M/S. FINE PET& CAPS, MUMBAI V. ITO 29(1) (4), MUMBAI

ITA 2082/MUM/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5390 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Appeal Filed On: 14-11-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Right to appeal
• Section: 154; 69C; 143(3); 80IC; 80IC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI ABY T. VARKEY, JM AND SHRI AMARJIT SINGH, AM आयकर अपील सं/ I.T.A. No.2082/Mum/2021 (निर्धारण वर्ा / Assessment Years: 2014-15) M/s. Fine Pet & Caps 120, Ramgopal Industrial Estate, Dr. RP Road, near Jawarhar Talkies, Mulund West, Mumbai-400080. बिधम/ Vs. ITO-29(1)(4) Mumbai-400051. स्थधयी लेखध सं./जीआइआर सं./PAN/GIR No. : AACFF0688B (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) सुनवाई की तारीख / Date of Hearing: 07/07/2022 घोषणा की तारीख /Date of Pronouncement: 20/07/2022 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Ld. CIT(A)/NFAC, Delhi dated 16.09.2021 for AY. 2014-15. 2. The main grievance of the assessee is against the action of the Ld. CIT(A) dismissing the appeal on the ground of delay in filing the appeal against the order of the AO dated 29.12.2016. 3. Brief fact of the case is that the assessee is a partnership firm engaged in the business of providing exclusive packaging solutions of pet bottles and containers for wide range of food products and other consumer goods for the pharmaceutical products and Alcoholic Beverages. The assessee had filed its return of income on 20.09.2014 declaring total income of Rs.2,24,040/-. However, the AO made the addition of Rs.1,10,36,805/- being 10% on account of Non genuine purchases u/s 69C of the Income Tax Act, 1961 (hereinafter “the Act”) from below mentioned parties: Assessee by: Shashank Mehta Revenue by: Vranda U Matkarni (Sr. AR) ITA No.2082/Mum/2021 A.Y. 2014-15 Fine Pet & Caps 2 Sr. No. Party Name Purchase Amount 1 Shree Balaji Polymer 7,11,900 2 Poly Uno Ventures India (Baddi) 9,62,46,066 3 Poly Uno Ventures India 17,58,301 4 Umrao Polymers 1,16,51,787 Total Purchases 11,03,68,054 4. Even though the AO made the disallowance of expenditure as aforesaid, however since the assessee was eligible for deduction under section 80IC of the Act, claimed the same in its return of income and the AO granted the same [deduction u/s 80IC of the Act] and so assessee got 100% deduction. And the AO while passing the assessment order dated 29.12.2016 calculated the income of the assessee as below: - Particulars Amount Income after set off of unabsorbed depreciation 44,62,038 Add: Purchases 110,36,805 Total Income assessed 1,54,98,843 Chapter VIA deduction 80IC 1,52,74,803 Total income 2,24,040 5. Thereafter, (after six months) on 29.06.2017 the AO again passed an order u/s 154 of the Act wherein he rectified the assessment order by which the deduction u/s 80IC of the Act was restricted to Rs.42,37,995/- by taking note of his own action of disallowance of expenditure (supra). The Ld. AR pointed out that even though the assessee was aggrieved by the original order passed u/s 143(3) of the Act dated 29.12.2016 (wherein AO had made disallowance of expenditure) it did not file appeal against the same as there was no tax implication because assessee got deduction u/s 80IC of the Act. But ITA No.2082/Mum/2021 A.Y. 2014-15 Fine Pet & Caps 3 when assessee came to know that AO had rectified the assessment order, then being aggrieved, the assessee preferred an appeal against the action of the AO where in it challenged the original action of AO dated 29.12.2016 also before the Ld. CIT(A); and whilw preferring the appeal, the assessee taking note that time limit available to prefer appeal against the original assessment order has lapsed, had duly filed an application for condonation of delay before the Ld. CIT(A). However, the Ld. CIT(A) has not condoned the delay and thereby dismissed the appeal of the assessee. Aggrieved by the action of the Ld. CIT(A), the assessee is before us. 6. We have heard both the sides and the facts narrated above are not disputed, so it is not repeated for the sake of brevity. We note that the assessee did not prefer an appeal after it received the original assessment order dated 29.12.2016 even though the AO had made disallowance of expenditure as noted supra. But AO while computing the total income granted the assessee the deduction u/s 80IC of the Act (which in effect increased the claim of deduction) and thus there was no adverse tax implication/liability on the assessee. So, even though the assessee was aggrieved by the action of AO regarding the disallowance of expenditure, it did not prefer an appeal before Ld. CIT(A) because there was no adverse tax implication on assessee. And later when the AO passed the rectification order u/s 154 of the Act dated 29.06.2017, the deduction under section 80IC of the Act got reduced (from what it claimed in the original return of income) and that too without intimation, the assessee preferred an appeal before the ITA No.2082/Mum/2021 A.Y. 2014-15 Fine Pet & Caps 4 Ld. CIT(A) challenging with action of AO (dated 29.12.2016 & 29.06.2017) and filed application for condonation of delay. However, the Ld. CIT(A) has dismissed the appeal on the ground of delay caused in filing appeal. This action of the Ld. CIT(A) cannot be countenanced. We note from the discussion (supra) that the assessee taking note that the original assessment order dated 29.12.2016 had no tax implication had not preferred the appeal against the AO’s action. However, when assessment order was rectified by order dated 29.06.2017, the assessee immediately had preferred an appeal before the Ld. CIT(A) and explained the aforesaid reasons for not doing so. In this context, it has to be borne in mind that if an assessee is aggrieved by the order of the AO, he has statutory right to file an appeal before the Ld. CIT(A) which has to be decided by him as per law. Merely on technicalities, the Ld. CIT(A) ought not to have dismissed the appeal of the assessee. Taking into consideration the overall facts, we are of the opinion that there was reasonable cause for the delay caused in filing appeal before the Ld CIT(A), so we are inclined to condone the delay in filing the appeal before the Ld. CIT(A) and restore the appeal back to the file of the Ld. CIT(A). Therefore, we set aside the impugned order of the Ld. CIT(A) and restore the appeal back to his file with a direction to decide the appeal on merits as per Section 250(6) of the Act. ITA No.2082/Mum/2021 A.Y. 2014-15 Fine Pet & Caps 5 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on this 20/07/2022. Sd/- Sd/- (AMARJIT SINGH) (ABY T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER मुंबई Mumbai; दिनांक Dated : 20/07/2022. Vijay Pal Singh, (Sr. PS) आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT 5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. आदेशधिुसधर/ BY ORDER, सत्यादपत प्रदत //True Copy// उि/सहधयक िंजीकधर /(Dy./Asstt. Registrar) आयकर अिीलीय अनर्करण, मुंबई / ITAT, Mumbai