MAHAVIR JAIN,SURAT vs. INCOME TAX OFFICER, WARD-3(2)(6), SURAT

The background facts leading to present appeal are such that the assessee-individual filed his return of income of AY 2014-15 declaring a total income of Rs. 2,79,530/- which was assessed by way of scrutiny assessment u/s 143(3) at a total income of Rs. 41,85,916/-. Subsequently, taking into consideration the information received from ADIT(Inv.)-3, Surat indicating that the assessee had availed accommodation entries for a sum of Rs. 69,00,000/- from M/s Maharaj Enterprise, the AO issued notice dated 30.03.2021 u/s 148 to re-open assessee’s case u/s 147. In response, the assessee filed objection which the AO disposed of. The AO also issued notices u/s 142(1) and show-cause notice asking explanation from assessee but the same remained uncompiled with. Ultimately, the Ld. AO passed ex- parte assessment-order u/s 144 whereby he made an addition of Rs. 69,00,000/- u/s 68 on account of unexplained cash credit and re-assessed total income at Rs. 1,10,85,916/-. Aggrieved, the assessee filed appeal to Ld. CIT(A) but the same was delayed by 17 days. The Ld. CIT(A) dismissed assessee’s appeal in limine for delayed filing. Now, the assessee has come in next appeal before us.

The registry has informed that the present appeal is delayed by 100 days and therefore time-barred. The assessee has filed an application/ affidavit for condonation of delay; the same is scanned and re-produced for an immediate reference:

The averments made by assessee in above affidavit, which are self- explanatory and which do not require repetition, were discussed and the Ld. DR for revenue does not have any objection if the bench condones delay and accordingly left it to the wisdom of bench. We have considered the explanation advanced by assessee in Paras 2 to 4 of above affidavit and in absence of any contrary fact or material on record, the assessee is found to have a “sufficient cause” for delay in filing present appeal. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a “sufficient cause” for not presenting appeal within prescribed time. It is also a settled position by Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting a justice-oriented approach. Thus, taking into account the facts of case, the provision of section 253(5) and the decision of Hon’ble Supreme Court, we take a judicious view, condone delay, admit appeal and proceed with hearing.

There was also a delay of 17 days in filing appeal before Ld. CIT(A). The assessee filed an explanation in Form No. 35 filed to Ld. CIT(A), the asesssee’s submission is re-produced by Ld. CIT(A) in Para 1 of his order. The delay was attributed by assessee to the unavailability of chartered accountant and family reason. In our considered view, the Ld. CIT(A) ought to have accepted assessee’s explanation and condoned the delay particularly when (i) it was a petty delay of 17 days and not inordinate, (ii) the assessee has given a credible explanation, and (iii) there was no contrary material or basis on record to reject assessee’s explanation. Considering these aspecxts and in the light of Collector, Land Acquisition Vs Mst. Katiji and others (supra) we condone the delay occurred at the stage of filing appeal before Ld. CIT(A).

On merit of case, the Ld. AR made a limited prayer to remand this matter to the file of Ld. CIT(A) for a fresh adjudication. He assured that the assessee shall make an effective representation before Ld. CIT(A) as and when called upon.

Replying to same, Ld. DR for revenue submitted that he does not have any objection if the matter is remanded to CIT(A) but his request would be to impose some cost upon assessee and also give stricter direction to assessee in view of the fact that (i) there is a delay in filing appeal at both stage i.e. first appeal before CIT(A) and present/next appeal before ITAT, and (ii) there was a non-participation by assessee to the notices issued u/s 142(1) and show-cause notice issued by Ld. AO which has only led the AO to make assessment in the nature of ex-parte.

Considering above submissions of parties, having regard to the principle of natural justice and also bearing in mind that no prejudice would be caused to revenue if the present matter is restored at the level of CIT(A), we remand this matter back to the file of CIT(A) for adjudication afresh. The CIT(A) shall give necessary opportunity of hearing to assessee and pass an appropriate order uninfluenced by his earlier order. The assessee is also directed to remain vigilant and ensure participation in the hearings as may be fixed by CIT(A) and do not seek unnecessary adjournments failing which the CIT(A) shall be at liberty to pass appropriate order in accordance with law. Ordered accordingly.

However, we find that the assessee has remained non-responsive before AO despite service of notices and the AO has noted in Para 7 of assessment-order “During the course of assessment proceedings, various opportunities were given to the assessee to provide necessary documents in support of his claim. However, the assessee did not reply and remained non responsive even after being well known of the fact that the assessment proceedings are underway”. Further, there is also delay in filing appeals at both stages of CIT(A) and ITAT. That apart, the revenue’s efforts are involved in dealing assessee’s case afresh. Considering these aspects, we accept the submission made by Ld. DR for revenue and impose a cost of Rs. 2,500/- to be paid by assessee to Income-tax Department through appropriate challan. The assessee shall submit a copy of duly paid challan to Ld. AO during the proceeding of fresh adjudication and shall not claim any credit or refund of such payment in any manner.

Resultantly, this appeal is allowed for statistical purposes, subject to payment of cost by assessee as mentioned above.