2020 (11) TMI 169 - AT - Income Tax

Condonation of delay - Reasons of delay - delay of 285 days - inadvertent lapse on the part of its chartered accountant - HELD THAT - In the case before us the chartered accountant of the assessee company i.e Shri Nishit Dave, partner of M/s Jayesh Dadia and associates LLP, had filed an affidavit , dated 15.02.2019, therein instils sufficient confidence as regards the genuineness and veracity of the explanation of the assessee pertaining to the reasons leading to the aforesaid delay in filing of the present appeal. On a perusal of the affidavit filed by the chartered accountant, it can safely or rather inescapably be gathered that he had in unequivocal terms admitted that the delay in filing of the appeal with the CIT(A) was attributable on account of an advertent omission on his part. Unable to persuade ourselves to subscribe to the manner in which the CIT(A) had summarily rejected the affidavit of the chartered accountant and consequently dismissed the appeal of the assessee company by holding that de hors a sufficient cause, the delay in filing of the appeal could not be brought within the realm of the provisions of Sec. 249(3). Shri Ketan Gandhi, director of the assessee company had also in order to buttress the aforesaid factual position as regards the delay in filing of the appeal deposed the facts on the basis of clearly worded affidavit. On the basis of the aforesaid factual matrix, we are of a strong conviction that in the absence of any facts proving to the contrary, the claim of the assessee that the delay in filing of the appeal was attributable on account of an inadvertent lapse on the part of its chartered accountant could not have been summarily scrapped, specifically when the assessee s chartered accountant had filed an affidavit supporting the aforesaid factual position. As such, we are of the considered view that the delay in filing of the present appeal can safely be held to be attributable on account of a lapse on the part of the chartered accountant, which in no way would suffice for justifying the declining of the admission of the appeal by the CIT(A). We thus condone the delay of 285 days involved in filing of the present appeal. Accordingly, in terms of our aforesaid observations, we herein set aside the order of the CIT(A), and therein restore the matter to his file with a direction to adjudicate the same on merits.

Summary

Issues Involved:
1. Delay in filing the appeal.
2. Legitimacy of penalty under Section 271(1)(c) of the Income Tax Act, 1961.

Detailed Analysis:

1. Delay in Filing the Appeal:
The primary issue addressed in the judgment was the delay of 285 days in filing the appeal by the assessee before the CIT(A). The assessee attributed this delay to an inadvertent lapse by its Chartered Accountant, who failed to file the appeal within the stipulated time. The Chartered Accountant admitted this oversight through an affidavit. The CIT(A) had dismissed the appeal due to the delay, questioning the credibility of the explanation provided by the assessee.

The Tribunal, however, found the explanation credible and supported by affidavits from both the Chartered Accountant and the director of the assessee company. The Tribunal emphasized that the delay was not due to any malafide intention or dilatory strategy on the part of the assessee. Citing precedents from the Hon’ble Supreme Court and the Hon’ble High Court of Bombay, the Tribunal concluded that the delay should be condoned to ensure justice on merits. The Tribunal set aside the order of the CIT(A) and directed it to adjudicate the appeal on merits, providing a reasonable opportunity of being heard to the assessee.

2. Legitimacy of Penalty under Section 271(1)(c):
The second issue pertained to the penalty of ?3,32,016/- imposed under Section 271(1)(c) for concealment of income and furnishing inaccurate particulars of income. The penalty was levied after the assessee withdrew its claim for deduction of interest on borrowed funds during the reassessment proceedings. The CIT(A) upheld the penalty, but this decision was contested by the assessee.

Given that the Tribunal restored the matter to the CIT(A) for a fresh adjudication on merits, the issue of the penalty will be reconsidered by the CIT(A) in the de novo proceedings. The Tribunal’s decision to condone the delay and direct a fresh hearing ensures that the assessee will have another opportunity to contest the penalty on substantive grounds.

Conclusion:
The Tribunal allowed the appeals for statistical purposes, condoning the delay in filing and directing the CIT(A) to adjudicate the appeals on merits. This decision applies to all the assessment years under consideration (2008-09 to 2011-12), ensuring that the assessee's appeals will be heard afresh with a reasonable opportunity to present their case.