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Income Tax Appellate Tribunal, “F” BENCH,
Before: SHRI KULDIP SINGH & SHRI AMARJIT SINGH
O R D E R PER BENCH:
At the very outset, it is brought to the notice of the Bench by the ld.AR for the assessee that aforesaid appeals filed by the assessee are time barred by 92 days and sought to condone the delay on the grounds, inter alia, that the Authorized Tax Practitioner of the assessee who was to file the appeals had to leave for his home town at Jaunpur, Uttar Pradesh, as his mother and sister-in-law were sick; that mother-in-law and sister-in-law of the Counsel for the assessee expired on 25.03.2023 and 20.04.2023 respectively; that due to aforesaid circumstances beyond the control of the Tax Practitioner, the assessee could not file within the time; and that “delay is neither willful nor intentional”.
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:: 2 :: 1.1 The ld.DR for the Revenue opposed the application filed by the assessee for condonation of delay on the ground that the assessee has not brought on record affidavit of the Tax Practitioner and prayed for dismissal of the application.
1.2 Keeping in view the facts and circumstances of the case narrated by the assessee as referred to in the preceding Para that the delay in filing of the appeals is on account of medical emergency happened in the family of Tax Practitioner of the assessee, which was beyond the control of the assessee as well as the Tax Practitioner and to our mind, it is a sufficient cause to condone the delay of 92 days in filing aforesaid appeals. Even otherwise, the assessee is required to be provided with adequate opportunity of being heard before the lower Revenue authorities who has passed ex parte order at the back of the assessee without providing adequate opportunity of being heard.
So, application for condonation of delay filed by the assessee in the aforesaid appeals are allowed. Appeals are ordered to be registered and being heard on merits by today itself.
The appellant, M/s.U.S.Roofs Ltd., (hereinafter referred to as ‘the assessee’) by filing aforesaid appeals, sought to set aside the impugned orders passed by the Commissioner of Income Tax (Appeals) dated 04.01.2023 on identically worded grounds except the difference in figure of addition / disallowance (for the sake of brevity, grounds of appeal from AY 2007-08 are being taken), on the grounds, inter alia that -
1.1. On the facts and in circumstances of the case and in law, the Learned National Faceless Appeals Centre ("Ld. NFAC") vide order dated January 4, 2023 under section 250 of the Income tax Act, 1961 ("the Act") erred in dismissing the -2105 & 2112 /Mum/2023
:: 3 :: appeal of the Appellant on the ground of non-prosecution, without appreciating the fact that written submissions and evidences were duly filed by the Appellant in physical form prior to the appeals being transferred to National Faceless Appeal Centre.
1.2. The Ld. NFAC further erred in not deciding the appeal on the merits of the matter.
1.3. The Appellant prays that order dated January 4, 2023 passed by the Ld. NFAC under section 250 of the Act be quashed and set aside.
2.1. On the facts and in the circumstances of the case and in law, the Ld. Assessing officer erred ("AO") in issuing a notice under section 148 of the Act without satisfying the jurisdictional conditions of section 148 of the Act.
2.2. The Appellant prays that the notice under section 148 of the Act and the reassessment order dated March 28, 2013 under section 144 read with section 148 of the Act be quashed as bad in law and void ab initio.
3.1. On the facts and in the circumstances of the case and in law, the Ld. AO erred in passing the reassessment order dated March 28, 2013 without issuing and serving a valid notice under section 143(2) of the Act, which is a precondition for passing of reassessment order.
3.2. The Appellant prays that the reassessment order dated March 28, 2013 be quashed as bad in law and void ab initio, as no valid notice under section 143(2) of the Act has been issued and served on the Appellant.
4.1. On the facts and in the circumstances of the case and in law, the Ld. AO erred in rejecting the books of accounts of the Appellant under section 145(3) of the Act without providing any cogent reasons.
4.2. The Appellant prays that books of accounts of the Appellant be accepted as valid and the additions made by the Ld. AO be deleted.
5.1. On the facts and in the circumstances of the case and in law, the Ld. AO erred in making addition of Rs. 74,67,365 being profit on alleged surrender of rights in 15,400 sq.ft. of constructed area in Bhumraj Meadown. The Ld. AO further erred in not appreciating that the said income has been offered to tax in assessment year 2011-12.
5.2. The Appellant prays that the Ld. AO be directed to delete the addition amounting to Rs.74,67,365.
6.1. On the facts and in the circumstances of the case and in law, the Ld. AO erred in making an addition of 0 52,02,000 under section 68 of the Act being alleged the cash credits from Regal Habitat Private Limited.
6.2. The Appellant prays that addition of D 52,02,000 made under section 68 of the Act be deleted.
7.1. On the facts and in the circumstances of the case and in law, the Ld. AO erred in making addition of Rs. 7,61.86,500 as unexplained amounts allegedly received and paid by the Appellant.
7.2. The Appellant prays that the Ld. AO be directed to delete the addition of Rs.7,61,86,500.
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:: 4 ::
7.3. Without prejudice to the above the Appellant prays that the Ld. AO be directed to make addition by netting of the receipts and opening balance from the payments.
8.1. On the facts and circumstances of the case and in law, the Ld. AO erred in making an addition of allegedly unexplained cash received by the Assessee amounting to D 2,64,69,500 and unexplained cash paid by the Assessee amounting to Rs.1,62,96,000 aggregating to D 4,27,66,000 on the basis of impounded material in the form of excel sheets.
8.2. The Appellant prays that addition made by the Ld. AO aggregating to 0 4,27,66,000 be deleted.
8.3. Without prejudice to the above, the Appellant prays that the Ld. AO could have added only D 1,01,73,500 under section 69C of the Act being net of payments of D 2,64,69,500 as reduced by receipts of D 1,62,96,000 as unexplained cash received. The Appellant further prays that opening balance of the sum of receipts and payments of the previous years be reduced.
9.1. On the facts and in the circumstances of the case and in law, the Ld. AO erred in making addition of Rs. 1,26,74,500 as unexplained amounts allegedly received and paid by the Appellant.
9.2. The Appellant prays that the Ld. AO be directed to delete the addition of Rs. 7,61,86,500.
9.3. Without prejudice to the above the Appellant prays that the Ld. AO be directed to make addition by netting of the receipts and opening balance from the payments.
10.1. On the facts and in the circumstances of the case and in law, the Ld. AO erred in making an addition of 0 6,06,19,500 merely on the basis of Annexure - P Special Audit Report under section 142(2A) of the Act for a different assessment year.
10.2. The Appellant prays that the Ld. AO be directed to delete the addition of Rs.6,06,19,500.
12.1. On the facts and in the circumstances of the case and in law the Ld. AO erred in disallowing a sum of D 65,000 under section 40a(ia) of the Act.
12.2. The Appellant prays that the Ld. AO be directed to delete the addition of 0 65,000 made under section 40 (ia) of the Act.
13.1. On the facts and in the circumstances of the case and in law, the Ld. AO erred in disallowing a sum of Rs.13,13,897 being 20% of administrative expenditure claimed on an ad hoc basis.
13.2. The Appellant prays that the Ld. AO be directed to delete the addition of Rs.13,13,897.
14.1. On the facts and in the circumstances of the case and in law, the Ld. AO erred in making an addition under section 68 of the Act amounting to Rs. 8,60,000 as being alleged cash credits from Udani Traders.
14.2. The Appellant prays that addition of Rs.8,60,000 made under section 68 of the Act be deleted.
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:: 5 :: 14.3. Without prejudice to the above, the Appellant prays that the Ld. AO, at best, could have added only Rs.3,32,369 as cash credits received from Udani Traders being net of receipts of Rs.8,60,000 as reduced by payments of Rs.5,27,631. 15.1. Without prejudice to the above, the Appellant prays that the Ld. AO be directed to give telescoping effect of all the annexures together and not make separate additions. 16.1. On the facts and in the circumstances of the case and in law, the Ld. AO erred in charging interest under section 234A amounting to Rs.1,09,95,452, under section 234B amounting to Rs.5,06,38,871 and under section 234C amounting to D 30,476 of the Act. 16.2. The Appellant prays that the Ld. AO be directed to delete interest charged under section 234A, 234B and 234C of the Act or be appropriately reduced, in accordance with law. The Appellant craves leave to amend, alter, modify and add any further grounds of appeal
, if required.
3. Briefly stated facts necessary for consideration and adjudication of the issues at hand are: a survey action was carried out at the business premise of the assessee as well as M/s.U.S.Reality Pvt. Ltd., on the basis of which re- opening was initiated u/s.147 of the Act. The AO after declining the contention raised by the assessee made additions of Rs.74,67,365/-, Rs.52,02,000/-, Rs.7,61,86,500/-, Rs.4,27,66,000/-, Rs.1,26,74,500/-, Rs.6,06,19,500/- & Rs.65,000/- on account of being the difference in the profit and surrender value being unaccounted cash credit, being unexplained amounts not reflected in the books of accounts, being unaccounted cash receipts, being unaccounted cash receipts and on account of unexplained cash credit brought into the books respectively, and thereby, framed the assessment u/s.143(3) r.w.s.147 of the Act at total income of Rs.20,89,47,611/- and at Rs.20,25,667/- under normal provision and u/s.115JB respectively (for AY 2007-08). -2105 & 2112 /Mum/2023
:: 6 :: 4. The assessee carried the matter before the Ld.CIT(A) by way of filing appeals who has dismissed the appeals for want of prosecution. Feeling aggrieved with the impugned order passed by the Ld. CIT(A), the assessee has come up before the Tribunal by way of filing present appeals.
We have heard the Ld. Authorized Representatives of the parties to the appeal, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and law applicable thereto.
Bear perusal of the impugned orders passed by the ld.CIT(A) go to prove that the appeals have not been decided on merits rather dismissed vide impugned order for want of prosecution by the ld.CIT(A) by returning the following findings:
5.1 The assessee is on appeal before this office against the order passed u/s.147 of the Income Tax Act. 5.2 The assessee was provided multiple opportunities by this office to submit documents and make submissions in response to the appeal filed. However, the assessee has not exercised this option despite multiple reminders. The table below indicates the dates and the compliance status of the various notices issued:
Date of Notice Compliance Date Remarks 23rd December, 2020 30th December, 2020 No details furnished nor nay petition for adjournment was received. 1st November, 2022 7th November, 2022 No details furnished nor any petition for adjournment was received 6th December, 2022 12th December, 2022 No details furnished nor any petition for adjournment was received 15th December, 2022 22nd December, 2022 No details furnished nor any petition for adjournment was received The conduct of the Appellant, as inferred from the aforesaid table, evidences that the Appellant is not interested in prosecuting the Appeal.
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:: 7 :: 5.3. The law aids those who are vigilant, not those who sleep upon their rights. This principle is embodied in the well-known Latin dictum, "VIGILANTIBUS ET NON DORMIENTIBUS JURA SUB VENIUNT". The conduct of the Appellant, as inferred from the aforesaid table, evidences that the Appellant fails on this principle of equity. Even the Hon'ble Courts, in various pronouncements, have frowned upon the Appellants who file appeals but thereafter do not take any further interest in prosecuting those appeals. 5.3.1. The Hon'ble Income Tax Appellate Tribunal - Kolkata in the case of Pradeep Kumar Jhawar Kolkata vs. DClT-CC-XXI (15 March, 2016) (ITA Nos. 450/Ko!/2013 for Asstt. Year: 2006-07) dismissed/the appeal of the Appellant for non-prosecution. 5.3.2. The Hon'ble Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar vs. CWT (223 ITR 480) held as under: "If the party, at whose instance the reference is made, fails to appear at the hearing, or fails in taking steps for preparation 'Of the, paper hooks so as, to enable hearing of the reference, the court is not bound to answer the reference.” 5.3.3. Similarly, the Hon’ble Punjab & Haryana High Court in the case of New Diwan Oil Mills vs. CIT [(2008) 296 ITR 495] returned the reference unanswered since the assesses remained absent and there was no assistance from the assessee. 5.4 In view of the above, it is clear that the Appellant is not aggrieved with the assessment order impugned herein and is not interested in prosecuting the same. Accordingly, the additions/disallowances as challenged in the Grounds of Appeal and in the Appeal Memo are hereby confirmed. 5.5 Based on the above it appears that the assessee is not keen on pursuing the appeal. Accordingly given that this office has not received any information or document so as to make a judgment based on merits, this office is left with no option but to dismiss this appeal. Accordingly the appeal of the assessee stands dismissed.
6. Accordingly, the appeal of the Appellant for AY 2007-08 is dismissed.
The ld.CIT(A) dismissed the appeals on the ground that the assessee has failed to furnish any details in response to the notice issued from time to time. The ld.AR for the assessee contended that no notice has been received by the assessee to appear before the ld.CIT(A) in appellate proceedings. We are alive to the fact that due to faceless proceedings before the First Appellate Authority being at nascent stage, some technical glitches are there and assessee might not have received the notice issued by the ld.CIT(A). For arguments, even if it is assumed that the assessee was served but did not appear before the ld.CIT(A), the appeals were required to be disposed off on -2105 & 2112 /Mum/2023
:: 8 :: merits, as has been held by the Hon’ble Bombay High Court in the case of CIT (Central) Nagpur v. Premkumar Arjundas Luthra (HUF) reported in 297 CTR 614 (Bombay) by returning the following findings:
From reading of sections 250 and 251, it is very clear that once an appeal is preferred before the Commissioner (Appeals), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in section 250(4). Further, section 250(6) obliges the Commissioner (Appeals) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251 (1 )(a) and (b) provides that while disposing of appeal the Commissioner (Appeals) would have the power to confirm, reduce, enhance or annui an assessment and/or penalty. Besides Explanation to sub-section (2) of section 251 also makes it clear that while considering the appeal, the Commissioner (Appeals) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue "is not raised by the appellant in its appeal before the Commissioner (Appeals). Thus, once an assessee files an appeal under section 246A, it is not open to him as of right to withdraw or not press the appeal. In fact, the Commissioner (Appeals) is obliged to dispose of the appeal on merits. In fact, with effect from 1-6-2001 the power of the Commissioner (Appeals) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the power of the Commissioner (Appeals) is co-terminus with that of the Assessing Officer, i.e., he can do all that Assessing Officer could do. Therefore, just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the Commissioner (Appeals) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from section 251(1)(a) and (b) and Explanation to section 251(2) which requires the Commissioner (Appeals) to apply his mind to all the issues which arise from the impugned order before him whether or not the same had been raised by the appellant before him. Accordingly, the law does not empower the Commissioner (Appeals) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act. [Para 8]
In view of what has been discussed above, we are of the considered view that the assessee is required to be granted adequate opportunity of being heard to get his appeals disposed off on merits.
So, the impugned order passed by the ld.CIT(A) are hereby set aside and remanded back to the ld.CIT(A) to decide afresh after providing opportunity of being heard to the assessee. -2105 & 2112 /Mum/2023 9. Resultantly, aforesaid appeals filed by the assessee are hereby allowed for statistical purposes.
Order pronounced on the 27th day of September, 2023, in Mumbai.