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Facts
The assessee, a non-resident staying in Singapore, purchased an immovable property for Rs. 1.21 crores and also received rental income. The AO reopened the assessment as no return was filed, made additions for the property and rent, and completed the assessment under Section 144. The assessee challenged the order before the Ld.CIT(A) after a significant delay.
Held
The Tribunal condoned the delay in filing the appeal before the Ld.CIT(A) finding reasonable cause. As the Ld.CIT(A) had dismissed the appeal in limine without adjudicating on merits, the Tribunal set aside the Ld.CIT(A)'s order and restored all issues to the file of the Ld.CIT(A) for fresh adjudication.
Key Issues
Whether there was a reasonable cause for the delay in filing the appeal before the Ld.CIT(A), and whether the Ld.CIT(A) should adjudicate the grounds on merits.
Sections Cited
148, 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI “B” BENCH : MUMBAI
Before: SHRI B.R. BASKARAN & SHRI SANDEEP GOSAIN
Date of Hearing : 12-03-2025 Date of Pronouncement : 13-03-2025 ORDER PER B.R. BASKARAN, A.M : The assessee has filed this appeal challenging the order dt.04-12-2024 passed by the Ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟] and it relates to AY. 2011-12.
The Ld.AR submitted that the assessee is a non-resident, staying in Singapore. During the year under consideration, the assessee had purchased an immoveable property for a sum of Rs. 1.21 crores. It was noticed that the assessee did not file any return of income and hence, the AO reopened the assessment by issuing notice u/s.148 of the Act. The assessee did not respond to any of the notices issued by the AO.
Hence, the AO completed the assessment to be best of his judgment u/s 144 of the Act adding the value of immoveable property as unexplained investment. The AO also noticed that the assessee has received rent of Rs. 1.59 lakhs shown from the data available with the Income Tax Department. The AO added the said income also in the hands of the assessee.
The assessee challenged the assessment order by filing an appeal before the Ld.CIT(A), after a delay of 1461 days. Since the explanation given by the assessee for the delay was not convincing, the Ld.CIT(A) dismissed the appeal in limine. Aggrieved, the assessee filed this appeal before the Tribunal.
The Ld.AR submitted that the assessee is non-resident and he had shifted to Singapore long back in the year 2000 itself. The Ld.AR further submitted that the assessee has mostly stayed in Singapore only and has visited India for less than twenty days in a year. Prior to shifting to Singapore, the assessee had obtained Permanent Account Number [PAN]. At that point of time, there was no necessity to register e-mail ID and phone number with the IT portal. Hence, the assessee was not aware of any of the notices issued by the AO. The Ld.AR submitted that the assessee is having sufficient sources to explain the cost of purchases. For the same reasons, the assessee was not aware of the assessment order passed by the AO. The assessee sold certain shares in December, 2022 and when he applied for Lower Deduction Certificate to the AO, he came to know of the demand raised by the AO for the AY. 2011-12. Immediately thereafter, the assessee obtained copy of the assessment order and filed the appeal before the Ld.CIT(A), wherein the assessee has explained above said reasons and requested the Ld.CIT(A) to condone the delay. However, the Ld.CIT(A) took the view that there was no reasonable cause for condoning the delay and accordingly dismissed the appeal of the assessee.
The Ld.AR submitted that the impugned addition made by the AO itself is not sustainable, since the assessee had sufficient sources for making the investment. The Ld.AR further submitted that the assessee was under genuine belief that no action shall be taken by the Income tax department in the hands of non-resident. Accordingly, he submitted that there was reasonable cause for the assessee in not filing appeal before the Ld.CIT(A) in time. Accordingly, the Ld.AR prayed that the delay in filing appeal before Ld CIT(A) may be condoned.
We heard the Ld.DR and perused the record. Having regard to the submissions made by the assessee, we are of the view that there was reasonable cause for the assessee in not filing appeal before the Ld.CIT(A) within the time. Accordingly, we condone the delay in filing the appeal before the Ld.CIT(A). We notice that the Ld.CIT(A) has not adjudicated the grounds urged by the assessee on merits. Accordingly, we set aside the order passed by the Ld.CIT(A) and restore all the issues to the file of the Ld.CIT(A) for adjudicating them afresh. We also direct the assessee to fully co-operate with the Ld.CIT(A) by furnishing all the information/explanations in support of his contentions. After affording adequate opportunity of being heard to the assessee, the Ld.CIT(A) may take appropriate decision in accordance with law.
In the result, the appeal filed by the assessee is treated as allowed.