The Lucknow Bench of Income Tax Appellate Tribunal (ITAT) directed the commissioner of Income Tax (appeals)[CIT(A)] to recalculate the 90 limits starting from October 3, 2021, excluding the COVID-19 period.
Bharat Shetty (assessee), whose income was assessed by the Assessing Officer(AO) amounting to Rs. 1,13,35,754, and the assessment order was passed on 19/04/2021. The AO made an addition of Rs. 63,84,964 under section 56(2)(x) of the Income Tax Act.
Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income Tax (appeals) [CIT(A)]. The assessee sought to condone the delay in filing an appeal. The CIT(A) did not condone the delay in filing the appeal and dismissed the appeal.
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Therefore, the assessee preferred an appeal before the ITAT. The counsel for the assessee argued that the delay in filing an appeal was due to the outbreak of COVID-19. The counsel also relied on the order of the Supreme Court in Miscellaneous Application ( In RE Cognizance for Extension of Limitation ) stating that the period of 15/03/2020 to 02/10/2021 to be excluded for computation of the period of limitation.
The order stated that the limitation period of 90 days can be computed from October 3, 2021, after excluding the period of COVID-19. The counsel also submitted that the Supreme Court order was not considered by the CIT(A). The counsel also requested to direct the CIT(A) for reconsideration, admit the appeal, and decide the matter on merits.
The two-member bench comprising Kul Bharat (Vice President) and Nath Misshra (Accountant Member) observed the order of the Supreme Court with respectful consideration and observed that the CIT(A) failed to consider the Supreme Court guidelines to decide the limitation. Therefore, the tribunal set aside the order of the CIT(A).
The tribunal also directed the CIT(A) to recalculate the limitation period for filing the appeal. The tribunal further directed that the appeal should be decided on merits with a reasonable opportunity to be given to the assessee.
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