MALPUR TALUKA PRIMARY TEACHERS SAHKARI SAKH & GRAHAK SAHKARI MANDLI,MALPUR vs. THE ACIT., HIMATNAGAR CIRCLE, HIMATNAGAR

On perusal of the grounds of appeal, the solitary issue for adjudication is that the assessee is aggrieved by the action of the learned NFAC/CIT(A) in confirming the ex parte assessment order under section 144, resulting in the rejection of the claim of deduction under section 80P(2)(d) amounting to Rs.39,80,161/- in respect of interest income from the cooperative. The assessee's appeal before the first appellate authority was outrightly rejected on the grounds that

Before me, the ld.counsel for the assessee primarily challenged the action of the Revenue authorities in rejecting the request of the assessee for condonation of delay in filing appeal before the ld.NFAC/CIT(A). The assessee has filed written submissions in this behalf before me, pleading interalia that the impugned order of the NFAC was uploaded by the Department on 8.4.2021, which was brought to the notice of the assessee very recently. The moment the assessee came to the notice of the impugned order being passed and uploaded in the Department’s portal, it preferred appeal, and in the interregnum a delay of 246 days i.e. between 8.5.2021 to 9.1.2022 in filing appeal was caused. It is further pleaded that the email id registered with IT Portal was “rajeshamritlalpatel@yahoo.in”, which was email id of tax consultant of the assessee, who was retained by the assessee for a brief period of time to look after the taxation matters of the assessee. However, the said tax consultant has failed to intimate the assessee about the assessment proceedings and the requirement of compliances in response to the notice issued by the Department in the matter. It was only when the assessee received physical copy of assessment order for Asst.Year 2014-15, the assessee approached the earlier tax consultant, Shri Nitin Patel, and enquired about the same, and also the fate of assessment of succeeding assessment year. Due to tardy approach of its earlier consultant, the assessee changed the above email.id to another new id viz. “malpurptm.1962@gmail.com”, and vide letter dated 30.12.2021 requested the Department to make changes in the assessee’s email.id and to effect all the future communication accordingly. This fact was clearly pointed out to the ld.NFAC in the state of facts filed before it, to explain the reasons for condonation of delay in filing the appeal.

It is further pleaded that the assessee is a cooperative society duly registered under Gujarat Cooperative Society Act and engaged in the business of providing credit facilities to its members, who are teachers; that there is no personal interest involved in the business of the assessee-society, and many a times, changes in the Managing Committee or Secretary/ Treasurer do take places, and during such time, lapse of this type does take place for bonafide and genuine reasons. The ld.counsel for the assessee submitted that the delay in filing appeal before the first appellate authority was not deliberate or intentional so as not to condone the delay. To buttress his contention, the ld.counsel for the assessee also relied on various case laws including the judgment of the Hon’ble Supreme Court in the case of N. Balakrishnan Vs. M. Krishnamurthy, (1998) (7 SCC 123) to the proposition that the law of limitation should be liberally interpreted to achieve the ends of justice. The ld.counsel for the assessee further submitted that even otherwise, the assessment proceedings fell within the COVID period whereby the Hon’ble Supreme Court had extended the period of limitation in all the proceedings w.e.f. 15.3.2020 to 02.10.21 and subsequently extended upto 28.2.2022. In that view also, the impugned delay caused in filing appeal before the ld.first appellate authority requires to be condoned, and the appeal of the assessee ought to have decided on merit. Since the assessee has a very good case on its hand qua the imposition of huge addition, if delay is not condoned, the assessee will suffer irreparable loss and injury, and therefore, the impugned deserves to be condoned in the interest of justice, equity and good conscience.

On the other hand, the ld.DR supported the orders of the Revenue authorities.

As could be seen from the record, the assessment order was passed under section 144 r.w.s. 144B on 8.4.2021, and the notices were issued by the AO to the email.id of the earlier tax consultant of the assessee, who was subsequently changed, as he did not intimate the communication/notices issued by the Department. It was the contention of the assessee that when the return for Asst.Year 2021- 12 was to be filed by the new tax consultant, it became aware of the impugned assessment proceedings and consequent orders. The assessee vide letter dated 30.12.2021 immediately updated the email.id with new one, and on surfing, the assessee found the impugned orders. A perusal of the impugned appellate order at page no.2, it can be noticed that all the notices/letters etc. issued through email by the Department, were addressed to the email.id “rajeshamritlalpatel@yahoo.in”, which was incidentally email.id of the earlier tax consultants, who failed to either intimate the assessee or comply with the same on behalf of the assesse. Till that date, the assessee was, in fact, not aware of the assessment proceedings, but immediately after receipt of assessment order along with penalty notice for Asst.Year 2014-15, the assessee rushed to the earlier tax consultant, and advised him to change the email.id for necessary compliance and follow-up for preparation of the appeal.

Furthermore, I note that the assessment proceedings for the assessee were concluded during the challenging period of the COVID- 19 pandemic. It is undeniable that the entire country was brought to a standstill by this devastating crisis. The Hon’ble Supreme Court, recognizing the difficulties faced by litigants nationwide in presenting their cases before judicial or quasi-judicial bodies, extended the period of limitation multiple times until February 28, 2022. Therefore, in light of the Supreme Court's directive, it cannot be argued that the assessee failed to respond to notices without reasonable cause. Thus, declining to condone the delayed appeal would be unjustified.

Looking to facts and circumstances in entirety, I am satisfied that the assessee presents a valid justification for the delay of 246 in filing the appeal with the first appellate authority. The delay primarily stemmed from the inaction of the previous tax consultant engaged by the assessee, compounded by the Department's communication via an incorrect email address, which cannot be attributed to the assessee. Upon becoming aware of the assessment proceedings, the assessee promptly rectified the situation by updating their email address and diligently responding to the notices, proceeding to file the appeal without delay. Notably, there is no indication in the records suggesting any negligence or lack of good faith on the part of the assessee regarding the aforementioned delay, coupled with the fact that the impugned assessment proceedings was taken place during the difficult COVID-period. Therefore, I am inclined to grant leniency

In the result, the appeal of the assessee is allowed for statistical purpose.