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Facts
The assessee's appeal was filed with a delay of 464 days. The assessee explained this delay due to various reasons including the demise of a professional, difficulty in obtaining case records, and IT consultant's engagements. The CIT(A) had dismissed the appeal for non-prosecution.
Held
The Tribunal condoned the delay in filing the appeal, finding reasonable cause for the delay. The Tribunal set aside the order of the CIT(A)/NFAC and restored the matter to his file for adjudication afresh on merits, after providing a reasonable opportunity of hearing to the assessee.
Key Issues
Whether the delay in filing the appeal before the Tribunal is to be condoned? Whether the order of the CIT(A)/NFAC dismissing the appeal for non-prosecution without adjudicating on merits is sustainable?
Sections Cited
147, 148, 143(3), 69, 2(14), 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, PUNE
Before: SHRI MANISH BORAD & MS. ASTHA CHANDRA
Assessment Year : 2012-13 Mr. Ananda Kondu Akhade, Income Tax Officer, A/p Pomgaon, Mulshi Road, Ward – 9(5), Pune Tal.-Mulshi, Dist.-Pune-410401 Vs. PAN : AKJPA7765K अपीलधर्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Bhuvanesh Kankani Department by : Shri Madhan Thirmanpalli Date of hearing : 14-05-2025 Date of 29-05-2025 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 12.07.2023 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Year (“AY”) 2012-13.
There is a delay of 464 days in filing of this appeal before the Tribunal for which the assessee has filed an affidavit explaining the reasons for such delay. He submitted that the delay is not intentional and is a bonafide one for the reasons beyond the control of the assessee as evident from the affidavit filed in support thereof and therefore prayed that the delay may be condoned and the appeal be admitted for adjudication.
2.1 The Ld. DR, on the other hand, strongly opposed the arguments advanced by the Ld. Counsel for the assessee.
2.2 We have heard the rival contentions and perused the record. It is an admitted fact that there is a delay of 464 days in filing of the appeal before the Tribunal. The Ld. Counsel for the assessee has filed an affidavit of the assessee stating the reason for such delay which are as under : “1) That said scrutiny proceedings for AY 2010-11 and AY 2012-13 were completed by making some additions and raising tax demand.
2) That against both the assessment orders I had preferred an appeal through my regular consultant Mr. Manish. 3) That I was being informed that requisite submission is being made in pursuance of the Appeal filed. 4) That, however, somewhere in month of August or September 2023, I came to know that both the Appeals have been dismissed because of non- appearance. Further, upon getting the IT e-filing portal verified it was informed to me that even email for CIT(A) hearing was sent to pathakm71@gmail.com, which is the email id belonging to said consultant. 5) That, when this aspect was confronted to my consultant, it was informed to me that after COVID-19, only one notice of hearing was sent for each case in the month of June and July 2023. And in said month he (Consultant) was occupied with ITR filings. 6) That, I immediately asked him to take next course of action. Accordingly, I was informed that, an Appeal before Hon'ble Income-tax Appellate Tribunal is required to be filed for which case needs to be handed over to professional who looks after such cases. 7) That, thereafter my consultant handed over the case to one senior professional (Mr. Kulkarni) in the city of Pune. 8) That, accordingly, I also paid ITAT Appeal Filing Challan fees of Rs. 10,000/- for each case on 29/12/2023, which gave me impression that Appeal has been duly filed. 9) That, after few months, since, I did not receive any notice of hearing or any order, I again connected with my consultant seeking the status of appeal. Thereupon, I was informed that the said senior professional to whom the case was handed over has passed away and probably the Appeal is also not filed. 10) That, I was further informed that now the case needs to be handed over to another professional Accordingly, I asked my consultant to proceed ahead. However, he (consultant) informed me that we need to get the files/case records from the office of senior professional who had passed away. 11) That, I had asked my consultant to speed up the process of finding another professional and getting the case file. However, he was unable to get the case records and also unable to appoint another professional till the month of October/November 2024. 12) That, thereafter in the month of December 2024, My Son could find another professional who could guide us on the next course of action. And accordingly, we also filed an application with the Jurisdictional Assessing Officer to get case records. Meanwhile, Appeal was also filed in the first week of January 2025. 13) That on 21/01/2025, Income-tax Officer Ward 9(3) gave certain copies of case records. (letter attached) 14) That from above it can be observed that, a. that in the month of December 2023, after making payment of appeal tiling challan of Rs.10,000 each, I was under genuine impression that both the Appeals have been filed. b. that initially appeals could not be filed in due time because of sad demise of senior professional. c. That thereafter, certain more time was consumed by my consultant in finding new professional and getting the case records 15) Accordingly, I wish to state that, a. I have been pro-active in taking necessary actions, however due to circumstances beyond my control present delay has occurred. b. that is to say the delay is not at all intentional and has not benefitted me in any sense. 16) That, I humbly request and pray before Hon'ble ITAT that the delay which have occurred be kindly condoned and allow me to present my case, in the interest of justice.”
2.3 In light of the above reason stated by the assessee in his affidavit, we find some merit in the submission of the Ld. Counsel for the assessee that there was a reasonable cause in not filing the appeal before the Tribunal within the stipulated time.
2.4 We find the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (supra) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 2.5 We find recently the Hon'ble Supreme Court in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339 has held as under: “14. There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation.”
2.6 Considering the totality of facts and in the circumstances of the case set out above and respectfully following the above decision(s) of the Hon'ble Supreme Court, we hereby condone the delay in filing of the appeal and admit the same for adjudication.
3. The assessee has raised the following grounds of appeal :
“1. On facts and circumstances prevailing in the case and as per provisions and scheme of the Act it be held that the addition of Rs. 39,30,000/-50 made by Ld. AO and that upheld by Ld. CIT(A)-NFAC is incorrect and not according to the provisions of the Act. Accordingly, the additions so made by ld. AO and that upheld by Ld. CIT(A)-NFAC be kindly deleted and appellant be granted just and proper relief in this respect.
2. On facts and circumstances prevailing in the case and as per provisions and scheme of the Act it be held that the addition of Agricultural income of Rs. 49,520/- so made as income from other sources by Ld. AO and that upheld by Ld. CIT(A)-NFAC is incorrect. Accordingly, the additions so made by Ld. AO and that upheld by Ld. CIT(A)-NFAC be kindly deleted and Appellant be granted just and proper relief in this respect.
Without prejudice to other grounds and on the facts and circumstances prevailing in the case and as per provisions and scheme of the Act it be held that the reassessment proceedings initiated u/s 147 of the Act are not in accordance with the provisions of the Act and accordingly, the Assessment Proceedings be kindly quashed and Appellant be granted just and proper relief in this respect.
Without prejudice to other grounds and on the facts and circumstances prevailing in the case and as per provisions and scheme of the Act it be held that Ld. CIT(A)-NFAC erred in dismissing the Appeal without reverting to the facts available on record and also without granting adequate opportunity of being heard. Accordingly, the order so passed by Ld. CIT(A)-NFAC be kindly set aside and Appellant be granted just and proper relief in this regard.
5. It is humbly prayed that the delay in filing present appeal be kindly condoned and Appellant be allowed to present his appeal in the interest of justice.
6. It is humbly prayed that the Appellant be kindly allowed to file any additional evidences in the interest of justice, if any.
The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing.”
4. Briefly stated, the facts of the case are that the assessee is an individual and carries on the business of civil contractor. For AY 2012-13, the assessee did not file any return of income as his income was marginally taxable. The Ld. Assessing Officer (“AO”) issued notice on 23.03.2019 u/s 148 of the Income Tax Act, 1961 (the “Act”) which was duly served upon the assessee. In response to the said notice, the assessee filed his return of income on 04.12.2019 declaring therein net taxable income of Rs.2,08,040/-. The main issue in the reassessment proceedings pertains to the source of investment of Rs.73,10,000/- made by the assessee on 19.03.2012 for purchase of immovable property being land bearing Gat No. 272 situated at Village Mouje Morve, Taluka Maval, District Pune. During the reassessment proceedings, the assessee explained the source of the said investment and the same are partly reproduced by the Ld. AO in Para4(i) and 4.1 of the assessment order. Before the Ld. AO, the assessee submitted that an amount of Rs. 35,00,000/- was received on account of sale proceeds of agriculture land sold on 11.02.2011. It was also explained that the assessee had sold commercial shop for Rs.26,00,000/- and an amount of Rs. 7,50,000/- was offered as undisclosed income for AY 2012- 13 declared in IDS, 2016. The balance amount of Rs.4,60,000/- was out of income of the current year and accumulated funds. The Ld. AO rejected the sources of investment consisting of sale proceeds of agriculture land sold on 11.02.2011 for Rs. 35,00,000/- on the ground that the sale proceeds did not suffer any capital gain tax and assessee did not justify whether the said capital asset was not falling within the meaning of section 2(14) of the Act and accordingly he made an addition of Rs.39,60,000/- u/s 69 of the Act as unexplained investment and also rejected the explanation about income of current year and accumulated funds. The Ld.AO also did not accept the agriculture income of Rs.49,520/- and made an addition of the same as income from other sources. The Ld. AO therefore completed the reassessment at assessed income of the assessee at Rs.42,17,560/- by making the above additions of Rs. 39,60,000/- as unexplained investment and Rs. 49,520/- as income from other sources, to the income of Rs. 2,08,040/- returned by the assessee vide his order dated 31.12.2019 passed u/s 143(3) r.w.s. 147 of the Act.
Aggrieved by such order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A)/NFAC who upheld the action of the Ld. AO and dismissed the appeal of the assessee for non-prosecution without himself going into the merits of the case on the ground that the assessee has not pursued the appeal despite being granted several opportunities of hearing and failed to file any submissions before him in support of his grounds of appeal.
Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
7. The Ld. AR submitted that non-compliance before the Ld. CIT(A)/NFAC was not intentional and that there a genuine reason for such non-compliance. He submitted that notices issued by the Ld. CIT(A)/NFAC partly falls within the COVID-19 pandemic period and that only one notice of hearing was issued post COVID-19. Further the notices were issued on the email-id of his tax consultant which skipped his attention and therefore did not come to the knowledge of the assessee on time.
7.1 The Ld. AR relied on the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Premkumar Arjundas Luthra (HUF) in Income Tax Appeal No. 2336 of 2013, dated 25.04.2016 wherein the Hon’ble High Court held that “the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act”. The Ld. AR further submitted that given an opportunity, the assessee has a strong case on merits and given an opportunity, is in a position to explain the source of the alleged income and substantiate his case before the Ld. CIT(A)/NFAC by filing all the requisite submissions/documentary evidence in support of his claim in respect of various grounds of appeal raised before the Ld. CIT(A)/NFAC. He, therefore, prayed that the matter may be restored to the file of the Ld. CIT(A)/NFAC to decide the impugned issues afresh on merits after affording an opportunity of being heard to the assessee.
The Ld. DR supported the order of the Ld. CIT(A)/NFAC and opposed the above request of the Ld AR submitting that the assessee was given sufficient opportunities by the Ld. CIT(A) to present his case before him.
We have heard the Ld. Representatives of the parties and perused the material on record, the paper book filed by the Ld. AR on behalf of the assessee as well the judicial precedent relied upon by the Ld. AR. Admittedly, there was a non-compliance by the assessee before the Ld. CIT(A). Before us, drawing support from the affidavit of the assessee, the Ld. Counsel for the assessee has submitted that such non-compliance was not intentional and has resulted due to the reasons mentioned therein reproduced above and has therefore prayed for an opportunity to be granted to present and substantiate his case before the Ld. CIT(A). We have perused the order of the Ld. CIT(A) and find that the Ld. CIT(A)/ NFAC has applied the decision in the case of CIT Vs. B.N. Bhattarcharjee and Another, 10 CTR 354 (SC) and various other cases cited therein and dismissed the appeal of the assessee for non-prosecution. No doubt, the Ld. CIT(A)/NFAC may decide the appeal ex-parte where the assessee does not prosecute his appeal in spite of several opportunities. None-the-less, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereon and the reason for the decision. We observe that the Ld. CIT(A)/ NFAC has passed the order in concurrence of the order of the Ld. AO without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act.
On the facts and in the circumstances of the case set out above, we deem it fit, in the interest of justice and fair play, to set aside the order of the Ld. CIT(A)/NFAC and restore the matter back to his file for adjudication afresh and pass speaking order on merits as per facts and law after allowing reasonable opportunity of being heard to the parties. Needless to say, the assessee shall provide the requisite support in terms of submitting the relevant documents/ evidence as may be required/called upon, without seeking adjournment under any pretext unless required for sufficient cause, failing which the Ld. CIT(A)/ NFAC shall be at liberty to pass appropriate order as per law. The assessee is also directed to provide the latest email id and contact details to the Department for receiving notices from ITBA portal and remain vigilant in accessing the same and responding to the notices. We direct and order accordingly.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 29th May, 2025.
Sd/- Sd/- (Manish Borad) (Astha Chandra) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ददन ांक / Dated : 29th May, 2025. रदि आदेश की प्रनिनलनप अग्रेनर्ि / Copy of the Order forwarded to : अपील थी / The Appellant. 1. प्रत्यथी / The Respondent. 2. 3. The Pr. CIT concerned. धिभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, “एक सदस्य मामला” बेंच, 4. पुणे / DR, ITAT, “SMC” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. //सत्य दपत प्रदत// True Copy// आदेश नुस र / BY ORDER,
िररष्ठ दनजी सदिि / Sr. Private Secretary आयकर अपीलीय अदधकरण ,पुणे / ITAT, Pune