SHRI OM PARSHAVNATH DEVELOPERS PVT. LTD., DURG,DURG V. ACIT-1(1), BHILAI, DURG

ITA 23/RPR/2025

AI Insights

The case involves Shri Om Parshvanath Developers Pvt. Ltd., which appealed against the order of the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center, Delhi. The appeal was initially dismissed by the CIT(Appeals) due to a claimed delay of 365 days in filing the appeal, which the CIT(Appeals) found unacceptable without any reasonable explanation from the assessee. The assessee contested that the appeal was filed within the stipulated time, based on the actual date of receipt of the order, which was claimed to be 02.01.2018, contrary to the CIT(Appeals)'s assumption of 29.12.2016. The Tribunal found merit in the assessee's argument and restored the matter to the CIT(Appeals) for re-evaluation of the timing and merits of the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 469766 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Other Referred Cases: National Thermal Power Company Ltd. Ltd. Vs. CIT, Shakti Clearing Agency (P) Ltd vs ITO, Krishna v. Chathappan, Union of India v. Tata Yodogawa Ltd., Collector of Central Excise, Madras v. A.M.D. Bilai & Co., Baroda Rayon Corporation Ltd. v. Commissioner of Sales Tax, Gujarat, Prashant Projects Ltd. vs. DCIT, Vedabai Alias Vaijayanatabai Baburao Patil Vs. Shantaram Baburao Patil, JCIT vs. Tractors & Farm Equipment's Ltd., Subodh Parkash Vs. JCIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: R.B DOSHI
• Keywords: Condonation of delay; Opportunity of being heard; Reasonable cause; Question of law; Corroborative evidences; Period of limitation
• Section: 143(3); 142(1); 13

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No. 23/RPR/2025 Ǔनधा[रण वष[ / Assessment Year : 2015-16 Shri Om Parshvanath Developers Private Limited Nadi Road, Ganjpara, Durg (C.G)-491 001 PAN: AAMCS7665N .......अपीलाथȸ / Appellant बनाम / V/s. The Assistant Commissioner of Income Tax-1(1), Bhilai (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri R.B Doshi, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 11.02.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 19.02.2025 2 Shri Om Parshavanath Developers Pvt. Ltd. Vs. ACIT-1(1), Bhilai ITA No. 23/RPR/2025 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee company is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 18.11.2024, which in turn arises from the order passed by the A.O under Sec.143(3) of the Income-tax Act, 1961 (in short ‘the Act’) dated 29.12.2016 for the assessment year 2015-16. The assessee company has assailed the impugned order on the following grounds of appeal: “1. Ld. CIT(A) erred in dismissing the appeal observing that the appeal filed by appellant was delayed by 365 days without appreciating the facts of the case properly. Order passed by Ld. CIT(A) is erroneous and illegal. 2. Ld. CIT(A) erred in not adjudicating the appeal on merits and erred confirming various additions /disallowances totaling to Rs.32,66,754/- made by AO. 3. Without prejudice to above ground, the assessment order passed by AO is illegal inasmuch as no order u/s 127 was passed for transfer of case from ITO-1(1), Bhilai to ACIT-1(1) Bhilai. Assessment order is illegal and liable to be quashed. 4. The addition made by A.O is illegal inasmuch as the subject matter of additions was not covered within the scope of “limited scrutiny”. 5. The appellant reserves the right to add, amend or modify any of the ground/s of appeal.” Also, the assessee company has raised additional grounds of appeal which reads as under: 3 Shri Om Parshavanath Developers Pvt. Ltd. Vs. ACIT-1(1), Bhilai ITA No. 23/RPR/2025 “i) Assessment order passed by the A.O is illegal inasmuch as no order u/s.127 was passed for transfer of case from ITO- 1(1), Bhilai to ACIT-1(1), Bhilai. Assessment order is illegal and liable to be quashed. ii) the addition made by the A.O is illegal inasmuch as the subject matter of additions was not covered within the scope of “limited scrutiny”. As the assessee company based on the additional grounds of appeal has assailed the validity of the jurisdiction that was assumed by the A.O for framing the impugned assessment, adjudication of which would not require looking any further beyond the facts available on record, therefore, I have no hesitation in admitting the same. My aforesaid view that where an assessee, had raised, though for the first time, an additional ground of appeal before the Tribunal which involves purely a question of law and requires no further verification of facts, then, the same merits admission finds support from the judgment of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC). 2. Succinctly stated, the assessee company which is engaged in the business of real-estate developer had e-filed its return of income for A.Y.2015-16 on 30.03.2016, declaring an income of Rs. Nil. Subsequently, the case of the assessee was selected for “limited scrutiny” and notice u/s. 143(2) of the Act, dated 28.07.2016 was issued to the assessee company. Ostensibly, the case of the assessee was selected for “limited scrutiny” 4 Shri Om Parshavanath Developers Pvt. Ltd. Vs. ACIT-1(1), Bhilai ITA No. 23/RPR/2025 through CASS on the two issues, viz. (i) large interest expenses as compared to business turnover; and (ii) large share premium received in a year. 3. Thereafter, the A.O vide his order passed u/s. 143(3) of the Act, dated 29.12.2016, inter alia, made two additions, viz. (i) estimated addition to the income of the assessee company based on conviction that the assessee ought to have followed percentage completion method : Rs.30,73,734/-; and (ii) disallowance of 60% of the assessee’s claim for deduction of traveling expenses of Rs.3,21,700/- : Rs.1,93,020/-, determined the income of the assesse company at Rs.32,66,754/-. 4. Aggrieved the assessee company carried the matter in appeal before the CIT(Appeals). As is discernible from the order of the CIT(Appeals), it transpires that he had observed that as the appeal filed by the assessee company before him involved a delay of 365 days, therefore, the appeal on the said count itself was liable to be dismissed as not maintainable. The CIT(Appeals) based on his aforesaid observations dismissed the appeal in limine, observing as under: “3.1 As per the provisions of the Act, the appellant should have filed the appeal within 30 days from the date of the service of the order i.e. on or before 29.01.2017 but the same has been filed on 29.01.2018 with the of 365 days. The appellant in form 35 mentioned the date of service of order 02.01.2018. The same is not acceptable as this order is passed on 29.12.2016. It is not possible that the appellant had received the order after 369 days after passed. Further, the appellant has not submitted any 5 Shri Om Parshavanath Developers Pvt. Ltd. Vs. ACIT-1(1), Bhilai ITA No. 23/RPR/2025 evidence regarding this claim. Hence, appellant’s claim in this regard is not acceptable. Further the appellant has not submitted any reason for late filing of appeal. 3.2 I have considered the facts of the appeal and it is noticed that the appeal is filed late by 365 days. The appellant has not furnished any explanation/supporting evidences regarding late filing. It is a well settled law that delay in filing the appeal can be condoned only if there is a reasonable and sufficient cause which prevented the assessee to file the appeal within the stipulated time. In the instant case, the appellant failed to show any reasonable or sufficient cause which prevented him to file the appeal within stipulate time. 3.3 There are various judicial pronouncements which laid down the principle for condonation of delay. The basic essence of all the judgment is that delay should be reasonable and justifiable and there should not be any negligence on the part of the appellant. Some of the decisions are relied upon are as under: (i) If the appellant has acted diligently then normally the delay gets condoned. However if the delay is caused due to negligence on the part of the appellant, it become difficult to get the delay condoned. Shakti Clearing Agency (P) Ltd vs ITO [2003] 127 Taxman 49 (Rajkot). (ii) Hon'ble Madras High Court in Krishna v. Chathappan, ILR 13 Mad 269 has held that it is however, necessary to emphasize that even after sufficient cause has been shown a party is not entitled to the condonation of delay in question as a matter of right. The proof of a sufficient cause is a condition precedent for the exercise of the discretionary jurisdiction vested in the court by Section 5. If sufficient cause is not proved nothing further has to be done; the application for condoning delay has to be dismissed on that ground alone. If sufficient cause is shown then the Court has to enquire whether in its discretion it should condone the delay. This aspect of the matter naturally introduces the consideration of all relevant facts and it is at this stage that diligence of the party or its bona fides may fall for consideration;... (iii) In the case of Union of India v. Tata Yodogawa Ltd., [1988 (38) Excise Law Times 739 (SC)], Hon'ble Court while granting some latitude to the Government in relation to condonation of delay, still held that there must be some way or attempt to explain the cause for such delay and as there was no whisper to explain what legal problems occurred in filing the Special Leave Petition, the application for condonation of delay was dismissed. 6 Shri Om Parshavanath Developers Pvt. Ltd. Vs. ACIT-1(1), Bhilai ITA No. 23/RPR/2025 (iv) Similarly, in the case of Collector of Central Excise, Madras v. A.M.D. Bilai & amp; Co., [1999 (108) Excise Law Times 331 (SC)], the Supreme Court declined to condone the delay of 502 days in filing the appeal because there was no satisfactory or reasonable explanation rendered for condonation of delay. (v) The jurisdictional Gujarat High Court laid down principle for condonation of delay in the case of Baroda Rayon Corporation Ltd. v. Commissioner of Sales Tax, Gujarat, Ahmedabad 1991 (3) TMI 355 — GUJARAT HC [1992] 87 STC 266 (Guj) Dt:15-3-1991 as under:- \"In our opinion, the Tribunal was, therefore, right in holding that the assessee had failed to make out sufficient cause for not preferring an appeal to the Tribunal within the prescribed time. For the reasons stated above, the question referred to us is answered in the affirmative, that is, against the assessee and in favour of the department. There shall be no order as to costs in this reference. Reference answered in the affirmative.\" (vi) The Hon'ble Mumbai Tribunal in the case of Prashant Projects Ltd. vs. DCIT (2013) 37 taxmann.com 137 is significant which is in favour of the revenue holding that by adopting a liberal view in condoning delay is one of the guiding principles in the realm of belated appeals, but liberal approach cannot be equated with a license to file appeals at will-disregarding the time-limits fixed by the Statutes; The behavior of the assessee could be termed as personified inaction and negligence which would not constitute reasonable cause. (vii) Further, Hon'ble Apex Court in the case of Vedabai Alias Vaijayanatabai Baburao Patil Vs. Shantaram Baburao Patil, 253 ITR 798, it was held as follows:-\"In exercising discretion under section 5 of the Limitation Act, the Court should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration may arise and such case deserves a liberal approach.\" (viii) Further, ITAT, Chennai in the case of JCIT vs. Tractors & Farm Equipment’s Ltd. it was held as under:-'The delay cannot be condoned simply because the appellant's case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay it must be proved beyond the shadow of doubt that the 7 Shri Om Parshavanath Developers Pvt. Ltd. Vs. ACIT-1(1), Bhilai ITA No. 23/RPR/2025 appellant was diligent and was not guilty of negligence whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. The Hon'ble Supreme Court in the case of Ramlal v. Rewa Coalfields Ltd. AIR 1962 SC 361 has held that the cause for the delay in filing the appeal which by due care and attention could have been avoid cannot be a sufficient cause within the meaning of the limitation provision. Where no negligence, nor inaction, or want of bona fides can be imputed to the appellant a liberal construction of the provisions has to be made in order to advance substantial justice. Seekers of justice must come with clear hands.\" (ix) Further in the case of Subodh Parkash Vs. JCIT (2017) [2017-TIOL-2249-HC-P&H-IT], the Hon'ble Mumbai High Court has held as under:- \"When the explanation submitted by the assessee does not satisfy the test of `sufficient cause' as required u/s.5 of the Limitation Act, 1963, the delay cannot be condoned. 3.4 In view of the above judicial pronouncements, the basic principle emerges that the delay should be bonafide and there should not be any negligence on the part of the appellant. However, in the appeal under consideration, the appellant has not submitted anything for the delay and the same was not even verifiable from the records. The appellant has not submitted any evidence either along with the appeal or during appellate proceedings even after giving ample opportunities. Therefore, the delay in filing the appeal does not deserve to be condoned and hence appellant's request for condonation is not entertained and rejected. Therefore, the appeal is not admitted and dismissed on this count. 3.5 Accordingly, the appeal stands dismissed. 4. In the result, this appeal is dismissed.” 5. The assessee company being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the Tribunal. 8 Shri Om Parshavanath Developers Pvt. Ltd. Vs. ACIT-1(1), Bhilai ITA No. 23/RPR/2025 6. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record. 7. Shri R.B Doshi, Ld. Authorized Representative (for short ‘AR’) for the assessee company, at the threshold of hearing, submitted that the CIT(Appeals) had based on his perverse observations dismissed the appeal filed by the assesse company as not maintainable. Elaborating further, the Ld. AR submitted that as the assessee company had received the order passed by the A.O u/s. 143(3) of the Act, dated 29.12.2016 on 02.01.2018, therefore, its appeal that was filed before the CIT(Appeals) on 29.01.2018 was well within the stipulated time period prescribed as per the mandate of law. The Ld. AR to buttress his aforesaid claim had drawn my attention to the “Form 35”-Cl. No.2(b), wherein the date of service of the order/notice of demand was mentioned as 02.01.2018. Carrying his contention further, the Ld. AR submitted that the CIT(Appeals) without dislodging the assesee’s claim that the assessment order was received/served upon it on 02.01.2018 had most arbitrarily reckoned the period of limitation based on the date on which the order of assessment u/s. 143(3) of the Act, dated 29.12.2016 was passed by the A.O. The Ld. AR had taken me through the observations of the CIT(Appeals) at Para 3 to 3.3.2 of his order. The Ld. AR to dispel all doubts qua his aforesaid claim had drawn my attention to the notice issued u/s. 142(1) of the Act, dated 09.06.2017, Page 2 of APB, 9 Shri Om Parshavanath Developers Pvt. Ltd. Vs. ACIT-1(1), Bhilai ITA No. 23/RPR/2025 based on which, it was claimed that the assessment proceedings initiated by the A.O for the subject year had yet not culminated. The Ld. AR based on his aforesaid observation submitted that the date of passing of the order mentioned by the A.O as 29.12.2016 was factually incorrect. The Ld. AR had further placed on record copy of the “demand notice” u/s. 156 of the Act, dated 29.12.2017 for the subject year, which fortified his claim that date of passing of the order of assessment u/s. 143(3) of the Act, was 29.12.2017 and not 29.12.2016. 8. Per contra, Dr. Priyanka Patel, Ld. Sr. Departmental Representative ( for short ‘DR’) fairly admitted that on a perusal of the assessment order it can safely be gathered that a mistake had crept on the part of the A.O while passing of the order by mentioning the date of the order as 29.12.2016. The Ld. DR had specifically referred to Page 5 & 6 of the A.O’s order wherein there was a reference to the reply filed by the assessee on 26.12.2017. Also, the Ld. DR in all fairness to support her claim had taken me through the reply filed by the assessee company on 23.12.2017 i.e. Para 5 of the assessment order. 9. Ostensibly, the CIT(Appeals) while disposing off the appeal had though declined to condone the alleged delay of 365 days involved in filing of the same, but had no occasion confronted the said aspect to the assessee. All that is discernible from the body of his order is that he held a 10 Shri Om Parshavanath Developers Pvt. Ltd. Vs. ACIT-1(1), Bhilai ITA No. 23/RPR/2025 conviction that now when the assessment order was passed by the A.O on 29.12.2016, therefore, as per the same, it was incomprehensible that the same would have been served upon the assessee company on 02.01.2018 i.e. the date mentioned by the latter in “Form 35”. I am of a firm conviction that had the CIT(Appeals) confronted the aforesaid aspect to the assessee, then the latter would have clarified the factual error in mentioning of the date of order by the A.O as 29.12.2016. I am unable to fathom that as to how the CIT(Appeals) could have dismissed the appeal of the assessee company without confronting the fact qua the alleged delay of 365 days involved in filing of the appeal to the assessee company, specifically when the latter had claimed to have filed the same within the stipulated time limit. 10. Considering the aforesaid facts, I am of a firm conviction that the matter in all fairness requires to be restored to the file of the CIT(Appeals) who is directed to re-adjudicate the same after verifying the correct factual position as regards the date on which the order of assessment was passed by the A.O. Needless to say, the CIT(Appeals) shall in the course of the set- aside proceedings afford a reasonable opportunity of being heard to the assessee company which shall remain at a liberty to substantiate its claim on the basis of fresh documentary evidence, if any. Also, the assessee company shall remain at a liberty to raise the additional grounds of appeal that have been raised before me, as per the extant law. 11 Shri Om Parshavanath Developers Pvt. Ltd. Vs. ACIT-1(1), Bhilai ITA No. 23/RPR/2025 11. As I have restored the matter to the file of the CIT(Appeals) for fresh adjudication, therefore, I refrain from adverting to the merits of the case which, thus, are left open. 12. In the result, appeal filed by the assessee company is allowed for statistical purposes in terms of the aforesaid observations. Order pronounced in open court on 19th day of February, 2025. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 19th February, 2025. ***SB, Sr. PS. आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The Pr. CIT-1, Raipur (C.G) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "