Case Law Details
Baskaran Vs DCIT (ITAT Chennai)
In a remarkable turn of events in the case of Baskaran vs DCIT, the Income Tax Appellate Tribunal (ITAT) Chennai set aside the order of the Commissioner of Income Tax (Appeals) or CIT(A) for the assessment year 2013-14. The initial rejection was based on the fact that the assessee’s appeal was filed 325 days late without showing any sufficient cause. Baskaran filed an appeal against this decision, explaining that the delay was due to a prolonged illness, and not wilful. This article discusses the course of events, the arguments presented, and the final decision by ITAT.
Baskaran, the Karta of the HUF, submitted that his prolonged illness prevented him from managing the day-to-day activities of the business, causing the delay in filing the appeal. Despite this, the CIT(A) dismissed the appeal, stating that the delay wasn’t sufficiently justified.
However, upon appeal to the ITAT Chennai, the Tribunal reviewed the circumstances and opined that due to the prolonged illness, there was a reasonable cause for the delay in filing the appeal. The Tribunal ruled that the delay has to be condoned and directed the CIT(A) to re-examine the case on its merits and provide an opportunity for the assessee to be heard.
Conclusion: This case underlines the importance of presenting a strong cause when filing an appeal after the due date. It also highlights the willingness of the ITAT to consider genuine reasons, such as serious illness, as acceptable causes for delay. With this order, ITAT Chennai has set a precedent for leniency in cases where the delay in appeal filing can be reasonably justified. As a result of this order, the assessee’s appeal was allowed for statistical purposes, and the case will be re-examined on its merits by the CIT(A).
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi dated 22.12.2022 relevant to the assessment year 2013-14.
2. Brief facts of the case are that the assessee has filed the return of income for the assessment year 2013-14 on 01.10.2013 admitting income of ₹.13,23,700/-. This case was selected for scrutiny under the CASS. A notice under section 143(2) of the Income Tax Act, 1961 [“Act” in short] was issued on 02.09.2014 and served on the assessee on 03.09.2014. After considering the details furnished by the assessee, the Assessing Officer has completed the assessment under section 143(3) of the Act dated 26.03.2016 assessing taxable income of the assessee at ₹.39,40,010/- after making addition towards disallowance of rent and disallowance of advertisement expenses under section 40a(ia) of the Act since the assessee has not deducted TDS under section 194I and 194C of the Act respectively.
3. The assessee preferred further appeal before the ld. CIT(A) with a delay of 325 days in filing the appeal before the ld. CIT(A). The ld. CIT(A) rejected the appeal of the assessee by not condoning the delay in filing the appeal as no sufficient cause was shown by the assessee.
4. On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the appeal filed before the ld. CIT(A) was dismissed on the ground that the delay in filing the appeal before the ld. CIT(A) was not properly substantiated. It was further submission that before the ld. CIT(A) the assessee filed detailed application for condonation of delay in filing the appeal and explained that due to prolonged illness of Shri Baskaran, the Karta of the HUF, who was managing the entire business has been prevented from participating in the day-to-day activities of the business for a long time. It was also submitted that there was no intentional delay in preparing and filing the appeal before the ld. CIT(A) and the circumstances were beyond the control of the assessee and not wilful. The ld. Counsel for the assessee has also submitted that the ld. CIT(A) has not adjudicated the case on merits and prayed for condoning the delay in filing the appeal before the ld. CIT(A) and may be directed the ld. CIT(A) to adjudicate the case on merits by affording an opportunity of being heard to the assessee.
5. On the other hand, the ld. DR supported the order passed by the ld. CIT(A).
6. Heard both the sides, perused the materials available on record and gone through the orders of authorities below. On perusal of the appellate order, we find that there was delay of 325 days in filing the appeal before the ld. CIT(A) for which the assessee has filed an application for condonation of delay in filing the appeal and explained that due to prolonged illness of Shri Baskaran, the Karta of the HUF, who was managing the entire business has been prevented from participating in the day-to-day activities of the business for a long time. It was also submitted that there was no intentional delay in preparing and filing the appeal before the ld. CIT(A) and the circumstances were beyond the control of the assessee and not wilful. Since it was not possible to discuss the tax matter or any other important matters with a person due to his prolonged illness, it is opined that there was reasonable cause for the delay in filing the appeal before the ld. CIT(A) and the delay in filing the appeal has to be condoned. Thus, the appellate order is set aside and remit the matter back to the file of the ld. CIT(A) with a direction to condone the delay as well as adjudicate the case on merits by affording an opportunity of being heard to the assessee.
7. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 09th June, 2023 at Chennai.
