Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. SUCHITRA RAGHUNATH KAMBLE
ORDER PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 28.03.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds:
1. Natural Justice The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi CIT (A) ('Ld. CIT (A), Mumbai ["the A.O."] erred in not giving sufficient, proper and adequate opportunity of erred in not giving sufficient, proper and adequate opportunity of erred in not giving sufficient, proper and adequate opportunity of being heard. The notice of opportunity was sent to the email being heard. The notice of opportunity was sent to the email being heard. The notice of opportunity was sent to the email address registered on the e ess registered on the e-filing portal, which belonged to the filing portal, which belonged to the appellant's income tax practitioner. Unfortunately, the said appellant's income tax practitioner. Unfortunately, the said appellant's income tax practitioner. Unfortunately, the said professional failed to communicate the notice to the appellant. professional failed to communicate the notice to the appellant. professional failed to communicate the notice to the appellant. Consequently, the appellant was deprived of the opportunity to Consequently, the appellant was deprived of the opportunity to Consequently, the appellant was deprived of the opportunity to file a response or present his case, resulting in a breach of the response or present his case, resulting in a breach of the response or present his case, resulting in a breach of the fundamental principles of natural justice. fundamental principles of natural justice. In view of the above, the appellant respectfully prays that your In view of the above, the appellant respectfully prays that your In view of the above, the appellant respectfully prays that your Honour be pleased to grant an opportunity of being heard. Honour be pleased to grant an opportunity of being heard. Honour be pleased to grant an opportunity of being heard.
2. Best judgement assessment is 2. Best judgement assessment is Invalid The Ld. A.O. erred in framing the reassessment invoking the The Ld. A.O. erred in framing the reassessment invoking the The Ld. A.O. erred in framing the reassessment invoking the provisions of section 144 of the Act. In the facts and the provisions of section 144 of the Act. In the facts and the provisions of section 144 of the Act. In the facts and the circumstances of the case, and in law, the reassessment so circumstances of the case, and in law, the reassessment so circumstances of the case, and in law, the reassessment so framed is bad, illegal and void ab initio. framed is bad, illegal and void ab initio. WITHOUT PREJUDICE TO THE A WITHOUT PREJUDICE TO THE ABOVE: 3. Addition of Rs. 47,12,671/ 3. Addition of Rs. 47,12,671/- under section 69C of the under section 69C of the Income Tax Act 1961 Income Tax Act 1961 The Ld. A.O. erred in making addition of Rs. 47,12,671/ The Ld. A.O. erred in making addition of Rs. 47,12,671/ The Ld. A.O. erred in making addition of Rs. 47,12,671/- u/s. 69C of the Income tax Act, 1961 considering as unexplained 69C of the Income tax Act, 1961 considering as unexplained 69C of the Income tax Act, 1961 considering as unexplained expenditure and added back to the total income of the expenditure and added back to the total income of the assesses.
4. On the facts and in the circumstances of the case and in law, 4. On the facts and in the circumstances of the case and in law, 4. On the facts and in the circumstances of the case and in law, The Ld. AO legally erred in charging interest u/s 234B of the Act. The Ld. AO legally erred in charging interest u/s 234B of the Act. The Ld. AO legally erred in charging interest u/s 234B of the Act.
5. On the facts and in the circumstances of the case the Ld. A.O.
5. On the facts and in the circumstances of the case the Ld. A.O.
5. On the facts and in the circumstances of the case the Ld. A.O. legally erred in passing penalty order u/s 271 legally erred in passing penalty order u/s 271 AAC of of the Act.
Briefly stated, facts of the case are that Briefly stated, facts of the case are that the assessee filed his the assessee filed his return of income electronically on 03.08.2017 declaring total return of income electronically on 03.08.2017 declaring total return of income electronically on 03.08.2017 declaring total income of Rs. 3,53,010/ income of Rs. 3,53,010/-. The return was selected for scrutiny . The return was selected for scrutiny under the Act and notice under section 143(2) under the Act and notice under section 143(2) of the Income of the Income-tax Act, 1961 (hereinafter referred to as Act, 1961 (hereinafter referred to as “the Act”) was issued and duly ) was issued and duly complied with. Thereafter, statutory notices under section 142(1) of complied with. Thereafter, statutory notices under section 142(1) of complied with. Thereafter, statutory notices under section 142(1) of the Act were issued, accompanied with a detailed questionnaire the Act were issued, accompanied with a detailed questionnaire the Act were issued, accompanied with a detailed questionnaire calling for, inter alia, the explanation of calling for, inter alia, the explanation of source of expenses source of expenses aggregating to Rs. 47,12,671/ aggregating to Rs. 47,12,671/- incurred through credit cards. incurred through credit cards. Since there was no compliance to such notices, the Assessing Officer there was no compliance to such notices, the Assessing Officer there was no compliance to such notices, the Assessing Officer issued a final show cause notice under section 144(1)(b) of the Act. issued a final show cause notice under section 144(1)(b) of th issued a final show cause notice under section 144(1)(b) of th As the assessee again failed to respond, the Assessing Officer As the assessee again failed to respond, the Assessing Officer As the assessee again failed to respond, the Assessing Officer proceeded ex parte and, vide assessment order dated 21.12.2019, proceeded ex parte and, vide assessment order dated 21.12.2019, proceeded ex parte and, vide assessment order dated 21.12.2019, treated the credit card expenses of Rs. 47,12,671/ treated the credit card expenses of Rs. 47,12,671/- as unexplained expenditure and added the same to the income of the assessee. expenditure and added the same to the income of the ass expenditure and added the same to the income of the ass
On appeal, the learned CIT(A), noticing persistent non On appeal, the learned CIT(A), noticing persistent non On appeal, the learned CIT(A), noticing persistent non- compliance of statutory notices, upheld the addition in the following compliance of statutory notices, upheld the addition in the following compliance of statutory notices, upheld the addition in the following terms:
“8.2.2 In view of the facts available on record it is clear that the In view of the facts available on record it is clear that the In view of the facts available on record it is clear that the appellant has failed to discharge his onus. appellant has failed to discharge his onus. During appellate During appellate proceedings, the appellant has not submitted any documentary proceedings, the appellant has not submitted any documentary proceedings, the appellant has not submitted any documentary evidence to justify his claim. Considering the fact that appellant evidence to justify his claim. Considering the fact that appellant evidence to justify his claim. Considering the fact that appellant had not furnished any explanation or documentary evidence to had not furnished any explanation or documentary evidence to had not furnished any explanation or documentary evidence to justify the payment of credit card bills amounting justify the payment of credit card bills amounting justify the payment of credit card bills amounting to Rs. 47,12,671/- to the satisfaction of the authority either during the to the satisfaction of the authority either during the to the satisfaction of the authority either during the course of assessment proceedings or in the appellate proceedings course of assessment proceedings or in the appellate proceedings course of assessment proceedings or in the appellate proceedings despite various opportunity, the addition made by AO of Rs. despite various opportunity, the addition made by AO of Rs. despite various opportunity, the addition made by AO of Rs. 47,12,671/- is fair and reasonable. Accordingly, the add is fair and reasonable. Accordingly, the addition of is fair and reasonable. Accordingly, the add Rs. 47,12,671/ Rs. 47,12,671/- made by the AO in the assessment order for A.Y. made by the AO in the assessment order for A.Y. 2017-18 u/s 69C of the Act is confirmed and this ground of 18 u/s 69C of the Act is confirmed and this ground of 18 u/s 69C of the Act is confirmed and this ground of appeal is dismissed. dismissed.”
4. Before us, the learned counsel for the assessee sought Before us, the learned counsel for the assessee sought Before us, the learned counsel for the assessee sought condonation of delay of 374 days in filing t condonation of delay of 374 days in filing the present appeal, he present appeal, placing reliance upon an affidavit explaining the circumstances. It placing reliance upon an affidavit explaining the circumstances. It placing reliance upon an affidavit explaining the circumstances. It was contended that the notices of hearing before the CIT(A) were was contended that the notices of hearing before the CIT(A) were was contended that the notices of hearing before the CIT(A) were not served on the assessee’s e not served on the assessee’s e-mail address, as specifically mail address, as specifically mentioned in Form No. 35, but were instead mentioned in Form No. 35, but were instead transmitted to the e transmitted to the e- mail addresses of his erstwhile Chartered Accountant, who had mail addresses of his erstwhile Chartered Accountant, who had mail addresses of his erstwhile Chartered Accountant, who had ceased to represent the assessee. Consequently, the appellate order ceased to represent the assessee. Consequently, the appellate order ceased to represent the assessee. Consequently, the appellate order itself was also not received by the assessee in time, and the delay itself was also not received by the assessee in time, and the delay itself was also not received by the assessee in time, and the delay occurred bonafide. The Ld. counsel fo The Ld. counsel for the assessee submitted that r the assessee submitted that the assessee was prevented by the sufficient cause for not filing the the assessee was prevented by the sufficient cause for not filing the the assessee was prevented by the sufficient cause for not filing the appeal and the delay was not intentional and otherwise the the delay was not intentional and otherwise the the delay was not intentional and otherwise the assessee has a strong case on merit strong case on merit, therefore, delay might be therefore, delay might be condoned.
The learned Departme The learned Departmental Representative, on the other hand, ntal Representative, on the other hand, opposed the condonation contending that no sufficient cause had opposed the condonation contending that no sufficient cause had opposed the condonation contending that no sufficient cause had been made out.
We have heard rival submissions of the parties We have heard rival submissions of the parties We have heard rival submissions of the parties on the issue of condonation of the delay in filing the appeal. condonation of the delay in filing the appeal. The relevant part of The relevant part of the affidavit of the assessee is reproduced as under: the affidavit of the assessee is reproduced as under:
5. I say that I did not receive the notices of hearing or the order I say that I did not receive the notices of hearing or the order I say that I did not receive the notices of hearing or the order passed by the Ld. CIT(A) dated 28.03.2024, and therefore could passed by the Ld. CIT(A) dated 28.03.2024, and therefore could passed by the Ld. CIT(A) dated 28.03.2024, and therefore could not file the appeal within the prescribed time. In Form 35 filed not file the appeal within the prescribed time. In Form 35 filed not file the appeal within the prescribed time. In Form 35 filed before the Ld. CIT(A), I had specifically the Ld. CIT(A), I had specifically mentioned my my own email address "jai_singh1981@yahoo.com" for all communications. "jai_singh1981@yahoo.com" for all communications. "jai_singh1981@yahoo.com" for all communications. However, after the enablement of the communication window on However, after the enablement of the communication window on However, after the enablement of the communication window on portal, various notices were sent to the email addresses of my portal, various notices were sent to the email addresses of my portal, various notices were sent to the email addresses of my erstwhile erstwhile consu consultant, ltant, Mr. Mr. B.M. B.M. Desai, Desai, namely, namely, "bmdesaiitp@gmail.com", "bmdesaiitp@gmail.com", "bmdesaiitp@gmail.com", "indiraghosh67@gmail.com", "indiraghosh67@gmail.com", "indiraghosh67@gmail.com", "ha "ha "ha rdikvora2007@rediffmail.com", rdikvora2007@rediffmail.com", rdikvora2007@rediffmail.com", and and and "bmdesaistp@yahoo.in", "bmdesaistp@yahoo.in", "bmdesaistp@yahoo.in", instead of my email id mentioned in the appeal memo. instead of my email id mentioned in the appeal memo.
6. I say that Mr. B.M. Desai was engaged only for assessment I say that Mr. B.M. Desai was engaged only for assessment I say that Mr. B.M. Desai was engaged only for assessment proceedings. During the assessment, he did not respond to any During the assessment, he did not respond to any notices, which were sent to his email ID. Being a senior citizen not notices, which were sent to his email ID. Being a senior citizen not notices, which were sent to his email ID. Being a senior citizen not attending office regularly, Mr. attending office regularly, Mr. Desai later informed me that the Desai later informed me that the emails were being received in his spam folder and thus went emails were being received in his spam folder and thus went emails were being received in his spam folder and thus went unnoticed. Upon receipt of the assessment order, I engaged M/s unnoticed. Upon receipt of the assessment order, I engaged M/s unnoticed. Upon receipt of the assessment order, I engaged M/s C.P. Chechani & Associates, Chartered Accountants, to handle my C.P. Chechani & Associates, Chartered Accountants, to handle my C.P. Chechani & Associates, Chartered Accountants, to handle my appeal before the Ld. CIT(A). appeal before the Ld. CIT(A).
7. I say that despite the fact that I had mentioned my email id in I say that despite the fact that I had mentioned my email id in I say that despite the fact that I had mentioned my email id in the appeal memo, the notices co the appeal memo, the notices continued to be sent on the email id ntinued to be sent on the email id of the old consultants, Mr. B.M. Desai. Initially, they forwarded the of the old consultants, Mr. B.M. Desai. Initially, they forwarded the of the old consultants, Mr. B.M. Desai. Initially, they forwarded the hearing notice to me for which I filed adjournment request. I say hearing notice to me for which I filed adjournment request. I say hearing notice to me for which I filed adjournment request. I say that I was under a bonafide impression that subsequent notices that I was under a bonafide impression that subsequent notices that I was under a bonafide impression that subsequent notices would also be sent to would also be sent to me by the consultants. However, subsequent me by the consultants. However, subsequent to Covid-19, the said consultants stopped forwarding the notices 19, the said consultants stopped forwarding the notices 19, the said consultants stopped forwarding the notices issued on their email IDs. As a result, I did not receive subsequent issued on their email IDs. As a result, I did not receive subsequent issued on their email IDs. As a result, I did not receive subsequent notices issued by Hon'ble CIT(A). Even the appellate order was notices issued by Hon'ble CIT(A). Even the appellate order was notices issued by Hon'ble CIT(A). Even the appellate order was sent to the old sent to the old consultant's email ID and I was not aware of the aware of the same.
8. I say that it was only in May 2025, when I appointed a new I say that it was only in May 2025, when I appointed a new I say that it was only in May 2025, when I appointed a new consultant for filing my return of income for A.Y. 2025 consultant for filing my return of income for A.Y. 2025 consultant for filing my return of income for A.Y. 2025-26, that he checked the Income Tax Portal and discovered that the appellate checked the Income Tax Portal and discovered that the appellate checked the Income Tax Portal and discovered that the appellate order for A.Y. 2017 or A.Y. 2017-18 had already been passed. Immediately 18 had already been passed. Immediately thereafter, I took steps to arrange for filing the present appeal thereafter, I took steps to arrange for filing the present appeal thereafter, I took steps to arrange for filing the present appeal before the Hon'ble Tribunal, which was filed on 09.06.2025. before the Hon'ble Tribunal, which was filed on 09.06.2025. before the Hon'ble Tribunal, which was filed on 09.06.2025.
I say that the delay in filing the appeal was due to the above I say that the delay in filing the appeal was due to the above I say that the delay in filing the appeal was due to the above- mentioned circumstances beyond my control. ircumstances beyond my control.
I say that the delay in filing the appeal as well as the non I say that the delay in filing the appeal as well as the non I say that the delay in filing the appeal as well as the non- compliance before lower authorities was purely unintentional and compliance before lower authorities was purely unintentional and compliance before lower authorities was purely unintentional and caused solely by reasons beyond my control. caused solely by reasons beyond my control.
I say that I have a strong case on merits and I say that I have a strong case on merits and if the delay is not if the delay is not condoned, I will suffer irreparable loss and prejudice, as condoned, I will suffer irreparable loss and prejudice, as condoned, I will suffer irreparable loss and prejudice, as substantial substantial substantial additions additions additions and and and demands demands demands will will will be be be confirmed against against me. 6.1 We have carefully considered the rival submissions and We have carefully considered the rival submissions and We have carefully considered the rival submissions and perused the affidavit placed on record. The assessee has explained, perused the affidavit placed on record. The assessee has explained, perused the affidavit placed on record. The assessee has explained, with supporting circumstances, that the non with supporting circumstances, that the non-receipt of notices and receipt of notices and appellate order was on account of their misdirection to the e-mail appellate order was on account of their misdirection to the e appellate order was on account of their misdirection to the e addresses of the erstwhile consultant, and not due to any addresses of the erstwhile consultant, and not due to any addresses of the erstwhile consultant, and not due to any negligence or deliberate default on his part. The explanation offered negligence or deliberate default on his part. The explanation offered negligence or deliberate default on his part. The explanation offered is plausible, and the delay in filing the appeal stands satisfactorily is plausible, and the delay in filing the appeal stands satisfactorily is plausible, and the delay in filing the appeal stands satisfactorily explained. Applying the ratio of explained. Applying the ratio of Collector, Land Acquisi Collector, Land Acquisition v. Mst. Katiji & Ors. [(1987) 167 ITR 471 (SC)], wherein it has been held [(1987) 167 ITR 471 (SC)], wherein it has been held [(1987) 167 ITR 471 (SC)], wherein it has been held that substantial justice deserves to prevail over technicalities, we that substantial justice deserves to prevail over technicalities, we that substantial justice deserves to prevail over technicalities, we are satisfied that the assessee was prevented by sufficient cause. are satisfied that the assessee was prevented by sufficient cause. are satisfied that the assessee was prevented by sufficient cause. Accordingly, the delay of 374 days in fil Accordingly, the delay of 374 days in filing the appeal is condoned ing the appeal is condoned and the appeal is admitted for adjudication. and the appeal is admitted for adjudication.
We have heard the rival submissions on We have heard the rival submissions on the issue raised in the the issue raised in the ground No. 1 of the appeal ground No. 1 of the appeal. The learned CIT(A) has noted that . The learned CIT(A) has noted that multiple statutory notices under section 250 of the Act were issued multiple statutory notices under section 250 of the Act multiple statutory notices under section 250 of the Act on different dates, but none elicited a substantive response. For on different dates, but none elicited a substantive response. For on different dates, but none elicited a substantive response. For ready reference, the dates of hearing notices and their outcomes are ready reference, the dates of hearing notices and their outcomes are ready reference, the dates of hearing notices and their outcomes are tabulated below:
Sr. No. Date of Issue Date of Issue Hearing Date Remark Remark 1. 28.02.2020 28.02.2020 16.03.2020 Adjournment Adjournment 2. 28.12.2020 28.12.2020 14.01.2021 Adjournment Adjournment 3. 08.04.2022 08.04.2022 18.04.2022 No reply 4. 17.06.2022 17.06.2022 24.06.2022 No reply 5. 08.12.2023 08.12.2023 14.12.2023 No reply 6. 16.02.2024 16.02.2024 22.02.2024 No reply 7. Final notice on Final notice on 26.03.2024 No reply 18.03.2024 18.03.2024 7.1 However, before us, the However, before us, the assessee has tendered an affidavit assessee has tendered an affidavit explaining the reasons for such non explaining the reasons for such non-compliance, namely that the compliance, namely that the notices and appellate order were misdirected to the e-mail IDs of the notices and appellate order were misdirected to the e notices and appellate order were misdirected to the e erstwhile consultant. In our considered view, this explanation, erstwhile consultant. In our considered view, this explanation, erstwhile consultant. In our considered view, this explanation, coupled with the fact t coupled with the fact that the assessee has undertaken to now hat the assessee has undertaken to now produce all necessary evidence in support of the claim, warrants produce all necessary evidence in support of the claim, warrants produce all necessary evidence in support of the claim, warrants one further opportunity in the interest of justice. one further opportunity in the interest of justice. Accordingly, Accordingly, in the totality of facts and circumstances, we set aside the order of the totality of facts and circumstances, we set aside the order of the totality of facts and circumstances, we set aside the order of the learned CIT(A) on the impugned issue and restore the matter back CIT(A) on the impugned issue and restore the matter back CIT(A) on the impugned issue and restore the matter back to his file for fresh adjudication in accordance with law. The to his file for fresh adjudication in accordance with law. The to his file for fresh adjudication in accordance with law. The assessee is granted liberty to file all necessary evidences in support assessee is granted liberty to file all necessary evidences in support assessee is granted liberty to file all necessary evidences in support of his claim. Needless to say, due opportunity of being heard shall of his claim. Needless to say, due opportunity of being heard sha of his claim. Needless to say, due opportunity of being heard sha be afforded to the assessee. be afforded to the assessee. The ground No. 1 of the appeal of the The ground No. 1 of the appeal of the assessee is accordingly allowed. The remaining grounds on appeal assessee is accordingly allowed. The remaining grounds on appeal assessee is accordingly allowed. The remaining grounds on appeal are rendered academic and therefore, we are not adjudicating upon are rendered academic and therefore, we are not adjudicating upon are rendered academic and therefore, we are not adjudicating upon at this stage.
In the result, the appeal of the ass In the result, the appeal of the assessee is allowed for essee is allowed for statistical purposes.