In a recent decision, the Income Tax Appellate Tribunal (ITAT) condoned a 395-day delay in the filing of an appeal by the assessee/appellant, M/s Khoday Ehshwarsa and Sons. The case involved a Joint Development Agreement and the income declared for the assessment year 2020-21.
The appeal had initially been dismissed by the Commissioner of Income Tax (Appeals) [CIT(A)] as non-maintainable due to the significant delay in filing. The assessee, however, approached the ITAT, arguing that the delay was justified and should be condoned to avoid the undesirable outcome of double taxation. According to the legal counsel representing the assessee, there was no addition made to the total income in the original assessment for the disputed year under section 143(1) of the Income Tax Act 1961 (ITA). Nevertheless, the assessee had offered certain income for tax during the year under consideration. This income, however, was already included in the total income for the assessment year 2020-21, which was being challenged. To avoid being taxed twice for the same income, the appeal was filed against the initial intimation under section 143(1).
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
In defense of the delay, the assessee’s counsel cited multiple reasons, including the preoccupation of their consultant with filing GST returns and preparing tax audit reports for the group. Additionally, the Managing Partner, Shri KL Swamy, had been embroiled in several legal and administrative proceedings, further contributing to the delay. Given the critical nature of these matters, the appellant argued that this was a reasonable cause for the delay, and prayed for the issue to be reconsidered by the CIT(A).
On hearing the arguments, the ITAT Bench, composed of Mr Waseem Ahmed and Mr Soundararajan K, found merit in the assessee’s contention. The Bench noted that there had been no actual addition to the total income under the intimation generated, and the primary concern of the assessee was the possibility of double taxation in the event that the Joint Development Agreement income was sustained for 2020-21. The Tribunal acknowledged that the appeal had been filed to safeguard against this scenario, and ruled that it was indeed a fit case for condoning the delay.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The Tribunal also noted that the Department’s representative did not raise any significant objection to the condonation of the delay, which further bolstered the assessee’s case.
In result, the ITAT allowed the appeal for statistical purposes, condoned the delay, and directed the CIT(A) to adjudicate the matter afresh on its merits.
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