2013 (5) TMI 533 - AT - Income Tax

Condonation of delay in filing the appeal - CIT(A) dismissed the same as barred by limitation - Held that - On appreciating the facts it is noticed that the assessee actually filed an application u/s 154 in the month of May, 2009 and the issues are common which remain un-adjudicated by the AO or the CIT (A) as on date. Considering the fact that the assessee moved an application for rectification, it cannot be inferred that the assessee is not vigilant about his rights. Therefore, dismissing the allegation of the CIT (A) in this regard it is noticed that AO has not so far adjudicated the said rectification and it is also noticed that the assessee is left with pending issues despite they are raised before the AO / CIT (A) through different proceedings. It is also a fact that the assessee is not a company placed with experts advising in matters of litigations. Assessee is only an individual which must be appreciated in matters of this kind. Thus assessee cannot be considered as non- vigilant person in the matter of exercising his rights. Therefore, it is a fit case for condonation of delay - direct the CIT (A) to admit the appeal. In favour of assessee.

Summary

Issues:
1. Condonation of delay in filing the appeal before the CIT (A) for the assessment year 2006-07.
2. Tax treatment of long term capital gains at 10% versus 20%.

Issue 1: Condonation of Delay
The case involved two appeals filed by the assessee against the order of CIT (A)-8, Mumbai for the assessment year 2006-07. The core issue revolved around the decision of the CIT (A) in rejecting the condonation request of the appeal filed with a delay of 307 days. The assessee had filed an application for rectification under section 154 of the Act, which was still pending. The delay in filing the appeal was attributed to the belief that issues raised in the rectification application would be addressed by the Assessing Officer. The assessee argued that the right of appeal is precious and wanted to exhaust the rectification channel before filing an appeal. The Assessing Officer's failure to attend to the rectification application was cited as a reasonable ground for condonation of the delay. The Tribunal found that the issues raised in the rectification application were common to those in the appeal, and the assessee's actions did not indicate non-vigilance. Consequently, the delay was condoned, and the appeal was admitted for further adjudication by the CIT (A).

Issue 2: Tax Treatment of Long Term Capital Gains
In the second appeal, the assessee challenged the rectification order passed by the AO under section 154 of the Act, which charged tax on long term capital gains at 20% instead of 10%. The Tribunal noted that the adjudication of these issues would impact the outcome of the first appeal. Considering the interrelation of the issues raised in both appeals, it was decided to set aside the second appeal to the files of the AO for further examination. The grounds raised by the assessee in the second appeal were thus set aside for reconsideration.

The Tribunal, comprising Shri D. Karunakara Rao and Shri Sanjay Garg, JJ., allowed the first appeal concerning the condonation of delay, directing the CIT (A) to admit the appeal and adjudicate the pending issues. The second appeal challenging the tax treatment of long term capital gains was set aside for reconsideration by the AO. The judgment emphasized the importance of the right of appeal, the need for vigilance in exercising such rights, and the proper consideration of pending issues before making decisions on condonation of delay and tax treatment.