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Facts
The assessee's appeal was dismissed by the CIT(A) on grounds of limitation due to a delay of 1364 days in filing. The assessee argued that the assessment order was not served properly, and they were unaware of it until receiving a demand notice.
Held
The Tribunal held that the CIT(A) failed to consider the assessee's submission regarding the non-receipt of the assessment order and dismissed the appeal summarily on limitation without proper adjudication. The Tribunal found that the assessee was denied a reasonable opportunity at both assessment and appellate stages.
Key Issues
Whether the appeal was rightly dismissed on limitation without properly considering the assessee's contention regarding proper service of the assessment order and whether the assessee was denied a reasonable opportunity.
Sections Cited
250, 144, 147, 50C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: SHRI ANIKESH BANERJEE & SHRI OMKARESHWAR CHIDARA
The instant appeal of the assessee was filed against the order of theNational Faceless Appeal Centre, Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2012-13, date of order 25/09/2024.The impugned order was emanated from the order of the Learned Income-tax Officer, Ward-34(3)(6), Mumbai(in short, the “AO”)passed under section144 read with section 147of the Act, date of order16/12/2019.
“1. The Ld. CIT(A) erred in passing the order u's 250 of the Act on the ground that the appeal is delayed without appreciating the fact that there was no delay in filing the Appeal as the appeal was filed within 30 days of service of notice of demand. 2. The Appellant reserves his right to add, amend, delete and modify the above grounds of appeal.” Additional ground:
1. The order passed u/s 147 r.w.s. 144 of the Act dated 16.12.2019 without a Document Identification Number (DIN) is invalid, non-est and bad in law.
3. We heard the rival submissions and considered the documents available in the record. The assessee has filed the return of income for the impugned assessment year. Subsequently, on verification of ITR it was found by the Ld.AO that the assessee has entered into transaction for sale of immovable property on 07/04/2011 for consideration of Rs.28,83,500/-. The market value of the said property was declared by the Stamp Duty Authority at Rs.63,12,000/-. Therefore, by imposing the provisions of section 50C of the Act, the Ld.AO issued the notice to the assessee. Finally, the assessment was completed under section 144 of the Act. Due non-compliance on part of assessee the Ld. AO considered the market value of the property as sales proceed and the alleged market value of Rs.63,12,000/- was treated asshort-term capital gain which was added back with the total income of the assessee. The aggrieved assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) rejected the appeal on the ground of limitation as the appeal was filed with a delay of 1364 days. Finally, the appeal of the assessee was
The Ld.AR filed an affidavit which was filed before the Ld.CIT(A) for explaining the delay of 1364 days. It is argued that the assessee was not aware of passing of the assessment order dated 06/12/2019 as the said order was not served on the assessee and was not available in the income tax portal. Finally, the assessee was aware about the assessment order after receiving the notice of demand realization. The assessee filed a letter on 11/09/2003 for issuance of the copy of the alleged assessment order. Finally, the alleged assessment order was served on the assessee on 03/10/2023 and the appeal was filed before Ld.CIT(A) on 10/10/2023. The reasons for delay in submission of appeal was duly explained before the Ld. CIT(A), which was mentioned in para 2.7 of the order. Further, it is informed the Bench that the assessment was passed exparte under section 144 for the reasons that the assessee was busy for his elder brother’s treatment. The assessee filed an affidavit and explained the delay for filing appeal before the Ld. CIT(A). The Ld. AR prayed for remanding the matter before the Ld. AO.
The Ld.DR vehemently argued and fairly relied on the orders of the revenue authorities.
In our considered view, we hold that the notice must be served in accordance with the procedure prescribed under Rule 127 of the Income-tax Rules, 1962. Mere service through the portal does not fulfill the requirement. The intimation must also be communicated via email.We observe that the Ld. CIT(A)failed to take cognizance of the assessee’s submission regarding the non- Sanjeev Kumar Das receipt of the assessment order, either via email or through the portal. Instead, the appeal was summarily dismissed on the ground of limitation, without properly addressing the assessee’s contention. On the other hand, the assessment order was served upon the assessee on 03.10.2023, and the appeal was filed within seven days thereafter. The assessment was completed ex parte under section 144 of the Act, and the Ld. AO disallowed the entire cost of acquisition due to the assessee’s non-compliance during the assessment proceedings. Furthermore, the sale was unilaterally treated as short-term capital gain, and tax was levied accordingly.The revenue has failed to produce any evidence to counter the assessee’s submission regarding the service of the impugned assessment order. We find that the assessee was denied a reasonable opportunity at both the assessment and appellate stages.
Accordingly, we set aside the matter to the file of the Ld. Assessing Officer for de novo verification of the impugned addition. It is clarified that we are not expressing any opinion on the merits of the case, as doing so may prejudice the reassessment proceedings. Needless to say, the assessee shall be afforded a reasonable opportunity of being heard in the set-aside assessment proceedings. Further, the assessee must be permitted to furnish all requisite documents and evidence necessary for the reassessment. At the same time, the assessee is expected to act diligently and cooperate in the reassessment process.
The Additional Ground was not pressed, so it is treated as withdrawn.