Loading judgment…
Facts
The assessee appealed against the CIT(A)'s order for AY 2011-12, where the CIT(A) refused to admit additional evidence under Rule 46A. The assessee claimed non-receipt of assessment notices due to an incorrect address used by the AO, preventing her from participating in the assessment. Consequently, the AO passed an ex-parte assessment order making additions for undisclosed flat sale consideration and rental income, which the CIT(A) upheld without deciding on merits.
Held
The ITAT noted a clear discrepancy between the assessee's registered address and the address used by the AO for assessment notices. Finding sufficient cause for the assessee's non-production of evidence before the AO, the ITAT directed the CIT(A) to admit the additional evidence, obtain a remand report from the AO, and decide the appeal on merits. The tribunal allowed the appeal for statistical purposes, remanding the matter to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) erred in not admitting additional evidence under Rule 46A due to non-participation of the assessee in assessment. Validity of assessment proceedings and additions made by the AO in light of alleged non-service of notices due to an incorrect address.
Sections Cited
Rule 46A of Income-tax Rules, 1962, 144, 147, 148, 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “E” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
This appeal by the assessee is directed against order dated 22.10.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2011-12, raising following grounds:
“A) Not admitting the additional evidences stating that A) Not admitting the additional evidences stating that A) Not admitting the additional evidences stating that none of the excepti none of the exceptions/circumstances mentioned in ons/circumstances mentioned in Rule 46A was present in the appellant's case Rule 46A was present in the appellant's case (1) The learned Commissioner of Income Tax (Appeals), The learned Commissioner of Income Tax (Appeals), The learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] erred National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] erred National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] erred on facts and in law in not admitting the additional evidences on facts and in law in not admitting the additional evidences on facts and in law in not admitting the additional evidences stating that none of the exceptions/circumstances mentioned stating that none of the exceptions/circumstances mentioned stating that none of the exceptions/circumstances mentioned in Rule 46A was present in the appellant's case. in Rule 46A was present in the appellant's case. 2) The learned CIT(A) failed to appreciate that the appellant 2) The learned CIT(A) failed to appreciate that the appellant 2) The learned CIT(A) failed to appreciate that the appellant had not received any notices during the course of had not received any notices during the course of had not received any notices during the course of assessment proceedings and was henc assessment proceedings and was hence deprived of e deprived of furnishing any evidences during the course of assessment furnishing any evidences during the course of assessment furnishing any evidences during the course of assessment proceedings and accordingly her case fell under clause (c) of proceedings and accordingly her case fell under clause (c) of proceedings and accordingly her case fell under clause (c) of Rule 46A(1). Hence, the additional evidences were required Rule 46A(1). Hence, the additional evidences were required Rule 46A(1). Hence, the additional evidences were required to be admitted. to be admitted. 3) Without prejudice to the above, the learned C 3) Without prejudice to the above, the learned CIT(A) failed to IT(A) failed to appreciate that the evidences filed by the appellant were appreciate that the evidences filed by the appellant were appreciate that the evidences filed by the appellant were required to be considered to decide the issue on merits and required to be considered to decide the issue on merits and required to be considered to decide the issue on merits and hence the said evidences needed to be admitted. hence the said evidences needed to be admitted. 4) Without prejudice to the above, the learned CIT(A) erred in 4) Without prejudice to the above, the learned CIT(A) erred in 4) Without prejudice to the above, the learned CIT(A) erred in considering all the evidences filed by the appellant including all the evidences filed by the appellant including all the evidences filed by the appellant including Computation of Total Income filed with the return of Income Computation of Total Income filed with the return of Income Computation of Total Income filed with the return of Income and case laws relied on as additional evidences while and case laws relied on as additional evidences while and case laws relied on as additional evidences while holding that none of the exceptions/circumstances mentioned holding that none of the exceptions/circumstances mentioned holding that none of the exceptions/circumstances mentioned in Rule 46A was present in the in Rule 46A was present in the appellant's case. 5) Appellant prays that the additional evidences may be Appellant prays that the additional evidences may be Appellant prays that the additional evidences may be admitted and CIT(A) may be directed to decide the appeal admitted and CIT(A) may be directed to decide the appeal admitted and CIT(A) may be directed to decide the appeal considering the additional evidences filed by the appellant. considering the additional evidences filed by the appellant. considering the additional evidences filed by the appellant. B) Confirming reopening of assessment and the B) Confirming reopening of assessment and the B) Confirming reopening of assessment and the additions made additions made without passing a speaking order without passing a speaking order 6) The learned CIT(A) erred on facts and in law in confirming 6) The learned CIT(A) erred on facts and in law in confirming 6) The learned CIT(A) erred on facts and in law in confirming the reopening of assessments and the additions made the reopening of assessments and the additions made the reopening of assessments and the additions made without passing a speaking order by holding that the without passing a speaking order by holding that the without passing a speaking order by holding that the additional additional additional evidences evidences evidences having having having not not not been been been taken taken taken into into into consideration and having been dismissed, the other grounds ation and having been dismissed, the other grounds ation and having been dismissed, the other grounds need not be adjudicated. need not be adjudicated. 7) The learned CIT(A) failed to appreciate that the grounds The learned CIT(A) failed to appreciate that the grounds The learned CIT(A) failed to appreciate that the grounds regarding reopening of assessment, validity of assessment regarding reopening of assessment, validity of assessment regarding reopening of assessment, validity of assessment without serving proper notices on the appellant, service of without serving proper notices on the appellant, service of without serving proper notices on the appellant, service of notice, principles of natural justice being violated, etc. being tice, principles of natural justice being violated, etc. being tice, principles of natural justice being violated, etc. being legal grounds could have been decided by him on the basis legal grounds could have been decided by him on the basis legal grounds could have been decided by him on the basis of assessment records even if he was not inclined to admit of assessment records even if he was not inclined to admit of assessment records even if he was not inclined to admit the additional evidences filed by the appellant. the additional evidences filed by the appellant. 8) As the CIT(A) has not de As the CIT(A) has not decided the appeal on merits, cided the appeal on merits, appellant prays that the order of the CIT(A) may be set aside appellant prays that the order of the CIT(A) may be set aside appellant prays that the order of the CIT(A) may be set aside and the CIT(A) may be directed to decide the appeal after and the CIT(A) may be directed to decide the appeal after and the CIT(A) may be directed to decide the appeal after considering the submissions of the appellant and also considering the submissions of the appellant and also considering the submissions of the appellant and also examining the case records of the appellant. examining the case records of the appellant. Without prejudice to the above, not deciding the rejudice to the above, not deciding the rejudice to the above, not deciding the following grounds: following grounds: C) Reopening of assessment C) Reopening of assessment 9) The learned AO erred on facts and in law in reopening the 9) The learned AO erred on facts and in law in reopening the 9) The learned AO erred on facts and in law in reopening the assessment of the appellant on the fallacious assumption assessment of the appellant on the fallacious assumption assessment of the appellant on the fallacious assumption that the appellant had not filed her return of incom that the appellant had not filed her return of income and on e and on the assumption that the appellant had not disclosed Capital the assumption that the appellant had not disclosed Capital the assumption that the appellant had not disclosed Capital Gains on sale of House Property and rental income from Gains on sale of House Property and rental income from Gains on sale of House Property and rental income from house property as her income. house property as her income. D) Assessment D) Assessment 10) The learned AO erred on facts and in law in passing the 10) The learned AO erred on facts and in law in passing the 10) The learned AO erred on facts and in law in passing the order u/s. 144 r.w.s. 147 wi order u/s. 144 r.w.s. 147 without serving the notice u/s. 148 thout serving the notice u/s. 148 or serving the notice u/s. 143(2) or properly serving the or serving the notice u/s. 143(2) or properly serving the or serving the notice u/s. 143(2) or properly serving the notices u/s, 142(1) and hence the order is bad in law. notices u/s, 142(1) and hence the order is bad in law. 11) The learned AO erred on facts and in law in passing the 11) The learned AO erred on facts and in law in passing the 11) The learned AO erred on facts and in law in passing the order u/s. 144 r.w.s. 147 without giving a reason order u/s. 144 r.w.s. 147 without giving a reasonable and able and sufficient opportunity of being heard to sufficient opportunity of being heard to the appellant. appellant. E) Adding the entire sale consideration of flat as E) Adding the entire sale consideration of flat as E) Adding the entire sale consideration of flat as undisclosed income undisclosed income - Rs. 4,90,00,000/- 12) The learned AO erred on facts and in law in adding the 12) The learned AO erred on facts and in law in adding the 12) The learned AO erred on facts and in law in adding the entire sale consideration of flat as undis entire sale consideration of flat as undisclosed income of Rs. closed income of Rs. 4,90,00,000/ 4,90,00,000/- without referring to the return of income without referring to the return of income wherein appellant had already offered the Capital Gain on wherein appellant had already offered the Capital Gain on wherein appellant had already offered the Capital Gain on sale of flat. F) Adding rental income of Rs. 8,66,000/ F) Adding rental income of Rs. 8,66,000/- 13) The learned AO erred on facts and in law in making an 13) The learned AO erred on facts and in law in making an 13) The learned AO erred on facts and in law in making an addition of Rs. 8,66,000/ n of Rs. 8,66,000/- on account of rental income on account of rental income without appreciating that the appellant had already offered without appreciating that the appellant had already offered without appreciating that the appellant had already offered gross gross rental rental income income of of Rs. Rs. 10,81,000/- 10,81,000/ in in the the return of income income.
2. At the very outset, learned counsel for the assessee drawn our At the very outset, learned counsel for the assessee drawn our At the very outset, learned counsel for the assessee drawn our attention to Ground No. 1 of the appeal and submitted that the Ld. Ground No. 1 of the appeal and submitted that the Ld. Ground No. 1 of the appeal and submitted that the Ld. CIT(A) failed to admit the additional evidence furnished by the CIT(A) failed to admit the additional evidence furnished by the CIT(A) failed to admit the additional evidence furnished by the assessee and assessee and proceeded to adjudicate assessee and proceeded proceeded to adjudicate the appeal without to adjudicate the appeal without the appeal without considering the merits of the case. It has been further contended considering the merits of the case. It has been further contended considering the merits of the case. It has been further contended that the assessee did not receive any of the notices issued by the e did not receive any of the notices issued by the e did not receive any of the notices issued by the Assessing Officer during the assessment proceedings, which Assessing Officer during the assessment proceedings, which Assessing Officer during the assessment proceedings, which resulted in non-compliance. compliance. In support thereof, the assessee placed In support thereof, the assessee placed on record a copy of the acknowledgments of the income-tax return on record a copy of the acknowledgments of the income on record a copy of the acknowledgments of the income for the assessment year under consideration as well as for sment year under consideration as well as for sment year under consideration as well as for subsequent assessment years, demonstrating that there was no subsequent assessment years, demonstrating that there was no subsequent assessment years, demonstrating that there was no change in the address of the assessee. It has been pointed out that change in the address of the assessee. It has been pointed out that change in the address of the assessee. It has been pointed out that the address mentioned in the acknowledgment for the relevant year the address mentioned in the acknowledgment for the relevant year the address mentioned in the acknowledgment for the relevant year and subsequent assessment assessment assessment years years years is is is "38/A, "38/A, "38/A, First First First Floor, Floor, Floor, Parekhwadi, 202 V.P. Road, Prarthana Samaj, Girgaon, Mumbai," Parekhwadi, 202 V.P. Road, Prarthana Samaj, Girgaon, Mumbai," Parekhwadi, 202 V.P. Road, Prarthana Samaj, Girgaon, Mumbai," whereas the assessment order was issued at "3rd Floor, 144A, V.P. whereas the assessment order was issued at "3rd Floor, 144A, V.P. whereas the assessment order was issued at "3rd Floor, 144A, V.P. Road, Sicka Nagar, Charni Road, Mumbai." The learned counsel Road, Sicka Nagar, Charni Road, Mumbai." The learned counsel Road, Sicka Nagar, Charni Road, Mumbai." The learned counsel further referred to Paper B further referred to Paper Book Volume 2 (Pages 49 to 68) and ook Volume 2 (Pages 49 to 68) and submitted that even on the e submitted that even on the e-filing portal of the Income filing portal of the Income-tax Department, the assessee’s registered address remains "38/A, First Department, the assessee’s registered address remains "38/A, First Department, the assessee’s registered address remains "38/A, First Floor, Parekhwadi, 202 V.P. Road, Prarthana Samaj, Girgaon, Floor, Parekhwadi, 202 V.P. Road, Prarthana Samaj, Girgaon, Floor, Parekhwadi, 202 V.P. Road, Prarthana Samaj, Girgaon, Mumbai." It has been urged that at Mumbai." It has been urged that at no point in time did the no point in time did the assessee had any nexus with the "Charni Road" address as reflected assessee had any nexus with the "Charni Road" address as reflected assessee had any nexus with the "Charni Road" address as reflected in the assessment order. in the assessment order. In light of the above, the learned counsel In light of the above, the learned counsel contented that there existed a bona fide reason for the assessee’s contented that there existed a bona fide reason for the assessee’s contented that there existed a bona fide reason for the assessee’s non-appearance before the As appearance before the Assessing Officer, and, consequently, sessing Officer, and, consequently, the additional evidence ought to have been admitted by the Ld. the additional evidence ought to have been admitted by the Ld. the additional evidence ought to have been admitted by the Ld. CIT(A). Accordingly, it has been prayed that the order of the Ld. CIT(A). Accordingly, it has been prayed that the order of the Ld. CIT(A). Accordingly, it has been prayed that the order of the Ld. CIT(A) be set aside, and a direction be issued to admit the CIT(A) be set aside, and a direction be issued to admit the CIT(A) be set aside, and a direction be issued to admit the additional evidence and adjudic additional evidence and adjudicate the issue on merits. ate the issue on merits.
We have heard the rival submissions advanced by the parties and We have heard the rival submissions advanced by the parties and We have heard the rival submissions advanced by the parties and perused the material placed on record. The primary grievance perused the material placed on record. The primary grievance perused the material placed on record. The primary grievance raised by the assessee pertains to the refusal of the Ld. CIT(A) to raised by the assessee pertains to the refusal of the Ld. CIT(A) to raised by the assessee pertains to the refusal of the Ld. CIT(A) to admit additional evidence filed und admit additional evidence filed under Rule 46A of the Income er Rule 46A of the Income-tax Rules, 1962 (hereinafter, "the Rules"). The findings recorded by the Rules, 1962 (hereinafter, "the Rules"). The findings recorded by the Rules, 1962 (hereinafter, "the Rules"). The findings recorded by the Ld. CIT(A) are reproduced as under: Ld. CIT(A) are reproduced as under:
“4. However, since during the assessment proceedings “4. However, since during the assessment proceedings “4. However, since during the assessment proceedings the appellant does not participated, however during the the appellant does not participated, however during the the appellant does not participated, however during the appellate proceedings she has submitted new evidence proceedings she has submitted new evidence proceedings she has submitted new evidence to justify the claim which has not been produced before to justify the claim which has not been produced before to justify the claim which has not been produced before the assessing officer. However, for submission of the assessing officer. However, for submission of the assessing officer. However, for submission of additional as well as new evidence the appellant failed additional as well as new evidence the appellant failed additional as well as new evidence the appellant failed to submit the reasons. Rule 46A of the IT Rules, to submit the reasons. Rule 46A of the IT Rules, to submit the reasons. Rule 46A of the IT Rules, prescribes the circumstances/exceptions under which escribes the circumstances/exceptions under which escribes the circumstances/exceptions under which the assessee can file additional evidences before the the assessee can file additional evidences before the the assessee can file additional evidences before the CIT (A), which are as under CIT (A), which are as under- (a) Where the AO has refused to admit (a) Where the AO has refused to admit (a) Where the AO has refused to admit evidence which ought to have been admitted; evidence which ought to have been admitted; evidence which ought to have been admitted; or (b) Where the assessee was prevented by (b) Where the assessee was prevented b (b) Where the assessee was prevented b sufficient cause from producing the evidence sufficient cause from producing the evidence sufficient cause from producing the evidence which he was called upon to produce by the which he was called upon to produce by the which he was called upon to produce by the AO; or AO; or (c) Where the appellant was prevented by (c) Where the appellant was prevented by (c) Where the appellant was prevented by sufficient cause from producing before the sufficient cause from producing before the sufficient cause from producing before the AO any evidence which is relevant to any AO any evidence which is relevant to any AO any evidence which is relevant to any ground of appeal
; or ground of appeal; or (d) Where the (d) Where the AO has made the order AO has made the order appealed against without giving sufficient appealed against without giving sufficient appealed against without giving sufficient opportunity opportunity opportunity to to to the the the assessee assessee assessee to to to adduce adduce adduce evidence relevant to any ground of appeal. evidence relevant to any ground of appeal. evidence relevant to any ground of appeal.
5. No such circumstances exist in the case of the 5. No such circumstances exist in the case of the 5. No such circumstances exist in the case of the assessee. The order u/s 144 of the Act, dated assessee. The order u/s 144 of the Act, dated assessee. The order u/s 144 of the Act, dated 30.10.2018 30.10.2018 was wa s passed passed after after giving giving sufficient sufficient opportunities to the assessee. It is pertinent to mention opportunities to the assessee. It is pertinent to mention opportunities to the assessee. It is pertinent to mention here that the appellant, who was much vigil to prefer here that the appellant, who was much vigil to prefer here that the appellant, who was much vigil to prefer the appeal but, did not bother to attend the assessment the appeal but, did not bother to attend the assessment the appeal but, did not bother to attend the assessment proceedings conducted by the Assessing Officer. Further proceedings conducted by the Assessing Officer. Further proceedings conducted by the Assessing Officer. Further regarding her claim no evidence has been submitted to regarding her claim no evidence has been submitted to regarding her claim no evidence has been submitted to justify the same. justify the same. 6. 6.
6. The The The assessee assessee assessee has, has, has, during during during the the the assessment assessment assessment proceedings before AO has not participated nor in its proceedings before AO has not participated nor in its proceedings before AO has not participated nor in its application has stated that it was prevented by application has stated that it was prevented by application has stated that it was prevented by sufficient cause from producing before sufficient cause from producing before the AO the the AO the details being submitted by it as "additional evidence". details being submitted by it as "additional evidence". details being submitted by it as "additional evidence". Since the appellant was not prevented by any sufficient Since the appellant was not prevented by any sufficient Since the appellant was not prevented by any sufficient reasons. Further, it would also be not out of context to reasons. Further, it would also be not out of context to reasons. Further, it would also be not out of context to mention here that the laws aid those who are vigilant, mention here that the laws aid those who are vigilant, mention here that the laws aid those who are vigilant, not those who sleep not those who sleep upon their rights. This principle is upon their rights. This principle is embodied in well know dictum IGILANTIBUS ET NON embodied in well know dictum IGILANTIBUS ET NON embodied in well know dictum IGILANTIBUS ET NON DORMIENTIBUS DORMIENTIBUS DORMIENTIBUS JURA JURA JURA SUB SUB SUB VENIUNT." VENIUNT." VENIUNT." Therefore, Therefore, Therefore, submission of the additional evidence at this stage is submission of the additional evidence at this stage is submission of the additional evidence at this stage is not acceptable and is rejected. not acceptable and is rejected. 7. 7.
7. Since, Since, Since, none none none of of of the the the exceptions/circumstances exceptions/circumst exceptions/circumst mentioned in Rule 46A of the IT Rules is present in mentioned in Rule 46A of the IT Rules is present in mentioned in Rule 46A of the IT Rules is present in assessee case; I am not inclined to admit the additional assessee case; I am not inclined to admit the additional assessee case; I am not inclined to admit the additional evidence submitted by the assessee. evidence submitted by the assessee.
8. Therefore, addition made by the AO in assessment
8. Therefore, addition made by the AO in assessment
8. Therefore, addition made by the AO in assessment order holds good. Thus, the addition made by the AO i order holds good. Thus, the addition made by the AO i order holds good. Thus, the addition made by the AO is hereby confirmed. This ground of appeal is dismissed. hereby confirmed. This ground of appeal is dismissed. hereby confirmed. This ground of appeal is dismissed. Since the additional evidences filed by the appellant Since the additional evidences filed by the appellant Since the additional evidences filed by the appellant have not been taken into consideration and the ground have not been taken into consideration and the ground have not been taken into consideration and the ground has been dismissed. The other grounds need not has been dismissed. The other grounds need not has been dismissed. The other grounds need not to be adjudicated.” adjudicated.” 3.1 The learned counsel f The learned counsel for the assessee submitted that the or the assessee submitted that the address recorded in the assessment order pertains to a location address recorded in the assessment order pertains to a location address recorded in the assessment order pertains to a location with which the assessee has no connection and that, consequently, with which the assessee has no connection and that, consequently, with which the assessee has no connection and that, consequently, the notices issued by the Assessing Officer were not received. The the notices issued by the Assessing Officer were not received. The the notices issued by the Assessing Officer were not received. The record reflects that the record reflects that the assessee's registered address on the Income assessee's registered address on the Income- tax Department portal and the acknowledgment of returns for tax Department portal and the acknowledgment of returns for tax Department portal and the acknowledgment of returns for assessment years 2014 assessment years 2014-15 to 2019-20 is "38/A, First Floor, 20 is "38/A, First Floor, Parekhwadi, 202 V.P. Road, Prarthana Samaj, Girgaon, Mumbai." Parekhwadi, 202 V.P. Road, Prarthana Samaj, Girgaon, Mumbai." Parekhwadi, 202 V.P. Road, Prarthana Samaj, Girgaon, Mumbai." The discrepancy in the address The discrepancy in the address raises a pertinent issue as to raises a pertinent issue as to whether the assessee was duly served with notices during the whether the assessee was duly served with notices during the whether the assessee was duly served with notices during the course of assessment proceedings. course of assessment proceedings. Upon due consideration of the Upon due consideration of the facts and circumstances, we are satisfied that the assessee was facts and circumstances, we are satisfied that the assessee was facts and circumstances, we are satisfied that the assessee was prevented by sufficient cause from prevented by sufficient cause from producing the relevant evidence producing the relevant evidences before the Assessing Officer. In such a situation, the provisions of before the Assessing Officer. In such a situation, the provisions of before the Assessing Officer. In such a situation, the provisions of Rule 46A(b) and (c) of the Rules are attracted, and the additional Rule 46A(b) and (c) of the Rules are attracted, and the additional Rule 46A(b) and (c) of the Rules are attracted, and the additional evidence ought to have been admitted by the Ld. CIT(A). evidence ought to have been admitted by the Ld. CIT(A). evidence ought to have been admitted by the Ld. CIT(A). Accordingly, we find it just an Accordingly, we find it just and proper to direct the Ld. CIT(A) to d proper to direct the Ld. CIT(A) to admit the additional evidence and adjudicate the issue in admit the additional evidence and adjudicate the issue in admit the additional evidence and adjudicate the issue in accordance with the law. The Ld. CIT(A) shall, after admitting such accordance with the law. The Ld. CIT(A) shall, after admitting such accordance with the law. The Ld. CIT(A) shall, after admitting such evidence, call for a remand report from the Assessing Officer and evidence, call for a remand report from the Assessing Officer and evidence, call for a remand report from the Assessing Officer and thereafter render a decisio thereafter render a decision on merits. In view of the foregoing, In view of the foregoing, Ground No. 2 of the appeal stands allowed. Ground No. 2 of the appeal stands allowed. Since we have already Since we have already allowed the ground No. 2 of the appeal of the assessee and restored allowed the ground No. 2 of the appeal of the assessee and restored allowed the ground No. 2 of the appeal of the assessee and restored the matter back to the file of the Ld. CIT(A) the matter back to the file of the Ld. CIT(A), the remaining grounds the remaining grounds are not required to be adjudicated upon at this stage. are not required to be adjudicated upon at this stage. are not required to be adjudicated upon at this stage.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open Court on nounced in the open Court on 20/02/2025. /02/2025.