2021 (2) TMI 708 - AT - Income Tax

Condonation of delay - delay of 480 days - Assessee put forth divorce/ matrimonial/penal proceedings filed by his daughter-in-law against the entire family which have not been accepted by the ld. CIT (A) and dismissed the appeal in limine - HELD THAT - We are of the considered view that multiple matrimonial/penal proceedings launched by the daughter-in-law against the assessee's entire family is a sufficient reason beyond the control of the assessee and sufficient to condone the delay, hence ld. CIT (A) has erred in not condoning the delay and is ordered to be condoned it and consequently directed to dispose off the appeal on merit, after providing an opportunity of being heard to the assessee. Consequently, the appeal filed by the assessee is allowed.

Issues Involved:
1. Delay in filing the appeal before the Commissioner of Income-tax (Appeals)
2. Disallowance under section 14A of the Income-tax Act, 1961
3. Addition on account of cessation of liability under section 41(1) of the Act

Delay in Filing the Appeal:
The Appellate Tribunal, ITAT Delhi, addressed the issue of delay in filing the appeal before the Commissioner of Income-tax (Appeals). The assessee, M/s. Jay Gee Overseas P. Ltd., sought to set aside the order dated 28.04.2017 passed by the Commissioner of Income-tax (Appeals)-5, Delhi for the assessment year 2012-13. The Tribunal noted that the appeal was filed with a delay of 480 days, and the Commissioner of Income-tax (Appeals) had dismissed the appeal in limine without condoning the delay. The assessee cited multiple matrimonial/penal proceedings launched by the daughter-in-law against the family as a reason for the delay. The Tribunal found this to be a valid reason beyond the control of the assessee and ordered the delay to be condoned. Consequently, the appeal was allowed, and the Commissioner of Income-tax (Appeals) was directed to dispose of the appeal on merit after providing an opportunity of being heard to the assessee.

Disallowance under Section 14A of the Income-tax Act:
During scrutiny proceedings, the Assessing Officer noticed that the assessee had claimed deduction for expenditure related to income not forming part of the total income. Consequently, the AO invoked the provisions of section 14A of the Income-tax Act, 1961, and disallowed an amount of ?73,703. The Commissioner of Income-tax (Appeals) confirmed this disallowance. However, the Appellate Tribunal, after considering the facts and circumstances of the case, allowed the appeal based on the delay issue and directed the Commissioner of Income-tax (Appeals) to reconsider the matter on merit.

Addition on Account of Cessation of Liability under Section 41(1) of the Act:
The Assessing Officer also made an addition of ?3,38,852 on account of cessation of liability concerning the amount due towards sundry creditors. The assessee failed to provide proof to support the existence of the liability during the assessment year. The Commissioner of Income-tax (Appeals) confirmed this addition. However, since the appeal was allowed based on the delay issue, the Appellate Tribunal directed the Commissioner of Income-tax (Appeals) to reexamine this addition on its merits after providing an opportunity for the assessee to be heard.

In conclusion, the Appellate Tribunal, ITAT Delhi, allowed the appeal filed by M/s. Jay Gee Overseas P. Ltd. based on the delay in filing the appeal before the Commissioner of Income-tax (Appeals). The Tribunal directed the Commissioner of Income-tax (Appeals) to reconsider the disallowance under section 14A of the Income-tax Act and the addition on account of cessation of liability under section 41(1) of the Act on their merits after providing the assessee with an opportunity to be heard.

← Previous Next →