Delay in Filing Appeal due to Service of FAA Notice to Old CA's Mail ID: ITAT remands Matter [Read Order]

The Bangalore bench of Income Tax Appellate Tribunal(ITAT) remanded the case back to CIT(A) for a fresh review due to improper service and a delayed appeal, directing a fair hearing for the assessee.The delay was found to be non-intentional.

Bhadra Sahakari Sakkare,the appellant-assessee, filed a return of income and reported a net loss of Rs. 4,47,10,206. The case was scrutinized revealing a provision in the Profit and Loss account(P&L).

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The assessee was asked to provide evidence for the expenditure,which was only a provision without actual payment. The Assessing Office(AO) noted that the expenditure, totaling Rs. 4,76,93,273, was covered by section 43B and disallowed it due to non-payment within the due date under section 139(1). As a result, the income was assessed at Rs. 29,83,067.

The assessee, dissatisfied with the order, filed an appeal before the First Appellate Authority(FAA). The FAA issued notices for compliance, but the assessee did not respond. The FAA dismissed the appeal based on the available information.The assessee then appealed to the ITAT.

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The appeal of the assessee was delayed by 231 days. The affidavit submitted stated that the CIT(A)'s order was never served. The assessee only learned of the order when inquiring about other matters and downloaded it on 31.3.2024. Acting on legal advice, the appeal was filed on 17.5.2024.

The tribunal considered the delay as non-intentional rather than deliberate. The counsel argued that the order uploaded on the IT portal did not constitute proper service. Based on these submissions and the Supreme Court's decision in Collector, Land Acquisition vs. MST. Katiji (1987), the delay in filing the appeal was condoned.

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The counsel for the assessee submitted that the FAA's notices were never served on the assessee due to the use of an outdated email address from a previous CA. The assessee discovered the FAA's order only after visiting the CA's office and checking e-proceedings. The counsel of the assessee, therefore requested that the matter be remanded to Commissioner of Income Tax(Appeals)[CIT(A)] for fresh consideration.

The two member bench comprising Prakash Chand Yadav (Judicial Member)and Laxmi Prasad Sahu (Accountant Member) considered the given submissions and noted that the AO added the amount due to lack of evidence showing payment and non-compliance with section 43B for provisions in the Profit & Loss account. The FAA's notices were not responded to by the assessee. Therefore, in the interest of justice, the matter is remanded to the CIT(A) for fresh consideration.

The tribunal contended that the assessee must update their email, communication address, and other details, and provide necessary documents and instructed the CIT(A) to give the assessee a reasonable opportunity to be heard.

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To Read the full text of the Order CLICK HERE 

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