Loading judgment…
Facts
The assessee, a retired Line Inspector, faced an ex-parte assessment order under Section 147/144B and a penalty order under Section 270A, resulting in a demand for Rs. 49.75 lakhs on retirement benefits and a penalty of Rs. 8.16 lakhs. His appeals to the CIT(A) were dismissed due to significant delays (350 and 164 days). The assessee attributed the delay and non-participation to unawareness of procedures, reliance on a tax consultant, and notices being sent to an unknown email ID/mobile number.
Held
The Tribunal condoned the delay in filing appeals before the CIT(A), imposing a cost of Rs. 2500 per appeal. It observed that the Assessing Officer added retirement benefits without allowing exemption under Section 10. Consequently, both the assessment order and the penalty order were set aside, and the matter was remanded to the Assessing Officer for fresh adjudication, providing the assessee an opportunity to submit relevant records and submissions.
Key Issues
Whether the delay in filing appeals before the CIT(A) should be condoned given the assessee's circumstances, and whether the ex-parte assessment and penalty orders were valid, particularly regarding the taxation of retirement benefits without considering statutory exemptions.
Sections Cited
147, 144B, 270A, 144, 10, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘ DB- A ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Manjunatha, G.
ORDER
Per Vijay Pal Rao, Vice President These two appeals by the assessee are directed against the composite orders dated, 05/12/2024 of the learned CIT (A)- NFAC Delhi, arising from the assessment order passed u/s 147 r.w.s. 144B of the I.T. Act, 1961 as well as the penalty order passed u/s 270A of the Act respectively for the A.Y 2017-18.
The assessee has raised the following grounds of appeal:
Page 1 of 8 1. Under the fact and circumstances of the case, the learned Commissioner of Income Tax (Appeals)/NFAC erred in not condoning the delay of 350 days in filing the appeal. 2. The Learned C.I.T(A)/NFAC failed to note that the Appellant was prevented by reasonable and sufficient cause in not filing the appeal in time. 3. The Appellant craves to add, modify or amend the above grounds anytime during the course of appeal.”
1. Under the fact and circumstances of the case, the learned Commissioner of Income Tax (Appeals)/NFAC erred in not condoning the delay of 164 days in filing the appeal. 2. The Learned C.I.T(A)/NFAC failed to note that the Appellant was prevented by reasonable and sufficient cause in not filing the appeal in time. 3. The Appellant craves to add, modify or amend the above grounds anytime during the course of appeal.”
At the time of hearing, the learned AR of the assessee has submitted that the learned CIT (A) has dismissed the appeals of the assessee in limine, as barred by limitation. He has pointed out that the assessee was working as a Line Inspector with the Telangana State Southern Power Distribution Company and retired on 31/12/2016 from services. The assessee is not a well educated person and therefore, is not well versed with the procedures and proceedings pending before the learned CIT (A). He has filed the affidavit of the assessee to explain the delay of 11 months and 5 months in filing the respective appeals before the learned CIT (A) against the assessment order as well as the penalty order passed u/s 270A of the Act. Since the assessee was Page 2 of 8 not aware about the procedure and was dependent on the Tax Consultant regarding the proceedings initiated u/s 148 of the Act, the notices were issued by the Tax Authorities on the email ID used by the Tax Consultant for filing the return of income and therefore, the assessee being not convergent with the technologies and use of computer was not aware about the notices issued by the Assessing Officer as well as the learned CIT (A). Thus, the learned AR has submitted that the assessee was under bonafide belief that, after filing the return, no further steps or compliance was required. Due to lack of knowledge and old age, the assessee was not aware about the order passed by the Assessing Officer and therefore, there was a delay in filing the appeal before the learned CIT (A). The learned AR has thus, pleaded that the delay in filing the appeal before the learned CIT (A) may be condoned.
On the other hand, the learned DR has submitted that, it is a case of complete gross negligence on the part of the assessee who has neither participated in the proceedings before the Assessing Officer nor filed the appeal in time before the learned CIT (A).
We have considered the rival submission and gone through the contents of the affidavit filed by the assessee. The reason for delay in filing the appeals have been explained in in para 8 to 14 of the affidavit as under:
Accordingly, in the facts and circumstances of the case, when the Assessing Officer has passed the ex-parte order and the learned CIT (A) has dismissed the appeal of the assessee in limine, we incline to condone the delay of 11 months and 5 months in filing the appeals before the learned CIT (A) arising from the assessment order as well as the penalty order passed u/s 270A of the I.T. Act, 1961 subject to cost of Rs.2500/- for each appeal to be paid to the Prime Ministers’ National Relief Fund within a period of one month from the date of this order.
The learned AR of the assessee has pleaded that the Assessing Officer has made the addition on account of unexplained deposits in the Bank Account, whereas the assessee was having only the salary income and retirement benefit funds as source of the deposits in the Bank Account. However, since the Page 5 of 8 assessee could not participate in the assessment proceedings, the relevant details and record could not be filed before the Assessing Officer. Thus, the learned AR has pleaded that the matter may be remanded to the record of the Assessing Officer for fresh adjudication after proper verification and examination of the relevant record to be filed by the assessee.
On the other hand, the learned DR has raised no objection if the matter is remanded to the record of the Assessing Officer for fresh adjudication after verification and examination of the relevant records.
Having considered the rival submission as well as perusal of the orders of the authorities below, we find that the Assessing Officer has made an addition of Rs.49,75,438/- in para 7 as under:
From the above, it is clear that the Assessing Officer was having the information that the amount in question was received by the assessee from the Telangana Southern Power
Page 6 of 8 Distribution Company on his retirement, but the same was considered by the Assessing Officer as salary and made the addition without giving benefit u/s 10 of the I.T. Act, 1961. Accordingly, in the facts and circumstances of the case, the impugned order of the learned CIT (A) is set aside and the matter is remanded to the record of the Assessing Officer for fresh adjudication after giving an appropriate opportunity of hearing to the assessee to submit the relevant record, details and submissions.
Since the matter in quantum appeal has been set aside to the record of the Assessing Officer, therefore, the order of the learned CIT (A) arising from the penalty levied u/s 270A of the I.T. Act, 1961 is also set aside and the matter is remanded to the record of the Assessing Officer for taking necessary steps, if need arises as per the outcome of the set aside proceedings in quantum/assessment.