MR. BHIMSINGH LALSINGH DASANA ,MUMBAI vs. ITO WARD 41(3)(1), MUMBAI

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ITA 214/MUM/2025Status: DisposedITAT Mumbai04 June 2025AY 2015-166 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal condoned the delay of 30 days in filing the appeal, finding that it was not intentional or deliberate. The Tribunal noted that the assessee had explained the reason for the delay through an affidavit, citing an inadvertent mistake in furnishing the email address in Form 35, which prevented the receipt of hearing notices from the CIT(A). The Tribunal emphasized the principle of preferring substantial justice over technical considerations, especially when the assessee is not seeking undue benefit from the delay. On the merits of the case, the Tribunal observed that the assessment order was passed ex-parte under section 144 r.w.s. 147. The addition of Rs. 52,00,000/- was made by treating the stamp duty valuation of an immovable property sale as income from other sources, as the assessee failed to disclose capital gains. The Tribunal acknowledged that the assessee had not availed a reasonable opportunity of hearing before the lower authorities. Considering the substantial rights involved and the ex-parte nature of the orders, the Tribunal restored the matter to the file of the Assessing Officer for passing a fresh assessment order. The CIT(A) was directed to allow a reasonable opportunity to the assessee, and the assessee was permitted to file requisite evidence before the Assessing Officer to substantiate the transaction of sale of the asset. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Mr. Bhimsingh Lalsingh Dasana, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging an order passed by the National Faceless Appeal Centre (NFAC) / CIT(A), Mumbai, for Assessment Year (AY) 2015-16. The appeal before the ITAT was filed with a delay of 30 days. The assessee's AR explained that the delay was due to inadvertent mistakes in providing the correct email address in Form 35 when filing the appeal before the CIT(A), leading to non-receipt of hearing notices and an ex-parte order. The assessee also sought to admit additional evidence, including purchase and sale agreements, to substantiate a sale of immovable property for which an addition of Rs. 52,00,000/- was made by the Assessing Officer (AO) under 'income from other sources'. The AO had treated the stamp duty valuation of Rs. 52,00,000/- as income from other sources, as the assessee failed to offer capital gains. The CIT(A) had confirmed the AO's action due to non-compliance by the assessee.

What were the issues?

1. Whether the delay of 30 days in filing the appeal before the ITAT should be condoned, considering the explanation provided by the assessee regarding the inadvertent error in furnishing the email address and the principle of substantial justice. 2. Whether the addition of Rs. 52,00,000/- made by the Assessing Officer under the head 'income from other sources' on account of the sale of immovable property is justified, and if the assessee should be granted an opportunity to present evidence regarding capital gains. Assessee's Contentions: - The delay in filing the appeal is not intentional or deliberate but due to a mistake in providing the correct email address in Form 35, leading to non-receipt of hearing notices from the CIT(A). - The assessee is a layman, not well-versed with technology, and relied on consultants who made errors. - The assessee has a strong case on merits regarding the sale of immovable property and wishes to offer capital gains, but could not do so before the lower authorities due to ex-parte orders. - Additional evidence, including sale agreements and computation of income, is sought to be admitted. - The matter should be restored to the Assessing Officer for a fresh assessment, allowing the assessee to file all relevant evidence. Revenue's Contentions: - The assessee has not properly explained the delay in filing the appeal before the Tribunal. - The assessee is a habitual defaulter in not attending hearings before lower authorities. - If the delay is condoned, the matter may be restored to the lower authorities for a finding on merits.

Which sections of the Income-tax Act were involved?

Section 254(1),Section 144,Section 147,Section 250

AI-generated summary — verify with the full judgment below

PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre (NFAC) / Ld. CIT(A), Mumbai dated 15.10.2024 for assessment year (AY) 2015-16. 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 30 days in filing appeal before Tribunal. The impugned order passed by ld. CIT(A) on 15.10.2024 and the assessee was required to file appeal on or before 14.10.2024, however, the appeal is filed on 13.01.2025. The ld. AR of the assessee submits that assessment order and order of First Appellate Authority is ex-parte. The assessee has explained the basis of non-compliance/non-appearance before assessing officer, ld. CIT(A) as well as delay in filing appeal in his affidavit. The ld. AR of the assessee submits that assessee is assessee was running a small business of gold and jewellery in the name of ‘Amaj Jewellers’ from April 2010 till March 2015. In March, 2015, the assessee suffered losses and close such business. Again in April, 2020 started new business in the name of ‘Kanak Jewellers’. The assessee is studied upto 5th standard and unable to read or write English and not much aware of the technological use of electronic gadgets. The assessee is layman so far as income tax related proceedings are concerned. All his income tax related matters were handled by Mr. Kailas Shripal Jain till A.Y. 2014-15, his e-mail ID was of “ksjain950@gmail.com”. When he started a new business, he engaged another consultant namely Javed Shaikh who is also a commerce graduate and his email ID is “jointincomtax@gmail.com” . Notices during assessment proceedings were issued on the e-mail id of Mr. Javed Shaikh. All notices if any issued through ITBA to email address of Javed Shaikh, which are being attended. In January 2023 Javed Shaikh informed the assessee that assessment order dated 12.10.2023 is passed against the assessee for A.Y. 2015-16. The assessee thereafter filed appeal before ld. CIT(A) in challenging the addition in the assessment order. While filing appeal before ld. CIT(A), his consultant Javed Shaikh engaged the services of Mr. Ashiya. Mr. Ashiya while filing appeal due to inadvertent mistake in Form 35 mentioned the e-mail address ksjain950@gmail.com that is the e-mail id of old consultant of assessee. During hearing before ld. CIT(A) such notices may have been issued on such e-mail address which has not been communicated to the assessee. The copy of notices sent at other e-mail which belongs to tax consultant who was no longer associated with the assessee. Thus, no communication of hearing of appeal came to the notice of assessee which resulted in passing the order of ex-parte by ld. CIT(A). The ld. AR submits that assessee realized about passing of the order when Mr. Ashiya checked the status of appeal somewhere in January, 2025 and appeal was filed immediately. The ld. AR submits that there is no intentional or deliberate delay in filing appeal before Tribunal. The assessee is really interested in pursuing his appeal on merit.

3.

On merit of the case, the ld. AR of the assessee submits that during the relevant financial year, the assessee has sold immovable property to recoup with financial losses. The buyer deducted the tax at source which is reflected in Form AS26. The assessing officer made addition of Rs. 52,00,000/- while passing the assessment order under the head income from ‘other sources’. The ld. AR of the assessee submits that she had also filed application for admission of additional evidence, which includes the copy of purchase deed/agreement and sale agreement with detail of TDS and computation of total income. The ld. AR of the assessee submits that the assessee could not file such evidences before lower authorities as the assessee was ex-parte. Non-appearance before lower authorities has already been explained, therefore, the additional evidence filed by assessee may be admitted as such evidences are relevant for determination of real issue involved in the present appeal. The ld. AR of the assessee submits that lower authority has passed ex-parte order, therefore, matter may be restored back to the file of assessing officer for passing the assessing officer afresh, with the liberty to assessee to file all relevant evidences to substantiate his claim and to contest all other issues emanating from assessment order.

4.

On the other hand, the ld. CIT DR for the Revenue submits that assessee has not explained the delay in filing appeal before Tribunal in proper manner. The assessee is habitual defaulter in not attending hearing before lower authorities. The ld. CIT DR for the Revenue submits that delay may not be condoned. On merit, the ld. CIT DR for the Revenue submits that in case the delay is condoned, the matter may be restored back to the lower authorities for giving finding on merit.

5.

We have considered the rival contentions of both the parties. On perusal of various grounds of appeal

1.

, we find that the assessee has raised multiple grounds of appeal, however, in our view, the substantial ground of appeal relates to addition of Rs. 52,00,000/- under head income from other sources vis-à-vis capital gain, long term or short term if any and if the assessee was allowed reasonable opportunity by lower authorities. In addition to aforesaid ground whether assessee has shown sufficient cause for filing appeal before this Tribunal.

1.

6. Firstly, we are considering the plea of ld AR of the assessee in condoning the delay in filing appeal. We find that impugned order was passed by ld. CIT(A) on 15.10.2024. However, the present appeal is filed on 13.01.2025. Thus, there is delay of 30 days in filing appeal. However, registry of this Tribunal has calculated delay of 13 days only. Before us, the ld. AR of the assessee vehemently argued that due to wrong mentioning of e-mail furnished while filing Form 35, the assessee could not receive the notice of hearing and that came to know only January, 2025, however, the status of appeal before ld. CIT(A) was checked. Such contention of assessee is supported by affidavit. We find that there is delay of 30 days only, the assessee is not going to be benefitted by filing the appeal belatedly, therefore, keeping in view, the principle of law on limitation that when technical consideration and cause of substantial justice are kept against each other, the cause of substantial justice may be preferred. We further find that delay in filing appeal in not intentional or delibrate, thus, the delay in filing appeal is condoned. Now, adverting to merits of the case.

7. We find that assessment was completed under section 144 r.w.s. 147 on 12.10.2023. The assessing officer while passing the assessment order made addition of Rs. 52,00,000/- by taking view that as per information in departmental record, the assessee has sold immovable property at Rs. 52,00,000/- which is also evident as per TDS detail in Form No. 26AS. The assessee was given various opportunities to substantiate the transaction but assessee failed to disclose capital gain and not offer such surplus for tax. The assessing officer treated the said value as stamp valuation authority of Rs. 52,00,000/- and treated the same as income from other sources. The ld. CIT(A) confirmed the action of assessing officer by holding that four notices under section 250 of Income Tax Act for fixing date of hearing were issued to the assessee but assessee failed to furnish any submission. Before us, the ld. AR of the assessee vehemently argued that assessee has good case on merit and is likely to succeed if one more opportunity to contest the case before lower authorities. The assessee has also furnished copy of purchase and sale

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