DNYANSHWAR NIVRUTI TALPADE,MUMBAI vs. PRINCIPAL COMMISSIONER OF INCOME TAX PCIT, THANE

There was a delay in filing this appeal by 430 days and assessee has filed condonation of delay vide letter dated 31.05.2022 and affidavit dated 11.11.2022. The assessee has stated that the case of the assessee submitted that in the case of the assessee scrutiny assessment was completed u/s 143(3) in physical mode. However, thereafter the revision proceedings were initiated u/s 263 of the Act in electronic mode and assessee was not awared about the sending of notices on the registered email id. Therefore, the proceeding was completed u/s 263 of the Act ex- parte without the knowledge of the assessee that notice were sent on registered email id. Even the assessment in consequence to order u/s 263 of the Act was completed u/s 144 and the assessee has come to know about proceedings u/s 263 of the Act on the basis of assessment order passed u/s 144 of the Act. Therefore, immediately assessee filed instant appeal against the order u/s 263, therefore, submitted that delay in filing the appeal is condoned.

Heard both the sides and perused the material on record. Without reiterating the fact as elaborated above the assessee was not having experience of making compliance on electronic media and submitted that these were the initial year of online communication and the assessee was not regular in verifying his email Id and assessment in his case u/s 143(3) was completed in physical mode. The assessee has explained that he has come to know about the 263 order only after obtaining the assessment order passed u/s 144 of the Act in consequence to order u/s 263 of the Act. We have also considered decision of Hon’ble Supreme Court in the case of Collector Land Acquisition Vs. Mst. Katigir Ors. And Civil Appeal No. 460 of 1987 dated 19.02.1987 wherein held that sufficient cause for purpose of condonationof delay should he interpreted with a view to do even-handed justice on merit in preference to the approach which scuttles a decision on merits. After taking into consideration the facts and circumstances we observe that there is bonafide reason for delay in filing the appeal. Therefore to adjudicate the case on merit we condone the delay in filing this appeal.

The fact of the case is that assessment u/s 143(3) was completed on 27.12.2017. Thereafter on verification of the record the ld. Pr.CIT notice that assessee had purchased immediately properties on behalf of the firm and the same was transferred to the firm. The ld. Pr.CIT further notice that since the land purchase agreement was executed in the name of the assessee therefore, land should have been treated as introduction of partners capital in the firm and same should have been taxed in the hands of the assessee as capital gain as per provision of Sec. 3 of Sec. 45 of the I.T Act 1961. The ld. Pr.CIT stated that notice u/s 263 of the Act was issued to the assessee on 03.03.2021 but assessee has neither made any submission nor attended during the course of 263 proceedings. Therefore, the ld. Pr.CIT has passed ex-parte order u/s 263 of the Act. Thereafter ld. Pr.CIT vide order u/s 263 of the Act dated 19.03.2021 set aside the order of the A.O passed u/s 143(3) with the direction to examine the applicability of Sec. 45(3) of the Act on transfer of the property of the firm and redo the assessment de novo.

Heard the ld. D.R. and considered the written submission filed by the assessee during the course appellate proceedings before us. As Dhyaneshwar Nivrutti Talapade Vs. Pr.CIT already discussed in this order the assessee has brought to our notice that he could not make compliance during the proceeding u/s 263 of the Act since the requisite notice were sent on the registered email Id and these were initial years of online communication and assessee was not regular in verifying his email Id, therefore, he could not made compliance before ld. Pr.CIT during the course of proceedings u/s 263 of the Act. However, the assessment u/s 143(3) of the Act was completed on physical mode in the case of the assessee. Looking to the above facts and circumstances we consider that there is bonafide reason because of which the assessee could not make compliance during the course of proceedings u/s 263 of the Act before the ld. Pr.CIT. Therefore, in the interest of justice to adjudicate the case of the assessee on merit we restore the issue to the file of ld. Pr.CIT for deciding afresh after affording adequate opportunity to the assessee.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 30.11.2022 (Rahul Chaudhary) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 30.11.2022 Rohit: PS Dhyaneshwar Nivrutti Talapade Vs. Pr.CIT