Non-Filing of Appeal due to Lack of Communication b/w Tax Advisors and Board of Directors

The Pune bench of the Income Tax Appellate Tribunal (ITAT) comprising Shri R.S. Syal, Vice President and Shri S.S. Viswanethra Ravi (Judicial Member) has held that the ground for non-filing of appeal due to lack of communication between tax advisors and the Board of Directors cannot be treated as a ‘reasonable cause’ for the condonation of delay under the provisions of the Income Tax Act, 1961.

The assessee, EnerCon Solutions Mauli Sugar Pvt. Ltd filed the appeal with a delay of 423 days. One Mr. Vijaykant Vikram Munde filed affidavit dated 13-07-2018 stating that the CIT(A) passed order in the year 2017, since then there was serious disputes in Board of Directors and shareholders about the business activities and the management and policies, as a result which disputes the dairy unit of the assessee situated at Kapadgaon Taluka Phaltan District Satara was forced to shut down w.e.f. 21-11-2017 and also the financial and legal records of the assessee were shattered and misplaced.

The assessee further contended that there is lack of communication between the tax advisors and the Board of Directors due to which the appeal could not be filed before this Tribunal within stipulated time. They further stated that this appeal was filed with a delay of 423 days when a call received from the office of Tax Recovery Officer regarding tax arrears and made enquiries with tax counsel, came to know that the appeal against the order of CIT(A) is required to be filed.

The Two-Meber bench noted that the Tribunal issued as many as 6 notices intimating the date of hearing to the assessee by Registered Post and all the notices were received except one which was returned unserved with endorsement dated 11-08-2021.

“On all the hearings above, we find no representation from the assessee. On perusal of the affidavit filed by the Directors of the assessee, we note that this appeal was filed when calls from the office of Tax Recovery Officer was received which, in our opinion, is not sufficient reason which really prevented the assessee in filing the appeal in time. Thus, we do not find any reasonable cause as explained in the said affidavit and the delay of 423 days are dismissed. Since, the delayis not condoned, the issues raised in the grounds of appeal becomes infructuous and are dismissed as such,” the Tribunal said.