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Facts
The assessee's appeal against the CIT(A)'s order was filed with a delay of 256 days. The delay was attributed to the assessee's personal difficulties following a divorce and her ex-husband's management of affairs. The reassessment proceedings were initiated for AY 2015-16, and an addition under Section 69 was made.
Held
The Tribunal held that the assessee's reasons for the delay in filing the appeal before the CIT(A) were bonafide and sufficiently explained the delay. The Tribunal condoned the delay and restored the matter to the CIT(A) for adjudication on merits.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was sufficiently explained, and whether the addition made under Section 69 was justified.
Sections Cited
148, 148A, 151A, 69, 147, 144, 250
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Income Tax Appellate Tribunal, MUMBAI BENCH “E” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN
This appeal has been preferred by the assessee against order dated 23.01.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2015-16, raising following grounds:
1. On the facts and circumstances of the case and in law the notice under section 148 of the Act dated 24.07.2022 was barred by limitation since it was beyond the surviving time limit as held by the Hon'ble Supreme Court in the Union of India & as held by the Hon'ble Supreme Court in the Union of India & as held by the Hon'ble Supreme Court in the Union of India & Ors. vs Rajeev Bansal. Ors. vs Rajeev Bansal.
2. On the facts and circumstances of the case and in law, the 2. On the facts and circumstances of the case and in law, the 2. On the facts and circumstances of the case and in law, the Assessing Officer has erred in applying the directions of the g Officer has erred in applying the directions of the g Officer has erred in applying the directions of the Supreme Court as issued in the case of Ashish Agarwal to the Supreme Court as issued in the case of Ashish Agarwal to the Supreme Court as issued in the case of Ashish Agarwal to the appellant's case without appreciating the fact that the notice appellant's case without appreciating the fact that the notice appellant's case without appreciating the fact that the notice issued under Section 148 on 29.06.2021 for AY 2015 issued under Section 148 on 29.06.2021 for AY 2015 issued under Section 148 on 29.06.2021 for AY 2015-16 was not covered by the p not covered by the provisions of TOLA.
3. On the facts and circumstances of the case and in law, the 3. On the facts and circumstances of the case and in law, the 3. On the facts and circumstances of the case and in law, the ITO, Ward 26(2)(1) , Mumbai has erred in passing the order u/s. ITO, Ward 26(2)(1) , Mumbai has erred in passing the order u/s. ITO, Ward 26(2)(1) , Mumbai has erred in passing the order u/s. 148A(d) and also issuing the notice u/s. 148 without 148A(d) and also issuing the notice u/s. 148 without 148A(d) and also issuing the notice u/s. 148 without appreciating that he was not having the jurisdiction for t appreciating that he was not having the jurisdiction for t appreciating that he was not having the jurisdiction for the same in view of Section 151A and the notification issued same in view of Section 151A and the notification issued same in view of Section 151A and the notification issued thereunder thereunder notifying notifying e-Assessment e Assessment of of Income Income Escaping Escaping Assessment Scheme, 2022 and, thereby, rendering the said Assessment Scheme, 2022 and, thereby, rendering the said Assessment Scheme, 2022 and, thereby, rendering the said order and the notice as well as the entire assessment order and the notice as well as the entire assessment order and the notice as well as the entire assessment proceeding as null and void. proceeding as null and void.
4. On the facts and circumstances of the case and in law, the On the facts and circumstances of the case and in law, the On the facts and circumstances of the case and in law, the CIT (A) / National Faceless Appeal Centre has erred in not CIT (A) / National Faceless Appeal Centre has erred in not CIT (A) / National Faceless Appeal Centre has erred in not condoning the delay of 108 days in filing the appeal. condoning the delay of 108 days in filing the appeal.
5. On the facts and circumstances of the case and in law, the 5. On the facts and circumstances of the case and in law, the 5. On the facts and circumstances of the case and in law, the Ld. Assessing Officer Ld. Assessing Officer has erred in adding an amount of of Rs has erred in adding an amount of of Rs 97,00,750 under section 69 of the Act alleging that the 97,00,750 under section 69 of the Act alleging that the 97,00,750 under section 69 of the Act alleging that the appellant was unable to prove the source of investment appellant was unable to prove the source of investment appellant was unable to prove the source of investment in an immovable property, without appreciating the fact that the immovable property, without appreciating the fact that the immovable property, without appreciating the fact that the appellant had no knowledge of any such pr appellant had no knowledge of any such property being operty being purchased in her name. purchased in her name.
6. Without prejudice to the above and on the facts and 6. Without prejudice to the above and on the facts and 6. Without prejudice to the above and on the facts and circumstances of the case and in law, the addition of Rs circumstances of the case and in law, the addition of Rs circumstances of the case and in law, the addition of Rs 97,00,750 made under section 69 of the Act alleging that the 97,00,750 made under section 69 of the Act alleging that the 97,00,750 made under section 69 of the Act alleging that the appellant was unable to prove the source of inv appellant was unable to prove the source of investment in an estment in an immovable property ought to have been deleted since the immovable property ought to have been deleted since the immovable property ought to have been deleted since the agreement agreement agreement towards towards towards purchase purchase purchase of of of the the the same same same has has has been been been subsequently cancelled.
We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. At the outset, we fi relevant material on record. At the outset, we find that there is a nd that there is a delay of more than 256 days in filing this appeal before us. The Ld. delay of more than 256 days in filing this appeal before us. The Ld. delay of more than 256 days in filing this appeal before us. The Ld. counsel for the assessee referred to the affidavit of the assessee and counsel for the assessee referred to the affidavit of the assessee and counsel for the assessee referred to the affidavit of the assessee and submitted that due to submitted that due to her separation from her husband consequent her husband consequent to the divorce proceedings to the divorce proceedings, she was going through difficult period of was going through difficult period of managing everything on her own and therefore, the appeal could managing everything on her own and therefore, the appeal could managing everything on her own and therefore, the appeal could not be filed within the limitation period. The relevant part of the not be filed within the limitation period. The relevant part of the not be filed within the limitation period. The relevant part of the affidavit is reproduced as under: affidavit is reproduced as under:
“3. I hereby submit that my ex 3. I hereby submit that my ex-husband and myself hav husband and myself have been residing separately since June 2020 and we got legally residing separately since June 2020 and we got legally residing separately since June 2020 and we got legally divorced vide order of Family Court Mumbai at Bandra dated divorced vide order of Family Court Mumbai at Bandra dated divorced vide order of Family Court Mumbai at Bandra dated 13m January, 2022. Copy of the decree is attached. 13m January, 2022. Copy of the decree is attached.
In the meantime, the reassessment proceedings were 4. In the meantime, the reassessment proceedings were 4. In the meantime, the reassessment proceedings were initiated in my case for AY initiated in my case for AY 2015-16 by issuing a notice under section 148 of the Act dated 16 by issuing a notice under section 148 of the Act dated 16 by issuing a notice under section 148 of the Act dated 29th June, 2021. 29th June, 2021.
5. All the notices issued during the course of the reassessment 5. All the notices issued during the course of the reassessment 5. All the notices issued during the course of the reassessment proceedings were sent to the mobile number and email id of my proceedings were sent to the mobile number and email id of my proceedings were sent to the mobile number and email id of my ex-husband. It was only after I changed my communica husband. It was only after I changed my communica husband. It was only after I changed my communication details after the divorce, I came to know that the reassessment details after the divorce, I came to know that the reassessment details after the divorce, I came to know that the reassessment proceedings were underway in my case. proceedings were underway in my case.
I learnt that the assessment in my case was reopened in 6. I learnt that the assessment in my case was reopened in 6. I learnt that the assessment in my case was reopened in order to verify the source of investment made towards purchase order to verify the source of investment made towards purchase order to verify the source of investment made towards purchase of an immovable property be of an immovable property bearing Flat No. B1703, Tirumala aring Flat No. B1703, Tirumala Habitats, Bal Rajeshwar Road, Mulund West. Habitats, Bal Rajeshwar Road, Mulund West.
During the course of the assessment proceedings, I had 7. During the course of the assessment proceedings, I had 7. During the course of the assessment proceedings, I had submitted before the Ld. submitted before the Ld. Assessing Officer that I had no Assessing Officer that I had no knowledge of any such property which was purchased and that knowledge of any such property which was purchased and that knowledge of any such property which was purchased and that all the documents related to the same would be with my ex documents related to the same would be with my ex documents related to the same would be with my ex- husband. Accordingly, I was trying my level best to reach him Accordingly, I was trying my level best to reach him Accordingly, I was trying my level best to reach him and obtain the necessary documents but I could not obtain the and obtain the necessary documents but I could not obtain the and obtain the necessary documents but I could not obtain the same at that point in time, same at that point in time, 8. In the meantime, the reassessment order under sect 8. In the meantime, the reassessment order under sect 8. In the meantime, the reassessment order under section 147 r.w.s. 144 of the Act was passed on 08.05.2023 wherein an r.w.s. 144 of the Act was passed on 08.05.2023 wherein an r.w.s. 144 of the Act was passed on 08.05.2023 wherein an amount of Rs 97,00,750 was added to my total income under amount of Rs 97,00,750 was added to my total income under amount of Rs 97,00,750 was added to my total income under section 69 of the Act. section 69 of the Act.
I hereby submit that all these years I have been battling an 9. I hereby submit that all these years I have been battling an 9. I hereby submit that all these years I have been battling an emotional turmoil and emotional turmoil and mental stress and I was even more even more tensed because of the assessment proceeding. tensed because of the assessment proceeding. Further, all of a Further, all of a sudden I had to take up a huge responsibility of becoming sudden I had to take up a huge responsibility of becoming sudden I had to take up a huge responsibility of becoming independent on my personal front and managing everything on independent on my personal front and managing everything on independent on my personal front and managing everything on my own. As a result, there were many things which were going my own. As a result, there were many things which were going my own. As a result, there were many things which were going on simultaneously in my life due to which there was a delay in simultaneously in my life due to which there was a delay in simultaneously in my life due to which there was a delay in filing the appeal before the Hon'ble NFAC filing the appeal before the Hon'ble NFAC 10. During the course of the First Appellate Proceedings, I was 10. During the course of the First Appellate Proceedings, I was 10. During the course of the First Appellate Proceedings, I was issued a notice under section 250 of the Act dated 16.10.2023 issued a notice under section 250 of the Act dated 16.10.2023 issued a notice under section 250 of the Act dated 16.10.2023 wherein I was given an oppor wherein I was given an opportunity to furnish the reason for tunity to furnish the reason for delay in filing the before the NFAC. delay in filing the before the NFAC.
In response to the said notice, I filed my reply vide 11. In response to the said notice, I filed my reply vide 11. In response to the said notice, I filed my reply vide submission dated 17.10.2023 submission dated 17.10.2023 explaining the reason for the explaining the reason for the same. Along with the said letter I had submitted the same. Along with the said letter I had submitted the grounds of grounds of appeal
and statement of facts. and statement of facts.
12. Thereafter, vide notice under section 250 dated 01.11.2023 Thereafter, vide notice under section 250 dated 01.11.2023 Thereafter, vide notice under section 250 dated 01.11.2023 it was informed to me that HARKISHN AHARthe delay in filing it was informed to me that HARKISHN AHARthe delay in filing it was informed to me that HARKISHN AHARthe delay in filing the appeal was condoned and I was asked to submit my the appeal was condoned and I was asked to submit my the appeal was condoned and I was asked to submit my response in support of support of the grounds of appeal raised by the grounds of appeal raised by me.
13. I was very much relieved that the delay was condoned and I was very much relieved that the delay was condoned and I was very much relieved that the delay was condoned and the fact that I had already the fact that I had already submitted the facts of the case in the facts of the case in response to a previous hearing notice, I was of the bonafide response to a previous hearing notice, I was of the bonafide response to a previous hearing notice, I was of the bonafide belief that the same would suffice for deciding the matter on belief that the same would suffice for deciding the matter on belief that the same would suffice for deciding the matter on merits. Therefore, no fresh submission was made in response to Therefore, no fresh submission was made in response to Therefore, no fresh submission was made in response to the notice dated 01.11.2023. the notice dated 01.11.2023.
14. I hereby submit that subsequently I was issued another
14. I hereby submit that subsequently I was issued another
14. I hereby submit that subsequently I was issued another notice dated 15.01.2024 notice dated 15.01.2024 wherein I was once again asked to wherein I was once again asked to submit the reasons for condoning the delay in filing submit the reasons for condoning the delay in filing the appeal. the appeal. It is submitted that I came to know about the said notice only at It is submitted that I came to know about the said notice only at It is submitted that I came to know about the said notice only at the time when I discovered that NFAC has passed an order the time when I discovered that NFAC has passed an order the time when I discovered that NFAC has passed an order under section 250 in my case. under section 250 in my case.
15. It is submitted before Your Honours that I was not in a 15. It is submitted before Your Honours that I was not in a 15. It is submitted before Your Honours that I was not in a position to keep a track of th position to keep a track of the First Appellate Proceedings and e First Appellate Proceedings and the order passed under section 250 of the Act for the fact that the order passed under section 250 of the Act for the fact that the order passed under section 250 of the Act for the fact that all these years have been very tough for me. all these years have been very tough for me.
16. The emotional turmoil coupled with mental stress and 16. The emotional turmoil coupled with mental stress and 16. The emotional turmoil coupled with mental stress and uncertainty had made it very difficult for me to cope up uncertainty had made it very difficult for me to cope up uncertainty had made it very difficult for me to cope up with life. However, slowly and gradually with the passage of time I However, slowly and gradually with the passage of time I However, slowly and gradually with the passage of time I started to get my things in order and it was at that point in time started to get my things in order and it was at that point in time started to get my things in order and it was at that point in time I realized that the NFAC has passed an order in my case where I realized that the NFAC has passed an order in my case where I realized that the NFAC has passed an order in my case where the delay was not condoned. the delay was not condoned.
Further, there was an unde 17. Further, there was an understanding that issues arising out rstanding that issues arising out of the period when my marriage was surviving would be of the period when my marriage was surviving would be of the period when my marriage was surviving would be handled by ex handled by ex-husband and his family. As can be seen from the husband and his family. As can be seen from the decree it was even agreed that my ex decree it was even agreed that my ex-husband would husband would indemnify any legal dues or debts arising in future out indemnify any legal dues or debts arising in future out indemnify any legal dues or debts arising in future out of the partnership firm viz. 'Steelfinity Homeware', wherein earlier I partnership firm viz. 'Steelfinity Homeware', wherein earlier I partnership firm viz. 'Steelfinity Homeware', wherein earlier I was a partner. Considering the same I was of the bonafide was a partner. Considering the same I was of the bonafide was a partner. Considering the same I was of the bonafide belief that the ongoing proceedings would be handled and taken belief that the ongoing proceedings would be handled and taken belief that the ongoing proceedings would be handled and taken care by my ex care by my ex-husband and his family. Also, all the documents husband and his family. Also, all the documents pertaining to said immovable were with by ex ertaining to said immovable were with by ex-husband and his husband and his family which even the more made it difficult for me to decide the family which even the more made it difficult for me to decide the family which even the more made it difficult for me to decide the further course of action. further course of action.
Thus, there is a delay of 264 days in filing the appeal. 18. Thus, there is a delay of 264 days in filing the appeal. 18. Thus, there is a delay of 264 days in filing the appeal. This affidavit is being made to justify del This affidavit is being made to justify delay in filing of an ay in filing of an appeal before the Income Tax Appellant appeal before the Income Tax Appellant Tribunal.” 3.1 In view of the reasons cited by the assessee, we are of the In view of the reasons cited by the assessee, we are of the In view of the reasons cited by the assessee, we are of the opinion that there is a sufficient cause in non-complying the opinion that there is a sufficient cause in non opinion that there is a sufficient cause in non limitation period for filing the appeal. Accordingly, we admit the limitation period for filing the appeal. Accordingly, we admit the limitation period for filing the appeal. Accordingly, we admit the appeal for adjudication. appeal for adjudication.
4. On perusal of the order of the Ld. CIT On perusal of the order of the Ld. CIT(A), we find that the Ld. (A), we find that the Ld. CIT(A) has dismissed the appeal of the assessee CIT(A) has dismissed the appeal of the assessee on the ground of no on the ground of no sufficient reason for delay in filing the appeal. The relevant finding sufficient reason for delay in filing the appeal. The relevant finding sufficient reason for delay in filing the appeal. The relevant finding of the Ld. CIT(A) is reproduced as under : of the Ld. CIT(A) is reproduced as under :
“There exists no sufficient or good reason for c There exists no sufficient or good reason for c There exists no sufficient or good reason for condoning inordinate delays of more than 108 days delay in filing appeal. inordinate delays of more than 108 days delay in filing appeal. inordinate delays of more than 108 days delay in filing appeal. Accordingly, this appeal is dismissed as barred by limitation. Accordingly, this appeal is dismissed as barred by limitation. Accordingly, this appeal is dismissed as barred by limitation. Accordingly I decline to condone the delay of 108 days, and Accordingly I decline to condone the delay of 108 days, and Accordingly I decline to condone the delay of 108 days, and dismiss this appeal of the appellant as barred by limitation dismiss this appeal of the appellant as barred by limitation dismiss this appeal of the appellant as barred by limitation. In view of the above discussion appeal is rendered as In view of the above discussion appeal is rendered as In view of the above discussion appeal is rendered as inadmissible. Hence stand inadmissible. Hence stand dismissed.” 4.1 In the affidavit filed before us, the assessee has also In the affidavit filed before us, the assessee has also In the affidavit filed before us, the assessee has also mentioned the circumstances under which there was a delay of 108 mentioned the circumstances under which there was a delay of 108 mentioned the circumstances under which there was a delay of 108 days in filing the appeal before the Ld. CIT(A). The reasons cited by days in filing the appeal before the Ld. CIT(A). The reasons cited by days in filing the appeal before the Ld. CIT(A). The reasons cited by the assessee are bonafide and are bonafide and sufficiently explain the delay in filing explain the delay in filing the appeal before the Ld. the appeal before the Ld. CIT(A). Accordingly, we condone CIT(A). Accordingly, we condone the delay in filing the appeal be in filing the appeal before the Ld. CIT(A) and restore restore the matter back to him for deciding the issue in dispute involved in the appeal back to him for deciding the issue in dispute involved in the appeal back to him for deciding the issue in dispute involved in the appeal on merit after providing adequate opportunity of being heard to the on merit after providing adequate opportunity of being heard to the on merit after providing adequate opportunity of being heard to the assessee. The grounds of appeal of the assessee are allowed for assessee. The grounds of appeal of the assessee are allowed for assessee. The grounds of appeal of the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for sult, the appeal of the assessee is allowed for sult, the appeal of the assessee is allowed for statistical purposes. statistical purposes.