RAMABEN VIPULBHAI SOJITRA,SURAT vs. ITO, WARD-2(3)(4), SURAT

The registry has informed that both of these appeals have been filed after statutory period and hence 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 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.

The background facts leading to these appeals are such that the assessee-individual filed her return of income of AY 2018-19 declaring a total income of Rs. 2,99,540/-. The case of assessee was selected for scrutiny and during proceedings, the AO proceeded to examine certain financial transactions undertaken by assessee. Ultimately, the Ld. AO issued draft-assessment order dated 12.04.2021 requiring the assessee to furnish submission by 15.04.2021. However, finding no response from assessee, the Ld. AO finalized assessment after making total additions of Rs. 75,38,500/- and thereby assessing total income at Rs. 78,38,040/-. Further, vide penalty-order dated 21.12.2021, the Ld. AO also imposed a penalty of Rs. 5,82,349/- u/s 271AAC(1) qua the impugned additions of Rs. 75,38,500/-. Aggrieved, the assessee carried matters in respective appeals before Ld. CIT(A). However, the Ld. CIT(A) dismissed assessee’s appeals for non-prosecution. Now, the assessee has come in next appeals before us.

Since these appeals are inter-related, they were heard together and are being disposed of by this common order for the sake of convenience, brevity and clarity. We firstly start with Quantum-Appeal and thereafter take up Penalty-Appeal.

Ld. AR for assessee submitted that the assessee was unable to make submissions on the hearings fixed during first-appellate proceedings as the Ld. CIT(A) issued notices to a different e-mail id than the e-mail id specified by assessee in Form No. 35. Further, the assessee was not able to comply with the draft assessment-order issued by AO because the Ld. AO issued the same on 12.04.2021 giving a very short time of just 3 days to file reply by 15.04.2021. Hence, the assessee was not able to file required details/documents to lower-authorities although the assessee is having same in possession. He submitted that the Ld. AO has made addition of deemed incomes such as (i) addition of Rs. 58,38,500/- u/s 69 on account of unexplained investment in a property, (ii) addition of Rs. 10,00,000/- u/s 68 on account of unexplained gift received, and (iii) addition of Rs. 7,00,000/- u/s 68 on account of unexplained loan taken. Ld. AR, therefore, prayed that in the interest of justice, one more opportunity be given to assessee by way of restoring this matter at the level of Ld. AO. He acknowledged that the assessee shall definitely make a proper and effective representation before Ld. AO.

The Ld. DR for revenue, though not opposing the prayer of the assessee for restoration, submitted that the assessee had remained non- compliant during the assessment proceedings as well as proceedings of first- appeal, which constrained the lower authorities to pass ex-parte orders. It was, therefore, submitted that while restoring the matter, appropriate directions may be issued to ensure strict compliance by the assessee.

In view of 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 Ld. AO, we restore this matter to the file of Ld. AO for adjudication afresh, at the risk and responsibility of assessee. The Ld. AO 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 Ld. AO without seeking unnecessary adjournments failing which the Ld. AO shall be at liberty to proceed in accordance with law. Ordered accordingly.

This appeal involves penalty u/s 271AAC(1) which is dependent on the outcome of Quantum-Appeal. Since we have already remanded Quantum-Appeal to Ld. AO, this matter is also remanded to Ld. AO for adjudication afresh after considering outcome of Quantum-Appeal and also considering submissions of assessee.

Resultantly, both of these appeals are allowed for statistical purposes.