NANASAHEB KONDIBA ABNAVE,KHARADI, PUNE vs. INCOME TAX OFFICER, WARD 7(3), PUNE

Relying on various decisions the Ld. Counsel for the assessee submitted that the delay in filing of the appeal(s) should be condoned as the same was not deliberate, but resulted due to the bonafide reasons stated above.

The Ld. DR, on the other hand, strongly opposed the condonation application(s) filed by the assessee.

We have heard the rival arguments made by both the sides on the issue of delay in filing of the appeal and considered the contents of the condonation application filed along with the affidavit of the assessee.

We find the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. 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.

We also find that the Hon'ble Supreme Court in the case of Inder has held as under:

There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation."

Considering the totality of the facts of the case and in the light of the decisions of Hon'ble Supreme Court cited (supra), the delay in filing of these appeals is condoned and the appeals are admitted for adjudication.

Briefly stated, the facts of the case are that the assessee is an individual and engaged in the real estate business of acquiring plot of lands and selling it to the customers. The assessee filed his return of Income tax for AY. 2016-17 on 30-01-2017 u/s. 139(5) by declaring net total income of Rs. 10,82,760/-. The assessee‟s case was selected for scrutiny under CASS. Accordingly notices u/s 143(2) and 142(1) of the Act were issued and duly served upon the assessee from time to time. However, the assessee could not furnish any reply in response to the said notices due to the sudden death of assessee‟s father and father-in-law as he was not mentally stable to reply to notices issued by the Ld. Assessing Officer (“AO”). The Ld.AO therefore, vide order dt. 24-12-2018 proceeded to complete the assessment ex-parte u/s 144 at the assessed income of Rs.67,35,257/-, thereby making the addition of (i) – Rs. 20,52,497/- on account of disallowance of interest expense and (ii) – Rs. 36,00,000/- on account of income from sale of property, totaling to Rs. 56,52,497/- to the total income of Rs. 10,82,760/- returned by the assessee.

Being aggrieved by the order of Ld. AO, the assessee filed appeal before the Ld.CIT(A)/NFAC. Before the Ld.CIT(A)/NFAC, there was non- compliance of notice(s) of hearing except submission of statement of facts, without any documentary evidence/information to substantiate his claim. Hence, relying on the decision of the Hon'ble Supreme Court in the case of B.N. Bhattacharjee and Another [118 ITR 461] and Hon'ble Bombay High Court in the case of M/s. Chernipol vs. Union of India in Central Excise Appeal No. 62 of 2009, the Ld.CIT(A)/NFAC dismissed the appeal of the assessee for non-compliance/prosecution.

Aggrieved, the assessee is in appeal before the Tribunal raising the following grounds of appeal:

The Ld.AR submitted that non-compliance to the notices issued by the Ld.CIT(A)/NFAC was not intentional, but the assessee had a reasonable cause due to which the compliance could not be made before the Ld.CIT(A)/NFAC. He submitted that the assessee is a senior citizen. During the reassessment proceedings, COVID-19 period was going on and the assessee lost his father as well as father-in-law in COVID 19, due to which the assessee could not submit any of the relevant documents before the Ld.AO. Further during the appellate proceedings before the Ld.CIT(A)/NFAC there was a misunderstanding between the then Authorised Representative and the assessee. The staff of the then Authorised Representative mentioned erstwhile email-id of the Authorised Representative and not the assessee. The said email-id was not in use anymore, due to which neither the Authorised Representative nor the assessee could know about any of the notices issued and consequently, the notice(s) of hearing could not be complied by the assessee and he could not submit the details/documents before the Ld.CIT(A)/ NFAC as well in support of his claim. The Ld.AR placed certain additional evidence on record and humbly prayed that in the interest of justice, the assessee may be granted an opportunity to substantiate his case before the Ld.CIT(A)/NFAC by filing the requisite details/documents/evidence.

The Ld.DR supported the order of the Ld.CIT(A)/NFAC and submitted that since the assessee failed to make any compliance before the lower authorities inspite of several opportunities granted, the Ld.CIT(A)/NFAC is completely justified in dismissing the appeal of the assessee.

We have heard the Ld. Representatives of the Parties and perused the material available on record. Admittedly, there was non-compliance by the assessee to the notice(s) issued by the Ld.AO as well as the Ld.CIT(A)/NFAC which resulted in an ex-parte order(s) passed by them. Before us, the Ld.Counsel for the assessee has submitted that the non- compliance to the notices of hearing before the Ld.CIT(A)/NFAC was not intentional, but resulted due to the reasons stated above and that the assessee is now in a position to substantiate its case before the Ld.CIT(A)/NFAC by filing the requisite explanation/details/documents in support of his claim. He has therefore, humbly prayed that an opportunity may be granted to the assessee to substantiate his case before the Ld.CIT(A)/NFAC by filing the requisite explanation/details/documents. We observe that the Ld.CIT(A)/NFAC has dismissed the assessee‟s appeal for non-prosecution and endorsed the findings of the Ld.AO without impugned order is in violation of provisions of section 250(6) of the Act.

Considering the totality of facts and in the circumstances of the case, we deem it fit, in the interest of justice to set aside the impugned order of the Ld.CIT(A)/NFAC and restore the matter back to his file to decide the issue(s) raised by the assessee afresh as per fact and law, after allowing reasonable opportunity of hearing to the assessee. Needless to say, the assessee shall comply with the notices issued by the Ld. CIT(A)/NFAC and make his submissions before him on the appointed date without seeking any adjournment under any pretext, unless required for the sufficient cause, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. At the same time, due to callous attitude of the assessee for not responding to the notice(s) issued by the office of the Ld.CIT(A)/NFAC, we levy a cost of Rs. 5,000/- on the assessee, which shall be deposited within one month from the receipt of this order. The Ld.CIT(A)/NFAC shall ensure that the cost has been deposited before disposal of the appeal. We hold and direct accordingly. The grounds of appeal raised by the assessee are accordingly allowed for statistical purposes.

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

In this appeal, the assessee has challenged the ex-parte order of the Ld.CIT(A)/NFAC, whereby he has confirmed the penalty levied by the Ld.AO vide his order dt. 12-06-2019 passed u/s. 271(1)(c) of the Act. Since we have set aside the quantum appeal vide our above order of even date, the penalty appeal is also set aside to the file of the Ld.CIT(A)/NFAC, for adjudication afresh, after quantum appeal is disposed-of.

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

To sum-up, both the appeals filed by the assessee are treated as allowed for statistical purposes.

The concerned Pr.CIT, Pune

DR, ITAT, „B‟ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, ////