Chirag Anil Shah Vs ACIT (ITAT, Mumbai)
Wife’s Credit Card, Husband’s Business Expense-ITAT Swipes Away Disallowance; 690-Day Delay Also Condoned u/s 253(5)
The controversy
The assessee, Chirag Anil Shah, challenged the order of the CIT(A), NFAC, for AY 2013-14, though the appeal before the Mumbai ITAT was delayed by 690 days. Apart from seeking condonation of delay, the assessee contested disallowance of foreign travel expenses, an addition arising from an alleged Form 26AS mismatch & an ad hoc disallowance out of other expenses.
The assessee explained that the CIT(A), while passing the appellate order, had failed to adjudicate the ground concerning the Form 26AS mismatch. He therefore filed a rectification application u/s 154 on 26.12.2023 & bona fide believed that an appeal before the ITAT could be filed only after disposal of that application. However, the rectification application remained unattended. It was only after the AO passed a penalty order u/s 271(1)(c) that the assessee consulted a Chartered Accountant & learnt that the appellate order could be challenged notwithstanding the pending rectification application.
690 days late, but the explanation was not an afterthought
The Revenue opposed condonation on the ground that the assessee ought to have been vigilant & filed the appeal within the prescribed period. The ITAT, however, found that the assessee’s explanation constituted reasonable & sufficient cause. His belief that the appeal should await disposal of the rectification application was found to be bona fide, particularly because the application related to a ground which had admittedly remained unadjudicated by the CIT(A).
