V. GANESAN,VIRUDHUNAGAR vs. ITO, WARD-1, VIRUDHUNAGAR

At the threshold, we observe that there is a delay of 1,038 days in the filing of the present appeal by the assessee. The assessee has furnished an affidavit explaining that the assessee’s auditor while filing first appeal before the NFAC, Delhi has given his e-mail ID and all the notices and orders were sent to the e-mail ID of the Auditor and the fact that notices and orders were sent to the e-mail of the Auditor has not been communicated to the assessee by the auditor and the assessee learnt that the NFAC, Delhi has passed order u/s.250 of the Act after the department had attached bank accounts of the assessee for arrear demand and after that the assessee approached an Advocate who facilitated in filing second appeal before the ITAT, Chennai and in the process, occurred the delay in filing of second appeal before the ITAT, Chennai by 1,038 days. Upon perusal of the affidavit and after affording due opportunity of hearing from both parties, we are satisfied that the assessee has demonstrated sufficient and reasonable cause for not presenting the appeal within the statutory period prescribed under law. Accordingly, in the interest of justice, the delay in filing the appeal is hereby condoned, and the appeal is admitted for adjudication on merits.

Brief facts of the case are that the assessee is an individual, engaged in the business of dealing in sales of safety match boxes and has filed his return of income on 30.09.2015 for the AY 2015-16, declaring total income of Rs.2,89,410/-. The case was selected for limited scrutiny to verify the large cash deposits in saving bank accounts and mismatch in sales turnover reported in Audit Report and ITR, accordingly notices were issued to the assessee and by calling for details. In response, the assessee submitted reply along with its

At the outset, we observed that ld.CIT(A) has provided four opportunities for the assessee to appear for hearings as detailed in paragraph 5.2 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld.CIT(A) passed an exparte order dated 26.05.2023 by confirming the order of the AO. Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us.

The ld.AR submitted that the NFAC, Delhi has erred in dismissing the appeal of the assessee on the grounds that the assessee is not keen on pursing the appeal, without going into merits of the case. Therefore, the ld.AR prayed that the Tribunal may be pleased to set aside the order of ld.CIT(A) and remit the issues to the file of AO. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the AO to complete the assessment proceedings effectively.

Per contra, the ld.DR submitted that both the AO and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).

We have heard the rival submissions and carefully perused the material available on record, including the orders of the authorities below. We note that the Assessing Officer completed the assessment on the basis of the information available with the Department and the partial reply furnished by the assessee. Aggrieved, the assessee preferred an appeal before the ld.CIT(A), however, despite opportunities afforded, the assessee failed to effectively participate in the appellate proceedings. Consequently, the ld.CIT(A) proceeded to dispose of the appeal on the basis of the material available on record. We further note that the assessee has approached this Tribunal with an inordinate delay of 1,038 days. Thus, the conduct of the assessee reflects lack of due diligence both in prosecuting the appeal before the ld. CIT(A) and in approaching the Tribunal within the prescribed period of limitation.

Nevertheless, considering the totality of the facts and circumstances of the case and with a view to afford the assessee one final opportunity to have the matter adjudicated on merits, we are inclined to take a lenient view, subject, however, to payment of costs. Accordingly, the assessee is directed to pay a cost of Rs.5,000/- (Rupees Five Thousand only) to the State Legal Services Authority, High Court of Madras, within 30 days from the date of receipt of this order and furnish proof of such payment before the ld.CIT(A). Subject to compliance with the aforesaid condition, the impugned order of the ld.CIT(A) is set aside and the matter is restored to his file for de novo adjudication on merits, after affording reasonable opportunity of being heard to the assessee. The assessee is specifically directed to appear before the ld.CIT(A), as and when called upon, and to furnish all necessary details, explanations and supporting evidence without seeking unnecessary adjournments. In the event of failure on the part of the assessee to comply with the aforesaid directions or to participate in the proceedings without sufficient cause, the ld.CIT(A) shall be at liberty to adjudicate the appeal in accordance with law on the basis of the material available on record, without granting any further indulgence.

In the result, appeal filed by the assessee is allowed for statistical purposes.