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Facts
The assessee, a salaried employee, did not file his return of income for AY 2015-16. Based on salary income information, the Assessing Officer reopened the case and completed an ex-parte assessment, raising a demand without allowing TDS credit or other statutory deductions. The assessee's appeal to CIT(A)/NFAC was dismissed due to a 379-day delay, without considering the merits of the case.
Held
The Tribunal observed that the assessee was unaware of notices due to shifting abroad and had assigned return filing to a friend. Considering these facts and in the interest of justice, the Tribunal set aside the CIT(A)'s order and remanded the matter back, directing the CIT(A) to condone the delay and adjudicate the appeal afresh on merits after providing a reasonable opportunity of hearing.
Key Issues
1. Whether the CIT(A) was justified in dismissing the appeal solely on the ground of condonation of delay without considering its merits. 2. Whether the non-allowance of TDS credit, exempt allowances, and various deductions by the Assessing Officer was proper.
Sections Cited
147, 144, 148A(d), 148, 142(1), 143(3), 144B, 271(1)(c), 10(13A), 10(14), 80C, 80D, 24(b), 16(iii)
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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
ORDER PER VINAY BHAMORE, JM: Both the above captioned appeals filed by the assessee are directed against the separate orders dated 08.08.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2015-16 respectively. 2. Since identical facts are involved in both the above captioned appeals of the assessee, we proceed to dispose of the same by this common order.
: 4. This appeal is directed against the order dated 08.08.2025 passed u/s 147 r.w.s. 144 of the IT Act by Ld. CIT(A)/NFAC for the assessment year 2015-16. 5. The appellant has raised the following grounds of appeal :-
1. OBJECTION AGAINST DISMISSING THE APPEAL OF THE APPELANT 1.1 On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals)- NFAC (hereinafter referred to as the CIT (Appeals)), has erred in dismissing the appeal filed by the Appellant without appreciating the facts of the case and grounds of appeal filed by the Appellant in relation to the addition made in the Assessment Order. 1.2 The Appellant respectfully submits that the dismissal of the appeal by the Ld. CIT (Appeals) without considering the detailed submissions filed by the Appellant with the Ld. Commissioner of Income Tax (Appeals), NFAC on 24th June, 2025 alongwith the evidences in support of the contention of the Appellant, is not justified and the same leads to injustice in the case of the Appellant. 1.3 The appellant respectfully submits that appeal of the Appellant has been decided without affording an opportunity to the Appellant and without considering various Judicial Pronouncements in favour of the Appellant and the passing of Appellate Order by the Ld. CIT (Appeals) is unjustified and against the principle of natural justice. 1.4 The appellant respectfully submits that the dismissal of the appeal vis-à-vis application of condonation of delay for filing of appeal by the Ld. CIT (Appeals) without considering the facts of the case is not justified and the same leads to injustice in the case of the appellant.
& 2526/PUN/2025 1.5 The appellant, therefore, prays that the case of the appellant may please be decided on merits of the case or the case be restored before the Ld. CIT (Appeals) after set aside the Appellate Order passed by the Ld. CIT (Appeals).
OBJECTION AGAINST NON-ALLOWANCE OF TDS CREDIT OF Rs. 15,81,732 2.1 The Ld. CIT (Appeals) has erred in confirming non-allowance of credit of Tax Deducted at Source (TDS) aggregating to Rs. 15,81,732 (Rupees Fifteen Lakhs Eighty-One Thousand Seven Hundred Thirty-Two Only) on Salary income earned by the Appellant after applying the provisions of the Income Tax Act, 1961 in the case of the Appellant. 2.2 The appellant respectfully submits that the above non-allowance of Rs. 15,81,732 is not justified for various reasons and more particularly when the said TDS credit is duly appearing in Form 26AS of the Appellant for the year under appeal. The appellant submits that the case of the appellant could not be properly explained in absence of adequate opportunity both during the assessment and appellate proceedings. 2.3 The appellant, therefore, prays that the above non-allowance made by the Ld. Assessing Officer may please be allowed or any other relief as deemed fit on the facts of the case may please be allowed to the appellant.
OBJECTION AGAINST NON-ALLOWANCE OF EXEMPT ALLOWANCES OF Rs. 3,89,296 3.1 The Ld. CIT (Appeals) has erred in confirming non-allowance of exemption claimed by the Appellant of Rs. 3,03,996/- for House Rent Allowance under the provisions of Section 10(13A) of the Income Tax Act, 1961 and exemption of Rs. 85,300 for Conveyance Exemption, LTA non-Taxable and Medical Non- taxable under the provisions of Section 10(14) of the Income Tax Act, 1961, aggregate allowances of Rs. 3,89,296 for the year under appeal after applying the provisions of the Income Tax Act, 1961 in the case of the Appellant. 3.2 The appellant respectfully submits that the above non- allowances of exempt allowances of Rs. 3,89,296 is not justified for various reasons. The appellant submits that the case of the appellant could not be properly explained in absence of adequate opportunity both during the assessment and appellate proceedings. 3.3 The appellant, therefore, prays that the above non-allowance made by the Ld. Assessing Officer may please be allowed or any & 2526/PUN/2025 other relief as deemed fit on the tads of the case may please be allowed to the appellant 4. OBJECTION AGAINST NON-ALLOWANCE OF DEDUCTIONS CLAIMED OF Rs.1,76,387 4.1 The Ld. CIT (Appeals) has erred in confirming non-allowance of deductions claimed by the Appellant of amount deposited in Public Provident Fund of Rs. 1,39,200 and deduction of Rs. 7,20,745 for Housing Loan Principal repayment under the provisions of Section 80C of the Income Tax Act, 1961, aggregate allowances of Rs. 1,50,000 and deduction of Rs. 26,387 for the Health Insurance under the provisions of Section 80D of the Income Tax Act, 1961, for the year under appeal after applying the provisions of the Income Tax Act, 1961 in the case of the Appellant. 4.2 The appellant respectfully submits that the above non- allowances of deductions claimed of Rs. 1,76,387 is not justified for various reasons. The appellant submits that the case of the appellant could not be property explained in absence of adequate opportunity both during the assessment and appellate proceedings.
OBJECTION AGAINST NON-ALLOWANCE OF OTHER DEDUCTIONS CLAIMED OF Rs. 2,02.500 5.1 The Ld. CIT (Appeals) has erred in confirming non-allowance of other deductions claimed by the Appellant for the deduction of Rs. 2,00,000/- for interest payment on Housing Loan under the provisions of Section 24(b) of the Income Tax Act. 1961 and deduction of Rs. 2,500/- for Tax on employment under the provisions of Section 16(iii) of the Income Tax Act, 1961, aggregate allowances of Rs. 2,02,500, for the year under appeal after applying the provisions of the Income Tax Act, 1961 in the case of the Appellant. 5.2 The appellant respectfully submits that the above non- allowances of other deductions claimed of Rs. 2,02,500 is not justified for various reasons. The appellant submits that the case of the appellant could not be properly explained in absence of adequate opportunity both during the assessment and appellate proceedings. 5.3 The appellant, therefore, prays that the above non-allowance made by the Ld. Assessing Officer may please be allowed or any other relief as deemed fit on the facts of the case may please be allowed to the appellant.
6. General Ground & 2526/PUN/2025 6.1 The Appellant craves leave to add, alter, delete, or modify any of grounds of appeal
, on or before the date of hearing or during the appellate proceedings.”
6. Facts of the case, in brief, are that the assessee is an individual salaried employee in Tech Mahindra Ltd. and has not furnished his return of income for the period under consideration. On the basis of information available on the AIMS module of the ITBA that the assessee has earned salary income of Rs.68,69,302/- and the return of income has not been furnished by him, the Assessing Officer reopened the case after passing the order u/s 148A(d) of the IT Act and notices u/s 148 and 142(1) of the IT Act and show-cause notice were issued to the assessee on 23.07.2022, 23.01.2023, 23.02.2023 and 10.04.2023 respectively. The assessee neither submitted any response nor requested for the adjournment therefore vide order dated 08.05.2023 the Assessing Officer completed the assessment u/s 143(3) r.w.s. 147 r.w.s. 144 r.w.s. 144B of the IT Act and determined the total income at Rs.68,70,570/- as against no return filed by the assessee and raised a demand of Rs.56,33,885/- without providing any credit of tax deducted at source of Rs.15,81,732/-. The Assessing Officer also initiated penalty proceedings u/s 271(1)(c) of the IT Act.
& 2526/PUN/2025 7. Being aggrieved with the above ex-parte assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. Since the appeal was furnished belatedly i.e. with a delay of 379 days and after considering the reply of the assessee, Ld. CIT(A)/NFAC was of the view that the reason submitted by the assessee do not constitute sufficient and reasonable cause accordingly the delay was not condoned and the appeal filed by the assessee was dismissed without going into merits of the case.
It is the above order against which the assessee is in appeal before this Tribunal.
We have heard Ld. counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that admittedly the assessee was in receipt of salary income which was also subjected to tax deduction at source by the employer. Admittedly, the return of income for the period under consideration was not furnished by the assessee, however at the same time it is also observed that the assessee assigned the job of return filing to one of his friend who failed to furnish the relevant return of income and on 24.04.2017 the assessee was shifted to United States of America in search of better & 2526/PUN/2025 employment and since then he is residing over there and became a Non-Resident Indian (NRI). However, in the month of June 2024 when huge demand appeared on the portal the assessee became aware of the ex-parte assessment which was passed by the Assessing Officer and immediately appointed a consultant to file an appeal before Ld. CIT(A)/NFAC with delay condonation application explaining that he was unaware of the proceedings due to residing abroad. However, Ld. CIT(A)/NFAC did not condone the delay of 379 days and without going into merits of the case dismissed the appeal filed by the assessee.
It was the contention of Ld. counsel of the assessee that the assessee was in receipt of salary income on which the income tax was deducted at source and the same was also reflecting in Form 26AS of the assessee. It was also contended by Ld. counsel of the assessee that the task of return filing was assigned to other person who failed to furnish the return of the assessee and the assessee was under bona-fides belief that the tax has already been deducted at source on his income and there will be no tax liability upon him. Subsequently, the assessee got shifted to United States of America for better employment and since then residing there and has become & 2526/PUN/2025 NRI. It was the contention of Ld. counsel of the assessee that in April 2017 the assessee shifted to United States of America and therefore he was not aware of information of any notice which was issued in his name with regard to assessment year under consideration. It was also the contention of Ld. counsel of the assessee that the statutory deductions such as interest on house loan, house rent allowance, investment in Public Provident Fund and medical claim etc and credit of tax deduction at source were also not allowed to the assessee and if all such deductions will be allowed to him there will be no tax demand.
Considering the totality of the facts of the case and in the interest of justice, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and remand the matter back to the file of Ld. CIT(A)/NFAC with a direction to condone the delay and adjudicate the appeal afresh as per fact & law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard and to produce relevant documents, submissions and evidences to substantiate the grounds of appeal without taking any adjournment under any pretext, otherwise Ld. & 2526/PUN/2025 CIT(A)/NFAC shall be at liberty to pass appropriate orders as per law. Accordingly, the effective ground raised by the assessee is allowed for statistical purposes.
12. In the result, the appeal filed by the assessee in is allowed for statistical purposes.
: 13. This appeal is directed against the order dated 08.08.2025 passed u/s 271(1)(c) of the IT Act by Ld. CIT(A)/NFAC for the assessment year 2015-16.
Consequential penalty u/s 271(1)(c) of the IT Act also remanded back to the file of Ld. CIT(A)/NFAC with direction to condone the delay and decide the appeal afresh as per fact and law after deciding the quantum appeal & after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard and to produce relevant documents, submissions and evidences to substantiate the grounds of appeal without taking any adjournment under any pretext, otherwise Ld. CIT(A)/NFAC shall be at liberty to pass appropriate orders as per law. Accordingly, the