2022 (6) TMI 1380 - AT - Income Tax

Condonation of delay filling appeal before ITAT - Revision u/s 263 - delay of 581 days - HELD THAT - Once the assessment order passed by the AO went against the assessee then she consulted a different professional who advised her to file the appeal against the order of the PCIT u/s.263 which is clearly evident from the fact that in all proceedings including assessment proceedings before the AO and revision proceedings before the PCIT and consequential assessment proceedings before the AO she had appeared through her Authorized Representative and filed necessary details. From the above sequence of events it is very clear that subsequent filing of the appeal against the order of the PCIT passed u/s.263 is only an afterthought but not a case of ignorance of law or unaware of provisions in filing of the appeal before the Tribunal against the order of the PCIT u/s.263 - Therefore we are of the considered view that there is no merit in the reasons given by the assessee in her petition for condonation of delay in filing of the appeal. As time and again held that when merits and technicalities pitted against each other then merit alone deserves to be prevailed because if you throw out a meritorious case out of judicial scrutiny on the grounds of technicalities then you may deprive the right of the petitioner in pursuing their case. Various Courts have held that rules of limitation are not meant to destroy the rights of parties they are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly within the time bound prescribed under the Act. Where for the reasons beyond the control of the petitioner the appeal could not be filed then the Courts are well equipped with power to condone the delay if the petitioner explains the delay in filing of the appeal with a reasonable cause. However there is no law or mandate in the Act to condone the delay in each and every case. But it depends upon all facts of each case and the reasons given by the parties for condonation of delay. One has to go by the facts of its own case and the reasons given by the petitioner for condonation of delay. In this case on perusal of reasons given by the assessee for delay in filing of the appeal we find that although it appears the assessee is not deriving any benefit by not filing the appeal within the due date prescribed under the Act but from the contents of petition filed by the assessee we could easily make out a case that the assessee has made an afterthought to file the appeal against the order of the PCIT u/s.263 only when she did not get a favourable order from the AO consequent to the order passed by the PCIT u/s.263. Therefore in our considered view for these vague reasons such huge delay of 581 days in filing of the appeal cannot be condoned. Reasons given by the assessee in her Affidavit does not come under reasonable cause as prescribed under the Act for condonation of delay. Hence we reject the petition filed by the assessee for condonation of delay and dismiss the appeal filed by the assessee.

Issues Involved:
1. Jurisdiction of the Principal Commissioner of Income Tax (PCIT) under Section 263.
2. Alleged error or prejudice in the original assessment order.
3. Verification of details by the Assessing Officer (AO) during the original assessment.
4. Substitution of PCIT's view over AO's.
5. Applicability of Section 56(2)(vii)(b).
6. Payment of consideration for property by the appellant's husband.
7. Condonation of delay in filing the appeal.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Principal Commissioner of Income Tax (PCIT) under Section 263:
The appellant contended that the order of the PCIT was without jurisdiction and contrary to law, facts, and circumstances of the case. The Tribunal, however, did not find merit in this contention, as the PCIT had initiated proceedings under Section 263 after determining that the assessment order passed by the AO was erroneous and prejudicial to the interest of revenue.

2. Alleged Error or Prejudice in the Original Assessment Order:
The appellant argued that there was no error or prejudice to warrant invocation of Section 263. The Tribunal noted that the PCIT had found the assessment order to be erroneous and prejudicial to the revenue's interest, which justified the invocation of Section 263.

3. Verification of Details by the Assessing Officer (AO) During the Original Assessment:
The appellant claimed that the AO had duly called for and verified the details regarding the purchase of property during the original assessment proceedings under Section 143(3). The Tribunal observed that the PCIT had reviewed the assessment order and found it lacking, thus justifying the revision under Section 263.

4. Substitution of PCIT's View Over AO's:
The appellant argued that the PCIT could not invoke Section 263 to substitute his view on an issue already considered by the AO. The Tribunal upheld the PCIT's action, noting that the assessment order was found to be erroneous and prejudicial to the revenue's interest.

5. Applicability of Section 56(2)(vii)(b):
The appellant contended that the provisions of Section 56(2)(vii)(b) were not applicable in their case. The Tribunal did not delve into this issue in detail, as the primary focus was on the procedural aspects and the delay in filing the appeal.

6. Payment of Consideration for Property by the Appellant's Husband:
The appellant argued that no addition could be made in her hands since the entire consideration for the property was paid by her husband. The Tribunal did not address this issue substantively, as the appeal was dismissed on procedural grounds.

7. Condonation of Delay in Filing the Appeal:
The appeal was filed with a delay of 581 days. The appellant claimed ignorance of the right to appeal and wrong professional advice as reasons for the delay. The Tribunal found these reasons to be not bona fide. The Tribunal emphasized that the appellant had engaged multiple Chartered Accountants (CAs) at different stages, demonstrating an awareness of tax proceedings. The Tribunal concluded that the delay was an afterthought and not due to ignorance of the law. Consequently, the petition for condonation of delay was rejected, and the appeal was dismissed as not maintainable.

Conclusion:
The Tribunal dismissed the appeal filed by the assessee, primarily on the grounds of an inordinate and unjustified delay of 581 days in filing the appeal. The reasons provided by the appellant for the delay were found to be not bona fide, and the Tribunal emphasized the importance of adhering to procedural timelines to ensure the integrity of judicial proceedings. The substantive issues raised by the appellant were not addressed in detail due to the procedural dismissal of the appeal.

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