2017 (8) TMI 246 - HC - Income Tax

Period of limitation - sufficient cause for not preferring the appeal within the time before CIT(A) - Held that - When the tax consultant of the assessee had filed an affidavit suggesting that the order of assessment was served on him and he had not supplied the copy to the assessee, ordinarily, this should have been treated as sufficient cause preventing the assessee from filing appeal within the period of limitation. To that extent, the Commissioner was not correct in holding that the explanation was frivolous or that it lacks credence. If the Revenue is able to prove and produced the supporting documents that order was served, the onus would have then been on the assessee to rebut the same. If the order of assessment was duly served on the partner of the firm as far back as on 26.03.2013, i.e. barely four days after passing of the order, the affidavit of the tax consultant of the assessee that he had received the order but had not passed on a copy thereof to the assessee, would be of no consequence. Matter remanded back.

Summary

Issues:
1. Delay in filing appeal before Commissioner (Appeals) by the assessee.
2. Sufficiency of cause for the delay in filing the appeal.
3. Consideration of additional evidence by the appellate Commissioner.

Analysis:

Issue 1: Delay in filing appeal before Commissioner (Appeals) by the assessee
The Tax Appeal was filed by the assessee challenging the judgment of the Income Tax Appellate Tribunal dated 20.03.2015 and an order dated 11.08.2016 passed in a rectification application. The appeal was delayed by 278 days as it was filed on 02.01.2014 instead of within the 30-day period specified under section 249 of the Income Tax Act, 1961. The Commissioner (Appeals) rejected the appeal solely on the ground of limitation, deeming the explanation provided by the assessee as frivolous.

Issue 2: Sufficiency of cause for the delay in filing the appeal
The main question in the appeal was whether the assessee had shown sufficient cause for not filing the appeal within the stipulated time. Section 249 of the Act empowers the Commissioner to admit an appeal after the limitation period if satisfied with the cause shown. The assessee's tax consultant had filed an affidavit stating that the order of assessment was served on him, but he failed to provide it to the assessee due to an oversight. The High Court found that this explanation should have been considered as sufficient cause by the Commissioner and criticized the Commissioner for not accepting it.

Issue 3: Consideration of additional evidence by the appellate Commissioner
During the proceedings, the Revenue presented a copy of an acknowledgment purportedly signed by a partner of the assessee firm, indicating that the order of assessment was served on them on 26.03.2013. The High Court noted that this crucial piece of information was not brought before the Commissioner (Appeals) or the Tribunal. To ensure fairness, the High Court remanded the proceedings to the appellate Commissioner for reconsideration, allowing both parties to submit necessary documents and affidavits. The previous orders were set aside for this purpose.

In conclusion, the High Court remanded the case to the appellate Commissioner for a fresh consideration of the delay in filing the appeal, considering all relevant evidence and submissions from both sides.