M/s Silver City Housing & Infrastructure Ltd., Chandigarh V. DCIT, C-1(1), Chandigarh

ITA 953/CHANDI/2019

AI Insights

The case involves M/s Silver City Housing & Infrastructure Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals), Chandigarh, concerning the assessment year 2010-11. The primary issues in the appeal included the disallowance of depreciation on a house used as an office, the addition of certain amounts under Section 36(l)(iii) of the Income Tax Act, and the restriction of MAT credit. The Tribunal found that the CIT(A) had not adequately considered the assessee's submissions and documentation, leading to the decision to set aside the matter for a fresh examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127719 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-01-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 25-06-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Right to appeal; Condonation of delay

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “बी ” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “ B ”, CHANDIGARH ी स ु धांश ु ीवा तव, या यक सद य, एवं ी #व$म &संह यादव, लेखा सद य BEFORE: SHRI. SUDHANSHU SRIVASTAVA, JM & SHRI. VIKRAM SINGH YADAV, AM ITA NO. 953 /Chd/ 2019 Assessment Year : 2010-11 M/s Silver City Housing & Infrastructure Ltd. House No. 89, Sector 8-A, Chandigarh The DCIT Circle-1(1), Chandigarh PAN NO: AAKCS4654H Appellant Respondent ! " Assessee by : Shri Tejmohan Singh, Advocate # ! " Revenue by : Shri Akashdeep, JCIT, Sr. DR $ % ! & Date of Hearing : 05/01/2023 '()* ! & Date of Pronouncement : 30/01/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. Commissioner of Income Tax, (Appeals), Chandigarh [hereinafter referred to as ‘CIT(A)’] passed under section 250(6) of the Income Tax Act, 1961 (in short ‘the Act’) dt. 26/05/2014 pertaining to A.Y. 2010-11 wherein the assessee has taken the following grounds of appeal: 1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the addition of Rs.5,55,946/- made by the assessing officer disallowing the depreciation claimed on house being used as an office and as such the addition upheld is arbitrary and unjustified. 2. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the addition of Rs.7,66,255/- made by the Assessing Officer applying the provisions of Section 36(l)(iii) which is arbitrary and unjustified. 3. That the Ld. Commissioner of Income Tax (Appeals) has further erred in upholding the finding of the assessing officer whereby he had restricted the credit of MAT to Rs.8,83,138/- as against Rs. 17,91,281/- available which is arbitrary and unjustified. 4. That the order of the Ld. Commissioner of Income Tax (Appeals) is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable. 2 2. At the outset, the Ld. AR fairly submitted that there is delay in filing the present appeal and in this regard our reference was drawn to the application filed by the assessee seeking condonation of delay as well as affidavit filed by the Director of the assessee company explaining the reasons for delay in filing the present appeal. It has been submitted that there were number of appeals pending before the Ld. CIT(A) in case of the assessee as well as other group companies for multiple years wherein the hearings happened over a period of time and there were cases where the matter were heard and thereafter no notices were received fixing the matter for further hearing and even no orders were received. Therefore for the instant year, the assessee was under the genuine believe that no order has been passed by the Ld. CIT(A). However on 11/11/2017, a notice under section 226(3) was received from the office of the TRO pertaining to A.Y. 2011-12, 2012-13 and 2013-14 and not for impugned assessment year and the assessee was under the belief that appeal is still pending before the ld CIT(A). Thereafter the assessee was involved in deliberation with TRO for multiple years in connection with recovery proceedings and as the assessee was having liquidity problems, the TRO attached the bank accounts and thereafter the assessee was involved in getting its bank account and property released which were attached by the Tax Department. It was submitted that only after the release of the companies bank account and property in Feb 2019, the assessee company could commence his business and matter relating to all pending tax demand and appeals were taken wherein it was noticed that the appeal for the impugned assessment year has been decided by the ld CIT(A) though a copy of the appellate order was not received. Thereafter the assessee moved an application for issuance of duplicate copy of the order which was received on 22/05/2019 and thereafter the assessee filed the subject appeal. It was accordingly submitted that there is no malafide intention in not filing the appeal in time and same may be condoned in interest of substantial justice. 3. Per contra, the Ld. DR submitted that there is substantial delay in filing the present appeal and the assessee cannot take excuse of multiple proceedings as a reasonable cause for not filing the appeal in time. It was submitted that the assessee 3 was duly supported by professionals and therefore it was incumbent on the assessee to take care of its tax matters and file the necessary appeal wherever advised. 4. We have heard the rival contentions and purused the material available on record. There is no dispute that there has been a delay in filing the present appeal and the period of delay as computed by the Registry comes to 1774 days. There is also no dispute that under section 253(5) of the Act, the Tribunal may admit an appeal filed beyond the period of limitation where it is satisfied that there was sufficient cause on the part of the assessee for not presenting the appeal within the prescribed time. The explanation of the assessee therefore becomes relevant to determine whether the same reflects sufficient cause on its part in not presenting the present appeal within the prescribed time. In the instant case, an affidavit of the assessee company submitted through its one of the Directors is placed on record and the contents thereof has been examined and noted supra. We understand that the assessee was involved in tax litigation for multiple years before various forums along with its related entities. It was incumbent on the assessee and the professional supporting it to take care of the tax matters for each of the years involved. It is not a case where the assessee was not adequately supported by professionals. Multiplicity of proceedings cannot be a reason sufficient enough to take appropriate steps before the appellate forums. Where the assessee was alive to its right to file an appeal against the order passed by the AO and has participated in the appellate proceedings and attended the proceedings on the scheduled date of hearings and where the matter was finally heard, it is a reasonable expectation on its part that its submissions were considered and the matter examined and an appropriate order passed by the appellate proceedings. It is also a reasonable expectation that such an order be passed within a reasonable time frame and where such an order is passed and delivered at the last given address by speed post, it should be alive enough to examine the said appellate order and where so advised, take further steps. In the instant case, all the assessee has stated that sometime in February 2019, when it took stock of all pending matters, it came to light that the order has been passed by the ld CIT(A) in May 2014 though a copy thereof has not been received. The fact that TRO has not raised the tax demand and there is change in the office of the ld CIT(A) wouldn’t help the case of the assessee in 4 explaining the delay as the onus is on the assessee to take appropriate steps. It is however unclear as to how the assessee came to know about passing of the appellate order. We therefore find that there are latches on part of the assessee in not filing the present appeal within prescribed time frame. At the same time, we believe that where the assessee has come in appeal before this Tribunal, it deserve an opportunity to be heard once before the matter is consigned to records. As held by the Hon’ble Supreme Court, where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserved to be preferred. Therefore, in exercise of powers under section 253(5) of the Act, we hereby condone the delay in filing the present appeal subject to cost of Rs 10,000/- as accepted by the ld AR on behalf of the assessee during the course of hearing. The same shall be deposited in PM National Relief Fund and evidence thereof should be brought on record. In light of aforesaid discussions, the delay is condoned and the appeal is hereby admitted for adjudication on merits. 5. On merits, the Ld. AR submitted that Ground No 1 relates to upholding of addition of Rs.5,55,946/- made on account of disallowance of depreciation claimed on house being used as an office. It was submitted that during the course of appellate proceedings, assessee placed on record written submissions placed in the Paper Book at Pages 1-6. The explanation in respect of this ground is at Pages 1-2 of the written submissions. The assessee referred to the purchase deed, brochure of the company, ledger account of security expenses, Journal Vouchers and conveyance expenses of employees of the marketing office. It was submitted that the ld CIT(A) without referring to the entire set of evidence filed dismissed the ground of appeal. It was submitted that the reasons mentioned in the order for dismissing the appeal were never confronted to the assessee to give a response thereto. Details of Electricity bills/water bills/other taxes were never asked to be placed on record. The contents of the written submissions at Pages 1 -2 are re-iterated and the evidence placed at Pages 7-57 of the Paper Book are relied upon to impress upon the contention that the house was being used as an office and the depreciation has been rightly claimed. 6. Ground No.2 relates to upholding of addition of Rs.7,66,255/- applying the provisions of Section 36(l)(iii). It was submitted by the ld AR that during the course of 5 Appellate proceedings, the assessee placed on record written submissions placed in the Paper Book at Pages 1 -6. The explanation in respect of this ground is at Pages 2-3 of the written submissions. The assessee specifically referred to the reply dated 23/10/2012 filed before the Assessing Officer. In response to query in respect of loans and advances, the assessee in Point No 8 placed on record the details thereof and in Annexure V gave the details of advances receivable in cash against projects and flats of Rs.7,94,33,467/-. The assessee company is in the business of developing real estate. The advances were given for business purposes only which was explained to the ld CIT(A). The ld CIT(A) without giving any reasoning and without reference to the Annexure V which is self-explanatory dismissed the ground. It was submitted that the business expediency has not been appreciated in the correct perspective and the contents of the written submissions at Pages 2-3 are re-iterated along with the reply dated 23/20/2012. 7. Ground No.3 relates to restricting the MAT credit to Rs.8,83,138/- as against Rs. 17,91,281/- available to the assessee. It was submitted that during the course of Appellate proceedings, assessee placed on record written submissions placed in the Paper Book at Pages 1-6. The explanation in respect of this ground is at Page 6 of the written submissions. The CIT(A) has just reproduced the findings of the Assessing Officer without considering the explanation of the assessee. It was explained that the MAT credit was rightly claimed. In any case, the matter can be restored to the file of the Assessing Officer for verification. 8. The Ld. DR relied on the order of the lower authorities. 9. We have heard the rival contentions and purused the material available on record. We find that it is a common contention of the ld AR that written submissions, the explanation and the supported documentation submitted by the assessee has either not been considered or properly appreciated by the ld CIT(A). It is a matter of record that the explanation and documentation so submitted by the assessee is available on record and therefore, in the fitness of things, we deem it appropriate that the matter is set-aside to the file of the ld CIT(A) to consider the same and decide the matter a fresh as per law after providing reasonable opportunity to the assessee. Both the parties 6 have agreed to the same. Therefore, leaving the various contentions open and not deciding on the merits of the case, the matter is set-aside to the file of the ld CIT(A). 10. In the result, the appeal of the assessee is allowed for statistical purposes. (Order pronounced in the open Court on 30/01/2023 ) Sd/- Sd/- स ु धांश ु ीवा तव #व$म &संह यादव (SUDHANSHU SRIVASTAVA) ( VIKRAM SINGH YADAV) या यक सद य / JUDICIAL MEMBER लेखा सद य/ ACCOUNTANT MEMBER AG Date: 30/01/2023 ( + ! , - . - Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. $ / CIT 4. $ / 0 1 The CIT(A) 5. - 2 ग 4 5 & 4 5 678 ग9 DR, ITAT, CHANDIGARH 6. ग 8 : % Guard File ( + $ By order, ; # Assistant Registrar