2010 for the assessment years 2001-02, 2002-03 and 2003-04 the status of the appeal in respect of the instant asstt. Year 2004-05 was examined and it was pointed out that no appeal has been filed, as no notice of demand was received. This statement shows that during the entire interregnum period of more than three years, the assessee has not pursued the matter to obtain the -NIL- notice of demand. This period of delay has not been explained.

This is a self-serving document as the Chartered Accountant has not corroborated the same.

As already noted the very ground on which the assessee based its entire case for condonation of delay fails and consequently we uphold the order of the first appellate authority and dismiss the appeal of the assessee.

Order pronounced in the open court on 30th September, 2015. sd/- sd/- (G.C. GUPTA) (J. SUDHAKAR REDDY) VICE PRESIDENT ACCOUNTANT MEMBER Dated: the 30th September, 2015 ‘veena’ Copy of the Order forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR 6. Guard File By order Dy. Registrar

Sl. Description Date No.

1. Date of dictation by the Author 9.7.2015

5. Date of approved order comes to the Sr. PS

6. Date of pronouncement of order

9. Date of dispatch of order