In a recent ruling by the Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT), the Judicial Member Suchitra Kamble and Accountant Member Waseem Ahmed held that, rejection of application for condonation of delay on the sole ground of not following prescribed technical grounds amounts to grave violation of the natural justice principles and remanded the matter back to the Commissioner of Income Tax (Appeals) [CIT(A)] for proper adjudication on merit.
The assessee company is an eligible Special Economic Zone (SEZ) unit and is entitled to deduction under Section 10AA of the Income Tax Act, 1961 as per the contentions of the assessee. The assessee company filed return of income declaring Nil income after claiming deduction under Section 10AA of the Act at Rs.51,60,137/-. The Minimum Alternate Tax (MAT) liability has been paid on adjusting total income under Section 115JC of Rs.51,60,137/-. The Assessing Officer (AO) thus made an addition of Rs.51,60,137/- thereby stating that the assessee is not entitled for claiming deduction under Section 10AA of the Act.
Aggrieved by this, the assessee filed an appeal before the CIT(A) which was dismissed.
The submitted that the assessee filed appeal before the CIT(A) within the time permitted under the Income Tax Act and merely not filing the appeal in electronic form which was introduced w.e.f. 01.03.2016 cannot be the sole criteria for rejecting the appeal filed by the assessee. The CIT(A) should have taken cognisance of the appeal filed before him physically, as per the assessee. It was also submitted that the matter may be remanded back to the file of the CIT(A) for proper adjudication of issues on merit.
It was observed that “there is a delay of 607 days in filing the present appeal before us. The assessee has filed an affidavit of the partner of the assessee thereby stating that due to certain difficulties which was elaborately explained in the affidavit the assessee could not file the appeal before us” and the application for condonation of the delay was allowed.
It was added that “simply rejecting on a technical ground amounts to denial of principles of natural justice to the assessee. Therefore, we are remanding back the appeal to the file of the CIT(A) for proper adjudication on merit. Needless to say the assessee be given opportunity of hearing by following principles of natural justice.”
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