The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) condoned a 140-day delay in filing an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] due to the appellant’s mistaken belief, based on incorrect tax consultant advice.
Shri Chowlor Matada Swamy,the appellant-assessee, had challenged the order dated 30/05/2024 passed by the CIT(A) for the assessment year ( AY ) 2019-20.
The assessee filed an appeal with a delay of 140 days before the CIT-A. The assessee explained that they believed it was necessary to deposit 20% of the tax demand before filing the appeal. Since Rs.24.50 lakhs had been seized during a search, they did not have the required funds.
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After receiving a penalty notice, the assessee consulted another tax advisor, who clarified that the deposit was not required for filing the appeal. Despite this explanation, the CIT-A did not condone the delay.
The tribunal noted that the reason given by the assessee for the delay in filing the appeal could not be considered unreliable or bogus, despite the cash seized during the search proceedings. They acknowledged the possibility of a cash shortage with the assessee.
As a result of incorrect advice from a tax consultant, the assessee failed to file the appeal within the stipulated time before the CIT-A, but the bench, after considering all the facts, concluded that there had been sufficient cause for the delay.
Section 249(3) of the Act allows the CIT(A) to accept an appeal filed after the 30-day deadline if the appellant shows a valid reason for the delay.
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The appellate tribunal directed the CIT(A) to condone the delay in filing the appeal and to review the assessee’s case based on its merits.
The two-member bench comprising Prakash Chand Yadav ( Judicial Member ) and Waseem Ahmed ( Accountant Member ) allowed the appeal filed by the assessee.
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