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Facts
The assessee filed two appeals against ex-parte orders of the CIT(A) after a significant delay. The delay was attributed to incorrect email addresses used for sending hearing notices, leading to non-receipt of communications by the assessee. The assessee provided affidavits explaining the circumstances leading to the delay.
Held
The Tribunal condoned the delay in filing the appeals, finding that the assessee had a reasonable cause due to not receiving the notices. The Tribunal set aside the ex-parte orders of the CIT(A) and restored the appeals to the file of the CIT(A) for adjudication on merits.
Key Issues
Whether the delay in filing the appeal should be condoned based on the assessee's explanation of non-receipt of notices. Whether the ex-parte order passed by the CIT(A) is sustainable when proper opportunities were not provided to the assessee.
Sections Cited
143(1), 143(3), 142(1), 250, 254, 271(1)(C)
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Income Tax Appellate Tribunal, MUMBAI “B” BENCH : MUMBAI
Before: SHRI VIKRAM SINGH YADAV & MS. KAVITHA RAJAGOPAL
O R D E R PER VIKRAM SINGH YADAV, A.M : These are two appeals filed by the assessee against the order(s) of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], pertaining to Assessment Year (AY) 2011-12.
At the outset, it is noted that there is a delay of 212 days in filing these two appeals as pointed out by the Registry. In this connection, the assessee filed two separate affidavits, explaining the reasons for the delay, which read as under: “The Appellant is a domestic company engaged in the business of manufacturing needle rollers, needle bushes, needle roller cages and needle roller bearings at Thane, Needle rollers and needle cages at Chikhalthana (Aurangabad), Needle rollers, needle cages and needle bushes at Waluj (Aurangabad) and cylindrical roller spherical roller, needle roller ball and taper roller bearings at Jalna, Needle cages, electrical stamping and automobile components at its plant at Hyderabad. 2. For the year under consideration, the appellant filed its return of income electronically on 29.11.2011 declaring total income at Rs. 78,63,33,570. The Return was processed u/s. 143(1) on 04.09.2012.
3. Subsequently, the Appellant filed a revised return declaring total income of Rs.75,88,75,980/-on 07.03.2013 and the same was processed u/s. 143(1) on 28.03.2013. Thereafter the case was selected for scrutiny by issue of notice 142 (1) of the Act. The case was completed by passing an order u/s 143(3) dated 27.03.2014 assessing the total income at Rs. 88,25,58,344/-by making certain additions / disallowances. The appellant filed an appeal before the CIT (A) which was partly allowed in the favour of the appellant. Thereafter, the appellant preferred further appeal before the Hon'ble ITAT against the order of CIT(A). The Hon'ble ITAT has, vide order dated 16.09.2019, in Income-tax Appeal No. 3758/MUM/2016 and restored back the following issues to the file of the Assessing Officer for deciding the same afresh: a. Enhancement in the Annual Letting Value of House Property by Rs. 9,45,417/- and b. An addition of Rs. 2,01,00,257/-as long-term capital gains on sale of flat.
4. Accordingly, notice was issued u/s 142(1) by the AO on the above matters and due submissions along with supporting documentary evidence was made by the appellant. However, the Ld. AO vide his order dated 28.09.2021 passed u/s 143(3) r.w.s. 254 disregarded the submissions made by the appellant and sustained the additions made earlier. Aggrieved by the same, the appellant once again preferred an appeal before CIT(A) on 28.09.2021. 5. 3 hearing notices were sent to the appellant by the Hon'ble CIT(A) before dismissing the appeal of the appellant. The 1st hearing notice was sent in the month of December 2022 on the email id of the person who had resigned and left the company and therefore the appellant could not comply with the hearing notice. The other 2 hearing notices were sent in the month of April and June 2024 on a wrong email id ie. 'm.prabhu@nrbbearings.co.in' instead of m.prabhu@nrb.co.in'. Even the order of the CIT(A) passed on 30.07.2024 dismissing the appeal of the appellant was also sent on the same email id 'm.prabhu@nrbbearings.co.in'. Hence, for the reasons stated above, the appellant was never served with the aforesaid notices and therefore could not respond to the hearing notices and also could not file this appeal in time against the order of CIT (A).
During the mid of April 2025 at the time of closure of the books when the appellant was working on contingent liabilities to be reported in the financial statements, it undertook a comprehensive review of the pending proceedings on the Income tax portal and during such review, it came across an order u/s 250 passed by the Hon'ble CIT(A) on 30.07.2024 dismissing the appeal ex-parte. Hence, with utmost urgency, the present appeal is filed before your honor on 30th April 2025 with a delay of 212 days.
In view of our above submissions, we humbly request Your Honour to kindly consider the above as a reasonable cause for not filing the appeal within the prescribed time and therefore condone the delay of 212 days in filing the same. The delay period has been computed from 1st October 2024 to 30th April 2025.
Your Honour may kindly note that we had no intention to jeopardize the interest of the revenue by delaying the filing of the appeal and on the contrary, we stand to suffer in case the delay is not condoned.
In view of the same, I humbly submit that the delay in filing of the appeal may be kindly condoned and the appeal may be accepted.”
In light of aforesaid, it was submitted that there was reasonable cause for the delayed filing of these two appeals and the assessee had no intention to jeopardize the interest of the Revenue by delaying the filing of the appeals and humbly prayed that the delay in filing the appeals may kindly be condoned and appeals be admitted for adjudication.
The Ld.CIT-DR has been heard who has objected to the condonation application. It was submitted that there is a substantial delay in filing these appeals and no reasonable cause has been shown by the assessee.
After hearing both the parties and perusing the affidavit placed on record, the contents of which have not been rebutted by the Revenue, we find that due to non-receipt of the impugned order which was sent on the wrong email id which doesn‟t belong to the assessee, the assessee was prevented from filing of the subject appeal within the stipulated time period. Further, as soon as the assessee came to know about passing of the impugned order, the assessee has taken necessary steps in terms of filing the subject appeals. We, therefore, find that the assessee has demonstrated reasonable cause for the delay in filing the present appeals and the delay is hereby condoned and both the appeals are admitted for adjudication.
6. Coming to the subject matter of these appeals, we find that the appeal of the assessee in Ld.CIT(A) dated 30-07-2024 wherein the assessee has assailed the order dated 28-09-2021 passed by the AO u/s 143(3) r/w 254 of the Act and appeal of the assessee in is against the ex-parte order of the Ld.CIT(A) dated 30-07-2024 wherein it has assailed the order dated 31-03-2018 passed by the AO u/s 271(1)(C) of the Act in the context of original assessment order passed u/s 143(3) of the Act.
7. During the course of hearing the Ld.AR submitted that the Ld.CIT(A) disposed-of these appeals ex-parte observing that various notices u/s. 250 of the Income Tax Act, 1961 (“the Act”) were issued to the assessee, but the assessee failed to comply with any of such notices nor did the assessee make any written submissions. The Ld.AR further submitted that the notices were issued by the Ld.CIT(A) to either the e-mail ID of the personnel, who left the assessee company or were sent on the wrong e-mail ID of the assessee as submitted in the affidavit and, therefore, the assessee never received the same and was thus prevented from making the necessary compliances. He accordingly submitted that in the interest of justice, an opportunity may be granted to the assessee to effectively prosecute these appeals and remit back both these appeals to the file of the Ld. CIT(A).
8. The Ld.CIT-DR opposed the request made on behalf of the assessee on the ground that more than sufficient opportunities were granted by the Ld.CIT(A), but without availing the same, it is not open for the assessee now to seek one more opportunity and prayed that the order of the Ld.CIT(A) be upheld.
9. Having regard to the facts and circumstances of the case, it is evident that the Ld.CIT(A) issued all the notices to either email ID of the personnel, who has left the assessee‟s organization or has been issued on the wrong e-mail ID which doesn‟t belong to the assessee and, therefore, the assessee never received the same. It is also a fact that in both these appeals, the Ld.CIT(A) passed an ex-parte order, without going to the merits of the case and did not comply with the requirement of Section 250(6) of the Act, which cannot be sustained. In view of the above, we are of the considered opinion that in the interest of justice, the assessee should be granted one more opportunity to represent its case on merits before the Ld.CIT(A). Consequently, we deem it fit and proper to set aside the impugned order(s) and restore both the appeals to the file(s) of the Ld.CIT(A) for adjudication with a direction to the assessee to furnish all the details/submissions in support of its contentions. We order accordingly.
In the result, both the appeals of the assessee are allowed for statistical purposes.