2020 (6) TMI 155 - AT - Income Tax

Condonation of delay - delay in filing revision petition u/s 264 of the Act - delay of only 34 days in filing appeal - assessee received an order u/s 245 for adjusting refund - HELD THAT - As noticed that the assessee has filed revision petition u/s 264 before Pr. CIT on 14.07.2015. The assessee was constrained to file the above said revision petition, since he received an order u/s 245 for adjusting refund of some of the year against the demand raised in AY 2007-08. It is noticed that the date of order passed/s 245 was 06-11-2014, meaning thereby, the assessee was aware of the intimation passed u/s 143(1) for AY 2007-08 by 06.11.2014 itself and hence he has filed revision petition u/s 264 of the Act before Ld Pr. CIT. It appears that the assessee did not take any step at that point of time. It is also not clear as to how the assessee could file revision petition u/s 264 of the Act without a copy of intimation, which was sought to be revised. CIT(A) has held that the delay is about 8 years. Assessee was aware of the intimation by the time he filed revision petition and the delay is about 18 months from that date. Accordingly, he has refused to condone the delay in filing appeal before him. CIT(A) has given proper reasons for refusing to condone the delay. In fact, the assessee has taken different stands in pursuing the matter and hence the Ld CIT(A) has observed that the assessee has given misleading statements. We also notice that there is huge time gap in between different steps taken by the assessee and the delay during those periods has not been explained properly. We notice that the assessee has, in fact, mentioned in Schedule E1 of the return of income that the long term capital gain is exempt. However, the same was not properly carried forward to the summary page of the return of income resulting in denial of exemption. After that, we notice that the assessee has not properly handled the matter, resulting in delay in filing appeal before Ld CIT(A). CIT(A) was justified in refusing to condone the delay and dismissing the appeal of assessee.

Summary

Issues:
- Delay in filing appeal challenging the order of Ld CIT(A) regarding the assessment year 2007-08.
- Claim of exemption u/s 10(38) of the Act against long term capital gain earned on sale of shares.

Analysis:
1. Delay in filing appeal:
The assessee filed the return of income for AY 2007-08 on 31.07.2007, including long term capital gain on the sale of shares. The intimation u/s 143(1) of the Act was processed on 20-03-2009, disallowing the exemption claimed by the assessee. The delay in filing the appeal before Ld CIT(A) was a crucial issue. The Ld CIT(A) noted conflicting statements by the assessee regarding the receipt of intimation and the subsequent actions taken. The Ld CIT(A) refused to condone the delay, citing discrepancies in the assessee's submissions and a significant time lapse between different steps taken by the assessee. The Tribunal upheld the decision, emphasizing the need for proper handling of the matter by the assessee and suggesting the pursuit of alternative remedies.

2. Claim of exemption u/s 10(38) of the Act:
The primary issue raised by the assessee related to the claim of exemption u/s 10(38) of the Act concerning long term capital gains from the sale of shares. The assessee had initially mentioned the exemption in "Schedule E1" of the return but failed to reflect it in the computation of total income, resulting in the denial of the exemption during processing. The Ld CIT(A) held that the failure to claim the exemption in the original return and rectify it through a revised return was a mistake on the part of the assessee. This led to the dismissal of the appeal on merits. The Tribunal concurred with the Ld CIT(A), stating that the assessee did not rectify the error in time, thereby justifying the dismissal of the appeal.

In conclusion, the Tribunal dismissed the appeal, affirming the decisions of the lower authorities regarding the delay in filing the appeal and the denial of exemption u/s 10(38) of the Act. The judgment highlighted the importance of timely and accurate compliance with tax laws and suggested exploring alternative legal avenues for addressing grievances.