Magic Engineers Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-2(1)(4), Ahmedabad

ITA 91/AHD/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9643 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 12-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause; Condonation of delay
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER ./ ITA NO. 91/AHD/2016 / ASSESSMENT YEAR: 2012-13 M/S. MAGIC ENGINEERS PVT LTD, 15, ARJAV SOCIETY, OPP. FUN REPUBLIC, SATELLITE, AHMEDABAD - 380015 .. APPELL ANT PAN : AABCI 8074 J VS INCOME TAX OFFICER, WARD-2(1)(4) AHMEDABAD .. RESPONDENT ASSESSEE(S) BY : SHRI SANJAY R. SHAH, AR REVENUE BY : SHRI KAMLESH MAKWANA, SR. DR. / DATE OF HEARING 17/02/2016 /DATE OF PRONOUNCEMENT 18/02/2016 / O R D E R THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DI RECTED AGAINST THE ORDER OF THE CIT (A)-2, AHMEDABAD, DATED 02.11.2015 . THE RELEVANT ASSESSMENT YEAR IS 2012-13. 2. THE GROUNDS RAISED READ AS FOLLOWS:- 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN REJECTING THE APPLICATION FOR CONDONATION OF DELAY IN FILING OF T HE APPEAL BEFORE HIM. IT IS SUBMITTED THAT THERE WAS A GENUINE AND REASONABLE CAUSE ON THE PART OF THE APPELLANT IN NOT BEING ABLE TO F ILE THE APPEAL BEFORE THE LEARNED CIT(A) IN STATUTORY TIME AND HENCE SUCH DELAY SHOULD HAVE BEEN CONDONED. IT IS SUBMITTED THAT IT BE SO HELD NOW AND LEARNED CIT(A) BE DIRECTED TO DISPOSE OFF THE APPEAL ON MERITS. 2. (I) ON MERITS, THE LEARNED A.O. ERRED IN LAW AND ON FACTS IN MAKING DISALLOWANCE OF RS.3,00,880/- U/S 14A OF THE ACT R. W. RULE 8D OF THE IT RULES. IT IS SUBMITTED THAT THE SAME REQUIRES T O BE DELETED AS THE APPELLANT HAS NOT EARNED ANY INCOME OUT OF THE INVE STMENT MADE IN THE TAX FREE INCOME YIELDING ASSETS. IT IS SUBMITT ED THAT IT BE SO HELD (SMC) ITA NO. 91/AHD/2016 MAGIC ENGINEERS PVT LTD VS. ITO AY 2012-2013 2 NOW AND THE ADDITION MADE BE DELETED. LEARNED CIT( A) OUGHT TO HAVE DISPOSED OFF THIS GROUND ON MERITS. (II)WITHOUT PREJUDICE TO ABOVE, YOUR APPELLANT RESPE CTFULLY SUBMITS THAT IN ANY CASE THE DISALLOWANCE U/S 14A CANNOT EXCEED AN AMOUNT OF RS.20,939/- BEING THE TOTAL EXPENSES INCURRED BY TH E APPELLANT DURING THE YEAR UNDER CONSIDERATION. IT IS SUBMITT ED THAT IT BE SO HELD NOW. LEARNED CIT(A) BE DIRECTED TO DISPOSE OFF THIS GROUND ON MERIT. 3. BRIEF FACTS OF THE CASE ARE AS FOLLOWS:- THE ASSESSEE IS A PRIVATE LIMITED COMPANY. FOR TH E RELEVANT ASSESSMENT YEAR, ASSESSMENT WAS COMPLETED U/S 143(3 ) OF THE INCOME- TAX ACT ON 06.02.2015, MAKING DISALLOWANCE OF RS.3, 00,880/- U/S. 14A OF THE ACT. 3.1 APPEAL WAS FILED BEFORE THE FIRST APPELLATE AUT HORITY AGAINST THE DISALLOWANCE MADE U/S. 14A OF THE ACT. THERE WAS A DELAY IN FILING THE APPEAL BEFORE THE CIT(A) AND A PETITION TO CONDONE THE DELAY WAS ALSO FILED BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE IN LIMINE WITHOUT GOING INTO THE MERITS OF THE ISSUE. THE CIT(A) DID NOT CONDONE THE DELAY IN FILING THE APPE AL BEFORE HIM. THE RELEVANT FINDING OF THE CIT(A) READS AS UNDER: 2.1 I HAVE CAREFULLY CONSIDERED THE APPLICATION OF THE APPELLANT. IT HAS BEEN NOTICED THAT THE ASSESSMENT ORDER U/S 143(3) WA S PASSED ON 06.02.2015 AND AS PER THE APPELLANT ITSELF THE SAME WAS SERVED ON 06.02.2015 AS PER FORM NO.35 FILED. THUS, THE APPE AL OUGHT TO HAVE BEEN FILED WITHIN 30 DAYS FROM THE DATE OF SERVICE BY 08.03.2015. BUT IN FACT IT HAS FILED THE APPEAL ON 31.03.2015, LATE BY 23 DAYS. IN SUPPORT OF THE DELAY, THE APPELLANT HAS FILED A CERTIFICATE FR OM THE DOCTOR CERTIFYING THAT SHRI CHIRAG MEHTA WAS SUFFERING FROM ACUTE ONS ET SCIATICA WHICH WAS STARTED ON 05.03.2015 AND HE WAS ADVISED COMPLE TE BED REST. THE APPELLANT HAS NOT EXPLAINED THAT HOW AND IN WHAT MA NNER THE OFFICIAL WORK WAS SUFFERED DUE TO SHRI CHIRAG MEHTA AND HOW THAT PERSON WAS CONNECTED/RELATED WITH THE APPELLANT. STILL, THE A PPELLANT ONLY HAS MADE THE REQUEST FOR CONDONATION OF THE DELAY ONLY FOR 1 1 DAYS, WHILE THE (SMC) ITA NO. 91/AHD/2016 MAGIC ENGINEERS PVT LTD VS. ITO AY 2012-2013 3 ACTUAL DELAY WAS 23 DAYS. THUS, THE REQUEST OF COND ONATION OF DELAY IS MADE ONLY FOR THE PART OF THE DELAYED PERIOD. CONSI DERING THE FACTS AND THE SUBMISSION AND ALSO THE INSUFFICIENT AND NON JU STIFIABLE REASONS GIVEN FOR DELAY IN FILING OF THE APPEAL, THE REQUES T FOR CONDONATION OF DELAY IS NOT ACCEPTED. IN OTHER WORDS, THE APPEAL IS NOT ENTERTAINED BECAUSE OF ABSENCE OF REQUEST OF THE COMPLETE PERIO D OF DELAY OF 23 DAYS AND ALSO DUE TO ABSENCE OF GOOD AND SUFFICIENT REAS ONS FOR SUCH DELAY, AND HENCE THE SAME IS DISMISSED. 4. AGGRIEVED BY THE ORDER OF THE CIT(A) IN DISMISSI NG THE APPEAL WITHOUT CONDONING THE DELAY, THE ASSESSEE IS IN APP EAL BEFORE THE TRIBUNAL. 5. THE ASSESSEE HAS FILED AN AFFIDAVIT STATING THE REASONING FOR THE DELAY IN FILING THE APPEAL BEFORE THE CIT(A). IN T HE SAID AFFIDAVIT, THE ASSESSEE ALSO EXPLAINED THE DELAY IN FILING THE APP EAL IS ONLY 11 DAYS INSTEAD OF 23 DAYS CALCULATED BY THE CIT(A). 6. THE LD. DEPARTMENTAL REPRESENTATIVE PRESENT WAS DULY HEARD. 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL ON RECORD. THE CIT(A) HAS NOT CONDONED THE DELAY IN F ILING THE APPEAL FOR TWO REASONS; I) THERE IS A DELAY OF 23 DAYS IN FILING THE APPEAL AN D THE ASSESSEE HAS FILED THE PETITION TO CONDONE THE DELA Y ONLY FOR 11 DAYS; II) DOCTOR HAS CERTIFIED THAT SHRI CHIRAG MEHTA IS SUFFERING FROM ACUTE ONSET SCIATICA. THE CIT(A) HAS OPINED T HAT IT IS NOT EXPLAINED HOW SHRI CHIRAG MEHTA IS CONNECTED OR RELATED WITH THE ASSESSEE-COMPANY. IN THE AFFIDAVIT FILED BY SHRI CHIRAG MEHTA, IT IS STATED THAT HE IS THE DIRECTOR, LOOKING AFTER FINANCIAL AND LEGAL MAT TERS OF THE ASSESSEE- (SMC) ITA NO. 91/AHD/2016 MAGIC ENGINEERS PVT LTD VS. ITO AY 2012-2013 4 COMPANY AND WAS TAKING CARE OF THE LEGAL MATTERS. FURTHER, IN THE AFFIDAVIT, IT IS ALSO MENTIONED THAT THE ASSESSMENT ORDER DATED 06.02.2015 WAS SERVED ON THE ASSESSEE-COMPANY ONLY ON 17.02.2015 AND MENTIONING OF SERVICE OF NOTICE IN FORM NO.35 AS 06 .02.2015 IS ONLY AN INADVERTENT MISTAKE AND THIS IS EVIDENT FROM THE LE TTER ADDRESSED TO THE CIT(A) DATED 30.03.2015. FOR READY REFERENCE, THE AFFIDAVIT OF THE DIRECTOR, SHRI CHIRAG MEHTA IS REPRODUCED BELOW:- 1. I AM DIRECTOR IN MAGIC ENGINEERS PVT LTD, LOOKI NG AFTER THE FINANCIAL AND LEGAL MATTERS OF MAGIC ENGINEERS PVT LTD [MAGIC } AND HENCE COMPETENT TO MAKE THIS AFFIDAVIT. 2. FOR THE ASSESSMENT YEAR 2012-13, THE ASSESSING O FFICER PASSED AN ORDER U/S 143(3) ON 6/2/2015 MAKING DISALLOWANCE OF RS.3,00,880/- U/S 14A OF THE ACT WHICH WAS SERVED ON MAGIC ON 17/ 2/2015. 3. I WAS SUFFERING FROM ACUTE SCIATIC PAIN FROM 5/3/20 15 AND WAS HAVING THE TREATMENT FROM DR. HARSH SHAH, A SPECIALIST IN JOINT REPLACEMENT AND ALSO ORTHOPAEDIC SURGEON WHO HAD ADVISED ME COM PLETE BED-REST FOR A PERIOD OF THREE WEEKS. 4. SINCE THE ORDER U/S 143(3) DATED 6/2/2015 FOR AY 201 2-13 GOT TIME- BARRED FOR FILING APPEAL ON 19/3/2015 DURING WHICH I WAS CONFINED TO BED THE APPEAL COULD NOT BE FILED WITHIN DUE DATE B EFORE THE CIT(A)-2, AHMEDABAD. 5. HOWEVER, IMMEDIATELY AFTER I STARTED ATTENDING TO M Y ROUTINE MATTERS, I TOOK STEPS TO FILE THE APPEAL BEFORE CIT(A)-2 AND THE SAME WAS THEREAFTER FILED UNDER MY SIGNATURE ON 30/3/2015, T HUS THERE WAS A DELAY OF 11 DAYS IN FILING THIS APPEAL BEFORE CIT(A )-2, AHMEDABAD. 6. ALONGWITH THE APPEAL PAPERS FILED BEFORE CIT(A)-2, AHMEDABAD I HAD ALSO ENCLOSED A LETTER DATED 30/3/2015 MENTIONING T HEREIN THAT THE ORDER OF AO WAS SERVED ON MAGIC ON 17/2/2015 AND TH AT THE DELAY IN FILING MAY PLEASE BE CONDONED. UNFORTUNATELY WHILE FILING APPEAL BEFORE CIT(A)-2 IN FORM NO.35 THIS DATE OF SERVICE OF ORDER WAS INADVERTENTLY MENTIONED AS 6/2/2015 BEING THE DATE OF ORDER OF ASSESSING OFFICER. 7. EVEN DURING THE COURSE OF APPELLATE HEARING BEFORE CIT(A)-2, I HAD FILED ANOTHER LETTER DATED 20/7/2015 ENCLOSING THER EWITH THE MEDICAL (SMC) ITA NO. 91/AHD/2016 MAGIC ENGINEERS PVT LTD VS. ITO AY 2012-2013 5 CERTIFICATE FROM DR. HARSH SHAH ABOUT THE FACTUAL A SPECTS OF MY ILLNESS. 8. CIT(A)-2, HOWEVER, DID NOT CONDONE THE DELAY AND DI SMISSED THE APPEAL OF MAGIC ON THE GROUND OF DELAY IN FILING TH E SAME. 9. THE ABOVE AFFIDAVIT IS FILED TO PUT IN PROPER PERSP ECTIVE THE FACTUAL MATRIX OF THE CASE LEADING TO DELAY IN FILING THE A PPEAL BEFORE THE CIT(A)-2, AHMEDABAD AND EXPLAINING THE REASONABILIT Y OF THE CAUSE FOR SUCH DELAY. ON PERUSAL OF THE ABOVE AFFIDAVIT, I AM OF THE OPIN ION THAT THE CIT(A) IS NOT JUSTIFIED IN DISMISSING THE APPEAL WI THOUT CONSIDERING THE ISSUE ON MERITS. THEREFORE, I CONDONE THE DELA Y IN FILING THE APPEAL BEFORE THE CIT(A) AND DIRECT HIM TO CONSIDER THE IS SUE ON MERITS. IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 18TH FEBRUARY, 201 6 AT AHMEDABAD. S D/- ( GEORGE GEORGE K. ) JUDICIAL MEM BER AHMEDABAD; DATED 18/02/2016 BIJU T., PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' ' # / CO NCERNED CIT 4. ' ' # ( ) / THE CIT(A) 5. &'( ! , ' ! , / DR, ITAT, AHMEDABAD 6. (- . / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) !', / ITAT, AHMEDABAD