Loading judgment…
Facts
The assessee's appeal was dismissed by the Ld. CIT(A) for non-prosecution. The assessee then filed an appeal before the ITAT with a delay of 552 days. The assessee explained the delay due to her consultant not communicating the order and her family's severe illness, leading to her inability to inquire about the case status.
Held
The Tribunal condoned the delay finding that the assessee's explanation was bonafide and due to circumstances beyond her control. The Tribunal also noted that the Ld. CIT(A) did not adjudicate the matter on merits. Therefore, the impugned order was set aside.
Key Issues
Whether the appeal dismissed for non-prosecution by the CIT(A) should be restored to the file of CIT(A) for fresh adjudication, considering the assessee's explanation for delay and non-compliance.
Sections Cited
50C, 54, 143(3), 250, 251
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “H (SMC
Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN
ORDER PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 07.08.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2018-19, raising following grounds:
“I. Ex-party order 1) On the facts and in the circumstances of the case and as per the law, the order dated 07.08.2023 as passed by the Ld. NFAC / CIT Appeals is bad in law since it dismisses the Ld. NFAC / CIT Appeals is bad in law since it dismisses the Ld. NFAC / CIT Appeals is bad in law since it dismisses the appeal on the reason of non appeal on the reason of non- prosecution and does not prosecution and does not adjudicate on the grounds adjudicate on the grounds of appeal and the issues under of appeal and the issues under consideration. The said order being in violation of the consideration. The said order being in violation of the consideration. The said order being in violation of the provisions of Section 250 and 251 of the Act. provisions of Section 250 and 251 of the Act. 2) On the facts and in the circumstances of the case and as 2) On the facts and in the circumstances of the case and as 2) On the facts and in the circumstances of the case and as per the law, the Ld. NFAC / CIT Appeals erred in deciding per the law, the Ld. NFAC / CIT Appeals erred in deciding per the law, the Ld. NFAC / CIT Appeals erred in deciding the appeal ex parte in violation of the principle of natural appeal ex parte in violation of the principle of natural appeal ex parte in violation of the principle of natural justice. II. Disallowance u/s 50C of the act: II. Disallowance u/s 50C of the act: 3) That on the facts and the circumstances of the case, the 3) That on the facts and the circumstances of the case, the 3) That on the facts and the circumstances of the case, the Ld. NFAC / CIT Appeals had erred in compute capital gain Ld. NFAC / CIT Appeals had erred in compute capital gain Ld. NFAC / CIT Appeals had erred in compute capital gain by adopting value of property determ by adopting value of property determined by stamp ined by stamp valuation authority as deemed sale consideration under valuation authority as deemed sale consideration under valuation authority as deemed sale consideration under section 50C(1) without considering the fact that where section 50C(1) without considering the fact that where section 50C(1) without considering the fact that where assessee objects to adoption of stamp duty value as assessee objects to adoption of stamp duty value as assessee objects to adoption of stamp duty value as deemed sale consideration, A.O is duty deemed sale consideration, A.O is duty-bound to make a bound to make a reference to DVO under su reference to DVO under sub-section (2) of section 50C for section (2) of section 50C for determining value of property and thereafter proceed to determining value of property and thereafter proceed to determining value of property and thereafter proceed to compute capital gains by following provisions of subsection compute capital gains by following provisions of subsection compute capital gains by following provisions of subsection (3) of section 50C of the act. Therefore the working of the (3) of section 50C of the act. Therefore the working of the (3) of section 50C of the act. Therefore the working of the capital gain by the A.O is bad in law. capital gain by the A.O is bad in law. III. Disallowance u/s 54 of the act of Rs.43,79,785/ allowance u/s 54 of the act of Rs.43,79,785/ allowance u/s 54 of the act of Rs.43,79,785/- 4) That on the facts and the circumstances of the case, the 4) That on the facts and the circumstances of the case, the 4) That on the facts and the circumstances of the case, the Ld. NFAC / CIT Appeals had erred in making addition of Ld. NFAC / CIT Appeals had erred in making addition of Ld. NFAC / CIT Appeals had erred in making addition of Rs.43,79,785/ Rs.43,79,785/- on the basis of the assessee has invested in on the basis of the assessee has invested in new immovable property costing to R new immovable property costing to Rs.82,00,000/ s.82,00,000/- had been alongwith two other co been alongwith two other co-owners and allowed only owners and allowed only 1/3th 1/3th of of Rs.86,10,000/- Rs.86,10,000/ including including stamp stamp duty duty i.e. i.e. Rs.28,70,000/ Rs.28,70,000/- deduction deduction under under section section 54 54 without without considering the actual investment made by considering the actual investment made by the assessee. assessee.”
2. The brief facts leading to The brief facts leading to the present appeal are that the the present appeal are that the assessee filed her return of income on 31.08.2018, declaring a total assessee filed her return of income on 31.08.2018, declaring a total assessee filed her return of income on 31.08.2018, declaring a total income of ₹3,66,180/ 3,66,180/-. The return was selected for scrutiny, and . The return was selected for scrutiny, and the assessment was completed under Section 143(3) of the Income- the assessment was completed under Section 143(3) of the Income the assessment was completed under Section 143(3) of the Income tax Act, 1961 (hereinafte tax Act, 1961 (hereinafter referred to as "the Act") on 16.04.2021, r referred to as "the Act") on 16.04.2021, wherein the Assessing Officer made an addition of ₹43,79,785/- wherein the Assessing Officer made an addition of wherein the Assessing Officer made an addition of under the head "Long under the head "Long-Term Capital Gains".
3. Aggrieved by the assessment order, the assessee preferred an Aggrieved by the assessment order, the assessee preferred an Aggrieved by the assessment order, the assessee preferred an appeal before the learned Commissioner of Income-tax (Appeals) appeal before the learned Commissioner of Income appeal before the learned Commissioner of Income [hereinafter referred to as "Ld. CIT(A)"]. However, during the course [hereinafter referred to as "Ld. CIT(A)"]. However, during the course [hereinafter referred to as "Ld. CIT(A)"]. However, during the course of appellate proceedings, the assessee failed to respond to the of appellate proceedings, the assessee failed to respond to th of appellate proceedings, the assessee failed to respond to th various statutory notices issued on 15.11.2022, 18.07.2023, and various statutory notices issued on 15.11.2022, 18.07.2023, and various statutory notices issued on 15.11.2022, 18.07.2023, and the final notice dated 25.07.2023. The Ld. CIT(A), after noting the the final notice dated 25.07.2023. The Ld. CIT(A), after noting the the final notice dated 25.07.2023. The Ld. CIT(A), after noting the absence of any submissions on merits, proceeded to adjudicate the absence of any submissions on merits, proceeded to adjudicate the absence of any submissions on merits, proceeded to adjudicate the appeal and, relying upon the decision of this Court in B.N. appeal and, relying upon the decision of this Court in appeal and, relying upon the decision of this Court in Bhattachargee v. State of Orissa Bhattachargee v. State of Orissa [(1979) 118 ITR 461 (SC)], held that [(1979) 118 ITR 461 (SC)], held that merely filing an appeal without pursuing it effectively amounts to merely filing an appeal without pursuing it effectively amounts to merely filing an appeal without pursuing it effectively amounts to abandonment. Accordingly, the appeal was dismissed, and the abandonment. Accordingly, the appeal was dismissed, and the abandonment. Accordingly, the appeal was dismissed, and the addition made by the Assessing Officer was confirmed. The relevant addition made by the Assessing Officer was confirmed. addition made by the Assessing Officer was confirmed. finding of the Ld. CIT(A) is reproduced as under: finding of the Ld. CIT(A) is reproduced as under:
“4.1 Considering the appellant's request the delay in filing of the 4.1 Considering the appellant's request the delay in filing of the 4.1 Considering the appellant's request the delay in filing of the appeal is condoned and the appeal is admitted. appeal is condoned and the appeal is admitted.
5. During the course of appellate proceedings vide notices dated 5. During the course of appellate proceedings vide notices dated 5. During the course of appellate proceedings vide notices dated 15.11.2022, 18 15.11.2022, 18.07.2023 and the final opportunity was given on .07.2023 and the final opportunity was given on 25.07.2023 and requested the appellant to file the submission 25.07.2023 and requested the appellant to file the submission 25.07.2023 and requested the appellant to file the submission by 01.08.2023. However no submissions were made during the by 01.08.2023. However no submissions were made during the by 01.08.2023. However no submissions were made during the entire appellate proceedings. The appellant during the appellate entire appellate proceedings. The appellant during the appellate entire appellate proceedings. The appellant during the appellate proceedings did not co proceedings did not comply with the notices and hence made no mply with the notices and hence made no submission in support of grounds of appeal. So it is held that submission in support of grounds of appeal. So it is held that submission in support of grounds of appeal. So it is held that the appellant had nothing more to submit except for raising the the appellant had nothing more to submit except for raising the the appellant had nothing more to submit except for raising the ground. 5.1 The Hon'bleITAT in 5.1 The Hon'bleITAT in for the 1027/Chandi/2005 for the A.Y. 2002-03 in the 03 in the case of M/s Chhabra Land and Housing case of M/s Chhabra Land and Housing Ltd. after following the decision of Hon'ble Supreme Court in the Ltd. after following the decision of Hon'ble Supreme Court in the Ltd. after following the decision of Hon'ble Supreme Court in the case of B.N. Bhattachargee, 118 ITR 461 (SC) held that the case of B.N. Bhattachargee, 118 ITR 461 (SC) held that the case of B.N. Bhattachargee, 118 ITR 461 (SC) held that the appeal does not mean merely filing of the appeal but effectively appeal does not mean merely filing of the appeal but effectively appeal does not mean merely filing of the appeal but effectively pursuing it. Keeping in view pursuing it. Keeping in view of the aforesaid factual position, of the aforesaid factual position, the appeal filed by the appellant is, therefore, decided on the appeal filed by the appellant is, therefore, decided on the appeal filed by the appellant is, therefore, decided on merits.
6. In the instance of the case the appellant failed to make any 6. In the instance of the case the appellant failed to make any 6. In the instance of the case the appellant failed to make any submissions in support of grounds of appeal
, this gives rise to submissions in support of grounds of appeal, this gives rise to submissions in support of grounds of appeal, this gives rise to an undisputable conclusio an undisputable conclusion that the assessee has got nothing n that the assessee has got nothing more to say in this regard. I have gone through the record before more to say in this regard. I have gone through the record before more to say in this regard. I have gone through the record before me and based on the record I have decided to adjudicate the me and based on the record I have decided to adjudicate the me and based on the record I have decided to adjudicate the issue on the merits of the case. In the instant case the AO has issue on the merits of the case. In the instant case the AO has issue on the merits of the case. In the instant case the AO has rightly assessed an income of rightly assessed an income of Rs. 47,45,965/-. Since the . Since the appellant failed to substantiate appellant's claim and addition appellant failed to substantiate appellant's claim and addition appellant failed to substantiate appellant's claim and addition made by the Assessing Officer of Rs. 43,79,785/ made by the Assessing Officer of Rs. 43,79,785/ made by the Assessing Officer of Rs. 43,79,785/- is hereby confirmed. confirmed.”
4. The assessee thereafter approached the Income Tax Appellate The assessee thereafter approached the Income Tax Appellate The assessee thereafter approached the Income Tax Appellate Tribunal (ITAT) by filing an ap Tribunal (ITAT) by filing an appeal on 12.04.2025, which peal on 12.04.2025, which was due on 06.10.2023. The appeal, thus, was delayed by 552 days. Along The appeal, thus, was delayed by 552 days. Along The appeal, thus, was delayed by 552 days. Along with the appeal, the assessee filed an application for condonation of with the appeal, the assessee filed an application for condonation of with the appeal, the assessee filed an application for condonation of delay supported by a duly sworn affidavit. The delay supported by a duly sworn affidavit. The relevant part relevant part of affidavit is reproduced reproduced as under:
2. I say that I was appointed Shri Farog Husain, a tax 2. I say that I was appointed Shri Farog Husain, a tax 2. I say that I was appointed Shri Farog Husain, a tax consultant to look after the income tax proceeding who has consultant to look after the income tax proceeding who has consultant to look after the income tax proceeding who has registered himself on my behalf on the portal of the Income Tax registered himself on my behalf on the portal of the Income Tax registered himself on my behalf on the portal of the Income Tax Department by procuring a logging ID and a password. The Department by procuring a logging ID and a password. The Department by procuring a logging ID and a password. The Commissioner of Appeal / NFAC order u/s 250 was received by ner of Appeal / NFAC order u/s 250 was received by ner of Appeal / NFAC order u/s 250 was received by my tax consultant Shri Farog husain on 07.08.2023 by his my tax consultant Shri Farog husain on 07.08.2023 by his my tax consultant Shri Farog husain on 07.08.2023 by his email ID nm.associates3463@gmail.com" but same was not email ID "nm.associates3463@gmail.com" but same was not email ID "nm.associates3463@gmail.com" but same was not handed over to assessee and did not taken any further action. handed over to assessee and did not taken any further action. handed over to assessee and did not taken any further action.
Further, I say that I was s 3. Further, I say that I was suffering from hypertension disease uffering from hypertension disease and taking regular treatment from R.K.Hospital. I had and taking regular treatment from R.K.Hospital. I had and taking regular treatment from R.K.Hospital. I had hospitalized due to hypertenstion & cardiovascular disease. hospitalized due to hypertenstion & cardiovascular disease. hospitalized due to hypertenstion & cardiovascular disease. Also, My Husban Mr. Mohd Asim Ansari was suffering from Also, My Husban Mr. Mohd Asim Ansari was suffering from Also, My Husban Mr. Mohd Asim Ansari was suffering from Diabetes and Blood pressure and my Granddaughter Ms Diabetes and Blood pressure and my Granddaughter Ms Diabetes and Blood pressure and my Granddaughter Ms Ifra Ansari has suffering from Synpneumonic effusion. Due to long Ansari has suffering from Synpneumonic effusion. Due to long Ansari has suffering from Synpneumonic effusion. Due to long ill-health of whole family, I could not able to made an enquiry on health of whole family, I could not able to made an enquiry on health of whole family, I could not able to made an enquiry on the status of my tax matter. However, I made an enquiry on the the status of my tax matter. However, I made an enquiry on the the status of my tax matter. However, I made an enquiry on the status of my tax matter on 04 status of my tax matter on 04-04-2025 and learned that the 2025 and learned that the appeal had not been filed against the NFAC order and I took appeal had not been filed against the NFAC order and I took appeal had not been filed against the NFAC order and I took action to discontinue the tax consultant shri Farog husain and action to discontinue the tax consultant shri Farog husain and action to discontinue the tax consultant shri Farog husain and appointed a new tax consultant shri Mohammed Anas. The new appointed a new tax consultant shri Mohammed Anas. The new appointed a new tax consultant shri Mohammed Anas. The new tax consultant forwarded the case paper to the tax counsel. The tax consultant forwarded the case paper to the tax counsel. The tax consultant forwarded the case paper to the tax counsel. The tax counsel prepared and filed appeal on 12.04.2025 after the l prepared and filed appeal on 12.04.2025 after the l prepared and filed appeal on 12.04.2025 after the delay of 553 days. delay of 553 days.
I say that, it was the first time I got involved in tax litigations, 4. I say that, it was the first time I got involved in tax litigations, 4. I say that, it was the first time I got involved in tax litigations, due to a lack of clarity on tax laws, I was under the impression due to a lack of clarity on tax laws, I was under the impression due to a lack of clarity on tax laws, I was under the impression that my case was properly represented by the ear that my case was properly represented by the ear that my case was properly represented by the earlier tax consultant but due to some inadvertent events the filing of the consultant but due to some inadvertent events the filing of the consultant but due to some inadvertent events the filing of the appeal was delayed by 553 days delay before ITAT. appeal was delayed by 553 days delay before ITAT.
I say that the delay was not intentional and the same was 5. I say that the delay was not intentional and the same was 5. I say that the delay was not intentional and the same was due to circumstances beyond my due to circumstances beyond my control.” 4.1 In the affidavit, In the affidavit, the assessee averred that she had engaged one see averred that she had engaged one Shri Farog Husain, a tax consultant, who was authorized to act on Shri Farog Husain, a tax consultant, who was authorized to act on Shri Farog Husain, a tax consultant, who was authorized to act on her behalf and had registered himself on the Income Tax portal her behalf and had registered himself on the Income Tax portal her behalf and had registered himself on the Income Tax portal using his own email ID. It was further stated that the order passed using his own email ID. It was further stated that the order passed using his own email ID. It was further stated that the order passed under Section 250 of t under Section 250 of the Act by the Ld. CIT(A) was received on he Act by the Ld. CIT(A) was received on 07.08.2023 by the said consultant but was never communicated to 07.08.2023 by the said consultant but was never communicated to 07.08.2023 by the said consultant but was never communicated to the assessee. The assessee further submitted that she and her the assessee. The assessee further submitted that she and her the assessee. The assessee further submitted that she and her family members were simultaneously undergoing medical treatment family members were simultaneously undergoing medical treatment family members were simultaneously undergoing medical treatment for for various various ailments ailments including incl uding hypertension, hypertension, cardiovascular cardiovascular complications, diabetes, and synpneumonic effusion, which further complications, diabetes, and synpneumonic effusion, which further complications, diabetes, and synpneumonic effusion, which further contributed to her inability to inquire into the status of her case. It contributed to her inability to inquire into the status of her case. It contributed to her inability to inquire into the status of her case. It was only on 04.04.2025 that she discovered the appeal had not was only on 04.04.2025 that she discovered the appeal had not was only on 04.04.2025 that she discovered the appeal had not been filed. Thereafter, she replaced the earlier consultant and took r, she replaced the earlier consultant and took r, she replaced the earlier consultant and took immediate steps to engage new counsel, who then filed the present immediate steps to engage new counsel, who then filed the present immediate steps to engage new counsel, who then filed the present appeal on 12.04.2025. It was further pleaded by the assessee that appeal on 12.04.2025. It was further pleaded by the assessee that appeal on 12.04.2025. It was further pleaded by the assessee that she was not conversant with the intricacies of tax litigation and had she was not conversant with the intricacies of tax litigation and had she was not conversant with the intricacies of tax litigation and had genuinely believed that her matter was being duly pursued by her ely believed that her matter was being duly pursued by her ely believed that her matter was being duly pursued by her consultant. The delay, therefore, was neither intentional nor consultant. The delay, therefore, was neither intentional nor consultant. The delay, therefore, was neither intentional nor deliberate, but occasioned due to circumstances beyond her control. deliberate, but occasioned due to circumstances beyond her control deliberate, but occasioned due to circumstances beyond her control 5 Having considered the contents of the affidavit and the Having considered the contents of the affidavit and the Having considered the contents of the affidavit and the explanation tendered therein, we find merit in the plea of the ion tendered therein, we find merit in the plea of the ion tendered therein, we find merit in the plea of the assessee. It is well settled that liberal construction must be assessee. It is well settled that liberal construction must be assessee. It is well settled that liberal construction must be accorded to applications seeking condonation of delay, particularly accorded to applications seeking condonation of delay, particularly accorded to applications seeking condonation of delay, particularly when substantive rights are involved and the explanation offered is when substantive rights are involved and the explanation offered is when substantive rights are involved and the explanation offered is bona fide and not lacking in diligence. In the present case, the na fide and not lacking in diligence. In the present case, the na fide and not lacking in diligence. In the present case, the circumstances narrated by the assessee, including non supplying of circumstances narrated by the assessee, including non supplying of circumstances narrated by the assessee, including non supplying of the order by her authorised representative and the long spell of the order by her authorised representative and the long spell of the order by her authorised representative and the long spell of illness in the family, constitute a just and sufficient cause for illness in the family, constitute a just and sufficient cause illness in the family, constitute a just and sufficient cause condonation of delay. condonation of delay. Therefore, we condoned the delay and admitted the appeal for adjudication. the appeal for adjudication.
5.1 Further, we find that the appeal before the Ld. CIT(A) was e find that the appeal before the Ld. CIT(A) was e find that the appeal before the Ld. CIT(A) was dismissed essentially on account of non dismissed essentially on account of non-compliance on the part of compliance on the part of the assessee to the notices issued. The assessee has now explained notices issued. The assessee has now explained notices issued. The assessee has now explained that the said non-compliance too arose due to illness in the family compliance too arose due to illness in the family compliance too arose due to illness in the family and her lack of knowledge of the pending proceedings, exacerbated and her lack of knowledge of the pending proceedings, exacerbated and her lack of knowledge of the pending proceedings, exacerbated by the failure of her consultant to keep her informed. In our view, by the failure of her consultant to keep her informed. In our view, by the failure of her consultant to keep her informed. In our view, the assessee has demonstrated a reasonable cause for such non essee has demonstrated a reasonable cause for such non essee has demonstrated a reasonable cause for such non- compliance.
5.2 We also find that the Ld. CIT(A) has not adjudicated the matter We also find that the Ld. CIT(A) has not adjudicated the matter We also find that the Ld. CIT(A) has not adjudicated the matter on merits and the order merely upholds the addition made by the on merits and the order merely upholds the addition made by the on merits and the order merely upholds the addition made by the Assessing Officer in the absence of any representation. In the Assessing Officer in the absence of any representation. I Assessing Officer in the absence of any representation. I interest of justice, therefore, we deem it appropriate to set aside the interest of justice, therefore, we deem it appropriate to set aside the interest of justice, therefore, we deem it appropriate to set aside the impugned order passed by the Ld. CIT(A) and restore the matter to impugned order passed by the Ld. CIT(A) and restore the matter to impugned order passed by the Ld. CIT(A) and restore the matter to his file for fresh adjudication, after affording due opportunity of his file for fresh adjudication, after affording due opportunity of his file for fresh adjudication, after affording due opportunity of hearing to the assessee. hearing to the assessee.
5.3 In view of the above, Ground No. 1 raised in the appeal is above, Ground No. 1 raised in the appeal is above, Ground No. 1 raised in the appeal is allowed. Since the matter is being restored for fresh adjudication, allowed. Since the matter is being restored for fresh adjudication, allowed. Since the matter is being restored for fresh adjudication, Grounds No. 2 and 3, which pertain to the merits of the addition, Grounds No. 2 and 3, which pertain to the merits of the addition, Grounds No. 2 and 3, which pertain to the merits of the addition, are rendered academic at this stage and are not being adjudicated. are rendered academic at this stage and are not being adjudicated. are rendered academic at this stage and are not being adjudicated.
In the result, the appeal of the assessee is allowed for esult, the appeal of the assessee is allowed for esult, the appeal of the assessee is allowed for statistical purposes.