Disallowance u/s.184(5) of the IT Act cannot be treated in every case of assessment u/s.144 of the Act

The Income Tax Appellate Tribunal (ITAT), Cuttack Bench, has ruled that a disallowance under Section 184(5) of the Income Tax Act cannot automatically be applied in every case of assessment under Section 144. The tribunal considered an appeal where the assessee sought condonation for a 359-day delay in filing, citing illness and the COVID-19 pandemic. The delay was condoned, and the appeal was admitted for hearing.

IN THE INCOME TAX APPELLATE TRIBUNAL,
CUTTACK ‘SMC’ BENCH, CUTTACK
SHRI CHANDRA MOHAN GARG, JUDICIAL

ITA No.218/CTK/2020
Assessment Year : 2010-2011

Deokaran Das Rambilash, Old
Station Road, Rourkela.
AADFD 9708 K
(Appellant)

Vs. 

ITO, Ward -4,
Rourkela.
Respondent

Assessee by : Shri S.K.Agarwalla, AR
Revenue by : Shri S.C.Mohanty, DR

Date of Hearing : 28/05/ 2021
Date of Pronouncement : 14/06/20

 O R D E R

This is an appeal filed by the assessee against the or CIT(A), Sambalpur dated 20.9.2019 for the assessment year Grounds raised by the assessee are as under:

“1. That the ld CIT(A) is factually and legally not correct in directing the AO to estimate the profit at 3% in the place of 4% estimated by the AO in view of the fact that, the appellant maintains the proper books of account which were audited by chartered accountant and the appellant produced the books of account during the course of assessment proceedings which was admitted by the AO in his assessment order. Therefore, the returned income is to be accepted.

2. That the authorities below erred in facts in not allowing the interest on partner’s capital, remuneration to partners and depreciation which are to be allowed as per the provisions of the

3. The appeal is time barred by 359 days. The assessee has filed condonation petition supported by an affidavit sworn by Sri Suresh Chandra Agarwal, Managing Partner of M/s. Deokaran Das Rambilash, wherein, it is stated that he received order of the ld CIT(A) on 20.9.2019 and the appeal has to be filed before the Tribunal on or before 20.11.2019. As he was suffering from diabetic, hypertension alongwith some other diseases,Doctor had advised to stay at home. In the meantime, COVID-19 came and Govt had declared lock down/shut down, therefore, he could not contact the counsel to file appeal within the stipulated period causing delay of 359 days. Ld D,.R. opposed to condonation of delay.

4. After considering the condonation petition and hearing the rival submissions, I am satisfied that the assessee was prevented by sufficient cause in filing the appeal before the Tribunal within the stipulated period, causing 359 days. Therefore, respectfully following the judgment of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs Mst. Katiji (1987) 167 ITR 471, wherein, it has been held that there can be no presumption of deliberateness or negligence or mala fides in case of delay, because litigants run a serious risk without any benefit by the delay, I condone the delay and admit the appeal for hearing.

5. Ld A.R. of the assessee did not press Ground No.1 of appeal. Therefore, this ground is dismissed as not pressed. 

To know more in details find the attachment file