2023 (11) TMI 188 - AT - Income Tax

Delay filling appeal against Revision order u/s 263 - delay of 324 days - Fresh order passed by the AO after remand back the case by CIT u/s 263 - assessee submitted that it did not receive proper legal advice - sufficient cause of delay - HELD THAT - As stated that pursuant to the impugned order, the assessee thought that it would only after disposal of the consequential proceedings, the order u/s 263 has to be challenged, but subsequently, on proper advice, came to know that the impugned order has to be challenged separately. Claiming that it did not receive proper legal advice that that point time, the assessee came forward with this appeal on 19/04/2023 with a delay of 324 days. The affidavit does not specify when did the assessee approach the counsel and got the advice. There is no reason as to why the assessee sought such an advice at a belated stage. There is no denial of the fact that the consequential order was also passed. It is also not in dispute that the assessee was pursuing the consequential order with the aid and advice of professionals only given the volume of the returned income. we are convinced that the assessee wanted to have the best of both the worlds and having tested its luck before the learned Assessing Officer in the consequential proceedings and having lost the same, it came back to agitate the legality of the impugned order. Assessee is not an individual, but it is a commercial entity with a battery of legally trained people available for assistance. Thus we do not find it proper to condone the delay and the reason stated by the assessee does not constitute sufficient cause for such purpose - Decided against assessee.

Summary

Issues involved:
The judgment involves the issue of assessment under section 263 of the Income Tax Act, 1961, pertaining to a business transfer agreement executed by the assessee with another company. The primary concern is the verification of the genuineness of the agreement, details of assets sold, consideration received, and payments made to creditors.

Details of the Judgment:

Issue 1: Assessment under section 263 of the Income Tax Act, 1961
The Appellate Tribunal, ITAT Hyderabad, heard an appeal by the assessee against an order passed by the Principal Commissioner of Income Tax (PCIT) under section 263 of the Act. The PCIT found the assessment order erroneous and prejudicial to the interest of revenue due to lack of verification regarding a business transfer agreement. The Tribunal considered the delay in filing the appeal by the assessee and the reasons provided for the same.

Issue 2: Delay in filing the appeal
The assessee appealed with a delay of 324 days, arguing that the PCIT's order was unwarranted as the Assessing Officer had considered all material. The Tribunal noted the contentions of both parties regarding the delay and assessed the reasons put forth by the assessee for the delay, including the belief that the appeal should be filed after the consequential order by the Assessing Officer.

Issue 3: Condonation of delay
The Tribunal deliberated on whether to condone the delay in filing the appeal. The Departmental Representative contended that condoning the delay would encourage prolonged litigation without genuine reasons. The Tribunal examined the circumstances leading to the delay, including the advice received by the assessee and the pursuit of consequential proceedings before challenging the PCIT's order.

Conclusion:
After reviewing the submissions and circumstances, the Tribunal declined to condone the delay in filing the appeal. It emphasized that the reasons provided by the assessee did not constitute sufficient cause for condonation. The Tribunal dismissed the appeal without delving into the merits of the case, citing the potential for endless litigation if delays are condoned without valid grounds.

This judgment by the Appellate Tribunal ITAT Hyderabad highlights the importance of timely appeals in tax matters and the implications of failing to verify crucial aspects of transactions in assessments under the Income Tax Act.