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2020 (2) TMI 211 - AT - Income TaxCondonation of delay - Sufficient cause for the assessee in not filing the appeal in time before Ld CIT(A) - HELD THAT - Sufficient cause for the assessee in not filing the appeal in time before Ld CIT(A). As held by Hon ble Supreme Court in the case of Mst. Katiji 1987 (2) TMI 61 - SUPREME COURT natural justice should prevail over technical considerations. In fact, allowing an opportunity to present its case will only promote the cause of justice. Accordingly we are of the view that the delay in filing appeal before Ld CIT(A) deserves to be condoned. However, the same shall be at a cost. Accordingly we impose a cost of ₹ 5000/- (Rupees Five thousand) upon the assessee which shall be paid to the credit of the Income tax Department as other fees on or before 29-02-2010. Subject to the payment of above cost, we condone the delay in filing appeal before Ld CIT(A). Since the Ld CIT(A) has not adjudicated grounds urged on merits, we deem it proper to restore all the issues to his file for adjudicating them afresh. Reopening of assessment - Addition of Product Development Expenses - addition was made by the AO in the assessment order passed u/s 143(3) - HELD THAT - The assessee is not entitled to challenge the addition, which was not made in the reassessment order, since the reassessment proceedings are for the benefit of revenue as held by Hon ble Supreme Court in the case of Sun Engineering Works (P) Ltd 1992 (9) TMI 1 - SUPREME COURT . Accordingly we do not find any infirmity in the order passed by Ld CIT(A) on this issue.
Issues:
1. Delay in filing appeal before Ld CIT(A) challenging assessment order passed u/s 143(3) of the Act. 2. Addition of Product Development Expenditure in assessment order passed u/s 143(3) r.w.s 147 of the Act. Issue 1: Delay in filing appeal before Ld CIT(A) challenging assessment order passed u/s 143(3) of the Act: The appeals filed by the assessee were related to the assessment year 2007-08 against the orders passed by Ld CIT(A)-1, Bengaluru. One appeal was against the assessment order passed u/s 143(3) of the Act, while the other was against the assessment order passed u/s 143(3) r.w.s 147 of the Act. The delay of 813 days in filing the appeal challenging the assessment order passed u/s 143(3) was not condoned by Ld CIT(A) due to the absence of compelling reasons. The assessee argued that restructuring and shifting of the registered office led to confusion and delay. The ITAT held that there was sufficient cause for the delay and, following the principles of natural justice, condoned the delay, imposing a cost of ?5000 on the assessee. The ITAT restored all issues to Ld CIT(A) for fresh adjudication. Issue 2: Addition of Product Development Expenditure in assessment order passed u/s 143(3) r.w.s 147 of the Act: The assessing officer re-opened the assessment and made an addition relating to "Product Development Expenditure" in the assessment order passed u/s 143(3) r.w.s 147 of the Act. The assessee challenged this addition before Ld CIT(A), who rejected the appeal stating that the addition was not made in the reassessment order. The ITAT upheld the decision, citing the principle that reassessment proceedings are for the benefit of revenue. As the addition was made in the original assessment order passed u/s 143(3) and not in the reassessment order, the assessee was not entitled to challenge it. Consequently, the appeal related to this issue was dismissed. In conclusion, the ITAT allowed the appeal related to the delay in filing the appeal before Ld CIT(A) and imposed a cost on the assessee, while dismissing the appeal challenging the addition of Product Development Expenditure in the reassessment order.
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