INCOME TAX ACT, 1961

Section 260A

Appeal (Tribunal) - Condontion of delay - Appeal filed belatedly--Bona fide belief of assessee -

CIT was of the view that the AO had wrongly allowed deduction under section 80-IC of the Act. He set aside the assessment order by directing the AO to pass fresh assessment order by taxing the interest income earned by the petitioner on the amount covered by the deduction sought for under section 80-IC, under the head 'income from other sources. Following the order passed by the jurisdictional administrative Commissioner under section 263 of the Act, the AO passed the consequential assessment Order. Against the assessment Order, petitioner preferred appeal before the Commissioner (Appeals). However, by the appellate Order, the first appellate authority dismissed the appeal of the petitioner. Aggrieved thereby petitioner preferred appeal before the Tribunal. In the meanwhile, petitioner having realised that the order passed by the jurisdictional administrative Commissioner under section 263 of the Act had remained unchallenged, belatedly fled appeal before the Tribunal. In the process there was delay of 450 days. Later petitioner fled an application before the Tribunal for condonation of delay in fling ITA No. 4866/Mum/2015 and in support thereof also fled an affidavit dated 12-9-2016 explaining the delay. Both the appeals were heard together and by the common Order the appeals were dismissed being time-barred as the delay in fling the appeal was not condoned. Tribunal did not accept the contention of the appellant that it was under a bona fide belief that since it had fled appeal against the consequential order of assessment as affirmed by the first appellate authority, its interest would be protected and therefore there was no need to independently challenge the order under section 263. Held: Tribunal had entertained the appeal arising out of the consequential assessment, it was not justified on the part of the Tribunal to have rejected the appeal filed by the appellant against the order passed by the jurisdictional administrative Commissioner under section 263 of the Act because that was the very foundation of the subsequent assessment proceedings. It would be in the interest of justice, if the delay in filing appeal is condoned and the said appeal is heard on merit by the Tribunal.

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