M/S. RAKESH METAL & TUBES , Mumbai V. INCOME TAX OFFICER 19(3) (1), MUMBAI

ITA 5/MUM/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 1668 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC-1
• Assessment Year: 2009-2010
• Appeal Filed On: 03-01-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Condonation of delay; Set aside
• Section: 143(3); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA No.05/M/2022 Assessment Year: 2009-10 M/s. Rakesh Metal & Tubes, 123, KIKA Street, Gulal Wadi, Mumbai – 400 004 PAN: AAAFR1105P Vs. Income Tax Officer- 19(3)(1), 202, 2 nd Floor, Matru Mandir, Mumbai - 400007 (Appellant) (Respondent) Present for: Assessee by : Shri Satyaprakash Singh, A.R. Revenue by : Shri Ashish Kumar, D.R. Date of Hearing : 06 . 07 . 2022 Date of Pronouncement : 29 . 07 . 2022 O R D E R Per : Kuldip Singh, Judicial Member: The appellant, M/s. Rakesh Metal & Tubes (hereinafter referred to as ‘the assessee’) by filing the present appeal, sought to set aside the impugned order dated 28.12.2021 passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] qua the assessment year 2009-10 on the grounds inter alia that: “1. The order dated 28/12/2021 bearing No.ITBA/NFAC/S/250/2021- 22/1038165415[l] passed under section 250 of Income Tax Act, 1961 by the Hon'ble CIT[Appeals], National Faceless Appeal Centre [NFAC], Delhi, is excessive, unreasonable, arbitrary, against the ITA No.05/M/2022 M/s. Rakesh Metal & Tubes 2 provisions of Income Tax Act, 1961 and therefore liable to be quashed. 2. On facts and circumstances of the case and in law. ihe Hon. C.I.T.(Appeals). NFAC, Delhi has erred in non-condoning the delay in presenting the Appellant even though sufficient cause was demonstrated beyond doubt. 3. On facts and circumstances of the case and in law, the Hon. C.I.T.(Appeals), NFAC, Delhi has grossly erred in passing the order under section 250 of Income Tax Act, 1961 without even affording a personal hearing to the Appellant to present its case. 4. On facts and circumstances of the case and in law, the Hon. C.I.T.(Appeals), NFAC, Delhi has erred in not adjudicating the issue relating to purchase from suspicious traders on the basis of information received from DG1T. Mumbai. 5. The appellant craves to alter, add, delete, substitute, or modify and other grounds of appeal.” 2. Briefly stated facts necessary for adjudication of the controversy at hand are: Assessing Officer (AO) made an addition of Rs.19,52,082/- being 12.5% of the total amount of alleged bogus purchases made by the assessee to the tune of Rs.1,56,16,653/-. The case was reopened on the basis of information received from Sales Tax Department that assessee is one of the beneficiaries of the accommodation entries being provided by the accommodation entry providers. AO accordingly framed the assessment at the total income of Rs.21,92,076/- under section 143(3) read with section 147 of the Income Tax Act, 1961 (for short the ‘Act’). 3. Assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has dismissed the appeal only on ground of delay in filing the appeal without deciding the issues on merits. Feeling aggrieved with the impugned order the assessee has come up before the Tribunal by way of filing present appeal. ITA No.05/M/2022 M/s. Rakesh Metal & Tubes 3 4. We have noticed that impugned order passed by Ld. CIT(A) is not on merits rather appeal of the assessee was dismissed on the ground of delay in filing the same. In para 2 of the impugned order it is mentioned that the appeal before the Ld. CIT(A) was filed on 19.11.2019 whereas the same was required to be filed on 25.04.2015 resulting into delay of 54 months. 5. Now before the Tribunal assessee has challenged the impugned order passed by Ld. CIT(A) primarily on the ground that non condoning the delay by Ld. CIT(A) is arbitrary, illegal and sought to condone the same on the grounds inter alia that the entire income tax related issues were being looked after by father of one of the partners namely Rajesh Uttamchand Shah, who remained admitted in the hospital for treatment of multi organ dysfunction, refractory heart failure, acute kidney injury on chronic kidney disease, bilateral pleural effusion, right vocal cord paresis, ischemic heart disease-post PTCA, LV Dysfunction, hypothyroidism and hypertension and the entire family got involved in providing him the medical treatment; that Uttamchand Prakash G. Shah father of one of the partners ultimately died as per death certificate available on record; that after death of Uttamchand Prakash G. Shah father of the assessee it has come to the notice that all the income tax related matters got delayed. All the reasons pleaded for seeking condonation of delay are supported with an affidavit and medical record running into 25 pages. 6. However, on the other hand, the Ld. D.R. for the Revenue opposed the application for condonation of delay on the ground that when Rajesh Uttamchand Shah was one of the partners in the ITA No.05/M/2022 M/s. Rakesh Metal & Tubes 4 assessee firm it is an afterthought that the entire income tax related issues were being looked after by his father and prayed for dismissal of the application. 7. Keeping in view the facts duly narrated in the affidavit inter alia that the assessee’s father namely Uttamchand Prakash G. Shah was suffering from multiple ailments during the period of delay and remained hospitalized in Sir HN Reliance Foundation Hospital, which we consider beyond the control of the assessee and all these facts to our mind are sufficient cause with the assessee not to file the appeal in time. 8. Hon’ble Supreme Court while deciding the issue of condonation of delay in case of Land Acquisition Collector vs. MST Katiji & Others 167 ITR 471 (SC) held that “when substantial justice and technical considerations are pitted against each other, the case of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non deliberate delay”. So the principle laid down by the Hon’ble Supreme Court is applicable to the reasons of delay in not filing appeal within limitations being beyond the control of the assessee and as such are sufficient to condone the delay. 9. Even by applying the principle of natural justice assessee is required to be provided with an opportunity of being heard which has not been granted by the lower revenue authority. So we are of the considered view that delay of 54 months in filing the appeal before Ld. CIT(A) was neither intentional nor deliberate on the part of the assessee and there being sufficient reasons the Ld. CIT(A) is directed to condone the delay and to decide the appeal of the ITA No.05/M/2022 M/s. Rakesh Metal & Tubes 5 assessee on merits. To substantiate the cause of justice and to decide the issue once for all in order to stop the multiplicity of the proceedings impugned order passed by the Ld. CIT(A) is liable to be set aside. 10. We are of the considered view that when the Ld. CIT(A) has not gone into merits in deciding the appeal rather deciding the same on ground of delay only by dismissing the application for condonation of delay filed by the assessee which has been condoned as per preceding paras, the case is required to be remitted back to the Ld. CIT(A) to decide afresh on merits after condoning the delay as per our findings in the preceding paras. So without entering into merits of the contentions raised by the assessee the impugned order passed by the Ld. CIT(A) is set aside to the file of the Ld. CIT(A) to decide afresh after providing opportunity of being heard to the assessee. 11. Resultantly, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 29.07.2022. Sd/- Sd/- (GAGAN GOYAL) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 29.07.2022. * Kishore, Sr. P.S. Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai ITA No.05/M/2022 M/s. Rakesh Metal & Tubes 6 The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// By Order Dy/Asstt. Registrar, ITAT, Mumbai.