2019 (8) TMI 1327 - AT - Income Tax

Condonation of the delay of 65 days - pendency of the rectification proceedings before the AO - HELD THAT - After receipt of the impugned order of assessment dated 03.03.2016, assessee had filed a rectification application before the AO seeking correction of the mistake therein; of non-allowing of set off; which was followed up by reminder to the AO in this regard. Therefore, in our view, it stands to reason that the pendency of the rectification proceedings before the AO and the assessee s expectation that the issue could be sorted out at that level has contributed in no small measure to the delay in filing the appeal for Assessment Year 2013-14 before the CIT(A). We are inclined to accept the contentions of the assessee that there is sufficient and reasonable cause for condonation of the delay of 65 days in filing the appeal for Assessment year 2013-14 before the CIT(A). The Hon ble Apex Court in the case of MST Katiji 1987 (2) TMI 61 - SUPREME COURT has laid down the principles that need to be kept in mind while considering an application for condonation of delay; emphasizing that substantial justice should prevail over technical considerations. The Hon ble Court observed that a litigant does not stand to benefit by lodging the appeal late. The Hon ble Court has also explained that every day s delay must be explained does not mean that pedantic approach should be adopted; the doctrine must be applied in a rational, common sense and pragmatic manner. We are of the considered opinion that it would be travesty of justice if the delay of 65 days in filing the appeal before the CIT(A) is not condoned. We condone the delay of 65 days in filing the appeal before the CIT(A); consequently set aside the impugned order dated 25.01.2019 for Assessment Year 2013-14 in the case on hand and restore the matter to the file of the CIT(A) for consideration and disposal of the issues raised in grounds of appeal on merits before him.

Summary

Issues:
Condonation of delay in filing appeal before CIT(A) for Assessment Year 2013-14.

Analysis:
The appeal was against the ex-parte order of CIT(A) for Assessment Year 2013-14. The assessee, a company in the automobile components business, declared a loss in its return of income for the year. However, during assessment, the business income was taken as NIL without allowing the carry forward of business loss claimed. The delay in filing the appeal was attributed to negligence by the assessee, leading to the CIT(A) dismissing the appeal. The grounds raised by the assessee included challenging the jurisdiction of the CIT(A) and arguing for the condonation of delay due to valid reasons.

The AR of the assessee argued that the delay was due to the failure to compute the set off of business loss against income from other sources during e-filing, which was later submitted to the AO but disregarded. A rectification application was filed, but the AO declined to rectify the order. The delay in filing the appeal was explained as being due to the expectation of rectification by the AO. The AR emphasized the legal entitlement of the assessee to the set off and cited relevant case law to support the arguments.

The Tribunal considered the submissions of both parties and reviewed the return of income filed by the assessee, noting the clear declaration of business loss and income from other sources. It was observed that the assessee's claim for set off was plausible, and the delay was not solely due to negligence. The pendency of rectification proceedings and the expectation of issue resolution at that level contributed to the delay. Referring to legal principles, including the MST Katiji case, the Tribunal emphasized the need for substantial justice over technicalities in condoning the delay.

In light of the legal principles and the specific circumstances of the case, the Tribunal found sufficient cause for condonation of the 65-day delay in filing the appeal. The delay was condoned, the CIT(A)'s order was set aside, and the matter was restored for consideration on its merits. The assessee was granted the opportunity to present its case before the CIT(A) for a fair hearing. The appeal was allowed based on the issue of delay condonation, with no address to the merits of the case before the CIT(A).