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Facts
The assessee's appeal was dismissed by the CIT(A) for being time-barred by 25 days. The assessee contended that the delay was due to reasons beyond their control, including an issue with the email address where the assessment order was sent and a lack of familiarity with the faceless appeal mechanism. The CIT(A) dismissed the appeal without granting an opportunity to explain the delay.
Held
The Tribunal held that the CIT(A) should have provided the assessee an opportunity to explain the reasons for the delay before dismissing the appeal as time-barred. The Tribunal set aside the CIT(A)'s order and restored the appeal to the CIT(A)'s file.
Key Issues
Whether the CIT(A) erred in dismissing the appeal as time-barred without providing the assessee an opportunity to explain the delay.
Sections Cited
147, 69, 69B
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Income Tax Appellate Tribunal, C” BENCH, MUMBAI
order : 28.01.2025 O R D E R Per Rahul Chaudhary, Judicial Member:
1. 1. By way of the present appeal the Assessee has challenged the order, dated 23/08/2024, passed by the National Faceless Appeal Centre (NFAC), Delhi, [hereinafter referred to as the ‘CIT(A)’], whereby the Ld. CIT(A) had dismissed the appeal of the Assessee against the Assessment Order, dated 12/03/2024, passed under Section 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year 2018-2019.
2. The Assessee has raised following grounds of appeal : “1. The assessee is a stock trader and is into full time trading of stocks. The assessee has submitted bank statements during the course of the appeal and assessment to substantiate the same.
2. The filing of appeal before the CIT (Appeals) was delayed by 25 days due to reasons beyond the control of the assessee. Assessment Year: 2018-2019
3. The assessee had requested for condonation for delay in filing the appeal with the learner CIT ( Appeals) , however the learned CIT appeals rejected the appeal on this ground without making any detailed inquiry regarding the delay in filing the appeal.
4. The additions have been made by the learned A.O on the presumption that the assessee has entered into penny stock trading without any material on record. 5. The assessee has not entered into any transaction In Goenka Business and Finance Limited. 6. Further even the transactions done in Ejecta Marketing for the first two financial year as called for by the officer for F.Y 15-16 and F.Y 16-17 is Nil and the net results of gain/loss for F.Y 2017-18 is also only Rs. 4,950. 7. Hence based on the above transactions addition of Rs. 1,51,22,099 is not warranted 8. Further an amount of Rs. 10,00,000 being the time deposit has been added back as income under Section 69 of the Income Tax act, 1961. However no details have been called for the same. We would like to state that the time deposit is all your banking channels and hence the addition under Section 69B is not warranted. The assessee does not have any cash deposits in the bank during the year under review.” 3. The relevant facts in brief are that the appeal preferred by the Assessee against the Assessment Order, dated 12/03/2024, passed under Section 147 of the Act was dismissed by the Ld. CIT(A), vide order dated 23/08/2024, on the ground that the appeal preferred by the Assessee was barred by limitation. In paragraph 5. 1. Of the order impugned, the CIT(A) had recorded that the Assessment Order was served on 12/03/2024 whereas the appeal before the CIT(A) was filed on 06/05/2025. Thus, there was a delay of around 25 days in filing appeal before the CIT(A).
4. In appeal before the Tribunal, the contention advanced on the behalf of the Assessee was that the appeal was dismissed by the CIT(A) without granting an opportunity to the Assessee to explain 2 Assessment Year: 2018-2019 the reason for the delay in filing the appeal. It was further submitted that the Assessee was not well verse with the faceless appeal mechanism and therefore, could not file affidavit explaining the reasons for delay in filing the appeal before the CIT(A). It was submitted that there was a delay of around 25 days in filing the appeal since the Assessment Order, dated 16/04/2022, was sent on email address of an employee of the Assessee/company who was relieved of his services. In support of the aforesaid submissions copy of printouts from Income Tax Business Application (ITBA) portal and copy of a certificate issued by the Assessee-Company to the aforesaid employee were placed before the Tribunal. It was further submitted that the Assessee was not able to place the aforesaid explanation/documents for consideration before CIT(A) as the appeal was dismissed without granting the Assessee opportunity of being heard.
5. Per contra the Learned Departmental Representative supported the order passed by CIT(A) and submitted that admittedly there was delay in filing the appeal which was not explained properly by the Assessee, and therefore, the CIT(A) was correct in dismissing the appeal as being barred by limitation.
6. We have perused the material on record and find that in the Memorandum of Appeal in Form 35 filed by the Assessee before the CIT(A), the Assessee had stated that there was delay in filing the appeal. On perusal of order passed by CIT(A) we find that it is admitted position that the delay was of 25 days. The contention of the Assessee is that had the CIT(A) granted opportunity to the Appellant to explain the reasons, the Appellant would have been able present his case for condoning delay in filing appeal before the Tribunal by filing affidavit and supporting documents. Given the period of delay involved in the present case was only 25 days, we find merit in the submission advanced 3 Assessment Year: 2018-2019 on behalf of the Assessee that the CIT(A) should have granted the Appellant an opportunity to explain the reasons for delay in filing the appeal before dismissing the same as being barred by limitation. In the facts and circumstances of the present case we deem in appropriate to set aside the order, dated 23/08/2024, passed by the CIT(A) and restore the appeal back to the file of the CIT(A). The Appellant is directed to file application seeking condonation of delay before the CIT(A) along with affidavit explaining the reasons for delay and the supporting documents. The CIT(A) is directed to decide the aforesaid application seeking condonation of delay in filing appeal as per law after granting the Assessee a reasonable opportunity of being heard, and thereafter, adjudicate the grounds raised by the Assessee in appeal before CIT(A), in case the delay in filing the appeal is condoned. It is clarified that in case the Assessee fails to enter appearance before the CIT(A) or fails to file relevant application, affidavit, documents, etc., the CIT(A) would be at liberty to adjudicate the issue of admission of appeal and/or on the grounds raised in appeal on merits, as the case may be, on the basis of material on record. The Appellant/Assessee is also directed to take necessary steps to update the email address in the records and track the appeal proceedings on the Income Tax Business Application Portal.
In result, the present appeal is treated as partly allowed for statistical purposes in terms of paragraph 6 above.