Rain Industries Limited (Formerly Known Rain Commodities Limited), Hyderabad V. Dy. Commissioner of Income Tax , Circle-3(1), Hyderabad

ITA 333/Hyd/2020

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6363 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2021
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB-A
• Assessment Year: 2007-2008
• Appeal Filed On: 28-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Bonafide belief
• Section: 154; 43B; 143(3); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “A”, HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA No.333/Hyd/2020 AY: 2007-08 Rain Industries Limited (Formerly known as Rain Commodities Limited), Hyderabad. PAN: AABCP 2276 K Vs. DCIT, Circle-3(1), Hyderabad. (Appellant) (Respondent) Assessee by: Shri Nikhil Tiwari Revenue by: Shri B. Balakrishna, DR Date of hearing: 11/10/2021 Date of pronouncement: 15/12/2021 ORDER PER A. MOHAN ALANKAMONY, AM.: This appeal is filed by the assessee against the order of the Ld. CIT (A)-3, Hyderabad in appeal No. 10085/2017- 18/B3/CIT(A)-3, dated 06/01/2020 passed U/s. 143(3) r.w.s 254 of the Act for the AY: 2007-08. 2. There is a delay of 87 days in filing this appeal before the Tribunal. In the affidavit filed by the assessee it was stated that due to Pandemic situation during the relevant period the assessee could not file the appeal within the prescribed time limit. Therefore, considering the Pandemic situation prevailed 2 during the relevant period, we hereby condone the delay of 87 days in filing the appeal before the Tribunal and proceed to adjudicate the appeal on merits. 3. The assessee has raised six grounds in its appeal and they are extracted herein below for reference: “On the facts and in the circumstances of the case and in law, the Ld. CIT (A): (i) Erred in upholding the adjustment made U/s. 43B of the Act on account of sales tax deferral of Rs. 8,79,58,467/- to the total income assessee; (ii) Erred in passing the order and dismissing appeal in limine, without providing any opportunity of being heard to the assessee and matter was adjudicated merely on the basis of hearing concluded by erstwhile CIT (A). (iii) Erred in not condoning the delay in filing of appeal against the order giving effect to the Tribunal order by the Ld. AO without appreciating the fact that the assessee had filed a rectification application against the order of the Ld. AO and was under bonafide belief that there was mistake apparent from record which could be rectified. (iv) Erred in not adjudicating the matter on merits and dismissing it in limine without appreciating the fact that the Ld. AO while passing the order giving effect to Tribunal order had not followed the specific directions of Hon’ble Tribunal, and thereby the order is invalid and bad in law. (v) Erred in disallowing the sales tax deferral of Rs. 8,79,58,467/- on the ground on non-payment under section 43B of the Act, without appreciating that the amount was the differential liability between sales tax as recorded in books of accounts and as assessed by VAT authorities, which was inadvertently recorded as interest on sales tax in the books of accounts. (vi) Erred in not appreciating the fact that the sales tax deferral of Rs. 8,79,58,467/- was deemed to be allowed u/s. 43B of the Act, in view of the Government of Andhra Pradesh order dated 22 September, 1985 and CBDT circular no. 496 dated 25 September, 1987 and circular no. 674 dated 29 December 1993, which provided that the deferral of sales tax was deemed to be paid for the purpose of section 43B of the Act on conversion of sales tax inability into loan.” 3 4. At the outset, the Ld. AR submitted before us that there was a delay in filing the appeal before the ld. CIT (A) because the assessee was under the belief that it would get relief by virtue of the rectification application filed U/s. 154 of the Act before the Ld. AO. However, the rectification petition filed by the assessee before the Ld. AO was rejected. Therefore, the assessee filed appeal before the Ld. CIT (A) with a delay of 131 days along with condonation petition. However, the Ld. CIT (A) dismissed the appeal of the assessee by not condoning the delay in filing the appeal. The Ld. AR pleaded before us that if the appeal is not heard on merit substantial injustice would be inflicted on the assessee and hence it was prayed that the Ld. CIT (A) may be directed to condone the delay and hear the appeal on merits. The Ld. DR strongly argued in support of the order of the Ld. CIT (A). 5. We have heard the rival submissions and carefully perused the material on record. It appears from the facts of the case that the assessee was under the bonafide belief that the relief would be granted by the Ld. AO on the application filed by the assessee U/s. 154 of the Act. This inadvertent belief of the assessee has prevented the assessee from filing the appeal before the Ld. CIT (A) within the stipulated period. Further, considering the issues 4 involved in the appeal and the substantial addition made and sustained by the Revenue, We are of the view that the appeal of the assessee is required to be heard on merit. Therefore, in the interest of justice, we hereby direct the Ld. CIT (A) to condone the delay in filing the appeal and hear the appeal on merits and pass appropriate order in accordance with law. 6. In the result, appeal of the assessee is allowed for statistical purposes as indicated herein above. Pronounced in the open Court on 15 th December, 2021. Sd/- Sd/- (CHANDRA MOHAN GARG) (A. MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated:15 th December, 2021. OKK Copy to:- 1) Rain industries Limited (Earlier known as Rain Commodities Limited), Rain Centre, 34, Srinagar Colony, Hyderabad. 2) Office of the Deputy Commissioner of Income Tax, Circle-3(1), Signature Bowers, Kondapur, Opposite Botanical Garden, Hyderabad. 3) The Commissioner of income Tax (Appeal)-3, Hyderabad. 4) The Principal Commissioner of Income Tax-3, Hyderabad. 5) The DR, ITAT, Hyderabad 6) Guard File