RADHEY SHYAM AGARWAL (DECEASED) THROUGH LEGAL HEIR GAURAV AGARWAL,JAIPUR V. ITO, WARD 7(1), JAIPUR, JAIPUR

ITA 1449/JPR/2024

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The case involves Radhey Shyam Agarwal, who was engaged in running warehouses, a specified business under section 35AD of the Income Tax Act, 1961. For the assessment year 2019-20, Agarwal declared a positive income after set-off of unabsorbed losses from specified business, which was denied by the CPC, Bengaluru, based on an amendment perceived as retrospective. The CIT (A) dismissed the appeal due to a significant delay in filing, which was attributed to the legal heir's late discovery of the adverse order. The Tribunal, referencing a Supreme Court decision on the principle of consistency, overturned the CIT (A)'s decision and directed the allowance of the claim.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474489 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Other Referred Cases: PCIT Central vs. MBL Infrastructure Ltd. [2023] 295 Taxman 586 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAUTAM SINGH CHOUDHARY
• Assessee Lawyers: MUKESH KHANDELWAL; LD
• Keywords: Rule of consistency
• Section: 250; 143(1); 139(1); 139(4)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH “SMC”, JAIPUR BEFORE SHRI GAGAN GOYAL, ACCOUNTANT MEMBER AND SHRI NARINDER KUMAR, JUDICIAL MEMBER ITA No. 1449(A.Y. 2019-20)/JPR/2024 Radhey Shyam Agarwal (Deceased), Through Legal Heir Gaurav Agarwal, E-227, 228, Ganesh Park, Jaipur, Ambabari, Jaipur-302039 PAN No. AAYPA6176B ...... Appellant vs. ITO, Ward 7(1), Jaipur …...Respondent Appellant by : Mr. Mukesh Khandelwal, CA, Ld. AR Respondent by : Mr. Gautam Singh Choudhary, Addl. CIT, Ld. DR Date of hearing : 26/02/2025 Date of pronouncement : 13/03/2025 O R D E R PER GAGAN GOYAL, A.M: This appeal by assessee is directed against the order of CIT(A)-10 Mumbai dated 14.11.2024 passed u/s. 250 of the Income Tax Act, 1961 (in short ‘the Act’). The assessee has raised the following grounds of appeal: - 2 1. That the Ld. CIT(A) has erred on facts in dismissing the appeal of the deceased assessee in limine by not condoning the delay occurred in filing the appeal before him, rejecting the genuine reason submitted to him due to which such delay took place. 2 The brief facts of the case are that the assessee individual indulged in the business of running warehouses, which is a specified business as defined in section 35AD of the Act w.e.f. A.Y. 2013-14. For the A.Y. 2013-14, the assessee filed a return of loss of Rs. 8, 24, 00,574/- under the head business on 26.03.2014 u/s. 139(4) of the Act, which is beyond the time limit prescribed in section 139(1) of the Act. The return for the year under consideration the assessee declared a positive income of Rs. 13, 65,575/- before set-off of unabsorbed B/f losses from specified business u/s. 73A of the Act on 23.08.2019 u/s. 139(1) of the Act. The return of the assessee was processed u/s. 143(1) of the Act and the claim of the assessee u/s. 73A of the Act was denied amounting to Rs. 13, 65,575/- (Amount equal to positive income declared from specified business). The assessee being aggrieved with the same filed an appeal before the Ld. CIT (A), who in turn dismissed the appeal of the assessee on the ground of delay in filing of the same by 1070 days. The assessee’s legal heir was there on records before the Ld. CIT (A) and here also the appeal is being filed by the legal heir of the deceased assessee. The legal heir of the deceased assessee being further aggrieved by the order of the Ld. CIT (A) preferred the present appeal before us. 3 We have gone through the intimation issued by the CPC, Bengaluru u/s. 143(1) of the Act, order of the Ld. CIT (A) and submissions of the assessee alongwith grounds taken before us. It is observed that the claim of the assessee was allowed for the A.Y.s 20104-15, 2015-16 and 2016-17 but as there was an amendment in section 139(3) of the Act w.e.f. 01.04.2016, wherein loss from 3 specified business was allowed to be set-off only if the return for the year incurring loss has been filed within the time limit as prescribed in section 139(1) of the Act. This amendment CPC, Bengaluru perceived as retrospective change, hence disallowed the claims of the assessee for the A.Y.s 2017-18, 2018-19 and 2019-20. Although, the claims of the assessee, for A.Y.s 2017-18 and 2018-19 ultimately allowed, by the coordinate bench, Jaipur (Copies of the order submitted before us.) 4. The appeal for this year could not be filed by the deceased assessee, as a senior citizen old person, he could file the appeals for A.Y.s 2017-18 and 2018-19 only and missed to file the appeal for the year under consideration before the Ld. CIT(A). The deceased assesses ultimately passed away on 09.02.2022 and his grandson Mr. Gaurav Agarwal was substituted as his legal heir on the portal. He only verified the portal of the assessee and then came to know that there was an adverse order u/s. 143(1) of the Act. Consequently, he filed an appeal before the Ld. CIT (A) with a delay of 1070 days. On merits and based on precedents in favour of the assessee, the Ld. CIT (A) was agreed but on the ground of delay of 1070 days he dismissed the appeal in limine. We do not see any justification in the decision of the Ld. CIT (A) while dismissing the appeal of the assessee ignoring the relevant surrounding facts. 5. Further, we rely on the decision of the Hon’ble Apex Court in the case PCIT Central vs. MBL Infrastructure Ltd. [2023] 295 Taxman 586 (SC), wherein it was held that “Rule of consistency had to be applied and deduction under section 80-IA was to be allowed in relevant assessment year also. On appeal, High Court noted that revenue had not disputed that no disallowance was made in previous two 4 assessment years as well as subsequent two assessment years, and further, in absence of any distinguished feature in nature of contract, Rule of consistency had to be applied and deduction under section 80-IA was to be allowed in relevant assessment year also - Whether there was no infirmity in impugned order and therefore, special leave petition was to be dismissed - Held, yes [Paras 2 and 3] [In favour of assessee]” . We equate the matter under consideration with the facts of the decision rendered by the Hon’ble Apex Court in the matter of MBL Infrastructure Ltd. (supra) and respectfully following the decision and principle of consistency, without hesitation we set-aside the order of the Ld. CIT (A) and it is directed to the Jurisdiction AO to rectify the intimation issued by the CPC, Bengaluru and allow the claim of the assessee. 6. With above directions, the appeal of the assessee is allowed. Order is pronounced in the open court on the 13th Day of March 2025. Sd/- Sd/- (NARINDER KUMAR) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Jaipur, िदनांक/Dated: 13/03/2025 Copy of the Order forwarded to: 1. अपीलाथ\r/The Appellant , 2. \u000eितवादी/ The Respondent. 3. आयकर आयु\u0015 CIT 4. िवभागीय \u000eितिनिध, आय.अपी.अिध., Sr.DR., ITAT, 5. गाड\u001e फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar) 5 ITAT, Jaipur Details Date Initials Designation 1 Draft dictated on PC on 13.03.2025 Sr.PS/PS 2 Draft Placed before author 13.03.2025 Sr.PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8 Date on which the file goes to the Head clerk 9 Date of Dispatch of order "