Case Law Details
Bharat Shetty Vs ITO (ITAT Lucknow)
In Bharat Shetty Vs ITO (ITAT Lucknow), the ITAT Lucknow addressed the issue of limitation for filing an appeal in light of the COVID-19 pandemic. The assessee had filed an appeal against an order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] on August 30, 2024, which dismissed the appeal for being time-barred. The delay was attributed to the COVID-19 pandemic, with the assessee citing the Supreme Court’s order from September 2021, which excluded the period from March 15, 2020, to October 2, 2021, in calculating limitation periods. The ITAT noted that the CIT(A) had not considered this order, which would have affected the limitation period for filing the appeal.
The ITAT ruled that the CIT(A) should have accounted for the Supreme Court’s directive, which provided a 90-day extension for appeals filed after October 3, 2021. Given this, the ITAT set aside the CIT(A)’s order and instructed the CIT(A) to reassess the matter, taking into account the Supreme Court’s ruling and the new limitation period. The CIT(A) was also directed to decide the appeal on its merits if the appeal was found to be within the admissible period. The ITAT’s order effectively allowed the appeal to proceed for statistical purposes, emphasizing the need for a reconsideration of the delay issue.
FULL TEXT OF THE ORDER OF ITAT LUCKNOW
(A) This appeal vide I.T.A. No.639/Lkw/2024 has been filed by the assessee for assessment year 2018-19 against impugned appellate order dated 30/08/2024 passed by learned Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. In this appeal the assessee has raised the following grounds:
“1. Because the learned CIT(A), NFAC erred in law and on facts in inferring that the appeal filed by the assessee is time barred and is not maintainable void abinitio.
2. Because the learned CIT(A), NFAC ought to have granted sufficient opportunity to the assessee to submit reasons/ explanation based on which the appeal was filed by the assessee beyond the time limit of 30 days as prescribed in section 249 of the Income Tax Act, 1961.
3. Because the assessee having requested for personal hearing for making oral submissions, the learned CIT(A), NFAC ought not to have disposed the appeal without granting personal hearing requested by the assessee.
4. Because the learned CIT(A), NFAC ought to have considered the written submissions filed by the assessee on the merits of the issues involved in the appeal and ought to have decided the appeal on the merits of the issues involved in the appeal.
5. Because the learned CIT(A), NFAC ought to have deleted the addition of Rs. 63,84,964/- made by the learned assessing officer to the total income returned by the assessee.
6. Because the learned CIT(A), NFAC ought to have considered the submissions of the assessee that since the immovable property is stock in trade and not capital assets of the assessee, hence, the provisions of section 56(x) of the Income Tax Act, 1961 are not applicable to the assessee.
7. Because the learned CIT(A), NFAC has passed the appellate order on the basis of conjectures and surmises and without considering the facts, the applicable law and without application of mind.
8. Because the order appealed against is contrary to the fact, law and principles of natural justice.”
(A.1) Assessment order dated 19/04/2021 was passed by the Assessing Officer (DIN No.ITBA/AST/S/143(3)/2020-21/1032510761(1) under section 143(3) read with section 144B of the I. T. Act whereby the assessee’s total income was assessed at Rs.1,13,35,754/- as against returned income of Rs.49,50,790/-. In the aforesaid assessment order, an addition of Rs.63,84,964/- was made by the Assessing Officer u/s 56(2)(x) of the I. T. Act. The assessee’s appeal against the aforesaid assessment order was dismissed by the learned CIT(A) vide impugned appellate order dated 30/08/2024 on grounds of limitation. The learned CIT(A) did not condone the delay in filing of the appeal. The present appeal before us has been filed by the assessee against the aforesaid impugned appellate order dated 30/08/2024 of the learned CIT(A). At the time of hearing the learned A.R. submitted that the delay in filing of the appeal was because of outbreak of COVID-19 pandemic. He drew our attention to the order of Hon’ble Supreme Court dated 23rd September, 2021 in Miscellaneous Application No. 665 of 2021 in SMW(C) No. 3 of 2020; in RE: Cognizance for extension of limitation; reproduced here for the ease of reference; whereby period from 15/03/2020 till 02/10/2021 has been excluded in computing the period of limitation.
2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply.
3. The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.
4. The Government of India shall amend the guidelines for containment zones, to state.
“Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements.”
3. Thereafter, there was a second surge in COVID-19 cases which had a devastating and debilitating effect. The Supreme Court Advocates on Record Association (SCAORA) intervened in the Suo Motu proceedings by filing Miscellaneous Application No.665 of 2021 seeking restoration of the order dated 23.03.2020. Acceding to the request made by SCAORA, this Court passed the following order on 27.04.2021:
“We also take judicial notice of the fact that the steep rise in COVID-19 Virus cases is not limited to Delhi alone but it has engulfed the entire nation. The extraordinary situation caused by the sudden and second outburst of COVID-19 Virus, thus, requires extraordinary measures to minimize the hardship of litigant-public in all the states. We, therefore, restore the order dated 23rd March, 2020 and in continuation of the order dated 8th March, 2021 direct that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders.
It is further clarified that the period from 14th March, 2021 till further orders shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.
We have passed this order in exercise of our powers under Article 142 read with Article 141 of the Constitution of India. Hence it shall be a binding order within the meaning of Article 141 on all Courts/Tribunals and Authorities,”
4. In spite of all the uncertainties about another wave of the deadly COVID-19 virus, it is imminent that the order dated 08.03.2021 is restored as the situation is near normal.
5. We have heard learned Attorney General for India, Mr. Vikas Singh, learned Senior Counsel for the Election Commission of India, Mr. Shivaji M. Jadhav, learned counsel for the SCAORA and other learned Advocates. There is consensus that there is no requirement for continuance of the initial order passed by this Court on 23.03.2020 and relaxation of the period of limitation need not be continued any further. The contention of Mr. Vikas Singh is that the order dated 08.03.2021 can be restored, subject to a modification. He submitted that paragraph No.2 of the order dated 08.03.2021 provides that the limitation period of 90 days will start from 15.03.2021 notwithstanding the actual balance of period of limitation in cases where limitation has expired between 15.03.2020 and 14.03.2021. According to him, the period of limitation prior to 15.03.2020 has to be taken into account and only the balance period of limitation should be made available for the purpose of filing cases.
6. The order dated 23.03.2020 was passed in view of the extraordinary health crisis. On 08.03.2021, the order dated 23.03.2020 was brought to an end, permitting the relaxation of period of limitation between 15.03.2020 and 14.03.2021. While doing so, it was made clear that the period of limitation would start from 15.03.2021. As the said order dated 08.03.2021 was only a one-time measure, in view of the pandemic, we are not inclined to modify the conditions contained in the order dated 08.03.2021.
7. The learned Attorney General for India stated that paragraph No.4 of the order dated 08.03.2021 should be continued as there are certain containment zones in some States even today.
8. Therefore, we dispose of the M.A. No.665 of 2021 with the following directions: –
I. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 02.10.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2021, if any, shall become available with effect from 03.10.2021.
II. In cases where the limitation would have expired during the period between 15.03.2020 till 02.10.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 03.10.2021. In the event the actual balance period of limitation remaining, with effect from 03.10.2021, is greater than 90 days, that longer period shall apply.
III. The period from 15.03.2020 till 02.10.2021 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of
(B) At the time of hearing, learned Authorised Representative for the assessee submitted that in the impugned appellate order dated 30/08/2024, passed by learned CIT(A), the aforesaid order dated 21/09/2021 of Hon’ble Supreme Court was not considered. He further submitted that had the learned CIT(A) considered the aforesaid order of Hon’ble Supreme Court, the appeal filed by the assessee in the office of the learned CIT(A) would have been found to have been filed within limitation period. He requested that the learned CIT(A) be directed to reconsider the matter, to admit the appeal, and to decide the appeal on merits. The learned Departmental Representative for Revenue expressed no objection to this.
(C) In view of the foregoing, we set aside the impugned order dated 30/08/2024 of learned CIT(A) with the direction to decide the limitation issue afresh, after giving respectful consideration to aforesaid order dated 21/09/2021 of Hon’ble Supreme Court. If the assessee’s appeal is admitted by learned CIT(A) in view of our aforesaid direction, then learned CIT(A) is further directed to decide the assessee’s appeal on merits after giving reasonable opportunity to the assessee.
(D) In the result, the appeal is partly allowed for statistical purposes.
(Order pronounced in the open court on 15/01/2025)
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