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Facts
The assessee's appeal for AY 2014-15 was directed against an order that dismissed his appeal without a decision on merit due to non-compliance. The assessee's representative cited ill health and subsequent expiry as reasons for the non-compliance, leading to a delay of 304 days in filing the present appeal.
Held
The Tribunal condoned the delay in filing the appeal due to the reasonable cause presented regarding the ill health of the authorized representative. To decide the case on merit, the Tribunal restored the appeal to the file of the CIT(A) for fresh adjudication after providing adequate opportunities to the assessee.
Key Issues
Whether the delay in filing the appeal before the CIT(A) due to the representative's ill health is a reasonable cause for condonation. Whether the appeal should be decided on merit or dismissed for non-compliance.
Sections Cited
143(2), 144, 80C, 194J, 194A, 250(6)
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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: SHRI AMARJIT SINGH & SHRI SUNIL KUMAR SINGH
O R D E R
PER AMARJIT SINGH, ACCOUNTANT MEMBER:
This appeal of the assessee for the assessment year 2014-15 is directed against the order dated 27.07.2023 passed by the ld. Commissioner of Income-tax (Appeal), NFAC, Delhi. The assessee has raised the following grounds of appeal:
“1. The Ex-party order by CIT(A) ought to have been passed on merit as he erred in confirming the additions made by AO.
2. The ld. AO erred in taking returned income as Rs. 42,64,213/- instead of correct returned income of Rs. 61,93,484/- as reflected in Income Tax Return schedule B-TI Sl No. 14, which was incorrectly confirmed by CIT(A).
The ld. AO erred in making addition of Rs. 19,16,080/- on account of difference in capital account even when appellant has mistakenly taken opening capital in AY 14-15 as Rs. 5,65,38,815/- instead of closing Mahesh Nanabhai Bhatt A.Y. 2014-15 capital of Rs. 5,79,76,443/- in AY 13-14 as reflected in ITR of both years, thus, there is no increase of capital rather there is decrease in capital. This addition was incorrectly confirmed by CIT(A).
4. The ld. AO erred in disallowing the expenses of Rs. 16,36,429/- incurred by appellant in carrying out his profession whereas appellant has himself disallowed expenses of Rs. 3,05,734/- as personal expenses in the return of income. This was incorrectly confirmed by CIT(A).
5. The ld. AO erred in making addition of Rs. 42,58,500/- because of mismatch in 26AS as tax being deducted u/s 194J whereas appellant has disclosed Rs. 32,58,500/- under the head salary and Rs. 10,00,000/- under the head sale of services of Rs. 15,28,437/- thus there is no undisclosed income. This was incorrectly confirmed by CIT(A).
6. The ld. AO erred in making addition of Rs. 16,96,077/- on account of mismatch in 26AS as tax was deducted u/s 194A whereas appellant has disclosed Rs. 5,28,437/- under the head sale of services of Rs. 15,28,427/-. This was incorrectly confirmed by CIT(A).
Appellant craves leave for adding, modifying, deleting any other ground before or at the time of hearing.”
There was a delay of 302 days in filing the appeal by the assessee. During the course of appellate proceedings before us, the assessee has filed affidavit for condonation of delay in filing the appeal. The assessee has reported that earlier his tax matter was looked after by Chartered Accountant, Mr. P.K. De of Kolkata due to his ill health he could not attend the appeal matter and his office was not fully functionable and ultimately he expired on 27.02.2024. In view of the above facts and circumstances, the ld. Counsel requested for condonation of delay in filing the appeal and requested for restoring the case to the file of the First Appellate Authority for adjudication on merit. After considering the facts and circumstances as reported in the affidavit and discussed above in this order it appeared that there is a reasonable cause for delay in filing this appeal. The Hon’ble Supreme Court in the case of Collector Land Mahesh Nanabhai Bhatt A.Y. 2014-15 Acquisition vs Mst, Katiji & Ors. Civil Appeal No. 460 of 1987 dated 19.12.1987 held that sufficient cause for the purpose of condonation of delay should be interpreted with a view to do even handed justice on merit in preference to the approach which scuttles a decision on merit. In the light of the above facts and findings, we condone the delay of 304 days in filing this appeal in order to decide the appeal on merit.
3. Fact in brief is that return of income declaring total income of Rs. 61,93,484/- was filed on 31.12.2014. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 28.08.2015. In response to the notices issued the assessee has not made compliance therefore, the assessing officer has finalized the assessment u/s 144 of the Act and assessed the total income at Rs. 1,55,04,837/- after making an addition of Rs. 19,16,080/- on account of introduction of capital during the year, disallowance of expenses of Rs. 16,36,429/- claimed in the profit & loss account, disallowance of provision of tax of Rs. 17,33,538/-, disallowance of claim of deduction u/s 80C of Rs. 1,00,000/-, addition of Rs. 42,58,500/- on account of discrepancy reported in the annual information report and addition of Rs. 16,96,077/- on account of mismatch of interest income reported in the annual information report.
The assessee filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee on account of not making any compliance to the notice of hearing issued during the course of appellate proceedings.
Heard both the sides and perused the material on record as discussed (supra) in this order. After considering the fact as Mahesh Nanabhai Bhatt A.Y. 2014-15 discussed above that because of ill health of the authorized representative of the assessee, necessary compliance could not be made before the ld. CIT(A) at the time of appellate proceeding, therefore, in order to decide the case of the assessee on merit we restore the same to the file of the ld. CIT(A) for deciding de novo on merit as contemplate u/s 250(6) of the Act after providing adequate opportunities to the assessee. The assessee is also directed to make due compliance before the ld. CIT(A) without any failure. Therefore, the appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 09.01.2025.