NEHA GOENKA ,VILE PARLE WEST, MUMBAI V. ITO CIRCLE-34 (3) (2), BANDRA KURLA COMPLEX, MUMBAI

ITA 2461/MUM/2024

AI Insights

Neha Goenka, the assessee, appealed against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition of Rs. 11,22,516 as her share of profit from M/s Galaxy Corporation, a private specific trust. The trust was exempt from tax, but the income received by the assessee as a beneficiary was taxable. The Assessing Officer had initially made this addition following a rectification order under sections 143(3)/147 of the Income Tax Act, 1961, based on the assessment of M/s Galaxy Corporation. The assessee's appeal was delayed, and the CIT(A) dismissed it for being beyond the limitation period without condoning the delay. The Tribunal found that the delay was justified as the assessee was awaiting the outcome of a related case, which would impact her appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 25736 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KIRAN UNAVEKAR
• Assessee Lawyers: N.R.AGARWAL
• Keywords: Period of limitation; Time period of passing order
• Section: 250; 154; 143(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “K (SMC)” BENCH, MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JM AND SHRI. PRABHASH SHANKAR, AM ITA No. 2461/Mum/2024 (Assessment Year: 2011-12) Neha Goenka Plot No. 57, Swastic Society, East West Road No. 3, Vile Parle (W), Mumbai – 400056. Vs. ITO Circle-25(3)(5) Kautilya Bhavan, G Block Bandra Kurla Complex, Mumbai – 400051. PAN/GIR No. ADHPG1462G (Assessee) : (Respondent) Assessee by : Shri. N. R. Agarwal Respondent by : Shri. Kiran Unavekar Sr. DR Date of Hearing : 02.01.2025 Date of Pronouncement : 02.01.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals), Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2011-12. 2. The assessee has raised the following grounds of appeal: “Ground No. 1 \"The learned CIT (Appeals) erred in confirming the addition of Rs. 11,22,516/- being share of profit from Galaxy Corporation\" Submission 2 ITA No. 2461/Mum/2024 (A.Y. 2011-12.) Neha Goenka Assessee is a beneficiaries in private specific trust M/s Galaxy Corporation with defined share of profit, Taxable in the hands of beneficiaries & trust is exempted. In the case of M/s Galaxy Corporation, AO had passed the order u/s 143(3)/147 dated 29/12/2018 Making addition of Rs. 1,00,00,000/- in M/s Galaxy Corporation, Hence AO passed order u/s 154/155(2) In the hands of Ms. Neha Gupta & taxed taxable share of profit as per order in case of M/s Galaxy Corporation. Assessee had filed the appeal in case of M/s Galaxy Corporation on 9/1/2019 Receipt no. 406578331090119 with CIT(A) 32 Mumbai. Notice from CIT(A), face less scheme was received in case of Galaxy Corporation & reply was also filed with paper book, acknowledgement no. 17022114188053 Hence we requested CIT(A) to first take up the appeal of M/s Galaxy Corporation which will help in deciding appeal of Ms. Neha Gupta automatically However without waiting for the order in case of Galaxy Corporation, Ld CIT(A) passed the order u/s 250 Ground No. 2 \"The learned CIT (Appeals) erred in not condoing the delay in filling the appeal Assessee had received order on 28/3/2019 & appeal was filed late on 23/9/2019, Delay of 184 days We request your Honour to kindly condone the delay on following ground. Initially we requested AO to wait for outcome of appeal in case of M/s Galaxy Corporation & then pass the order u/s 154/155 Such letter was filed with AO on 8th March 2019, However AO did not accept the request & passed order without waiting for appellate order in case of M/s Galaxy Corporation. We did not file appeal in case of Neha Goenka as it was consequential to appeal in case of M/s Galaxy Corporation. How ever AO attached the bank account of assessee on 4/4/2019 & asked assessee to file appeal & pay 20% of demand Rs. 2,24,500/- on 01/10/2019 which assessee paid & filed appeal as well, which was delayed by 184 days.” 3. Brief facts of the case are that the assessee is an individual and had filed her return of income dated 25.08.2011, declaring total income at Rs. 2,80,330/- and the same was processed u/s. 143(1) of the Act. The learned Assessing Officer ('ld. A.O.' for short) 3 ITA No. 2461/Mum/2024 (A.Y. 2011-12.) Neha Goenka issued notice u/s. 154 of the Act dated 27.02.2019 for rectification of the intimation u/s. 143(1) of the Act on the basis of the information received during the assessment proceedings in the case of M/s. Galaxy Corporation (AOP/Trust), that the assessee was one of the beneficiaries having 10% shares in the said trust. The ld. AO concluded the assessment in the case of M/s. Galaxy Corporation which is a beneficiary trust exempted from tax, thereby determining the total income at Rs. 1,12,25,165/- as against the Nil returned income. The assessee being one of the beneficiaries of the said trust having 10% share, addition was made in the hands of the assessee to the extent of Rs. 11,22,516/- being 10% of Rs. 1,12,25,165/-. The ld. AO passed the order u/s. 154 r.w. 152(2) of the Act, dated 22.03.2019, thereby determining assessee’s income at Rs. 14,02,846/- after making the impugned addition. 4. Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 26.03.2024 dismissed the appeal filed by the assessee for the reason that the appeal was filed with a delay of 149 days beyond the limitation period on the ground that the assessee has failed to explain ‘sufficient cause’ for the said delay. 5. Aggrieved the assessee is in appeal before us, challenging the impugned order of the ld. CIT(A). 6. We have heard the rival submissions and perused the materials available on record. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee has made a request before the ld. AO in the Section 154 proceedings to keep the said proceedings in abeyance till the adjudication of the ld. CIT(A) in the case of M/s. Galaxy Corporation for the reason that the outcome of the said decision will have bearing in the case of the assessee. The ld. AR further stated that the said request 4 ITA No. 2461/Mum/2024 (A.Y. 2011-12.) Neha Goenka of the assessee was rejected by the ld. AO who then proceeded to pass the order u/s. 152 of the Act. The ld. AR further stated that this was brought to the knowledge of the ld. CIT(A) at the time of the appeal and stated that the delay of 149 days was attributable to the said reason. The ld. AR contended that the ld. CIT(A) has failed to consider the same and had dismissed the appeal of the assessee without condoning the delay and had also not decided the issue on the merits of the case. 7. The learned Departmental Representative (‘ld. DR’ for short) for the revenue on the other hand stated that the reason tendered by the assessee does not amount to being a ‘sufficient cause’ for condoning the delay and vehemently opposed to remanding the issue back to the ld. CIT(A). 8. In the above factual matrix of the case, we are of the considered opinion that the assessee has justified the delay in filing the appeal before the first appellate authority for the reason that she was awaiting the decision of the ld. CIT(A) in the case of M/s. Galaxy Corporation which would directly have a bearing in the case of the assessee. It is also evident from the order of the ld. AO that the assessee has constantly requested for further time from the ld. AO till the conclusion of the case of M/s. Galaxy Corporation and the same was denied. That being so, we deem it fit to hold that the assessee had ‘sufficient cause’ for the delay in filing the appeal before the first appellate authority and therefore we remand this issue back to the file of the ld. CIT(A) for de novo adjudication on the merits of the case. The ld. CIT(A) is directed to decide the issue in hand on the merits of the case and in accordance with law and the assessee was also directed to cooperate with the proceedings without any undue delay on her side. 9. In the result, the appeal filed by the assessee is allowed for statistical purpose. 5 ITA No. 2461/Mum/2024 (A.Y. 2011-12.) Neha Goenka Order pronounced in the open court on 02.01.2025 Sd/- Sd/- (PRABHASH SHANKAR) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 02.01.2025 Karishma J. Pawar (Stenographer) Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai "