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Facts
The assessee did not file an Income Tax Return for AY 2017-18. The Assessing Officer reopened the assessment under Section 147 based on information that the assessee had purchased immovable property. An ex-parte assessment was completed under Section 144, making an addition of Rs. 2,47,90,341/- as unexplained investment under Section 69A, which was sustained by the CIT(A).
Held
The Tribunal condoned the 386-day delay in filing the appeal, emphasizing substantial justice. It held that the CIT(A) erred in not admitting additional evidence presented by the assessee. The Tribunal restored the issue to the Assessing Officer for fresh adjudication, directing to provide the assessee one final opportunity to substantiate their case.
Key Issues
Whether the delay in filing the appeal should be condoned; whether the ex-parte assessment and addition under Section 69A were valid without considering additional evidence, and if the assessee should be given an opportunity to present their case.
Sections Cited
147, 148, 142(1), 144, 69, 69A, Rule 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
This appeal filed by the assessee is directed against the order dated 17.10.2023 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2017-18.
There is a delay of 386 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. After hearing both the sides, we find this appeal was earlier looked after by late M.K. Kulkarni. After his demise, it took considerable time to obtain the papers from his office for which the delay has occurred. We find the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) 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. Considering the facts of the case and in light of the decision of the Hon'ble Supreme Court cited (supra), 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 has not filed his return of income for the year under consideration. Since information was in possession of the Assessing Officer that the assessee had purchased certain immovable property and since the assessee had not filed his return of income, the Assessing Officer, after recording reasons, reopened the assessment as per the provisions of section 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). Accordingly, notice u/s 148 of the Act was issued to the assessee on 30.03.2021 after obtaining the necessary approval of the competent authority. Subsequently, statutory notice u/s 142(1) of the Act was also issued to the assessee. However, neither the assessee filed any return of income nor filed any submission for which the Assessing Officer completed the assessment u/s 144 of the Act by bringing to tax an amount of Rs.2,47,90,341/- as unexplained investment u/s 69 of the Act.
In appeal, the Ld. CIT(A) / NFAC sustained the addition made by the Assessing Officer.
Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal challenging the order of Ld. CIT(A) / NFAC in sustaining the addition of Rs.2,47,90,341/- u/s 69A by the Assessing Officer.
The Ld. Counsel for the assessee at the outset submitted that the assessment was completed u/s 144 of the Act. She submitted that the assessee comes from rural area and does not have much knowledge about the intricacies of the income tax law for which these unfortunate events happened and the assessment was completed ex-parte. She submitted that although the assessee filed additional evidences before the Ld. CIT(A) / NFAC as per the provisions of Rule 46A, however, the Ld. CIT(A) / NFAC without admitting these additional evidences, dismissed the appeal. She submitted that in the interest of justice, the assessee should be given an opportunity to substantiate his case before the Assessing Officer.
The Ld. DR on the other hand strongly opposed the arguments advanced by the assessee and submitted that despite number of opportunities granted, the assessee did not bother to appear before the Assessing Officer for which the Assessing Officer was constrained to pass the ex-parte order. Further, in absence of any justifiable reasons for filing of the additional evidences, the Ld. CIT(A) / NFAC rejected the same which is also correct. He accordingly submitted that the order of the Ld. CIT(A) / NFAC 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. It is an admitted fact that due to non-compliance to the statutory notices issued by the Assessing Officer, he was constrained to pass the ex-parte order u/s 144 of the Act by making addition of Rs.2,47,90,341/-. We find although the assessee filed certain additional evidences before the Ld. CIT(A) / NFAC, however, the Ld. CIT(A) / NFAC did not accept the additional evidences and confirmed the addition made by the Assessing Officer. It is the submission of the Ld. Counsel for the assessee that the additional evidences so filed go to the root of the matter and given an opportunity, the assessee is in a position to substantiate his case by filing the requisite details before the Assessing Officer. Cconsidering 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 grant one final opportunity to the assessee to substantiate his case by filing the requisite details to his satisfaction and decide the issue as per fact and law after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to make his submissions, if any, 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.
SA No.3/PUN/2025
Since we have decided the appeal and restored the issue to the file of the Assessing Officer for fresh adjudication, therefore, the SA filed by the assessee becomes infructuous. Accordingly, the same is dismissed.
In the result, the appeal filed by the assessee is allowed for statistical purposes and the SA is dismissed.
Order pronounced in the open Court on 29th January, 2025.