Sun Pharmaceutical Medicare Ltd., Mumbai V. The DCIT, CPC, Banglore

ITA 251/AHD/2021

AI Insights

Sun Pharmaceutical Medicare Ltd. appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which dismissed their appeal due to a delay of 238 days in filing. The delay was attributed to the company's failure to update the email ID on the Income-tax portal after an employee left, leading to the intimation under section 143(1) of the Income Tax Act, 1961, not being noticed. The Tribunal found that there was a reasonable cause for the delay and that the NFAC had not provided an opportunity for the assessee to file an affidavit explaining the delay. Consequently, the Tribunal condoned the delay and remanded the case back to the NFAC for a decision on merits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114317 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 19-04-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 10-10-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause; Condonation of delay; Set aside
• Section: 43B; 115JB; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH Before: Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member Sun Pharmaceutical Medicare Ltd. Plot No. 201/ B-1, Sun House, Western Express Highway, Goregaon (East), Mumbai-400063, Maharashtra PAN: AAYCS 0886M (Appellant) Vs The DCIT, CPC, Bangalore (Respondent) Assessee Represented: Shri S.N. Soparkar, Sr. Adv. & Shri Parin Shah, A.R. Revenue Represented: Shri Alpesh Parmar, Sr.D.R. Date of hearing : 20-04-2023 Date of pronouncement : 21-04-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the order dated 19.08.2021 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “NFAC”), arising out of the Intimation passed under section 143(1) ITA No. 251/Ahd/2021 Assessment Year 2018-19 I.T.A No. 251/Ahd/2021 A.Y. 2018-19 Page No Sun Pharmaceutical Medicare Ltd.. vs. DCIT, CPC 2 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2018-19. 2. The brief facts of the case is that the assessee is a company engaged in the manufacturing and marketing of pharmaceuticals products. For the Assessment Year, 2018-19, the assessee filed its Return of Income on 29.11.28 declaring a loss of Rs.6,11,2,934/- under the normal provisions and Book Profit u/s. 115JB as Nil on 29.11.2018. The return was processed an intimation u/s. 143(1) dated 2.11.2019 passed by CPC after making certain adjustments. Thus the assessee filed an appeal before Ld. NFAC with a delay of 238 days. Though the Ld. NFAC considered the appeal on merits however not condoned the delay and dismissed the appeal observing as follows: 5. Delay in filing the appeal not condoned: 5.1 Appellant filed the appeal against the Intimation u/s 143(1) dt 20/11/2019 on 21/8/2020 with delay of 238 days. 5.2 In the letter requesting for condonation of delay the appellant stated that - (i) The email-ID registered on the online portal pertained to an employee who had left the organization (ii) the Appellant Company inadvertently missed out on updating the email- ID registered on the online Income-tax portal. (iii) Thus, till recently, the Appellant Company was not aware about the adjustments carried out by the CPC while processing return of income under section 143(1) of the Act as the Intimation was sent to an email- ID which was not actively operated and (iv) It was only during the recent course while--checking the status of returns of income filed, the Appellant Company became aware about the Intimation passed under section 143(1) of the Act and adjustments/ disallowances made thereunder. 5.3 The appellant filed the appeal on 21/8/2020 and in Form No.35, the appellant gave the E-mail address as - Amit [e-mail]. The appellant did not furnish the basic details like - (i) what was the earlier e- mail which was given by the appellant and to which the Intimation u/s 143(1) was sent (ii) When that particular employee left (iii) when did the assessee came to know about the Intimation u/s 143(1). I.T.A No. 251/Ahd/2021 A.Y. 2018-19 Page No Sun Pharmaceutical Medicare Ltd.. vs. DCIT, CPC 3 In the absence of these basic details the reason given for the delay in filing appeal is vague. Thus, the appellant failed to explain the delay in filing the appeal on day-to-day basis. Moreover, the appellant did not file any Affidavit explaining the delay in filing the appeal. For the above stated reasons, the delay in filing the appeal is not condoned and the appeal is dismissed as barred by limitation. 6. In result, this appeal of the assessee is dismissed. 3. Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of appeal: The Appellant claims the following reliefs, which are without prejudice to one another. 1. Ground No. 1: Non-Condonation of delay on account of bona fide mistake to file the appeal within the prescribed time limit: 1.1. Delay in filing the appeal should be condoned. 2. Ground No. 2: Disallowance of interest paid in respect of borrowed capital u/s 36(1)(iii) - Rs. 3,25,46.154/- 2.1 Interest paid in respect of borrowed capital should not be disallowed under section 36(1)(iii) of the Act. 3. Ground No. 3: Disallowance u/s. 43B- Rs. 97,80,045/-: 3.1 No disallowance under section 43B of the Act ought to be made. 4. Ground No. 4: Disallowance u/s 36(1)(va) read with section 2(24)(x) for delayed payment of employees' contribution to ESIC / EPF- Rs. 16,288/- 4.1 Deduction of employees' contribution to ESIC/EPF ought to be allowed. 5. Ground No. 5: Exclusion of interest income- Rs. 6,50,870/- 5.1 Interest income amounting to Rs. 6,50,870/- ought to be excluded 4. The assessee also filed an Affidavit explaining the delay of 238 days in filing before Ld. CIT(A) as follows: 1. Jagat Mazmudar, adult, Dy. General Manager of Sun Pharmaceutical Medicare Limited state on solemn affirmation as under:- That intimation u/s 143(1) of the Act for A.Y. 2018-19 was communicated to email id registered in the e- proceedings portal. The email id mentioned on portal pertains to Shri Jay Gala (Manager) who left the organization on 28 12 2018 Copy of relieving letter is attached herewith as per Exhibit 1. I.T.A No. 251/Ahd/2021 A.Y. 2018-19 Page No Sun Pharmaceutical Medicare Ltd.. vs. DCIT, CPC 4 On leaving organization, appellant company inadvertently missed out to update email id on e-proceeding portal. The intimation passed by CPC was delivered on email id of Shri Jay Gala having email address [e-mail]. Copy of aforesaid intimation is attached herewith as per Exhibit II. As per the corporate IT practice, on resignation of employee, the email id and other IT access granted are blocked so that leaving employee cannot misuse the same in future. Hence, this intimation and its adjustment were never came in notice of the appellant company. NDIA Subsequently, the aforesaid intimation came to the notice of the Appellant company in the second week of August 2020 while checking the status of the return of income filed on Income Tax portal. On scrutinizing above intimation, we found above facts and immediately updated the email id and thereafter appeal was filed before CIT (A) with delay of 238 days. However, CIT (A) did not consider above facts and rejects the appeal as same was filed belatedly. It is further submitted that there is no delay in filing appeal before Income Tax Appellate Tribunal. It is hereby requested to your honour to take this reason into consideration and direct CIT (A) to condone the delay occurred in filing of the captioned appeal before him and set aside same to file of CIT (A) on fresh adjudication. That what has been stated above is the fact and true to my knowledge. 5. Ld. Senior Counsel Shri S.N. Soparkar appearing for the assessee submitted that the assessee filed reasons for the delay of 238 days in filing the appeal and requested to taken a liberal, considerate and a lenient view to condone the delay and exercise the power conferred upon it u/s. 249(3) of the Act. The assessee also filed detailed written submissions running to 20 pages on various disallowances made in the intimation u/s. 143(1) of the Act. But the Ld. NFAC without giving proper opportunity of hearing to the assessee and without asking for affidavit of delay in filing the above appeal, dismissed the appeal by neither condoning the delay nor also adjudicating the case on merits. Thus Ld. Senior Counsel further relying upon the Affidavit filed by the assessee before the Tribunal, claimed that the matter may be set aside back to the file I.T.A No. 251/Ahd/2021 A.Y. 2018-19 Page No Sun Pharmaceutical Medicare Ltd.. vs. DCIT, CPC 5 of Ld. CIT(A) by condoning the delay of 238 days in filing the appeal before CIT(A) and decide the appeal on merits by giving proper opportunity to the assessee. 6. Per contra, the Ld. Sr. D.R. Shri Alpesh Parmar supported the order of the Ld. CIT(A) and requested to uphold the same. 7. We have given our thoughtful consideration and perused the materials available on record. We find from the Affidavit filed by the assessee, there is ‘reasonable cause’ for not filing the appeal within the stipulated period of limitation. It is further seen from the appellate order, the assessee submissions running to 20 pages in its entirety reproduced by the NFAC but however at the end of the appellate order declined to condone the delay, on the ground that the affidavit to that extent of delay was not filed before the NFAC. We notice from the order, the NFAC given any opportunity to the assessee to file affidavit before it. Thus Ld. NFAC has blindly and mechanically dismissed the assessee’s appeal without invoking the powers vested u/s. 249(3) of the Act. There is a common proverb “Face is the Index of Mind”. But we observe that Ld. NFAC being the Faceless Appellate Authority, without application of mind passed this impugned order. Therefore we hereby condone the delay of 238 days in filing the appeal before Ld. NFAC. 8. Thus, we condone the delay of 238 days in filing the appeal before Ld. NFAC and set aside the impugned order to the file of Ld. NFAC with a direction to pass fresh order, after giving adequate opportunity to the assessee to defend its case. Needless to state, I.T.A No. 251/Ahd/2021 A.Y. 2018-19 Page No Sun Pharmaceutical Medicare Ltd.. vs. DCIT, CPC 6 the assessee should cooperate in the appellate proceedings before the Ld. NFAC, for passing the order on merits. . 9. In the result, the appeal filed by the Assessee is allowed for statistical purpose. Order pronounced in the open court on 21-04-2023 Sd/- Sd/- (WASEEM AHMED) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 21/04/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद