Case Law Details
Avalon Courtyard-2 Coop Housing Service Society Ltd Vs ITO (ITAT Ahmedabad)
ITAT noted that the tax consultant of the assessee has not followed all the tax demands and the necessary submissions made to the Revenue Authorities during the pre-covid period i.e. 06.08.2019 to 14.03.2020. The earlier officer bearers of the society also has not taken cognizance or the precaution to ascertain the latest tax position. Therefore, in the interest of justice it will be appropriate to condone the delay of 217 days as the assessee has explained the reasonable cause for delay in filing the appeal before the CIT(A). Therefore, it will be appropriate to remand back the issues contested by the assessee society on merit to the file of the CIT(A) (NFAC) for proper adjudication of the issues on merit. Needless to say, the assessee be given opportunity of hearing by following principle of natural justice.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The appeal filed by the assessee is against the order passed by the Ld. CIT(Appeals), National Faceless Appeal Centre (in short “NFAC”), Delhi on 27.10.2022 for A.Y. 2018-19.
2. The grounds of appeal raised by the assessee are as under:
“1.1 The order passed u/s. 250 on 27.10.2022 for A.Y. 2018-19 by NFAC Delhi dismissing the appeal on the ground of limitation is wholly illegal, unlawful and against the principles of natural justice.
1.2 The Ld. NFAC has grievously erred in law and or on facts in not allowing opportunity to further explain the reasons for delay in filing appeal before NFAC. Therefore there was gross violation of principles of natural justice & equity.
2.1 The NFAC has grievously erred in law and on facts in holding that there was no sufficient cause for delay in filing appeal before NFAC and thereby dismissing the appeal on limine and confirming the assessment.
2.2 That in the facts and circumstances of the case as well as in law, the NFAC ought not to have held that there was no sufficient cause for delay in filing appeal before NFAC. On the contrary when explanation with evidence was asked for in the notices issued u/s 250 from time to time without disputing the explanation give for the delay in SOF, the delay should be deemed to have been condoned.
3.1 The NFAC has erred in law and on facts in upholding the assessment u/s 143(1) at Rs. 10,39,251/-.
It is, therefore, prayed that the order passed by NFAC rejecting to condone delay in filing the appeal should be set aside and be directed to consider the appeal on merits of the case.”
3. The assessee is a registered cooperative housing society under Gujarat Cooperative Act, 1961 registered on 04.11.2011. It maintains regular books of accounts and other record which was subject to cooperative audit. The assessee society filed its return of income on 11.10.2018 declaring total income at Rs. NIL as the assessee declared the surplus income were explained at Rs. 10,39,251/- and claimed the same as exempt on the principle of mutuality. The return was processed under Section 143(1) on 13.05.2019 determining the total income at Rs. 10,39,251/- due to adjustment of income replaced by Rs. 10,39,251/- as total income against the NIL income. The assessee filed rectification application under Section 154 of the Act on 29.06.2019 stood rejected vide order under Section 154 of the Act dated 06.07.2019 confirming the adjustment made under Section 143(1) of the Act vide intimation dated 13.05.2019.
4. Being aggrieved by the rectification order passed under Section 154 of the Act the assessee filed appeal before the CIT(A). The CIT(A) dismiss the appeal of the assessee.
5. The Ld. A.R. submitted that there was a delay of 217 days in filing appeal before the CIT(A) in respect of the assessee’s tax consultant has not taken any remedial action and the assessee society was not aware about the order passed by the CPC. And therefore, there was a delay of 217 days prior to Covid period which is 06.08.2019 to 14.03.2022. The Ld. A.R. submitted that when the assessee society came to know the same after the Covid period the assessee society appointed another tax consultant / Chartered Accountant after the change of office bearers of the society and made enquiries of the I. T. Portal to ascertain the latest tax position. At that time the assessee society came to know that the outstanding demand and orders was released by the Revenue. The Ld. A.R. submitted that the CIT(A) has not condoned the delay and dismiss the appeal on the limitation itself and not decided on merits. The Ld. A.R. submitted the issue on merit is related to exempt income claimed by the assessee.
6. The Ld. D.R. submitted that the assessee has not explained the delay properly before the CIT(A) and relied upon the decision cited by the CIT(A) in its order.
7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the tax consultant of the assessee has not followed all the tax demands and the necessary submissions made to the Revenue Authorities during the pre-covid period i.e. 06.08.2019 to 14.03.2020. The earlier officer bearers of the society also has not taken cognizance or the precaution to ascertain the latest tax position. Therefore, in the interest of justice it will be appropriate to condone the delay of 217 days as the assessee has explained the reasonable cause for delay in filing the appeal before the CIT(A). Therefore, it will be appropriate to remand back the issues contested by the assessee society on merit to the file of the CIT(A) (NFAC) for proper adjudication of the issues on merit. Needless to say, the assessee be given opportunity of hearing by following principle of natural justice.
8. In result, appeal of the assessee is partly allowed for statistical purpose.
This Order pronounced in Open Court on 19/04/2023
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