SAUNAK MITRA,KOLKATA vs. ACIT, CIR-25, KOLKATA, KOLKATA

The appeal by the Assessee is directed against the order dated 24.2.2015 of CIT(A)-7, Kolkata, relating to AY 2009-10.

The Assessee is an individual engaged in the business of advertising in the name and style of M/S.Colour Purple. The Assessee filed his return of income for AY 2009-10 declaring total income of Rs.16,63,243. An order of assessment u/s.143(3) of S.P.No.50/Kol/2015 & – Saunak Mitra-A.Y.2009-10 1 the Income Tax Act, 1961 (Act) was passed by the AO dated 29.12.2011 in which the AO made the following additions to the total income of the Assessee:

However in the said assessment order in the computation of total income, the AO did not add the addition of Rs.1,18,01,138/-. The Assessee at this stage did not file appeal against the order dated 29.12.2011 because the then counsel advised him that since no addition of Rs.1,18,01,138 was made in the order, there is no need to file any appeal. According to the Assessee, it believed the advice so given and did not file appeal before the CIT(A) against the order dated 29.12.2011.

The AO thereafter found that there was an omission to add the aforesaid sum of Rs.1,18,01,138 to the total income of the Assessee in the order of assessment passed u/s.143(3) of the Act, dated 29.12.2011. He accordingly passed an order u/s.154 of the Act dated 4.6.2012 rectifying the aforesaid mistake and adding the aforesaid sum to the total income of the Assessee.

The Assessee filed appeal against the aforesaid order 4.6.2012 before CIT(A). The CIT(A) dismissed the aforesaid appeal holding that the order u/s.154 of the Act was justified as there was a mistake apparent on the face of the order dated 29.12.2011. The order was passed in January, 2014 as stated by the learned counsel for the Assessee, across the bar.

At this stage, the Assessee approached the present counsel Mr.K.M.Roy who advised the Assessee that the Assessee ought to have filed an appeal against the order u/s.143(3) dated 29.12.2011. An appeal was filed against the order dated 29.12.2011 S.P.No.50/Kol/2015 & – Saunak Mitra-A.Y.2009-10 2 challenging all the additions made in the order u/s.143(3) of the Act before the CIT(A) on 31.1.2014. There was a delay of about 717 days in filing the appeal before the CIT(A).

The assessee filed an application for condonation of delay in filing appeal before CIT(A). The Assessee pointed out to the above circumstances which lead to the belated filing of appeal and prayed for condonation of delay. The Assessee filed an affidavit affirming the facts as stated above and prayed for condonation of delay.

The CIT(A) however refused to condone the delay in filing appeal by observing that the Assessee changed his lawyer and he advised that appeal should be filed. The CIT(A) held that the above reason is not genuine reason which is not out of control of the Assessee. The CIT(A) held that the Assessee failed to discharge his legal obligation without genuine cause. The CIT(A) also observed that the Assessee did not bother to attach any importance to filing of appeal in time.

Aggrieved by the order of the CIT(A), the Assessee has preferred the present appeal before the Tribunal.

We have heard the rival submissions. The learned counsel for the Assessee placed reliance on the decision of the Hon’ble Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji & Ors. (1987) 167 ITR 47. The ld. DR for the revenue, however, opposed the application for condonation of delay. It was submitted by him that the reasons given in the application for condonation of delay are not sufficient to condone the delay which is inordinate.

We have considered the rival submissions. At the outset, we observe that the Hon’ble Supreme Court in the case of Mst. Katiji (supra) has explained the principles that need to be kept in mind while considering an application for condonation of delay. The Hon’ble Apex Court has emphasized that substantial justice should prevail over technical considerations. The Court has also explained that a litigant does not stand to benefit by lodging the appeal late. The Court has also explained that every day’s delay must be explained does not mean that a pedantic approach should be S.P.No.50/Kol/2015 & – Saunak Mitra-A.Y.2009-10 3 taken. The doctrine must be applied in a rational common sense and pragmatic manner.

Keeping in mind the aforesaid principles, we shall consider the claim of the assessee in the present case. Admittedly the advice was given by the counsel who appeared on behalf of the Assessee in the assessment proceedings not to prefer any appeal against the order of assessment as the addition of Rs.1,18,01,138 was not made in the computation of total income in the order dated 29.12.2011. Subsequently when an order u/s.154 of the Act was passed rectifying the aforesaid mistake and when the appeal against the said order was dismissed by the CIT(A) in January, 2014, the Assessee approached the present C.A. who advised the Assessee to file appeal before the CIT(A) against the order of assessment dated 29.12.2011. Thereafter the appeal was filed before CIT(A) without much delay. These facts are not denied by the CIT(A). The appeal has been filed by the Assessee before the CIT(A) on 31.1.2014. Hence, we find that there has been no willful neglect on the part of the Assessee. In such matters the advice of the professional would be the point of time at which the Assessee would begin to explore the option of exhausting all legal remedies. We are also of the view that by condonation of delay there is no loss to the revenue as legitimate taxes payable in accordance with law alone would be collected. We are therefore of the view that the CIT(A) ought to have condoned the delay as the delay in filing the appeal before CIT(A) was owing to a reasonable and sufficient cause. We according condone the delay in filing the appeal before CIT(A). Since the CIT(A) has not decided the appeal of the Assessee on merits of the issues raised in the grounds of appeal, we set aside his order and remand for adjudication the grounds raised by the Assessee in the grounds of appeal on merits. The CIT(A) will afford opportunity of being heard to the Assessee in the set aside proceedings.

In the result, the appeal of the Assessee is allowed. In view of the decision in the main appeal, the Stay Petition does not require any consideration and the same is dismissed as infructuous.