Ita/399/2009 Of The Commissoner Of Income Tax v. Sri Prakash B Nichani

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18 DAY OF AUGUST, 2015 PRESENT. THE HON’BLE MR. JUSTICE VINEET SARAN AND THE HON’BLE MR. JUSTICE B MANOHAR| ITA No.399 /200 BETWEEN: 1.)THRE COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE, C R BUILDING, © QUEENS ROAD, BANGALORE 2THER DEPUTY COMMISSIONER OFINCOME-TAX, CENTRAL CIRCLE -1(3)INCOME-TAX, CENTRAL CIRCLE -1(3) CR BUILDING, QUEENS ROAD BANGALORE.. APPELLANTS (BY SRI K V ARAVIND, ADV A/W SRI. E.I. SANMATHI, ADV.) AND: SHRI PRAKASH B NICHANL| 9-2, “K’ BLOCK, GOLDEN ORCHID, LAVELLE ROAD BANGALORE SINCEK DEBAD BY L.Bs 1.NISHA P NICHANL| W/O PRAKASH B NICHANI AGEI) 40 YEARS. 2SHIVANGI, D/O PRAKASH P NICHANTI AGEI) 15 YEARS. SINCE MINOR REPRESENTED BYNATURAL GUARDIAN,SMT.NISHA NICHANL.|NATURAL GUARDIAN,SMT.NISHA NICHANL.| 4AYESHA, D/O PRAKASH B NICHANTI AGE] 13 YEARS. SINCE MINOR REPRESENTED BY|NATURAL GUARDIAN,SMT.NISHA NICHANI].(AS PER COURT ORDER DATEDDATED 8.7.2014). RESPONDENTS.NATURAL GUARDIAN,SMT.NISHA NICHANI].(AS PER COURT ORDER DATEDDATED 8.7.2014). RESPONDENTS. (BY SRI. A. SHANKAR, ADV.) THIS ITA IS FILED UNDER SECTION 260A OF INCOME|TAX ACT, 1961 ARISING OUT OF ORDER DATED 27.02.2009PASSED IN ITA NO.809/BNG/2008 FOR THE ASSESSMENT YEAR.1998-99PRAYINGTO!BFORMULATETHESUBSTANTIAL.QUESTIONS OF LAW STATED THEREIN AND TO ALLOW THE|APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT,BANGALORE IN ITA NO.809/BNG/2008 DATED 27.02.2009CONFIRMINGTHEORDERC)FTHEAPPELLATECOMMISSIONER AND CONFIRM THE ORDER PASSED BY THERDEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(3),|BANGALORE. THIS ITA COMING ON FOR HEARING THIS DAY,VINEET SARAN,, J.,DELIVERED THE FOLLOWING: JUDGMENT For the assessment year 1998-99, which is in question, the) assessee is said to have filed a return of income on 11.1.2000, forwhich he claims to have a valid receipt from the Income-Tax Department. No order of assessment was passed on the said returnfor the assessment year 1998-99 and according to the assessee, theincome was deemed to have been accepted under Section 143(1) ofthe Income Tax Act, 1961 (for short “the Act). However, a notice dated30.3.2005 was issued under Section 148 of the Act for reopeningassessment under Section 147 of the Act. In pursuance to the saidnotice, an assessment order dated 31.35.2006 was passed, whereby thereturn of income dated 11.1.2000, re-filed by assessee in response to the notice issued under Section 148 of the Act, has been accepted 1n|toto. The assessee challenged the said order dated 31.3.20006 by filingan appeal before the Commissioner of Income-Tax (Appeals),wherein the very notice for reopening assessment was also challenged.The said appeal by the assessee was filed with a delay of 331 days. TheAppellate Commissioner dismissed the appeal on the ground of delay,which order was challenged by the assessee 1n appeal before theTribunal. By impugned order dated 27.2.2009, the Tribunal, aftercondoning the delay in filing the appeal before the AppellateCommissioner, allowed the appeal of the assessee and remanded the, matter for fresh decision on merits to the Appellate Commissioner.Agerieved by the said order, this appeal has been filed by theRevenue, which was admitted on two substantial questions of law, but the learned counsel for parties have jointly stated that the only onequestion of law arises for determination in this appeal, which 1s astollows: “Whether the Lribunat was correct in proceeding to set aside theorder of the Appellate Commissioner by condoning the delay of331 days without examining the reasons for such condonation|and consequently recorded aperversefinding? 2We heard Sri K V Aravind, learned counsel for theappellants/Revenue as well as Sri A Shankar, learned counsel for therespondent/assessee and perused the records.| matter for fresh decision on merits to the Appellate Commissioner.Agerieved by the said order, this appeal has been filed by theRevenue, which was admitted on two substantial questions of law, but the learned counsel for parties have jointly stated that the only onequestion of law arises for determination in this appeal, which 1s astollows: “Whether the Lribunat was correct in proceeding to set aside theorder of the Appellate Commissioner by condoning the delay of331 days without examining the reasons for such condonation|and consequently recorded aperversefinding? 2We heard Sri K V Aravind, learned counsel for theappellants/Revenue as well as Sri A Shankar, learned counsel for therespondent/assessee and perused the records.| CuInitially, no appeal was filed by the assessee against theassessment order dated 31.3.2006. The entire claim or return of|assessee had been accepted by the Assessing Officer. However,|subsequently a notice under Section 263 of the Act was issued 1n|February 2007 by the Commissioner of Income-Tax for revising theassessment order dated 31.3.2006 on the ground that the same was) erroneous and prejudicial to the interest of revenue. In pursuancethereof, the order dated 4.4.2007 was passed by the RevisionalCommissioner, which was against the assessee. It was in suchcircumstances that after notice under Section 263 of the Act wasissued, the appellant filed an appeal on 27.3.2007 (which was prior tothe order of Revisional Commissioner) challenging the assessmentotder dated 31.3.2000 passed by the Assessing Officer. Along withthe appeal, an application for condonation of 331 days delay was filed,which was rejected by the Appellate Commissioner. AThe Tribunal, after considering the averments made inthe affidavit of the assessee filed in support of the application for|condonation of delay and after holding that the assessee was under,belief that filing an appeal, when there is no demand, would be a)pointless exercise and that it was only after receiving the notice under,Section 263 of the Act, the assessee found it necessary to challengethe order of assessment as also notice for reopening an alreadyconcluded assessment issued under Section 148 of the Act, held that|there was sufficient reason for delay in filing the delay. 5On having perused the order of Tribunal, we aresatisfied with the reasons given by the Tribunal for condoning thedelay and as such do not find any ground for interference with suchotder of the Tribunal. As such, we are of the opinion that the orderof the Tribunal is perfectly justified in law and thus, we dismiss thisappeal by answering the question of law in favour of the assessee andagainst the revenue. However, there shall be no order as to cost. 6.Since the matter has been pending for a substantialleneth of time, we may observe that the Commissioner of Income-Tax (Appeals) shall decide the appeal of the appellant on merits and inaccordance with law, as expeditiously as possible, preferably withinthree months of filing a copy of this order before the concernedCommissioner of Income- Tax (Appeals). Sd/-|JUDGE Bkm Sd/-.JUDGE