The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) set aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)] and directed a fresh examination, observing that Section 80P of the Income Tax Act, 1961, which is meant exclusively for cooperative societies, was mistakenly applied to a private limited company.
Read More: National Pension System: The Dual Benefit of Tax Savings and Retirement Planning
The assessee, Indian Chain Pvt. Ltd., had filed its return of income for the Assessment Year (AY) 2020-21. On 24.12.2021, an intimation under Section 143(1) of the Income Tax Act, 1961, was issued by the Deputy Commissioner of Income Tax (DCIT) to the assessee. The assessee, however, claimed that it did not receive this order either in physical form or by email.
Aggrieved by the intimation and by the resultant tax demand, the assessee filed an appeal before the CIT(A). However, the appeal was delayed by 230 days. The CIT(A) dismissed the appeal solely on the ground of delay and mistakenly treated the assessee as a cooperative society.
India’s New Tax Era Begins – Are You Ready for the Changes? – Click Here
Challenging the dismissal and the factual error, the assessee preferred an appeal before the tribunal.
Read More: CBDT notifies Revised Income Tax Return Form ITR-2
C.A. S Jhajharia, representing the assessee, submitted that the delay was neither deliberate nor due to negligence but was solely because the intimation under Section 143(1) of the Act was never served. As a result, the assessee remained unaware of the order and could not file the appeal on time.
The representative also pointed out that CIT(A) had wrongly invoked Section 80P of the Income Tax Act, 1961, which applies only to cooperative societies, whereas the assessee is a private limited company.
Meanwhile, Vineet Kumar, the counsel appearing on behalf of the Revenue, did not contest the claim of delay or factual error.
Read More: GST Portal Glitches: A comprehensive Overview, Challenges and Mitigation Measures
After hearing both sides, the bench opined that justice cannot be denied merely on a technicality when the cause of delay is substantiated and bona fide. The tribunal found that the non-service of the intimation under Section 143(1) of the Act constituted a valid reason for condoning the 230-day delay.
The Future of Taxation is Here – Unravel the Income Tax Bill 2025! – Click Here
The bench also observed that the CIT(A) had wrongly applied Section 80P of the Act to the assessee by assuming it to be a cooperative credit society. This was factually incorrect, as the assessee was a private limited company. The tribunal held that such a material error affected the validity of the appellate order.
The tribunal, comprising Sonjoy Sarma (Judicial Member) and Rajesh Kumar (Accountant Member), thus condoned the delay in filing the appeal, set aside the order passed by the CIT(A), and restored the matter for fresh adjudication.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
