Chirag P. Thummar, L/h Pravinbhai Thummar, Navsari V. Principal Commissioner of Income Tax, Valsad

ITA 44/SRT/2022

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 4220 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-01-2024
• Assessment Year: 2008-2009
• Appeal Filed On: 23-02-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH
• Keywords: Revision of order; Opportunity of being heard; Principle of natural justice; Bonafide belief; Period of limitation; Condonation of delay; Ignorance of law; Set aside
• Section: 263; 143(3); 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकर अपील सं./ITA No.44/SRT/2022 Assessment Year: (2008-09) (Physical Hearing) Chirag P. Thummar, L/h of Pravinbhai Thummar, 78-D, Sheetal Park Society, Vijalpore, Jalalpore, Navsari – 396421. Vs. The PCIT, Valsad èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AJCPP1386P (Appellant) (Respondent) Appellant by Shri Rasesh Shah, CA Respondent by Shri Ravinder Sindhu, CIT(DR) Date of Hearing 08/01/2024 Date of Pronouncement 22/01/2024 आदेश / O R D E R PER DR. A. L. SAINI, AM: By way of this appeal, the assessee has challenged the correctness of the order passed by the Learned Principal Commissioner of Income Tax, Valsad, (in short ‘ld. PCIT’), dated 22.03.2017 under section 263 of the Income Tax Act, 1961 (in short ‘the Act’). 2. The appeal filed by the assessee for Assessment Year 2008-09, is barred by limitation by 1740 days. The assessee has moved a petition requesting the Bench to condone the delay. The Ld. Counsel argued that delay identified by the Registry of ITAT is 1740 days, however, the effective delay is only one thousand one hundred (1100) days only, if the Covid-19 Pandemic period, is excluded, which ended on 22.03.2022. Therefore, effective delay in filing the appeal should be considered one thousand one hundred (1100) days. 2 ITA No.44/SRT/2022/AY.2008-09 Chirag P. Thummar For that, the Ld. Counsel submitted an affidavit for condonation of delay, which is reproduced below: “(1) The assessee begs to prefer this application for condonation of delay in relation to Appeal filed against the order of the PCIT, Valsad u/s 263 of the Act which is received by the assessee on 22.03.2017. There is a delay of 1740 days in filing the appeal before Honourable Tribunal against the order passed by PCIT, Valsad. (2) That the appeal was filed late as the income tax practitioner Shri Sanjay Gandhi didn’t advise the assessee to file appeal against the order u/s 263, under the bonafide belief that the order u/s 263 was not appealable. The order u/s 143(3) r.w.s. 263 was subsequently passed on 29.12.2017. Against this order the Sanjay Gandhi, the ITP of assessee advised his client to file the appeal. (3) Accordingly, the appeal fee of Rs.1,000/- was paid on 04.01.2018 within due date of filing the appeal. The appeal was drafted but actually appeal was not filed. However, the assessee and the ITP was under the honest belief that the appeal was filed before CIT(A). The assessee also made the payment of Rs.2,00,000/- being more than 20% of the demand raised vide order passed u/s 143(3) r.w.s. 263 vide challan dated 09.02.2018 so that stay is granted as per instruction of CBDT in F. No.404/72/93-ITCC on 31.07.2017. As the assessee didn’t receive hearing notice from the office of CIT(A), it was ultimately found that appeal before CIT(A) was not actually filed. (4) Therefore, the assessee and his ITP Shri Sanjay Gandhi approached CA Rasesh Shah for consultation in the month of February, 2022. Hence, CA Rasesh Shah advised him to take chance by filing the belated appeal against the order passed u/s 263. (5) The case of the assessee is meritorious one as at the time of passing the original assessment order, proper inquiry was made by the assessing officer in respect of the cash deposit made in the bank account. (6) Therefore, in the facts and circumstances of the case, the applicant prayed to his Honourable Income Tax Appellate Tribunal: (a) To condone the delay of 1740 days in filing the Appeal No.44/SRT/2022 and to extent the time for filing the same inclusive and upto the date of filing the appeal; (b) To grant such other and further relief as deemed fit by Honourable Income Tax Appellate Tribunal. (7) The above stated facts are true and correct to the best of my knowledge and belief and I know that to make a false affidavit is a criminal offence.” 3 ITA No.44/SRT/2022/AY.2008-09 Chirag P. Thummar 3. The ld Counsel also stated that since the assessee has not filed the appeal before the ld. CIT(A), against the appeal effect order passed by the assessing officer under section 263 r.w.s 147 of the Income Tax Act, 1961, dated 29.12.2017, therefore, delay may be condoned, as the assessee has not exercised the alternative remedy available to him to file the appeal before ld CIT(A). The ld Counsel also stated that assessee should not be penalized because of mistake committed by assessee`s advocate/ITP. The ld Counsel further stated that the reasons given in the affidavit for condonation of delay were convincing and these reasons would constitute reasonable and sufficient cause for the delay in filing this appeal, hence in the interest of justice the delay may be condoned. 4. The ld Counsel further argued that since the order passed by ld PCIT is an ex parte order therefore order of ld PCIT, passed under section 263 of the Act, may be set aside and the matter may be remitted back to the file of ld PCIT for fresh adjudication. 5. On the other hand, Learned Commissioner of Income Tax – Departmental Representative (ld. CIT-DR) for the Revenue, opposed the prayer of the assessee to condone delay in filing the appeal and stated that such huge delay should not be condoned merely on the reasons that assessee`s advocate/ITP has committed mistake in not advising the assessee to file the appeal and the assessee does not know whether order passed by ld PCIT u/s 263 of the Act, is appealable or not. Ignorance of law is not an excuse. The ld. CIT-DR also stated that assessee has failed to explain the sufficient cause/reason to condone the delay and even if the delay attributable to the Covid-19, Pandemic 4 ITA No.44/SRT/2022/AY.2008-09 Chirag P. Thummar period, are excluded, then also there is a delay of 1100 days therefore such huge delay should not be condoned. 6. In rejoinder, the Ld. Counsel submitted that the assessee has paid 20% tax demand, which has arised after appeal effect of the order of ld. PCIT passed under section 263 of the Act, therefore assessee has intention to file the appeal before the Tribunal against the order of ld. PCIT passed under section 263 of the Act. The assessee has also deposited the fees for filing the appeal, before this Tribunal in advance. Therefore, Ld. Counsel contended that the delay may be condoned. 7. We have heard both the parties on this preliminary issue. We note that Hon`ble Supreme Court, vide MISCELLANEOUS APPLICATION NO. 21 OF 2022 has extended the period from 15.03.2020 till 28.02.2022, which shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings. The findings of the Hon`ble Supreme Court are as follows: “Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions: The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi judicial proceedings. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022. In cases where the limitation would have expired during the period between 15.03.2020 till 5 ITA No.44/SRT/2022/AY.2008-09 Chirag P. Thummar 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.” 8. We note that after excluding the period of Covid-19 Pandemic, the effective delay in filing this appeal is 1100 days. To explain such balance delay, the ld Counsel stated that there was a mistake on the part of the ld Counsel, not to advise the assessee to the effect that order passed by ld PCIT is appealable. We find merit in the submission of ld Counsel to the effect that mistake committed by advocate/CA of assessee is one of the reasons to condone the delay, for that reliance is placed on the decision of I.T.A.T., 'C' Bench, Kolkata in the case of M/s. Garg Bros. Pvt. Ltd. & Others vs. DCIT [ITA Nos.2519 to 2521/Kol/2017, order dated 18.04.2018], wherein under similar set of facts and reasons, the Hon'ble Tribunal was pleased to condone the delay of 211 days by holding as under: “3. We have heard both the parties on this preliminary issue. Having regard to the reasons given in the application for condonation of delay, we are of the considered opinion that assessee was under a bona fide belief that the impugned order of Pr. CIT was not appealable before this Tribunal since they were not advised by their Tax Consultants about this legal right. Later on, when a Senior Lawyer advised them to file an appeal, the assessees immediately took steps to file the appeals. Therefore, the delay caused. We note that delay was occurred because of the wrong advice of the Tax Professional for which assessees cannot be penalized. For the ends of justice, we condone the delay and admit the appeal for hearing.” 9. We note that in assessee`s case under consideration, the appeal was filed late, as the income tax practitioner (Shri Sanjay Gandhi) of 6 ITA No.44/SRT/2022/AY.2008-09 Chirag P. Thummar assessee, did not advise the assessee to file appeal against the order u/s 263 of the Act, under the bona fide belief that the order u/s 263, was not appealable. We note that the power to condone the delay is discretionary and the discretion must be judicially exercised. The words ‘sufficient cause’ should receive a liberal construction so as to advance substantial justice where no negligence nor inaction nor want of bona- fide is imputable to the applicant. Thus, mistake of the lawyer or accountant may be a good reason for condoning delay. 10. In considering the condonation petition, it is to be remembered that statutes conferring a right of appeal must be construed in furtherance of justice and the provision limiting the time for bringing an appeal must be liberally interpreted, so that the party pursuing such remedy allowed to him by the law is not ‘non-suited’ on mere technicalities [Chaman Lal Bros. P. Ltd. v. The Punjab State, (1961) 12 STC 643 (Punj)]. An honest mistake of calculation of period of limitation committed either by an advocate or by the party remains an honest mistake and will furnish sufficient ground for condonation of delay [Central Bank of India v. Devdatt Shukla, AIR 1995 MP 214, 215]. Similarly, a bona fide mistake of the Advocate of the assessee, in giving advice to file appeal in a wrong forum can be regarded as a sufficient ground for condoning the delay in filing the appeal in the proper forum [Savita Sadi Centre v. Bank of Boroda, AIR 1998 (Bom) 231,232]. In the case of Radha Krishna Rai v. Allahabad Bank [(2000) 9 SCC 33. 733-34]. it has been held that though the period of delay (1418 days) is unduly long for condonation of delay in preferring the appeal, the circumstances are also very unusual. The petitioner has been a victim of misrepresentation of facts by his own advocate and was kept under the impression that the appeal is pending before the High Court 7 ITA No.44/SRT/2022/AY.2008-09 Chirag P. Thummar whereas no appeal was in fact filed by the advocate. It cannot be said that the appellant has not been vigilant in prosecuting the appeal. The cause shown by the petitioner is sufficient to justify condoning the delay in filing the appeal. Therefore, having regard to the reasons given in the petition, we condone the delay and admit the appeal for hearing. 11. On merit, the ld. Counsel for the assessee assailed the impugned order by contending that the assessee could not represent his case before Ld. PCIT during revision proceedings under section 263 of the Act and the order being an ex-parte order, stood vitiated on account of violation of principle of natural justice. The ld. Counsel for the assessee contended that in the interest of justice, another opportunity to contest the appeal before the Ld. PCIT may be granted to the assessee. 12. The ld. DR for the Revenue debarred from objecting the stand of the ld. Counsel. 13. We have heard both the parties. We note that in the assessee’s case under consideration, the impugned order passed by the ld. PCIT, under section 263 of the Act, is an ex parte order and non-speaking order, therefore, we do not wish to make any comments on the merits of the grounds raised by the assessee. Considering the above facts, we note that assessee has not given sufficient opportunity of being heard and could not plead his case successfully before the ld. PCIT. Therefore, we deem it fit and proper to set aside the order of the ld. PCIT and remit the matter back to the file of the ld. PCIT to adjudicate the issue afresh on merits. For statistical purposes, the appeal of the assessee is treated as allowed. 8 ITA No.44/SRT/2022/AY.2008-09 Chirag P. Thummar 14. In the result, the appeal filed by the assessee is allowed for statistical purposes in above terms. Order is pronounced on 22/01/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 22/01/2024 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat