2024 (11) TMI 494 - AT - Income Tax

Delay in filing appeal before FAA by about 2 years 8 months and 6 days - delay in filing the appeal is deliberate/intentional or bonafide reasonable cause - HELD THAT - We note that the rectification application was processed on 3.5.2021 raising a demand during the Covid 19 pandemic period. The DGM and the Manager handling the tax matters left the organisation and management was informed that tax demand would be nullified in the rectification proceedings. However the rectification order and the demand came to notice of assessee during audit of FY 2022-23. Accordingly we note that assessee has sufficient cause for the delay in filing appeal before the FAA. Considering the facts of the case and in the interest of justice, we remit the issue to the Assessing Officer for fresh consideration and decision as per law, subject to payment of costs of Rs. 50,000/- - Appeal by the assessee is allowed for statistical purposes.

Summary

Issues: Delay in filing appeal, condonation of delay, rectification application during Covid-19 pandemic, remittance of issue to Assessing Officer, payment of costs by assessee, cooperation with proceedings.

In this case, the appellant filed an appeal against the order of the CIT(A) for the AY 2019-20, which was dismissed due to a delay of 2 years, 8 months, and 6 days in filing the appeal. The appellant contended that the delay was due to the rectification application process during the Covid-19 pandemic, where key personnel handling tax matters had left the organization. The appellant argued that the delay was not deliberate but due to a bonafide reasonable cause. The appellant also cited a Supreme Court order granting an extended deadline, reducing the delay to less than 952 days. An affidavit explaining the delay was submitted. The appellant requested a chance to present evidence before the lower authorities to substantiate their case.

The Department, however, opposed granting another chance to the appellant, emphasizing the appellant's multinational status and awareness of tax proceedings. The ITAT considered the submissions and noted that the delay was due to the rectification process during the pandemic, with key personnel leaving the organization. The ITAT found that the appellant had a valid reason for the delay and, in the interest of justice, remitted the issue to the Assessing Officer for fresh consideration, subject to the payment of costs amounting to Rs. 50,000 by the appellant. The appellant was directed to provide proof of payment and necessary documents for adjudication. The appellant was also instructed to cooperate with the proceedings and warned that failure to do so would result in no leniency. The appeal was allowed for statistical purposes.

Therefore, the ITAT allowed the appeal, considering the delay in filing the appeal, the rectification application during the pandemic, and the need for a fresh consideration by the Assessing Officer, subject to the payment of costs and cooperation by the appellant.