PRAMEELA PORIKA,SURYAPET vs. ACIT., CIRCLE-7(1), HYDERABAD

Per contra, the Learned Departmental Representative (“ Ld. DR”) objected to the condonation of delay and submitted that the reasons explained by the assessee are not adequate or reasonable. It was submitted that the assessee was also non- compliant during the assessment as well as penalty proceeding, which reflects a casual approach towards the appellate process. Therefore, the delay should not be condoned and the appeal should be dismissed as barred by limitation.

We have considered the rival submissions and perused the material placed on record. It is evident that although the assessee had specifically opted ‘No’ for e-mail communication in Form No.35, the entire appellate process before the Ld. CIT(A) was conducted only through email, and no physical notice was ever issued. This is a clear violation of principles of natural justice. Further, the assessee came to know about the appellate order only upon receipt of the penalty notice under section 270A of the Act, and the medical evidence placed on record shows that the Page 3 of 7 assessee was under medical treatment around the relevant period. The sequence of events explained by the assessee is consistent, reasonable, and supported by documents. We find no mala fide intention on the part of the assessee. Therefore, the assessee has established sufficient cause for the delay. Considering the settled position that substantial justice must prevail over technicalities, we find it appropriate to condone the delay, subject to imposition of reasonable cost. Accordingly, the delay of 449 days in filing the present appeal is hereby condoned, subject to the assessee depositing a cost of Rs.5,000/- (Rupees Five Thousands only) to the Prime Minister National Relief Fund within one month from the date of receipt of this order and filing proof of the same before the Registry. Subject to such compliance, the appeal is admitted for adjudication on merits.

The assessee has raised the following grounds of appeal: “1) The order of the learned Commissioner of Income Tax (Appeals) is erroneous both on facts and in law. 2) The learned Commissioner of Income-Tax (Appeals) erred in not providing proper opportunity to the appellant. 3) The learned Commissioner of Income-Tax (Appeals) erred in confirming the addition of Rs. 11,68,000/- made u/s 68 of the I.T Act. 4) The learned Commissioner of Income-Tax (Appeals) erred in treating the amount of Rs. 1,15,865/- representing unsecured loan as the income of the appellant. 5) The learned Commissioner of Income Tax (Appeals) erred in confirming the addition made of Rs. 4 lakhs as unexplained cash credits u/s 68 of the I.T Act;

The brief facts of the case are that the assessee had filed an appeal before the Ld. CIT(A) against the order of the Ld. AO passed under section 143(3) of the Act for the Assessment Year 2017-18 dated 23.12.2019. However, during the appellate proceedings before the Ld. CIT(A), the assessee could not comply with the notices issued. Accordingly, the Ld. CIT(A) dismissed the appeal ex parte and upheld the assessment order.

Aggrieved with the order of the Ld. CIT(A), the assessee is in appeal before this Tribunal. The Ld. AR submitted that, as explained in the condonation petition, the notices issued by the Ld. CIT(A) were never effectively communicated to the assessee and therefore the assessee could not appear or furnish submissions during the appellate proceedings. It was further submitted that even during the assessment proceedings before the Ld. AO, the assessee could not properly prosecute the case and therefore substantive submissions and supporting documents could not be filed. The assessee has now filed a petition for admission of additional evidence, containing all relevant documents necessary to establish the claims made in the return of Page 5 of 7 income. The Ld. AR therefore pleaded that, in the interest of natural justice, one more opportunity may be granted to the assessee to present the case on merits. It was requested that the matter may be remanded to the file of the Ld. AO, so that the assessee can furnish necessary evidence and explanations.

Per contra, the Ld. DR objected to the remand and submitted that both the lower authorities had already provided sufficient opportunities during the assessment as well as appellate proceedings, which the assessee failed to utilize. Therefore, no further opportunity is warranted.

We have considered the rival submissions and perused the material available on record. We observe that as explained in the condonation petition, the notices issued by the Ld. CIT(A) were never effectively communicated to the assessee and therefore the assessee could not appear or furnish submissions during the appellate proceedings. Further, it is also evident that the assessee could not properly represent its case before the Ld. AO as well. The assessee has now come forward with supporting documents and evidence which go to the root of the determination of taxable income. The principle of natural justice requires that legitimate claims should not be rejected solely on account of technical or procedural lapse when relevant evidence is now available and is being tendered for examination. Therefore, in the interest of justice, we deem it appropriate to restore the matter to the file of the Ld. AO, to examine the additional evidence and to re-decide

In the result, the appeal of the assessee is allowed for statistical purposes.