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Facts
The assessee, a dealer in Four Wheeler vehicles, did not file the return of income for AY 2014-15. The case was reopened under Section 147 after the department received information about rent and interest income on which TDS was deducted. The assessee neither complied with notices issued under Section 148 nor Section 142(1). The Assessing Officer completed the assessment ex-parte.
Held
The Tribunal held that the delay in filing the appeal before the CIT(A)/NFAC by the assessee (496 days) was due to reasonable cause, such as the director absconding and the business closing down. Therefore, the delay ought to have been condoned. The matter was remitted back to the CIT(A)/NFAC for denovo adjudication.
Key Issues
Whether the CIT(A)/NFAC was justified in dismissing the appeal in limine without condoning the significant delay of 496 days, and whether there was a reasonable cause for the delay.
Sections Cited
139(1), 147, 148, 142(1), 194, 194A, 250(6), 144, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
This appeal filed by the assessee pertaining to the Assessment Year 2014-15 is directed against the order dated 18.06.2024 passed by the National Faceless Appeal Centre, Delhi [in short ‘NFAC’) which inturn is arising out of the Assessment order passed u/s.147 r.w.s.144 r.w.s.144B of the Act dated 24.03.2022.
2. Facts apropos this appeal are that the assessee is a dealer in Four Wheeler vehicles of different Automobile Companies. For the year under consideration, the assessee has not filed the return of income under the provisions of section 139(1) of the Act. Based on the information available with the Department that the assessee received huge rent and interest on which TDS was deducted u/s.194(b) and 194A, the case was reopened by issuance of notice u/s.148 of the Act. Assessee neither complied with notice u/s.148 nor with notices issued u/s.142(1) of the Act. In the circumstances, the ld. AO completed the assessment making addition of Rs.72.00 lakh on account of rent received and Rs.23,391/- on account of interest received.
3. Dissatisfied assessee filed an appeal before the ld.CIT(A)/NFAC with a delay of 496 days. The ld.CIT(A)/NFAC dismissed the appeal in limine without condoning the delay.
4. The assessee further aggrieved is now in appeal before the Tribunal challenging the impugned order.
5. We have heard the rival submissions and perused the record before us. It is an admitted position that the assessee has not participated in the proceedings before the Assessing Officer as well as ld.CIT(A) resulting in passing of the exparte orders. Further, on perusal of the impugned order, it would Pashankar Auto Works Pvt. Ltd. reveal that the assessee from the beginning contending that the assessee company surrendered the dealership and closed the business forever. Further, the main Director of the assessee company also absconded on account of liabilities. Therefore, it could not file the return of income for A.Y. 2014-15. The ld.CIT(A)/NFAC albeit extracting the submissions of the assessee chose to dismiss the appeal in limine by not condoning the delay. Ostensibly, there was reasonable cause which prevented the assessee in not filing the appeal within the time limit and the ld.CIT(A) ought to have condoned the delay. Further, it is the settled position of law that even in case of exparte the ld.CIT(A) is obliged to pass a speaking order as contemplated u/s.250(6) of the Act by giving reasons for arriving such decision and adjudication thereof. are of the considered
6. In this context, we would like to quote the judgment of Hon’ble Supreme Court in the case of Collector Land Acquisition Vs. MST Katiji (1987) 167 ITR 471 SC . In the said Judgment, their Lordships have given certain principles based on which, the issue with regard to the delay can be approached and the said portion of the order of the Judgment cited supra is reproduced hereunder:
1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
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.
Every day's delay must be explained does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, common sense and pragmatic manner.
When substantial justice and technical considerations are pitted against each other, the 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.
There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk.
It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 6.1 The Hon’ble Jurisdictional High Court in the case of Vijay Vishin Meghani vs. DCIT, 389 ITR 250 (Bom.) has held that in the matter of condonation of delay an overall view in the larger interest of justice has to be taken. None should be deprived of an adjudication on merits unless the Court of law or the Tribunal/Appellate Authority finds that the litigant has deliberately and intentionally delayed filing of the appeal, that he is careless, negligent and his conduct is lacking in bonafides.
6.2 In the light of above judicial precedents, we are inclined to condone the delay of 496 days in filing of appeal before ld.CIT(A).
Considering the entirety of facts and circumstances in the instant case and without dwelling into merits of the issues, the matter is remitted back to the file of ld.CIT(A)/NFAC for denovo adjudication. The assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause, failing which the ld.CIT(A)/NFAC shall be free to proceed in accordance with law. Finding of the ld.CIT(A)/NFAC is set-aside and Effective grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 16th day of January, 2025.