MOHAMMED AFZAL MOHAMED HUSSAIN KAPADIA,MUMBAI vs. WARD 22(2)(1), MUMBAI, MUMBAI

Through ground no. 1, assessee is contesting that the first appeal has been dismissed for the reasons of delay in its filing and the explanations given by the assessee are vague not acceptable for the purpose of condoning the same. In this regard, it is noted that there is delay of 14 days in filing the first appeal. Assessee is an individual who filed his return of income on 18.06.2018 for the year under consideration. Case of the assessee was selected for limited scrutiny assessment under the e-assessment Scheme, 2019 on the issue of “Investment in Immovable Property.”

From the perusal of the orders of the authorities below, it is noted that the explanation given by the assessee in respect of transaction of purchase of immovable property is that residential property having address 6, Bhusrath Building, 15th Kamatipura Lane, Mumbai Central, Mumbai-400008 was purchased for a consideration of Rs.16,20,000/-. The market value of the property at the time of purchase was Rs. 16,93,346/-. The said amount is based on the fact that an independent valuation of the said property was undertaken by a Government Approved Valuer - S.B. Associates, Registered Architect and Valuer- Registration No. F- 1143. A copy of the said report had also been submitted during the course of the assessment proceedings. The value of the property at the time of purchase was determined at Rs. 1,11,12,200/- by the Stamp Duty Valuation Authority for the purpose of payment of Stamp Duty. The said valuation was based on the fact that the building was a vacant property with ready possession. The case was referred to the Valuation Officer by the Jurisdictional Assessing Officer in order to determine the value of the property. Original assessment was getting barred by limitation on 30.09.2021, pending the receipt of valuation report from the Valuation Officer, assessment order was passed on 23.09.2021, determining the value of the property at Rs. 1,11,12,000. Ld. Departmental Valuation Officer issued the valuation report on 08.11.2021 and determined the value of Property at Rs. 18,96,650/-. However, ld. Assessing Officer levied a penalty based on the valuation adopted in the original assessment order of Rs. 1,11,12,200/-. Aggrieved, assessee went in appeal before the ld. CIT(A).

At the first appellate stage, delay of 14 days occurred in filing the said appeal due to the fact that assessee had filed application for rectification based on which penalty was to be levied. Ld. CIT(A) dismissed the appeal in limine as not maintainable on account of delay in filing the first appeal. For this, he observed that assessee could not demonstrate “sufficient cause” in terms of section 249(3) of the Act.

To address the issue in hand before us, we need to delve into the understanding of the expression "sufficient cause". Sub-section 3 of Section 249 contemplates that ld. CIT(A) may admit an appeal after expiry of relevant period, if he is satisfied that there was a "sufficient cause" for not presenting it within that period. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon'ble High Court as well as before the Hon'ble Supreme Court, then, Hon'ble Court were unanimous in their conclusion that this expression is to be used liberally.

Ld. Sr. DR objected by contending that the assessee has defaulted before the authorities below in complying with the requirements. We have perused the material placed on record and gone through the orders of the authorities below. The facts of the case have already been narrated in the above paragraph.

Considering the submissions made by the assessee before the ld. CIT(A) as well as contentions raised through ground no. 1 in the present appeal, we do take note of the fact that faceless regime is a new technological phenomenon going through teething phase. Hence, it requires lenient and pragmatic approach to handle certain lapses which are unintended. Transition to a faceless and digital appellate regime is intended to enhance efficiency, but it must not become a barrier to justice for those who lack the technical proficiency to navigate such systems. Reiterating Hon'ble Supreme Court's repeated emphasis on the view that "substantial justice" must prevail over technical lapses, we emphasize that the merits should not be stifled due to a failure to respond to electronic notices, provided such failure is not mala fide.

In the light of the above, if we examine the facts, then it would reveal that there is delay of 14 days in filing of first appeal. For the just decision of the controversy, considering the explanation furnished by the assessee, we find it appropriate to condone the delay in filing the appeal before ld. CIT(A).

Having condoned the delay, in the given set of facts and circumstances, we find it appropriate to remit the matter back to the file of ld. CIT(A) for de novo meritorious adjudication. Needless to say, assessee be given reasonable opportunity of being heard and to make all the relevant submissions as required to substantiate the claim made by him. We also direct the assessee to be diligent in making all its submissions so as to comply with the notices issued for fixing the date of hearing for effective and expeditious disposal of the proceedings. Accordingly, ground raised by the assessee in this regard is allowed for statistical purposes.

In the result, appeal of the assessee is allowed for statistical purposes.