Loading judgment…
Facts
The assessee appealed against an ex parte best judgment assessment under Section 144 for AY 2018-19, which occurred because assessment notices went to their spam folder. The appeal to the ITAT was filed with a 259-day delay, for which condonation was sought and granted. The CIT(A) had refused to admit additional evidences submitted by the assessee, citing the lack of a formal petition for their admission.
Held
The Tribunal condoned the delay in filing the appeal, noting that justice should not be denied on technical grounds regarding additional evidence. It set aside the CIT(A)'s order and restored the assessment to the AO for fresh adjudication after allowing the assessee to present their case, subject to the assessee paying Rs. 10,000/- to the State Legal Aid Authority.
Key Issues
The key legal issue was whether the CIT(A) was justified in refusing to admit additional evidence from the assessee on technical grounds, thereby upholding an ex parte assessment made by the AO due to notice delivery issues.
Sections Cited
144
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER ABY T. VARKEY, JM:
1. This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Delhi, dated 19.01.2024 for the Assessment Year (hereinafter referred to as "AY”) 2018-19.
At the outset, the Ld.AR of the assessee brought to our notice that the instant appeal has been filed belatedly with a delay of ‘259’ days and has filed application for condonation of delay and affidavit supporting the averments made therein explaining the cause of delay. Having gone through the contents of the application for condonation of delay, the affidavit as well as medical records supporting the averments made therein, we condone the delay and proceed to examine the appeal on its own merits.
The Ld.AR brought to our notice that the AO passed an ex parte order because the notices issued by the AO unfortunately got delivered into the ‘spam’ e-mail account of the assessee, because of which, assessee was not aware of the notices and couldn’t represent before the AO which resulted in the AO passing best judgment assessment u/s.144 of the Income Tax Act, 1961 (hereinafter referred to as "the Act”).
According to the Ld.AR, before the First Appellate Authority, the assessee filed additional evidences which the Ld.CIT(A) refused to admit on the specious plea that assessee didn’t file any petition explaining the cause which prevented him from producing the said evidences before the AO.
According to the Ld.AR, the assessee had filed additional evidences along with the copies of relevant documents and pleaded for admitting it since it were necessary for adjudication of grounds of appeal. But the Ld.CIT(A) has arbitrarily ignored the same and has confirmed the action of the AO by passing a cryptic order. Hence, by relying on the decision of the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC), the Ld.AR submitted that since the assessee didn’t get proper opportunity before the AO, the assessee should be given one more opportunity before the AO.
Per contra, the Ld.DR doesn’t want us to give one more innings to the assessee. In his rejoinder, the Ld.AR undertook to appear diligently before the AO and file all the relevant documents before him and pleaded for one more opportunity before the AO.
Having heard both the parties and after perusal of the records, we note that the AO has passed an ex parte order [best judgment assessment u/s.144 of the Act]. Before the First Appellate Authority, assessee is noted to have filed additional evidences which have not been admitted by the Ld.CIT(A) on the specious plea that the assessee didn’t file any application for admission of additional evidences. We don’t countenance such an action of the Ld.CIT(A). It must be borne in mind that justice should not only be done, but must also be seen to be done.
In case, if the assessee didn’t file application for admission of additional evidences, then in such an event, nothing prevented the Ld.CIT(A) from asking the assessee to explain the reason for not producing the same before the assessing authority. On technical grounds, substantial justice shouldn’t be denied to the assessee. Therefore, we are inclined to set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of the AO by relying on the decision of the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT (supra) subject to assessee remitting cost of Rs.10,000/- to the State Legal Aid Authority, Hon’ble Madras High Court within three (3) months of receipt of this order; and produce necessary proof of depositing of the same before the AO and then, the AO to assess the income of the assessee afresh after hearing the assessee in accordance to law. In order to serve notices, the Ld.AR has furnished his e-mail which is also noted as under: sarathy20260@gmail.com
In the result, appeal filed by the assessee is allowed for statistical purposes.