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Facts
The assessee, an individual, did not file a return of income. A notice under section 148 was issued for capital gains on property sale, which was returned unserved. Subsequently, an ex-parte assessment order was passed under section 144 r.w.s. 147 of the Act. The assessee appealed to the CIT(A) after a significant delay, citing change of residence and non-receipt of notices.
Held
The Tribunal held that the CIT(A) was incorrect in dismissing the appeal in limine for delay without condoning it. It found that the assessee had sufficient cause for the delay due to change of address and non-receipt of orders, and the delay was not attributable to negligence. The case was set aside to the AO for adjudication on merits.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was for sufficient cause and whether the CIT(A) was justified in dismissing the appeal in limine.
Sections Cited
144, 147, 148, 142(1), 156
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI
This appeal is filed by Smt. Manikarnike Yadu (the assessee/appellant) for the assessment year 2010-11 against the appellate order passed by the National Faceless Appeal Centre, Delhi (NFAC) [ld. CIT(A)] dated 18.12.2024 wherein the appeal filed by the assessee against the assessment order passed u/s. 144 of the Income-tax Act, 1961 [the Act] dated 11.12.2017 by the ITO, 2(3), Bhopal was dismissed in limine.
The brief facts of the case show that assessee is an individual, who did not file any return of income. As per information available the assessee has sold immovable property for Rs.43 lakhs and has not filed any return of income. Therefore reasons were recorded that assessee has not offered capital gain on sale of property and accordingly notice u/s. 148 was issued on 30.3.2017. The above notice was returned back unserved with the postal remark “Left” on 1.4.2017. Therefore, the above notice was affixed on the address available as per office records. No response was received. Further notice u/s. 142(1) was also issued on 22.9.2017 which also returned unserved and once again affixed and no response was received. Therefore, the ld. AO assessed the total income of the assessee as per the provisions of section 144 r.w.s. 147 of the Act on 11.12.2017 assessing total income at Rs.43 lakhs.
Aggrieved with the same, the assessee preferred appeal before the ld. CIT(A).
The ld. CIT(A) in para 4 has stated that in compliance to the hearing notices and letters, the assessee has uploaded her submissions in the appellate portal. The ld. CIT(A) noted that Form 35 stated though date of order is 11.12.2017, but same was served on the assessee on 16.9.2019 and appeal was instituted on 6.4.2020 and therefore there is a delay of 150 days in filing of the appeal which needs to be explained by the assessee. At sl. No.15 of Form 35, the assessee explained that notice u/s. 148 issued on 31.3.2017 and final show cause notice was issued on 16.11.2017 were not at all received by the assessee as she has already shifted from Bhopal and now residing at Bangalore. It was also stated that assessee was never served notice of demand u/s. 156 of the Act issued on 11.12.2017 and therefore the appeal could not be filed. Subsequently the Tax Recovery Officer [TRO] on 16.9.2019 communicated at her Bangalore address about the outstanding demand of Rs.34,77,962. The assessee raised a grievance on the online portal stating that none of the notices were received by the assessee and still the assessment was framed. The assessee made an application for transfer of her PAN from Bhopal to Bangalore. Now the jurisdiction was transferred and order was received on 13.3.2020. After that immediately the assessee after communicating with her CA at Bangalore filed an appeal on 6.4.2020 against the impugned assessment year. This has caused the delay and therefore as it is unintentional and for sufficient cause, needs to be condoned.
The ld. CIT(A) held that delay in filing of the appeal is not reasonable and for sufficient cause as the assessee has failed to upload the material evidence and circumstances which prevented her to file the appeal in time. In para 5.6 the ld. CIT(A) also held that assessee has failed to prove with material evidences the delay on day to day basis. Therefore the appeal of the assessee was dismissed in limine.
The assessee is aggrieved with the above order and is in appeal before us.
The ld. AR submitted that assessee is an individual Senior Citizen housewife and does not have any income taxable and therefore she has not filed any return of income. It was also submitted that none of the notices were received by the assessee during the assessment proceedings and before the CIT(A) she has given a submission on the merits as well as in Form 35 about the delay in filing of the appeal. It was also submitted that none of the notices were received by the assessee during the assessment proceedings and before the ld. CIT(A) she has given a submission on the merits as well as in Form 35 about the delay in filing of the appeal. It was submitted that when the assessment order itself is not received by the assessee as per dates mentioned by the ld. CIT(A), the appeal could not have been filed. As soon as the assessee received assessment order, she filed the appeal in time. On the facts of the case, it was stated that the property belongs to the husband of assessee Mr. M. Sundar Raj and assessee is mentioned as a second party and nominee and therefore the capital gain is chargeable to tax, if at all, in the hands of the husband of the assessee, her husband has already deposited the amount earlier in the Capital Gain Account Scheme and subsequently utilised the same for purchase of property on 6.7.2012 and therefore even the addition on merit is not correct. It was further stated that along with condonation of delay request, the assessee also submitted on the merits of the case. The ld. CIT(A) did not consider that the delay in filing of the appeal is for sufficient cause.
The ld. DR submitted that there is no fault with the order of the ld. CIT(A) in not condoning the delay of 150 days as there was no sufficient cause shown by the assessee.
We have carefully considered the rival contentions and perused the orders of the ld. lower authorities. The only issue before us is, whether the ld. CIT(A) was correct in holding that there is no sufficient cause available for condonation of delay. We find that assessee was originally based at Bhopal and subsequently shifted to Bangalore. The original notice for reopening as well as u/s. 142(1) was affixed at the address of the asse. Therefore notice was served by affixture. Tehrefore, notice was served by affixture. The assessment order was also passed ex parte u/s. 144 of the Act. The reason shown by the assessee clearly shows that due to change in the address of the assessee, assessee was not in receipt of the order passed by the ld. AO. Subsequently when a request was made on 25.9.2019 to transfer the PAN correspondence address at Bangalore was mentioned on 13.3.2020, the assessee got the demand letter and subsequently on 6.4.2020 assessee filed the appeal. Thus it is clear that as soon as demand notice was received by the assessee, assessee preferred the appeal before the ld. CIT(A). Therefore, as assessment order was not received by the assessee, naturally the assessee could not have filed the appeal in time. The ld. CIT(A) did not condone the delay holding that assessee failed to produce material evidences to explain the delay day by day. The ld. CIT(A) adopted a pedantic approach in not condoning the delay. Further asking to explain delay day by day is also not proper. No doubt, the delay can be condoned only if sufficient cause is shown by the asse. There cannot be any other consideration to condone the delay other than sufficient cause. However, looking at the facts of the case about the change in the address of the assessee and non-receipt of assessment order by the assessee and action of the assessee as soon as the order and demand notice is received for immediately filed the appeal shows that delay caused in filing of the appeal is for sufficient cause. While analysing sufficient cause, we do not find that delay in filing of the appeal is attributable to any negligent or malafide behaviour of the assessee, therefore we find that the ld. CIT(A) is not correct in not condoning in filing of the appeal. Therefore, the order of the ld. CIT(A) in dismissing the appeal of the assessee in limine by not condoning the delay of 170 days is not sustainable, hence quashed.
Further the assessee did not receive any notices for reopening of the assessment and assessment order was also framed u/s. 144 of the Act, it is clear that assessee did not get an opportunity to explain her case before the ld. AO.
Though we have quashed the order of the ld. CIT(A), but as the assessee was also not represented before the ld. AO, no fruitful purpose would be served if the matter is restored to the file of the ld. CIT(A). A the ld. AO is required to examine the various claims raised by the assessee on merits, in the interest of justice, the case deserves to be set aside to the file of the ld. AO.
Therefore, we allow the appeal of the assessee quashing the order of the ld. CIT(A) and holding that the delay in filing of the appeal before the ld. CIT(A) was for sufficient cause and further the assessee was not having proper opportunity before the AO. Ground No.3 of the appeal
is allowed and on the merits, the issues are set aside to the file of the ld. AO. The assessee is directed to furnish requisite information before the AO within 90 days of the date of the receipt of the order with complete details, the ld. AO after examining the merits and giving opportunity of hearing to the assessee, may decide the case afresh.
In the result, the appeal by the assessee is allowed for statistical purposes.