Case Law Details
Mukhtiyarodin Ajimodin Malek Vs ITO (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT) Ahmedabad recently ruled on the case of Mukhtiyarodin Ajimodin Malek versus Income Tax Officer (ITO), where the central issue was the condonation of a significant delay in filing an appeal by the assessee. The appeal, pertaining to the Assessment Year 2008-09, was filed against the order of the Commissioner of Income Tax (Appeals) (NFAC), Delhi.
The appeal was necessitated by the order dated 19.10.2023, where the CIT(A) dismissed the assessee’s appeal due to a delay of 1430 days in filing. The initial return of income was filed in 2008, with subsequent assessment orders under Section 143(3) and Section 147. The dispute escalated with orders under Section 263, leading to a demand notice of Rs. 33,12,029/-.
The crux of the matter lay in the negligence of the initial Chartered Accountant (CA), Shri Gopal Shah, who failed to inform the assessee about critical developments during the assessment proceedings. It was only after an alert from HDFC Bank in November 2019 that the assessee became aware of the adverse orders. Despite immediate action, including a subsequent CA’s involvement, delays ensued, compounded further by the COVID-19 pandemic and the unfortunate demise of CA Shri Nazir Malek.
The assessee’s plea for delay condonation was grounded in these exceptional circumstances, emphasizing the non-deliberate nature of the delay. The ITAT Ahmedabad acknowledged the lapse on the part of the initial CA and highlighted the assessee’s prompt action once informed of the situation. While recognizing the exorbitant nature of the delay, the tribunal ultimately chose to condone it, underscoring the principle of allowing parties to contest matters on their merits.
In conclusion, the ITAT Ahmedabad’s decision in the case of Mukhtiyarodin Ajimodin Malek versus ITO exemplifies the tribunal’s adherence to fairness and justice. By condoning the delay in filing the appeal, despite its considerable duration, the tribunal upheld the principle that an assessee should not suffer due to the faults of their representative.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal is filed by the assessee against order dated 19.10.2023 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2008-09.
2. The assessee has raised the following grounds of appeal :-
“1. The learned Commissioner of Income Tax (Appeals) (NFAC) erred in Law and on facts in rejecting prayer for condonation of delay in filing the appeal made by the appellant and on that ground dismissed the appeal without considering merits of appeal.
2. The learned Commissioner of Income Tax (Appeals) (NFAC) erred in Law and on facts, dismissed the appeal on technical ground without adjudicating the merits of the case.
3. The learned Commissioner of Income Tax (Appeals) (NFAC) erred in Law and on facts in not adjudicating ground in respect of determining entire transport receipt of Rs.33,91,530/- as an income without appreciating nature of business of the appellant and not allowing deduction of expenses incurred for earning the business income.”
3. The return of income was filed on 25.09.2008 declaring total income of Rs.90,974/-. The assessment order under Section 143(3) of the Income Tax Act, 1961 was passed on 22.12.2010 on a total income of Rs.90,974/-. The Assessing Officer passed order under Section 143(3) read with Section 147 of the Act on 20.03.2013 and income was assessed at Rs.1,92,720/-. The order under Section 263 of the Act was passed ex-parte on 30.03.2015. The assessment order under Section 144 read with Section 263 of the Act was passed on 28.01.2016 thereby totalling the income at Rs.34,82,500/- thereby assessing gross receipts instead of income out of gross receipts.
4. Being aggrieved by the Order under Section 144 read with Section 263 of the Act which is the Assessment Order in consequential to order passed under Section 263 of the Act by the PCIT, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
5. The Ld. AR submitted that during the proceedings under Section 263 of the Act, the assessee was kept in dark by his AR (CA Shri Gopal Shah). The Ld. AR further submitted that during the assessment proceedings under Section 143 read with Section 263 of the Act also the assessee was not informed anything by his AR. The assessee came to know about passing the order under Section 263 and under Section 143 read with Section 263 of the Act when HDFC Bank Limited informed the assessee about the attachment of his Bank account for outstanding demand of Rs.33,12,029/- while informing the same on 29.11.2019. The assessee immediately on CPC Portal found the e-mail of mobile nos. of his previous CA Shri Gopal Shah. The assessee approached the said CA who did not give proper answer and told the assessee that he will look into the matter. The assessee waited for 15 days then approached another CA who took him to Income Tax Office, Petlad and came to know that the order under Section 263 and order under Section 144 read with section 263 of the Act were passed and demand was raised due to passing of the order. On 20.12.2019, the assessee requested the Income Tax Office to give copy of both the orders and obtained the same. On 01.01.2020, the assessee filed appeal before the CIT(A)ia i.e. within 15 days period of receipt of both the orders under Section 263 as well as Section 144 read with Section 263 as well as Section 144 read with Section 263 of the Act. In March 2020 due to Covid 2019 unfortunately the other CA Shri Nazir Malek passed away and, therefore, on 12.09.2020 the assessee filed application for delay condonation along with affidavit. The CIT(A) rejected the prayer for delay condonation on 19.10.2023 and dismissed the appeal accordingly. The Ld. AR submitted that the delay on the part of the assessee before the CIT(A) in filing the statutory appeal was not deliberate but due to the negligence of the earlier CA Shri Gopal Shah and in fact the subsequent CA passed away on March 2020 due to Covid Pandemic. Therefore, the delay condonation application was filed belatedly. The Ld. AR submitted that in the peculiar circumstances, the delay before the CIT(A) be condoned and the matter may be remanded back to the file of the CIT(A) for proper adjudication of the issues on merit.
6. The Ld. DR opposed to the delay as it is more than 1430 days delay which is exorbitant delay. The Ld. DR relied upon the order of the CIT(A).
7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the delay in filing the appeal before the CIT(A) has been elaborately explained and in fact after verifying the records, it appears that the fault was on the part of the earlier CA who has been engaged by the assessee and due to the negligence of earlier CA the assessee suffered. But from the perusal of the records, it appears that when the assessee came to the knowledge of the order with the help of subsequent CA, the assessee within 15 days has filed the appeal before the CIT(A). Due to Pandemic, the subsequent CA expired and that is why the assessee’s delay condonation application was filed later. The CIT(A) who has taken this aspect for condoning the delay. Though the delay is exorbitant the peculiar facts and circumstances which is exceptional in nature in the present case cannot be treated as contrary to the assessee’s right to contest the appeal on merit. Therefore, in the interest of justice, it will be appropriate to condone the delay in filing the appeal before the CIT(A). The CIT(A) will decide the matter on merit as per due process of law. Needless to say, the assessee be given opportunity of hearing by following the principles of natural justice.
8. In the result, appeal of the assessee is partly allowed for statistical purpose.
Order pronounced in the open Court on this 11th June, 2024.
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