Condonation of delay – 458 days – Belated appeal against section 263 order before ITAT – Appeal filed after consequential assessment order and dismissal of appeal – Delay condoned on payment of costs

4. Procter & Gamble Hygiene and Healthcare Ltd. vs. Commissioner of Income Tax-8 [Income tax Appeal No. 1210 of 2017]

Date of order: 4^th February, 2020

Procter & Gamble Hygiene & Healthcare Ltd. vs. CIT, Range-8 [ITA No. 4866/Mum/2015; Date of order: 30th November, 2016; A.Y.: 2008-09; Bench ‘H’ Mum.]

Condonation of delay – 458 days – Belated appeal against section 263 order before ITAT – Appeal filed after consequential assessment order and dismissal of appeal – Delay condoned on payment of costs

The issue involved in the appeal is condonation of delay in filing of the appeal u/s 254 of the Act by the appellant before the Tribunal. The A.O. passed the assessment order on 1^st February, 2012 in which certain deductions were allowed u/s 80IC. The CIT-8, Mumbai was of the view that the A.O. had wrongly allowed deduction u/s 80IC. He was of the further view that the assessment order so made was erroneous and prejudicial to the interest of the Revenue. Accordingly, he invoked jurisdiction u/s 263 and vide an order dated 31^st March, 2014 set aside the assessment order by directing the A.O. to pass a fresh assessment order by taxing the interest income earned by the petitioner on the amount covered by the deduction sought for u/s 80IC under the head ‘income from other sources’. The A.O. passed the consequential assessment order dated 9^th June, 2014. It was against this assessment order that the assessee preferred an appeal before the CIT(A)-17.

However, by the appellate order dated 28^th August, 2015 the first appellate authority dismissed the appeal of the assessee, holding that it was not maintainable as the A.O. had only given effect to the directions given to him by the CIT, relying on the decision in Herdillia Chemicals Ltd. vs. CIT [1997] 90 Taxman 314 (Bom.). Aggrieved by this, the petitioner preferred an appeal before the Tribunal which was registered as ITA No. 5096/Mum/2015. In the meanwhile, the assessee, having realised that the order passed by the jurisdictional administrative commissioner u/s 263 of the Act had remained unchallenged, belatedly filed an appeal before the Tribunal which was registered as ITA No. 4866/Mum/2015. In the process there was a delay of 450 days. The assessee filed an application before the Tribunal for condonation of delay in filing ITA No. 4866/Mum/2015 and in support thereof also filed an affidavit dated 12^th September, 2016 explaining the delay. The assessee stated in its affidavit that the appellant did not prefer an appeal as the Learned CIT had set aside the assessment so that the issues involved would be agitated before the A.O. or the appellate authorities, i.e., against the order of the A.O.

Both the appeals were heard together and by a common order dated 30^th November, 2016 both the appeals were dismissed. The appeal ITA No. 5096/Mum/2015 was dismissed on the ground that there was no question of any consequential assessment as per the revision order. The assessee’s appeal was rightly dismissed by the CIT(A).

Insofar as ITA No. 4866/Mum/2015 was concerned, the same was dismissed as being time-barred as the delay in filing the appeal was not condoned. The ITAT observed that the assessee had clearly, and presumably only on the basis of a legal opinion, taken a conscious decision not to appeal against the revision order. No reasonable, much less sufficient, cause had been advanced for condonation of delay. It also stated that there was no basis for the said bona fide belief which is stated as the reason for the assessee having not preferred an appeal against the revision order.