101-day delay condoned in filing appeal due to communication gap between CA and counsel

ITAT Ahmedabad condoned 101-day delay in filing appeal, accepting assessee's explanation of communication gap between CA and counsel as sufficient cause. The Tribunal relied on precedent allowing condonation of even 492-day delay where assessee had bona fide impression appeal was filed. On merits, ITAT allowed assessee's appeal finding the AO exceeded jurisdiction in limited scrutiny assessment by disallowing commission and purchases beyond scope of section 143(2) notice, which only covered interest expenses and related party mismatches, not bogus transactions or section 14A disallowances.

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Issues:
1. Condonation of delay in filing appeal.
2. Jurisdiction of assessment order under limited scrutiny assessment.

Analysis:

Issue 1: Condonation of delay in filing appeal
The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) for the assessment year 2015-16. The appeal was time-barred by 101 days, but the assessee sought condonation of the delay. The assessee attributed the delay to a communication gap between the Chartered Accountant (CA) and the legal representatives. The ITAT considered the case of Smt. Samanthapudi Lavanya v. ACIT, where a delay of 492 days was condoned due to a bona fide impression that the appeal had been filed. The ITAT, in the interests of justice, condoned the delay as the Departmental Representative did not object to it.

Issue 2: Jurisdiction of assessment order under limited scrutiny assessment
The assessee contended that the assessment order exceeded the scope of limited scrutiny assessment as specified in the notice under section 143(2) of the Act. The grounds of appeal included disallowance of commission and purchases made by the Assessing Officer (AO). The AO's additions were not in line with the issues mentioned in the notice for limited scrutiny assessment. The ITAT observed that the assessment order strayed beyond the scope of the notice, which is impermissible in law. The ITAT referred to various judicial precedents to support the contention that the assessment order must align with the issues specified in the limited scrutiny notice. The ITAT held that the assessment order was beyond the jurisdiction of the AO for limited scrutiny assessment and set it aside, allowing the additional Grounds of Appeal raised by the assessee.

In conclusion, the ITAT allowed the appeal of the assessee, emphasizing that the assessment order had exceeded the scope of the limited scrutiny notice, leading to the setting aside of the assessment. The judgment highlighted the importance of adhering to the specified issues in a limited scrutiny assessment to maintain the jurisdiction of the Assessing Officer.

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