Vasundhara Vrix Vanwadi Jal sinchn vikas Sahakai Mandli Ltd., Navsari V. The Assistant Commissioner of Income Tax , Navsari Circle, Navsari

ITA 280/SRT/2023

AI Insights

The case involves Vasundhara Vrix Vanwadi Jalsinchnvikas Sahakari Mandli Ltd., the appellant, contesting an order from the National Faceless Appeal Centre/Commissioner of Income Tax (Appeals) which confirmed the disallowance of a deduction claimed under Section 80P(2)(a)(v) of the Income Tax Act, 1961. The deduction of Rs. 9,76,464 was disallowed by the Assessing Officer due to non-compliance with a show cause notice regarding the use of electricity for certain purposes. The appellant argued that the CIT(A) had dismissed their appeal without adequate hearing, and the Assessing Officer had initiated penalty proceedings under sections 274 read with 270A(9)(a) of the Act. The Tribunal found sufficient cause for the delay in filing the appeal due to the death of the appellant's representative and restored the matter to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301559 (ITAT-SURAT)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-08-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 19-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Period of limitation; Condonation of delay; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH (SMC), SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 280/Srt/2023 (Assessment Year 2017-18) (Physical hearing) Vasundhara Vrix Vanwadi Jalsinchnvikas Sahakari Mandli Ltd., “Vrindavan Campus” At:Lachhakadi, Post-Gangpur, Tal. Vansada, Dist.- Navsari, Gujarat-396050. PAN No. AAAJV 0058 M Vs. A.C.I.T., Navsari Circle, Navsari, Room No. 302, 3 rd Floor, Income Tax Office, Charpool, Awabaug, Navsari, Gujarat-396445. Appellant/ assessee Respondent/ revenue Assessee represented by Shri Bipin Jariwala, A.R. Department represented by Shri Vinod Kumar, Sr. DR Date of Institution of Appeal 20/04/2023 Date of hearing 03/08/2023 Date of pronouncement 03/08/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A)) dated 30/03/2022 for the Assessment Year (AY) 2017-18. The assessee has raised following grounds of appeal: “1. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer has erred in disallowing the deduction claimed of Rs. 9,76,464/-. 2. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has not offered adequate opportunities to hear the case and passed non-speaking order and hence the case may please be set aside and restored back to the CIT(A) or AO. ITA No. 280/Srt/2023 Vasundhara Vrix Vanwadi Jalsinchnvikas Sahakari Mandli Ltd. Vs ACIT 2 3. On the facts and in the circumstances of the case as well as law on the subject, the learned Assessing Officer has erred in initiating penalty proceedings u/s 274 r.w.s. 270A(9)(a) of the Income Tax Act, 1961. 4. It is therefore prayed that the above addition may please be deleted as learned members of the Tribunal may deem it proper. 5. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.” 2. Rival contentions of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that there is a delay of about 315 days in filing appeal before the Tribunal. The assessee has filed application for condonation of delay alongwith affidavit of Shri Ratanbhai Navsubhai Thorat, Secretary of assessee society. The ld. AR of the assessee submits that the delay in filing appeal was neither intentional nor deliberate but for the reasons that the assessee was represented before the ld. CIT(A) through Shri Chetankumar Balvantrai Desai, Chartered Accountant, who died in Covid-19 period on 25/04/2021. The assessee was not aware about dismissal of appeal and only came to know when the assessee society appointed new authorised representative who checked the portal of ITBA and came to know that the appeal of assessee was dismissed in ex parte order on 30/03/2022. The assessee immediately downloaded the order of ld. CIT(A) in April, 2023 and filed the present appeal immediately. The assessee has good case on merit and is likely to succeed if one more opportunity is given to the assessee. The ld. AR of the assessee submits that the assessee is not going to be benefitted in ITA No. 280/Srt/2023 Vasundhara Vrix Vanwadi Jalsinchnvikas Sahakari Mandli Ltd. Vs ACIT 3 filing the appeal belatedly rather there is a chance that delay may not be condoned. 3. On merit, the ld. AR of the assesse submits that the ld. CIT(A) passed the ex parte order without considering the merit of the case. The order of ld. CIT(A) is not in consonance with provisions of Section 250(6) of the Income Tax Act, 1961 (in short, the Act). The ld. AR of the assessee further submits that the Assessing Officer made addition under Section 80P(2)(a)(v) of the Act by taking a view that the assessee was given show cause notice to explain if the electricity expenses on electrical fittings, required for lighting and fencing and complete description of plant and machinery, if such plant and machinery are operated without aid of power and electricity load with electricity bill. The assessee was required to make compliance on 29/11/2019 and the Assessing Officer by recording that no reply was received from the assessee, the Assessing Officer disallowed the claim of Section 80P(2)(a)(v) of the Act to the extent of 75.22% of turnover and made addition of Rs. 9,76,464/- . The ld. AR of the assessee submits that the addition was made for want of compliance, therefore, matter may be restored to the file of Assessing Officer for allowing the assessee to file their reply and to pass order afresh. 4. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that there is inordinate delay in filing appeal. The assessee in their application has contended that they were ITA No. 280/Srt/2023 Vasundhara Vrix Vanwadi Jalsinchnvikas Sahakari Mandli Ltd. Vs ACIT 4 represented through Shri Chetankumar Balvantrai Desai, Chartered Accountant. Shri Chetankumar Balvantrai Desai was expired in April, 2021, however, the impugned order was passed by the ld. CIT(A) on 30/03/2022. The assessee was having ample time to file appeal against such order. The assessee has filed appeal after one year of passing of order without showing sufficient cause for condonation of delay. 5. In the rejoinder submission, the ld. AR of the assessee submits that the assessee was not aware about the status of notice of ld. CIT(A), therefore, even after death of their Counsel/CA, the assessee was not aware. There is no intentional or deliberate delay in filing appeal rather the assessee has shown sufficient cause. 6. I have considered the submissions of both the parties and have gone through the orders of the lower authorities carefully. I find that the assessment order was passed on 04/12/2019. The assessee filed appeal before the ld. CIT(A) on 15/01/2020 in challenging the addition in the assessment order. As per contents of order of ld. CIT(A), first notice of hearing of appeal was issued on 17/01/2021 to make compliance by 01/02/2021 and again on 09/11/2021 to make compliance by 24/11/2021 and finally vide notice dated 15/03/2022 to make compliance by 24/03/2022. The ld. CIT(A) recorded that no compliance was made, the appeal of assessee was dismissed by the ld. CIT(A) by taking a view that there is no sufficient material on record to allow relief to the assessee and that the assessee is not seriously interested in ITA No. 280/Srt/2023 Vasundhara Vrix Vanwadi Jalsinchnvikas Sahakari Mandli Ltd. Vs ACIT 5 pursuing the appeal. The assessee filed appeal before the Tribunal on 20/04/2023. The assessee has also filed application for condonation of delay which is supported by affidavit of Ratanbhai Navsubhai Thorat, Secretary of assessee society. I also find that the assessee has also filed copy of death certificate of Chetankumar Balvantrai Desai who was allegedly appointed by the assessee society to pursue the appeal of assesse before the first appellate authority. I find that the appeal of assessee was dismissed for want of prosecution or submission on various grounds of appeal. Before me, the ld. AR of the assessee vehemently submitted that non-filing of appeal before the Tribunal within prescribed period of limitation is neither intentional nor deliberate but due to the death of their counsel during Covid-19 period. I find that there is sufficient cause for condoning the delay as the representative of the assessee died and the assessee was not aware about outcome of decision of ld. CIT(A), therefore, the delay in filing appeal is condoned. 7. On merit, I find that the addition in the assessment was made in absence of any reply by assessee. The ld. CIT(A) is also confirmed the order of Assessing Officer in an ex parte proceedings, therefore, I find that the assessee deserve one more opportunity to contest their case on merit, therefore, the grounds of appeal raised by the assessee is restored back to the file of Assessing officer to decide the issue afresh in accordance with law. The assessee is also directed to be more vigilant in future and not to cause further delay and seek adjournment without ITA No. 280/Srt/2023 Vasundhara Vrix Vanwadi Jalsinchnvikas Sahakari Mandli Ltd. Vs ACIT 6 any valid reason and to furnish all the details and his submissions and evidences on various grounds of appeal raised by him, as soon as possible, if so desired without any further delay. In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes. 9. In the result, the appeal of assessee is allowed for statistical purposes only. Order announced in open court on 3 rd August, 2023. Sd/- (PAWAN SINGH) JUDICIAL MEMBER Surat, Dated: 03/08/2023 *Ranjan Copy to: 1. Assessee – 2. Revenue – 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Surat