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Facts
The assessee filed an appeal against an order by the Ld. CIT(A) which dismissed the assessee's appeal on grounds of delay in filing. The assessee claimed there was a reasonable cause for the delay and the Ld. CIT(A) failed to appreciate the affidavit, and also did not issue a show-cause notice before dismissal.
Held
The Tribunal held that in the interest of justice, the assessee should be granted another opportunity to present their case before the Ld. CIT(A). The impugned order was set aside, and the matter was restored to the Ld. CIT(A) to decide afresh, considering the condonation application and the affidavit, after providing a reasonable opportunity to the assessee.
Key Issues
Whether the Ld. CIT(A) erred in dismissing the appeal without considering the merits and without providing a proper opportunity to the assessee, and whether the delay in filing the appeal was sufficiently explained.
Sections Cited
37(1), 57, 143(3), 144B, 234A, 234B, 270A, 272A(1), 274
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI “D” BENCH : MUMBAI
Before: SHRI VIKRAM SINGH YADAV & SHRI RAHUL CHAUDHARY
Assessment Year : 2020-21 Dilipkumar Phoolchand Jain, DCIT, Circle-20(1), A/1901-1902, Piramal Chambers, Vardhman Heights, vs. Dr.SS Rao Marg, TB Kadam Marg, Parel, Byculla (East), Mumbai-400012. Mumbai-400027. PAN : AARPJ1996K (Appellant) (Respondent) For Assessee : Mr. Dipesh Ruparelia (Virtually present) For Revenue : Shri Annavaram Kosuri, Sr.DR Date of Hearing : 22-09-2025 Date of Pronouncement : 24-09-2025 O R D E R PER VIKRAM SINGH YADAV, A.M :
This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 18-03-2025, pertaining to Assessment Year (AY) 2020-21, wherein the assessee has taken the following grounds of appeal: “Grounds on rejection of application for condonation of delay:
1. Erred in dismissing the appeal of the Appellant by rejecting the application for condonation of delay, without considering the merits of the appeal;
2. Erred in not considering the grounds and arguments made by the Appellant while passing the impugned order; 3. Erred in not granting an opportunity of being heard to the Appellant before passing an ex-parte order; 4. Erred in not considering the application for condonation of delay filed by the Appellant as genuine and reasonable; 5. Erred in not appreciating the fact that the Appellant is not a tax professional and hence was dependent on his erstwhile Chartered Accountant to comply for the notices; Grounds on merits of the case 6. Erred in upholding the order of the learned Assessing officer ('AO') wherein, the learned AO has made an addition of notional rent without appreciating the fact that the Appellant does not have two separate house properties and it is a one single unit; 7. Erred in upholding the order of the learned AO wherein, the learned AO has made a disallowance under Section 57 of the Act without appreciating the fact that there was a direct nexus between the income earned and expense incurred; 8. Erred in upholding the order of the learned AO wherein, the learned AO has made a disallowance under Section 57 of the Act without appreciating the fact that the Appellant could have claimed the Interest expense as a business expense under Section 37(1) of the Act, which would in-turn lead to a business loss at which would have been allowed to be duly set off against the interest income (offered under the head income from other sources); 9. Erred in upholding the order of the learned AO wherein, the learned AO has made a disallowance under Section 57 of the Act without appreciating the fact that the Appellant could have claimed the interest expense as a business expense under Section 37(1) of the Act and the balance business expense (which is not set off) could have been carried forward by the Appellant for 8 assessment years, 10. Erred in upholding the order of the learned AO wherein, the learned AO has made an addition of without appreciating the fact that the Appellant had let the property but it had remained vacant and thus the Appellant was eligible for vacancy allowance under the Act; 11. Erred in upholding the order of the learned AO wherein, the learned AO has made an addition of notional rent on closing stock without appreciating the fact that the Appellant does not have any house property as closing stock;
12. Erred in upholding the order of the learned AG wherein, the learned AO has levied interest under Section 234A and Section 234B of the Act; and 13. Erred in upholding the order of the learned AO wherein, the learned AO has initiated penalty proceedings under Section 270A and Section 272A(1) (d) read with Section 274 of the Act.”
2. Briefly the facts of the case are that the assessment in this case was completed u/s. 143(3) r.w.s. 144B of the Income Tax Act, 1961 („the Act‟) vide order dt. 22-09-2022, wherein as against the returned loss of Rs. 8,68,899/-, the income was determined at Rs. 1,29,09,671/-. The assessee thereafter carried the matter in appeal before the Ld. CIT(A), who has since dismissed the appeal of the assessee on the ground of delay in filing the appeal and against the said order, the assessee is in appeal before us.
During the course of hearing, the Ld.AR submitted that there was a reasonable cause for delay in filing the appeal before the Ld.CIT(A) and the necessary affidavit was also furnished, however, the Ld.CIT(A) has failed to appreciate the contents of the affidavit in proper perspective. It was further submitted that before dismissing the appeal of the assessee, no show cause was even issued to the assessee, allowing the assessee necessary opportunity to represent his case. It was accordingly submitted that the assessee may be given one more opportunity and the matter may be remitted to the file of the Ld.CIT(A).
Per contra, the Ld.DR is heard, who has not raised any specific objection to remit the matter to the file of the Ld.CIT(A) to consider the same afresh.
Having regard to the facts and circumstances of the case, it is evident from the record that the assessee has furnished necessary affidavit before the Ld.CIT(A) explaining the reasons which prevented him from filing the appeal within the statutory time period and it is claimed before us that the Ld.CIT(A) has failed to appreciate the contents of the affidavit in proper perspective and the appeal has been dismissed in limine without going into the merits of the case. It is also a matter of record that no show-cause has been issued by the ld CIT(A) to the assessee before dismissing the appeal so filed. In view of the above, we deem it appropriate that in the interest of justice, the assessee should be granted one more opportunity to represent his case before the Ld.CIT(A). Consequently, we deem it fit and proper to set aside the impugned order and restore the matter to the file of the Ld.CIT(A) to decide the same afresh including the matter relating to the condonation application, duly taking into account the contents of the affidavit in proper perspective and after providing reasonable opportunity to the assessee. The assessee is also directed to attend to the proceedings without fail and furnish necessary information/documentation as so called for and as so advised.