M/s. Plast-O-Fine Industries, Gandhidham-Kutch V. The ITO, Ward-2, Gandhidham

ITA 98/RJT/2020

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0977 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-07-2024
• Assessment Year: 2009-2010
• Appeal Filed On: 14-06-2020
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Depreciation; Rectification of order; Period of limitation; Condonation of delay; Unabsorbed depreciation
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं./ITA No.98/RJT/2020 (Assessment Year: 2009-10) (Hybrid Hearing) M/s. Plast-O-Fine Industries, Plot No. 271, A2 Type, Sector- 3, KFTZ, Gandhidham – Kutch, Gujarat-370230 Vs. ITO, Ward-2, Gandhidham - Kutch थायीलेखासं./जीआइआरसं./PAN/GIR No.: AAEFP6986G (अपीलाथ /Appellant) ( यथ /Respondent) नधा रतीक ओरसे / Assessee by : Shri Vimal Desai, A.R. राज वक ओरसे/Revenue by : Shri V. J. Boricha, Sr. DR स ु नवाईक तार ख/ Date of Hearing : 02/07/2024 घोषणाक तार ख/Date of Pronouncement : 08/07/2024 आदेश/ORDER PER ARJUN LAL SAINI, AM: The captioned appeal filed by the assessee, pertaining to Assessment Year 2009-10, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-3, Rajkot, vide order dated 27.11.2019, which in turn arises, out of an order passed by the Assessing Officer under Section 154 of the Income Tax Act, 1961 (hereinafter referred to “as the Act”) vide order dated 18.11.2016. 2. The grounds of appeal raised by the assessee are as follows: “1. The rectification order u/s. 154(4) of the Act passed by the ld. A.O. is bad in law. I.T.A No.98/Rjt/2020 A.Y. 2009-10 M/s. Plast-O-Fine Industries vs. ITO 2 2. The learned Assessing Officer has erred in law as well as on facts in not allowing set-off of brought forward losses and unabsorbed depreciation to the extent of Rs.5,53,366/- against the income. The learned CIT(A) has erred in confirming such action of the A.O.” 3. The appeal filed by the assessee, for assessment year (A.Y.) 2009-10, is barred by limitation by 134 days. The assessee moved a petition for condonation of delay, requesting the Bench to condone the delay. The Learned Counsel for the assessee argued that assessee`s relationship with his regular consultant (chartered accountant), who was handling all the tax matters was not cordial and the assessee was not receiving timely communications from his Chartered Accountant. Subsequently, in the month of February, 2020, assessee received a notice for recovery of demand from the assessing officer (A.O.) and the assessee was asked to make payment of outstanding demand for A.Y. 2009-10. On inquiry with the office of the A.O., the assessee was informed that his appeal for A.Y. 2009-10 was decided ex-parte by the CIT(A)-3, Rajkot, vide appellate order dated 27.11.2019 and the addition made in the rectification order was upheld. However, assessee neither received any communication from his tax consultant nor did receive original appellate order. On inquiry with the office of the CIT(A)-3, Rajkot, assessee came to know that the appellate order dated 27.11.2019 was served on 04.12.2019. Therefore, because of the mistake of the Chartered Accountant, the assessee could not file the appeal, on time. 4. The ld Counsel also explained that out of 134 days, the delay of 80 days are attributable to COVID-19 pandemic, the said period starts from 20 th March 2020 and ends on 15 th June 2020. Subsequently, when the restrictions of lockdown were liberalized, after a period of more than 2 months, the assessee forwarded all the relevant documents to the chartered accountants at Rajkot, who I.T.A No.98/Rjt/2020 A.Y. 2009-10 M/s. Plast-O-Fine Industries vs. ITO 3 has completed all the formalities for filing an appeal, thus, delay in filing the appeal has occurred, which may be condoned, in the interest of justice. 5. On the other hand, the ld. D.R. for the Revenue, argued that the assessee did not mention the entire facts in the Affidavit for condonation of delay, however, the same is mentioned in the prayer for condonation of delay, therefore, since the entire facts were not narrated in the Affidavit, explaining the sufficient cause, to condone the delay, hence delay should not be condoned, as the affidavit is defective. The ld. DR also stated that assessee has failed to explain the sufficient cause, hence delay should not be condoned. 6. We have heard both the parties on this preliminary issue. We find that entire delay of 134 days, in the assessee`s case, under consideration, has occurred because of mistake of the assessee`s, chartered accountant. We also find that although, total delay is 134 days, however, if the delay pertaining to Covid-19 pandemic, is excluded, (for the period 20.03.2020 to 15.06.2020) which comes to 80 days, then effective delay in filing the present appeal comes to 54 days only (134 – 80). Thus, effective delay is only of 54 days and for that the assessee has explained the sufficient cause in the petition for condonation of delay. 7. We do not find merit in the submissions of ld DR for the Revenue, to the effect that affidavit is defective. We note that the assessee has submitted an Affidavit for condonation of delay and in the said Affidavit itself, the assessee mentioned that they have made application for condonation of delay on 12.06.2020, which is part of the Affidavit. The Affidavit for condonation of delay is also bears the date 12.06.2020. Therefore, we note that Affidavit for I.T.A No.98/Rjt/2020 A.Y. 2009-10 M/s. Plast-O-Fine Industries vs. ITO 4 condonation of delay clearly states that “the reasons in the application for condonation of delay are true and correct and hence, delay may be condoned”. Hence, we note that the prayer for condonation of delay is part of the Affidavit and in the prayer for condonation of delay, the assessee has explained the sufficient cause stating that because of the mistake of the Chartered Accountant, the assessee could not get the appellate order, on time and when the assessee received a notice for recovery of demand from the AO, then the assessee came to know that during the appellate proceedings, the Ld. CIT(A) has passed the ex- parte order and dismissed the appeal of the assessee. Soon after this, the assessee took immediate steps to file the appeal before this Tribunal. Therefore, considering the sequence of events mentioned in the petition for condonation of delay, we are of the view that assessee has explained the sufficient cause, so far the effective delay of 54 days are concerned. We note that total delay in filing the appeal before this Tribunal is 134 days. However, if we exclude the period pertaining to Covid-19 pandemic, ( said period in the assessee’s case under consideration is 20.03.2020 to 15.06.2020), the number of days for this period comes at 80 days, the effective delay is only 54 days. We note that 80 days delay should be condoned in view of the suo motu Writ Petition of the Hon’ble Supreme Court, vide suo motu Writ Petition No. 3 of 2020, wherein the Hon’ble Supreme Court stated that the period from 15.03.2020 to 14.03.2021 shall be excluded in computing the period of limitation. Therefore, we note that 80 days, delay is attributable to Covid-19 pandemic and it should be condoned in the light of the suo motu Writ Petition of the Hon’ble Supreme Court (supra). 8. However, for balance delay of 54 days, the assessee has explained the sufficient cause in the petition for condonation of delay and stated that because of the mistake of the Chartered Accountant of the assessee, the assessee could I.T.A No.98/Rjt/2020 A.Y. 2009-10 M/s. Plast-O-Fine Industries vs. ITO 5 not file the appeal, on time, before the Tribunal. We note that after going through the contents of the petition for condonation of delay, we find that sequence of events mentioned in the petition for condonation of delay, clearly demonstrates that assessee was willing to file the appeal on time, and there is no negligence on the part of the assessee. However, because of the mistake committed by the Chartered Accountant of the assessee, the assessee should not be penalized. There was no deliberateness or negligence on the part of the assessee, therefore, we find that reasons given in the Affidavit for condonation of delay are convincing and these reasons would constitute a reasonable and sufficient cause for the delay in filing this appeal. We, therefore, condone the delay of 134 days, and admit the appeal for hearing. 9. On merit Ld. Counsel for the assessee, argued that assessee has raised only one ground wherein the grievance of the assessee is that the assessing officer (AO) has not allowed, the set off of brought forward losses and unabsorbed depreciation to the extent of Rs. 5,53,366/-. The Ld. Counsel for the assessee submitted before us, a brief chart explaining the balance amount of Rs. 5,53,366/-, for which the assessee is entitled for set off of brought forward losses and unabsorbed depreciation. The said chart of the assessee is reproduced below: “The calculation of alleged amount of Rs. 5,53,366 are as under: Sr No. Particular Amount (Rs.) Page number of paper book 1. The amount of addition for A.Y. 2004-05 not contested and adjusted against the loss 2,600 13-15 @15 2. The amount of business loss claimed as set-off in A.Y. 2005-06. 32,99,307 16 & 17 @ 17 3. The additional amount of loss/depreciation set-off by the AO in the assessment order for A.Y. 2005- 2,44,656 29 to 34 @ 34 I.T.A No.98/Rjt/2020 A.Y. 2009-10 M/s. Plast-O-Fine Industries vs. ITO 6 06. 4. The total loss/depreciation set-off given by the AO in the assessment order for A.Y. 2006-07 (including that claimed by the appellant in the return). 21,51,153 21 to 28 @27 &28 Total... 56,97,716 5 Less: Amount already allowed by the AO 51,41,930 Order u/s. 154 6 Less: Amount of addition in AY 2004-05 2,600 Balance amount not granted 5,53,186 Some minor difference 180 Balance amount 5,53,366 ” Therefore, Ld. Counsel contended that suitable instructions may be given to the Assessing Officer to allow the set off of brought forward losses and unabsorbed depreciation to the extent of Rs. 5,53,366/-, which was not allowed to the assessee, however, the assessee is entitled to get the above benefit of brought forward loss and unabsorbed depreciation, as per above chart. 10. On the other hand, the Ld. D.R. for the Revenue did not raise any objection, if the matter is remitted back to the file of the AO for examination of the above chart submitted by the assessee before the Bench. If the assessee is entitled for above claim, the Assessing Officer, may, after due verification, allow the benefit of set off of brought forward losses and unabsorbed depreciation to the assessee, to the extent of Rs. 5,53,366/-. 11. We have heard both the parties and perused all the relevant material available on record. We note that Ld. Counsel stated that the assessee was not allowed, the set off of brought forward losses and unabsorbed depreciation, to the extent of Rs. 5,53,366/-. Therefore, the same may be remitted back to the file of the AO for his examination. We note that the assessee has explained the I.T.A No.98/Rjt/2020 A.Y. 2009-10 M/s. Plast-O-Fine Industries vs. ITO 7 position of various previous years, about set off and brought forward losses and unabsorbed depreciation in the above chart. Therefore, considering the explanation narrated on the respective pages of the Paper Book, which are mentioned in front of the each figure, in the above chart, the ld Counsel claimed that assessee is entitled to claim the set off of brought forward losses and unabsorbed depreciation to the extent of Rs. 5,53,366/-. Therefore, we direct the assessing officer, (AO) to examine the relevant explanations, which are given in the assessee’s Paper Book, in front of each figure, in the above chart, submitted by the assessee, and then allow the assessee, the benefit of set off of brought forward losses and unabsorbed depreciation in accordance with law. Therefore, assessee’s appeal is allowed for statistical purposes. 12. In the result, the appeal filed by the assessee is allowed for statistical purposes, in above terms. Order pronounced in the open court on 08-07-2024 Sd/- Sd/- (DINESH MOHAN SINHA) (A. L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Rajkot Dated: 08/07/2024 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Rajkot 6. Guard file. By order/आदेश से, // TRUE COPY // Assistant Registrar/Sr. P.S./P.S. ITAT, Rajkot