M/S. INSCRIBE GRAPHICS LTD., CHENNAI V. ACIT (OSD), CORPORATE RANGE-2, CHENNAI

ITA 110/CHNY/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5667 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 17-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief; Reasonable cause; Set aside
• Section: 90

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . , BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ ITA NO.: 110/CHNY/2020 / ASSESSMENT YEAR: 2015-16 M/S. INSCRIBE GRAPHICS LTD., 174, DEVELOPED PLOTS, INDUSTRIAL ESTATE, PERUNGUDI, CHENNAI 600 096. PAN: AACCI0211Q V. THE A CIT (OSD) , CORPORATE RANGE 2, CHENNAI. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI I. DINESH, ADVOCATE /RESPONDENT BY : SHRI SURESH PERIASAMY, JCIT /DATE OF HEARING : 11.03.2021 /DATE OF PRONOUNCEMENT : 28.04.2021 / O R D E R PER G. MANJUNATHA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-6, CHENNAI, DATED 20.11.2019 AND PERTAINS TO ASSESSMENT YEAR 2015-16. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 2 I.TA. NO. 110/CHNY/2020 1-1 THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN DISMISSING THE APPEAL ON LIMITATION WITHOUT ADJUDICATING ON MERITS IS BAD IN LAW AND IS LIABLE TO BE SET ASIDE IN TOTO. 1.2 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT CONDONING THE DELAY IN FILING THE APPEAL; EVEN THOUGH THERE IS A SUFFICIENT CAUSE FOR DELAY IN FILING THE APPEAL. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER WITHOUT CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE. 3.1. THE COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO CONSIDER THE FACT WHERE THE ASSESSING OFFICER ERRED IN NOT GIVING CREDIT FOR THE STATE TAXES PAID BY THE APPELLANT IN USA WHILE COMPUTING THE TAXES. 3.2 THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO DIRECTED THE ASSESSING OFFICER TO GIVE TAX CREDIT FOR THE FEDERAL TAXES AND STATE TAXES PAID UNDER SECTION 90 OF THE INCOME TAX ACT, AS CLAIMED BY THE APPELLANT IN ITS RETURN OF INCOME. 4.1 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LEVYING INTEREST U/S.234B AMOUNTING TO RS.2,91,222/- AND RS.1,69,637/- U/S.234C OF THE INCOME TAX ACT. 4.2 THE LEVY OF INTEREST IS ILLEGAL AND IN ANY EVENT IS EXCESSIVE. 5. ANY OTHER GROUND/S THAT MAY BE RAISED AT THE TIME OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SERVICE EXPORTER, PRINT DESIGN, ETC., FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2015-16 ON 30.09.2015 DECLARING TOTAL INCOME OF RS.1,40,80,000/-. THE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT ON 12.12.2017, DETERMINING TOTAL INCOME OF RS.1,40,80,300/-. HOWEVER, THE AO HAS DENIED THE CREDIT FOR TAXES PAID BY THE ASSESSEE COMPANY IN USA AS PER 3 I.TA. NO. 110/CHNY/2020 PROVISIONS OF SECTION 90 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) AND ARTICLE 25(2)(A) OF DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA) ENTERED INTO BY INDIA WITH USA. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A) AND SUCH APPEAL HAS BEEN FILED BEYOND THE DUE DATE SPECIFIED UNDER THE ACT. BEFORE THE LD.CIT(A), THE ASSESSEE EXPLAINED THE REASONS FOR NOT FILING THE APPEAL WITHIN THE DUE DATE SPECIFIED UNDER THE ACT. ACCORDING TO WHICH, THE ASSESSEE WAS PURSUING ITS CASE BEFORE THE AO BY FILING A RECTIFICATION APPLICATION U/S.154 OF THE ACT AND EXPECTED A POSITIVE ORDER FROM THE AO. THEREFORE, THE DELAY IN FILING APPEAL WAS UNDER THE BONAFIDE BELIEF THAT THE ASSESSEE WOULD GET A RELIEF FROM THE AO AND THERE IS NO NECESSITY OF FILING APPEAL BEFORE THE APPELLATE AUTHORITIES. HENCE, THE DELAY IN FILING APPEAL BEYOND DUE DATE SPECIFIED UNDER THE ACT IS NEITHER WILLFUL NOR TO DERIVE ANY UNDUE BENEFIT AND ACCORDINGLY REQUESTED THE LD.CIT(A) TO CONDONE THE DELAY IN FILING THE APPEAL. THE CIT(A) HOWEVER WAS NOT CONVINCED WITH THE EXPLANATION FURNISHED BY THE ASSESSEE AND ACCORDING TO HIM, THE REASONS GIVEN BY THE ASSESSEE FOR NOT FILING THE APPEAL WITHIN THE PRESCRIBED TIME PROVIDED UNDER THE ACT, 4 I.TA. NO. 110/CHNY/2020 DOES NOT COME UNDER THE REASONABLE CAUSE AND ACCORDINGLY BY RELYING UPON CERTAIN JUDICIAL PRECEDENTS DISMISSED APPEAL FILED BY THE ASSESSEE WITHOUT CONDONING THE DELAY. AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD.AR FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) HAS ERRED IN DISMISSING THE APPEAL ON LIMITATION WITHOUT ADJUDICATING THE ISSUES ON MERIT WITHOUT APPRECIATING THE FACT THAT THE REASONS GIVEN BY THE ASSESSEE FOR NOT FILING THE APPEAL WITHIN THE DUE DATE SPECIFIED UNDER THE ACT IS A SUFFICIENT CAUSE AND HENCE, THE LD.CIT(A) OUGHT TO HAVE CONDONED THE DELAY TO DECIDE THE ISSUE OF CREDIT FOR TAXES PAID IN USA ON MERITS. 6. THE LD.DR ON THE OTHER HAND SUBMITTED THAT THE ASSESSEE IS A HABITUAL OFFENDER FILING BELATED APPEALS, WHICH IS EVIDENT FROM THE FINDINGS RECORDED BY THE CIT(A) THAT THE ASSESSEE HAS FILED MANY APPEALS BEYOND DUE DATE SPECIFIED UNDER THE ACT, AS STATED BY THE CIT(A) IN PARA 4.3 OF HIS ORDER. THEREFORE, THE REASONS GIVEN BY THE ASSESSEE THAT THE DELAY IN FILING APPEAL WAS DUE TO RECTIFICATION APPLICATION FILED BEFORE THE AO FOR RECTIFYING THE 5 I.TA. NO. 110/CHNY/2020 MISTAKE IS NOT BONAFIDE AND ACCORDINGLY THE DELAY IN FILING THE APPEAL SHOULD NOT BE CONDONED. 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. ADMITTEDLY, THE LD.CIT(A) HAS DISMISSED APPEAL FILED BY THE ASSESSEE IN LIMINE WITHOUT CONDONING THE DELAY IN FILING THE APPEAL BY HOLDING THAT THE REASONS GIVEN BY THE ASSESSEE FOR NOT FILING THE APPEAL DOES NOT COME UNDER THE SUFFICIENT CASE FOR CONDONING THE DELAY OF 314 DAYS IN FILING THE APPEAL. IT IS ALSO AN ADMITTED FACT THAT THE LD.CIT(A) HAS NOT DISCUSSED OR DECIDED THE ISSUE ON MERITS. IT IS AN ADMITTED FACT THAT WHEN THE APPELLANT NOT PURSUING HIS APPEAL BEFORE THE APPELLATE AUTHORITIES, THEN THE APPELLATE AUTHORITIES ARE LEFT WITH NO OPTION BUT TO DISPOSE OFF THE APPEAL FILED BY THE APPELLANT. BUT, SUCH APPEAL SHOULD BE DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. IT IS ALSO AN ADMITTED FACT THAT BY THE DECISION OF VARIOUS HIGH COURTS AND SUPREME COURT, WHEN AN APPEAL IS DISMISSED ON TECHNICAL GROUNDS, A MERITORIOUS CASE WOULD GO OUT OF THE JUDICIAL SCRUTINY AND FURTHER WHEN TECHNICALITIES AND MERITS ARE FITTED AGAINST EACH OTHER, THEN THE MERITS DESERVES TO BE GIVEN PREFERENCE. IN THIS 6 I.TA. NO. 110/CHNY/2020 CASE, ON PERUSAL OF ORDER PASSED BY THE CIT(A), WE FIND THAT THE LD.CIT(A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE ON TECHNICAL GROUNDS FOR NOT FILING THE APPEAL WITHIN THE DUE DATE SPECIFIED UNDER THE ACT, WITHOUT DISCUSSING THE ISSUES ON MERITS CONTRARY TO THE SETTLED POSITION OF LAW. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE DELAY IN FILING APPEAL BEFORE THE CIT(A) DESERVES TO BE CONDONED IN THE INTEREST OF JUSTICE AND ALSO TO DECIDE THE ISSUES INVOLVED IN APPEAL ON MERITS. HENCE, WE CONDONE THE DELAY IN FILING APPEAL BEFORE CIT(A) AND SET ASIDE THE APPEAL TO THE FILE OF THE LD.CIT(A) AND DIRECT HIM TO DECIDE THE ISSUES INVOLVED IN APPEAL ON MERITS. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 28 TH APRIL, 2021 AT CHENNAI. SD/- SD/- ( ) (MAHAVIR SINGH) /VICE PRESIDENT ( . ) (G. MANJUNATHA) /ACCOUNTANT MEMBER /CHENNAI, /DATED, THE 28 TH APRIL, 2021 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( ) /CIT(A) 4. /CIT 5. /DR 6. /GF.