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Facts
The assessee's appeal was delayed by 251 days, which she sought to condone, citing non-service of notices for the CIT(A)'s ex-parte order. The case originated from additions made by the Assessing Officer for alleged bogus Long-Term Capital Gain (LTCG) from penny stock trading, despite the assessee having declared the income under the Income Disclosure Scheme (IDS) 2016 and paid tax.
Held
The Tribunal condoned the 251-day delay in filing the appeal, recognizing that the CIT(A) had dismissed the appeal ex-parte without addressing its merits. To ensure natural justice, the matter was remitted back to the CIT(A) for fresh adjudication on merits, with a caution for the assessee to cooperate.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without adjudication on merits, especially when the assessee had declared the disputed income under the IDS 2016, and the validity of the assessment proceedings including the additions made.
Sections Cited
282, 127, 144B, 183, 148, 143(2), 142(1), 133(6), 143(3), 147, 68, 69A, 234A, 234B, 151, Rule 29
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Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
The present appeal is directed at the instance of assessee against the order of Id. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 21.02.2024 passed for Assessment Year 2012-2013.
(A.Y. 2012-2013) Aditi Mitra
The appeal is time barred by 251 days in filing the appeal by the assessee. However, the assessee filed a condonation petition dated 06.01.2025 before the ITAT in support of condonation of delay of 251 days mentioning that the she availed the benefit of Income Disclosure Scheme (IDS) 2016 and declared her undisclosed income under that scheme and paid tax thereon and accordingly certificate issued by the ld. Pr. CIT by accepting declared income. The assessee also mentioned in her condonation petition that the order passed by the ld. CIT(Appeals) without service of notices as contemplated under the provision of section 282 of the Income Tax Act read with Rules 127 of the Income Tax Rules, 1962 and section 144B of the Income Tax Act, 1961. Finally, the assessee approached the ld. A.R. to prefer an appeal, due to that there was a delay of 251 days in filing the appeal before the Tribunal. Therefore, he pleaded to condone the delay.
Considering the facts and circumstances of the case, I am of the view that the assessee was prevented in filing the appeal within the stipulated time. Therefore, I am inclined to condone the delay of 251 days. Hence the delay is condoned.
Brief facts of the case are that information received from the Pr. DIT (Inv.), Kolkata revealed regarding accommodation entries of bogus LTCG/STCG/Business Loss booked by the assessee by trading in penny stock of Blue Print Securities Limited. As per information received, the entities involved in eh transaction are the syndicate members, the brokers, the entry operators. The (A.Y. 2012-2013) Aditi Mitra transaction generally involves three legs. The beneficiary receives the number of shares at a nominal rate. This leg of the transaction mostly is off-line. The prices of the shares are rigged gradually through the brokers. The assessee made a declaration under section 183 of the Finance Act, 2016 in respect of the Income Declaration Scheme 2016 disclosing the Long-Term Capital Gain on sale of Investment of Share of Blue Print Securities Ltd of Rs.14,84,830 and paid tax of Rs.6,68,173/-. A certificate of declaration under section 183 in Form No 4 was issued by Principal Commissioner of Income Tax dated 19/11/2019 under Receipt Number 256711920191119, accepting the declaration. A notice under section 148 of the Income Tax for Assessment Year 2012 13 was issued by ITO 37(4), now 37(3) on 30.03.2019 and assessee has filed her return showing income as per original return amounting to Rs.3,75,010/-. Thereafter notices under section 143(2) and 142(1) of the Act were issued during the course of scrutiny proceedings and duly served upon the assessee. Notice under section 133(6) of the Act was issued to BSE and CSE. While completing the assessment, the Assessing Officer did not consider the disclosure made as per the Scheme of 2016 and also not considered the tax paid of Rs.6,68,173 under the scheme. While completing the assessment under section 143(3) r.w.s 147 the sale proceed of sale of shares of Blue Print Securities Ltd was taken by the ld. Assessing Officer at Rs.27,01,390/- under section 68 of Income Tax Act. Assessing Officer further added Rs.54,027/- being 2% commission, as the assessee tried to exempt bogus income earned by trading in shares of Scan Steels Ltd., therefore, the entire sale proceeds i.e. the amount introduced /credited in the (A.Y. 2012-2013) Aditi Mitra books/account of the assessee during the year of Rs.27,01,390/- which was incurred by the assessee out of books remained unexplained under section 68 of Income Tax Act. Finally, ld. Assessing Officer assessed the total taxable income of the assessee at Rs.31,30,430/-
On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) confirmed the addition made by the ld. Assessing Officer and dismissed the appeal of the assessee saying that the assessee has not furnished any corroborative evidence to prove against the bogus long-erm capital gain. The assessee was asked for substantiating her contention with evidence at the time of appellate proceedings. However, no response or evidence of any type has been filed by the assessee and it is difficult to differ with the order of the ld. Assessing Officer since the assessee has chosen not to reply and it is a case of habitual non-compliance.
On being aggrieved, the assessee preferred an appeal before the Tribunal and raised the following grounds:-
(1) That on the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) - NFAC, Delhi has erred in dismissing the appeal ex- parte without adjudicating any grounds of appeal raised by appellant. Tax Effect - N.A. (2) That on the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) - NFAC, Delhi has erred in dismissing the appeal by passing ex-parte order without proper and effective adjudicating the case on merits. Tax Effect - N.A. (3) That on the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals)
4. (A.Y. 2012-2013) Aditi Mitra - NFAC, Delhi has erred in dismissing the appeal ex- parte is against the principal of natural justice. Tax Effect-N.A. (4) That on the facts and circumstances of the case and in law, the Ld. CIT (A) - NFAC, Delhi has erred in dismissing the appeal ex-parte without adjudicating ground of appeal for the action of the Assessing Officer in the initiation of proceedings and issue of notice u/s. 147/148 which was illegal, mechanical, based on borrowed satisfaction, without application of mind, and unsustainable in law as well as on merits. Tax Effect - N.A. (5) That, on the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals) - NFAC, Delhi has erred in dismissing the appeal ex- parte and confirming the action of the Ld. Assessing Officer. (6) That on the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) - NFAC, Delhi has erred in dismissing the appeal ex- parte and by not adjudicating the ground that the subject matter of appeal was already considered and declared as income of Rs. 14,84,830/-under Income Disclosure Scheme (IDS) 2016 and payment ofRs.6,68,173/-taxes thereon and certificate also issued by Principal Commissioner of Income Tax accepting disclosure without considering section 188 of Income Disclosure Scheme (IDS) 2016.Thus non consideration or omission invalidates whole of the proceedings. Thus, assessment order, liable to be quashed. Tax effect - Rs.6,82,317/- (7) That on the facts and circumstances of the case and in law, the learned * Commissioner of Income-tax (Appeals) - NFAC, Delhi has erred in dismissing the appeal ex-parte and confirming the action of the Assessing Officer in making addition of Rs. 27,01,039/- u/s 69A on account of sale proceeds of share without application of mind by treating Rs. 27,01,390/- as sale of investment in script namely Blueprint Securities Ltd. instead of sale value of Rs.15,34,830/-. Thus, liable to be deleted. Tax effect - Rs. 6,82,317/- (8) That on the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) - NFAC, Delhi has erred in dismissing the appeal ex-parte and 5. (A.Y. 2012-2013) Aditi Mitra confirming the action of the Assessing Officer in making addition of Rs. 54,027/- being commission expense incurred without any evidence of such payment. Thus, liable to be deleted. Tax effect - Rs.13,646/- (9) That the CIT(A) erred in confirming the interest u/s 234A/B of the Income Tax Act, 1961 the same was unjustified and hence the same be deleted or recalculated as per law. (10) The appellant craves leave to produce additional evidences in terms of Rule 29 of the Income Tax (Appellate Tribunal) Rules 1963. (11) The appellant craves to press new, additional grounds of appeal or modify, withdraw any of the above grounds at the time of hearing of the appeal.
7. The assessee also raised the following additional grounds:- (1) That on the facts and in law, the approval granted by the Income Tax Authority u/s 151 was illegal, mechanical, based on borrowed satisfaction, without application of mind, and bad in law. Thus the assessment order be cancelled/quashed. Tax Effect - N.A. (2) That, on the facts and in law, the reopening of assessment u/s 147 based on wrong and improper facts recorded for the formation of reason to belief is bad in law and in facts. Thus, the assessment order be cancelled/quashed. Tax Effect - N.A. (3) That on the facts and in law, the assessment order u/s 147 was passed without following the direction issued by Hon’ble Delhi High Court in case of Sabh Infrastructure (P) Ltd. Vs CIT [398 ITR 198], Tax Effect - N.A. (4) That on the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) - NFAC, Delhi has erred in dismissing the appeal ex-parte and confirming the action of the Assessing Officer in making addition of Rs.27,01,039/- u/s 69A on account of bogus LTCG based on borrowed satisfaction and without supplying documents collected at the back of assessee in violation of the principal of natural justice which vitiated whole of the proceeding liable to be quashed. Tax effect - Rs.6,82,317/- (A.Y. 2012-2013) Aditi Mitra 8. It was the submission of the ld. Counsel for the assessee that the ld. CIT(Appeals) simply upholding the order of ld. Assessing Officer and without going into the merit of the case dismissed the appeal ex-parte. Ld. Counsel pleaded to set aside both the orders of revenue authorities.
9. It was the submission of the ld. Departmental Representative that sufficient opportunity was being provided to the assessee. Therefore, the ld. CIT(Appeals) has no other option except dismissing the appeal and he pleaded to uphold the order passed by the ld. CIT(Appeals).
10. I have heard both the sides and perused the material available on record. The ld. CIT(Appeals) dismissed the appeal of the assessee ex-parte without going into the merit of the case. By considering the totality of the facts and circumstances of the case, and in order to ensure the principle of natural justice, I am of the view that it is a fit case to provide one more opportunity to the assessee. Therefore, I remit the matter back to the file of ld. CIT(Appeals) with a direction to dispose of the appeal without any inference on the observations of earlier order passed by him and to decide it afresh on merit. At the same breath, I also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. CIT(Appeals) failing which the Ld. CIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits of the case, based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes.
(A.Y. 2012-2013) Aditi Mitra
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 29/08/2025.