ITAT allows appeal on delay, imposes cost. Issues restored for fresh adjudication. Addition in original assessment non-appealable.

The ITAT allowed the appeal regarding the delay in filing the appeal before Ld CIT(A), condoning the delay and imposing a cost on the assessee. The ITAT also restored all issues to Ld CIT(A) for fresh adjudication. However, the appeal challenging the addition of Product Development Expenditure in the reassessment order was dismissed as the addition was made in the original assessment order passed u/s 143(3) and not in the reassessment order, rendering it non-appealable.

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Issues:
1. Delay in filing appeal before Ld CIT(A) challenging assessment order passed u/s 143(3) of the Act.
2. Addition of Product Development Expenditure in assessment order passed u/s 143(3) r.w.s 147 of the Act.

Issue 1: Delay in filing appeal before Ld CIT(A) challenging assessment order passed u/s 143(3) of the Act:
The appeals filed by the assessee were related to the assessment year 2007-08 against the orders passed by Ld CIT(A)-1, Bengaluru. One appeal was against the assessment order passed u/s 143(3) of the Act, while the other was against the assessment order passed u/s 143(3) r.w.s 147 of the Act. The delay of 813 days in filing the appeal challenging the assessment order passed u/s 143(3) was not condoned by Ld CIT(A) due to the absence of compelling reasons. The assessee argued that restructuring and shifting of the registered office led to confusion and delay. The ITAT held that there was sufficient cause for the delay and, following the principles of natural justice, condoned the delay, imposing a cost of Rs. 5000 on the assessee. The ITAT restored all issues to Ld CIT(A) for fresh adjudication.

Issue 2: Addition of Product Development Expenditure in assessment order passed u/s 143(3) r.w.s 147 of the Act:
The assessing officer re-opened the assessment and made an addition relating to "Product Development Expenditure" in the assessment order passed u/s 143(3) r.w.s 147 of the Act. The assessee challenged this addition before Ld CIT(A), who rejected the appeal stating that the addition was not made in the reassessment order. The ITAT upheld the decision, citing the principle that reassessment proceedings are for the benefit of revenue. As the addition was made in the original assessment order passed u/s 143(3) and not in the reassessment order, the assessee was not entitled to challenge it. Consequently, the appeal related to this issue was dismissed.

In conclusion, the ITAT allowed the appeal related to the delay in filing the appeal before Ld CIT(A) and imposed a cost on the assessee, while dismissing the appeal challenging the addition of Product Development Expenditure in the reassessment order.

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