Case Law Details
Bhandari Foils and Tubes Ltd Vs DCIT (ITAT Chennai)
Introduction: The Income Tax Appellate Tribunal (ITAT) in Chennai recently passed an order in the case of Bhandari Foils and Tubes Ltd vs. DCIT, involving assessment years 2009-10 to 2011-12. The appeals were filed by the assessee against the orders of the Commissioner of Income Tax (Appeals) and pertained to a delay in filing the appeals. This article provides a detailed analysis of the case, including the background, legal arguments, and the tribunal’s decision.
Detailed Analysis:
1. Background: The appellant company had filed its income tax returns for assessment years 2009-10 to 2011-12 under section 139(1) of the Income-tax Act, 1961. The assessments were completed under section 144 read with section 147, and the total income was determined for each of the assessment years. The appellant filed appeals against the assessment orders with a slight delay, ranging from 6 to 8 days.
2. Delay and Non-Appearance: The primary issue in the case was the delay in filing the appeals. The appellant had not specified the reasons for the delay in the Form No. 35 filed for the relevant assessment years, nor had they filed a petition for the condonation of the delay. The Commissioner of Income Tax (Appeals) dismissed the appeals as unadmitted due to the delay and non-cooperation of the appellant during the proceedings.
3. ITAT’s Decision: The ITAT, after hearing both parties, noted that there was a small delay in filing the appeals, and the appeals had been dismissed unheard. The ITAT found that the Commissioner of Income Tax (Appeals) had decided the issues on merits, which was contrary to the established legal principle that unadmitted appeals should not be decided on merits.
The ITAT set aside the orders of the Commissioner of Income Tax (Appeals) for all three assessment years and directed that the issues be reconsidered by the Assessing Officer. The Assessing Officer was instructed to provide a reasonable opportunity for the appellant to present their case. The ITAT also imposed a nominal cost of Rs. 5,000 for each assessment year as a penalty for the appellant’s non-appearance. The appellant was directed to deposit this cost with the State Legal Aid Authority and provide proof of payment to the Assessing Officer.
Conclusion: In the case of Bhandari Foils and Tubes Ltd vs. DCIT, the ITAT Chennai allowed the appeals filed by the assessee and set aside the orders of the Commissioner of Income Tax (Appeals) due to the small delay in filing the appeals. The ITAT emphasized that unadmitted appeals should not be decided on merits and should be reconsidered by the Assessing Officer. However, a nominal cost was imposed on the appellant for their non-appearance before the lower authorities, underlining the importance of complying with legal proceedings.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
These three appeals filed by the assessee are directed against separate, but identical order passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, all dated 26.06.2023, 27.06.2023 & 26.06.2023 and pertains to assessment years 2009-10 to 2011-12, respectively. Since, facts are identical and issues are common, for the sake of convenience, these appeals are heard together and are being disposed off, by this consolidated order.
2. The brief facts of the case are that, the appellant company had filed its return of income for assessment years 2009-10 to 2011-12 u/s. 139(1) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”). The assessment has been completed u/s. 144 r.w.s. 147 of the Act on 29.03.2016, and determined total income of Rs. 7,55,62,695/- for assessment year 2009-10, Rs. 9,89,64,678/- for assessment year 2010-11 & Rs. 7,20,29,912/- for assessment year 2011-12. The appellant filed appeals against the order of the assessment before the ld. CIT(A) and said appeals has been filed with a delay of 6 days for assessment year 2009-10, 7 days for assessment year 2010-11 & 8 days for assessment year 2011-12, as noticed by the ld. CIT(A) in Para 2 of their orders. According to the ld. CIT(A), the appellant did not specify the delay in filing of appeals in Form no. 35 filed for all assessment years and also not filed any petition for condonation of delay. Therefore, the ld. CIT(A) dismissed appeals filed by the assessee for all three assessment years at admission level and rejected appeals in absence of condonation of delay. However, decided the issue involved in appeals on merits and sustained additions made by the Assessing Officer. Aggrieved by the ld. CIT(A) order, the assessee is in appeal before us.
3. The Ld. Counsel for the assessee, Shri. D. Anand, Advocate, submitted that the assessment order passed by the Assessing Officer is ex-parte. The ld. CIT(A) also passed exparte appellate order and dismissed appeals filed by the assessee without condoning delay in filing of appeals. But, the CIT(A) decided the issue on merits contrary to the law. Therefore, in the interest of justice, the appeals may be set aside to the file of the Assessing Officer to give one more opportunity of hearing to the assessee.
4. The ld. Sr.AR. Shri. AR V Sreenivasan, Addl. CIT, on the other hand supporting the order of the ld. CIT(A) submitted that the assessee is a habitually non-cooperator to the proceedings, which is evident from the exparte assessment order passed by the Assessing Officer. The non-cooperation from the assessee is constituted even before the ld. CIT(A), which is evident from the order passed by the ld. CIT(A). The assessee could not adduce proper reasons for non-appearance. Therefore, he submitted that the appeals should not be set aside to the file of the Assessing Officer/CIT(A).
5. Per contra, the Ld. Counsel for the assessee submitted that, there is a mistake from the assessee side for not appearing before the Assessing Officer and CIT(A). However, the fact remains that the appeals of the assessee has been decided unheard contrary to principle of natural justice. Therefore, the appeals may be set aside within a nominal cost on the assessee for not responding to the hearings before the ld. CIT(A).
6. We have heard both the parties, perused materials available on record and gone through orders of the authorities Admittedly, there is a small delay of 6 days to 8 days in appeals filed by the assessee for three assessment years. The assessee neither specified the delay in Form no. 35 filed for relevant assessment years nor filed any petition for condonation of delay in filing of the appeals explaining reasons. Therefore, the ld. CIT(A) has dismissed appeals filed by the assessee unadmitted in absence of petition for condonation of delay. No doubt, when the litigant are not persuading/ prosecuting their appeals with utmost honesty, then the appellate authority left with no option, but to decide the appeals on merits. But, in the present case, the CIT(A) although dismissed appeals filed by the assessee unadmitted, but went on to decide the issue involved in appeals on merits, contrary to settled position of law. It is an admitted fact, once the appeals are not admitted then there is no question of deciding those appeals and issues therein on merits. However, the ld. CIT(A) has decided the issues on merits. Further, the appeals of the assessee has been dismissed on technical grounds, without any proper petition from the assessee. Further, the delay in all the three appeals is very small. Therefore, considering the fact that the assessment order passed by the Assessing Officer is ex-parte and also the appeals of the assessee has been dismissed unheard, we are of the considered view that the issues needs to go back to the file of the Assessing Officer. Thus, we set aside the order passed by the CIT(A) for all three assessment years and restore the issues back to the file of the Assessing Officer for fresh adjudication. The Assessing Officer is also directed to reconsider the issue denovo in accordance with law, after providing a reasonable opportunity of hearing to the assessee. Needless to say, the assessee shall appear before the Assessing Officer as and when the case is called for hearing and also file necessary evidences without seeking any adjournments. We further make it clear that, for default committed by the assessee for not appearing before the lower authorities, the assessee needs to pay nominal cost for such default. Therefore, we impose a nominal cost of Rs. 5,000/- for each assessment year and direct the assessee to deposit the amount of cost imposed to the State Legal Aid Authority, The Hon’ble High Court of Madras and produce necessary proof before the Assessing Officer.
7. In the result, appeals filed by the assessee for assessment years 2009-10 to 2011-12 are allowed for statistical purposes.
Order pronounced in the court on 17th October, 2023 at Chennai.
