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Facts
The assessee, engaged in money lending, filed an appeal against the order confirming additions of Rs. 74,43,670/-. The appeal was dismissed by the CIT(A)/NFAC for non-prosecution due to non-compliance with hearing notices sent via ITBA portal.
Held
The Tribunal condoned the 257-day delay in filing the appeal, noting the non-communication of notices to the correct email ID and citing Supreme Court judgments. The Tribunal also set aside the CIT(A)/NFAC's ex-parte order for violating Section 250(6) of the Act, as it did not consider the merits.
Key Issues
Whether the delay in filing the appeal should be condoned and if the CIT(A)/NFAC's ex-parte order, which did not consider the merits, is valid.
Sections Cited
143(3), 147, 69A, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE “B” BENCH : PUNE
Before: SHRI RAMA KANTA PANDA, VICE- & Ms. ASTHA CHANDRA
The appeal filed by the assessee is directed against the order dated 29.11.2023 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Year (“AY”) 2014-15.
The assessee has raised the following grounds of appeal:-
“1. The learned CIT(A) erred in law and on facts in confirming the addition of Rs.74,43,670/- made to the returned income of the appellant amounting to Rs.3,29,225/- thereby assessing the total income of the appellant at Rs.76,72,895/-.
2. The learned CIT(A), National Faceless Appeal Centre (NFAC); erred in law and on facts in passing an ex-parte appellate order without granting an effective appropriate opportunity for hearing, thus violating the principle of natural justice. The learned CIT(A) ought to have appreciated the fact that the appellant intends to pursue the appeal on merits.
The learned I-T authorities erred in law and on facts in making addition of Rs 66,07,700 as unexplained money u/s 69A of the ITA, 1961. The learned I-T authorities ought to have appreciated that the 2 ITA.No.2093/PUN./2024 (Swati Balasaheb Pukale) entire cash deposit of Rs 66,07,700 were out of the repayment of loan received from the borrower through the money lending business. Appellant contends that, appellant has already offered profit from such money lending to tax.
4. The learned IT authorities erred in law and in fact in making an addition of Rs. 8,35,970/- as unexplained deposits u/s 69A of the IT Act, 1961, without providing an opportunity to explain the source of the alleged income. The appellant contends that the learned AO ought to have granted an effective appropriate opportunity for hearing, thus violating the principle of natural justice.
5. The appellant craves leave to add / modify / delete / amend all / any of the grounds of appeal.
3. There is a delay of 257 days in filing of this appeal before the Tribunal for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay. The Ld. Counsel for the assessee at the outset submitted that in the appeal filed before the Ld. CIT(A)/NFAC on 17.01.2020 and the e-mail ID for communication of notices was given as: katariyakailash@yahoo.com. However, the notices were forwarded to the assessee’s former tax consultant. He submitted that in view of the non-communication of the order in the correct e-mail ID, the assessee was not in a position to know the fate of the order of the Ld. CIT(A)/ NFAC. Subsequently, the assessee came to know about the passing of the order by the Ld. CIT(A)/NFAC only when his relative was going through income tax portal of the assessee. Thereafter, the assessee required additional time to find the new tax consultant who could advice with reference to further course of action and collation of the required documents also took some time. He submitted that the delay is not an intentional and is a bonafide one for the reasons beyond the control of the assessee. Referring to the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) and some other decisions of the Hon’ble Apex Court, the Ld. AR submitted that the delay in filing of the appeal should be condoned.
3 ITA.No.2093/PUN./2024 (Swati Balasaheb Pukale) 3.1 The Ld. DR, on the other hand, strongly opposed the arguments advanced by the Ld. Counsel for the assessee.
3.2 We have heard the rival contentions and perused the record. It is an admitted fact that there is a delay of 257 days in filing of the appeal before the Tribunal. It is also an admitted fact that the notice of hearing from the office of the Ld. CIT(A)/NFAC was communicated to the assessee’s former tax consultant’s email katariyakailash@yahoo.com instead of sending the same to the assessee / new tax consultant. The Ld. Counsel for the assessee has submitted that the delay was purely unintentional and was due to time consumed in getting advice and compiling requisite documents. We, therefore, find some merit in the submissions of the Ld. Counsel for the assessee that there was a reasonable cause in not filing the appeal before the Tribunal within stipulated time.
3.3 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.
3.4 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:
4 ITA.No.2093/PUN./2024 (Swati Balasaheb Pukale) “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.”
3.5 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.
Briefly stated, the facts of the case are that the assessee is an individual engaged in the business of money lending that primarily cover lending to the people belonging to low income groups and such loans are financed by taking borrowings from Federal Bank on the mortgage of gold and the same is collected from people to whom the money is lent. For the AY 2014-15, the assessee filed his return of income on 01/04/2019 declaring income of Rs. 3,29,225/-. The assessment was completed by the Ld. Assessing Officer (“AO”) vide his order dated 22/12/2019 passed u/s 143(3) r.w.s. 147 of the Act by making an addition of Rs. 66,07,000/- and Rs. 8,35,970/- totaling to Rs. 74,43,670 /- on account of unexplained cash / other deposits made by the assessee during the relevant AY under the provisions of section 69A of the Act.
Aggrieved, the assessee filed an appeal before the Ld. CIT(A)/NFAC. There was non-compliance of notices of hearing sent via ITBA portal, hence, Ld. CIT(A)/NFAC dismissed the appeal of the assessee for non- prosecution and endorsing the findings of the Ld. AO in absence of any meaningful and worthwhile documentation furnished by the assessee.
Dissatisfied, the assessee is in appeal before the Tribunal and all the ground of appeal relate thereto. Although, there are number of grounds raised by the assessee, however, these all relate to the ex-parte
5 ITA.No.2093/PUN./2024 (Swati Balasaheb Pukale) order of the Ld. CIT(A)/NFAC in confirming the addition of Rs. 74,43,670/- as unexplained money / deposit u/s 69A of the Act.
The Ld. AR submitted that non-compliance before the Ld. CIT(A)/NFAC was not intentional. He submitted that assessee overlooked the notices issued by the Ld. CIT(A)/NFAC due to lack of necessary expertise and technical knowledge. Notices were issued to the assessee via ITBA portal and since the assessee is not accustomed and habitual to access the ITBA portal on regular basis, the same were inadvertently missed by the assessee. The Ld. AR further submitted that given an opportunity, the assessee is in a position to explain the source of the alleged deposits/ 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 had no objection to the above request of the Ld. AR.
We have heard the Ld. Representatives of the parties and perused the material on record. The appellate order reveals 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
6 ITA.No.2093/PUN./2024 (Swati Balasaheb Pukale) 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, Delhi and restore the matter back to his file for adjudication afresh and pass speaking order on merits 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 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 19.05.2025.