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Facts
The assessee's appeal was directed against an order of the Ld. CIT(A) for assessment year 2020-21. The matter was a second round of proceedings before the Ld. CIT(A) after being restored by the ITAT. During the rehearing, the assessee failed to provide requested information regarding condonation of delay in filing Form 10B.
Held
The Tribunal held that the assessee failed to comply with notices and did not provide the necessary information, leading to the rejection of the claim. The Tribunal also noted an affidavit explaining the trustee's inability to respond due to computer literacy and medical constraints.
Key Issues
Whether the CIT(A) erred in dismissing the appeal due to non-compliance with notices and failure to furnish information regarding condonation of delay in filing Form 10B, and if the assessee's explanation for non-compliance is justifiable.
Sections Cited
143(1)
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Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN
ORDER PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 03.03.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2020-21, raising following grounds:
The orders passed by the learned lower authorities are bad in law and bad in facts.
2. The learned lower authorities have grossly erred in The learned lower authorities have grossly erred in The learned lower authorities have grossly erred in upholding the validity of the Intimation issued u/s 143(1) of upholding the validity of the Intimation issued u/s 143(1) of upholding the validity of the Intimation issued u/s 143(1) of the I.T. Act, 1961, even though no intimation, (notice) as the I.T. Act, 1961, even though no intimation, (notice) as the I.T. Act, 1961, even though no intimation, (notice) as provided by the, 1st & 2nd Proviso below Sec. 143 (1) of the provided by the, 1st & 2nd Proviso below Sec. 143 (1) of the provided by the, 1st & 2nd Proviso below Sec. 143 (1) of the I.T. Act, 1961, was issued I.T. Act, 1961, was issued 3. The Intimation issued u/s 143(1) of the I. T. Act, 1961, is The Intimation issued u/s 143(1) of the I. T. Act, 1961, is The Intimation issued u/s 143(1) of the I. T. Act, 1961, is ab-initio void, inasmuch as, impugned adjustment Rs. initio void, inasmuch as, impugned adjustment Rs. initio void, inasmuch as, impugned adjustment Rs. 1,20,11,455/ 1,20,11,455/- without issuing an intimation is contrary to without issuing an intimation is contrary to the mandatory provisions of law. the mandatory provisions of law. 4. The learned lower The learned lower authorities have grossly erred in not authorities have grossly erred in not considering the prevalent circumstances emerging out of considering the prevalent circumstances emerging out of considering the prevalent circumstances emerging out of Covid restrictions and have further erred in adding a sum of Covid restrictions and have further erred in adding a sum of Covid restrictions and have further erred in adding a sum of Rs.1,20,11,455/ Rs.1,20,11,455/- to the returned income. 5. The learned lower authorities have grossly erred in not The learned lower authorities have grossly erred in not The learned lower authorities have grossly erred in not considering, prior to making of impugned addition of idering, prior to making of impugned addition of idering, prior to making of impugned addition of Rs.1,20,11,455/ Rs.1,20,11,455/- that the appellant was prevented by a that the appellant was prevented by a reasonable and sufficient cause in filing return of income reasonable and sufficient cause in filing return of income reasonable and sufficient cause in filing return of income belatedly. belatedly. 6. Having regard to the facts of the case, provisions of law Having regard to the facts of the case, provisions of law Having regard to the facts of the case, provisions of law and judicial proposition and judicial propositions, impugned adjustment to returned s, impugned adjustment to returned income is wholly unwarranted income is wholly unwarranted & uncalled for. for. 2. We have heard the learned representatives of the parties and We have heard the learned representatives of the parties and We have heard the learned representatives of the parties and have carefully perused the material available on record. The have carefully perused the material available on record. The have carefully perused the material available on record. The essential facts, briefly stated, are that the prese essential facts, briefly stated, are that the present appeal arises out nt appeal arises out of the second round of proceedings before the Ld. CIT(A). In the first of the second round of proceedings before the Ld. CIT(A). In the first of the second round of proceedings before the Ld. CIT(A). In the first round, the matter had been restored to the file of the CIT(A) by the round, the matter had been restored to the file of the CIT(A) by the round, the matter had been restored to the file of the CIT(A) by the Tribunal vide order dated 31.05.2023 in with a Tribunal vide order dated 31.05.2023 in with a Tribunal vide order dated 31.05.2023 in with a direction for fresh adjudicati direction for fresh adjudication.
2.1 In the course of the rehearing, the Ld. CIT(A) issued several In the course of the rehearing, the Ld. CIT(A) issued several In the course of the rehearing, the Ld. CIT(A) issued several notices, as duly recorded in paragraph 4 of the impugned order. notices, as duly recorded in paragraph 4 of the impugned order. notices, as duly recorded in paragraph 4 of the impugned order. However, save for a solitary communication dated 26.12.2024, the However, save for a solitary communication dated 26.12.2024, the However, save for a solitary communication dated 26.12.2024, the assessee did not furnish the information requisitioned. The Ld. assessee did not furnish the information requisitioned. T assessee did not furnish the information requisitioned. T CIT(A) specifically called upon the assessee to produce evidence CIT(A) specifically called upon the assessee to produce evidence CIT(A) specifically called upon the assessee to produce evidence regarding any application made before the Commissioner of Income- regarding any application made before the Commissioner of Income regarding any application made before the Commissioner of Income tax (Exemption) seeking condonation of delay in filing Form No. tax (Exemption) seeking condonation of delay in filing Form No. tax (Exemption) seeking condonation of delay in filing Form No. 10B. The assessee failed to respond to this requirement. In the 10B. The assessee failed to respond to this requirement 10B. The assessee failed to respond to this requirement absence of any order condoning the delay in filing the mandatory absence of any order condoning the delay in filing the mandatory absence of any order condoning the delay in filing the mandatory audit report, the Ld. CIT(A) proceeded to dismiss the appeal, audit report, the Ld. CIT(A) proceeded to dismiss the appeal, audit report, the Ld. CIT(A) proceeded to dismiss the appeal, primarily on account of non primarily on account of non-compliance. The relevant extracts of compliance. The relevant extracts of the order of the Ld. CIT(A) have already been reproduced the order of the Ld. CIT(A) have already been reproduce the order of the Ld. CIT(A) have already been reproduce hereinabove. The relevant finding of the Ld. CIT(A) is reproduced as The relevant finding of the Ld. CIT(A) is reproduced as The relevant finding of the Ld. CIT(A) is reproduced as under:
“4. DISCUSSION, REASON & DECISION: 4. DISCUSSION, REASON & DECISION: The matter was set aside to the undersigned by the ITAT Order The matter was set aside to the undersigned by the ITAT Order The matter was set aside to the undersigned by the ITAT Order vide of 2022 dated 31/05/2023. The ITAT vide of 2022 dated 31/05/2023. The ITAT vide of 2022 dated 31/05/2023. The ITAT remanded the issue to the fi remanded the issue to the file of CIT(A) for its fresh adjudication. le of CIT(A) for its fresh adjudication. During this appellate proceeding, hearing notices were issued on During this appellate proceeding, hearing notices were issued on During this appellate proceeding, hearing notices were issued on 01/11/2023, 01/11/2023, 01/11/2023, 04/04/2024, 04/04/2024, 04/04/2024, 24/06/2024, 24/06/2024, 24/06/2024, 04/10/2024, 04/10/2024, 04/10/2024, 08/11/2024, 17/12/2024, 09/01/2025 08/11/2024, 17/12/2024, 09/01/2025 and 28/01/2025 08/11/2024, 17/12/2024, 09/01/2025 and 28/01/2025 and 28/01/2025 respectivelly for submission in support of grounds t respectivelly for submission in support of grounds taken by the aken by the appellant. In response to these notices, the appellant responded appellant. In response to these notices, the appellant responded appellant. In response to these notices, the appellant responded only once on 26/12/2024 stating as under: only once on 26/12/2024 stating as under: "The appellant Smt. DAKUBEN SAREMALJI SANCHETI (NADOL) "The appellant Smt. DAKUBEN SAREMALJI SANCHETI (NADOL) "The appellant Smt. DAKUBEN SAREMALJI SANCHETI (NADOL) CHERITABLE trust is in receipt of notice dated 17/12/2024 CHERITABLE trust is in receipt of notice dated 17/12/2024 CHERITABLE trust is in receipt of notice dated 17/12/2024 bearing bearing DIN: DIN: ITBA/NFAC/F/APL_4/2024-25/1071288525(1) ITBA/NFAC/F 25/1071288525(1) fixing the date of hearing on 26/12/2024 in respect of appeal no: fixing the date of hearing on 26/12/2024 in respect of appeal no: fixing the date of hearing on 26/12/2024 in respect of appeal no: NFAC/2019-20/10296220 FPR ASST. YEAR: 2020 20/10296220 FPR ASST. YEAR: 2020-21. In this -21. In this connection we have to submit that the appellant has not received connection we have to submit that the appellant has not received connection we have to submit that the appellant has not received any communication from the Hon'ble CIT (e any communication from the Hon'ble CIT (exemption) in regard to xemption) in regard to condonation of delay in filing audit report in form 10b and notice condonation of delay in filing audit report in form 10b and notice condonation of delay in filing audit report in form 10b and notice of accumulation in form 10. The central board of direct taxes vide of accumulation in form 10. The central board of direct taxes vide of accumulation in form 10. The central board of direct taxes vide circular no: 11/2024 dated 01/10/2024 have delegated power circular no: 11/2024 dated 01/10/2024 have delegated power circular no: 11/2024 dated 01/10/2024 have delegated power of condonation of delay to various autho of condonation of delay to various authorities. Appellants rities. Appellants application for condonation of delay is pending and a favorable application for condonation of delay is pending and a favorable application for condonation of delay is pending and a favorable consideration of application is expected for the assessment year consideration of application is expected for the assessment year consideration of application is expected for the assessment year 2020-21. The due date for filing return of income and audit 21. The due date for filing return of income and audit 21. The due date for filing return of income and audit reports was extended upto 15/02/2021 on account reports was extended upto 15/02/2021 on account reports was extended upto 15/02/2021 on account of covid.
Even Even Even after after after 15/02/2021 15/02/2021 15/02/2021 government government government restrictions restrictions restrictions for for for transportation / movement of general public continued. Hence, transportation / movement of general public continued. Hence, transportation / movement of general public continued. Hence, appellant staff could not attend the office and do the needful. appellant staff could not attend the office and do the needful. appellant staff could not attend the office and do the needful. Considering all the surrounding circumstances hon'ble supreme Considering all the surrounding circumstances hon'ble supreme Considering all the surrounding circumstances hon'ble supreme court in the case of cognizance for extension of limitation 441 ITR the case of cognizance for extension of limitation 441 ITR the case of cognizance for extension of limitation 441 ITR 0722 extended the due date upto 28/02/2022. In case of 0722 extended the due date upto 28/02/2022. In case of 0722 extended the due date upto 28/02/2022. In case of appellant the audit report in 10B was filed on 25/03/2021 and appellant the audit report in 10B was filed on 25/03/2021 and appellant the audit report in 10B was filed on 25/03/2021 and form 10 also filed on 25/03/2021. Return of income was filed on form 10 also filed on 25/03/2021. Return of income was filed on form 10 also filed on 25/03/2021. Return of income was filed on 27/03/2021. Thu 27/03/2021. Thus, all the statutory compliances were made well s, all the statutory compliances were made well before the time line set by the hon'ble supreme court. In view of before the time line set by the hon'ble supreme court. In view of before the time line set by the hon'ble supreme court. In view of the above stated facts, we request your honor to kindly grant us the above stated facts, we request your honor to kindly grant us the above stated facts, we request your honor to kindly grant us some time to peruse the condonation application before the some time to peruse the condonation application before the some time to peruse the condonation application before the hon'ble Commission hon'ble Commissioner of Income Tax (exemption) and oblige.." er of Income Tax (exemption) and oblige.." However, this office issued a letter dated 09/01/2025 and also However, this office issued a letter dated 09/01/2025 and also However, this office issued a letter dated 09/01/2025 and also a reminder for the same on 28/01/2025 for copy of application a reminder for the same on 28/01/2025 for copy of application a reminder for the same on 28/01/2025 for copy of application made to the CIT(Exemption) which is as follows: made to the CIT(Exemption) which is as follows: "As per your submission dated 26.12.2024 "As per your submission dated 26.12.2024, you have claimed , you have claimed that you had applied for condonation in respect of delay in filling that you had applied for condonation in respect of delay in filling that you had applied for condonation in respect of delay in filling Audit Report in form 10B. You are requested to furnish the copy Audit Report in form 10B. You are requested to furnish the copy Audit Report in form 10B. You are requested to furnish the copy of it to this office." of it to this office." But, the appellant has failed to comply with the notices. Hence, But, the appellant has failed to comply with the notices. Hence, But, the appellant has failed to comply with the notices. Hence, on being non- - compljant to the notices issued and in absence of pljant to the notices issued and in absence of proper submission, the claim of the appellant is rejected. proper submission, the claim of the appellant is rejected. proper submission, the claim of the appellant is rejected. 4.2 The Hon'ble ITAT in 4.2 The Hon'ble ITAT in for the 1027/Chandi/2005 for the A.Y. 2002-03 in the case of M/s Chhabra Land and Housing Ltd. 03 in the case of M/s Chhabra Land and Housing Ltd. 03 in the case of M/s Chhabra Land and Housing Ltd. after following the decisi after following the decision of Hon'ble Supreme Court in the case on of Hon'ble Supreme Court in the case of B.N. Bhattachargee, 118 ITR 461 (SC) held that the appeal of B.N. Bhattachargee, 118 ITR 461 (SC) held that the appeal of B.N. Bhattachargee, 118 ITR 461 (SC) held that the appeal does not mean merely fifing, of the appeal but effectively does not mean merely fifing, of the appeal but effectively does not mean merely fifing, of the appeal but effectively pursuing it. 4.3 As per Tax Payer's Charter, the Income Tax Department 4.3 As per Tax Payer's Charter, the Income Tax Department 4.3 As per Tax Payer's Charter, the Income Tax Department expects from taxpayers expects from taxpayers 1. Tax payer is expected to be aware of his compliance 1. Tax payer is expected to be aware of his compliance 1. Tax payer is expected to be aware of his compliance obligations under tax law and seek help of department if needed. obligations under tax law and seek help of department if needed. obligations under tax law and seek help of department if needed.
Tax payer is expected to make submission as per tax law in 2. Tax payer is expected to make submission as per tax law in 2. Tax payer is expected to make submission as per tax law in timely manner. timely manner. 4.4 4.4 4.4 In In In the the the result, result, result, the the the appeal appeal appeal of of of the the the appellant appellant appellant is is is hereby "dismissed." ismissed."
Before us, the assessee has placed on record an affidavit Before us, the assessee has placed on record an affidavit Before us, the assessee has placed on record an affidavit sworn by the trustee of the assessee sworn by the trustee of the assessee-trust, explaining that due to trust, explaining that due to lack of computer literacy as well as medical constraints, the trustee lack of computer literacy as well as medical constraints, the trustee lack of computer literacy as well as medical constraints, the trustee was unable to respond to the repeated notices i was unable to respond to the repeated notices issued by the first ssued by the first appellate authority. It has further been brought to our notice that appellate authority. It has further been brought to our notice that appellate authority. It has further been brought to our notice that subsequent to the passing of the impugned order dated 03.03.2025, subsequent to the passing of the impugned order dated 03.03.2025, subsequent to the passing of the impugned order dated 03.03.2025, the Ld. Commissioner of Income the Ld. Commissioner of Income-tax (Exemption), by order dated tax (Exemption), by order dated 06.03.2025, has rejected the assessee’s 06.03.2025, has rejected the assessee’s application seeking application seeking condonation of delay in filing Form No. 10B, and that the assessee condonation of delay in filing Form No. 10B, and that the assessee condonation of delay in filing Form No. 10B, and that the assessee has preferred an appeal against the said rejection, which remains has preferred an appeal against the said rejection, which remains has preferred an appeal against the said rejection, which remains pending adjudication. pending adjudication.
3.1 In the totality of the circumstances, and having regard to the In the totality of the circumstances, and having regard to the In the totality of the circumstances, and having regard to the principles of natural justice, we are of the considered view that the natural justice, we are of the considered view that the natural justice, we are of the considered view that the ends of substantial justice would be best served if the matter is ends of substantial justice would be best served if the matter is ends of substantial justice would be best served if the matter is restored to the file of the Ld. CIT(A) for a fresh decision. Since the restored to the file of the Ld. CIT(A) for a fresh decision. Since the restored to the file of the Ld. CIT(A) for a fresh decision. Since the adjudication of the assessee’s appeal before the CIT(A) is adjudication of the assessee’s appeal before the CIT(A) is adjudication of the assessee’s appeal before the CIT(A) is inextricably linked with the outcome of the pending appeal against tricably linked with the outcome of the pending appeal against tricably linked with the outcome of the pending appeal against the order of the Ld. Commissioner of Income the order of the Ld. Commissioner of Income-tax (Exemption) tax (Exemption) rejecting the condonation request, we direct the Ld. CIT(A) to rejecting the condonation request, we direct the Ld. CIT(A) to rejecting the condonation request, we direct the Ld. CIT(A) to dispose of the appeal afresh after the final determination of the said dispose of the appeal afresh after the final determination of the said dispose of the appeal afresh after the final determination of the said condonation proceedings. condonation proceedings.
3.2 Accordingly, the impugned order is set aside, and the matter is 3.2 Accordingly, the impugned order is set aside, and the matter is 3.2 Accordingly, the impugned order is set aside, and the matter is remanded to the Ld. CIT(A) with the aforesaid directions. The remanded to the Ld. CIT(A) with the aforesaid directions. The remanded to the Ld. CIT(A) with the aforesaid directions. The assessee shall ensure full cooperation and timely compliance before assessee shall ensure full cooperation and timely compliance before assessee shall ensure full cooperation and timely compliance before the appellate authority. the appellate authority.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on ounced in the open Court on 26/11/2025. /11/2025.