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Facts
The assessee, a private limited company engaged in multimedia industries, filed its return and a revised return. During assessment proceedings under Section 143(3), notices were issued, and the assessee faced difficulties in compliance due to the Covid-19 pandemic lockdown, with requests for adjournment being rejected.
Held
The Tribunal held that the CIT(A)/NFAC erred in not condoning the delay in filing the appeal and in not considering documents submitted by the assessee. The Tribunal set aside the order of CIT(A)/NFAC and remanded the matter back for a fresh decision.
Key Issues
Whether the CIT(A)/NFAC was justified in dismissing the appeal due to delay and non-consideration of documents, especially in light of the Covid-19 pandemic, and whether the assessment order passed without proper opportunity was valid.
Sections Cited
143(3), 270A, 143(2), 142(1), 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “A”, 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 05.06.2024 passed by Ld. CIT(A)/NFAC involving the issue of assessment order u/s 143(3) and issue of penalty u/s 270(A) respectively of the IT Act for the assessment year 2018-19.
& 1579/PUN/2024 : 2. Facts of the case, in brief, are that the assessee is a private limited company and is engaged in the multi media industries, providing services in the field of design, audio visual, web and interactive technology, entertainment and communication. The assessee has filed its original return of income on 31.10.2018 declaring income of Rs.68,57,222/-. Subsequently, the assessee furnished revised return of income on 23.03.2019 declaring revised income of Rs.73,21,919/-. Notices u/s 143(2) and 142(1) respectively were issued requiring the assessee to furnish various details. In response, the assessee furnished reply along with supporting documents on two occasions. The Assessing Officer again issued another notice on 01.03.2021 to furnish/upload remaining information/documents and thereafter issued notice u/s 142(1) on 05.04.2021. In response to the above notice, the assessee submitted that due to Covid Pandemic Lockdown all the establishments are closed and, therefore he is unable to furnish reply & accordingly requested for further time to submit the desired documents. The Assessing Officer rejected the above request of adjournment and proceeded to complete the assessment u/s 143(3)
& 1579/PUN/2024 r.w.s. 144B of the IT Act by determining total income at Rs.7,82,78,106/- as against the income returned by the assessee at Rs.73,21,919/-. The above assessed income includes various additions amounting in all to Rs.7,09,56,186/-.
In first appeal, Ld. CIT(A)/NFAC dismissed the appeal of the assessee by observing as under :- “Considering the non-compliant behavior of the appellant assessee during assessment proceedings, a delay of 561 days in filing this appeal that too without any reason enough or supporting evidence or even an affidavit to justify its case for such a delay, the appellant’s request for condonation of delay being turn down by this Appellant authority and the additional documents being rejected. This Appellate authority rejects the appeal of the appellant assessee and resultantly the addition’s made by the Assessing Officer amounting to Rs.7,09,56,186/- in its order are hereby UPHELD. The grounds are not allowed.”
It is this order against which the assessee is in appeal before this Tribunal.
Ld. AR appearing from the side of the assessee submitted before us that the order passed by ld. CIT(A)/NFAC is unjustified. Ld. AR submitted before us that the reason of dismissing the appeal by Ld. CIT(A)/NFAC was non-condonation of delay of 561 days. In this regard, it was submitted that Hon’ble Supreme Court in an order passed in suo moto application has excluded the period of & 1579/PUN/2024 limitation upto 30.05.2022 and after excluding the above period the delay remains only 157 days. It was further submitted that the documents which were produced before the Assessing Officer were also produced before Ld. CIT(A)/NFAC but Ld. CIT(A)/NFAC committed grave error in treating those documents as additional evidences. Ld. AR further submitted that the assessment order was passed on 22.04.2021 and that was the Covid Pandemic period. It was further submitted that due to Covid Pandemic, the last two notices issued by the Assessing Officer could not be complied by the assessee. Although a request for adjournment was made before the Assessing Officer which was not considered by him and the assessment orders were passed which resulted in unnecessarily additions and huge demands. Ld. AR also drew our attention to the modified/additional grounds of appeal
and requested to set-aside the orders passed by Ld. CIT(A)/NFAC as well as by the Assessing Officer.
6. Ld. DR appearing from the side of the Revenue relied on the orders passed by the subordinate authorities and requested to confirm the same.
& 1579/PUN/2024 7. We have heard Ld. Counsels from both the sides and perused the material available on record. We find that Ld. CIT(A)/NFAC has not condoned the delay of 561 days in filing the appeal before him. It is an admitted fact that the Hon’ble Apex Court has already excluded the period upto 30.05.2022 for the purpose of calculation of limitation. However, even after excluding the period upto 30.05.2022 there remains delay of 157 days in filing the appeal before Ld. CIT(A)/NFAC. We also find that Ld. CIT(A)/NFAC in his order has mentioned that the assessee has not filed any application under Rule 46A(3) of the IT Rules for admission of additional evidences submitted before him during the course of appellate proceedings and accordingly the evidences/documents filed before him were not considered by Ld. CIT(A)/NFAC. In this regard, we find that it was the contention of Ld. AR that all these documents were filed before the Assessing Officer during the course of assessment proceedings and therefore these documents do not constitute an additional evidence and Ld. CIT(A)/NFAC should have had considered the same for the purpose of deciding the appeal. We further find that the whole of the assessment proceedings before the Assessing Officer was continued during the & 1579/PUN/2024 Covid Pandemic. Admittedly, not less than 10 notices were issued to the assessee for making compliance before the Assessing Officer and the assessee could not make compliance only against 3 notices. It was the contention of Ld. Counsel of the assessee that most of the compliance desired by the Assessing Officer was made and only last notice which was required to be complied on 09.04.2021 could not be complied due to the Covid Pandemic Lockdown and even adjournment request was also send to the Assessing Officer but the same was not considered by the Assessing Officer. Considering the totality of the facts of the case, & also in the interest of justice, without going into the merits of the case, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and remand the matter back to his file with a direction to condone the delay & decide the appeal afresh as per fact and 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 & to produce any further documents evidences explanations in support of grounds of appeal without taking any adjournment under any pretext, otherwise Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per & 1579/PUN/2024 law. Since we have not gone into the merits of the case and only remanded the matter back to the file of Ld. CIT(A)/NFAC to decide the appeal afresh after condoning the delay, other grounds raised before us are not adjudicated.
8. In the result, the appeal filed by the assessee in is allowed for statistical purposes.
9. As we have already set-aside quantum appeal order and remanded the matter back to the file of Ld. CIT(A)/NFAC to decide the appeal afresh, therefore, we are of the considered opinion that the appeal against the penalty order u/s 270A of the IT Act also needs to be decided afresh being consequential in nature. Accordingly, the order passed by Ld. CIT(A)/NFAC is set-aside and the matter is remanded back to his file with a direction to condone the delay, if any, and decide the penalty appeal afresh after providing reasonable opportunity of hearing to the assessee. Thus, the grounds raised by the assessee are partly allowed.
10. In the result, the appeal filed by the assessee in is partly allowed.