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Facts
The assessee's original assessment under Section 143(3) was completed. Subsequently, the case was reopened under Section 147 due to information regarding a lease deed change and un-offered capital gains from the sale of two flats, leading to an ex-parte assessment. The CIT(A) dismissed the assessee's appeal for non-prosecution. The assessee filed the present appeal with a delay of 198 days due to medical reasons.
Held
The Tribunal condoned the delay of 198 days, citing the liberal approach mandated by the Supreme Court in MST Katiji. It noted that the CIT(A) passed a non-speaking order without addressing the grounds of appeal, particularly the assessee's claim that the reopened issue was already disclosed in the original return. The matter was set aside and restored to the Assessing Officer for de novo verification with a proper opportunity of hearing.
Key Issues
Condonation of delay in filing appeal; validity of reopening assessment under Section 147 when the issue was previously assessed under Section 143(3) and disclosed; and dismissal of appeal by CIT(A) without a speaking order.
Sections Cited
143(3), 147, 148, 142(1), 144, 144B, 250, 139
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Income Tax Appellate Tribunal, HYDERABAD “B” BENCH: HYDERABAD
Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G
ORDER PER MANJUNATHA G. : This appeal has been filed by the Assessee against the order dated 08.07.2024 of the learned CIT(A)- National Faceless Appeal Centre [in short the “NFAC”] Delhi, relating to the assessment year 2015-2016. 2. At the very outset, CA, E. Phalguna Kumar, Learned Counsel for the Assessee submitted that, there is a delay of 198 days in filing the appeal before the Tribunal. The assessee has filed an affidavit explaining the reasons for
2 ITA.No.667/Hyd./2025 the delay and pleaded for condonation of delay in filing the appeal before the Tribunal. The reasons explained by the assessee for not filing the appeal within the time before the Tribunal are that, he is suffering from physical and mental problems and also filed medical reports in support of his contention. The Learned Counsel for the Assessee accordingly pleaded to condone the delay of 198 days in filing the appeal before the Tribunal in the interest of justice.
Dr.Sachin Kumar, learned Sr. AR for Revenue on the other hand strongly opposed for condonation of delay and submitted that, the assessee could not explain day-to- day delay reasons before the Tribunal and, therefore, submitted that, the delay condonation petition filed by the assessee should be dismissed in the interest of justice.
We have gone through the affidavit filed by the assessee and the annexed medical reports. We find that, admittedly, the assessee had given medical reasons for not filing the appeal on or before the due date. To support his arguments, he has filed medical records which can be 3 ITA.No.667/Hyd./2025 considered for condonation of delay. The Hon’ble Supreme Court in the case of Collector, Land Acquisituon vs., MST Katiji [1987] 167 ITR 471 (SC) has laid down certain principles for condoning the delay and also directed the lower courts to follow a lenient approach for condoning the delay. Going by the principles laid down by the Hon’ble Supreme Court in the case of MST Katiji (supra), there is no dispute if an appeal is dismissed on account of technicalities, a meritorious case may be thrown-out of judicial review. Therefore, while condoning the delay, the courts must have a liberal approach or lenient approach considering the reasons given by the petitioners or appellants. Therefore, going by the principles laid down by the Hon’ble Supreme Court in the case of MST Katiji (supra) and also considering the medical history of the assessee, we condone the delay of 198 days in filing the appeal before the Tribunal and admit the appeal for adjudication.
Briefly stated facts of the case are that, the assessee is an individual and had not filed return of income. In the case of the assessee original assessment has been 4 ITA.No.667/Hyd./2025 completed u/sec.143(3) of the of the Income Tax Act, 1961 [in short “the Act”] determining the total income of the assessee at Rs.12,99,910/- by making addition of Rs.1,30,000/- being disallowance made on labour bills/self- made vouchers. Subsequently, the case of the assessee has been reopened u/sec.147 of the Act on the basis of information that, assessee has changed his lease deed on 26.04.2021 by surrendering the old lease deed and entered into new lease deed on 26.06.2014 and thereby, the monetary consequences which was not forthcoming from the file and that, income from house property is required to be recomputed on the basis of new lease deed. Further, the has also sold two flats and not offered the capital gains tax. Therefore, the case of the assessee has been reopened u/sec.147 of the Act and notice u/sec.148 of the Act was issued on 31.03.2021. In response, the assessee did not file return of income. Therefore, the Assessing Officer issued notices u/sec.142(1) of the Act on 16.12.2021 and 29.12.2021 and show cause notice dated 07.02.2022. Since, there were no compliance from the assessee, the Assessing
5 ITA.No.667/Hyd./2025 Officer determined the total taxable income of the assessee at Rs.61,66,472/- by making additions of Rs.66,562/- on account of income from house property [estimated increase @ 20% on Rs.3,32,811/-] and Rs.48 lakhs on account of sale of two flats vide ex-parte order dated 25.03.2022 passed u/sec.147 r.w.s.144 r.w.s.144B of the Income Tax Act, 1961.
On being aggrieved, the assessee preferred an appeal before the learned CIT(A). During the course of appellate proceedings, the learned CIT(A) issued notices u/sec.250 of the Act dated 05.04.2023, 17.04.2024, 13.05.2024, 30.05.2024 and 14.06.2024. Since the assessee failed to furnish his explanation or filed any documentary evidences in support of his contention, the learned CIT(A) has dismissed the appeal of the assessee for non- prosecution and sustained the additions made by the Assessing Officer.
CA, E. Phalguna Kumar, Learned Counsel for the Assessee submitted that, although, the assessee has not filed return of income in response to notice u/sec.148 of the 6 ITA.No.667/Hyd./2025 Act, but, the fact remains that, the issue on which the assessment has been reopened has already been disclosed in the return of income filed u/sec.139 of the Income Tax Act, 1961 and the return was subjected to assessment u/sec.143(3) of the Income Tax Act, 1961. This fact has been brought to the notice of the learned CIT(A) by way of grounds of appeal. However, the learned CIT(A) has not addressed the said issue. Therefore, the Learned Counsel for the Assessee pleaded that the matter may be set-aside to the file of Assessing Officer for de novo verification, by providing reasonable opportunity of hearing to the assessee to substantiate his case in the interest of substantial justice.
8. Dr. Sachin Kumar, learned Sr. AR for Revenue, on the other hand, supporting the order of the learned CIT(A) submitted that, despite several notices issued by the learned CIT(A) during the course of appellate proceedings, the assessee did not file his submissions along with documentary evidences to substantiate his case and, therefore, the learned CIT(A) has rightly sustained the 7 ITA.No.667/Hyd./2025 addition made by the Assessing Officer. He, accordingly, pleaded that the order of the learned CIT(A) should be upheld and submitted that, it is not a fit case for verification of facts/documents afresh.
We have heard both the parties, perused the material on record and the orders of the authorities below. We find that, admittedly, the Assessing Officer completed original assessment u/sec.143(3) of the Income Tax Act, 1961 vide order dated 20.12.2017 and assessed the income of the assessee at Rs.12,99,910/-. Subsequently, the case of the assessee has been reopened u/sec.147 of the Act and determined the total income of the assessee at Rs.61,66,472/- vide ex-parte order dated 25.03.2022 on the ground that, the assessee did not file any documentary evidences in support of his claim. Even during the course of appellate proceedings, the learned CIT(A) passed ex-parte order by dismissing the appeal of the assessee for want of prosecution. It was the case of the assessee that, assessment in his case has already been completed u/sec.143(3) of the Act, basing on the return filed by the 8 ITA.No.667/Hyd./2025 assessee u/sec.139 of the Act. Further, the issue on which, the assessment has been reopened is subjected to assessment and assessee has already disclosed capital gain in the return of income. This fact has been explained to learned CIT(A) in the grounds, but, in appeal, the learned CIT(A) has passed non-speaking order without even considering the grounds of appeal filed by the assessee. Therefore, considering the facts and circumstances of the case, we set aside the order of the learned CIT(A) and restore the matter back to the file of Assessing Officer. The Assessing Officer is directed to consider the issue de novo, after providing adequate opportunity of being heard to the assessee.
In the result, appeal of the Assessee is allowed for statistical purposes.