CHANDRAKUMAR SRINIVAS MEHTA,SURAT vs. ITO, WARD 3(2)(6), SURAT, SURAT

The registry has informed that the present appeal is filed after prescribed statutory period and therefore 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. The medical sufferings of assessee’s wife is a “sufficient cause”. 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 present appeal are such that the assessee-individual filed his return of income of AY 2017-18 declaring a total income of Rs. 1,44,230/-. The case of assessee was selected for scrutiny assessment and the Ld. AO issued notices u/s 143(2)/142(1). During proceedings, the Ld. AO asked assessee to explain the sources of total payment of Rs. 44,40,410/- made towards credit card bills but finding no response from assessee, the Ld. AO treated the same as unexplained and made addition of Rs. 44,40,410/- u/s 69A r.w.s. 115BBE of the Act. Accordingly, the Ld. AO completed assessment at Rs. 45,84,640/- as against returned income of Rs. 1,44,230/-. Aggrieved, the assessee carried matter in first-appeal but the Ld. CIT(A) precisely dismissed assessee’s grounds for non-prosecution and did not grant any relief. Now, the assessee has come in next appeal before us.

Ld. AR for assessee carried us to Para No. 4 of the order of Ld. CIT(A) to demonstrate that the Ld. CIT(A) granted four hearings on 29.01.2021, 07.04.2022, 22.11.2023 and 12.12.2023. The assessee filed an adjournment request on first hearing which the Ld. CIT(A) granted. However, the subsequent notices were issued after a gap of substantial period which could not be attended by assessee being unaware of the same. Further, the assessee has been facing the challenge of bad health of his wife over the period. Therefore, the impugned order passed by Ld. CIT(A) deserves to be set aside and in the interest of justice, the assessee should be given one more opportunity of representation.

Ld. AR went ahead to submit that the assessment-order passed by Ld. AO is also ex-parte due to lack of submissions by assessee but the Ld. AO has made addition for payments towards credit card bills. Those payments have been made through banking channels and the assessee is having all relevant details and documents and ready to make an effective representation before Ld. AO. He prayed that it would be more appropriate to restore present matter to the file of Ld. AO so that an effective examination can be done by 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.

Resultantly, this appeal is allowed for statistical purpose.