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2012 (11) TMI 661 - AT - Income TaxCondone the delay - appeal before CIT(A) delay of 1 year 10 months and 16 - The assessee had submitted before the ld. CIT(Appeals) that the reason for delay in filing the return was because of the wrong advise given by the assessee s counsels that not to pursue the additions/ disallowances before the ITAT and therefore the assessee had proceeded to pay the demand as per CBDT s circular no.2/2006 dated 17.01.2006. However in view of the decision of the Special Bench of the ITAT in the case of M/s. Topman Exports and Others in ITA No.5769/Mum/2006 the assessee realized that it had a fool proof case in its favour for seeking deduction under section 80HHC. Held that - assessee remained under good faith and bonafide impression of the given legal position and did not proceed to indulge in cost prohibitive protracted litigations by availing the remedy before the chain appellate authorities starting with learned CIT(A)- Mere fact that the assessee cooperated with the Revenue based on the circular issued by the CBDT should not put the assessee on in a weaker footing - The subsequent decision by the Special Bench of the Tribunal has enlightened the assessee to knock the doors before the appellate authority for justice. In these circumstances the request of the assessee for the delay of condonation for all the assessment years seems to be reasonable and justifiable. Therefore in the interest of justice we hereby condone the delay in filing the appeals before the ld. CIT(A) by the assessee and remit back the issues before the ld. CIT(A) to decide the case as per law and merit. - appeals of the assessee are allowed
Issues Involved:
1. Condonation of delay in filing the first appeal. 2. Sustaining the disallowance of relief under Section 80HHC concerning the sale proceeds of DEPB certificates. Detailed Analysis: 1. Condonation of Delay in Filing the First Appeal: The primary issue was whether the delay in filing the appeals before the Commissioner of Income Tax (Appeals) [CIT(A)] should be condoned. The assessee argued that they were misadvised by their counsel not to pursue the additions/disallowances before the ITAT and decided to pay the demand based on CBDT Circular No. 2/2006 dated 17.01.2006. The delay in filing the appeals was 1 year 10 months and 16 days for the assessment year 2001-02, 3 years 8 months and 15 days for the assessment year 2003-04, and 2 years 11 months and 13 days for the assessment year 2004-05. The CIT(A) denied condonation of delay, relying on various judicial decisions, observing that the delay was due to a conscious and deliberate decision by the assessee not to file the appeal. The CIT(A) concluded that there was no sufficient cause for the delay, and the delay was not beyond the control of the assessee. The assessee submitted an affidavit explaining the reasons for the delay, emphasizing that the delay was bona fide and unintentional. They cited the decision of the Special Bench of the ITAT in the case of Topman Exports, which provided a favorable ruling on the issue of Section 80HHC in respect of DEPB certificates. The assessee argued that this decision prompted them to file the appeal, and the delay should be condoned in the interest of justice. The Tribunal considered the case of Kvaerner Boving Construction Ltd vs. DCIT, where the Delhi High Court allowed the condonation of delay due to a subsequent favorable judicial decision. The Tribunal noted that the assessee initially decided to follow the CBDT circular to avoid protracted litigation but later realized they had a strong case based on the Special Bench decision. The Tribunal concluded that the assessee's arguments had merit and that the delay was reasonable and justifiable. It condoned the delay in filing the appeals before the CIT(A) and remitted the issues back to the CIT(A) to decide the case on its merits. 2. Sustaining the Disallowance of Relief Under Section 80HHC: The second issue was the sustenance of the disallowance of relief under Section 80HHC concerning the sale proceeds of DEPB certificates. The CIT(A) had dismissed the appeals in limine due to the delay in filing, without addressing the merits of the case. The Tribunal noted that the assessee had a strong prima facie case on merits, as the Special Bench of the ITAT in the case of Topman Exports had provided a favorable ruling on the issue of Section 80HHC in respect of DEPB certificates. The Tribunal emphasized that substantial justice should be rendered by allowing the assessee to contest the appeal on merits. The Tribunal set aside the CIT(A)'s order and remitted the issues back to the CIT(A) to decide the case as per law and merit, allowing the assessee to raise any legal grounds it deemed fit. Conclusion: The Tribunal allowed the appeals filed by the assessee, condoning the delay in filing the appeals before the CIT(A) and remitting the issues back to the CIT(A) to decide the case on its merits, ensuring that substantial justice is served.
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