M/S. KENDWA PACHWAI SHOP,ASANSOL vs. ITO,WARD-2(2), ASANSOL., ASANSOL

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ITA 655/KOL/2023Status: DisposedITAT Kolkata09 October 2023AY 2014-155 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(Appeals) failed to follow the mandatory procedure under Section 250(6) of the Income Tax Act by not formulating points of dispute and recording reasons. Therefore, the order of the CIT(Appeals) was set aside.

What were the facts?

The assessee's appeal was dismissed by the CIT(Appeals) for want of prosecution and being time-barred, without adjudicating the issues on merit. The CIT(Appeals) noted that multiple notices were sent via email, but the assessee failed to appear or file a condonation application for the delay.

What were the issues?

Whether the CIT(Appeals) properly followed the procedural requirements before dismissing the appeal for want of prosecution and delay. Whether the CIT(Appeals) should have adjudicated the appeal on merits after the assessee filed an application for condonation of delay.

Which sections of the Income-tax Act were involved?

Section 40A(3),Section 143(3),Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, KOLKATA

Before: Shri Rajpal Yadav, Vice- & Shri Girish Agrawal

Per Shri Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 25th May, 2023 passed for A.Y. 2014-15.

1.

Assessment Year : 2014-2015 M/s. Kendwa Pachwai Shop 2. Brief facts of the case are that Shri Gopi Nath Mondal was proprietor of M/s. Kendwa Pachwai Liquor Shop. He has filed his return of income declaring total income of Rs.69,880/-. The case was selected for scrutiny assessment and the ld. Assessing Officer has made disallowance under section 40A(3) of the Income Tax Act. He was of the opinion that the assessee had made payment in cash exceeding Rs.20,000/- in a single day and thereby violated the provision of section 40A(3). He listed the purchase statement in the assessment order and observed that cash payment of Rs.1,45,18,846/- has been made. He made a disallowance under section 40A(3) and passed the assessment order under section 143(3) on 22.12.2016.

3.

Dissatisfied with the assessment order, the assessee carried the matter in appeal. The ld. 1st Appellate Authority has dismissed the appeal for want of prosecution. The ld. CIT(Appeals) has observed that notices were issued more than six times. These notices were sent to the assessee through e-mail, which has been reproduced on page no. 7 of the impugned order. According to the ld. CIT(Appeals), the assessee failed to appear before him and, therefore, he dismissed the appeal without adjudicating the issues on merit. The ld. CIT(Appeals) further observed that the appeal is time-

Assessment Year : 2014-2015 M/s. Kendwa Pachwai Shop barred by 14 days and assessee failed to file any application for condonation of delay.

4.

The assessee has filed a paper book but again did not file any application for condonation for filing the appeal before the ld. CIT(Appeals) as belated one. There may be a reason that notices issued through e-mail were not communicated to the assessee. Well there may be a chance that nobody was looking after that e-mail. Otherwise this defect of 14 days being time-barred would have been brought to the notice of assessee. He must have filed an application disclosing the reason as to how the appeal becomes time-barred before the ld. CIT(Appeals). The ld. CIT(Appeals) has not touched this issue except mentioning the factum of appeal being time- barred.

5.

The ld. CIT(Appeals) has not decided the issues on merit nor dismissed the appeal being time-barred.

6.

Sub-section (6) of section 250 contemplates that ld. CIT would formulate the point in dispute and thereafter record reasons in support of his conclusion on those points, but here the ld. 1st Appellate Authority did not adhere to the mandatory procedure provided in the Income Tax Act, therefore, the impugned order is not sustainable. Considering the above facts, we deem it

Assessment Year : 2014-2015 M/s. Kendwa Pachwai Shop appropriate to set aside the order of ld. CIT(Appeals) and restore all the issues to the file of ld. CIT(Appeals) for fresh adjudication. The assessee is directed to file an application for condonation of delay, if advised so before the ld. 1st Appellate Authority within a period of one month from receipt of this order. In case, an application for condonation of delay is being filed by the assessee, then, ld. 1st Appellate Authority would consider it sympathetically. If this exercise is completed by the assessee and ld. CIT(Appeals) agreed to condone the delay on the basis of reasonable cause explained by the assessee, then shall decide the appeal on merit. Otherwise ld. 1st Appellate Authority will be at liberty to decide the appeal in accordance with law.

7.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on October 9, 2023.

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