Case Law Details
Everest Grande Commercial Premises Co–Operative Society Ltd. Vs ITO (ITAT Mumbai)
In a recent decision by the Income Tax Appellate Tribunal (ITAT) Mumbai, the case of Everest Grande Commercial Premises Co–Operative Society Ltd. Vs Income Tax Officer (ITO) was heard. The appeals were filed by the assessee against the orders passed by the Commissioner of Income Tax (Appeals) for the assessment years 2018–19 and 2019–20 under section 250 of the Income Tax Act, 1961. The primary contention of the appellant was the dismissal of the appeals by the Commissioner of Income Tax (Appeals) due to the delay in filing.
Background: The appellant raised various grounds in its appeals, challenging the dismissal of the appeals by the Commissioner of Income Tax (Appeals) without condoning the delay. The grounds also included objections to the addition of specific amounts as business income based on the mutuality principle.
Tribunal Proceedings: During the hearing, the Authorized Representative (AR) for the appellant explained that the delay in filing the appeals was due to the ill-health of Mr. Shabbir N Akolawala, who was responsible for managing the accounts and administration of the assessee society. It was stated that Mr. Akolawala had been occupied with the treatment of his wife, who had been suffering from an incurable disease for the past 8 to 9 years. Additionally, part of the delay was attributed to COVID-19-related restrictions.
The Departmental Representative contested the appeal, relying on the Commissioner’s decision to dismiss the appeals due to the balance delay not being condoned.
Tribunal’s Decision: After considering both sides’ submissions and reviewing the available material, the ITAT accepted the appellant’s claim for condonation of delay. The Tribunal observed that Mr. Akolawala’s affidavit and the medical certificate from Kokilaben Dhirubhai Ambani Hospital supported the fact that his wife’s rare and incurable disease warranted reasonable cause for the delay.
While the ITAT set aside the orders of the Commissioner of Income Tax (Appeals) dismissing the appeals, it emphasized that the appeals had not been decided on their merits. Consequently, the matter was remanded back to the Commissioner of Income Tax (Appeals) for fresh adjudication on the merits of the appeals for the assessment years 2018–19 and 2019–20. The Tribunal directed the appellant to participate in the proceedings before the Commissioner of Income Tax (Appeals) and afforded them the opportunity for a fair hearing.
Conclusion: The ITAT’s decision underscores the importance of considering reasonable causes for delay, especially when health-related issues are involved. In this case, the Tribunal recognized the severity of the wife’s illness as a justifiable reason for the delay in filing the appeals. The ruling emphasizes the need for a balanced approach in tax proceedings, taking into account the circumstances beyond the control of the appellant.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeals have been filed by the assessee challenging the separate impugned orders of even date 19/06/2023, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment years 2018–19 and 2019–20.
2. In its appeal for the assessment year 2018-19, the assessee has raised the following grounds:–
“1) The learned CIT (Appeals) erred in dismissing the appeal being filed late & without condoning the delay.
2) The learned CIT (Appeals) erred in not not deciding appeal on merit for addition of Rs.1,78,01,881/- as a business income & also on the basis of under Mutuality principal.”
3. While in the appeal for the assessment year 2019-20, the assessee has raised the following grounds:–
“1). The learned CIT (Appeals) erred in dismissing the appeal being filed late & without condoning the delay
2). The learned CIT (Appeals) erred in not not deciding appeal on merit for addition of Rs.1,66,96,810/- as a business income & also on the basis of under Mutuality principal.”
4. During the hearing, the learned Authorised Representative (“learned AR”) at the outset submitted that the learned CIT(A) vide separate impugned orders dismissed the appeal filed by the assessee for the assessment year 2018-19 and 2019-20 only on the ground of delay in filing the appeals. The learned AR submitted that he was looking after accounts and administration of the assessee society and was busy in the treatment of his wife for the past 8 to 9 years. The learned AR further submitted that the assessee filed an application seeking condonation of delay before the learned CIT(A), which was rejected and the appeal for the assessment years 2018-19 and 2019-20 were dismissed in limine.
5. On the other hand, the learned Departmental Representative vehemently relied upon the impugned order passed by the learned CIT(A).
6. We have considered the submissions of both sides and perused the material available on record. For the assessment year 2018-19, the assessee filed its return of income on 28/08/2018 declaring a total income of Rs. 23,15,094, which was processed vide intimation dated 29/06/2019 issued under section 143(1) of the Act determining the total income of Rs. 2,01,16,975 after making an addition of Rs. 1,78,01,881 under the head income from business and profession. For the assessment year 2019-20, the assessee filed its return of income on 04/10/2019 declaring a total income of Rs. 26,16,490, which was processed vide intimation dated 06/05/2020 issued under section 143(1) of the Act determining the total income of Rs. 1,93,63,775 after making an addition of Rs. 1,66,96,810 under the head income from business and profession. Being aggrieved, the assessee filed separate appeals before the learned CIT(A). In Form No. 35 for both assessment years, the assessee mentioned that there is a delay in filing the appeal. As per the assessee, Mr. Shabbir N Akolawala, i.e. learned representative for the assessee, was looking after the accounts and administration of the assessee and was also looking after the income tax matters of the assessee. It was further submitted that Mr. Shabbir N Akolawala was busy due to the incurable illness of his wife for the past 8 to 9 years. Due to the aforesaid reason, it was submitted that he was unable to give attention to the work of the assessee. It was further submitted that part of the delay is due to the COVID-19-related restrictions imposed in the state. Further, it was submitted that he is not techno-savvy and he had to depend on his staff to download orders to reply to or to contact the practising Chartered Accountants to file appeals, rectifications, etc. It is evident from the record that in respect of both the appeals, similar submissions were made for seeking condonation of delay. The learned CIT(A), vide separate impugned orders, accepted the submission of the assessee and condoned the delay in respect of the period covered by the Covid 19 pandemic, which was also excluded by the Hon’ble Supreme Court. However, in respect of the balance delay of 575 days in respect of the appeal for the assessment year 2018-19 and delay of 346 days in respect of the appeal for the assessment year 2019-20, the learned CIT(A) did not agree with the submissions of the assessee and rejected the prayer for condonation of delay.
7. In support of its claim that the assessee has also filed the affidavit of Mr. Shabbir N Akolawala along with the present appeals, wherein it has been reiterated that the wife of Mr. Shabbir N Akolawala was suffering from an incurable disease which is the rarest of disease in the world and because of same since last few years she had undergone many major operations. In this regard, the assessee has also furnished the medical certificate issued by Kokilaben Dhirubhai Ambani Hospital and Medical Research Institute dated 02/03/2023 supporting the aforesaid claim. From the perusal of the aforesaid affidavit and medical certificate, we are of the view that the ill-health of the wife of the person who was looking after the accounts and administration of the assessee and was also responsible for attending the income tax matters constitutes reasonable cause for delay in filing the appeal before the learned CIT(A). Accordingly, the impugned orders passed by the learned CIT(A) dismissing the assessee’s appeals only on the ground of delay are set aside. Since the learned CIT(A) has not decided the appeals filed by the assessee on merits, we deem it fit and proper to restore the matter to the file of the learned CIT(A) for de novo adjudication of the appeals for the assessment years 2018-19 and 2019-20 on merits after consideration of all the details/submissions as may be filed by the assessee. Needless to mention no order shall be passed without affording reasonable opportunity of hearing to the parties. Further, the assessee is directed to appear before the learned CIT(A) on all the dates of hearing as may be fixed without any default.
8. In the result, both appeals by the assessee are allowed for statistical purposes.
Order pronounced in the open Court on 10/11/2023
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