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Facts
The assessee's appeal before the Tribunal was filed with a delay of 461 days due to a communication error with the Ld. CIT(A). The assessee claimed the delay was unintentional and due to circumstances beyond their control, citing incorrect email communication for notices. The Assessing Officer added the value of land transactions under Section 69 of the Income Tax Act.
Held
The Tribunal, following Supreme Court decisions on condonation of delay, held that there was a reasonable cause for the delay in filing the appeal. The Tribunal admitted the appeal for adjudication and restored the issue to the Assessing Officer for fresh decision after proper verification.
Key Issues
Whether the delay in filing the appeal before the Tribunal should be condoned due to a communication error, and if the issue should be decided on merits.
Sections Cited
148, 142(1), 133(6), 69, 250
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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
This appeal filed by the assessee is directed against the order dated 23.08.2023 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2013-14.
There is a delay of 461 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 18.02.2020, the e-mail ID for communication of notices was given as under: marutiwindsatara@rediffmail.com 3. However, the notice to the assessee Shri Ajay Bhauso Kadam was forwarded to pawarassociatessatara@gmail.com. She 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, when the bank account of the assessee was attached, he came to know about the passing of the order by the Ld. CIT(A) / NFAC. Thereafter, the assessee, after taking advice from the consultant, filed the appeal with a delay of 461 days. She submitted that the delay is not an intentional one 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 cases of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) and Inder Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339, she submitted that the delay in filing of the appeal should be condoned.
The Ld. DR on the other hand strongly opposed the arguments advanced by the Ld. Counsel for the assessee.
We have heard the rival contentions and perused the record. It is an admitted fact that there is a delay of 461 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 pawarassociatessatara@gmail.com instead of the correct e-mail ID marutiwindsatara@rediffmail.com. 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.
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.
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.”
Respectfully following the above decisions of the Hon'ble Supreme Court and considering the fact that the notices of hearing were sent to pawarassociatessatara@gmail.com instead of correct e-mail ID pawarassociatessatara@gmail.com, the delay in filing of the appeal is condoned and the appeal is admitted for adjudication.
Facts of the case, in brief, are that the assessee is an individual and has filed his return of income on 25.04.2013 declaring total income of Rs.2,44,480/-.
Information was received that the assessee, in the capacity of General Power of Attorney holder of Kadam family, has entered into a transaction of sale of land for consideration of Rs.4,53,000/- having market value of Rs.61,04,000/-. Further, during the year under consideration the assessee has purchased the immovable property for a consideration of Rs.1,28,03,000/- and source of investment is unexplained. In view of the above reasons, the Assessing Officer, after recording reasons and obtaining the approval from the competent authority, reopened the assessment and a notice u/s 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 27.03.2019 was issued which was duly served on the assessee. However, the assessee failed to file the return of income in response to the notice u/s 148 of the Act. Subsequently, due to change of incumbency another notice u/s 142(1) of the Act was issued and served on the assessee, in response to which the AR of the assessee appeared before the Assessing Officer and filed the requisite details from time to time. The Assessing Officer also obtained information from the office of the Registrar u/s 133(6) of the Act.
The Assessing Officer in the assessment order has mentioned that as per the statement of the assessee the transaction involved is related to Shri Maruti Wind Park Developers. In order to allow the natural justice and opportunity to the assessee to explain the matter, a letter to the manager of the said company situated at Pune was issued requesting him to explain as to whether the transactions covered in the reasons for issue of notices is related to them. However, the company did not furnish any information nor any details were filed by the assessee. He, therefore, added the value of land at Chiplun amounting to Rs.1,28,03,000/- and another transaction at Revalkarwadi amounting to Rs.61,04,000/- in the hands of the assessee by invoking the provisions of section 69 of the Act.
Since there was a delay in filing of the appeal before the Ld. CIT(A) / NFAC by more than 40 days and there was no condonation application or documentary evidence and further there was non-compliance to the two notices issued by the office of the Ld. CIT(A) / NFAC, he dismissed the appeal filed by the assessee by observing as under: “2.1 Present appeal has been filed by the appellant on 18.02.2020 whereas as per Form-35 the impugned order was served upon the appellant on 06.01.2020. Thus, there was delay in filing more than 40 days. However, the appellant has answered column 14 of Form-35 as "No". Further, no condonation request or documentary evidence in this regard has been filed by the appellant. Therefore, the appellant has filed the present appeal with a delay of more than 40 days for insufficient cause. 3.1 Further, during the appellate proceedings, the following opportunities of being heard were granted to the appellant vide notices u/s 250 of the Act issued through the ITBA portal which are summarized below: Sr. No Date of notice Date of compliance Remark 1. 31.07.2023 07.08.2023 Non compliance 2. 09.08.2023 16.08.2023 Non compliance The above table clearly demonstrates that the appellant has been allowed several opportunities to rectify column 14 of Form-35 and to explain the delay in filing of present appeal but to no avail as the appellant has remained not-forthcoming and has not responded on the ITBA portal. 3.2 Considering the above facts and the records available, it is established that the appellant was provided many opportunities of being heard. However, the appellant has remained noncompliant. Accordingly, appeal is dismissed as not admitted 4. In result, the appeal is dismissed as not admitted.”
Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal by raising the following grounds:
1. The impugned assessment order dated 24th December 2019 does not bear a DIN and further that the said order issued without a DIN does not bear the required format set out in paragraph 3 of the Circular no. 19/2019 and, therefore, the impugned assessment orders for Assessment Year 2013-14 ought to be treated as invalid and deemed never to have been issued. An order passed in contravention of the said Circular is void, bad in law and of no legal effect.
2. The ld CIT(A) erred in law and on facts in dismissing appeal ex parte when there was sufficient cause for non-compliance.
3. The learned CIT(A) erred in law confirming addition of Rs.18907000/- towards Purchase of Land under unexplained investment.
4. The appellant prays to be allowed to add amend modify rectify delete raise any grounds of appeal at the time of hearing.
The Ld. Counsel for the assessee at the outset did not press ground No.1 for which the Ld. DR has no objection, hence the same is dismissed as not pressed.
The Ld. Counsel for the assessee at the outset submitted that there were only two notices issued by the office of the Ld. CIT(A) / NFAC for which there was non-compliance from the side of the assessee. She submitted that the assessee is only a General Power of Attorney holder of Kadam family and was purchasing the property on behalf of Shri Maruti Wind Park Developers. Due to non-submission of the reply by the manager of the said company, the Assessing Officer made addition in the hands of the assessee. The Ld. Counsel for the assessee filed an application for admission of certain additional evidences to substantiate the case of the assessee that he is only a General Power of Attorney holder and has not done any transaction for his own. Whatever lands purchased were for the company for which the company had made the payment and the assessee has no role to play other than the General Power of Attorney holder being an employee of the said company. She accordingly submitted that in the interest of justice, the assessee should be given an opportunity to substantiate his case before the lower authorities. She requested that the matter may be remitted back to the file of the Assessing Officer because the assessee is a salaried employee and his bank account has been attached.
The Ld. DR on the other hand strongly opposed the arguments advanced by the Ld. Counsel for the assessee. She submitted that the assessee before the Assessing Officer did not file any details. Further, there was a delay in filing of the appeal before the Ld. CIT(A) / NFAC as well as before the Tribunal. The assessee also did not avail of the opportunity before the Ld. CIT(A) / NFAC by furnishing the requisite details. The chronology of events show that the assessee has scant regard to the income tax law. She accordingly submitted that the order of the Ld. CIT(A) / NFAC should be upheld and the grounds raised by the assessee be dismissed.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case made addition of Rs.1,89,07,000/- on the ground that the manager of Shri Maruti Wind Park Developers did not reply in response to the notice issued by him to explain that the transaction covered in the reasons for issue of notice is related to them. Further, in absence of any plausible explanation before him, the Assessing Officer rejected the explanation of the assessee which was given during the course of assessment proceedings which read as under: “The assessee was given an opportunity to show cause as to why the addition of Rs.1,28,03,000/- and Rs.61,04,000/- towards sale of property should not be made to his total Income. In response thereof the assessee contented that during the year under consideration he was working with M/s. Maruti Wind Park Developers having registered office at Pune as a salaried person. Though the above transaction has been registered against his name, same was carried out by him in the capacity of POA holder of the above company who had made the payment of the said transaction. He further concluded that he has no connection with the above transaction and liability will be borne by M/s. Maruti Park Developers.”
We find due to the delay in filing of the appeal before the Ld. CIT(A) / NFAC and non-response of the assessee to the two statutory notices issued by him, he dismissed the appeal filed by the assessee, the reasons of which have been reproduced in the preceding paragraphs. The Ld. Counsel for the assessee filed certain details such as index-2 of the land sold, confirmation from Shri Maruti Wind Park Developers, etc as additional evidences which go to the root of the matter for which these additional evidences are admitted. It is the submission of the Ld. Counsel for the assessee that the assessee is an employee of Shri Maruti Wind Park Developers and he had done the transactions in the capacity of General Power of Attorney holder. It is her submission that the purchase of properties in question are for the said company where the assessee is an employee and acting as General Power of Attorney holder and all the payments were made by the company. In our opinion, the Ld. CIT(A) / NFAC should have taken a pragmatic view by condoning the delay of 40 days in light of the decisions of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (supra) where it has been 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.
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.”
Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to decide the issue afresh after proper verification of the records and considering the fact that the assessee is an employee of Shri Maruti Wind Park Developers and his transactions are in the capacity of General Power of Attorney holder. Needless to say, he shall decide the issue as per fact and law after providing due opportunity of being heard to the assessee. The assessee is also hereby directed to participate in the assessment proceedings and submit the requisite details before the Assessing Officer on the appointed date without seeking any adjournment under any pretext, failing which the Assessing Officer is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 5th May, 2025.