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Facts
The assessee's appeal was dismissed in limine by the CIT(A) for non-prosecution. The assessee claimed this was due to notices being sent to an incorrect email address and the appellant suffering from a brain tumor, leading to a delay in responding. The Assessing Officer (AO) made ex-parte additions under Sections 144, 145(3), 68, and 69A of the Income Tax Act.
Held
The Tribunal held that the CIT(A)'s dismissal of the appeal in limine without deciding on merits was not justified, following the precedent set by the Hon'ble Bombay High Court. The delay in filing the appeal before the ITAT was condoned due to the appellant's medical condition. The appeal was restored to the file of the CIT(A) for a fresh speaking order on merits.
Key Issues
Whether the CIT(A) erred in dismissing the appeal in limine for non-prosecution without passing a speaking order on merits, and if the reasons provided by the appellant (incorrect email communication, medical condition) constitute a reasonable cause for non-compliance.
Sections Cited
147, 148, 143(3), 250, 144, 145(3), 68, 69A, 115BBE
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Income Tax Appellate Tribunal, Mumbai “A” Bench, Mumbai.
Before: Smt. Beena Pilla (JM) & Shri Omkareshwar Chidara (AM)
The learned CIT(A) erred in dismissing the appeal in limine for non prosecution without passing any speaking order adjudicating the various grounds of appeal and thereby confirming the additions of Rs.1,48,43,120 made by the A.O. in the ex-parte asst. order without appreciating that said dismissal of appeal was not justified on facts of the case and in law.
2. The assessee submits that the appellate order passed by CIT(A) in limine without deciding the issue on merits is not justified in view of the law laid down by Hon'ble Jurisdictional Bombay High Court in Premkumar Arjundas Luthra [(2017) 297 CTR 614] and hence, the said appeal may be restored to the file of the CIT(A) for passing a speaking order on merits afresh.
3. The appellant submits that there was a reasonable cause due to which the notices issued by the CIT(A) could not be complied with in as much as the notices of hearing u/s 250 were issued on the email ids surya.ca1989(gmail.com and jaisinghanidd@yahoo.co.in) and not on the email id kajalsl86@gmail.com' registered on income tax portal which was also stated in Form No. 35 for communication of notices and therefore, the dismissal of appeal without issuing notice on the correct email address is bad in law.
2 Ajay Mahesh Shivdasani 4. Without prejudice to the above grounds, the appellant submits that the notices of hearing by the A.O. were issued on the email id hlalchandaning@yahoo.co.in' belonging to an erstwhile tax consultant and not on the email id 'kajals1986@gmail.com' registered on income tax portal, due to which the said notices could not be complied, thereby resulting into huge additions of Rs. 1,48,43,120 made by the A.O. in the ex-parte asst. order and hence, in the interest of justice, it is prayed that the matter may please be set aside to the file of the A.O. for fresh asst. after granting one more opportunity of being heard.
Without prejudice to the above grounds, the appellant submits that the addition of Rs.24,11,118 made by the A.O. by rejecting the book results u/s 145(3) and estimating the net profit @ 3% on sales as against 1.25% declared by the appellant is not justified on facts and in law and hence, the said addition may please be deleted.
Without prejudice to the above grounds, the appellant submits that the addition of Rs.22,15,000 made by the A.O. by taxing entire unsecured loans received during this year as unexplained income u/s 68 is not justified on facts and in law and hence, the said addition may please be deleted.
7. Without prejudice to the above grounds, the appellant submits that the addition of Rs. 1,02,17,000 made by the A.O. by taxing the entire cash deposits in bank account during demonetization period as unexplained money u/s 69A is apparently unjustified on facts and in law and hence, the said addition may please be deleted. 2. From the above, it is observed that the appellant did not comply with the notices issued by the Ld. AO and hence the Ld. AO has passed assessment order ex-parte under section 144 of the I.T. Act. The Ld. AO observed that during this assessment year appellant made sales of Rs. 13.79 crores and after claiming various expenses a net profit of Rs. 17.28 lakh was admitted which comes to 1.25% sales turnover. The appellant was given several opportunities by the Ld. AO to furnish details as per notices issued, but the appellant failed to comply with the notices issued. Since the appellant did not furnish reply despite giving repeated opportunities by the Ld. AO, it was mentioned that the assessment was completed ex-parte under section 144 of the Act based on the material available on record. The Ld. AO rejected the book result under section 145(3) of the Act and net profit of the appellant was estimated at 3% on the sales turnover of Rs. 13.79 crores which comes to Rs. 41.39 lakh resulting in addition of Rs. 24.11 lakhs.
3 Ajay Mahesh Shivdasani Apart from this, liabilities have increased during the current assessment by Rs. 22.15 lakhs and the appellant did not furnish details of the creditors and hence this amount of Rs. 22.15 lakhs was added under section 68 read with section 115BBE of the Act. Finally, the Ld. AO has observed from the bank statement of the appellant, that the amount of Rs. 1.02 crore cash was deposited into the Corporation Bank during demonetization period i.e. 9.11.2016 to 30.12.2016. As the appellant has not submitted details regarding source of cash which was deposited into the Bank Account, the same was added by the Ld. AO under section 69A read with section 115BBE of the Act.
Aggrieved by the additions made by the Ld. AO, appellant filed appeal before Ld. CIT(A) and from the appeal order passed by Ld. CIT(A) under section 250 of the Act shows that there was no compliance to the seven notices issued by Ld. CIT(A) and hence additions made by the Ld. AO were confirmed and dismissed the appeal of the appellant.
Aggrieved by the order of Ld. CIT(A), appellant has filed appeal before the ITAT with grounds of appeal mentioned in page No. 1 of this order. From the above grounds of appeal, it is observed that the appeal order passed by the Ld. CIT(A) in limine without deciding the issue on merits is not justified in view of the law laid down by Hon'ble Jurisdictional Bombay High Court in Premkumar Arjundas Luthra (2017) 297 CTR 614 and appellant has pleaded before the ITAT that the said appeal may be restored to the file of Ld. CIT(A) for passing a speaking order on merits afresh.
5. Ld. AR of the appellant has submitted that there is a reasonable cause due to which notices issued by Ld. CIT(A) could not be complied with as the same were sent to the e-mail id of erstwhile tax consultant and not on the e- mail id of the appellant and hence notices could not be complied with.
6. Ld. AR of the appellant has submitted that there is a delay in filing the appeal before the ITAT of 100 days and reason for delay is that the appellant
4 Ajay Mahesh Shivdasani is suffering from brain tumor and hospital records were also produced in support of this plea. In view of the same the Bench decided to condone the delay and proceeded to hear the appeal on merits. Ld. AR of the appellant has pleaded that the appellant was in the hospital for a considerable period and that is why could not appear before the lower authorities also. Moreover, Ld. CIT(A) did not pass appeal order on merits. In view of the same, Ld. AR has submitted that the case may be remanded back to the file of Ld. CIT(A) with the direction to pass a speaking order on merits afresh.
Ld. DR opposed the plea of the appellant because several notices were sent by the Ld. AO as well as Ld. CIT(A) and hence appeal should be dismissed. Ld. DR has opposed the delay plea before the ITAT. As far as merits are concerned, reliance was placed on the orders of the Ld. AO and Ld. CIT(A) and argued that the additions made by the Ld. AO may be confirmed.
Heard both sides. As mentioned above, delay in filing the appeal before the ITAT is condoned due to the disease of brain tumor of the appellant. For the same reason, appellant could not furnish the replies before the Ld. AO and Ld. CIT(A). Moreover, Ld. CIT(A) did not pass order on merits as decided by Hon'ble Jurisdictional High Court in the case of Premkumar Arjundas Luthra (supra). Last argument of Ld. AR of the appellant that the notices were sent to the e-mail of erstwhile tax consultant and not on e-mail port of the appellant and hence replies could not be submitted, is taken into consideration, and accordingly the appeal is restored to the file of Ld. CIT(A) for passing a speaking order afresh after giving reasonable opportunity to the appellant. The appellant is directed to furnish all details before Ld. CIT(A) and cooperate with the Department because there is no compliance before lower authorities by the appellant. A lenient view was taken only because appellant was suffering from brain tumor and hence appellant is directed to furnish all particulars to Ld. CIT(A) at the earliest and cooperate with the 5 Ajay Mahesh Shivdasani Department in completing the assessment, as the Ld. AR of the appellant has stated before the Bench that the appellant recovered now.
The appeal of appellant is allowed for statistical purposes.
Order pronounced in the open Court on 25/07/2025.