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Facts
The assessee filed an appeal with a significant delay due to errors in digital signature certificates and claims non-receipt of notices from the AO. The CIT(A) dismissed the appeal in limine for non-filing within the due date. The assessee is in appeal before the Tribunal against this dismissal and the penalty levied.
Held
The Tribunal held that the assessee had a reasonable and sufficient cause for the delay in filing the appeal before the CIT(A) due to issues beyond their control. Consequently, the delay was condoned, and the appeals were restored to the CIT(A) for fresh adjudication on merits.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was condonable and whether the penalty under Section 271(1)(c) was rightly confirmed without adjudicating the quantum appeal on merits.
Sections Cited
139(1), 147, 148, 142(1), 144, 69A, 115BBE, 271(1)(c), 249(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad
O R D E R PER MANJUNATHA G, AM: At the outset, we find that there is a delay of 437 days in filing the appeal before the Tribunal. The assessee has filed a petition for condonation of delay along with an affidavit and explained the reasons for delay. Shri, S.K. Gupta, the Ld. Counsel for the assessee referring to the petition filed by the assessee submitted that, although the assessee has paid appeal fees on 5/10/2023 and filed relevant Form- 36 on 06/10/2023 but, because of certain errors in Digital Signature Certificate (in short “DSC”), the Form-36 could not be uploaded. However, the assessee has obtained DSC and filed digitally signed Form- 36 on 10/01/2025 with a delay of 437 days. The said delay is beyond the control of the assessee. He therefore submitted that the delay in filing the appeal is neither intentional nor for want of any undue benefit. Therefore, in the interest of justice, the delay may be condoned.
Dr. Sachin Kumar, the Learned Departmental Representative (in short “Ld. DR”) present for the Revenue, on the other hand, opposed the petition filed by the assessee and submitted that when the assessee needs to file the appeal in electronic mode, the assessee should obtain the relevant DSC before the due date. The assessee although paid the appeal fees on or before the due date but, did not file the appeal within the time, and also not explained the reasons for delay in filing the appeal. Therefore, the petition filed by the assessee for condonation of delay should not be admitted.
We have heard both the parties and considered the reasons of the assessee in the petition for condonation of delay and we find that, the assessee has made an honest attempt for filing the appeal and paid the relevant appeal fees on 05/10/2023 and also uploaded unsigned Form- 36 on 06/10/2023 i.e., on or before the due date of filing the appeal before the Tribunal. The only reason for not filing the Form-36 with DSC is due to mistake in DSC which is beyond the control of the assessee. Therefore, we are of the view that the reasons given by the assessee for not filing the appeal before the Tribunal does come under ‘reasonable and sufficient cause’ and thus, the delay in filing of the appeal is condoned and the appeal is admitted for hearing.
Brief facts of the case are that the assessee had filed his return of income for the AY 2016-17 U/s. 139(1) of the Income Tax Act, 1961 (in short “the Act”). The assessment has been subsequently reopened U/s. 147 of the Act, for the reasons as per which, income has escaped assessment and accordingly notice U/s. 148 of the Act, dated 29/03/2021 was issued and served on the assessee. The assessee has not filed the return of income in response to notice U/s. 148 of the Act. Therefore, notices U/s. 142(1) of the Act, dated 11/11/2021, 14/12/2021 and 20/01/2022 were issued, but the assessee did not file any response. Therefore, the A.O passed ‘Best Judgment Assessment’ U/s. 144 of the Act and made addition of Rs. 1,93,40,000/- towards cash deposited into M/s. Sri Renuka Mata Multi State Urban Cooperative Society Limited as unexplained money U/s. 69A of the Act and brought to tax U/s. 115BBE of the Act.
Being aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A) and such appeal has been filed on 18/12/2022 with a delay of 07 months. The assessee has explained the reasons for delay in filing of the appeal before the CIT(A). The CIT(A), however, considering the submissions of the assessee, dismissed the appeal filed by the assessee in limine for not filing the appeal on or before the due date. Aggrieved by the CIT(A)’s order, the assessee is now in appeal before the Tribunal.
The Learned Counsel for the assessee submitted that the assessee could not appear before the A.O in response to various notices issued U/s. 142(1) of the Act, because the notices issued by the Assessing Officer did not serve on the assessee and further, the said notices have been sent to an email Id i.e., 65bhtc@gmai.com which is neither pertains to assessee nor to the Tax Practitioner of the assessee. Since the assessee was not served the notices by the Assessing Officer, there was no response before the A.O. Further, the assessee could not file the appeal before the CIT(A) for the very same reasons that the assessment
order passed by the A.O was sent to an email Id which was not pertained to the assessee. Therefore, he submitted that the delay in filing of appeal before the CIT(A) should be condoned and the matter may be remitted back to the file of the A.O to provide one more opportunity to the assessee.
Insofar as the appeal of the assessee against the order passed by the CIT(A) confirming the penalty levied by the AO U/s. 271(1)(c) of the Act, he submitted that the CIT(A) has confirmed the penalty levied by the Assessing Officer U/s. 271(1)(c) of the Act only on the ground that the quantum appeal of the assessee has been dismissed, but the fact remains that the CIT(A) has not examined the addition made by the A.O towards cash deposit to allege that the assessee has furnished inaccurate particulars or concealed particulars of income. Therefore, he submitted that this issue may also be remitted back to the file of the A.O to give one more opportunity of being heard to the assessee.
The Ld. DR, on the other hand, supporting the order of the CIT(A), submitted that the assessee is not cooperative at all stages of proceedings which is evident from the ex-parte orders passed by the authorities. The assessee could not explain as to why he could not appear before the authorities and explain his case. Therefore, he submitted that there is no reason to give another opportunity to the assessee and thus, the order of the CIT(A) should be upheld.
We have heard both the parties, perused the material available on record and perused the orders of the authorities below. Admittedly, before the Assessing Officer the assessment is ex-parte and the A.O has passed the order U/s. 144(1) of the Act. The CIT(A) has dismissed the appeal filed by the assessee in terms of section 249(3) of the Act for non- filing of the appeal on or before the due date. The assessee has explained the reason for not appearing before the A.O and also not filing the appeal before the CIT(A) on or before the due date. As per the reasons given by the assessee, we find that the A.O has issued notices of hearing U/s. 142(1) of the Act and also passed order U/s. 147 r.w.s 144 of the Act, dated 24/03/2022 to an email Id ie., 65bhtc@gmai.com and the assessee’s claim that the said email Id is not the assessee’s and also his Tax Practitioner. The Revenue could not controvert the arguments of the assessee, as no evidence to disprove the claim of the assessee that notices and the assessment order passed by the A.O are not served on the assessee. Once there is a sufficient reason for the assessee for non- appearing and not filing the details before the A.O and further the assessee could not file the appeal before the CIT(A) on or before the due date because of non-service of assessment order to the assessee, in our considered view the CIT(A) ought to have condoned the delay in filing of the appeal and decide the appeal on merits. Since the CIT(A) dismissed the appeal of the assessee in limine for not filing of the appeal within the due date and also has not discussed the appeal on merits, in our considered view, the delay in filing of the appeal before the CIT(A) needs to be condoned because, there is sufficient reason for the assessee for not filing the appeal. Thus, we condone the delay in filing the appeal of the assessee before the CIT(A) and restore the issue back to the file of the CIT(A) for fresh adjudication of the issue. Thus, we set-aside the order of the CIT(A) and restore the issue back to the CIT(A) for de novo consideration after providing reasonable opportunity of hearing to the assessee.
In the result, appeal filed by the assessee in (AY 2016-17) is allowed for statistical purposes.
This appeal filed by the assessee against the order of the CIT(A), dated 17/12/2024, challenging the reasons given by the CIT(A) while confirming the penalty levied by the Assessing Officer U/s. 271(1)(c) of the Act is consequential to the appeal filed by the assessee against the addition made by the Assessing Officer towards cash deposit in the bank account U/s. 69A of the Act. Since the issue of addition made towards cash deposit U/s. 69A of the Act has been set aside to the file of the CIT(A) for de novo consideration, in our view, the appeal filed by the assessee against penalty order also need to go back to the file of CIT(A). Thus, we set aside the order of the CIT(A) and restore the matter back to the CIT(A) and also direct the CIT(A) to re-consider the issue of penalty U/s. 271(1)(c) of the Act after deciding the quantum appeal filed by the assessee.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Ex-consequenti, both the appeals filed by the assessee are allowed for statistical purposes.