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Facts
The assessee's appeal against an ex-parte order of the CIT(A) was filed with a delay of 409 days. The assessee claimed medical issues prevented timely filing and proper representation before the CIT(A). The CIT(A) had dismissed the appeal for non-prosecution.
Held
The Tribunal condoned the delay of 409 days, holding that the assessee was prevented by reasonable cause due to medical issues. The CIT(A)'s ex-parte order was set aside, and the appeal was remanded for fresh adjudication.
Key Issues
Whether the delay in filing the appeal and the ex-parte order passed by the CIT(A) due to medical reasons should be condoned and the appeal restored for fresh adjudication.
Sections Cited
250, 143(3), 147, 10(38), 69, 234A, 234B, 234C, 234D, 271(1)(c), 131, 144, 253(5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
order : 07.04.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member:
1. 1. The present appeal preferred by the Assessee is directed against the order, dated 07/11/2023, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] whereby the Ld. CIT(A) had dismissed the appeal against the Assessment Order, dated 31/12/2019, passed under Section 143(3) read with Section 147 of the Act for the Assessment Year 2012-2013.
2. The Assessee has raised following grounds of appeal :
“1. On the facts & in the circumstances of the case and in law the Hon'ble CIT (A) erred in passing an ex parte order and confirming the addition made by the Id. Assessing Officer and ITA No,1116/Mum/2025 Assessment Year 2012-2013 the reasons assigned for doing so are wrong and contrary to the provisions of Income Tax and rules made thereunder.
On the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in dismissing the appellant's appeal in limine without considering the subject issues on merit. Therefore, the appeal may kindly be restored to the Hon'ble CIT(A) for fresh adjudication.
3. Without prejudice to the aforesaid grounds, on the facts and in the circumstances of the case and in law the Hon'ble CIT(A) erred in upholding the disallowance of the LTCG amounting to Rs. 68,50,419/- on account of sale of shares of M/s PFL Infotech Ltd claimed as exempt u/s 10(38) of the IT Act 1961 and the reasons assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under.
4. On the facts and in the circumstances of the case and in law the Hon'ble CIT(A) erred in upholding the addition made by the Ld AO of Rs.70,86,550/- towards receipt of sale proceeds of shares of M/s PFL Infotech Ltd by treating the same as unexplained income u/s 69 of the IT act 1961 and the reasons assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under.
5. On the facts and in the circumstances of the case and in law the Hon'ble CIT(A) erred in upholding the addition made by the Ld AO of Rs.73,225/-on account of hypothetical commission paid on sale of shares of M/s PFL Infotech Ltd as unexplained expenditure u/s 69 of the IT act 1961 and the reasons assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under.
On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the interest levied by the Ld AO u/s. 234A, 234B, 234C & 234D of the IT Act 1961 and the reasons assigned for doing so are wrong and contrary to the provision of Income Tax Act and rules made there under.
7. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the penalty initiated by the Ld AO u/s. 271(1)(c) of the IT Act 1961 and the reasons assigned for doing so are wrong and contrary to the provision of Income Tax Act and rules made there under.” Assessment Year 2012-2013
For the Assessment Year 2012-2013 the Assessee filed original return of income on 29/03/2013 wherein as exemption of INR.68,50,419/- was claimed under Section 10(38) of the Act. Subsequently, information was received from the DDIT (Inv) Unit– 7(3), Mumbai regarding investigations conducted by the Directorate of Investigation, Mumbai in relation to a script (namely M/s PFL Infotech Limited) and after examining the trade data collected from the Bombay Stock Exchange, the Assessing Officer found that the Assessee was one of the beneficiary who had sold the shares of the aforesaid scrip for INR.70,86,550/-. Therefore, reassessment proceeding were initiated against the Assessee under Section 147 of the Act. Statement of the Assessee was recorded by the Assessing Officer under Section 131 of the Act and after considering the same along with other material on record the Assessing Officer passed Assessment Order on 10/12/2019 under Section 144 read with Section 147 of the Act making (a) addition of INR. 70,86,550/- under Section 69 of the Act and (b) addition of INR.73,225/- holding the same to be commission paid for obtaining bogus accommodation entry.
4. Being aggrieved, the Assessee preferred appeal before the CIT(A) which was dismissed vide ex-parte order, dated 07/11/2023.
Now the Assessee had preferred the present appeal challenging the ex-parte order passed by the CIT(A).
6. The Learned Authorised Representative for the Assessee at the outset requested for condonation of delay of 409 days in filing the present appeal. It was explained that the Assessee was facing medical issues at the relevant time and in support reliance was placed upon the medical reports and the affidavit filed along with application seeking condonation of delay. It was further submitted that for the same reasons the Assessee was proceeded ex-parte by Assessment Year 2012-2013 the CIT(A) and therefore, Learned Authorised Representative for the Assessee prayed for another opportunity to make proper representation before the CIT(A). The aforesaid submission were opposed by the Learned Departmental Representative who supported the order passed by the Authorities below and submitted that notice of hearing were issued by the CIT(A) on four occasions. However, none of the said notices were complied with and therefore, the CIT(A) was correct in dismissing the appeal. In rejoinder, the Learned Authorised Representative submitted that the appeal was dismissed on account of non-prosecution. It was reiterated that the Assessee could not make proper representation before the authorities below on account of medical issues.
We have heard both the sides and perused the material on record. It is admitted position that the no representation was made on behalf of the Assessee before the CIT(A). It has been explained that the Assessee had been facing medical issues at the relevant time. In this regard, the Learned Authorised Representative for the Assessee had placed reliance upon the affidavit filed along with application for seeking condonation of delay, the relevant extract of which reads as under:
“3. That as per the date of service the last date of filing of present appeal was 06.01.2024. However, the same is being filed on 18.02.2025 hence there is a delay of 409 days in filing of the appeal before Your Honours.
The delay in filing the present appeal is due to following reasons: a) That the appellate proceedings were initiated in the month of September 2023 after receipt of enablement of communication on the Income Tax Portal. Since, I was recovering from health issue which was priority during that period hence I was not aware about any such proceedings being initiated. b) That the appellate order was passed on 07.11.2023 but Assessment Year 2012-2013 could not submit any response due to continued health related issues and I was not aware of the order being passed due to which the appeal Your Honours could not be filed within the time limit. c) That during the entire year of 2024 my condition did not improve nut was worse and for that I was undergoing treatment. d) That I came to know about order being passed when I received demand notice dtd 08.01.2025 from the office of Ld AO stating that a sum of Rs. 40,28,900/- is payable by me to the income tax department and asked me to make the payment of the outstanding demand, payment of the outstanding demand. e) That on coming to notice of the said fact, I told my personnel to check the portal reason for such huge demand and came to know that appellate order u/s 250 of the Act has been passed against me. f) That I immediately informed my CA who advised me that appeal against the said order needs to be filed before Hon'ble ITAT. g) That after consultation with the CA, I decided to file the appeal for which I told them to prepare the necessary papers. h) That during the third week of January they were out of town on pilgrimage tour. I) That as soon as they returned they prepared the appeal papers and sent me for signing and payment of appeal fees in the first week of February. j) That immediately thereafter the appeal papers were signed, payment of appeal fees was made and the appeal is being filed. k) That in the view of the aforesaid reasons which were inadvertent and without any malafied intention, there was a delay of 409 days from the receipt of impugned order. I) That I had no malafied intention to jeopardise the interest of revenue in delaying the filing of appeal. Assessment Year 2012-2013
5. That due to the aforesaid genuine reasons there has been delay in filing of present appeal, hence, I am making this application for condonation of delay in filing this present appeal. “ 8. On perusal of above affidavit it is clear that the Assessee had been facing medical issues since September, 2023. In support Assessee had also placed on record copy of medical records which have also been perused. The aforesaid support the contention of the Assessee that she was facing medical issues at the relevant time. As per the affidavit filed by the Assessee, the Assessee came to know about impugned order having been passed by the CIT(A) only on receiving demand notice, dated 08/01/2025. Thereafter, the Assessee took steps to get the appeal filed against the impugned ex-party order passed by the CIT(A). We further note that three of the four notices issued by the CIT(A) were issued in the month of September/October, 2023. Thus, keeping in view totality of facts and circumstances of the present case, we hold that the Assessee was prevented by reasonable cause from (a) filling appeal against the order passed by CIT(A) within the time prescribed and (b) making proper representation before the CIT(A). Therefore, we condoned the delay of 409 days in filing the present appeal in exercise of Section 253(5) of the Act and set aside the order passed by the CIT(A) with the directions to adjudicate the grounds raised by the Assessee in appeal before CIT(A) afresh as per law after granting the Assessee a reasonable opportunity of being heard. The Assessee is directed to file submissions along with supporting documents before the CIT(A) on receipt of notice of hearing. The Assessee is directed to be vigilant and track the proceedings through Income Tax Business Application Portal. It is clarified that in case the Assessee fails to act as per the aforesaid directions and/or fails to appear before the CIT(A) or fails of file details/documents/submissions before the CIT(A), the CIT(A) would be at liberty to proceed with the adjudication of the appeal based Assessment Year 2012-2013 upon material on record.
In result, in terms of paragraph 8 above, the appeal preferred by the Assessee is allowed for statistical purposes.