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Facts
The assessee received a notice under Section 148 of the Income Tax Act, 1961, for the assessment year 2012-13. The assessee contended that the reassessment proceedings were initiated without proper notices, without adequate opportunity of being heard, and based on surmises. The assessee also pointed out several procedural irregularities in the assessment process.
Held
The Tribunal condoned the delay in filing the appeal after considering the submissions of both parties and the relevant case law. The Tribunal found that the assessee had made out a reasonable cause for the delay and that there was no malafide intention. The matter was restored to the file of the Ld. CIT(A) for fresh adjudication on merits.
Key Issues
Whether reassessment proceedings were validly initiated without proper notices and adequate opportunity? Whether the delay in filing the appeal should be condoned?
Sections Cited
148, 143(3), 147, 151, 69C, 133(6), 226
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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SMT. BEENA PILLAI
The present appeal filed by assessee arises out of the order dated 26/02/2025 passed by the Ld. Commissioner of Income Tax (Appeals)/Addl./JCIT(A) - 5, Chennai [hereinafter “the Ld.CIT(A)] for A.Y. 2012-13 on the following grounds of appeal:-
“1. On the facts and circumstances and judicial pronouncements; the Ld. CIT(A) has erred in confirming there-opening of the assessment U/s 148 of Income Tax Act, 1961 on the fact that no documentary evidences has been brought on record by the learned assessing officer which proves that income has escaped the assessment. The assessment U/s 143(3) r.w.s. 147 of the Income tax Act, 1961 are completed merely on the basis of surmises. In view of the above, the said order passed should be quashed and assessment be annulled.
2. On the facts and circumstances and judicial pronouncements; the reassessment proceedings in pursuance to the notice u/s. 148 of The Income Tax Act, 1961 is in violation of provisions of section 151 of Income Tax Act, Therefore, such assessment is erroneous on facts and bad in law and assessment be annulled.
On the facts and circumstances and judicial pronouncements; Ld. CIT(A) has without providing proper show cause notices and without providing proper opportunity of hearing to the appellant passed the CIT(A) order. Therefore such order is erroneous on facts and bad in law and appellant be allowed proper opportunity of hearing.
On the facts and circumstances and judicial pronouncements; Ld. CIT(A) has erred in confirming the addition of Rs. 14,30,939/- u/s 69C without considering the proper facts. Such addition of income is bad in law & erroneous in facts and therefore liable to be deleted.
Your appellant craves to add, alter, or amend any of the grounds of appeal on or before the date of hearing of appeal.”
Brief facts of the case are as under:-
The assessee is a resident individual who filed the return of income for the year under consideration on 24/07/2012. Subsequently, on or around 31/03/2018, the assessee received a notice issued under section 148 of the Act. In response thereto, the assessee, vide letter dated 18/04/2018, requested the Ld. Assessing Officer (AO) to treat the original return of income as the return filed in response to the said notice and also sought a copy of the reasons recorded for reopening of the assessment. It is submitted that thereafter no communication was received from the Ld. AO until around 19/01/2019, when the assessee was served with the assessment order passed under section 143(3) read with section 147 of the Act.
It is submitted that In the said assessment order, the Ld. AO recorded that a notice under section 143(2) was issued on 31/03/2018, and that the reasons recorded for reopening were communicated to the assessee vide letter dated 15/10/2018. However, the Ld.AR contends that the assessee neither received the notice under section 143(2) nor the recorded reasons for reopening was ever served upon him. The Ld.AR submitted that the assessee further pointed out that while at one place in the assessment order it is mentioned that the assessee did not file a return of income in response to the notice issued under section 148, at another place the Ld.AO himself has acknowledged that the assessee filed response vide letter dated 18/04/2018.
The Ld.AR submitted that, upon receipt of the assessment order, the assessee undertook inspection of the assessment records. According to the assessee, during the course of such inspection it was noticed that the notice issued under section 148 was not preceded by the approval of the appropriate authority, as stated in the notice, and further that no copy of the recorded reasons for reopening was available on record. He submitted that neither a copy of the notice issued under section 143(2), nor any proof of service thereof was available on record. It has also been submitted that though the order sheet mentioned issuance of notices under section 142(1) dated 04/09/2018 and 05/11/2018, the assessee did not receive any such notices and no proof of service thereof was found on record.
The Ld.AR submitted that the assessment order states that notices under section 133(6) were issued on 14/12/2018 to the Branch Managers of IDBI Bank and SBI. However, according to the assessee, no such notices, proof of service thereof, or corresponding entries in The Ld.AR submitted that the Ld.AO proceeded to make an addition of ₹14,30,939/- under section 69C of the Act on account of alleged premium paid on two insurance policies issued by Birla Sun Life Insurance Company, without granting the assessee adequate opportunity of being heard.
Aggrieved by the order of the Ld. CIT(A), the assessee preferred an appeal before the Ld. CIT(A).
3. It was submitted before the Ld.CIT(A) that the assessee had intimated in Form No. 35 that all communications were to be sent in physical mode. However, the Ld.CIT(A), after issuing three notices to the assessee through email, dismissed the appeal for non- prosecution. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal. 4.1. At the outset, the Ld. AR submitted that there is a delay of 229 days in filing the present appeal before the Tribunal. An application seeking condonation of delay has been filed along with an affidavit of the assessee in support of the same, which is reproduced hereunder for ready reference:-
***This space has been left blank intentionally, P.T.O.*** Petititon for condonation of delay:-
4.1. In our view, the assessee has made out a reasonable cause for the delay that is caused in filing the present appeal before this Tribunal. Nothing to establish any contrary intention has been filed by the revenue before this Tribunal. In our opinion there is a sufficient cause for condoning the delay as observed by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 in support of his contentions.
4.2. We place reliance on following observations by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 wherein, Hon’ble Court observed as under:-
“The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits". The expression “sufficient cause” employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making a justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that : 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.
appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.” 4.3. Considering the submissions by both sides and respectfully following the observation by Hon’ble Supreme Court, we find it fit to condone the delay caused in filing the present appeal as it is not attributable to the assessee. In any event, though the procedural law pertaining to the limitation has been drafted to construe it strictly, the fact remains that, considering such technicalities will not advance the cause of justice.
4.4. We take support from the observations of Justice Krishna Iyer wherein he has quoted at various occasion while dealing with technicalities that “any interpretation that alludes substantive justice is not to be followed and that substantive justice must always prevail over procedural technicalities”. Even Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 has laid down a ratio of similar principles. Respectfully following the thoughts propounded by Late Hon’ble Justice Krishna Iyer, as well as various decisions of Hon’ble Supreme Court on similar issues, we condone the delay caused in filing the present appeals before this Tribunal.
5. On merits, it is observed that the Ld. CIT(A) has not adjudicated the issue on merits, as the assessee did not receive the notice in the physical mode, as opted for by him in Form No. 35. Considering that the assessee is a senior citizen and may not be fully conversant with the online mode of communication, we deem it appropriate, in the interest of justice, to restore the matter to the file of the Ld. CIT(A). The Ld. CIT(A) shall issue notice to the assessee both in physical form as well as through the online portal and grant adequate opportunity of being heard. The Ld.CIT(A) shall also examine the assessee’s contention regarding the alleged discrepancies in the issuance and service of statutory notices and the recording of reasons for reopening, with reference to the assessment records. Thereafter, the Ld.CIT(A) shall pass a reasoned and speaking order on merits in accordance with law after considering the evidence that may be furnished by the assessee.
Accordingly, grounds raised by assessee stands partly allowed for statistical purposes. In the result, appeal filed by assessee stands partly allowed for statistical purposes.