Maxtech Formulations (I) P. Ltd. Income Tax Officer - 4(2) Plot No. 86, Vasai Municipal Room No. 29, B Wing, 6th Floor Industrial Estate, Vs. Ashar I.T. Park Road, 16-Z, Wagle Vasai (W), Thane Indl. Estate, Thane 400604
March, 11th 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
"SMC" Bench, Mumbai
Before Shri D. Manmohan, Vice President
ITA No. 5903/Mum/2013
(Assessment Year: 2007-08)
Maxtech Formulations (I) P. Ltd. Income Tax Officer - 4(2)
Plot No. 86, Vasai Municipal Vs. Room No. 29, B Wing, 6th Floor
Industrial Estate, Ashar I.T. Park Road, 16-Z, Wagle
Vasai (W), Thane Indl. Estate, Thane 400604
PAN - AAECM2059C
Appellant by: None
Respondent by: Shri Airiju Jaikaran
Date of Hearing: 06.03.2014
Date of Pronouncement: 06.03.2014
Per D. Manmohan, V.P.
This appeal by the assessee company is directed against the order
passed by the learned CIT(A)-II, Thane and it pertains to A.Y. 2007-08.
2. None appeared on behalf of the assessee. I, therefore, proceed to
dispose of the appeal exparte, qua assessee, on merits.
3. At the outset it may be noticed that the learned CIT(A) dismissed the
appeal on the ground that the assessee was not prevented by reasonable
cause from filing the appeal within the time prescribed under section 249(2)
of the Income Tax Act, 1961. The assessment order was received by the
assessee on 04.01.2010. The assessee ought to have filed an appeal in the
month of February whereas the appeal, before the CIT(A), was actually filed
on 09.08.2010 resulting in a delay of 176 days. In support of the fact that
there was sufficient cause for the delay in filing the appeal the Managing
Director of the assessee company filed an affidavit stating that he (Shri
Popatlal K. Shah) is 73 years old and was looking into the accounts of the
company. Due to the heavy additions made by the AO in the group concerns
he went into depression from December, 2009 to September, 2010. He was
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Maxtech Formulations (I) P. Ltd.
the only person looking into the affairs of the company and conversant with
the accounts of the company. He has also filed an affidavit in support of his
contention that due to mental pressure he lost sight of the issue concerning
filing of the appeal and soon after it has come to his notice the appeal was
filed and thus the delay was neither intentional nor wilful.
4. The learned CIT(A) held that the assessee had shifting his stand while
explaining the reasons for delay; in his own affidavit it was stated that the
delay was on account of oversight under mental depression whereas in the
written submission the stand taken was that the Managing Director was
undergoing treatment for depression. In his opinion, a person who was
under mental depression could have been more conscious and under such
circumstances another Director, Shri Hasmukhlal Shah, could have filed the
appeal in time. For the above reasons he concluded that the assessee was
not prevented by reasonable cause from filing the appeal in time.
5. Aggrieved, assessee is in appeal before the Tribunal. The main ground
of the assessee is that the learned CIT(A) was not justified in dismissing the
appeal on the ground of delay in filing the appeal overlooking the fact that
depression was caused due to the abnormal demand raised by the
Department. The Authorised Representative of the assessee, Shri Avadesh
Kumar, has filed a letter dated 28.01.2014 wherein it was submitted that
heavy additions were made by the AO in the group concerns which resulted
in the Managing Director of the assessee company going into depression and
a medical certificate was also enclosed in support thereof. The learned
CIT(A) has wrongly assumed that the assessee had taken two independent
stands. It was also contended that the other Director of the assessee
company was not looking to the affairs of the company and also submitted
that even on merits the assessee has a strong prima facie case and in such
an event the appeal should not have been dismissed on technical grounds.
6. I have heard the learned D.R. in this regard and perused the record.
7. The learned CIT(A) dismissed the appeal as unadmitted mainly on the
ground that the assessee has taken a dual stand. But in my considered
opinion the assessee had consistently taken a stand that the Managing
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Director was looking after the accounts and due to mental tension the need
to file the appeal escaped attention and the other Director being not
incharge of the day-to-day affairs of the company, it resulted in delay in
filing the appeal. It may be noticed that due to the changed circumstances
Shri Hasmukhlal Shah, another Managing Director, might have appeared
before the CIT(A). It would rather support the stand of the assessee that the
Managing Director was still under depression which is also supported by an
affidavit and certificate of a Physician & Surgeon. The Apex Court has time
and again held that ordinarily the assessee would not be benefited by filing
an appeal belatedly and any explanation given with regard to the delay in
filing the appeal should be considered in that backdrop. In other words, the
explanation has to be considered liberally. On a conspectus of the matter, I
am of the view that this is a fit case for condoning the delay in filing the
appeal and accordingly direct the learned CIT(A) to admit the appeal and
dispose of the same on merits. The matter is set aside to the file of the CIT(A)
for disposal on merits.
8. In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 6th March, 2014.
Mumbai, Dated: 6th March, 2014
1. The Appellant
2. The Respondent
3. The CIT(A) II, Thane
4. The CIT III, Thane
5. The DR, "SMC" Bench, ITAT, Mumbai
ITAT, Mumbai Benches, Mumbai