2017 (7) TMI 570 - AT - Income Tax

Tribunal allows appeal, grants condonation of delay, directs reassessment of income addition.

Sh. Ashok Ahuja, Panchkula Versus The ITO, Ward 5 (1), Chandigarh

The Tribunal allowed the appeal, condoning the delay in filing and directing the reconsideration of the addition of Rs. 5 lakhs to the assessee's income. ... Exemption u/s 10(10C) - Held that:- Since the Assessing officer has noted in the assessment order that assessee offered an amount of ₹ 5 lakhs to tax by claiming that he does not want to claim deduction u/s 10(10C) of the Act and the appeal of the assessee has not been decided on merit, therefore, in view that matter with regard to the merits of the addition have to be considered by Ld. CIT(A). Set aside the order of Ld. CIT(A) and restore the issue on merit, with regard to the addition of ₹ 5 lakhs, to the file of Ld. CIT(A) with a direction to re decide the appeal of the assessee - Appeal of the assessee is allowed for statistical purposes. Issues Involved:1. Condonation of delay in filing the appeal.2. Merits of the addition of Rs. 5 lakhs to the income of the assessee.Detailed Analysis:1. Condonation of Delay in Filing the Appeal:The primary issue in this case revolves around the condonation of delay in filing the appeal. The assessee filed a return of income declaring Rs. 2,48,561/- and claimed an exemption of Rs. 5 lakhs under section 10(10C) of the Income-tax Act, 1961. However, during assessment proceedings, the assessee offered the amount of Rs. 5 lakhs to tax, claiming he did not want to claim the deduction under section 10(10C) to avoid penalty. The Assessing Officer added Rs. 5 lakhs to the return of income and passed the order under section 143(3) on 30.11.2009. The assessee filed an appeal before the Ld. CIT(A) on 01.12.2011, which was delayed by about 680 days. The assessee submitted an application for condonation of delay, explaining that he was advised not to file an appeal due to the potential penalty and was out of the country from 26.07.2010 to 15.01.2011. He learned from colleagues on 15.11.2011 about a favorable judgment in a similar case (Bikram Jit Passi) and subsequently filed the appeal.The Ld. CIT(A) did not condone the delay, noting that the assessee had sufficient time to file the appeal before going abroad and after returning. The Tribunal, however, considered the precedent set in Madan Mohan Sharma v ITO, where a similar delay was condoned due to legal advice against filing the appeal. The Tribunal emphasized that the assessee acted promptly after learning about the favorable judgment and held that the delay was due to sufficient cause. Consequently, the Tribunal set aside the order of the Ld. CIT(A) and condoned the delay in filing the appeal.2. Merits of the Addition of Rs. 5 Lakhs:Since the appeal was not decided on merits by the Ld. CIT(A), the Tribunal directed that the merits of the addition of Rs. 5 lakhs to the income should be reconsidered. The Assessing Officer had noted that the assessee offered the amount of Rs. 5 lakhs to tax, claiming he did not want to claim the deduction under section 10(10C). Given that the appeal was not adjudicated on its merits, the Tribunal remanded the matter back to the Ld. CIT(A) to re-decide the appeal on merits, ensuring a reasonable and sufficient opportunity of being heard to the assessee.Conclusion:The Tribunal allowed the appeal for statistical purposes, condoning the delay in filing the appeal and directing the Ld. CIT(A) to reconsider the merits of the addition of Rs. 5 lakhs to the income of the assessee. The order of the Ld. CIT(A) was set aside, and the matter was remanded for a fresh decision on merits.