2018 (10) TMI 1035 - AT - Income Tax

Tribunal orders appeal consideration despite delay, prioritizing substantial justice over technicalities

The Tribunal directed the CIT(A) to condone the delay in filing appeals by the assessee, a closely held company facing financial crisis and business ... Denial of the CIT(A) to admit the appeal - refusing to condone the delay in filing appeal before the CIT(A) - Held that:- The assessee has provided justification for such delay. The assessee has taken consistent position that its business venture has closed down and the possession of the premises have been taken by the lender bank on 14.07.2010. The power supply was also disconnected much earlier. The assessee has underlined his precarious financial position giving rise to such alleged lapse. It is the case of the assessee that respective orders of assessment and penalty presently appealed against were not made privy to the assessee. The assessee has obtained the certified copy of the respective orders from the AO belatedly on 07.04.2015 and when this date of receipt/service of order is taken into account, there is no delay in filing the appeal. Delay condoned - Matter restored before CIT(A). Issues:Delay in filing appeal before CIT(A) and refusal to condone the delay.Analysis:The judgment concerns six appeals of the same assessee for different assessment years. The main issue revolves around whether the CIT(A) was justified in refusing to condone the delay in filing the appeals and subsequently dismissing them in limine. The CIT(A) declined to entertain the appeals due to the delay in filing, leading to the assessee approaching the Tribunal.The assessee, a closely held company engaged in manufacturing and dealing in steel products, faced financial crisis and business closure, resulting in defaults in loan repayments to nationalized banks. The company was unaware of tax demands until served with summons by the Tax Recovery Officer. The delay in filing the appeals was attributed to the chaotic situation caused by the financial crisis, leading to the company not being able to attend to tax matters promptly.The Tribunal noted that while there was a delay in filing the appeals as per Section 249(2) of the Act, the assessee provided justifications for the delay. The financial crisis and business closure were significant factors contributing to the delay, and the assessee filed the appeals within 30 days of receiving the certified copies of the assessment orders. The Tribunal emphasized the need to consider the circumstances leading to the delay and adopted a justice-oriented approach rather than a strict technical one.Citing relevant legal precedents, the Tribunal highlighted that refusing to condone the delay could result in meritorious matters being dismissed without consideration on merits. It emphasized the importance of substantial justice over technicalities and stressed that the judiciary should prioritize removing injustice. Ultimately, the Tribunal found that the assessee had sufficiently proven the reasons for the delay and directed the CIT(A) to condone the delay and admit the appeals for adjudication on merits, allowing all the appeals for statistical purposes.In conclusion, the Tribunal's decision favored the assessee, acknowledging the extenuating circumstances that led to the delay in filing the appeals and emphasizing the importance of allowing matters to be contested on merits rather than being dismissed on technical grounds.