1978 (12) TMI 58 - AT - Income Tax

Summary

Issues:
1. Appeal against the order of the AAC dismissing the appeal on the ground of limitation and incompetence.
2. Consideration of delay in filing the appeal and failure to enclose the notice of demand with the memorandum of appeal.
3. Assessment order under section 146, cancellation by the Commissioner under section 263, and subsequent appeal to the AAC.

Detailed Analysis:
1. The appeal before the Appellate Tribunal ITAT BOMBAY-E was filed by the assessee, an individual, against the order of the AAC, which dismissed the appeal on the grounds of limitation and incompetence. The original assessment for the assessment year 1967-68 was completed by the ITO under section 143(3) on 25th Feb 1972, with a determined total income of Rs. 1,18,507. The AAC set aside this assessment on 1st Oct 1974, and a fresh assessment was made by the ITO on 28th Feb 1975. Subsequently, the Commissioner passed an order under section 263 on 11th Feb 1975, canceling the ITO's order under section 146. The assessee's appeal against the Commissioner's order was dismissed by the Tribunal on 9th Feb 1977.

2. The assessee filed an appeal against the ITO's order of 28th Feb 1975 on 26th Dec 1975. The AAC found there was an inordinate delay in filing the appeal without a justifiable cause and that the appeal was incompetent due to the absence of the notice of demand with the memorandum of appeal. The assessee contended that the delay was due to confusion regarding the nature of the assessment order and the loss of the original demand notice. The Departmental Representative argued that the appeal was rightly dismissed by the AAC due to the assessee's conduct.

3. The Tribunal noted that the delay in filing the appeal was reasonable given the circumstances, as the ITO's order of 28th Feb 1975 was later canceled by the Commissioner under section 263. The Tribunal disagreed with the Department's contention that the delay was solely the assessee's fault, highlighting that the ITO had allowed insufficient time for compliance. The Tribunal also found that the failure to enclose the demand notice was an irregularity that could have been rectified if given the opportunity. Consequently, the Tribunal set aside the AAC's order and directed the assessee to file a certified copy of the demand notice for further consideration of the appeal on its merits.

In conclusion, the appeal was allowed for statistical purposes, and the Tribunal's decision favored the assessee by acknowledging the reasonable causes for the delay in filing the appeal and the procedural irregularity regarding the notice of demand.