2021 (4) TMI 289 - AT - Income Tax

Delay of 156 days in filing the appeal before the CIT(A) - HELD THAT - CIT(Appeals) did not dispute the facts stated in the affidavit. In the case of CIT v. Sanmac Motor Finance Ltd. 2009 (4) TMI 331 - MADRAS HIGH COURT took the view that if the explanation for the delay does not smack of malafides and is not by way of dilatory strategy, the court must condone the delay. According to CIT(A), the bonafides of assessee has to be seen. According to him, in the case of assessee, reasons given are not attributable to any bonafides and therefore the delay in filing the appeal should not be condoned. As already stated the reasons given by the assessee before the CIT(Appeals) in the form of an affidavit for the delay in filing the appeal have not been disputed by the CIT(Appeals). In such circumstances, there existed bonafide reasons for not filing the appeal before the CIT(A) in time. In the circumstances, the CIT(A) should have condoned the delay in filing the appeal - In the case of Sanmac Motor Finance Ltd. (supra) will support the plea of assessee in the facts and circumstances of the case for condonation of delay in filing the appeal. We therefore condone the delay in filing the appeal by the assessee before the CIT(Appeals). The order of the CIT(Appeals) is set aside and the CIT(Appeals) is directed to decide the appeal on merits after affording the assessee opportunity of being heard. Appeal of assessee is treated as allowed.

Summary

Issues:
1. Delay in filing appeal before CIT(A) due to AO not affording opportunity of being heard.
2. Refusal by CIT(A) to condone the delay based on negligence and want of due diligence.

Analysis:
Issue 1: The appeal was filed by the assessee against the order of the AO dated 15.04.2014, which confirmed the additions sustained by the CIT(A) without affording the assessee an opportunity of being heard as directed by the ITAT. The delay in filing the appeal before the CIT(A) was 156 days, and the reasons for the delay were explained by the assessee in an Affidavit. The delay was attributed to the AO not providing a hearing opportunity, subsequent health issues faced by the managing partner, and the advice received from the Chartered Accountant. The CIT(A) refused to condone the delay, citing negligence and lack of due diligence on the part of the assessee.

Issue 2: The Tribunal, after hearing the rival submissions, found that the reasons for the delay in filing the appeal were not disputed by the CIT(A). The Tribunal referred to the decision of the Hon'ble Madras High Court in CIT v. Sanmac Motor Finance Ltd. where it was held that if the delay explanation is not mala fide and not a dilatory tactic, the delay should be condoned. The Tribunal observed that the reasons provided by the assessee for the delay did not indicate any malafides and were genuine. Therefore, the Tribunal concluded that there were bonafide reasons for the delay and the CIT(A) should have condoned it. The Tribunal set aside the order of the CIT(A) and directed the CIT(A) to decide the appeal on merits after giving the assessee an opportunity to be heard.

In conclusion, the Tribunal allowed the appeal of the assessee, condoned the delay in filing the appeal before the CIT(A), and directed the CIT(A) to decide the appeal on its merits after affording the assessee an opportunity to be heard.