TaxTMI 
TaxTMI 
2021 (6) TMI 842
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....red by 359 days. The assessee has filed condonation petition supported by an affidavit sworn by Sri Suresh Chandra Agarwal, Managing Partner of M/s. Deokaran Das Rambilash, wherein, it is stated that he received order of the Ld. CIT(A) on 20.9.2019 and the appeal has to be filed before the Tribunal on or before 20.11.2019. As he was suffering from diabetic, hypertension alongwith some other diseases, Doctor had advised to stay at home. In the meantime, COVID-19 came and Govt. had declared lock down/shut down, therefore, he could not contact the counsel to file appeal within the stipulated period causing delay of 359 days. Ld. D.R. opposed to condonation of delay. 4. After considering the condonation petition and hearing the rival submissions, I am satisfied that the assessee was prevented by sufficient cause in filing the appeal before the Tribunal within the stipulated period, causing 359 days. Therefore, respectfully following the judgment of Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji (1987) 167 ITR 471, wherein, it has been held that there can be no presumption of deliberateness or negligence or mala fides in case of delay, because liti....
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....e partners should be allowed as deduction to the assessee. 8. Replying to above, Ld. DR supported the order of the Ld. CIT(A) and submitted that as per the provisions of section 184(5) of the I.T. Act, 1961, the salary paid to the partners is not allowable. Hence, the order of the Ld. CIT(A) should not be disturbed. 9. I have heard the rival submissions and perused the record of the case as well as the orders of the Tribunal, placed in the paper book filed by the assessee. 10. Section 184(5) provides that where in respect of any assessment year, there is on the part of a firm any such failure as mentioned in section 144 of the Act, deduction by way of any payment of interest, salary, bonus, commission or remuneration etc. to any partner of such firm shall not be allowed in computing the income chargeable under the head "Profits and gains of business or profession". Section 144 of the Act provides that if any person fails to make the return required under sub-section (1) of Section 139 and has not made a return or a revised return under sub-section(4) or sub-section (5) of that section, or fails to comply with all the terms of a notice issued under sub-section (1) of section 142 ....
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....f any payment of interest, salary, bonus, commission or remuneration, by whatever name called, made by such firm to any partner of such firm shall be allowed in computing the income chargeable under the head "profits and gains of business or profession". Thus, the provision of Section 184(5) of the Act empowers the AO in denying deduction of interest and salary to the partners, where he has invoked the provision of Section 144 of the Act. 12. I also find profitable in taking cognizance of relevant provision of Section 144 of the Act, which reads as under:- 144. Best judgment assessment (1) If any person- (a) fails to make the return required 2 under sub-section (1) of section 139] and has not made a return or a revised return under sub-section (4) or sub-section (5) of that section,] or (b) fails to comply with all the terms of a notice issued under sub-section (1) of section 142 or fails to comply with a direction issued under sub-section (2A) of that section], or (c) having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143, the [Assessing] Officer, after taking into account all relevant material which the Asses....
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....d, however, there is no allegation that the assessee did not produce the books of accounts. Therefore, I can safely presume that the allegation of non-production of books of accounts has no legs to stand against the assessee. In the totality of facts and circumstances of the case, I clearly observe that there was a part compliance of the assessee and part non-compliance of the assessee regarding notices issued by the AO but it is not the case of complete non-compliance. 13. In the order of "A" bench of the Lucknow Tribunal in the case of Surendra Prasad Misra (supra), it was held that mere non-cooperation of the assessee making it difficult to determine the correct income may justify an assessment u/s. 144 of the Act but that by itself is not sufficient to assess the firm as an AOP u/s. 184(5) of the Act. 14. In view of the above discussion and keeping in mind the relevant provisions of Sections 144, 145(3) and 184(5) of the Act, I am of the considered view that the disallowance u/s. 184(5) of the Act cannot be treated in every case of assessment u/s. 144 of the Act but this provision can be invoked as a result of the lapses as mentioned by the legislature u/s. 144 of the Act. ....