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Facts
The assessee filed an appeal against an order that dismissed their appeal in limine due to a 2-day delay in filing. The original assessment was reopened, and the reassessment order was challenged before the CIT(A).
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal in limine based on an incorrect date of receipt of the reassessment order, which led to a miscalculation of the delay. The CIT(A) also failed to provide an opportunity to the assessee to explain the discrepancy and should have decided the appeal on merits, including the validity of the reopening.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal in limine due to a perceived 2-day delay without proper verification and opportunity to the assessee, and whether the reopening of assessment was valid.
Sections Cited
147, 148, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI & SHRI SOUNDARARAJAN K.
Per Prashant Maharishi, Vice President
This appeal is filed by Global E-Business Solutions Pvt. Ltd. (the assessee/appellant) for the assessment year 2014-15 against the appellate order passed by the National Faceless Appeal Centre, Delhi (NFAC) [ld. CIT(A)] dated 04.10.2024 wherein the appeal filed by the assessee against the reassessment order passed u/s. 147 r.w.s. 144B of the Income-tax Act, 1961 [the Act] dated 30.3.2022 by National Faceless Assessment Centre, Delhi [ld. AO] was dismissed in limine by not condoning the period of delay of 2 days in filing of appeal. Therefore assessee is in appeal before us.
The brief facts of the case show that assessee filed its return of income on 26.11.2014 at a total income of Rs.295,33,75,980 which was reopened by issue of a notice u/s. 148 of the Act dated 31.3.2021 which culminated into a reassessment order on 30.3.2022 at a total income of Rs.297,68,30,810.
Aggrieved with the reassessment order, assessee filed appeal before the ld. CIT(Appeals). As per Form 35, in col. No. 2(c) the reassessment order was served on the assessee on 31.3.2022 and assessee filed appeal on 30.4.2022. In col. no. 14, the assessee stated that there is no delay in filing of appeal.
The ld. CIT(Appeals) noted that as the reassessment order was passed and received on 30.3.2022 and appeal filed on 30.4.2022, there is a delay of 2 days, but Form 35 neither mentions the delay nor any condonation application is filed and therefore dismissed the appeal of the assessee in limine in the absence of any existence of proper explanation and reason. Thus, in substance, the reassessment order was confirmed.
The assessee aggrieved with the same is in appeal before us.
The ld. AR submitted a paperbook containing 275 pages wherein at pages 202-205, notice of hearing of appeal by the ld. CIT (A) dated 19.1.2024 is filed. He also referred to pages 206-227 where written submissions dated 31.1.2024 is filed before the ld. CIT(A). The ld. AR submits that though the hearing was conducted by the ld. CIT(A) on merits of the case, but did not give any opportunity to the assessee for explaining the delay in filing of appeal, if any. He submits that it was never mentioned by the ld CIT (A) . He submitted that the date of assessment order is mentioned as 30.3.2022, the order was digitally signed on 31.3.2022, the notice of demand is also passed on 31.3.2022, therefore in fact, the order is passed on 31.3.2022. The assessee has filed appeal on 30.4.2022 and therefore there is no delay in filing of the appeal. He submits that even otherwise the ld. CIT(A) should have at least asked the assessee about any misunderstanding on the date of receiving the order. When the assessee in Form 35 has categorically mentioned that date of service of order is 31.3.2022 and appeal is filed on 30.4.2022, the appeal is not at all delayed, but is filed in time, but ld CIT (A) mentioned that assessee received reassessment order on 30/3/2022.
On merits, he submitted that reopening is bad in law, because reopening is made on the basis of same material which was available at the time of original assessment. Therefore, in absence of any tangible material, reopening is bad in law for the reason that the impugned assessment
year is AY 2014-15. He further submitted that as 4 years have already elapsed, the reopening could not have been done on the basis of the reasons so recorded, which does not allege that there is failure on the part of the assessee. He submits that in the absence of specific allegation that escapement of income is due to failure on the part of the assessee to fully and truly disclose all material facts, the reassessment is not valid. He referred to the reasons recorded at page 179 of the PB where there is no allegation recorded that failure is on the part of the assessee and even from the reasons so recorded, it could also not be inferred that there is any failure on the part of assessee. Thus on both the above counts, reopening of assessment is bad in law.
The ld. DR submitted that there is a delay of 2 days as noted by the ld. CIT(A) in filing appeal and Form 35 did not mention this, No condonation of delay petition was filed and therefore the ld. CIT(Appeals) is correct in dismissing the appeal of the assessee in limine. On the issue of validity of reopening, she submitted that those issues are not decided by the Ld CIT (A).
We have considered the rival contentions and perused the order of the ld. CIT(Appeals). The ld. CIT(A) has held that assessee has received the reassessment order on 30.3.2022. This fact is mentioned in the first line at page 8 of the appellate order. On careful perusal of the reassessment order, we find that though reassessment order is dated 30.3.2022, but same was digitally signed on 31.3.2022 and therefore the statement made by the ld. CIT(A) that assessee has received the reassessment order on 30.3.2022 is incorrect. The assessee has mentioned the correct date in Form 35. Assessee states that it has received the order on 31.3.2022. Based on this, it was mentioned that there is no delay in filing of appeal. The ld. CIT(A) by mentioning the above incorrect date of receipt of order has held that appeal is late by 2 days and therefore he dismissed the appeal of the assessee in limine. The action of the ld. CIT(A) is devoid of any merit and without verification of the record. He has heard the appeal on merits. Despite hearing so on merits, he could have raised a query to the assessee that according to him, though incorrectly, the appeal is delayed by 2 days. Assessee then would have explained that there is no delay. Even otherwise had he looked at the facts of the case and the respective dates of the assessment order, the date on which it is digitally signed, the date on which notice of demand is issued, he would have reached at the correct conclusion that there is no delay in filing of appeal and he would have disposed of the matter on merits of the case. The ld. CIT(A) even otherwise, assuming that he is correct, he should have given an opportunity to the assessee to substantiate the fact stated in Form 35 and the dates of the order, which he failed to do. Thus, we have no hesitation in holding that ld. CIT(A) has failed in his duty to even look at the basic facts of the dates of the order while deciding the issue against the assessee, holding that appeal is delayed by 2 days, which is, in fact, not. Even otherwise, the CIT(A) is duty bound to hear the assessee if he is deciding against the assessee on the merits or on jurisdiction. This is the basic duty of the ld. CIT(A), he has failed to perform. In view of this, we restore back the issue to the file of the ld. CIT(A) to dispose of the appeal of the assessee on its merits, after granting opportunity of hearing to the assessee and considering the written submissions which is already placed on record. The assessee is also challenging reopening of assessment wherein basic facts are already recorded by us. This issue also needs to be decided by him that whether reopening of assessment is valid or not. Accordingly, the order of the ld. CIT(Appeals) is reversed, and appeal restored to his file to decide it on merits of the case.
In the result, the appeal by the assessee is allowed for statistical purposes.