RAKESH KUMAR DUGAR,CHENNAI V. ITO, NCW03(1), CHENNAI

ITA 3134/CHNY/2024

AI Insights

The case involves Rakesh Kumar Dugar, the appellant, who contested an order from the Learned Commissioner of Income Tax (Appeals) regarding the assessment year 2017-18. The primary issue was the addition of Rs. 1,65,77,555 as income by the Central Processing Centre (CPC), which the assessee claimed was a turnover, not income. The assessee had initially filed a rectification return, which was presumed accepted, but later found to be incorrect upon recovery proceedings, leading to the appeal. The CIT(A) dismissed the appeal due to a significant delay, which the assessee contested, claiming non-receipt of the original order. The Tribunal, after considering the submissions and evidence, decided to set aside the CIT(A)'s order and remand the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 302968 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Other Referred Cases: Kalyankumar Ray 191 ITR 0634
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: I.ROOPA; ADDL
• Assessee Lawyers: D.ANAND
• Keywords: Condonation of delay; Set aside; Recovery proceedings
• Section: 250; 143(1); 44AD; 191

Judgement Text

"Page - 1 - of 5 आयकर अपीलीय अधिकरण, ‘‘ए’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI श्री एबी टी. वर्की, न्यायिर्क सदस्य एवं श्री अयिताभ शुक्ला, लेखा सदस्य क े समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.3134 / Chny / 2024 निर्ाारण वर्ा /Assessment Years: 2017-18 Rakesh Kumar Dugar, New No.27, Poes Garden, Gopalapuram S.O, Chennai- 600 086. [PAN: ADQPD6567Q] Income Tax Officer, Non-Corporate Ward-3(1), Chennai (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr. D.Anand, Advocate. प्रत्यर्थी की ओर से /Revenue by : Dr.I.Roopa, Addl, CIT सुिवाई की तारीख/Date of Hearing : 27.02.2025 घोर्णा की तारीख /Date of Pronouncement : 23.04.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : This appeal is filed by the assessee against the order bearing DIN & Order No.ITBA/APL/S/250/2024-25/1070368119(1) dated 14.11.2024 of the Learned Commissioner of Income Tax [herein after “CIT(A), for the assessment year 2017-18. Through the aforesaid appeal the assessee has challenged order u/s 250 dated 14.11.2024 passed by Addl / JCIT(A)-7, Mumbai. ITA No.3134/Chny/2024 Page - 2 - of 5 2.0 Through its 12 grounds of appeal which have been found to be descriptive and narrative in nature, the assessee has in principle contested the order of Ld. First Appellate Authority in confirming the action of the CPC u/s 143(1). The Ld.Counsel for the assessee submitted that through its order dated 19.03.2019 CPC has made an addition of Rs. 1,65,77,555/-. It is the case of the assessee that it had filed its original return on 31.03.2018 declaring turnover of Rs.1,65,77,555/-. It was submitted that assessee had shown profit of Rs.10,40,418 u/s 44AD on the said turnover of Rs.1,65,77,555/-. The CPC instead considered turnover of Rs.1,65,77,555/- as income and raised a demand of Rs.77,51,300/-. The Ld. Counsel for the assessee submitted that upon realizing that it had inadvertently mentioned in the return sale amount of Rs. 1,65,77,555/- in the regular P&L category instead of no book case P&L, it filed a rectification return on 04.03.2022. The mistake was admittedly, though inadvertently, committed by the assessee. 3.0 The Ld.Counsel further submitted that it was under presumption that its rectification return on 04.03.2022 had been accepted. However, upon initiation of recovery proceedings by the department, it learnt otherwise. Consequently, it proceeded to file an appeal on 04.07.2024 before the Ld.First Appellate Authority. The Ld. Counsel for the assessee drew our attention to para 5 and 6 from pages 6 to 9 of the ITA No.3134/Chny/2024 Page - 3 - of 5 order wherein the Ld. CIT(A) has proceeded to dismiss the appeal holding that assessee did not have any justified ground for the nearly five years delay in filing of appeal. The Ld. Counsel submitted that in para 6 of his order Ld. Additional CIT(A) has made an incorrect factual finding that the assessee had received the impugned order u/s 143(1) dated 19.03.2019 on the same day. It is the case of the assessee that the same is an erroneous finding since till date the assessee has not been able to download the impugned order u/s 143(1) dated 19.03.2019. In support of its contentions, the Ld. Counsel for the assessee has placed reliance upon judicial pronouncements made by the Hon’ble Apex Court in the case of Kalyankumar Ray 191 ITR 0634. It was accordingly requested that the matter be set aside to the Ld. Additional CIT(A) for readjudication. The Ld.DR argued that the assessee has committed the mistake, in the first place of filing a wrong return and hence does not deserve for any benefit. 4.0 We have heard rival submissions in the light of material available on records. We have noted that the principal controversy in the matter is non-condonation of delay in filing appeal before him by the Ld. Addl.CIT(A) on the observation that order u/s 143(1) dated 19.03.2019 was received by the assessee on the same day. We have also noted that the assessee has emphatically submitted that it had not received the order u/s 143(1) and that even on the date of this hearing, the order was ITA No.3134/Chny/2024 Page - 4 - of 5 still non-downloadable. In support of its contentions, the assessee has placed necessary documents in its paper book. We are therefore of the considered that the assessee has justified grounds for the delay in filing the appeal before the Ld.First Appellate Authority. We do not find any force in the argument of Ld.DR that the assessee should be penalized for the mistake committed while filing the return of income. It is trite law that the substance must always prevail over form. The mistake committed by the assessee while filing its return of income falls in the category of an inadvertent mistake, as no taxpayer would like to do something which adversely impacts its own interest. Be that as it may be, we are of the view that ends of justice would be met if the case is set aside to the file of the Ld. CIT(A) for readjudication after giving opportunities of being heard to the assesse and to pass a speaking order. While doing so he will download, if required, the impugned order u/s 143(1) for the convenience of the assessee. The assesse shall be bound to comply to all the notices and details called by the Ld. CIT(A). Any non-compliance from the assesse side shall be adversely viewed. Accordingly, we set aside the order of the Ld. First Appellate Authority and direct him to readjudicate the matter de novo. Accordingly, the grounds of appeal raised by the assesse are allowed for statistical purposes. ITA No.3134/Chny/2024 Page - 5 - of 5 5.0. In the result, the appeal of the assessee is allowed for statistical purposes Order pronounced on 23rd , March-2025 at Chennai. Sd/- ( एबी टी. वकी) (ABY T VARKEY) न्यानयक सदस्य / Judicial Member Sd/- (अयिताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, नदिांक/Dated: 23rd , March-2025. KB/- आदेश की प्रनतनलनप अग्रेनर्त/Copy to: 1. अपीलार्थी/Assessee: 2. प्रत्यर्थी/Revenue 3. आयकर आयुक्त/CIT - Chennai 4. नवभागीय प्रनतनिनर्/DR 5. गार्ा फाईल/GF "