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Facts
The assessee's appeal was delayed by 141 days due to communication errors where hearing notices were sent to incorrect email IDs. The assessee claims the delay was unintentional, attributing it to a communication gap and the director's illness. The appeal pertains to an addition of Rs. 85,08,800/- made by the AO on account of unexplained cash credit from share application money.
Held
The Tribunal condoned the delay in filing the appeal, admitting it for adjudication. The Tribunal found that the assessee was not afforded a sufficient opportunity of being heard due to notices being sent to old email addresses. The matter was remanded back to the Ld. CIT(A) for fresh adjudication, with instructions to ensure notices are sent to the correct email IDs.
Key Issues
Whether the delay in filing the appeal should be condoned and whether the assessee was denied a proper opportunity of being heard before the lower authorities.
Sections Cited
68, 250, 56(2)(viib), Rule 11UA, Rule 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH” KOLKATA
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
In this case, the ITAT Registry has pointed out that there is a delay of 1406 days in the filing of the present appeal. The assessee has filed a petition for condonation of the said delay as under:
“The appellant do hereby most respectfully submits before your honours that in the present case, the appellate order is dated 24.11.2023. Accordingly, the last date to file the appeal was 23.01.2024. As such there is a delay of 141 days in filing the appeal. Regarding delay in filing of appeal, it is submitted that the hearing notices dated 21.09.2023, 18.10.2023 and 06.11.2023 were sent at incorrect email Ids ie. aabcr2237h@gmail.com sdacasit@gmail.com whereas the correct email Id was it.vkma@gmail.com which was duly mentioned in the returns of income and at M/s Radhika Commercial Pvt. Ltd. which the intimation u/s 143(1) were sent for the AY 2020-21 to AY 2023-24. The latest email ID of the assessee company ie disaduttapukur@yahoo.com was also updated on e-filing portal. The e-filing portal does not show the email ID on which the appellant order was sent. However, it appears that the same would also have been sent at incorrect email. It is therefore the notices and order remained unnoticed by the appellant assessee. It is further submitted that the director of the company Mr. Ashis Kumar Sen looking into income tax related compliance was sick during the period from last six months.. The appellate order has come to notice of the appellant recently and thereafter the present appeal has been prepared and is being filed. However, in the process considering the date of order, there is a delay of 141 days. In view of the facts stated hereinabove, the appellant do hereby most respectfully request for condonation of delay. For this act of kindness, the appellant as in duty bound shall ever pray.” 1.1 Considering the reasons given in the said petition, the delay is hereby condoned and this appeal is admitted for adjudication.
2. The present appeal emanates from the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2017-18, vide order dated 24.11.2023.
2.1 In this case, the Ld. AO added Rs. 85,08,800/- u/s 68 of the Act by way of unexplained cash credit on account of share application money received, which allegedly could not be verified. A recurring theme in the Ld. AO’s order is that the share application money could not be verified in the absence of evidence for ascertaining the applicants’ creditworthiness etc. In fact, the Ld. AO has mentioned in several places in his order that the relevant documents pertaining to such investments were not produced before him to enable the assessee to escape the rigours of section 68 of the Act.
M/s Radhika Commercial Pvt. Ltd. 2.2 Aggrieved with the action of Ld. AO, the assessee approached the Ld. CIT(A), where he could not succeed mainly on the ground that many notices issued fixing the dates for hearing were not responded to by the assessee. In fact, one of the grounds to be adjudicated by the Ld. CIT(A) was denial of opportunity by the Ld. AO to present the facts of the case before him. The Ld. CIT(A) thereafter, upheld the action of Ld. AO, admittedly through ex-parte order.
2.3 Since, the assessee could not succeed before the Ld. CIT(A), therefore, he has filed the present appeal with the following grounds:
“1. For that the Ld. NFAC erred in confirming the assessment order passed by the Ld. AO which is otherwise bad in law as well as on facts.
For that the Ld. NFAC erred in passing the appellate order without providing the assessee any effective opportunity of being heard for the reason that the notices of hearing issued u/s 250 were served at old email IDs of the assessee company in spite of the fact that the new email Ids were duly available with the department.
3. For that the Ld. NFAC erred in ignoring the fact that the assessment order was passed by the Ld. AO without affording the assessee sufficient and effective opportunity of being heard.
4. For that the Ld. NFAC erred in confirming the addition of Rs. 85,08,000/-being share capital and premium raised during the year in spite of the fact that the assessee company provided the name, address and PAN of the investors (all of whom were individuals) regularly filing their returns of income, the amounts were received through banking channels and have adequate creditworthiness considering the contributed by them. amounts 5. For that the Ld. NFAC erred in confirming the addition of Rs. 85,08,000/-being share capital and premium raised during the year in spite of the fact that admittedly the issue price was not too high as compared to Fair Market Value of shares as per Rule 11UA of the Income Tax Rules, 1962 r.w.s. 56(2)(viib) of the Income Tax Act, 1961.
For that the Ld. NFAC erred in confirming the addition of Rs. 85,08,000/-being share capital and premium raised during the year in spite of the fact that admittedly the issue price was not too high as compared to Fair Market Value of shares as per Rule 11UA of the Income Tax Rules, 1962 r.w.s. 56(2)(viib) of the Income Tax Act, 1961.”
Before us, the Ld. AR argued with the help of paper book containing 79 pages and stated that the Ld.AO had sufficient material before him to arrive at a fair assessment of income of the assessee and the additions made by him were to be assailed. The Ld. AR stated that due to a 3 M/s Radhika Commercial Pvt. Ltd. communication gap between the assessee and the Ld. CIT(A), the notices issued from his office could not be responded to.
3.1 The Ld. DR relied on the order of authorities below and pointed out that adequate documentary evidences were not presented before the Ld. AO.
We have carefully considered the submissions before us and heard the rival contentions. It is seen that in Ground No. 2, it has been mentioned that the notices issued from the Ld. CIT(A) office were on an old email I/D and hence the assessee could not receive them. It is felt that in the interest of substantive justice, this matter deserves to be remanded back to the file of Ld. CIT(A) for fresh adjudication. The Ld. CIT(A) would do well to ensure that the notices are issued on the correct address and correct email I/D. The assessee, on his part, would do well to present the full facts and documents before the Ld. CIT(A), and if required file additional details under Rule 46A of the IT Rules so that a fair assessment of the income of the assessee can be made.
In result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the court 18.02.2025.