Delay of 2366 days condoned due to advocate's misconduct; VAT receivable write-off disallowance creates double taxation issue

ITAT Mumbai condoned a delay of 2366 days in filing appeal after finding the assessee acted in good faith, believing their advocate had filed timely when he had actually left India without filing. Regarding disallowance of VAT receivable write-off, the Tribunal noted the assessee had already offered the subsequently received VAT refund for taxation in AY 2015-16, making disallowance in AY 2012-13 tantamount to double taxation. The matter was remanded to AO for verification of this fact. Appeal allowed for statistical purposes.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Merits of the addition related to VAT refund write-off.

Condonation of Delay:
The appeal was delayed by 2366 days. The assessee, a private limited company trading in Gold Bullion and Bars, filed for condonation of delay, citing that their authorized representative (AR) left the country without filing the appeal. The Tribunal considered the affidavit from the assessee's director and the judicial precedents, including the Supreme Court's decisions in the cases of Collector, Land Acquisition v. Mst. Katiji and N. Balakrishnan v. M. Krishnamurthy, which advocate for a liberal approach in condoning delays to serve the ends of justice. The delay was condoned as the assessee promptly acted upon discovering the omission.

Merits of the Addition:
The assessee wrote off VAT receivables for FY 2008-09 and 2009-10 in AY 2012-13, which the AO disallowed, resulting in an addition of Rs. 13,03,839. The assessee argued that this amount was received and offered for tax in AY 2015-16, thus disallowing it in AY 2012-13 would lead to double taxation. The Tribunal noted that the assessee had indeed offered the VAT refund amount for taxation in AY 2015-16, as evidenced by the profit & loss account and other records. Consequently, the Tribunal set aside the CIT(A)'s order and directed the AO to verify if the amount was taxed in AY 2015-16. If confirmed, the disallowance for AY 2012-13 would not be warranted.

Conclusion:
The appeal was allowed for statistical purposes, with directions for the AO to verify the facts regarding the VAT refund taxation in AY 2015-16. The order was pronounced on 01/09/2023.

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