2020 (2) TMI 141 - AT - Income Tax

Condonation of delay - delay of 615 days - communication gaps etc. between Shri D.Uniyal and the erstwhile C.A. - HELD THAT - Assessee cannot be made to suffer on account of the negligence of his counsel. The said view was reiterated by the Apex Court in the case of Vedabai alias Vaijayanatabai Baburao Patil v. Shantaram Bahurao Patil 2001 (7) TMI 117 - SUPREME COURT In the facts of the present case, as set out in greater detail hereinabove where we have accepted the Explanation offered on behalf of the assessee as bona fide and true, we deem it appropriate to also address the response of the ld. CIT-DR who though has not opposed the condonation of delay, however, has requested that the assessee be advised to exhibit and ensure vigilance and alertness towards its rights and responsibilities in its future conduct. We expect the assessee to ensure its effective participation with due diligence in all future actions. Having so observed, the delay is condoned. In terms of the prayers of the parties before the Bench as noted in the earlier paras, the impugned ex parte orders are set aside back to the file of the AO and not the CIT(A) as the parties have highlighted that evidences are not on record as before the AO also, the assessee could not make effective representation due to the illness etc. of the Directors.

Summary

Issues Involved:
1. Delay in filing appeals.
2. Condonation of delay.
3. Remand back to the Assessing Officer (AO).

Detailed Analysis:

1. Delay in Filing Appeals:
The appeals were filed by the assessee against the orders dated 26.09.2016 of CIT(A)-3 Gurgaon for the assessment years 2005-06, 2009-10, 2010-11, 2011-12, and 2012-13. The appeals were delayed by 615 days. The delay was attributed to the health issues of one of the directors, Shri Rajeev Goyal, who was suffering from multiple life-threatening diseases, including cancer, since 2013. Due to his illness, both directors, who are husband and wife, were preoccupied and unable to attend to the company’s affairs. The company had been defunct since 2012 and was managed by a semi-literate employee, Shri Deepak Uniyal, who communicated orders and notices to the directors and their General Power of Attorney (G.PA) holder, Shri B.K. Bhola. The delay in filing the appeals was due to a communication gap between the company, the Department, and the G.PA holder.

2. Condonation of Delay:
The assessee filed a revised condonation of delay application dated 27.07.2019, supported by affidavits and medical records. The application detailed the reasons for the delay, including the serious health issues of Shri Rajeev Goyal, the execution of a G.PA in favor of Shri B.K. Bhola, and the communication gaps between the employee, the G.PA holder, and the Chartered Accountant (C.A.). The CIT-DR did not oppose the condonation of delay, considering the medical records and affidavits. The Tribunal referred to the principles laid down by the Supreme Court in the case of Collector, Land Acquisition v. MST. Katiji, emphasizing a liberal approach towards condonation of delay to serve the ends of justice. The Tribunal found that the delay was non-deliberate and caused by genuine reasons, and thus, condoned the delay of 615 days in filing the appeals.

3. Remand Back to the Assessing Officer (AO):
The Tribunal noted that the impugned orders were ex parte due to the assessee’s inability to participate effectively in the assessment proceedings. The assessee requested a remand back to the AO for a fresh examination of the evidences, which were not on record due to the directors’ health issues. The CIT-DR agreed with the remand back to the AO. The Tribunal set aside the impugned orders and remanded the matters back to the AO for fresh consideration, directing the assessee to ensure full and proper participation in the proceedings. The AO was given the liberty to pass an order based on the material available on record if the assessee failed to participate effectively.

Conclusion:
The Tribunal allowed the appeals for statistical purposes, condoning the delay and remanding the matters back to the AO for fresh consideration, with directions for the assessee to ensure diligent participation in the proceedings.