HOTEL MALVAN SAMUDRA,MUMBAI V. COMMISSIONER OF INCOME TAX (APPEALS) NFAC, MUMBAI

ITA 4885/MUM/2024

AI Insights

The case involves Hotel Malvan Samudra, the appellant, contesting an order from the Learned Commissioner of Income Tax (Appeals) which dismissed their appeal as not maintainable due to being filed beyond the permissible time limit without sufficient cause for delay. The appellant had initially filed a return for A.Y. 2019-20, which was subjected to a rectification order by the Assessing Officer, leading to double taxation of the same income. The appellant's subsequent appeals for rectification and condonation of delay were rejected, prompting the appeal to the Tribunal. The Tribunal, referencing the Supreme Court's extension of limitation periods due to the COVID-19 pandemic, found merit in the appellant's arguments and restored the case for a decision on its merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470235 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Other Referred Cases: Collector, Land Acquisition Vs. MST. Katiji & Ors.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Set aside; Period of limitation; Right to appeal; Time period of passing order
• Section: 250; 154

Judgement Text

"Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI B R BASKARAN, ACCOUNTANT MEMBER AND SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER ITA NO. 4885/MUM/2024 (A.Y: 2019-20) Hotel Malvan Samudra Old Court Bldg, Station Road Vikhroli (west), Maharashtra – 400 012 PAN: ASSPS0021R Vs. ITO Ward 27(1)(1) R. No. 124, Piramal Chambers, Lalbaug, Parel, Maharashtra – 400 012 (Appellant) (Respondent) Assessee Represented by : Shri Ramesh Iyer, Ld. AR Department Represented by : Shri Umesh Chandra Sinha, Ld. DR Date of conclusion of Hearing : 13.11.2024 Date of Pronouncement : 03.01.2025 O R D E R PER RAJ KUMAR CHAUHAN (J.M.): 1. This appeal is filed by the appellant/assessee against the order dated 26.07.2024 of Learned Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre, Delhi [hereinafter referred to as the “CIT(A)”],passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] for the A.Y. 2019-20, wherein the ITA No. 4885/Mum/2024 Hotel Malvan Samudra Page | 2 appeal of the assessee by the Ld. CIT(A) was dismissed as not maintainable because it was found that the appeal has been filed beyond the time limit permitted u/s. 249 of the act without any sufficient cause for condonation of delay. 2. The brief facts of the case are that the assessee has e-filed its return of income for A.Y. 2019-20 on 07.00.2019 declaring profits and gains from business after deducting allowable remuneration of interest paid to partners and the taxable income considered by the assessee was Rs. 15,88,790/-. But the AO has not considered and levied on the same income twice and passed order u/s 154 dated 16.09.2020. In response assessee filed various rectification u/s 154 on 22.01.2020 to 23.02.2022 to rectify the mistake apparent, but the same could not processed. 3. Aggrieved by the order of AO, assessee preferred the appeal before Ld. Ld. CIT(A) requesting condonation of delay, but the Ld. CIT(A) did not find those grounds justified and sufficient cause for condonation of delay and has dismissed the appeal without considering the merit of the appeal. ITA No. 4885/Mum/2024 Hotel Malvan Samudra Page | 3 4. Aggrieved by the said impugned order, the assessee is in appeal before us and has raised following grounds in the appeal: 1. The Ld. CIT(Appeals) has erred in dismissing the appeal stating that the condonation of delay for filing appeal is rejected without considering the efforts taken by the assessee for getting the rectification processed. 2. The Ld. CIT (Appeals) has erred in not considering deduction for allowable remuneration and interest due to which the Profits and Gains of Business and Profession have been considered incorrectly. 3. The Ld. CIT (Appeals) has ignored that the remuneration and interest has been taxed in the hands of partners thus causing double taxation of the same income. 4. The appellant further reserves the right to add, amend or alter the aforesaid grounds of appeal as they may think fit by themselves or by their representatives. 5. It is brought to our notice that there was sufficient cause for condonation of delay as mentioned in form no. 35 and the impugned order is therefore liable to be set aside and an opportunity of hearing need to be granted. The Ld. DR has relied upon the judgment of the Ld. CIT(A) stating that there was no sufficient cause for condonation of delay and the judgment is legally perfect. 6. We have considered the submissions made by Ld. DR as well the material placed on record. The observation of the Ld. CIT(A) shows that ITA No. 4885/Mum/2024 Hotel Malvan Samudra Page | 4 the Ld. CIT(A) has adopted a hyper-technical approach while considering the grounds of condonation of delay in the case of the appellant. 7. It is evident that the assessment order passed on 16.09.2020 during the Covid-19 period and the period of limitation for filing the appeal has also been expired during the Covid period. The Hon’ble Supreme Court in Suo Moto Writ Petition (Civil) No. 3 of 2020 vide order dated 10.01.2022, was pleased to direct the condonation of delay on account of covid pandemic and extended limitation period for judicial and quasi judicial proceedings from March 15, 2020 to February 28, 2022. The Hon’ble Supreme Court has further allowed the filing of the proceedings whatever it may be within the limitation period starting the limitation from 01.03.2022. The appeal was instituted before the Ld. CIT(A) on 10.03.2023. 8. The right of appeal to the Ld. CIT(A) u/s. 248 is a statutory right granted to the appellant/assessee. The statutory right cannot be denied to an assessee unless there is inordinate delay or gross negligence on the part of the assessee. It is settled law that the rules and procedure is ITA No. 4885/Mum/2024 Hotel Malvan Samudra Page | 5 handmade of justice and the adjudicating authorities should not deny a statutory right of appeal on technical grounds. 9. Nothing contrary has been brought on record by the respondents which may contradict and falsify facts alleged by the appellant in support of seeking condonation of delay. The Hon'ble Supreme Court in the case of Collector, Land Acquisition Vs. MST. Katiji&Ors., [1987] 167 ITR 471 (SC),dated 19.02.1987, was pleased to hold regarding the condonation of delay as under: “The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits”. The expression “sufficient cause” employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making of justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that: 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late. 2. 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 is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.” ITA No. 4885/Mum/2024 Hotel Malvan Samudra Page | 6 10. In the facts and circumstances as discussed above and because of the law laid down by the Hon’ble Supreme Court in Collector, Land Acquisition Vs. MST. Katiji & Ors (supra),we are of the considered opinion that there was sufficient cause for condoning the delay for filing this appeal before the Ld. CIT(A) by the assessee. 11. For the above reasons, the impugned order of the Ld. CIT(A) is not sustainable in the eyes of law and accordingly set aside with the directions to restore the case of the appellant on the file of Ld. CIT(A) who shall dispose the same on merit after duly considering the material brought on record by the appellant before the Ld. CIT(A). The appellant/assessee shall present its case before the Ld. CIT(A) within 90 days of this order. 12. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 03.01.2025 Sd/- Sd/- (B R BASKARAN) (RAJ KUMAR CHAUHAN) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) Mumbai / Dated 03.01.2025 Dhananjay (Sr. PS) ITA No. 4885/Mum/2024 Hotel Malvan Samudra Page | 7 Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mumbai "