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Facts
The assessee filed two appeals against the orders of the CIT(A) for AY 2013-14. The quantum appeal was dismissed by the CIT(A) due to a significant delay in filing, without adjudicating the merits. The penalty appeal was also dismissed on similar grounds.
Held
The Tribunal set aside the ex-parte orders of the CIT(A) and restored the issue to the AO for de novo adjudication. The quantum appeal was allowed for statistical purposes, subject to costs, while the penalty appeal was dismissed as infructuous because the underlying assessment order was set aside.
Key Issues
Whether the CIT(A) was justified in dismissing the appeals solely on grounds of delay without considering the merits, and whether the assessee's explanation for the delay was sufficient.
Sections Cited
147, 144, 69A, 250, 249, 271(1)(c)
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Before: SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL & SHRI PRABHASH SHANKAR
Date of Hearing 04.02.2025 Date of Pronouncement 10.02.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The above captioned two appeals, being quantum and penalty appeals respectively, are filed by the assessee against the orders of the Learned Commissioner of Income-tax (Appeals),Mumbai/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 16.10.2024 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2013-14.Since both the 6518/Mum/2024 6517& 6518/Mum/2024 A.Y. 2013-14 Mr. Prashant Pawar appeals are interlinked, pertaining to the same assessment year , pertaining to the same assessment year , pertaining to the same assessment year and heard together, they are being they are being adjudicated vide this composite order for adjudicated vide this composite order for the sake of brevity. We first take up the quantum appeal in We first take up the quantum appeal in:
The assessee in in various grounds of appeal has pleaded that the pleaded that the ld.CIT(A) passed the appellate order ld.CIT(A) passed the appellate order dismissing his appeal on account of dismissing his appeal on account of delay in filing of appeal, without sufficient opportunity of hearing. without sufficient opportunity of hearing. without sufficient opportunity of hearing. The Id.
Assessing officer erred in re opening the case on wrong facts and passing Assessing officer erred in re opening the case on wrong facts and passing Assessing officer erred in re opening the case on wrong facts and passing the ex parte order u/s 147 r.w.s. 144 parte order u/s 147 r.w.s. 144 and also in determining the in determining the total income at Rs. 61,00,000 income at Rs. 61,00,000/- by treating the Fixed Deposit of Rs. by treating the Fixed Deposit of Rs. 61,00,000/- as income of the assessee as unexplained money u/s 69A. as income of the assessee as unexplained money u/s 69A. as income of the assessee as unexplained money u/s 69A. It is pleaded that The Assessee further prays that the opportunity of hearing The Assessee further prays that the opportunity of hearing The Assessee further prays that the opportunity of hearing may be provided and application for condo may be provided and application for condonation of delay rejected by the rejected by the ld. CIT(A) may be allowed, since the balance convenience lies in favour of ld. CIT(A) may be allowed, since the balance convenience lies in favour of ld. CIT(A) may be allowed, since the balance convenience lies in favour of the assessee.
Brief facts of the case are that the facts of the case are that the assessment order was passed u/s assessment order was passed u/s 144 of the Act on account of non compliance by 144 of the Act on account of non compliance by the assessee before the ld.AO. the assessee before the ld.AO.
Even before the ld.CIT(A),there was no compliance by the assessee despite Even before the ld.CIT(A),there was no compliance by the assessee despite Even before the ld.CIT(A),there was no compliance by the assessee despite several opportunities of hearing accorded by him several opportunities of hearing accorded by him, apart from making part , apart from making part compliance electronically compliance electronically. The appellate authority noticed that that the appeal of P a g e | 3 & 6518/Mum/2024 6517& 6518/Mum/2024 A.Y. 2013-14 Mr. Prashant Pawar the assessee was delayed by 280 days even after the assessee was delayed by 280 days even after excluding the delay of 124 excluding the delay of 124 days pertaining to COVID period. days pertaining to COVID period. The ld.CIT(A) after taking into account The ld.CIT(A) after taking into account observed that “for condoning the delay, it must be proved beyond the shadow of doubt condoning the delay, it must be proved beyond the shadow of doubt condoning the delay, it must be proved beyond the shadow of doubt that the assessee was diligent and was not guilty of negligence whatsoever. The sufficient was diligent and was not guilty of negligence whatsoever. The sufficient was diligent and was not guilty of negligence whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond cause within the contemplation of the limitation provision must be a cause which is beyond cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party Invoking the aid of the provisions. The Hon'ble Supreme Court in the control of the party Invoking the aid of the provisions. The Hon'ble Supreme Court in the control of the party Invoking the aid of the provisions. The Hon'ble Supreme Court in the case of Ramlal vs. Rewa Coalfield Ltd. AIR 196 SC 361 has held that the party will have e case of Ramlal vs. Rewa Coalfield Ltd. AIR 196 SC 361 has held that the party will have e case of Ramlal vs. Rewa Coalfield Ltd. AIR 196 SC 361 has held that the party will have to show sufficient cause not only for not filing the appeal on the last day but to explain the to show sufficient cause not only for not filing the appeal on the last day but to explain the to show sufficient cause not only for not filing the appeal on the last day but to explain the delay made thereafter day by day. In other words, in showing sufficient delay made thereafter day by day. In other words, in showing sufficient delay made thereafter day by day. In other words, in showing sufficient cause for condoning the delay the party may be called upon to explain for the whole of the delay condoning the delay the party may be called upon to explain for the whole of the delay condoning the delay the party may be called upon to explain for the whole of the delay covered by the period between the last day prescribed for filing the appeal and the day on covered by the period between the last day prescribed for filing the appeal and the day on covered by the period between the last day prescribed for filing the appeal and the day on which the appeal is filed. It has also been held in this case that which the appeal is filed. It has also been held in this case that it is necessary to emphasize it is necessary to emphasize that even after sufficient cause has been shown, a party is not entitled to the condonation of that even after sufficient cause has been shown, a party is not entitled to the condonation of that even after sufficient cause has been shown, a party is not entitled to the condonation of delay in question as a matter of right. The proof of a sufficient cause is a condition delay in question as a matter of right. The proof of a sufficient cause is a condition delay in question as a matter of right. The proof of a sufficient cause is a condition precedent for the exercise of the discretiona precedent for the exercise of the discretionary jurisdiction vested in the Court by s.5. If ry jurisdiction vested in the Court by s.5. If sufficient cause is not proved nothing further has to be done; the application for sufficient cause is not proved nothing further has to be done; the application for sufficient cause is not proved nothing further has to be done; the application for condonation of delay has to be dismissed on that ground alone. Here, it is pertinent to condonation of delay has to be dismissed on that ground alone. Here, it is pertinent to condonation of delay has to be dismissed on that ground alone. Here, it is pertinent to mention that the provisions of Section mention that the provisions of Section 5 of The Limitation Act 1961 are parametria to the 5 of The Limitation Act 1961 are parametria to the provisions of Sec 249 of the Act as both the provisions stipulate that after expiry of provisions of Sec 249 of the Act as both the provisions stipulate that after expiry of provisions of Sec 249 of the Act as both the provisions stipulate that after expiry of stipulated period of limitation as per provisions of the relevant Act, if the court is satisfied stipulated period of limitation as per provisions of the relevant Act, if the court is satisfied stipulated period of limitation as per provisions of the relevant Act, if the court is satisfied that there was a "sufficient cause" for non fficient cause" for non-presenting the appeal within prescribed period, presenting the appeal within prescribed period, then the appeal may be admitted for hearing on merits by condoning the then the appeal may be admitted for hearing on merits by condoning the then the appeal may be admitted for hearing on merits by condoning the delay.”Accordingly, the the the ld.CIT(A) ld.CIT(A) ld.CIT(A) did did did not not not condone condone condone the the the delay delay delay and and and 6518/Mum/2024 6517& 6518/Mum/2024 A.Y. 2013-14 Mr. Prashant Pawar consequently,the appeal of the assessee was dismi the appeal of the assessee was dismissed in terms of section ssed in terms of section 249(2) of the Act.
Before us, the ld.ARs the ld.ARs pleaded for restoration of the appeal before pleaded for restoration of the appeal before the lower authorities following the the lower authorities following the principles of natural justice. Per contra t principles of natural justice. Per contra the ld.DR however, supported the orders of aut ld.DR however, supported the orders of authorities below stating that the horities below stating that the assessee is habitually non compliant. assessee is habitually non compliant. The assessee has also filed an affidavit The assessee has also filed an affidavit citing reasons for the delay in filing of appeal before first appellate authority.It citing reasons for the delay in filing of appeal before first appellate authority.It citing reasons for the delay in filing of appeal before first appellate authority.It is, inter alia submitted that there was in fact delay of 40 inter alia submitted that there was in fact delay of 402 days which occurred 2 days which occurred partly on account of Covid ovid related reasons and partly on account of t reasons and partly on account of the earlier Chartered Accountant,not being conversant with tax proceedings. ,not being conversant with tax proceedings. ,not being conversant with tax proceedings. The assessee had to engage another CA later.It is submitted that the delay was assessee had to engage another CA later.It is submitted that the delay was assessee had to engage another CA later.It is submitted that the delay was neither deliberate nor with any malicious intention but on account of bonafide deliberate nor with any malicious intention but on account of bonafide deliberate nor with any malicious intention but on account of bonafide reasons and circumstances beyond the control of the assessee. reasons and circumstances beyond the control of the assessee.
We have carefully considered the facts of the case and the contents of We have carefully considered the facts of the case and the contents of We have carefully considered the facts of the case and the contents of the appellate orders and also the aff s and also the affidavit submitted by the assessee idavit submitted by the assessee.As per section 249(2) of the Act, any appeal before the CIT(A) is required to be filed section 249(2) of the Act, any appeal before the CIT(A) is required to be filed section 249(2) of the Act, any appeal before the CIT(A) is required to be filed in electronic mode within 30 days of receipt of the order and demand notice in electronic mode within 30 days of receipt of the order and demand notice in electronic mode within 30 days of receipt of the order and demand notice by the appellant. Further, section 249(3) provides that the by the appellant. Further, section 249(3) provides that the CIT(A) may admit CIT(A) may admit an appeal filed after the prescribed due date if he is satisfied that the appellant an appeal filed after the prescribed due date if he is satisfied that the appellant an appeal filed after the prescribed due date if he is satisfied that the appellant had sufficient cause for not filing the appeal within the prescribed time limit. had sufficient cause for not filing the appeal within the prescribed time limit. had sufficient cause for not filing the appeal within the prescribed time limit.
The assessee failed to cite any reasonable cause for the delay in filing of the failed to cite any reasonable cause for the delay in filing of the failed to cite any reasonable cause for the delay in filing of the 6518/Mum/2024 6517& 6518/Mum/2024 A.Y. 2013-14 Mr. Prashant Pawar appeal before the ld.CIT(A). appeal before the ld.CIT(A).It is also a fact that the ld.CIT(A) dismissed the CIT(A) dismissed the appeal solely on the ground of substantial delay in filing of the appeal and did the ground of substantial delay in filing of the appeal and did the ground of substantial delay in filing of the appeal and did not adjudicate the issues adjudicate the issues raised in the grounds of appeal and did not examine raised in the grounds of appeal and did not examine the material available on record. Such dismissal without deciding the appeal the material available on record. Such dismissal without deciding the appeal the material available on record. Such dismissal without deciding the appeal on merits is contrary to the principles of natural justice. However, it is a on merits is contrary to the principles of natural justice. However, it is a on merits is contrary to the principles of natural justice. However, it is a fundamental duty of the assessee to diligently pur fundamental duty of the assessee to diligently pursue the appeal and comply sue the appeal and comply with the notices and proceedings initiated by the with the notices and proceedings initiated by the Revenue authorities evenue authorities which in this case is grossly lacking as is grossly lacking as evident from the attitude of the assessee evident from the attitude of the assessee. Despite the issuance of multiple notices under section 250 of the Act by the the issuance of multiple notices under section 250 of the Act by the the issuance of multiple notices under section 250 of the Act by the ld.CIT(A), no substantive response or explanation was submitted. no substantive response or explanation was submitted. No plausible reasons No plausible reasons were adduced with regard to the delay in filing of appeal were adduced with regard to the delay in filing of appeal as well as well.The failure of the assessee to take any initiative the assessee to take any initiative in pursuing the appeals in pursuing the appeals reflects gross negligence and an indifference that is unacceptable difference that is unacceptable. Needless to state Needless to state, the principles of natural justice principles of natural justice apply both to the Revenue authorities evenue authorities who are required to provide a reason required to provide a reasonable opportunity of being heard and also able opportunity of being heard and also the taxpayer is obligated to co taxpayer is obligated to co-operate with the authorities and utilize the operate with the authorities and utilize the opportunities extended. In the present case, despite receiving adequate opportunities extended. In the present case, despite receiving adequate opportunities extended. In the present case, despite receiving adequate opportunities, the assessee displayed a casual approach and indifference, opportunities, the assessee displayed a casual approach and indifference, opportunities, the assessee displayed a casual approach and indifference, which not only delayed the appel which not only delayed the appellate proceedings but also burdened the late proceedings but also burdened the judicial system. Such conduct cannot be condoned. h conduct cannot be condoned.The inability or The inability or unwillingness to pursue the matter actively not only disrupts the judicial unwillingness to pursue the matter actively not only disrupts the judicial unwillingness to pursue the matter actively not only disrupts the judicial 6518/Mum/2024 6517& 6518/Mum/2024 A.Y. 2013
14. Mr. Prashant Pawar process but also undermines the efficient functioning of the appellate process but also undermines the efficient functioning of the appellate process but also undermines the efficient functioning of the appellate mechanism. In view of such observations view of such observations, we find that the non cooperative non cooperative attitude of the assessee calls for levy of cost on it attitude of the assessee calls for levy of cost on it. The cost serves as a . The cost serves as a necessary deterrent to ensure that taxpayers act with due diligence in pursuing necessary deterrent to ensure that taxpayers act with due diligence in pursuing necessary deterrent to ensure that taxpayers act with due diligence in pursuing their appeals and respecting th their appeals and respecting the timelines and processes laid down under the e timelines and processes laid down under the law. It also emphasizes the principle that while justice must be ensured, the law. It also emphasizes the principle that while justice must be ensured, the law. It also emphasizes the principle that while justice must be ensured, the system cannot cater to indolence or negligence on the part of the assessee. system cannot cater to indolence or negligence on the part of the assessee. system cannot cater to indolence or negligence on the part of the assessee.
6. In view of the above, we set aside the ex In view of the above, we set aside the ex-parte order of the parte order of the ld.CIT(A) and restore the CIT(A) and restore the issue to the ld.AO who also passed ex parte issue to the ld.AO who also passed ex parte assessment order u/s 144 of assessment order u/s 144 of the Act, for de novo adjudication. He He is directed to decide the matter on merits after providing on merits after providing a reasonable opportunity a reasonable opportunity of being heard to the assessee who shall duly co heard to the assessee who shall duly co-operate in the assessment proceedings operate in the assessment proceedings and make necessary compliances as required by ary compliances as required by in the assessment in the assessment proceedings.
6.1 Considering the assessee’s failure to Considering the assessee’s failure to make necessary make necessary compliance and inordinate delay in filing of appeal inordinate delay in filing of appeal reflecting complete lack of diligence in lack of diligence in pursuing the appeal, we impose a cost of Rs.11,000/ pursuing the appeal, we impose a cost of Rs.11,000/- on the assessee. The cost on the assessee. The cost shall be deposited to the credit of the Income Tax Department within 15 shall be deposited to the credit of the Income Tax Department within 15 shall be deposited to the credit of the Income Tax Department within 15 days of the receipt of this order, and proof of payment shall be submitted before the e receipt of this order, and proof of payment shall be submitted before the e receipt of this order, and proof of payment shall be submitted before the ld.AO.
6518/Mum/2024 6517& 6518/Mum/2024 A.Y. 2013-14 Mr. Prashant Pawar
In the result, the appeal of the assessee is In the result, the appeal of the assessee is allowed for statistical allowed for statistical purposes, subject to the levy of costs as specified above. , subject to the levy of costs as specified above. appeal) 8. The assessee with regard to The assessee with regard to dismissal of its penalty appeal has dismissal of its penalty appeal has contented that the ld.CIT(A) did not allow adequate opportunity of hearing contented that the ld.CIT(A) did not allow adequate opportunity of hearing contented that the ld.CIT(A) did not allow adequate opportunity of hearing and dismissed the appeal on and dismissed the appeal on the ground of delay of 280 days. ground of delay of 280 days. Besides, the Assessing officer erred in levying 100% penalty of Rs. 18,23,100 red in levying 100% penalty of Rs. 18,23,100 red in levying 100% penalty of Rs. 18,23,100/- on the tax sought to have evaded as per order u/s 144 r.w.s 147. It is pleaded that It is pleaded that opportunity of hearing may be provided and application for condonation of opportunity of hearing may be provided and application for condonation of opportunity of hearing may be provided and application for condonation of delay rejected by the ld. CIT(A) may be allowed y the ld. CIT(A) may be allowed. It is noticed that the AO is noticed that the AO passed order of penalty u/s 271(1)(c) of the Act in ex parte manner on account passed order of penalty u/s 271(1)(c) of the Act in ex parte manner on account passed order of penalty u/s 271(1)(c) of the Act in ex parte manner on account of repeated non compliance by the assessee during penalty proceedings.The of repeated non compliance by the assessee during penalty proceedings.The of repeated non compliance by the assessee during penalty proceedings.The ld.CIT(A) dismissed the appeal on account of delay of 291 days in filing of the ld.CIT(A) dismissed the appeal on account of delay of 291 days in filing of the ld.CIT(A) dismissed the appeal on account of delay of 291 days in filing of the appeal which remained to be explained by the assessee before him. appeal which remained to be explained by the assessee before him. appeal which remained to be explained by the assessee before him.
We have already set aside the quantum appeal in e have already set aside the quantum appeal in e have already set aside the quantum appeal in 24(supra), restoring the issue to the AO for de novo restoring the issue to the AO for de novo assessment, the present appeal has become infructuous assessment, the present appeal has become infructuous.Since the assessment .Since the assessment order no longer exists,there is no question of any penalty existing as well. order no longer exists,there is no question of any penalty existing as well. order no longer exists,there is no question of any penalty existing as well.
Thus,the appeal is therefore, is therefore, dismissed.
6518/Mum/2024 6517& 6518/Mum/2024 A.Y. 2013-14 Mr. Prashant Pawar Order pronounced in the open court on 10 ed in the open court on 10.02 .2025.