ITAT Bangalore Rules in Favor of Elegant Embassy III Apartment Owners Association

Elegant Embassy III Apartment Owners Association Vs ITO (ITAT Bangalore)

The Income Tax Appellate Tribunal (ITAT) Bangalore recently ruled favorably for the Elegant Embassy III Apartment Owners Association, overturning a decision made by the Commissioner of Income Tax (Appeals) due to procedural concerns. The association had appealed against an order from the National Faceless Assessment Centre (NFAC), but this appeal was hindered by a 367-day delay. The CIT(A) dismissed the appeal without addressing the delay.

Background of the Case

The association, which operates as a non-profit volunteer organization, faced a delay in submitting the appeal attributed to a technical issue. Specifically, the registered email ID was linked to the previous president, who was unreachable to provide the One-Time Password (OTP) required for updates. As a result, the newly elected committee struggled to change the email ID, leading to the extended delay in filing.

Appeal Review and Tribunal's Decision

During the proceedings, the ITAT recognized the valid reasons behind the delay and noted the assurance provided by the association's representative regarding future compliance. The Departmental Representative did not oppose the reconsideration of the appeal.

Key Findings:
- The delay was genuine, stemming from an unforeseen technical barrier.
- The representatives assured compliance with all necessary procedures moving forward.

In light of these findings, the ITAT decided to remit the case back to the CIT(A) for a fresh assessment. It instructed the CIT(A) to condone the delay and reevaluate the appeal based on its merits, reinforcing the importance of due process.

Additionally, the ITAT emphasized the necessity for the association to strictly adhere to all requirements and to avoid unnecessary adjournments in future proceedings. Consequently, the appeal was partially approved for statistical purposes, allowing the association another chance to present its case.

Full Text of the Order of ITAT Bangalore

An appeal was filed by the assessee against the NFAC order dated 27/06/2024 for the assessment year 2022-23.
It was noted that the appeal was delayed by 367 days before the CIT(A), which the CIT(A) did not condone, leading to the appeal being dismissed in limine.
The Authorized Representative (AR) stated that the association comprises an elected Managing Committee and office bearers serving on a voluntary basis for two-year terms.
The new managing committee took office on 19/05/2022, but the email ID on record belonged to the former president who was abroad, resulting in technical difficulties in obtaining the OTP for updates. This situation contributed to the delay.
The AR highlighted the association’s non-profit status and the significant hardship that would result from rejecting the appeal solely on procedural grounds. Thus, he requested the CIT(A) to be instructed to condone the delay and assess the appeal on its merits, assuring compliance moving forward.
The Departmental Representative (DR) did not contest the remittance of the case back for a fresh adjudication.
After reviewing the arguments from both parties and the documentation, the ITAT concluded that the association should be granted another opportunity to present its case, prioritizing justice and fairness. The Tribunal directed the CIT(A) to condone the delay and reassess the case in accordance with legal provisions.
The Tribunal also instructed the association to ensure compliance with all requirements and to avoid unwarranted adjournments. Thus, the appeal was partially allowed for statistical purposes.

Conclusion

Ultimately, the appeal by the Elegant Embassy III Apartment Owners Association was partially allowed for statistical purposes, providing the organization another chance to present its case effectively. The order was pronounced in court on 17th December 2024.