2024 (7) TMI 347 - AT - Income Tax

Condonation of delay in filing appeal before ITAT - there is a delay of around 379 days in filing of the present appeal - Assessee argued that the order of the CIT(A) was not served on the assessee on the email ID which was mentioned in the prescribed Colum of Form 35 therefore the assessee was not able to file the appeal before the ITAT with in the period of limitation. HELD THAT - The Finance Head (FH) has stated that he is a 70 year old person and not very much conversant with the operations of computer/email ID. FH has further clarified that the order of the CIT(A) could have been gone to the spam folder and hence he was unable to see the same in due course - CIT(A) has dismissed the appeal of the assessee without dealing with the merits of the case. Section 250(6) of the Act provides that the Ld CIT(A) is bound to decide an appeal on merits. Considering the facts and circumstances of the case we hereby condoned the delay of 399 days for the reasons mentioned by the FH in the application for condonation of delay supported by duly sworn affidavit. As as held by Apex Court in the case of Collector of Land Acquisition Vs Katiji and others 1987 (2) TMI 61 - SUPREME COURT wherein it is held that when technical consideration and substantial justice pitted against each other cause of substantial justice would be given credence. Therefore we restore the matter to the file of the ld. CIT(A) and direct him to decide the matter afresh in accordance with law after providing reasonable and meaningful opportunity to the assessee. We also direct the assessee to appear before the CIT(A) and file necessary details failure to do so will be construed adversely against the assessee without any leniency. Appeal filed by the assessee is allowed for statistical purposes.

Summary

Issues Involved:
1. Disallowance of deduction in interest income by AO.
2. Dismissal of appeal by CIT(A) ex-parte.
3. Condonation of delay in filing appeal before ITAT.
4. Restoration of the matter to CIT(A) for fresh decision.

Analysis:
1. The appeal challenges the order of the AO disallowing the deduction in interest income earned by the co-operative society based on a Supreme Court judgment. The AO taxed the interest income without considering the cost of funds, leading to the dispute.

2. The assessee's appeal before the CIT(A) was dismissed ex-parte due to non-attendance at the appellate proceedings. The assessee argued that the dismissal was unfair as they were not heard, highlighting a delay in filing the appeal before ITAT.

3. The delay of 379 days in filing the appeal before ITAT was sought to be condoned by the assessee, attributing it to the non-receipt of the CIT(A) order on the specified email ID. The Finance Head, a 70-year-old individual unfamiliar with email operations, explained the delay in filing.

4. The ITAT, after considering the submissions, condoned the delay of 399 days based on the Finance Head's affidavit. Citing the principle of substantial justice over technical considerations, the ITAT directed the matter to be restored to the CIT(A) for a fresh decision, emphasizing providing a fair opportunity to the assessee.

5. The ITAT allowed the appeal for statistical purposes, emphasizing the need for the assessee to appear before the CIT(A) and provide necessary details to avoid adverse consequences. The judgment prioritized fairness and substantial justice in the proceedings.

This detailed analysis covers the issues raised in the judgment, addressing the legal aspects and the decision-making process involved in each aspect of the case.