VICKY SINGH, BHILAI,DURG vs. INCOME TAX OFFICER, WARD-1(3), BHILAI, DURG

ITA No. 273/RPR/2026 is a quantum appeal originating from the assessment order passed under section 147 r.w.s. 144 r.w.s 144B of the Income Tax Act, 1961 (‘Act’). Other three appeals; ITA Nos. 274, 275 and 276/RPR/2026 are against the penalty orders passed under sections 270A, 271A and 271AAC(1) of the Act respectively. Vide appeal in ITA No. 273/RPR/2026, the assessee has challenged the taxability of income of Rs.6,17,81,903/- on merit. In other three appeals; ITA Nos. 274, 275 and 276/RPR/2026, the levy of penalties of Rs.4,03,86,686/- under section 270A, Rs.25,000/- under section 271A and Rs.2,59,816 under section 271AAC(1) of the Act have been challenged respectively. Further, the assessee has raised the issue of denial of principles of natural justice, in all these appeals, as the Ld. CIT(A) has not allowed proper opportunity of being heard to the assessee and therefore, prayed for quashing assessment order and all penalty orders.

The relevant facts giving rise to these appeals are that the assessee is a non-filer of the Income Tax Return (‘ITR’) of the relevant year. However, the financial details of the assessee available on the insight portal of the Income Tax Department reveal following transactions of the relevant year:

Aggrieved with the above mentioned assessment order and penalty orders, the assessee filed appeals before the Ld. CIT(A), who dismissed all these appeals due to non-prosecutions.

On the other hand, Shri Raghunath, Ld. CIT-DR, drawing our attention to various paras of the assessment order, penalty orders and impugned appellate orders, submitted that the Authorities below had provided reasonable opportunities of being heard to the appellant assessee; however, the assessee tactfully ensured noncompliance to avoid investigations. Hence, he prayed for dismissal of all these appeals. As far as the delay condonation of these appeals; the Ld. CIT-DR, after perusing Form Nos. 35 of these cases, appeared in agreement with the Ld. AR. Further, on our specific query that the Ld. CIT(A) had not decided any appeal with reasoned order, the Ld. CIT-DR reluctantly admitted for remitting these cases back to the Ld. 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 Ld. CIT(A) has not decided any of these appeals 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 all these cases. Thus, the assessee’s belief that his appeals would be pending before the Ld. CIT(A) as he had not received any notice in physical mode prior to attachment of his bank account under section 220(6) of the Act is held justified.

The justification of the appellant assessee for delay condonation in these cases therefore, becomes relevant to determine whether the same reflects sufficient and reasonable cause on his 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 these appeals as the assessee does not stand to benefit by resorting to such delay. Therefore, in the factual matrix of the present cases, we find that there exists sufficient and reasonable cause for condoning the delay in filing these appeals 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 these appeals deserve to be condoned and these appeals should be decided on merit. Further, we do not see any prejudice which will be caused to the Revenue in deciding these appeals 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 these four appeals as we are satisfied that there is sufficient cause for not presenting these appeals within the prescribed time. Accordingly, the delay in filing these appeals are hereby condoned.

We have taken note of the fact that the Ld. CIT(A) has not decided these cases after hearing the assessee and discussing the issues in detail and his reasons for agreeing with the assessment order and penalty orders 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 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) is required to apply his/her mind to all the issues arisen from the assessment order and penalty 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) 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.).

We have taken note of the fact that the assessee has not made any compliance before the Ld. AO and Ld. CIT(A). Even in such facts and circumstances, the Ld. 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 these cases. Keeping in view the facts of these cases, we, without offering any comment on merit of these cases, find all four impugned orders deem fit to set aside and remand the matter back to the files of the Ld. CIT(A) for deciding these cases 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 these four remitted appellate proceedings.

In the result, all these four appeals; ITA Nos. 273, 274, 275 and 276/RPR/2026 of the assessee are allowed for statistical purposes.