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Facts
The assessee, an individual engaged in real estate and film production, failed to file income tax returns for assessment years 2012-13 to 2017-18. The Assessing Officer passed ex-parte orders making significant additions due to unexplained credits, loans, and expenditures. The assessee also failed to appear before the CIT(A).
Held
The Tribunal condoned the delay in filing the appeals, noting the assessee's difficulties including medical issues and the COVID-19 pandemic. The Tribunal set aside the CIT(A)'s order and remitted the matter back to the Assessing Officer for de novo assessment.
Key Issues
Whether the delay in filing the appeals by the assessee can be condoned due to bonafide reasons, and if the matter should be remanded for de novo assessment.
Sections Cited
144, 147, 148
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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI S.R.RAGHUNATHA
आदेश / O R D E R
PER BENCH: These six appeals by the assessee are arising out of the orders passed by the Learned Commissioner of Income Tax (Appeal), NFAC, Delhi (in short “ld.CIT(A)”) against the order u/s.144 r.w.s 147 of the Income Tax Act, 1961 (hereinafter the ‘Act’) passed by the Assessing Officer as detailed below:
A.Y. AO’s order u/s. Date CIT(A) Order date 2012-13 147 r.w.s.144 18.12.2019 27.08.2024 2013-14 147 r.w.s.144 18.12.2019 27.08.2024 2014-15 147 r.w.s.144 19.12.2019 10.09.2024 2015-16 147 r.w.s.144 18.12.2019 10.09.2024 2016-17 147 r.w.s.144 16.12.2019 10.09.2024 2017-18 147 r.w.s.144 19.12.2019 10.09.2024
At the outset, we find that registry has recorded a delay of 284 days before us in all the six appeals filed by the assessee, for which the assessee has filed affidavit stating the reasons for delay, wherein, it is submitted that the assessee was facing various medical issues and further the change of authorised representative, collection of files, documents and details from old auditor took additional time. Hence, there was a delay in filing these appeals by the assessee. After considering the Affidavit filed by the assessee and also hearing both the parties, we find that there is a reasonable cause for the assessee in not filing these appeals on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of these appeals and admit the appeals filed by the assessee for adjudication.
Brief facts of the case emanating from the records are that the assessee is an individual doing business of real estate in the name and style of M/s.Shakthi Real Estate and film production in the name of M/s.RSSS Pictures. The department found that the assessee had not filed his return of income for these assessment years and having huge transactions in multiple bank accounts in his name as well as the business names and hence issued statutory notices for reopening the assessments. However, assessee did not respond to these notices nor filed the return of income for these assessment years within the time provided. Hence, the Assessing Officer passed an exparte order by making the additions on account of unexplained credits in the bank account, unsecured loans, 90% of the expenditure as unexplained and income from other sources as detailed below:
A.Y. AO’s order u/s. Date Additions made in Rs. 2012-13 147 r.w.s.144 18.12.2019 1,03,97,750/- 2013-14 147 r.w.s.144 18.12.2019 51,17,000/- 2014-15 147 r.w.s.144 19.12.2019 79,78,100/- 2015-16 147 r.w.s.144 18.12.2019 6,44,51,512/- 2016-17 147 r.w.s.144 16.12.2019 3,50,36,077/- 2017-18 147 r.w.s.144 19.12.2019 4,94,53,793/-
Aggrieved by the orders of the Assessing Officer the assessee preferred an appeal before the ld.CIT(A). The assessee did not respond to the notices issued by the ld.CIT(A) by providing opportunities for hearing except filing letters for seeking adjournment. Therefore, the ld.CIT(A) passed the orders by confirming the additions made by the Assessing Officer.
The ld.AR submitted that the notices issued u/s.148 of the Act dated 26.03.2019 were not uploaded and the same was uploaded only on 17.12.2019. During the assessment proceedings, there was a change in jurisdiction also took place, which also created the ambiguity. Further, the ld.AR stated that only three opportunities were provided to the assessee by the ld.CIT(A), on of which was during the COVID period. Hence, the appeal was not prosecuted before the ld.CIT(A) within the time limit due to unprecedented disruption caused by the COVID-19 pandemic and prayed for one more opportunity to be provided to the assessee to represent his case before the AO in the interest of natural justice, since the orders by the Assessing Officer were passed exparte u/s.144 of the Act. Further, the ld.AR assured the bench that he will undertake to represent on behalf of the assessee before the AO, in case one more opportunity is provided.
Per contra, the ld.DR submitted that both the Assessing Officer and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).
We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the Assessing Officer has passed an exparte order by considering the information available with the department and the same has been dismissed by the ld.CIT(A), NFAC, Delhi due to the assessee failing to furnish the documentary evidence to delay in filing of appeal file. The assessee failed to file an appeal before the ld.CIT(A) within the time limit due to bona fide reasons beyond the control of the assessee, including the COVID period. We note that the AO has passed an orders by making the additions as shown in the Table supra as total income of the assessee based on material available on records and the same has been upheld by the ld.CIT(A)-NFAC due to non-participation of the assessee before the Assessing Officer as well as the first appellate authority. Since the assessee has failed to participate both before the Assessing Officer as well as the appellate authority, we levy the cost of Rs.5,000/- for each appeal (total cost of six appeals – Rs.30,000/-) to be paid to State Legal Aid Authority, Hon’ble High Court of Madras and produce proof of payment of cost to the Registry within 30 days from the date of receipt of this order.
Therefore, in the present facts and circumstances of the case and to meet the ends of justice, we deem it fit to provide one more opportunity for the assessee. Therefore, we set aside the order of ld.CIT(A) and remit the matter back to the file of AO and direct the AO to de novo frame the assessment order in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so.
In the result, all the six appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open court on 15th December, 2025 at Chennai.