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Facts
The assessee, PKP Hotels Private Limited, purchased two immovable properties for Rs. 76,42,040/- in FY 2011-12 but did not file its return of income for AY 2012-13. The Assessing Officer (AO) reopened the case, issued notices, and passed an ex-parte order under section 144 r.w.s. 147, assessing the entire purchase amount as unexplained investment under section 69. The CIT(A) confirmed the AO's order ex-parte.
Held
The tribunal noted a delay of 161 days in filing the appeal, which was attributed to the sudden departure of accounting personnel and subsequent difficulty in retrieving documents. The tribunal condoned the delay, acknowledging that the delay was not wilful and the assessee has now engaged external consultants. The tribunal also observed that the lower authorities did not delve into the merits of the case.
Key Issues
Whether the ex-parte assessment order passed due to non-compliance with statutory notices was justified, and if not, whether the delay in filing the appeal can be condoned.
Sections Cited
69, 144, 147, 148, 250
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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI S.R. RAGHUNATHA
Year: 2012-13 PKP Hotels Private Limited, Vs. Assistant Commissioner of No.69, Adhiyaman Bye Pass Road, Income Tax, Dharmapuri, Circle-1, Tamil Nadu-636 701. Hosur. [PAN: AAGCP0732P] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से/ Assessee by : Shri D. Anand, Advocate ��थ� की ओर से /Revenue by : Shri A. Sasikumar, CIT सुनवाई की तारीख/Date of Hearing : 12.03.2025 घोषणा की तारीख /Date of Pronouncement : 18.03.2025 आदेश / O R D E R
PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against the order bearing DIN & Order No.ITBA/NFAC/S/250/2023-24/1056586224(1) dated 27.09.2023 of the Ld. Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Centre [NFAC], Delhi, for the assessment years 2013- 14. Through the aforesaid appeal the assessee has challenged order u/s. 250 dated 27.09.2023 passed by NFAC, Delhi.
The assessee raised a ground that the Assessing Officer went wrong in making addition of Purchases of Immovable Property of Rs.76,42,040/- as unexplained investment u/s 69 of the Income Tax Act
Page - 1 - of 5 by passing an ex-parte order u/s 144 and the same was confirmed by the Ld.CIT(A) without participation of the assessee.
It has been noted that there is a delay of 161 days in the case, in filing of this appeal before the tribunal. In its affidavit the assessee has pleaded that the primary reason for the delay is the sudden departure of its accounts and finance personnel, who was responsible for handling tax-related matters. Despite its best efforts, it could not establish communication with them and their whereabouts remain unknown. This unexpected situation left them in a state of disarray and it struggled to locate essential documents and information necessary for filing the appeal in time. Now, they are engaging external consultants to assist them in reconstructing the relevant financial records and compiling the necessary documents for the appeals. All these activities contributed to the delay which was neither wilful nor wanton. The assessee submitted that there will not be case of any non-compliance now. We have considered the justification put forth by the assessee and we are satisfied with their adequacy. We are also conscious of the fact that no litigant gains by intentionally delaying its own matters. The Ld. DR did not pose any serious objections to the delay. Accordingly, we hereby condone the delay and proceed to adjudicate this appeal.
The appellant assessee M/s.PKP Hotels is Private Limited and is running a business of providing lodging, accommodation and restaurant
Page - 2 - of 5 facilities to general public. The assessee has purchased two immovable properties amounting to the tune of Rs.74,62,040/- during the FY-2011- 12 relevant to the AY-2012-13 but has not filed its return of come for the AY-2012-13. Based on the information available on records the AO held that more than Rs. 1 lakh has escaped assessment. Accordingly, the case was reopened u/s.147 and notice u/s.148 dated 27.03.2019 was served to the assessee to file the return of income for AY-2012-13. However, the assessee failed to comply with the above notice and did not file its return of income. Accordingly, the assessment order u/s.144 r.w.s. 147 was passed by the AO on 29.12.2019 assessing the total income at Rs.74,62,040/- as the income of the assessee and brought to tax u/s.69 of the Income Tax Act 1961. Aggrieved by the order of AO, the assessee has presented his appeal before the Ld.CIT(A).
At the outset the Ld. Counsel for the assessee informed that the Ld. CIT(A) has passed an ex-parte order dated 27.09.2023 thereby confirming the AO’s order and that the appeal was dismissed for non- compliance to statutory notices. It was pleaded that the non-compliance of the statutory notices was attributable to unforeseen exit of their accounts and finance personnel who were taking care of tax related issues and was not intentional. The Ld. Counsel for the assessee pleaded for setting aside the orders of lower authorities and requested to Page - 3 - of 5 send back to file of the AO and assured that full compliance would now be made to the statutory notices of the AO.
We have heard the rival submissions in the light of material available on records. It is trite law that no litigant benefits by non- prosecution of its case. We find sufficient force in the pleadings of the assessee as to why it could not prosecute its appeal before AO. We have also noted that apart from merely harping on the issue of non-compliance by the assessee the lower authorities have not touched upon merits of the case.
We are therefore of the view that ends of justice would be met if the case is set aside to the file of the AO for re-adjudication after giving opportunities of being heard to the assessee and to pass a speaking order. The assessee shall be bound to comply with all the notices and details called by the AO. Any non-compliance from the assessee side shall be adversely viewed. Accordingly, we set aside the order of the Ld.CIT(A) and by relying on the decision of the Hon’ble Supreme Court in the case of Tin Box Company vs. CIT, [2001] 249 ITR 216 (SC) and direct the AO to denovo frame the order in accordance to law, after providing reasonable opportunity to the assessee. The assessee shall deposit cost of Rs.5,000/- within 30 days from the date of receipt of this order to ‘Tamil Nadu State Legal Services Authority’ at Hon’ble High
Page - 4 - of 5 Court of Madras. The proof of the same will be furnished by the Assessee before AO. Needless to say, assessee to be diligent and file written submissions and relevant documents, if advised so. Accordingly, the grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 18th March 2025 at Chennai.