Dewsoft Overseas Pvt. Ltd. vs JCIT Spl Range-3, New Delhi | Assessment Year 2014-15 | Appeal Dismissed Due to Lack of Condonation of Delay

Dewsoft Overseas Pvt. Ltd. vs JCIT Spl Range-3, New Delhi: Assessment Year 2014-15

Case Number: ITA 6489/DEL/2019

Appellant: Dewsoft Overseas Pvt. Ltd., New Delhi

Respondent: JCIT Spl Range-3, New Delhi

Assessment Year: 2014-15

Order Date: 14th October 2022

Pronounced On: 14th October 2022

Order Type: Final Tribunal Order

Background

Dewsoft Overseas Pvt. Ltd., the appellant in this case, filed an appeal against the assessment order passed by the Joint Commissioner of Income Tax (JCIT), Special Range-3, New Delhi, for the assessment year 2014-15. The assessment order, dated 29th December 2016, determined the income of the assessee at Rs. 7,27,97,883/- as against the returned income of Rs. 96,64,470/-. The appeal was filed with the Commissioner of Income Tax (Appeals) [CIT(A)] after a delay of 30 days, and the CIT(A) dismissed the appeal on two grounds: the delay in filing and non-compliance with hearing notices.

Why the Case Was Filed

The appeal was filed because the appellant, Dewsoft Overseas Pvt. Ltd., contested the disallowance of Rs. 6,31,33,413/- made by the Assessing Officer (AO) on the grounds that these expenses were incurred for business purposes. The appellant also challenged the validity of the assessment, arguing that the disallowances were made without rejecting the books of accounts under section 145 of the Income Tax Act, 1961. The CIT(A), however, dismissed the appeal due to a delay in filing and non-attendance at the hearings.

Grounds of Appeal

The appellant raised several grounds of appeal before the Income Tax Appellate Tribunal (ITAT), including:

• The order passed by the CIT(A) was bad in law and on facts as it was passed ex-parte without affording a reasonable opportunity of being heard to the assessee.
• The CIT(A) erred in rejecting the application for condonation of delay without considering the reasonable cause submitted by the appellant, namely that the father of the director of the company was seriously ill.
• The CIT(A) failed to consider the merits of the case and dismissed the appeal solely on procedural grounds.
• The disallowances made by the AO were arbitrary, without any basis, and in violation of the principles of natural justice.

Key Issue: Condonation of Delay

The central issue in this case was the rejection of the appellant’s request for condonation of a 30-day delay in filing the appeal with the CIT(A). The appellant had cited the serious illness of the father of the company’s director as the reason for the delay. However, the CIT(A) dismissed this explanation on the grounds that no evidence was provided to support the claim.

Tribunal’s Findings

The ITAT, comprising Shri Challa Nagendra Prasad (Judicial Member) and Shri Anadee Nath Misshra (Accountant Member), reviewed the facts of the case and the arguments presented by the Revenue. The Tribunal noted that the CIT(A) had not provided sufficient facts or a clear rationale for rejecting the condonation request. The Tribunal also observed that the CIT(A) had failed to pass a speaking order on the merits of the case, as required under section 250(6) of the Income Tax Act.

Moreover, the ITAT found that the CIT(A) had not made it clear whose father was seriously ill, given that the appellant is a corporate entity and not a natural person. The lack of clarity and the absence of a reasonable opportunity for the appellant to present evidence led the Tribunal to conclude that the CIT(A) had not acted fairly in dismissing the appeal.

Conclusion

Based on the findings, the ITAT set aside the impugned order of the CIT(A) and directed the CIT(A) to pass a denovo order. The Tribunal instructed the CIT(A) to take a fresh view on whether the delay in filing the appeal should be condoned and, if so, to pass a speaking order on the merits of the case after providing a reasonable opportunity to the appellant.

Final Judgment

The appeal filed by Dewsoft Overseas Pvt. Ltd. was partly allowed for statistical purposes, as the ITAT set aside the order of the CIT(A) and directed a fresh evaluation of the case. The ITAT emphasized the importance of procedural fairness and the need for the CIT(A) to consider the merits of the case if the delay is condoned.

This case underscores the significance of due process in tax litigation, particularly when it comes to the condonation of delays and the necessity of a fair hearing on the merits of the case.

Dewsoft Overseas Pvt. Ltd. vs JCIT Spl Range-3, New Delhi | Assessment Year 2014-15 | Appeal Dismissed Due to Lack of Condonation of Delay