M/A. ADARSH GHANYODYA VIKAS SAMITI,TONK vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-7, JAIPUR

However, the appeals filed by the assessee against the assessment order as well as the penalty levied under section 271(1)(b) and 271(1)(c) of the IT Act were belated by 352 days, 396 days and 166 days respectively. The assessee filed the application for condonation of delay and explained the cause of delay being non receipt of the notice issued by the AO as well as the orders passed by the AO due to the Secretary of the assessee society was out of place as well as change of address of the assessee. The ld. CIT (A) did not accept the explanation of the assessee for condonation of delay and consequently dismissed all the three appeals in limine being barred by limitation.

Before us, the ld. A/R of the assessee has submitted that the assessee filed the application for condonation of delay and also filed the copy of affidavit which was filed before the AO explaining the cause of non appearance before the AO. The ld. A/R has thus contended that since the notices were issued at the old address, the assessee did not receive the same which resulted in non appearance before the AO whereas for the assessment year 2012-13 the AO issued notices at the current address and assessee duly attended the proceedings before the AO for the assessment year 2012-13. He thus submitted that the AO has accepted the returned income while passing the assessment under section 143(3) for the assessment year 2012-13. At the same time, the proceedings for the year under consideration were also pending. However, the AO has issued the notice at a different address and thus the assessee did not receive the notice as well as the orders passed by the AO. Prior to the month of February, 2015 when the Secretary of the assessee society came to know about the demand raised by the AO, immediately the assessee obtained the certified copies of the orders and filed the appeal before the ld. CIT (A). Thus the ld. A/R has submitted that the assessee is a society and running the educational institution for physically challenged children for which the assessee society is funded by the Government and, therefore, there was no reason for avoiding the proceedings either before the AO or to delay in filing the appeal before the ld. CIT (A). He has thus contended that nothing could be achieved by the assessee by filing the appeal belatedly before the ld. CIT (A). Thus the ld. A/R has submitted that the delay in filing the appeal before the ld. CIT (Appeals) was neither intentional nor willful but due to unavoidable circumstances.

On the other hand, the ld. D/R has objected to the condonation of delay and submitted that the assessee himself has provided the address to the AO as well as in Form No. 35 to which address the AO issued the notices and also served the assessment order. He has further submitted that even in form no. 36 the assessee has given the same address which is given in the return of income. Therefore, the assessee cannot blame the AO if the notices and assessment order were sent at the address given by the assessee itself. He has relied upon the order of the ld. CIT (A).

We have considered the rival submissions as well as the relevant material on record. The assessment order was passed ex parte whereby the AO treated the entire receipts of the assessee as business receipts and allowed 50% as expenses on estimation basis. The AO assessed the balance amount as business income of the assessee apart from making the addition under section 68. We further note that for the assessment year 2012-13 the AO has accepted the returned income of the assessee as in the said assessment year the assessee has appeared before the AO in response to the notices issued under section 143(2) and 142(1) of the Act. The AO has specifically mentioned that in response to the notices Shri Surendra Kumar Sharma, Secretary of the assessee society attended and submitted the detailed record and information. Once the AO after considering the relevant record accepted the claim of the assessee as well as the returned income for the assessment year 2012-13, then the additions made by the AO for the year under consideration for want of necessary record and details, requires re-consideration as the assessee is seeking the opportunity of hearing and to produce the relevant details and evidences. Though there was a delay in filing the appeals before the ld. CIT (A), however, we find that despite the casual and negligent conduct of the assessee, the matter ought to have been decided on merit when the assessee society is represented by its Secretary and it was the lapse on the part of the Secretary for not attending the proceedings as well as updating the address of the assessee society before the AO. Therefore, once the AO has accepted the returned income for the assessment year 2012-13, then making the huge addition for the year under consideration which is otherwise not sustainable if assessee would have participated in the proceedings. Hence in the facts and circumstances of the case and in the interest of justice, we condone the delay in filing the three appeals before the ld. CIT (A) subject to the cost of Rs. 1,000/- each. Since the ld. CIT (A) has not decided the appeals on merit and the AO has also passed the ex parte order, therefore, the matter arising from the ex parte assessment order is set aside to the record of the AO for deciding the same afresh after giving an opportunity of hearing to the assessee. The other appeals being arising from penalty orders under section 271(1)(b) and 271(1)(c) are consequential, therefore, the same are also set aside to the record of the AO for deciding afresh after the outcome of the said set aside assessment proceedings.

In the result, appeals of the assessee are allowed for statistical purposes.