BHISHM CHAUHAN,HARYANA vs. INCOME TAX OFFICER WARD 1(2), FBD, FARIDABAD

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ITA 3969/DEL/2024Status: DisposedITAT Delhi15 April 2025AY 2016-176 pages
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What did the Tribunal hold?

The Tribunal, in the interest of justice, decided to set aside the impugned orders of the Ld. CIT(A) dated 30.06.2024 and the assessment and penalty orders of the Ld. AO dated 29.12.2018, 28.06.2019, and 15.12.2019 for AYs 2016-17 and 2017-18. The reasoning was based on the assessee's plea of custody and mental health issues, which led to the significant delay in filing appeals. The Tribunal acknowledged the ex-parte nature of the assessment orders and the consequential penalty. The ratio decidendi is that in cases of significant delay attributable to personal hardship like custody and mental illness, and where ex-parte orders have been passed, it is expedient to provide an opportunity for a fresh adjudication on merits. The penalty order, being consequential, was also set aside. The Ld. AO is directed to pass fresh orders in accordance with the law. No issue was expressly left undecided.

What were the facts?

The assessee, Bhishm Chauhan, filed three appeals before the Income Tax Appellate Tribunal (ITAT) against orders passed by the Commissioner of Income-Tax (Appeals)/National Faceless Appeal Centre (NFAC). ITA Nos. 3969/DEL/2024 and 3970/DEL/2024 pertain to Assessment Year (AY) 2016-17, challenging an assessment order dated 29.12.2018 and a penalty order dated 28.06.2019, both passed by the Income Tax Officer (AO). ITA No. 3971/DEL/2024 relates to AY 2017-18, challenging an assessment order dated 15.12.2019 passed by the AO. The assessee had appealed these orders before the CIT(A) with an application for condonation of a 1716-day delay, which was dismissed by the CIT(A) on 30.06.2024. The assessee is aggrieved by this dismissal and the original orders.

What were the issues?

1. Whether the delay of 1716 days in filing appeals before the Ld. CIT(A) for AYs 2016-17 and 2017-18 should be condoned, considering the assessee's claim of custody and mental health conditions. The assessee argued that these circumstances prevented timely filing and sought condonation. The revenue contended that the assessee failed to assist departmental authorities. 2. Whether the ex-parte assessment orders passed under Section 144 of the Income-Tax Act, 1961, for AYs 2016-17 and 2017-18 should be set aside. The assessee requested that these orders be set aside. The revenue's contention was that the assessee failed to comply with notices. 3. Whether the income for AYs 2016-17 and 2017-18 should be computed at 8% of total income, as per Section 44AD of the Act. The assessee sought this method of computation. The revenue did not record any specific argument on this point.

Which sections of the Income-tax Act were involved?

Section 250,Section 144,Section 271(1)(c),Section 143(2),Section 142(1),Section 44AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI

Before: SHRI VIMAL KUMAR & SHRI BRAJESH KUMAR SINGH

For Appellant: Shri Yogesh Sharma, Adv
For Respondent: Shri Javed Akhtar, CIT (DR)
Hearing: 26.03.2025

Heard together (3 matters)

ITA No. 3969/DEL/2024
ITA No. 3970/DEL/2024
ITA No. 3971/DEL/2024

Read from the judgment's own cause title. This page is filed under one of them.

O R D E R PER BENCH: The three appeals are filed by the appellant/assessee. In 3970/Del/2024 are against order dated 30.06.2024 passed by Learned Commissioner of Income- Tax(Appeals)/National Faceless Appeal Centre(NFAC), Delhi (hereinafter referred as ‘Ld. CIT(A)’) under Sections 250 of the Income-Tax Act, 1961 (hereinafter referred as “the Act”) arising out of assessment order and penalty order dated 29.12.2018 and 28.06.2019 of the Learned Income Tax Officer, Ward No. 1(1), Faridabad (hereinafter referred as “Ld. AO”) under Section 144 of the Act and 271(1)(c) of the Act respectively. is against order dated 30.06.2024 of Learned Commissioner of Income-Tax(Appeals)/National Faceless Appeal Centre(NFAC), Delhi (hereinafter referred as “Ld.CIT(A)”) arising out of order dated 15.12.2019 of the Income Tax Officer, Ward- 1(5), Faridabad (hereinafter referred as “Ld. AO”) under Section 144 of the Act for assessment year 2017-18.

2.

Brief facts of the case in 01.11.2017 declaring income of Rs.3,36,300/-. The case was selected for complete scrutiny through CASS. Notice under Section 143(2) of the Act was issued on 09.08.2018. Notices under Section 142(1) along with certain queries were issued on 06.12.2018. No compliance was made by the assessee. As per section 144 of the Act, Ld. AO vide order dated 29.12.1018 made additions of Rs.9,31,000/- and Rs.21,02,250/- for assessment year 2016-17. separate penalty proceedings initiated as per order dated 29.12.2018, lead to passing of penalty order dated 28.06.2019 by the Ld. A.O under Section 271(1)(c) of the Act for the assessment year 2016-17.

Ld. AO passed assessment order dated 15.12.2019 and made addition of Rs.14,60,000/- for assessment year 2017-18.

5.

The appellant/assessee against assessment order dated 29.12.2018, penalty order dated 28.06.2019 for assessment year 2016-17 and assessment order dated 15.12.2019 of Ld. AO preferred appeals with applications for condonation of delay of 1716 days in filing before Ld. CIT(A). Vide order dated 30.06.2024, Ld. CIT(A) dismissed the applications for condonation of delay of 1716 days in filing appeals and appeals.

6.

Being aggrieved, the appellant/assessee preferred present appeals.

7.

At the time of hearing, Learned Authorised Representative for the appellant/assessee submitted one application in 3970/Del/2024 and another application in both dated 24.03.2024. In applications, it is stated that the delay in filing appeals be condoned considering the custody and mental health conditions, ex parte orders under Section 144 of the Act may be set aside and Ld. AO be directed to compute income at 8% of total incomes for AYs 2016-17 and 2017-18.

8.

Learned Authorised Representative for the Revenue submitted that the appellant/assessee had failed to assist the departmental authorities.

9.

From examination of records in the light of aforesaid rival submissions, it is crystal clear that appellant/assessee had failed to comply with the several notices during the assessment proceedings. Ld. AO vide order dated 29.12.2018 made additions of Rs. 9,31,000/- and Rs.21,02,250/- on a total income of Rs.43,00,550/- for AY 2016-17. Further, Ld. AO passed penalty order dated 28.06.2019 for AY 2016-17. Similarly, Ld. AO vide order dated 15.12.2019, made addition of Rs.14,60,000/- in total income of Rs.17,46,580/- for AY 2017-18. Ld. CIT(A) vide order dated 30.06.2024 dismissed the applications for condonation of delay of 1716 days in filing appeals.

10.

The Appellant/assessee claims that due to custody and mental illness, he could not file appeals within period of limitation. In applications dated 24.03.2024, appellant/assessee requested condonation of delay in filing appeals due to custody and mental health, setting aside ex parte order under Section 144 of the Act and reassessment income as per section 44AD of the Act and to compute total income at 8% of Rs.43,00,550/- and Rs.17,86,580/- for AYs 2016-17 and 2017-18 respectively.

11.

In view of above material facts, in the interest of justice, it is considered expedient to set aside the impugned orders dated 30.06.2024 of Ld. CIT(A) and dated 29.12.2018, 28.06.2019 and 15.12.2019 of Ld. AO for AYs 2016-17 and 2017-18. Ld. AO is directed to pass a fresh orders in accordance with law for AYs 2016-17 and 2017-18. The penalty order being consequential is set aside.

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