What did the Tribunal hold?

The Tribunal condoned the delay, citing the principle of natural justice and the substantial enhancement in assessment, but imposed a cost of Rs. 25,000 on the assessee. The case was remanded to the Assessing Officer for de novo adjudication.

The assessee filed an appeal with a significant delay of 1746 days. The revenue contended that the order was served and the assessee was aware of subsequent proceedings, while the assessee claimed ignorance until recovery proceedings. The returned income was significantly enhanced during assessment.

What were the issues?

Whether the delay in filing the appeal should be condoned, and if so, on what terms, considering the assessee's alleged negligence and the merits of the case.

M.Bharathi, Villupuram vs ITO | ITAT Chennai 2022

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: HON’BLE SHRI MAHAVIR SINGH & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2012-13 arises out of the order of learned Commissioner of Income Tax (Appeals), Puducherry [CIT(A)] dated 31-10-2016 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 31-03-2015. 2. The registry has noted a delay of 1746 days in the appeal, the condonation of which has been sought by Ld. AR on the strength of affidavit of the assessee. It has been submitted that impugned order 2 - came to knowledge only during recovery proceedings initiated by the revenue. The Ld. AR pleaded that subsequently, the copy of the impugned order was obtained from the file of Ld. AO and the appeal was filed. The Ld. Sr. DR, on the other hand, submitted that the impugned order was duly served on 05.11.2016 which is evident from the postal acknowledgement as placed on record. Subsequently, various notices were issued to assessee during recovery proceedings as well as during penalty proceedings which were also received by the assessee from time to time. The Ld. Sr. DR also submitted that the assessee failed to appear before first appellate authority and therefore, the appeal deserves to be dismissed.

Upon perusal of impugned order, we concur with the submissions of Ld. Sr. DR that the assessee has remained negligent in attending the appellate proceedings. However, in the assessment order, the returned income of Rs.4.59 Lacs has been assessed at much higher figure of Rs.31.95 Lacs. The assessee is a resident individual. Therefore, keeping in mind the background of the assessee as well as the principle of natural justice, we deem it fit to condone the delay and grant another opportunity of hearing to the assessee. However, this concession would be subject to payment of cost of Rs.25,000/-. The same shall be paid by the assessee within one month from the date of receipt of this order to ‘Tamil Nadu State Legal Services Authority’ at Hon’ble High Court of Madras. The proof of the same shall be furnished by the assessee to learned Assessing Officer who shall proceed to re-adjudicate the issue on merits and framed an assessment de novo. Needless to add that adequate opportunity of hearing shall be granted to the assessee. The assessee is directed to substantiate its stand.

The appeal stand allowed for statistical purposes.

Order pronounced on 12th October, 2022.

M.BHARATHI,VILLUPURAM vs. ITO-VILLUPPURAM, VILLUPURAM

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