CECILIA RAM BAWALE,MUMBAI vs. COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI

From the assessment order passed by the Ld. AO., it is noticed that the appellant did not appear before the Ld. AO despite several notices issued to him and the Ld. AO passed an assessment order under section 144 of the I.T. Act as best judgement assessment. Before passing this ex-parte assessment, the Ld. AO has even sent a copy of draft assessment order and requested for his objections. The appellant has not responded to this show- notice notice. Left with no choice, the Ld. AO completed the assessment by making addition of the total value of the flat under section 69 of the Act and Rs. 2,51,000/- under section 56(2) of the Act for inadequate consideration.

Aggrieved by the addition made by the Ld. AO., an appeal was filed before the Ld. CIT(A) contesting both these two additions. As this appeal was filed with a delay of 791 days, the Ld. CIT(A) dismissed the appeal of appellant stating that here is no sufficient cause for delay and he relied on various decisions of Hon'ble Apex Court mentioned in his order.

The appellant has escalated the appeal to the ITAT and filed an appeal with the grounds of appeal mentioned in page No. 1 of this order.

During the hearing proceedings before the ITAT, Ld. AR of the appellant has pleaded that due to the following reasons an appeal could not be filed and hence requested the Bench to condone the delay and hear the case on merit and justice may be rendered.

It was further argued that the appellant has got a good case on merits and has sources to acquire the immovable property which is a major addition. It was also argued that the appellant took major portion of asset value as loan from GIC Housing Corporation and the addition under section 56(2)(x) of the Act is not applicable to him. Certain additional evidences like copy of sanction of loan from GIC Housing Corporation was also filed and requested the Bench to provide necessary relief to him.

After hearing both sides, it is decided the delay is condoned for the reasons mentioned by the appellant as the appellant has got prima facie a good case on merits. Moreover, in the case of Premkumar Arjundas Luthra HUF (69 Taxman.com 407)(Bom), it was held by Hon'ble Bombay High Court that the Ld. CIT(A) cannot dismiss the appeal for non-prosecution of appeal by appellant, and the appellate authority should pass an order on the issues raised in the assessment order/grounds of appeal. In view of the same, the matter is set aside to the file of Ld. CIT(A) with a direction to decide the case on merits after giving an opportunity. The appellant is also directed to cooperate with the Revenue and file necessary documents/evidences to advance his case without seeking further adjournment.