TaxTMI 
TaxTMI 
2022 (3) TMI 1514
X X X X Extracts X X X X
X X X X Extracts X X X X
....text, it is humbly submitted that an order u/s 263 was passed in the case of assessee by Pr. Commissioner of Income Tax-2, Jaipur on 08.03.2019. Appeal against such order was supposed to have been filed within 60 days, i.e. 06.05.2019, however, the appeal got delayed by 932 days, as the appeal is being filed now on 243 for the reasons as explained below: 1. That, as soon as the impugned order passed by Id. Pr. CIT was received, the same was forwarded to the office of counsel of assessee so as to decide if appeal against such order was required to be filed. 2. That, the counsel of assessee advised that no appeal is required to be filed against impugned order and appeal would be filed against the order passed u/s 143(3) r.w.s. 263 of the Income Tax Act. 3. That, order u/s 143(3) r.w.s. 263 was passed on 02.12.2019, and when the same was discussed with another counsel, assessee was advised as to why no appealwas filed against order u/s 263. 4. However, by that time, there was countrywide lockdown and offices of counsels remained closed due to COVID 19 pandemic and again appeal could not be filed against order passed u/s 263. 5. Thus, it is submitted that the delay in fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... delay." 2.2 Based on the stated facts in the petition and affidavit filed by the assessee it is noted as even confirmed by the registry that this present appeal is delayed by 932 days delay and if the delay of covid period for 619 days is deducted than the delay is of 313 days. For that matter of the delay the ld. AR of the assessee submitted that the majority part of the delay is on account of covid 19 period and rest of the period delay in filling this appeal is absolutely inadvertent and has occurred due to advise of the counsel appeared in the assessment proceedings and has not advised to file an appeal against the order of the PCIT passed under section 263 of the Act. There was no malafide of deliberate delay in filling the present appeal and when the assessee came to know about the absolute right of filling an appeal against the order of the PCIT they moved this present appeal. The ld. AR of the assessee further submitted that in the assessment proceeding the other chartered accountant represented the company. Whereas the present appeal is filled by another chartered accountant. This fact itself proves the version stated in the affidavit and therefore, there is no need of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elay of 313 days for which the ld. AR of the assessee submitted that they have reasonable reasons for not filing an appeal in time. 3.1 There is also no dispute that under section 253(5) of the Act, the Tribunal may admit an appeal filed beyond the period of limitation where it is satisfied that there was sufficient cause on the part of the assessee for not presenting the appeal within the prescribed time. Section 253(5) deals the power of the tribunal and the same is reiterated here in below: Section 253 (5) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in sub-section (3) or sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period. 3.2 Thus, based on that provision tribunal may admit an appeal filed beyond the period of limitation where it is satisfied that there exists a sufficient cause on the part of the assessee company for not presenting the appeal within the prescribed time. The explanation of the assessee therefore, becomes relevant to determine whether the same reflects sufficient and reasonable case on its pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....case of Collector, Land Acquisition vs MST Katiji, the Hon'ble Supreme Court has held that the expression 'Sufficient Cause' employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner to sub-serves the ends of justice that being the life-purpose of the existence of the institution of Courts. It was further held by the Hon'ble Supreme Court that such liberal approach is adopted on one of the principles that refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. Another principle laid down by the Hon'ble Supreme Court is that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a nondeliberate delay. It was also held by the Hon'ble Supreme Court that there is no presumption that delay is occasioned deliberately, or on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....powers under section 253(5) of the Act, we hereby condone the delay of 932 days in filing the present appeal as we are satisfied that there was sufficient cause for not presenting the appeal within the prescribed time and the appeal is hereby admitted for adjudication on merits. 4. Now, coming to the merits of the case, the assessee has marched this appeal on the following grounds of appeal: " 1. On the facts and in the circumstances of the case and in law, Id. PCIT-2, Jaipur has grossly erred in revising the assessment completed u/s 263 of the Income Tax Act, 1961 arbitrarily. 1.1 That Id. PCIT-2, Jaipur has further erred in passing the impugned order u/s 263 of the Income Tax Act, 1961 by ignoring the doctrine of merger as impugned order was already adjudicated by the ld. CIT(A) prior to the initiation of revision proceedings, thus the impugned order deserves to be quashed and be hold as having been passed without the authority of law. 2. On the facts and in the circumstances of the case and in law Id. PCIT-2, Jaipur has grossly erred in issuing direction for revision of completed assessment for re computing the Book Profit u/s 115JB of the Income Tax Act. Appellant pray....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der/apply his mind to the information available on record with regard to the calculation of book profit u/s 115JB. Thus the order passed on 28-12- 2016 is without making necessary verification of the income determined under section 115JB and without examination of the claim of MAT and as such the assessment was made without application of mind on the given facts on record. This in turn has resulted in passing of an erroneous order by the Assessing Officer in the case due to non application of mind to relevant material, an incorrect assumption of facts and an incorrect application of mind to law which s prejudicial to the interest of the revenue. 9. Since, the case was converted into complete scrutiny for the purposes of verifying the correctness of return of income, the Assessing Officer was required to examine and correctly determined the book profit u/s 115JB and charge MAT tax and interest u/s 234B & 234C thereon. In this case, the Assessing Officer failed to correctly charge MAT tax. Thus the order passed U/s 143(3) on 28-12-2016 is erroneous and prejudicial to the interest of the revenue in terms of Judgment of the Hon'ble Supreme Court in the case of Malabar Industrial....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Rs. 1,69,76,200/- after making following additions: - Disallowance of part depreciation on building Rs.22,50,530/- - Long Term Capital Gain on Sale of Land Rs. 3,47,485/- - Part disallowance of depreciation on Vehicle Rs. 1,37,346/- Rs. 27,35,361/- Aggrieved of the additions made in the assessment order, assessee preferred appeal before ld. CIT(A), which proceedings were also concluded vide order dated 31.01.2018. Subsequently, ld. PCIT(adm.) initiated the proceedings u/s 263 by issue of ,show cause notice vide letter No. Pr. CIT-II/ITO/(T & J)/JPR/263- 264/2018-19/1104 dated 06.12.2018. In response to such notice, assessee furnished relevant details and Revision proceedings were concluded vide order dated 08.03.2019, whereby order passed u/s 143(3) was held as erroneous and prejudicial to the interest of the revenue and was set aside with the direction to re-determine the book profits u/s 115JB and for calculation of MAT by including the profit from sale of asset into it. Aggrieved of the order so passed by ld. PCIT, assessee has preferred present appeal before the hon'ble bench. Grounds of Appeal No. 1, 1.1 and 2: In grounds of appeal No.1 & 1.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....MAT has not been examined at all. Moreover, basically Revision proceedings were initiated for inclusion of profit on sale of land and building under Book profits whereas this issue of quantum of profit related to land and quantum of profit related to building was already before ld. CIT(A), and no amendments whatsoever were made by ld. CIT(A) in order passed by ld.AO in this regard. It is submitted that by virtue of clause (c) of explanation to section 263(1), powers conferred vide section 263 cannot be exercised in respect of part of order that has been subject matter of adjudication by ld.CIT(A). In the instant case also, issue of profit on sale of land and building (which has been proposed to be not reduced while computing book profit) was subject to appeal and has been thus also examined by ld.CIT(A). Your honours would appreciate that after passing of order dated 31.01.2018 by ld.CIT(A), order passed u/s 143(3) got merged with the order of CIT(A), i.e. authority superior in hierarchy and therefore order passed u/s 263 on related issue already before ld. CIT(A) is bad in law. Hon'ble High Court of Bombay in CIT v. TejajiFarasram Kharawalla (1953 SCC OnLine Bom 28) has held....
X X X X Extracts X X X X
X X X X Extracts X X X X
....958] 34 ITR 342 (Bom.) affirmed in CIT v. Shapoorji Pallonji Mistry [1962] 44 ITR 891 (SC) that an appellate authority can deal with any matter covered by the order appealed against, irrespective of the fact whether that matter is raised in appeal or not. If it does not deal or revise any of the points within its jurisdiction, it should be assumed that the appellate authority has affirmed the findings on those points and has not thought it necessary to interfere with them. Hence, the entire order of assessment should be deemed to merge in the appellate order subject only to any other enabling statutory provision, as in the Explanation below section 251 of the Income-tax Act mentioned above. J.K. Synthetics v. Addl. CIT [1976] 105 ITR 344, (Alld) upholds this view. The ratio of the decision in Tel Utpadak Kendra's case [Tel Utpadak Kendra v. Dy. CST [1981] 48 STC 248.] is also that when an appeal is filed, the appellate authority is seized of the entire order and not only that part of it which is challenged before it. 231 ITR 50 CIT vs. Shri Arbuda Mills Ltd. (SC): Revision - Doctrine of merger - Powers of Commissioner - Amendment of section 263(1) by Finance Act, 1989, wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r passed by ld.PCIT 2015-16 25.09.2015 Return filed 31.03.2017 2016-17 12.10.2016 Return filed 31.03.2018 From perusal of above, it is apparent that even at the time of initiation of Revision proceedings by ld.PCIT, last date of revising Returns of Income for A.Y. 2015-16 as well as A.Y. 2016-17 had already expired, therefore no remedy was left with assessee. In any case, there is no loss to revenue due to reduction of profit on sale of land for computation of MAT and accordingly, it is prayed that order u/s 263 be set-aside." 9. The ld. AR of the assessee in addition the above written submission argued that the case of the assessee was for limited scrutiny and was converted into a complete scrutiny. The issue of capital gain has extensively argued and analyzed by the ld. AO in the assessment proceedings and out of the issue so examined the separate addition on the issue were also made as it is evident from the assessment order. The ld. AO while verifying the issue has made an addition to excess depreciation on the building was disallowed as claimed by the assessee when computing the capital gain and thus the long term capital gain was also increased wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... observed that there is no inquiry appears to have been made, even the report u/s. 115JB in form no. 29 is not on record. It has thus not been examined by the AO. Based on these submissions the ld. DR supported the order of the PCIT on merits. 11. We have heard the rival contentions, perused the material on record and orders of the lower authorities. We have also gone through the various decisions cited by both the parties to drive home to the contentions raised by the rival parties. Apropos ground no. 3 the bench observed that the same is general in nature and therefore, it does not require any separate adjudication. The bench also observed that vide ground no.1, 1.1 and 2 the assessee has challenged the action of the Principal Commissioner of Income Tax-2, Jaipur and the grounds so raised are inter connected and relates on the issue of assessee liability on MAT. The bench also observed that the case of the assessee was converted to a complete scrutiny from limited scrutiny. In the assessment proceeding the ld. AO touched upon the various aspects issue of capital gain and has made adjustments to the returned income. Against the said order of the assessing officer the assessee has....