BOMBAY GASLIGHT STORES, VISAKHAPATNAM V. DCIT ,ACIT, CIRCLE 3(1), VISAKHAPATNAM

ITA 55/VIZ/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1477 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 11-06-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 19-02-2024
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: APARNA VILLURI
• Assessee Lawyers: SREEKAR VEDULA
• Keywords: Reasonable cause; Condonation of delay
• Section: 143(1)

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम “SMC” पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER आयकर अपील सं./I.T.A.No.55/Viz/2024 (ननधधारण वर्ा / Assessment Year : 2018-19) Bombay Gaslight Stores 10-1-27/A, Asilmetta Visakhapatnam [PAN : AAAAB0207B] Vs. DCIT/ACIT Circle-3(1) Visakhapatnam (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri Sreekar Vedula, AR प्रत्यधथी की ओर से / Respondent by : Dr.Aparna Villuri, DR सुनवधई की तधरीख / Date of Hearing : 12.06.2024 घोर्णध की तधरीख/Date of Pronouncement : 25.06.2024 आदेश /O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : Condonation of Delay : This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], Mumbai in DIN & Order No.ITBA/APL/S/250/2023-24/1058556370(1) dated 07.12.2023 arising out of intimation u/s 143(1) of the Income Tax Act, 1961 (in short ‘Act’) dated 03.09.2019 with the delay of 12 days. The assessee filed condonation petition, submitting that the mother of the managing partner was not in proper health due to her age and the he had to assist 2 I.T.A. No.55/Viz/2024, A.Y.2018-19 Bombay Gaslight Stores, Visakhapatnam her since she has been taking treatment for a long time. He, therefore, pleaded to condone the delay and admit the appeal for hearing. 2. I have gone through the condonation petition filed by the assessee and find that the assessee was prevented by a reasonable cause to file the appeal belatedly. Hence, I condone the delay and admit the appeal for hearing. 3. Brief facts of the case as submitted by the assessee are that the assessee is a partnership firm, being assessed to tax with the same status and same PAN for the past three decades. However, the assessee found that the allotted PAN is indicating the status as AOP instead of partnership and the same was brought to the notice of the income tax department and also to the notice of the assessing officers several times, but no action was taken, despite of many reminders given by the assessee. Assessment during the impugned assessment year was completed in the status of AOP and the CPC has disallowed deductions u/s 40(b)(iv) of the Act in respect of interest and remuneration paid to the partners and made addition of the same. 4. Aggrieved by the intimation u/s 143(1) of the Act, the assessee preferred an appeal before the CIT(A) with the delay of 1008 days and filed condonation petition. Relying on various judicial precedents, the 3 I.T.A. No.55/Viz/2024, A.Y.2018-19 Bombay Gaslight Stores, Visakhapatnam Ld.CIT(A) rejected the condonation petition filed by the assessee, holding that there is no sufficient cause to file the delayed appeal and accordingly dismissed the appeal of the assessee . 5. Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal and raised the following grounds : Incorrect PAN Designation: The Income Tax Department erroneously designated our entity as an Association of Persons (AOP) instead of a partnership firm due to a technical mistake in the PAN number issued. Historical Assessment: For the past three decades, our firm has consistently been assessed for income tax as a partnership firm, with assessments completed by the department reflecting this status. Documentation: All official records, including the PAN card issued by the department, corroborate our status as a registered partnership firm. The issuance of the PAN card was based on partnership deed documentation, further affirming our classification. Lack of AOP Existence: There is no evidence or documentation indicating the existence of an Association of Persons related to our entity. The assessment completed by the Central Processing Centre (CPC) solely relied on the technical discrepancy in the PAN number, overlooking the substantive legal status of our firm. Repeated Notifications: Despite multiple notifications to the department highlighting the error in our PAN designation and requesting correction, no action was taken by the assessing officers. Unilateral Assessment: The sudden completion of the assessment by the CPC, treating us as an AOP, without due consideration of our documented status as a partnership firm, is unjust and constitutes a breach of fair assessment practices. 4 I.T.A. No.55/Viz/2024, A.Y.2018-19 Bombay Gaslight Stores, Visakhapatnam Request for Justice: We appeal to the authorities for justice in rectifying this error, restoring our correct classification as a partnership firm, and ensuring fair treatment in all future assessments. We urge the department to review our appeal thoroughly and take corrective action to rectify this oversight promptly. 5. The main grievance of the assessee is that the Ld.CIT(A) has not condoned the delay in filing the appeal for 1008 days. He submitted that there was change in administrative staff and the management roles, post covid, hence, there was a delay in following up the statutory proceedings. He further submitted that the delay in filing the appeal before the Ld.CIT(A) was attributable to circumstances beyond the control of the assessee. He further submitted that the onset of covid pandemic and subsequent lockdown coupled with change in management responsibilities due to illness caused the delay. Therefore, the Ld.AR submitted before me that since the assessee has established the reasonable cause, the orders passed by the Ld.CIT(A) are to be set aside and pleaded to remit the matter back to the file of the Ld.CIT(A) to dispose of the appeal on merits. 6. Per contra, the Ld.DR submitted that even before covid pandemic, the assessee failed to file the appeal and he has not given any sufficient reason for the delay of five months prior to the covid pandemic and also 5 I.T.A. No.55/Viz/2024, A.Y.2018-19 Bombay Gaslight Stores, Visakhapatnam even after covid pandemic, the assessee failed to give any sufficient cause which prevented the assessee to file the appeal in time but to file the appeal beyond the period of 8 months. The Ld.DR, therefore submitted that there is no valid reason to condone the delay of 1008 days and pleaded to uphold the order of the Ld.CIT(A) and dismiss the appeal of the assessee. 7. I have heard both the parties and perused the material placed on record. In the instant case, the assessment order was passed and served on the assessee on 03.09.2019, therefore, the assessee ought to have filed appeal within 30 days before the Ld.CIT(A) from the date of receipt of the assessment order i.e. on or before 02.10.2019 and considering 02.10.2019 being a national holiday, the assessee ought to have filed the appeal by 03.10.2019. Lockdown during covid pandemic started in March 2020 and there is a delay of 5 months even before the lockdown started, from the date from which the assessee ought to have filed the appeal before the Ld.CIT(A). Covid pandemic pacified in March, 2022 and the assessee preferred appeal before the Ld.CIT(A) in November 2022, which means the assessee did not prefer appeal for eight months even after covid. The assessee has not given any valid reasons for non filing of the appeal even after covid pandemic for about eight months. The Ld.AR 6 I.T.A. No.55/Viz/2024, A.Y.2018-19 Bombay Gaslight Stores, Visakhapatnam simply submitted before me that due to illness of one of the partners and other administrative problems, the assessee did not prefer appeal in time and has not given any valid reasons before me. Moreover, according to section 9 of the Limitation Act, where once time has begun to run, no subsequent disability or inability to institute a suit or make an application stops it. Therefore, the limitation in the present case on hand has started on 02.09.2019 and the delay in filing the appeal in this case before the Ld.CIT(A) is 1008 days. I find that the assessee has not established any sufficient cause to condone the delay of 1008 days to prevent him to prefer appeal before the Ld.CIT(A) belatedly. Apart from this, even after covid pandemic also, there is huge delay of 8 more months. Considering all the facts and circumstances of the case, I am of the view that the Ld.CIT(A) has rightly dismissed the appeal filed by the assessee, since the assessee has not established any sufficient cause to condone the delay. Therefore, I find no infirmity in the order passed by the Ld.CIT(A) and hence, dismiss the grounds raised by the assessee. 8. In the result, appeal of the assessee is dismissed. 7 I.T.A. No.55/Viz/2024, A.Y.2018-19 Bombay Gaslight Stores, Visakhapatnam Order pronounced in the open court on 25 th June, 2024. Sd/- (द ु व्वूरु आर.एल रेड्डी) (DUVVURU RL REDDY) न्याधयक सदस्य/JUDICIAL MEMBER Dated : 25.06.2024 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– M/s Bombay Gaslight Stores, 10-1-27/A, Asilmetta, Visakhapatnam 2. रधजस्व/The Revenue – The DCIT/ACIT, Circle-3(1), Visakhapatnam 3. The Principal Commissioner of Income Tax,Visakhapatnam 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam