INCOME TAX OFFICER, NCW-8(2), CHENNAI vs. SHRI SIVANANTHAM, CHENNAI

At the outset, we find that there is a delay of 23 days in appeal filed by the revenue. During the course of hearing, when defect was brought to the notice of learned DR present for the submitted that delay in filing of appeal is mainly due to lockdown imposed by the Govt. on account of spread of Covid- 19 infections and in view of Hon’ble Supreme Court suo motu Writ Petition No.3 of 2020, if the period of delay is covered within the period specified in the order of the Apex Court , then same needs to be condoned in view of specific problem faced by the public on account of Covid-19 pandemic.

The learned AR, on the other hand, fairly agreed that delay may be condoned in the interest of justice.

Having heard both sides and considered reasons given by the learned DR, we find that the Hon’ble Supreme Court in suo motu Writ Petition No.3 of 2020, has extended limitation applicable to all proceedings in respect of courts and tribunals across the country on account of spread of Covid-19 infections w.e.f. 15.03.2020, till further orders and said general exemption has been extended from time to time. We further noted that delay noticed by the Registry pertains to the period of general exemption provided by the Hon'ble Supreme Court extending limitation period applicable for all proceedings before Courts and Tribunals and thus, considering facts and circumstances of the case and also in the interest of natural justice, we condone delay in filing appeal filed by the Revenue .

Brief facts of the case are that as per information available with the Department, the assessee has made cash deposits into Lakshmi Vilas Bank, Mowlivakkam branch, Chennai, during demonetization period between 09.11.2016 to 31.12.2016. Notice u/s.142(1) of the Income Tax Act, 1961, was issued on 01.05.2019 requiring the assessee to furnish source for cash deposits during the demonetization period. The assessee neither appeared nor furnished any details.

Being aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A). Before the learned CIT(A), the assessee has filed certain additional evidences to justify source for cash deposits and also income declared from business. The learned CIT(A), after considering relevant submissions of the assessee deleted additions made by the Assessing Officer towards cash deposits made into bank account during demonetization period and also scaled down estimation of profit from 8% to 6% on total turnover.

The learned DR submitted that the Assessing Officer has passed ex-parte order u/s.144 of the Income Tax Act, 1961, due to non-cooperation of the assessee, but the learned CIT(A) deleted additions made by the Assessing Officer towards cash deposits by accepting certain additional evidences without providing those evidences to the comments of the Assessing Officer in violation of Rule 46A of the Income Tax Rules, 1962.

The learned A.R. for the assessee referring to sub-rule 4 of Rule 46A of Income Tax Rules, 1962, submitted that the CIT(A) does have power to call for additional evidence and decide the issue on merits, without giving opportunity of hearing to the Assessing Officer for his comments. Therefore, there is no error in the reasons given by the learned CIT(A) to admit additional evidences and decide the issue on merits. Therefore, question of setting aside the issue to the file of the Assessing Officer does not arise.

We have heard both the parties, perused material available on record and gone through orders of the authorities below. It is well settled principle of law that no appeal or case should be decided unheard the other side. In other words, before deciding any issue reasonable opportunity of hearing should be given to both the sides. In this case, the assessee did not appear before the Assessing Officer to justify its case.