2021 (4) TMI 289 - AT - Income Tax

Tribunal grants appeal, allows delay, directs CIT(A) to decide, citing genuine reasons

The Tribunal allowed the appeal, condoned the delay in filing before CIT(A), and directed CIT(A) to decide on the merits after providing the assessee an ... Condonation of delay in filing appeal - bonafide explanation for delay - opportunity of being heard - remand for decision on merits after affording hearingCondonation of delay in filing appeal - bonafide explanation for delay - Whether the delay of 156 days in filing the appeal before the CIT(A) should be condoned. - HELD THAT: - The assessee filed an affidavit explaining the delay, which the CIT(A) did not dispute. The Tribunal applied the principle that where an explanation for delay does not show mala fides or dilatory intent but is bona fide, delay ought to be condoned. Relying on this approach and the undisputed factual explanation (including alleged non-service timing, attempts to obtain hearing before the AO, and medical incapacity of a partner), the Tribunal held that the CIT(A)'s conclusion of negligence and lack of due diligence was not justified on the record. Consequently, the Tribunal exercised its power to condone the delay and found that the appeal should be admitted for adjudication on merits. [Paras 6]Delay of 156 days condoned and appeal admitted for consideration on merits.Opportunity of being heard - remand for decision on merits after affording hearing - Whether the matter should be remitted for fresh consideration and decision on merits after affording the assessee an opportunity of being heard. - HELD THAT: - The Tribunal noted that the AO had purportedly not afforded the assessee the opportunity of being heard as earlier directed by the Tribunal and that the CIT(A) should decide the appeal on its merits only after affording the assessee such hearing. Having condoned the delay, the Tribunal set aside the CIT(A)'s order refusing condonation and directed the CIT(A) to decide the appeal on merits after giving the assessee an opportunity of being heard. This direction constitutes a remand for fresh adjudication on merits. [Paras 7]Order of the CIT(A) set aside and matter remitted to the CIT(A) to decide the appeal on merits after affording the assessee an opportunity of being heard.Final Conclusion: Delay in filing the appeal before the CIT(A) is condoned; the CIT(A)'s order refusing condonation is set aside and the matter is remitted to the CIT(A) to decide the appeal on merits after affording the assessee an opportunity of being heard. For statistical purposes the assessee's appeal is treated as allowed. Issues:1. Delay in filing appeal before CIT(A) due to AO not affording opportunity of being heard.2. Refusal by CIT(A) to condone the delay based on negligence and want of due diligence.Analysis:Issue 1: The appeal was filed by the assessee against the order of the AO dated 15.04.2014, which confirmed the additions sustained by the CIT(A) without affording the assessee an opportunity of being heard as directed by the ITAT. The delay in filing the appeal before the CIT(A) was 156 days, and the reasons for the delay were explained by the assessee in an Affidavit. The delay was attributed to the AO not providing a hearing opportunity, subsequent health issues faced by the managing partner, and the advice received from the Chartered Accountant. The CIT(A) refused to condone the delay, citing negligence and lack of due diligence on the part of the assessee.Issue 2: The Tribunal, after hearing the rival submissions, found that the reasons for the delay in filing the appeal were not disputed by the CIT(A). The Tribunal referred to the decision of the Hon'ble Madras High Court in CIT v. Sanmac Motor Finance Ltd. where it was held that if the delay explanation is not mala fide and not a dilatory tactic, the delay should be condoned. The Tribunal observed that the reasons provided by the assessee for the delay did not indicate any malafides and were genuine. Therefore, the Tribunal concluded that there were bonafide reasons for the delay and the CIT(A) should have condoned it. The Tribunal set aside the order of the CIT(A) and directed the CIT(A) to decide the appeal on merits after giving the assessee an opportunity to be heard.In conclusion, the Tribunal allowed the appeal of the assessee, condoned the delay in filing the appeal before the CIT(A), and directed the CIT(A) to decide the appeal on its merits after affording the assessee an opportunity to be heard.