ARAVINDRAMBABU TAMIL MANI,KALLAKURICHI vs. ITO, WARD-1,, VILLUPURAM

Aggrieved by the orders of the AO, the assessee filed three separate appeals before the ld.CIT(A), NFAC, Delhi on 29.11.2022 and 30.11.2022 respectively with a delay in filing the appeals.

At the outset, we observed that the ld.CIT(A) dismissed all the appeals in limine filed by the assessee without condoning the delay in filing the appeals by 221 days in respect of the quantum assessment and 35 days in respect of the penalty orders.

Aggrieved by the impugned orders of the Ld.CIT(A), the assessee is in appeal before us. The ld.AR for the assessee submitted that the assessee is an illiterate from a remote rural area and is not conversant with assessment proceedings especially online faceless assessments, and he does not have any professionals to advice and hence, he was not aware of the process and procedure relating to appeals. In view of the above, the ld.AR prayed that the :-4-:

Per contra, the ld.DR submitted that the appeal was supposed to be filed before the ld.CIT(A) by the assessee within 30 days of the service, but the assessee has filed these appeals with delay of 221 days and 35 days respectively. The assessee has been negligent in filing the appeals within the time limit provided and hence prayed for confirming the order of the ld.CIT(A).

We have heard the rival submissions, carefully perused the orders of the lower authorities and the material available on record. The primary issue arising for our consideration is whether the ld. CIT(A) was justified in dismissing the appeals in limine on the ground of delay without examining the explanation offered by the assessee and, if not, the appropriate course of action to be adopted in the facts of the present case.

It is an admitted position that the assessee filed the appeals before the ld.CIT(A) with a delay of 221 days in respect of the quantum assessment order and 35 days in respect of the penalty orders. The ld. CIT(A), without condoning the delay, dismissed all the three appeals in limine, thereby declining to adjudicate the issues on merits. Before us, the ld.AR submitted that the assessee is an illiterate individual hailing from a remote rural area and has very little knowledge of the provisions of the Income-tax Act or the procedure governing faceless assessment and appellate proceedings. It was submitted that the delay in filing the appeals was neither deliberate nor intentional but occurred due to lack of proper professional guidance and ignorance of the statutory procedure. The ld.AR further submitted that the assessee is now

The ld.DR, on the other hand, supported the orders of the ld.CIT(A) by submitting that the assessee failed to file the appeals within the period prescribed under the Act and had not shown sufficient diligence in prosecuting the matter. We have given our thoughtful consideration to the rival submissions. It is well settled that the expression "sufficient cause" occurring in the provisions relating to condonation of delay deserves to receive a liberal and justice-oriented interpretation so as to advance substantial justice. The Hon'ble Supreme Court, in a catena of decisions, has consistently held that procedural rules are intended to facilitate justice and not to defeat it. Ordinarily, when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to prevail, unless the delay is found to be deliberate, mala fide or attributable to gross negligence.

In the present case, the explanation offered by the assessee indicates that he is an individual from a rural background with limited education and was not adequately aware of the procedure governing faceless appellate proceedings. There is nothing on record to suggest that the delay was intentional or that the assessee stood to derive any advantage by filing the appeals belatedly. On the contrary, refusal to condone the delay has resulted in the assessee being denied an opportunity to contest substantial additions and consequential penalties on merits.

We also notice that the reassessment order has been passed by estimating the assessee's income at 5% of the gross turnover, resulting in a :-6-:

Considering the peculiar facts and circumstances of the case, we are satisfied that the assessee has shown sufficient cause for the delay in filing the appeals before the ld.CIT(A). Accordingly, the delay of 221 days in the quantum appeal and 35 days in the penalty appeals is condoned. Having condoned the delay, we find that merely restoring the matter to the file of the ld. CIT(A) would only prolong the litigation. Since the additions made in the reassessment order require detailed factual verification and examination of the evidences produced by the assessee, and considering the specific request made by the ld.AR for restoring the matter to the AO, we deem it appropriate, in the interest of justice, to set aside the orders of the ld. CIT(A) as well as the reassessment order passed u/s.147 r.w.s 144B of the Act and restore the matter to the file of the AO for de novo adjudication. The AO shall issue appropriate notices, afford reasonable and effective opportunity of hearing to the assessee, examine the books of account, lease agreement, financial statements and all other documentary evidences that may be produced, and thereafter pass a fresh assessment order in accordance with law by way of a speaking order without being influenced by the findings recorded in the earlier assessment order.

Since the penalties levied u/s.271(1)(c) and 271B of the Act are directly linked with the outcome of the reassessment proceedings, the orders imposing the said penalties also cannot survive independently at this stage. Accordingly, the penalty orders are also set aside and restored to the file of the Assessing

Accordingly, the delay in filing the appeals before the ld.CIT(A) is condoned. The impugned orders of the ld.CIT(A), the reassessment order and the consequential penalty orders are set aside, and the entire matter is restored to the file of the AO for de novo adjudication in accordance with law after affording adequate opportunity of being heard to the assessee.

In the result, all the appeals filed by the assessee are allowed for statistical purposes.