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Facts
The assessee's case was reopened under Section 147 of the Income Tax Act, 1961, based on information regarding Client Code Modification in the National Stock Exchange. The assessment order was passed on 20.12.2019. The assessee, being a Non-Resident Indian during the relevant period, became aware of the order in October 2020 when their bank account was attached. An appeal was filed before the CIT(A) on 28.12.2020.
Held
The Tribunal held that the assessee had sufficiently explained the delay in filing the appeal before the CIT(A), citing the severe Covid-19 pandemic and the fact that the assessment order was only communicated on 13.11.2020. The Supreme Court's directive to condone delays during the pandemic was also considered.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal in limine due to alleged delay, and if not, should the delay be condoned and the matter restored for adjudication on merits.
Sections Cited
147, 144, 148, 250, 234A, 234B, 234C, 271
AI-generated summary — verify with the full judgment below
PAN. ATLPR0558C Appellant (RESPONDENT) Assessee Represented by : Shri Bhupendra Shah Department Represented by : Shri Rajesh Meshram, Sr DR Date of Conclusion of hearing : 26.03.2025 Date of Pronouncement of Order : 02.05.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by assessee is directed against order of National Faceless Appeal Centre (NFAC) / CIT(A) dated 23.10.2024 for the A.Y. 2012-13. Assessee has raised following grounds of appeal: -
1. On facts and circumstances of the case and in l aw the learned Assessing Officer erred in reopening the assessment of the appellant and correspondingly the order passed u/s 144 r. w. s. 1 47 is bad in law.
2. On facts and circumstances of the case and in l aw the learned Assessing Officer erred in making addition of Rs. 21,06,113/- with the remark that it represents transactions amount of client code modification.
3. On the facts and circumstances of the case and in law the Assessing officer erred in computing income equivalent to value of transactions which were subject to client code modification without estimating business profits arising from the said transactions to the best of his judgment.
4. In the facts and the circumstances of law, the Ld.Commissioner of Income Tax(A) erred in dismissing the appeal only by holding that delay (AY: 2012-13) LAKSHMI RAO in filing 1stappeal is not untenable and without remanding case u/r 46A or without granting video conferencing. Relief Prayed: 1. To Quash the reopening u/s 147, 2. To delete the addition of Rs 21,06,113 3. To restore the appeal to NFAC appeals after condoning delay 4. To delete interest charged u/s 234 A, B & C and penalty initiated u/s 271[4][c] [C] General: • The appellant reserve rights to add alter or delete any portion of this appeal before its conclusion. • This appeal is filed in time and may please be allowed in full. • A Detailed paper book along with case laws will be submitted at the time of hearing.”
Rival submissions of both the parties have been heard and record perused. The Learned Authorised Representative (Ld.AR) of the assessee submitted that he is seeking a very limited relief in the present appeal for restoring appeal to the file of ld.CIT(A) for adjudication of various grounds of appeal
on merit. The Ld.AR of the assessee submits that case of assessee was reopened on the basis of information from investigation wing about Client Code Modification (CCM) in National Stock Exchange and that assessee was one of the person who had allegedly received benefit of such CCM. The case of assessee was reopened under section 147 of Income Tax Act, 1961 (inshort “Act”) in 2018 i.e. after six years from relevant Financial Year. During the re-assessment period, the assessee was Non-Resident Indian (NRI). Thus, no notice either under section 148 of the Act or any other notice was received by the assessee. The Assessing Officer completed assessment under section 144 /147 on 20.12.2019. The assessee came to (AY: 2012-13) LAKSHMI RAO know about passing of assessment order only in October 2020, when her bank account was attached. The assessee was informed by his banker that her bank account is attached on the direction of ITO-22(2)(4) Mumbai. The assessee immediately made communication to Assessing Officer i.e. ITO – Ward -22(2)(4), Mumbai and sent request through E-Mail to supply assessment order. Copy of E-Mail communication with Assessing Officer is placed on record. The assessee also communicated to the Assessing Officer that in case it is not possible to send the assessment order through E-Mail, she has appointed her consultant to collect such assessment order. The copy of assessment order was sent to assessee by Assessing Officer vide his E-mail communication dated 13.11.2020. Copy of E-Mail communication is also filed at Page No. 6 of the Paper Book. On receipt of assessment order, assessee filed an appeal before ld.CIT(A). When the assessee filed appeal it was severe Covid
19. Pandemic. Though, from date of receipt of assessment order there was no delay, yet, if any, it was liable to be condoned. In Statement of fact, filed along with the Form 35 the assessee explained all such fact. The ld.CIT(A) issued notice under section 250 of the Act. However, no show-cause notice for explaining alleged delay was issued. The show-cause notice dated 16.10.2024 under section 250 was issued to furnish ground wise submissions. In response to such show-cause notice dated 16.10.2024, assessee communicated to ld.CIT(A) that assessee is interested in availing benefit of Direct Vivaad Se Vishwas Scheme, 2024, therefore, appeal may be kept in abeyance. Copy of such application dated 22.10.2024 along with acknowledgment of ITBA portal is (AY: 2012-13) LAKSHMI RAO filed. The Ld. CIT(A) instead of keeping the appeal pending or seeking any explanation on alleged delay dismissed the appeal by taking view that appeal is filed belatedly. Resultantly appeal was dismissed in limine. In the meantime, assessee has applied for Vivaad Se Vishwas Scheme, 2024 (DTVSV-2024). Copy of Form-1 of DTVSV-2024 is placed on record. The ld. AR of the assessee submits that in fact there was no delay in filing the appeal before ld.CIT(A) and the assessee has not only sufficient cause for non-appearance before Assessing Officer and appeal was filed within 40 days of receipt of assessment order. Even otherwise, the delay was liable to be condoned as delay in filing appeal during Covid pandemic is already condoned by Hon’ble Supreme Court in Suo Moto Writ Petition(Civil) No. 3 of 2020, wherein the entire period is covered by decision of the Hon’ble Apex Court. Ld.AR of the assessee prayed that delay in filing appeal before ld.CIT(A) may be condoned and the matter may be restored back to the file of ld.CIT(A) so that application of assessee pending before Distinguished Authority under DTVSV-2024 may be considered and assessee may avail such benefit.
3. On the other hand, Learned Senior Departmental Representative (Sr. DR) for the revenue after going through various documentary evidences which includes the communication by assessee with Assessing Officer and the reply of Jurisdictional Assessing Officer about supply of assessment order vide his communication dated 13.11.2020, supported the order of the ld.CIT(A). Alternatively, Sr. DR for the revenue submits that he has no
We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We find that assessment was completed on 20.12.2019 under section 144/147 of the Act. The assessee filed appeal before ld.CIT(A) on 28.12.2020. The appeal of the assessee is dismissed by ld.CIT(A) by taking view that appeal is filed belatedly. Before us, Ld.AR of the assessee has explained that alleged delay, which we have recorded supra. Considering the aforesaid submissions of the Ld.AR of the assessee, we find that assessee has sufficiently explained the alleged delay; even otherwise relevant period during which the appeal was filed was a period of severe Covid-19 pandemic. We find that that relevant period during which assessment order the assessee was not in India. The Assessing Officer supplied copy of assessment order to the assessee only along with his communication dated 13.11.2020. So the time period filing first appeal would start form 13.11.2020 only. When the assessee has filed the appeal, was a severe Covid-19 Pandemic,wherein Hon’ble Supreme Court has directed to condone the delay for taking recourse of law before various judicial or quasi judicial forum in Suo Motu Writ Petition (Civil) No. 3 of 2020. Therefore, the delay in filing the appeal before ld.CIT(A) is condoned, thereby the order of ld.CIT(A) is set-aside. Considering the fact that ld.CIT(A) has not adjudicated various grounds of appeal on merit, therefore, the appeal is restored back to the file of ld.CIT(A) for (AY: 2012-13) LAKSHMI RAO adjudication of grounds of appeal on merits. Needless to direct that before passing the order, ld. CIT(A) shall provide reasonable and fair opportunity to the assessee. In the result, the grounds of appeal filed by the assessee are allowed for statistical purpose.
In the result, appeal filed by the assessee is allowed for statistical purposes.