SHIVALIK POWER AND STEEL PRIVATE LIMITED,RAIPUR vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), RAIPUR, RAIPUR

The assessee has raised following grounds: “1. That on the facts and in the circumstances of the case and in law, the Id. CIT(A), National Faceless Appeal Centre, Delhi has passed the order u/s 250 of the Act dated 30/03/2025 without giving an opportunity of being heard to the appellant by non-service of physical hearing notice on the appellant when the appellant has opted for 'No' with regard to service of notice in the personal information of form 35.

Facts, in brief, relevant for adjudication of this appeal are that the assessee is engaged in the business running foundry/casting unit and operating Bio Mass Power Plant. It filed its Income Tax Return (‘ITR’) of the relevant year on 28.09.2012 declaring NIL income under normal provision of Act and Book Profit of Rs.1,64,72,717/- in accordance with the provisions of Section 115JB of the Act. The ITR was processed under section 143(1) of the Act. Later, the case was reopened under section 147 of the Act on 30.03.2015. In the reopened assessment, the addition of Rs.80,00,000/- on account of unexplained share application money was made under section 68 of the Act. Aggrieved, the assessee filed appeal before the Ld. CIT(A)/Addl./JT. CIT(A), who dismissed the appeal due to non-prosecution placing reliance on following decisions:

The relevant finding of the Ld. Addl./Jt. CIT(A) is as under: “3.0 It is seen from record that a notice under Section 250 was issued to the appellant on 06/01/2021 for submissions of details/evidence in support of its contention/grounds of appeal Vide response 27/01/2021, the appellant had requested for adjournment. Further. notice under Section 250 was issued to the appellant on 21/12/2021. Vide response dt.07/01/2022, the appellant had requested for adjournment. Thereafter, notices under Section 250 were issued to the appellant on 13/02/2023 & 19/06/2023. However, no compliance was made by the appellant.

Shri Ch. Rajeswara Reddy, Ld. Sr. DR did not object to condonation of the delay. The Ld. Sr. DR, drawing our attention to various paras of the assessment order and impugned appellate order, prayed for dismissal of the appeal. Further, on our specific query that the Ld. CIT(A)/Addl./Jt. CIT(A) had not decided the appeal with reasoned order, the Ld. Sr. DR reluctantly admitted for remitting the case back to the Ld. CIT(A)/Addl./Jt. CIT(A) for denovo adjudication.

We have heard both parties and have perused the material available on the record. We have taken note of the fact that the Addl./Jt. CIT(A) has not decided the appeal after sending any notice through post/physical mode (other than through email) even after categorical mention of ‘NO’ in response to whether notices/communication may be sent on email in Form Nos. 35 of this case. Thus, the assessee’s belief that his appeals would be pending before the Ld. CIT(A)/Addl./Jt. CIT(A) as it had not received any notice in physical mode is found genuine.

The justification of the appellant assessee for delay condonation in this case therefore, becomes relevant to determine whether the same reflects sufficient and reasonable cause on its part in not presenting this appeal within the prescribed time. In case of Collector, Land Acquisition vs MST Katiji (1987) 2 SCC 107, the Hon'ble Supreme Court has held that the expression ‘Sufficient Cause’ used by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner to sub-serves the ends of justice that being the life-purpose of the existence of the institution of Courts. It is further held by the Hon’ble Supreme Court that such liberal approach is adopted on one of the principles that 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. Another principle laid down by the Hon’ble Supreme Court is that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred as the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. It is also held by the Hon’ble Supreme Court that there is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of malafides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. In the instant case, applying the same principles, we find that there is no culpable negligence or malafide on the part of the assessee in delayed filing of the appeal as the assessee does not stand to benefit by resorting to such delay. Therefore, in the factual matrix of the present case, we find that there exists sufficient and reasonable cause for condoning the delay in filing the appeal as held by the Hon’ble Supreme Court in the case of Collector, Land Acquisition vs MST Katiji (supra). Therefore, in the interest of substantial justice, we are of the considered view that the delay in filing this appeal deserves to be condoned and the appeal should be decided on merit. Further, we do not see any prejudice which will be caused to the Revenue in deciding this appeal on merit. Thus, in view of the aforesaid discussions, in exercise of powers under section 254 of the Act, we hereby condone the delay in filing all the appeal as we are satisfied that there is sufficient cause for not presenting this appeal within the prescribed time. Accordingly, the delay in filing of this appeal is hereby condoned.

We have taken note of the fact that the Ld. Addl./Jt. CIT(A) has not decided the appeal after hearing the assessee and discussing the issues in detail and the reasons for agreeing with the assessment order though he/she, as per provisions of section 250(6) of the Act, is obliged to dispose of the appeal in writing with well- reasoned order on each point of determination arisen for his/her consideration. It is evident from the perusal of section 251(1)(a), 251(1)(b) and Explanation of section 251(2) of the Act that the CIT(A)/Addl./Jt. CIT(A) is required to apply his/her mind to all the issues arisen from the assessment order, whether or not such issues have been raised by the assessee before him/her. On cumulative consideration of the provisions of section 250(6) of the Act read with sections 250(4), 250(5), 251(1)(a), 251(1)(b) of the Act and Explanation of section 251(2) of the Act, the CIT(A)/Addl./Jt. CIT(A) is not empowered to dismiss the appeal for non-prosecution of appeal and is obliged to dispose of the appeal on merit. Reliance is placed on the decision of the Hon'ble Bombay High Court in case of Prem Kumar Arjun Das Luthra HUF, (2017) 291 CTR 614 (Bom.). The case laws relied upon by the Ld. Addl./Jt. CIT(A) are of no relevance as those appeals are beyond the purview of section 250(6) of the Act read with sections 250(4), 250(5), 251(1)(a), 251(1)(b) of the Act and Explanation of section 251(2) of the Act.

We have taken note of the fact that the assessee has not made any compliance before the Ld. Addl./Jt. CIT(A). Even in such facts and circumstances, the Ld. Addl./Jt. CIT(A) cannot dispose the appeal ex-parte due to non-prosecution as he/she has no option except to decide the case on merit with detailed reasoning, which has not been done in this case. Keeping in view the facts of the case, we, without offering any comment on merit of the case, find impugned order deem fit to set aside and remand the matter back to the file of the Ld. CIT(A)/Addl./Jt. CIT(A) for deciding the appeal afresh/denovo, in accordance with the law, after affording reasonable opportunity of being heard to the assessee. We, therefore, order accordingly. Needless to say that the appellant assessee has to cooperate in the remitted appellate proceedings.

In view of the above, all grounds of appeal/issues mentioned/raised above, stand disposed off accordingly.