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Facts
The assessee's appeal was dismissed by the CIT(A) ex-parte for non-prosecution. The assessee filed a belated appeal before the ITAT, explaining the delay due to the death of their previous tax consultant and subsequent communication issues.
Held
The Tribunal condoned the 746-day delay in filing the appeal, citing principles of substantial justice over technicalities. The CIT(A)'s order was set aside, and the issue was remanded back to the Assessing Officer for fresh adjudication.
Key Issues
Whether the delay in filing the appeal should be condoned, and if the case should be remanded to the Assessing Officer for fresh adjudication after the CIT(A) dismissed the appeal ex-parte.
Sections Cited
143(3), 194C, 194I, 234A, 234B, 234C, 234D, 271(1)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
order : 29.09.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member:
1. 1. The present appeal preferred by the Assessee is directed against the order, dated 08/05/2023, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] whereby the Ld. CIT(A) had dismissed the appeal against the Assessment Order, dated 31/03/2016, passed under Section 143(3) of the Income Tax Act, 1961 for the Assessment Year 2013-2014.
2. The Assessee has raised following grounds of appeal : “1. The Learned Commissioner of Income Tax (Appeals) [CIT(A)] had erred in dismissing the appeal ex-parte without deciding the 2 Assessment Year 2013-2014 matter on merits and without granting the appellant a reasonable opportunity of being hear, this is in violation of the principles of natural justice causing serious prejudice to the Appellant.
2. The Ld. CIT(A) had erred in upholding the contention of the Ld. AO where the Ld. AO erred in conducting the assessment without application of mind as Ld. AO erred in not considering the fact that gross receipts of Rs.87,00,154 is already disclosed in ITR form under Part A – P&L page no.5 and the same fact had also mentioned by the Ld. AO in para no.2 on page no.2 of the assessment order.
3. The Ld. CIT(A) had erred in upholding the contention of the Learned Assessing Officer (AO) where the Ld. AO had erred in adding gross receipts of Rs.87,00,154 as taxable incomes on Adhoc basis, resulting in unjust assessment of gross receipts as income and thereby inflating the tax liability without basis.
4. The Ld. CIT(A) erred in upholding the contention of the Ld. AO where the Ld. AO had erred in conducing the assessment blindly and without any independent inquiry and thus making additions solely based on the TDS/AIR information.
5. The Ld. CIT(A) had erred in upholding the contention of the Ld. AO where the Ld. AO erred in passing the assessment order blindly with predetermined mindset and without considering the explanation provided by the accountant of the Appellant regarding gross receipts already offered to tax to the extent of Rs.87,00,154/-
6. The Ld. CIT(A) erred in upholding the contention of the Ld. AO where the Ld. AO erred in invoking Section 194C and Section 194I of the Income Tax Act 1961, for making additions to income though these are TDS provisions applicable to payers and not charging sections applicable to the Appellant.
7. The Ld. CIT(A) had erred in upholding the contention of the Ld. AO where the Ld. AO erred in adding rental income and contract receipt amounting to Rs.87,00,154/- only on the basis of AIR Information. 8. The Ld.CIT(A) had erred in holding the contention of the Ld. AO where the Ld. AO erred in adopting return of income of Rs.8,94,906/- (10,09,063-1,14,157) instead of correct returned income of Rs.7,69,360/-, where by not considering the house 3 Assessment Year 2013-2014 property loss of Rs.1,25,545 mentioned in the Income Tax Return Schedule CYLA, page no.17 of Income Tax Return. 9. The Ld. AO completed the assessment without calling for explanations, disregarded the financials filed, and made additions solely on TDS/AIR data, which is against settled law and CBDT instructions. Therefore, the assessment order is passed mechanically, without appreciating that the books of account and expenses details, which were already disclosed in the ITR. 10. The Ld. CIT(A) erred in upholding the contention of the Ld. AO where the Ld. AO erred in charging of interest under Sections 234A, 234B, 234C and 234D as charging such interest is arbitrary, excessive and not sustainable in law. 11. The Ld. CIT(A) erred in upholding the contention of the Ld. AO where the Ld. AO erred in initiating penalty under Section 271(a)(b) as such penalty is arbitrary, excessive, and not sustainable in law. The Ld. CIT(A) erred in upholding the same.” 3. When the appeal was taken up for hearing none was present on behalf of the Assessee. After hearing Learned Departmental Representative and on perusal of record, we proceeded to adjudicate the grounds raised by the Assessee in the present appeal.
4. On perusal of the Assessment Order, we find that addition of INR.87,00,154/- was made in the hands of the Assessee by the Assessing Officer observing as under:
“2. During the year under consideration, the assessee has shown gross receipts of Rs.87,00,154/- against which expense of Rs.79,97,091/- has been claimed and thus, declared net profit of Rs.7,09,063/-. Neither the assessee nor his accountant has submitted any details as called for with documentary evidence in support of his claim in the return of income.
On perusal of the AIR information, it is found that assessee has received rental income to the tune of Rs.19,44,500/- from various entities on which TDS is deducted amounting to 38,891/- . Further, AIR information reveals that the assessee is in receipt of contract receipts from various concerns amounting to Rs.67,55,644/- on which TDS is deducted of Rs.1,13,437/-.
4 Assessment Year 2013-2014 Since the assessee failed to furnish any supporting details with documentary evidence, the entire sum of Rs.19,44,500/- and Rs.67,55,644/- aggregating to Rs.87,00,154/- is added back to the total income of the assessee based on the material facts available on record. Penalty u/s.271(1)(b) is hereby initiated for non-attendane by the assessee.”
Bare perusal of the above Assessment Order, shows that Assessee had shows Gross Receipts of INR.87,00,154/- and after claiming deduction for expenses of INR.79,91,091/- against the same, the Assessee had declared net profit of INR.7,09,063/-. On perusal of AIR information it was noted by the Assessing Officer that the Assessee had received rental income of INR.19,44,500/- and contract receipts aggregating to INR.67,55,644/-. The aggregate of the aforesaid receipts come to INR.87,00,154/-. It is the case of the Assessee that the aforesaid receipts were offered to tax. In the present appeal before the Tribunal, it has been contended that the Gross Receipts of INR.87,00,154/- offered to tax consisted of rental income and the contract receipts.
6. We note that the appeal preferred by the Assessee in respect of the above addition made by the Assessing Officer was dismissed by the Ld. CIT(A) holding as under: “In this case notices for hearing have been sent to be appellant on 26.12.2020, 18.01.2021, 08.02.2021, 11.04.2023 and 25.04.2023. The appellant has not responded to these notices. It is apparent that the appellant is not interested in pursuing the impugned appeal before me. On merits also there is nothing on record to support the issues raised in this appeal. Hence, in view of the above reasons, this appeal is dismissed.”
7. We find that the present appeal preferred by the Assessee is also barred by limitation. On perusal of application seeking condonation of delay of 746 days in filing the present appeal (which is accompanied by supporting affidavit) it has been stated that:
5 Assessment Year 2013-2014 “2. That I had appointed a tax consultant to handle my income tax compliance and representation before the income tax authorities, including proceedings for Assessment Year 2013-14.
3. That the said consultant was responsible for filing my return of income for AY 2013-14, handling scrutiny notices, and filing an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)].
That the said consultant passed away suddenly in or around the year 2020, due to illness. I was unable to retrieve complete records or obtain any status updates on my pending appeals or assessment matters due to his demise.
5. That I was unware of the progress of the appeal filed before CIT(A)-41, Mumbai and believed it to be pending. I did not receive any notices of hearing or communication from the CIT(A) in respect of appeal proceedings.
That I did not received the ex-parte order dated 08.05.2023 passed by the Ld. CIT(A) until much later, after I had appointed a new consultant, ……………, 2 month ago for assistance with my tax returns and refund queries.
The phone number registered on the Income Tax portal and the email IDs (ganesh_akh@yahoo.co.in) used for communication of notices belong to the previous consultant, not to the me, and differ from the my registered email ID on the portal, resulting in the I have received any notices; however, both details were updated one month ago.
I have submitted a request letter dated June 20, 2025, seeking certified copies of the assessment proceedings and related records, a copy of which is attached for your reference.
9. That upon review of my income tax account and CPC communications, ……….. informed me of the dismissal of the appeal by CIT(A) and adjustment of refunds against the outstanding demand for AY 2013-14.
That this was the first time I came to know about the dismissal of the appeal and the existence of such a large demand, despite having already paid Rs.8,00,000 voluntarily and having multiple refunds adjusted aggregating to Rs.2,81,040/-.
That there was no intention to delay or evade proceedings, and 6 Assessment Year 2013-2014 the delay in filing the appeal before the Hon’ble ITAT is purely on account of the above genuine and unavoidable circumstances.”
8. In view of the above we are of the view that the delay in filing the present appeal was not deliberate and the delay was on account of reasons beyond control of the Assessee. We have no reasons to doubt the aforesaid explanation offered by the Assessee. In the case of Collector of Land Acquisition Vs. Mst. Katiji & others AIR 1987 1353 (SC) the Hon’ble Supreme Court has, while dealing with the issue of condonation of delay, emphasized that substantial justice should prevail over technical considerations. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. In the present the Assessee has provided sufficient explanation for delay in filing the appeal before the Tribunal. In our view, no benefit would have accrued to the Assessee by delaying filing of appeal. When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred. Therefore, delay of 746 days in filing the present appeal is condoned. Further, taking into consideration the overall facts and circumstances of the present case we deemed it appropriate set-aside the Order, dated 08/05/2023, passed by the Ld. CIT(A) and remand the issue back to the file of the Assessing Officer with the direction to adjudicate the same afresh after taking into consideration the submissions of the Assessee and the documents/details to be furnished by the Assessee in support of the claim. The Assessee is also directed to co-operate in the assessment proceedings and forthwith file details, documents & submission in support of its claims/contentions before the Assessing Officer. It is clarified that the Assessing Officer shall grant reasonable opportunity of being heard to the Assessee. The Assessee is directed to be vigilant and track the assessment proceedings through Income Tax Business Application 7 Assessment Year 2013-2014 Portal. In case the Assessee fails to enter appearance and/or fails to file details/documents/submission in response to notice of hearing issued by the Assessing Officer, the Assessing Officer shall be at liberty to decide the issues on merits on the basis of material on record. In terms of the aforesaid, Ground No. 1 to 2 raised by the Assessee are treated as allowed for statistical purposes while all other ground raised by the Assessee are dismissed as having been rendered academic at this stage since we have remanded the issue back to the file of the Assessing Officer.
In result, the present appeal preferred by the Assessee is treated as allowed for statistical purposes.