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Facts
The assessee's appeal against an ex-parte order by the CIT(A) was delayed by 451 days. The assessee attributed the delay to the illness of their tax consultant's father and the consultant forgetting to pursue the matter. The lower authorities had passed ex-parte orders without considering the merits of the case.
Held
The Tribunal condoned the delay in filing the appeal, citing the principle of natural justice, and restored the matter to the file of the Assessing Officer. The Assessing Officer was directed to pass a fresh assessment order after providing the assessee with a fair opportunity to be heard.
Key Issues
Whether the delay in filing the appeal should be condoned, and whether the ex-parte orders passed by the lower authorities warrant restoration of the matter to the Assessing Officer for a decision on merits.
Sections Cited
254(1), 144
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PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by assessee is directed against the order of Ld. CIT(A)/NFAC dated 02.02.2024 for assessment year (AY) 2010-11. The assessee has raised following grounds of appeal:
“1. The learned CIT(A) erred in dismissing appeal by passing ex-parte order.
The learned CIT(A) erred in confirming the addition of INR 13,98,561 being labour charges not accounted in the year under consideration. He erred in not appreciating that the amount of INR 13,98,561 had already been offered to tax in the earlier year i.e. Assessment Year 2009-10 and therefore, the said addition would amount to double addition of the same income.
3. The learned CIT(A) erred in confirming the addition of INR 2,69,420 in respect of labour charges received from Bhansali Bright Bars Pvt. Ltd. for non- accounting of such income in the books of account.
4 The learned CIT(A) erred in confirming the addition of INR 1,42,814 in respect of labour charges received from Jindal Saw Limited for non-accounting of such income in the books of account.
5. The learned CIT(A) erred in confirming the addition of INR 1,08,926 in respect of labour charges received from Venus Wire Industries Pvt. Ltd. for non- accounting of such income in the books of account.
6. The Appellant prays to set aside the order passed by the CIT(A).
Each one of the above grounds of appeal is without prejudice to the above.
The appellant reserves the right to add, alter or amend to the above grounds of appeal.”
2. Rival submissions of both the parties have been heard and record perused.The learned Authorised Representative (ld. AR) of the assessee fairly submits that there is delay of 451 days in filing appeal before Tribunal. The delay in filing appeal was not intentional or deliberate. The impugned order was passed by ld. CIT(A) on 02.02.2024. However, the assessee was not served with physical copy or through email. The assessee came to know only in the month of February, 2025 when bank account of assessee was attached. On attachment of bank account, the assessee realised that appeal of assessee is dismissed by ld. CIT(A). On further enquiry, it was revealed that said order was passed by ld. CIT(A) in ex-parte proceeding. The ld. AR of the assessee submits that Harvinder Singh, Director of assessee was looking after the accounts and tax affairs of assess-company, who has resigned in 2020. After his resignation, tax matter was assign to Nandlal Sohanlal Prajapati, present consultant who could not attend the hearing as his father was seriously ill during relevant time, when notices were issued and he missed to check his email account. The tax consultant has given his affidavit to accept such facts. The ld. AR of the assessee submits that due to lapses on the part of tax consultant, the assessee has suffered adverse order.
To support his submission, the ld. AR relied on the decision of Surat Bench in the case of Chirag P. Thummar vs PCIT (2024) 159 taxmann.com 1628 (Surat-Trib). On merits of the case, the ld. AR of the assessee submits that assessing officer also passed ex-parte order, which was confirmed by ld. CIT(A) in ex-parte proceedings. The ld. AR of the assessee prayed that delay may be condoned and matter may be restored back to the file of assessing officer for passing the order on merit. The assessing officer made addition / disallowance for the want of submission. He undertakes on behalf of assessee to be more vigilant in future in making timely compliance before lower authorities.
On the other hand, learned senior departmental representative (ld. Sr. DR) for the revenue after going through the contents of application for condonation of delay and affidavit in support thereof submits that the assessee has not explained the delay, yet if the bench is of the view that delay in filing appeal is condonable, instead of deciding the matter on merit, the matter may be restored back to the file of assessing officer to pass the assessment order. However, the assessee may be directed to be more vigilant in making timely compliance.
I have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. I find that both lower authorities have passed order in ex-parte proceedings. Further, three is delay of 451 days in filing appeal before Tribunal. Before me, the ld. AR of the assessee vehemently argued that delay in filing is not intentional but due to the reasons that hearing before ld. CIT(A) was not attended by their tax consultant, due to illness of his father and he forget to pursue the matter.
Though, I find that assessee has not properly explained the delay, yet considering the principle of natural justice and ratio of law on limitation that when technical consideration and cause o substantial justice are kept against each other, the cause of substantial justice may be preferred. I also find that tax consultant namely Nandlal Sohanlal Prajapati has given his affidavit in accepting the lapses on his behalf. Thus, taking a lenient view, the delay in filing appeal is condoned. Now, adverting to merits of the case.
On merit, I find that assessing officer have passed assessment order under section 144. The ld. CIT(A) confirmed the action of assessing officer in ex- parte proceedings. Therefore, considering the fact that lower authorities have passed the ex-parte without considering the merits of various claims made by assessee. Therefore, the matter is restored back to the file of assessing officer to pass the assessment order. Needless to direct that before passing the assessment order, the assessing officer shall allow fair and reasonable opportunity to the assessee. The assessee is also directed to be more vigilant in future in making timely compliance. In the result, grounds of appeal of assessee is allowed for statistical purpose.
In the result, the appeal of assessee is allowed for statistical purpose.