Mohd Abid, Ghaziabad V. ITO Ward 2(1)(3), Ghaziabad

ITA 1508/DEL/2023

AI Insights

The case involves an appeal by the assessee, Mohd. Abid, against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, which dismissed the appeal in limine on the ground of limitation. The assessee had filed his return of income for the assessment year 2016-17, which was processed and later scrutinized, resulting in additional income being assessed due to non-deduction of tax on certain payments and cash payments exceeding Rs. 20,000. The assessee contended that the delay in filing the appeal was due to the Assessing Officer's verbal confirmation that the rectification application under Section 154 could not be rectified from their end, and thus, an appeal should be filed. The Tribunal found merit in the assessee's arguments, citing the Supreme Court's precedence that substantial justice should prevail over technical considerations, and thus condoned the delay.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 108517 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-09-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 15-05-2023
• Other Referred Cases: Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. 167 ITR 471 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Reasonable cause
• Section: 154; 40A(3); 143(3); 40(a)(ia); 143(1); 250

Judgement Text

1 ITA No. 1508/Del/2023 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No. 1508/DEL/2023 [Assessment Year: 2016-17 Mohd. Abid, 7/8, Sector-2, Rajendra Nagar, Sahibabad (Ghaziabad)-201005 PAN-AGAPM4709Q Vs Income-tax Officer, Ward-2(1)(3), Ghaziabad APPELLANT RESPONDENT Assessee represented by Shri Manish Jain, CA Department represented by Shri Om Parkash, Sr. DR Date of hearing 19.09.2023 Date of pronouncement 27.09.2023 O R D E R PER KUL BHARAT, JM: This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 23.03.2023, pertaining to the assessment year 2016-17. The assessee has raised following grounds of appeal: “1. On the basis of facts and circumstances & legal position of the case the order passed by the Hon’ble Commissioner of Income fax (Appeals) is bad in Law and therefore needs to be quashed. 2. On the basis of facts and circumstances & legal position of the case, the order u/s 250 passed by the Hon'ble Ld. Commissioner of Income Tax (Appeals) is against the principle of natural justice. 3. On the basis of facts and circumstances & legal position of the case, 2 ITA No. 1508/Del/2023 the Hon'ble Ld. Commissioner of Income Tax (Appeals) failed to appreciate that the appeal was filed late as the Ld. Assessing officer on 27.06.2019 i.e. after approximate 120 days, verbally confirmed to the appellant that the application U/s 154 cannot be rectified from their end and should file an appeal against it, 4. On the basis of facts and circumstances & legal position of the case, the Hon'ble Ld. Commissioner of Income l ax (Appeals) failed to appreciate that the appeal was filed late because of error on the part of Ld. Assessing Officer to rectify the mistake U/s 154. 5. On the basis of facts and circumstances & legal position of the case, the Hon’ble Ld. Commissioner of Income Tax (Appeals) failed to appreciate the reason because of which the appeal was filed late. 6. On the basis of facts and circumstances & legal position of the case, the Hon’ble Ld. Commissioner of Income Tax (Appeals) erred in dismissing the appeal even after issuing notice U/s 250 for hearing of the appeal. 7. On the basis of facts and circumstances & legal position of the case, the Hon’ble Ld. Commissioner of Income Tax (Appeals) erred in dismissing the appeal on the ground that the appeal was filed late without appreciating the fact that hearing notice U/s 250 of the Income Tax Act. 1061 have been issued 6 times before against which the appellant had duly submitted his reply. 8. That the appellant craves permission to add, amend alter or vary all or any of the ground of appeal on or before the date of hearing of the appeal.” 2. Facts giving rise to the present appeal are that in this case assessee had filed his return of income electronically on 17.10.2016 declaring total income at Rs. 6,69,770/-. Return was processed u/s 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”). Thereafter the case was selected for scrutiny and the assessment u/s 143(3) of the Act was completed at an income of Rs. 12,21,744/-. During the course of assessment the AO noticed that the assessee had 3 ITA No. 1508/Del/2023 made payment amounting to Rs. 19,87,429/- and no tax had been deducted. Therefore, he made addition of Rs. 1,05,174/- by invoking the provisions of Section 40(a)(ia) read with Section 194 of the Act. Further, the AO noticed that there were cash payments exceeding Rs. 20,000/-. Therefore, he invoking the provisions of Section 40A(3) made addition of Rs. 4,46,800/- and assessed income at Rs. 12,21,744/-. Aggrieved against this the assessee carried the matter before learned CIT(A), who dismissed the appeal in limine on the ground of limitation. Aggrieved against this the assessee is in appeal before this Tribunal. 3. Apropos to the grounds of appeal learned counsel for the assessee submitted that the learned CIT(A) grossly erred in not condoning the delay as there was a reasonable cause for not filing the appeal before the learned CIT(A). He contended that learned CIT(A) ought to have condoned the delay and decided the issue on merit. Learned counsel submitted that there was no deliberate or the assessee has not obtained any undue advantage by filing belated appeal before the learned CIT(A). He further relied on the submissions made before the learned CIT(A). He submitted that the assessee had filed a rectification application before the AO which was not disposed of by the AO. 4. On the other hand, learned DR opposed the submissions and supported the orders of the authorities below. He contended that the assessee would require to 4 ITA No. 1508/Del/2023 explain each day’s delay. He further strongly supported the order of learned CIT(A). 5. I have heard rival contentions and perused the material available on record. I find that learned CIT(A) had dismissed the appeal by observing as under: “6. In view of the aforesaid discussion, I believe in the present case, the appellant has failed to prove sufficient cause for delay in filing this appeal as envisaged u/s.249(3) of the I.T.Act. Therefore, it is held that the cause of substantial justice would not be served by condoning inordinate delay of 168 days. Therefore, appeal stand dismissed in limine in view of non- compliance of the provision of section 249(3) of Income tax Act, 1961 read with Faceless Appeal Scheme 2020 Paragraph 5(1 )(ii)(b).” 5.1. The Hon’ble Supreme Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. 167 ITR 471 (SC) has observed that the legislature has conferred power to condone delay by enacting section 5 of the Limitation Act, 1963, in order to enable the courts to do substantial justice to parties by disposing of matters on merits and “every day’s delay must be explained” does not imply a pedantic approach. The doctrine must be applied in a rational, common sense and pragmatic manner. Further, the Hon’ble Apex Court has observed as under: “When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay.” 5 ITA No. 1508/Del/2023 5.2 The Revenue has not brought any material suggesting that the assessee by filing a belated appeal has obtained any undue advantage. On the contrary, the rights of the assessee company for filing appeal are seriously prejudiced. The assessee has enclosed a copy of rectification order dated 7.1.2019 pertaining to A.Y. 2016-17 in the case of the assessee. It states “at the time of assessment, income wrongly calculate by system”. The learned CIT(A) noticed that the appeal was instituted on 24.7.2019 against the order date d 7.1.2019. While computing the delay the learned CIT(A) has calculated the delay of 168 days. If the order appealed against was dated 7.1.2019 then appeal against such order would lie within thirty days from the date on which intimation of the order sought to be appealed against is served. As per Form no. 35, the date of service of order is stated to 7.1.2019. Therefore, the assessee ought to have filed appeal within thirty days from 7.1.2019. Hence, there was a delay of 168 days as computed by the learned CIT(A). It is well settled law that the appeal should not be dismissed purely on the ground of limitation. While adjudicating the issue of limitation the appellate authority should also examine whether there is a strong merit in the case of the appellant. 5.3 In the present case it is the contention of the assessee that the AO has wrongly made addition on account of non-furnishing of Form 28 and making cash payments exceeding rupees twenty thousand. The contention of the assessee is that the AO had wrongly invoked the provisions of Section 40A(3) as n cash payment was exceeding rupees twenty thousand to a single individual. The learned CIT(A) without examining this issue dismissed the appeal purely on the ground of limitation. However, in the light of the binding precedence I am of the considered view that learned CIT(A) ought to have examined the correctness of contention of the assessee that the impugned additions have been wrongly made. Therefore, 6 ITA No. 1508/Del/2023 looking to the totality of facts, I hereby condone the delay in filing the appeal before the CIT(A) and restore the issue to the file of the learned CIT(A) to pass a speaking order on the issue related to the impugned addition. 6. In the result, assessee’s appeal stands allowed for statistical purposes only. Order pronounced in open court on 27 th September, 2023. Sd/- (KUL BHARAT) JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI