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Facts
The assessee HUF deposited Rs. 12,51,000 during demonetization, which was treated as unexplained under section 69 of the Income Tax Act. The assessee's appeal before the CIT(A) was dismissed ex-parte due to notices being sent to an incorrect email address.
Held
The Tribunal condoned the delay in filing the appeal, finding sufficient cause due to a genuine mistake in communication leading to the ex-parte dismissal by the CIT(A). The matter was restored for fresh adjudication on merits.
Key Issues
Whether the delay in filing the appeal should be condoned due to the assessee being unaware of hearing dates due to an incorrect email address and whether the ex-parte order of the CIT(A) should be set aside.
Sections Cited
69, 143(3), 271AAC(1), 115BBE
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Income Tax Appellate Tribunal, ‘SMC’ BENCH, BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER WASEEM AHMED, ACCOUNTANT MEMBER:
This is an appeal filed by the assessee against the order passed by the NFAC, Delhi vide order dated 06/12/2023 in DIN No. ITBA/NFAC/ S/250/2023-24/1058505608(1) for the assessment year 2017-18.
The appeal before us has been filed with a delay of 430 days. The assessee has explained that the delay has occurred on account of bona- fide reasons beyond its control.
It is noticed from the record that though the appellant had mentioned the correct email address in Form 35, the notices of hearing from the ld. CIT(A), NFAC were issued to a different email address. Consequently, the appellant remained totally unaware of the dates of hearing and the appeal came to be dismissed ex-parte on 06.12.2023.
3.1 It is further noted that even the jurisdictional Assessing Officer, in his letter dated 01.07.2024 stated to pay the 20% of the outstanding demand until the disposal of appeal. As such the AO proceeded on the assumption that the appeal of the appellant was still pending, thereby confirming the bona fide impression prevailing with both sides.
It has also been explained that the appellant became aware of the dismissal of the quantum appeal only when penalty proceedings under section 271AAC(1) were initiated and the penalty order dated 10.03.2025 was passed. Immediately thereafter, the appellant, upon obtaining legal advice, has filed the present appeal without further delay. In view of the above, the learned AR contended that the explanation offered by the assessee appears to be reasonable and supported by facts on record and accordingly, the delay in the instant case deserves to be condoned.
4.1 On the other hand, the learned DR submitted that the delay in filing the appeal is substantial and therefore the same should not be condoned.
We have heard the rival contentions of both the parties and perused the materials available on record. We find merit in the . submission of the assessee that the delay was not deliberate or intentional but was occurred due to circumstances beyond its control. The assessee has otherwise been diligent in responding to proceedings whenever notices were properly served. No mala fide intention can be attributed. On the other hand, if the delay is not condoned, the assessee would be put to great hardship and irreparable loss, whereas no prejudice would be caused to the Revenue if the delay is condoned and the matter is decided on merits.
We also take note of the judgment of the Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. MST. Katiji and Others (1987) 167 ITR 471 (SC), wherein it has been held that while considering an application for condonation of delay, a liberal approach is to be adopted to advance substantial justice.
In the facts and circumstances of the present case, we are satisfied that the assessee was prevented by sufficient cause from filing the appeal within the prescribed time. Accordingly, we condone the delay of 430 days in filing the appeal and admit the appeal for hearing on merits.
The facts in brief are that the assessee is an HUF. The assessee HUF during the demonetization period has deposited cash amounting to Rs. 12,51,000/- only. In the assessment order completed under section 143(3) of the Act dated 3rd December 2019 the impugned cash deposit was treated as unexplained money under section 69 of the Act and added to the total income of the assessee.
The aggrieved assessee preferred an appeal before the learned CIT(A).
The learned CIT(A) dismissed the assessee appeal in an ex-parte order for reason hearing notices issued were not complied with and the assessee failed to make submission and furnish the evidence in support of sources of the cash deposit.
Being aggrieved by the order of the learned CIT(A) the assessee is in appeal before us.
The learned AR before the Tribunal submitted that the assessee was prevented by sufficient cause from responding to the hearing notices before the ld. CIT(A), NFAC. It was explained that although the appellant had clearly mentioned the correct email address (meenatalanki@gmail) belonging to karta’s wife in Form 35, however the hearing notices were mistakenly sent to a different email ID (sarindividual5@gmail,com). Therefore, the assessee was not aware of the hearing opportunities. Because of this genuine mistake, the appeal was dismissed ex-parte without proper adjudication on merits. The ld. AR pointed out that the appellant has otherwise been diligent and has promptly responded whenever notices were properly received.
12.1 The ld. AR further argued that even the jurisdictional AO was under the impression that the appeal was still pending, as evident from the AO’s letter dated 01.07.2024 requiring payment of 20% of the outstanding demand till disposal of the appeal by the CIT(A). The appellant’s reply dated 11.07.2024 also shows that both sides genuinely . believed the appeal was pending. This supports the bona fides of the assessee’s case.
12.2 It was also submitted that when penalty proceedings under section 271AAC(1) were initiated, the appellant duly responded to the notices, which again proves the appellant’s bona fide conduct. Only after receiving the penalty order on 10.03.2025 and upon consulting counsel, the appellant came to know that the quantum appeal had already been dismissed ex-parte on 06.12.2023. Immediately thereafter, the present appeal has been filed within reasonable time.
12.3 The AR contended that there is a good case on merits and the additions made under section 69 r.w.s. 115BBE have not been properly examined. Since the appeal was dismissed only for technical reasons and not on merits, an opportunity deserves to be granted to the assessee to put forth its case. The learned AR therefore prayed that, in the interest of justice, the ex-parte order of the ld. CIT(A) be set aside and the matter be restored for fresh adjudication on merits.
On the contrary, the learned DR vehemently supported the order of the authorities below.
We have heard the rival contentions od both the parties and perused the materials available on record. The facts show that the assessee HUF had deposited cash of Rs. 12,51,000 during the period of demonetization. The AO treated the same as unexplained under section 69 of the Act and made the addition in the assessment completed under section 143(3) of the Act. The assessee carried the matter in appeal . before the learned CIT(A). However, the appeal was dismissed ex-parte for non-compliance of hearing notices.
14.1 From the records, it is clear that the notices of hearing were issued to a wrong email address which did not belong to the assessee. In Form 35, the assessee had clearly mentioned the correct email ID of the karta’s wife, but the NFAC sent the notices to a different address. Thus, the assessee remained unaware of the hearings and could not respond. The circumstances also show that the assessee was under a bona fide belief that the appeal was pending, as even the jurisdictional AO issued a letter dated 01.07.2024 requiring payment of 20% of the demand till disposal of the appeal. The assessee’s reply dated 11.07.2024 also reflects the same understanding.
14.2 It is also relevant that the assessee promptly responded to penalty proceedings initiated under section 271AAC(1) of the Act, which demonstrates his conduct of diligence whenever notices were duly served. The delay in filing the present appeal occurred only because the assessee came to know much later, in March 2025, that the appellate order had been dismissed ex-parte in December 2023. Immediately thereafter, steps were taken without undue delay.
14.3 In these facts, we find that the dismissal of the appeal ex-parte by the learned CIT(A) has resulted in denial of proper opportunity to the assessee. The addition has not been adjudicated on merits, and the assessee deserves one more chance. Considering the principles of natural justice and in the interest of fair play, we are of the view that the . matter should be restored to the file of the learned CIT(A) for fresh adjudication after granting adequate opportunity to the assessee.
14.4 Accordingly, we set aside the impugned order of the CIT(A) dated 06.12.2023 and restore the appeal to his file with a direction to decide the matter afresh on merits, in accordance with law, after giving proper opportunity to the assessee. The appeal of the assessee is thus allowed for statistical purposes.
In result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in court on 9th day of September, 2025