Bona Fide Delay In Filing Tax Appeal Caused By Pursuing Alternate Remedy Condonable: ITAT Chennai

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) held that a delay of 1036 days in filing an appeal could be condoned when it arose from pursuing an alternate remedy and was not deliberate.

A Bench comprising Vice President George George K and Accountant Member S.R. Raghunatha, in an appeal filed by A-One Leathers for Assessment Year 2015-16, remanded the matter to the Assessing Officer to examine a claim of double taxation. It observed:

“The delay… neither wanton nor willful but only on account of the party pursuing an alternate remedy under the rectification route.”

The case arose from a reassessment under the Income-tax Act, where the Assessing Officer added Rs.2,92,239 on the ground that tax deducted at source (TDS) had been claimed without offering the corresponding income to tax.

A-One Leathers contended that this income had already been disclosed as part of its sales in financial statements and that taxing it again would result in duplication.

Taking note of this contention, the Tribunal held that if the amount had indeed already been offered to tax, its addition would not be justified, stating: “If what has been stated by the party firm is true, then addition of Rs.2,92,239/- would be taxed twice.”

The Bench further directed the Jurisdictional Assessing Officer to verify the claim and decide it afresh after granting an opportunity of hearing. It clarified that if the income had already been disclosed, it “shall not” be added again, as it would amount to double taxation.

The Tribunal also recorded that the reassessment had been completed ex parte due to non-response by A-One Leathers, who attributed this to business slowdown, staff attrition, and personal circumstances during the relevant period, including the Covid-19 pandemic.

Accordingly, the ITAT allowed the appeal for statistical purposes.