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Facts
The assessee's appeal is directed against the order of the CIT(A) confirming the disallowance of a claim under section 80IBA. The assessee claims that they did not receive hearing notices from the lower authorities, leading to ex-parte orders.
Held
The Tribunal condoned the delay in filing the appeal, noting the principles of natural justice. On merit, the Tribunal found that the AO and CIT(A) passed ex-parte orders without proper opportunity to the assessee.
Key Issues
Whether the assessee was denied natural justice due to non-receipt of hearing notices from lower authorities, and if the delay in filing the appeal should be condoned.
Sections Cited
254(1), 80IBA, 144, 143(3A), 143(3B)
AI-generated summary — verify with the full judgment below
(AY: 2018–19) (Physical hearing) Somani Realty Income Tax Officer Shop No-3, Anubhav Vs. Wd-22(3)(1), Apartment, Sayani Road, Mumbai. Prabhadevi, Mumbai-400025. (Appellant) .. (Respondent) Assessee by Shri. D. C. Jain Revenue by Shri. Vijay Kr. G. Subramanyam, Sr. DR Date of Hearing 21/04/2025 Date of Pronouncement 28/04/2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICAIL MEMBER, 1. This appeal by the assessee is directed against the order of Learned Commissioner of Income Tax (Ld. CIT(A)) dated 07.08.2024 for A.Y. 2018-19. The assessee has raised the following grounds of appeal:
“1. The Commissioner of Income Tax (Appeals) order States about opportunity of hearing on 04/01/2024, 19/07/24 but the appellants deny of any notice of hearing manually or electronically served to it. Lack of opportunity is a certificate of not following principles of natural justice and hence this appeal.
Under the facts and circumstances, the learned CIT (A) erred in confirming the disallowance of claim u/s 801BA of Rs.17,59,345/- by issuing the notices electronically, but the appellants were not aware about the notices, as no notices served to the appellants therefore remain non-complied.
Under the facts circumstances and in law, the learned Assessing officer erred in disallowing the claim u/s 801 BA amounting to Rs.17,59,345/- whereas the appellants filed Return of Income Voluntarily with Audited statement of accounts and Tax Audit Report.
The Appellants crave, leave to add, amend, alter, delete the grounds of appeal at or before the hearing of appeal.”
Somani Realty 2. Rival submissions of both the parties have been heard and record perused. The Learned Authorized Representative (Ld. AR) of the assessee submits that there is delay of 116 days in filing appeal. The delay in filing appeal is neither intentional nor deliberate. The assessee is Association of Person (AOP). The assessee has filed affidavit of one of the member of assessee i.e. Nitin Prabhudas Somani, in explaining the cause of delay. The Ld. AR of the assessee submits that notice of hearing issued by Ld. CIT(A) on 04.01.2024 and 19.07.2024 was not served either physically or through e-mail provided at the time of filing first appeal before Ld. CIT(A). The assessee came of know about the dismissal of their appeal, when their auditor tried to check the status of appeal. The assessee on coming to know immediately filed an appeal before Tribunal. The Ld. AR of the assessee has good case on merit and is likely to succeed, if delay in filing the appeal is condoned.
3. On merit, the Ld. AR of the assessee submits that Assessing Officer (AO) as well as Ld. CIT(A) passed ex-parte order. The assessment was completed during severe COVID-19 pandemic. Thus, there was no proper communication due to lockdown. The assessee filed appeal before CIT(A). As per order of CIT(A), two notice dated 04.01.2024 and 19.07.2024 was issued. No such notice was received by the assessee. Thus, assessee has no occasion to make their submission. The Ld. AR of the assessee submits that assessee while filing return of income claim deduction under section 80IBA. Since, such deduction claimed by assessee has not being examined by lower authority, therefore matter may be restored back either to file of CIT(A) or to the file of AO to examine the claim of assessee and to pass order in accordance with law.
Somani Realty 4. On the other hand, the Learned Senior Departmental Representative (Ld. DR) for the revenue supported the order of lower authorities. On the issue of condonation of delay, the Ld. DR for the revenue submits that assessee is habitual defaulter in not making compliance. The assessee has not attended the assessment proceeding and again before CIT(A). Now, the assessee is taking excuse that no notice were served from the office of ld CIT(A). No evidence of non-service of notice by showing the details of ITBA portal has been filed on record. The assessee is relying upon self serving statement. On merit, the Ld. DR for the revenue submits that in case the delay is condoned by this bench, the matter may be restored back to the file of Ld. CIT(A) for adjudication of the issues on merit.
I have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. Firstly, I shall consider the plea of condonation of delay. Before me, the Ld. AR of the assessee vehemently argued that no notice of hearing from the office was received either of 04.01.2025 or 19.07.2025. It was also argued by Ld. AR that he undertakes on behalf of the assessee to be more vigilant in future. To support such contention, the assessee has filed affidavit of one of the members of their AOP. Considering the overall facts and circumstance, that assessee is interested in pursuing his case on merit and the assessee is not going to be benefited by filing appeal belatedly. Further, considering the principal of law on limitation that when technical consideration is pitted against the cause of substantial justice, cause of substantial justice must be proffered. Therefore, delay in filing the appeal is condoned. Now adverting to merit of the case.
Somani Realty 6. I find that AO while passing the assessment order made addition of Rs. 17,59,345/- The AO taxed the addition u/s. 144 r.w.s 143(3A) and 143(3B) of the Act. The ld CIT(A) also confirmed the action of AO in ex-parte order. Considering the fact that AO as well as Ld. CIT(A) has passed that order in absence of any submission. Therefore, keeping in view the Principal of natural justice, the assessee is give one more opportunity to contest the case on merit, thus, the matter is restored back to the file of AO to pass the assessment order afresh. Needless to direct that before passing the assessment order the AO shall provide reasonable opportunity to the assessee. The assessee is also directed to be more vigilant in future in making timely compliance. Moreover, the matter is restored back to the file of AO. Thus, considering the nature of addition no cost of import on the assessee. In the result, the grounds of appeal raised by the assessee are allowed for statistical purpose.
7. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in open court on 28.04.2025.