El Forge Limited, CHENNAI V. ACIT Company Circle II(1), Chennai

ITA 2453/CHNY/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 8002 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 26-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Reasonable cause; Set aside

Judgement Text

आयकर अपीलीय अिधकरण, ‘सी’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI Įी महावीर ͧसंह, उपाÚय¢ एवं Įी मनोज क ु मार अĒवाल, लेखा सदèय के सम¢ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA Nos.: 2452 & 2453/CHNY/2018 िनधाᭅरण वषᭅ /Assessment Years: 2007-08 M/s. EI Forge Limited, No.338, Ambujammal Street, Alwarpet, Chennai – 600 018. PAN: AAACE 1706E v. The ACIT, Company Circle –II(1), Chennai – 34. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri S. Sridhar, Advocate ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri P. Sajit Kumar, JCIT स ु नवाई कȧ तारȣख/Date of Hearing : 21.02.2022 घोषणा कȧ तारȣख/Date of Pronouncement : 25.02.2022 आदेश /O R D E R PER MAHAVIR SINGH, VP: These two appeals by the assessee are arising out of the common order of Commissioner of Income Tax (Appeals)-6, Chennai in ITA No.106/CIT(A)-6/2011-12 & ITA No.45/CIT(A)- 6/2010-11, vide order dated 04.04.2017. The original return of income was processed by the DCIT, Company Circle II(1), Chennai 2 I.T.A. Nos.2452 & 2453/Chny/2018 for the assessment year 2007-08 u/s.143(1) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide intimation dated 19.03.2009. Subsequently, the AO passed rectification order dated 19.08.2010, u/s.154 of the Act, in consequence to revision orders in earlier assessment years 2004-05, 2005-06 & 2006-07 and another rectification order was also passed by the ACIT, Company Circle II(1), Chennai vide order dated 03.09.2010, u/s.154 of the Act. 2. At the outset, the ld.counsel for the assessee stated that both the appeals filed by the assessee are time barred by 450 days and assessee has filed condonation petition supported by affidavit, stating common reasons, in both the appeals. The ld.counsel read out the relevant para of the affidavit wherein reasons are cited and the same reads as under:- I state that the delay in filing the appeal was beyond the control of the Petitioner/Appellant and the appellate order dated 04.04.2017 passed by the CIT(Appeals) - 6, Chennai was misplaced inasmuch as I state that the registered office/corporate office was shifted from No.338, Ambujamammal Street, Alwarpet, Chennai — 600 018 to Door No.21C&D, ARK Colony, Eldams Road, Alwarpet, Chennai — 600 018 initially in January 2012 and I state that after a gap of three years the registered office was shifted to factory address from 01.10.2015 (No.1A, Sriperumbudur High Road, Appur Village, Kancheepuram District — 603 204) while retaining the corporate office in two floors at Eldams Road address comprised of finance, secretarial and MD’s office. I state that the frequent shifting of the registered office including the accounts department and further drastic reduction in man power due to retirement of senior persons and resignation of few staff members in May 2017 constituted reasonable cause for the belated filing of the appeal before the Jurisdictional Bench of the Income Tax Appellate Tribunal. I state that the 3 I.T.A. Nos.2452 & 2453/Chny/2018 order of the First Appellate Authority dated 4.4.2017 was traced after repeated reminders received from the counsel on record only in the first part of month of August 2018 and consequently I state that the appeal prepared in the office of the counsel on record was ultimately filed on 27.08.2018 belatedly by 450 days which according to the Petitioner/Appellant was beyond the control and the circumstances prevailed as explained herein before. 2.1 The ld.counsel stated that even before CIT(A) in both the appeals, there was delay in filing appeals and delay was of 147 days. The ld.counsel apart from reasons, stated before us that the orders under challenge were received and accounts department was under the bonafide impression as communications received in the routine course without understanding the legal implications in as much as the entire files pertaining to the assessment year 2007-08 were taken up for review proceedings in the month of February, 2011. Hence, there was mistake pointed out by the Chartered Accountants, M/s.P. Rajagopalan & Co., Chennai for non-filing of appeal against the two rectification orders. Consequently, the matter was brought to the notice of management and immediately necessary instructions were given to the counsel for filing of appeal belatedly and accordingly, appeals were filed on 11.02.2011. 3. We have gone through the reasons cited by assessee for delay of 450 days before us and as pointed out by ld.counsel for the 4 I.T.A. Nos.2452 & 2453/Chny/2018 assessee that the order of CIT(A) was misplaced as the assessee within a gap of 3 years shifted the registered office to factory address from 01.10.2015 at No.1A, Sriperumbudur High Road, Appur Village, Kancheepuram District – 603 204 and also retained corporate office in two floors at Eldams Road address comprised of finance, secretarial and MD’s office. The ld.counsel stated that due to frequent change, the papers got mixed up and could not be traced. Subsequently, when it was traced, it got delayed by 450 days. The ld.counsel stated that the rectification proceedings is in consequence to prima facie adjustment made in the processing of return u/s.143(1) of the Act. The ld.counsel for the assessee stated that basically the prima facie adjustment should not have been made or the rectification not at all is required. The ld.counsel stated that this is a good and reasonable cause for condonation of delay. When this was pointed out to ld.Senior DR, he opposed to condone the delay but could not controvert the above stated facts. 4. We find that the delay is long before us ie., 450 days and even the delay before CIT(A) was 147 days, when this was opposed by ld. Senior DR, it was proposed to the ld.counsel for the assessee, whether the assessee is ready to pay a cost and on such condition, we are inclined to condone the delay. The ld.counsel for the 5 I.T.A. Nos.2452 & 2453/Chny/2018 assessee Shri S.Sridhar, made statement at bar that the assessee will pay a sum of Rs.25,000/- as cost and will be paid to Legal Aid Authority of Tamil Nadu situated at Madras High Court campus. We direct the assessee to pay this cost of Rs.25,000/- to Legal Aid Authority of Tamil Nadu situated at Madras High Court campus and show the receipt of payment to the CIT(A) before he takes up these appeals. 5. After hearing rival contentions, we find that cause seems reasonable and the assessee has also agreed to pay cost of Rs.25,000/-, hence, we condone the delay and admit these two appeals. We noticed that there was a delay before CIT(A) for 147 days and reason noted above was that non-filing of appeal was pointed out by the Chartered Accountants, M/s. P. Rajagopalan & Co., Chennai, who examined the file while replying for revision proceedings. We find that the CIT(A) has not controverted these facts and dismissed the appeals as un-admitted without condoning the delay. In our view, the reasons cited by assessee in its petition before CIT(A) seems quite reasonable and hence we condone the delay before CIT(A) and also direct him to admit the issue on merits. The orders of CIT(A) in both the appeals are set aside and 6 I.T.A. Nos.2452 & 2453/Chny/2018 matter remanded back to his file and allowed for statistical purposes. 6. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the court on 25 th February, 2022 at Chennai. Sd/- Sd/- (मनोज कुमार अᮕवाल) (MANOJ KUMAR AGGARWAL) लेखा सद᭭य /ACCOUNTANT MEMBER (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 25 th February, 2022 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ (अपील)/CIT(A) 4. आयकर आयुᲦ /CIT 5. िवभागीय ᮧितिनिध/DR 6. गाडᭅ फाईल/GF.