LINTAS EMPLOYEES RECREATION TRUST ,MUMBAI V. ITO WARD 25(2)(1), MUMBAI

ITA 3747/MUM/2025

AI Insights

The case involves the Lintas Employees Recreation Trust appealing against the order of the CIT(A) which dismissed their appeal as being barred by limitation. The appeal was initially filed with a significant delay, attributed to the health issues of the Trust's administrator and technical problems with the Income Tax Portal during the COVID-19 pandemic. The Tribunal considered similar precedents and the unique circumstances of the pandemic and the administrator's health, leading to the decision to condone the delay and remand the case for a decision on the merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713293 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2021-2022
• Other Referred Cases: M/s. Lintas Employees Hobbies and Craft Trust Vs. Income Tax Officer Ward 22(2)(1), M/s. Lintas Employees Family Planning Assistance Trust Vs. Centralilzed Processing Centre
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASSESSEE
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Principle of natural justice; TDS; FORM 26AS
• Section: 154

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No.3747/MUM/2025 (Assessment Year:2021-2022) Lintas Employees Recreation Trust 13th Floor, Express Towers, Nariman Point Mumbai - 400021. Maharashtra [PAN:AAATL0332Q] …………. Appellant Income Tax Officer Ward 25(2)(1), Mumbai Kautilya Bhavan, Mumbai - 400051. Maharashtra Vs …………. Respondent Appearance For the Appellant/Assessee For the Respondent/Department : : Shri Prakash Jotwani Shri Surendra Mohan Date Conclusion of hearing Pronouncement of order : : 28.07.2025 31.07.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal preferred by the Assessee is directed against the order, dated 13/03/2025, passed by the Additional/Joint Commissioner of Income Tax (Appeals) – 3, Ahmedabad [hereinafter referred to as ‘the CIT(A)’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] whereby the Ld. CIT(A) had dismissed the appeal against the Intimation Order, dated 28/12/2022, passed under Section 143(1) of the Act for the Assessment Year 2021-2022. 2. The Assessee has raised following grounds of appeal : On the facts and circumstance of the case and in law: “Ground No.1 ERRED IN NOT CONDOING DELAY IN FILING THE APPEAL Printed from counselvise.com ITA No.3747/Mum/2025 Assessment Year 2021-2022 2 The learned CIT(A) erred in dismissing the appeal without considering the merits of the case, and erred in not condoning the delay of 390 days in filing the appeal against the Intimation u/s.143(1) dated 28- 12-2022, which was filed on 21-02-2024 and failed to take into consideration the reasons provided for the delay in filing the appeal. The reasons assigned for rejection nor refusing the condonation of delay, are unjustified and contrary to the principles of natural justice. GROUND NO.2: ADDITION IN AN INTIMATION ORDER U/S.143(1) The learned CIT(A) failed to take into consideration that the AO/CPC does not have any jurisdiction to make an adjustment in an Intimation Order u/s.143(1), and that the same should have been a matter of scrutiny proceedings and therefore clearly it is a mistake apparent on record. GROUND NO.3: LONG TERM CAPITAL LOSS OF INR.1,16,445/- The learned CIT(A) failed to take into consideration that the AO/CPC erred in making an addition of Rs.1,66,445/- under the head Long Term Capital Gain, although the same was actually a Long Term Capital Loss of Rs.1,66,445/- arising on account of sale of Tata Steel Perpetual Bonds Face Value of Rs.10,00,000 each. GROUND NO.4: LEVY OF SURCHARGE @37% of RS.2,98,637/- The learned CIT(A) failed to take into consideration that the income is below the limit of Rs.50 lakhs prescribed under the Act and therefore the Surcharge is not leviable, as the assessed income was disclosed at Rs.27,29,230/- and further erred in not following the decision of the ITAT in the appellant’s own case, where relief has been granted on account of levy of surcharge GROUND NO.5: DENIAL OF TDS CREDIT OF Rs.4,500/- a) The learned AO/CPC erred in denying TDS credit of Rs.4,500/- with respect to the corresponding income of Rs.60,000/- received from North Point Centre of Learning, merely on the basis of information gathered from Form 26AS. b) Without prejudice, in the event the TDS credit of Rs.4,500/- has been denied in AY.2021-22, then the corresponding income of Rs.60,000/- should also be reduced from the total income.” 3. We have heard both the sides and perused the material on record. 4. By way of present appeal the Assessee has challenged the order passed by the learned CIT(A), dated 13/03/2025 whereby the appeal preferred by the Assessee against the Intimation Order, Printed from counselvise.com ITA No.3747/Mum/2025 Assessment Year 2021-2022 3 dated. Issued under Section 143(1) of the Act was dismissed in limine as being barred by limitation. 5. We have heard both the sides and have perused the material on record. We find that the Assessee had provide following explanation for delay in filing the appeal before the CIT(A) (which is reproduced at Paragraph 7 of the order impugned). “7.1. The reason for condonation of delay is as under: (1) MR. DINESH KABRA, aged 74 years, is the Administrator, and is in charge of the accounts and finance of the Assessee Trust. He has been looking after all the tax litigation matters of the Assessee Trust. (ii) Mr. Dinesh Kabra received the Intimation Order u/s. 143(1) dated 28.12.2022, for AY. 2021-22. (iii) Since he was having serious health issues due to covid along with pneumonia and was quite unwell, he was attending to matters of the Assessee Trust only once a week and on urgent matters only. He was advised by the Doctors to take rest due to his ill health. (iv) On becoming aware of the impugned Intimation u/s. 143(1) being passed, several efforts were being made to file rectification application u/s. 154 either online on the portal or in physical mode. (v) However, since the Income Tax Portal was completely upgraded and revamped was under construction for a long time, it seems that there was not and there is no tab to file rectification application u/s. 154. This caused immense delay in filing the appeal. (vi) The Assessee Trust contacted their lawyers who suggested that despite there merely being a mistake apparent on record which is clerical in nature, an appeal should be filed in order to get justice and equity. (vii) Accordingly, an appeal has been filed against the Intimation Order u/s. 143(1), with a delay of 390 days (approximately). (viii) Due to the ongoing pandemic scenario prevalent in India and the prolonged maintenance on account of technical issues and Printed from counselvise.com ITA No.3747/Mum/2025 Assessment Year 2021-2022 4 upgradation of the Income Tax Portal, the Assessee was unable to file the appeal within time limits prescribed.” 6. However, the CIT(A) declined to condone the delay and dismissed the appeal as being barred by limitation holding as under: “7.2 The submissions of the appellant are considered but found to be not acceptable for the reason that the appellant should have consulted the accountant first after getting the order u/s 143(1) or u/s 154 of the I.T. Act and appeal should have been filed first. Being a responsible tax payer assessee should be more careful regarding filing the appeal. In this case, the date of order u/s 143(1) is 28.12.2022 and the due date of filing the appeal was 27.01.2023 instead of 30 days of filing of appeal, the appellant has filed on 21.02.2024. Thus there is a gap of filing of appeal of 390 days without substantiating the delay for filing the appeal. 7.3 Even the appellant has paid the appeal fee of Rs 1000/- on 16.02.2024 beyond the due date of filing of appeal which also proved that the fee payment has not been made before due date of filing of the appeal i.e. on 27.01.2023. 7.4 In absence of good and justifiable reasons for delay in filing the appeal, the appeal” 7. We find that the CIT(A) did not take into consideration the reasons furnished by the Assessee for delay in filing the present appeal and declined to condone the delay by observing that the Assessee should have been more careful regarding filing the appeal since the CIT(A) was of the view that the Assessee should have immediately consulted the tax professional on receipt of Intimation, dated 28/11/2022 issued under Section 143(1) of the Act. 8. We note that before the CIT(A) the Assessee had cited ill health of administrator, who was about 74 years of age and was facing health issue on account of covid and pneumonia, as the reason for delay in filing the appeal. We find that in the case of M/s. Lintas Employees Hobbies and Craft Trust Vs. Income Tax Officer Ward 22(2)(1), the assessee being an associate trust set up for welfare of employees, the Mumbai Bench of the Tribunal had accepted identical reasons/explanation as genuine/bonafide while condoning the delay of 341 days in filing appeal vide order, dated 23/05/2025 passed in Printed from counselvise.com ITA No.3747/Mum/2025 Assessment Year 2021-2022 5 ITA No. 1801&1802/Mum/2025, Assessment Year 2019-2020 and 2020-2021]. The relevant extract of the aforesaid decision of the Tribunal reads as under: “3. Coming to ITA No.1801/M/2025, we observe that the Assessing Officer (AO)/CPC vide intimation/order u/s 143(1) of the Act dated 01.05.2020 assessed the total income of the Assessee at Rs.20,64,260/- and made the addition of Rs.12,50,214/- in total (Rs.6,74,181/- being dividend from mutual funds which was claimed by the Assessee as exempt u/s 10(35) of the Act + Rs.5,76,033/- interest from tax free bonds which was claimed as exempt u/s 10(15) of the Act. 4. The Assessee, being aggrieved, challenged the said additions before the Ld. Addl./Joint Commissioner by filing first appeal, however, with the delay of 979 days in filing of the same. As observed above, the CPC/AO has passed the order/intimation on dated 01.05.2020 and that time Covid period has already been started and therefore considering the peculiar facts and circumstances the Hon'ble Apex Court, in suo-moto case in writ petition No.3 of 2020 & ors. decided on January 10, 2022, exempted the period from 15.03.2020 till 28.02.2022 and therefore, if we exclude the excluded period for filling of appeal, revision etc. as directed by the Hon'ble Apex Court and filing of appeal on dated 04.02.2023, the exact delay would come to 341 days. 4.1. Admittedly, the Assessee has as many as 12 trusts for welfare of its employees and in all the cases pertaining to A.Y. 2019-20 & 2020-21 to all the trusts the assessment/intimation orders were passed u/s 143(1) of the Act on dated 01.05.2020. And therefore the Assessee has claimed, as the time when the intimation/order was passed by the CPC on dated 01.05.2020, Covid period was going on and therefore only one manager namely Mr. Dinesh Kabra was available in office and the office for staff was closed entirely and thus such manager could not see the mails that arrived from the Department. However, once Mr. Kabra resumed office after a long time, he was able to see the mails about receipt of orders and consequently all appeals of 12 trusts were filed at a time around February 2023 before the CIT(A), along with condonation of delay varied from case to case. In all other cases, the Ld. CIT(A) has allowed the condonation of delay except in the instant case. 4.2 The Assessee, before this Court, has also submitted duly sworn affidavit dated 19.01.2023 of one of the trustees namely Mr. Printed from counselvise.com ITA No.3747/Mum/2025 Assessment Year 2021-2022 6 Shahrook Munsiff, wherein the reasons for delay are demonstrated as under: “1. I say that I am the Trustee of LINTAS EMPLOYEES HOBBIES AND CRAFTS TRUST, (hereinafter referred to as \"the Assessee Trust\"). 2. I say that MR. DINESH KABRA, aged 74 years, is the Administrator, and is in charge of the accounts and finance of the Assessee Trust. The Assessee Trust has been regularly filing the Income Tax Returns and looking after all the tax litigation matters of the Assessee Trust. For the AY. 2019-20, the Assessee Trust was in receipt of Intimation Order u/s. 143(1), which was passed on 01-05-2020. 4. Mr. Dinesh Kabra was having serious health issues due to covid along with pneumonia and was quite unwell. Due to the Covid Pandemic, he was attending to matters of the Assessee Trust only once a week and on urgent matters only. He was advised by the Doctors to take rest due to his ill health. 5. I say that I was unaware of the Intimation us. 143(1) being passed. When it was brought to my notice, I saw that there was a demand raised in the Intimation u/s. 143(1), against which we made several efforts to file rectification application u/s. 154 either online on the portal or in physical mode. 6. On 12-05-2020, an employee working from the accounts team of the Assessee Trust (who was working from home during the Covid Lock Down), filed an online response to the outstanding demand, on the I.Tax Portal and intimated about the mistake apparent on record of the Intimation u/s. 143(1). However till date no response has been received from the 1. Tax Department on this issue till date. 7. However, since the Income Tax Portal was completely upgraded and revamped was under construction for a long time, it seems that there was not and there is no tab to file rectification application u/s. 154. This caused immense delay in filing the appeal. 8. Accordingly, I contacted my lawyers who suggested that Printed from counselvise.com ITA No.3747/Mum/2025 Assessment Year 2021-2022 7 despite there merely being a mistake apparent on record which is clerical in nature, an appeal should be filed in order to get justice and equity. 9. Accordingly, an appeal has been filed against the Intimation Order u/s. 143(1), with a delay of 975 days (approximately). 10. Due to the ongoing pandemic scenario prevalent in India, the Assessee was unable to file the appeal within time limits prescribed. 11. However, since the Income tax website was under revamp/reconstruction, the appeal could not be filed on time due to various technical problems. Till date there are problems on the Income Tax Portal. 12. I humbly request you to kindly condone this delay and not treat the Assessee as a person in default and grant the opportunity to be heard on merits. 13. The delay is on account of the non-functional income tax website and the inability to file the appeal and the covid pandemic. The office was closed between April 2020 to June 2020 due to lock down like conditions and thereafter it was operational on an irregular basis and only to attend to very urgent work. Staff were advised to work from home.” 4.3 And therefore, on the aforesaid reasons, the Assessee has prayed that the delay of 341 days by considering as bonafide and un-intentional, may kindly be condoned. 5. On the contrary, the Ld. D.R. refuted the claim of the Assessee. 6. We have given thoughtful considerations to the peculiar facts and circumstances of the case. Admittedly, the then Ld. Addl./JCIT 2, in other cases of the Assessee specifically for the A.Y. 2019-20 decided vide order dated 06.12.2023, has also taken into consideration the delay of about 975 days in filing of appeal before him as well as the identical affidavit as produced before us and ultimately considering the facts of that particular case and the details filed, condoned the delay in filing of the appeal before him. Even otherwise, the reason stated by the Assessee supported by duly sworn affidavit appears to be genuine, bonafide and unintentional and therefore, for Printed from counselvise.com ITA No.3747/Mum/2025 Assessment Year 2021-2022 8 substantial justice, we are inclined to condone the delay occurred in filing of first appeal before the Ld. Addl./Joint Commissioner. Thus, the delay is condoned.” (Emphasis Supplied) 9. Similarly, in the case of M/s. Lintas Employees Family Planning Assistance Trust Vs. Centralilzed Processing Centre for the Assessment Year 2019-2020 [ITA No.1462/Mum/2024, dated 13/08/2024] the order passed by the First Appellate Authority dismissing the appeal preferred by an associate trust as being barred by limitation was over turned by the Tribunal accepting identical reason/explanation offered by the Assessee in that case. 10. Keeping in view of the above decisions of the Tribunal, we are of the view that the order passed by the CIT(A) rejecting the reasons given by the Assessee for delay in filing the appeal cannot be sustained. Accordingly, the order passed by the Learned CIT(A) is set aside. Delay of 390 days in filing the appeal is condoned. The CIT(A) is directed to adjudicate the ground raised by the Assessee in appeal before CIT(A) on merits. Thus, Ground No.1 raised by the Assessee is allowed. While Ground No. 2 to 5 raised by the Assessee pertaining to merits are disposed off as having been rendered infructuous in view of the directions given to CIT(A) to adjudicate the appeal on merits. 11. In terms of above, the present appeal is treated as allowed for statistical purposes. Order pronounced on 31.07.2025. Sd/- Sd/- (Vikram Singh Yadav) Accountant Member (Rahul Chaudhary) Judicial Member म ुंबई Mumbai; दिन ुंक Dated : 31.07.2025 Milan,LDC Printed from counselvise.com ITA No.3747/Mum/2025 Assessment Year 2021-2022 9 आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त/ The CIT 4. प्रध न आयकर आय क्त / Pr.CIT 5. दिभ गीय प्रदिदनदध ,आयकर अपीलीय अदधकरण ,म ुंबई / DR, ITAT, Mumbai 6. ग र्ड फ ईल / Guard file. आिेश न स र/ BY ORDER, सत्य दपि प्रदि //True Copy// उप/सह यक पुंजीक र /(Dy./Asstt. Registrar) आयकर अपीलीय अदधकरण, म ुंबई / ITAT, Mumbai Printed from counselvise.com "