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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI NARENDRA PRASAD SINHA
PER SIDDHARTHA NAUTIYAL, JM: This appeal by the Assessee is directed against the order dated 20/02/2024 passed by the Ld.Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)"], for the Assessment Year (AY) 2014-15, passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act').
The assessee has raised the following grounds of appeal: "All the grounds of appeal in this appeal are mutually exclusive and without prejudice to each other. Reopening of Proceedings u/x. 148 of the Act
The learned Commissioner of Income Tax (Appeals), National Faceless Appeals Centre ("the CIT(A)") and the learned Income Tax Officer, Ward 3(1)(4), Vadodara (the AO") erred in fact and in law in reopening the proceedings of the Appellant w/s. 148 of the Act.
The learned CIT(A) and the AO erred in fact and in law in issuing notice u/s. 148 of the Act which was barred by limitation u/s. 149 of the Act.
The learned CIT(A) and the AO erred in fact and in law in issuing notice u/s. 148A of the Act beyond the stipulated time as per Section 149 of Act.
The learned CIT(A) and the AO erred in fact and in law in reopening the proceedings u/s. 148 of the Act simply relying upon the information received from the investigation wing of the Income Tax Department.
The learned CIT(A) and the AO erred in fact and in law in making the order us. 148A(d) of the Act without recording his own opinion for reopening of the matter u/s. 148 of the Act. Addition of Rs.55,00,000/-
The learned CIT(A) and the AO erred in fact and in law in making addition of Rs 55,00,000/- to the total income of the Appellant.
The learned CIT(A) and the AO erred in fact and in law in making the addition based on the assumptions and presumptions.
The learned CIT(A) and the AO erred in fact and in law in making the addition to the total income of the Appellant without specifying the provision under which the addition has been made.
The learned CIT(A) and the AO erred in fact and in law in making addition to the total income of the Appellant despite the fact that similar addition has already been made in the buyers of the rights in property thereby taxing the same income twice. Other Grounds
The learned CIT(A) and the AO erred in fact and in law in making the Assessment Order without juri iction and without considering the provisions of Section 144B of the Act.
The learned CIT(A) and the AO erred in fact and in law in making the assessment order on substantive basis whereas the assessment should have been made on protective basis.
The learned CIT(A) and the AO erred in fact and in law in making the assessment order without giving a proper opportunity of giving heard.
The learned CIT(A) and the AO erred in fact and in law in making an addition u/s. 234A of the Act.
The learned CIT(A) and the AO erred in fact and in law in making an addition u/s. 234B of the Act.
The learned CIT(A) and the AO erred in fact and in law in initiating penalty proceedings u/s. 271(1)(c) of the Act.
The learned CIT(A) and the AO erred in fact and in law in initiating penalty proceedings u/s. 271(1)(b) of the Act.
The learned CIT(A) and the AO erred in fact and in law in initiating penalty proceedings u/s. 271F of the Act.
The Appellant reserves the right to add, or modify, or substitute, or alter, or delete all or any of the grounds of appeal." The brief facts of the case are that the assessing officer received information that the assessee, Shri Shirishbhai R. Patel, had received cash of Rs.55,00,000/- on account of a family partition deed. Based on this information, notice under section 148A(b) of the Act was issued but the assessee failed to file a return in response to the said notice. The case was subsequently taken up for reassessment. During investigation, the Assessing Officer observed that the assessee maintained a savings bank account with HDFC Bank Ltd., Bodeli Branch, where cash deposits aggregating to Rs. 31,50,000/- were made during September 2013. On being questioned, the assessee submitted that the deposits represented part of Rs. 55,00,000/- received in cash from his brothers, Shri Indravadan R. Patel and Shri Girish R. Patel, under a family partition deed dated 20.02.2013 executed after the death of their father, late Shri Raghunath Patel. As per the deed, the agricultural lands of the family were transferred to the two brothers in consideration of cash payments of Rs. 55,00,000/- each to the other family members. The Assessing Officer recorded statements under oath from the assessee and his brothers, wherein the transaction was admitted. However, the Assessing Officer observed that the alleged payers, Shri Girish R. Patel and Shri Indravadan R. Patel, failed to produce any credible evidence to substantiate the source of such large cash payments. The Assessing Officer, therefore, held that the amount of Rs. 55,00,000/- received by the assessee represented consideration for relinquishment of rights in ancestral property and, in the absence of corroborative proof regarding the source of payment, the same was liable to be taxed as “Income from Other Sources.” Accordingly, the sum of Rs. 55,00,000/- was added to the total income of the assessee and penalty proceedings under sections 271(1)(c), 271F, and 271(1)(b) were initiated for concealment of income, failure to file return, and non-compliance with statutory notices respectively.
In appeal, the assessee contended before the CIT(Appeals) that the reassessment proceedings initiated under section 148 were time-barred and bad in law, and that the Assessing Officer had passed the order without proper opportunity of being heard and without independently forming a belief of escapement of income. The CIT(Appeals), after examining the record, held that the notice under section 148A(b) was issued within the permissible time limit and that the case fell within the ambit of section 149(1)(b) of the Act, since the escaped income exceeded Rs. 50 lakh. The CIT(Appeals) observed that the Assessing Officer had duly followed the procedure prescribed under section 148A of the Act by issuing notices and granting opportunities, but the assessee failed to respond at every stage. On merits, the CIT(Appeals) noted that the assessee had admitted receiving Rs. 55,00,000/- in cash from his brothers under the partition deed, and this fact was also confirmed by one of the payers. Since no evidence was furnished to substantiate the genuineness or source of such cash transaction, the CIT(Appeals) held that the Assessing Officer was justified in treating the same as taxable income under "Other Sources”. The CIT(Appeals) held that the plea that the assessment was made without juri iction or in violation of section 144B was unsubstantiated, as the proceedings were carried out under the Faceless Assessment Scheme in accordance with due process. The CIT(Appeals), therefore, dismissed all grounds of appeal and upheld the addition of Rs. 55,00,000/- made by the Assessing Officer.
The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. At the outset, we note that the present appeal is time barred by 293 days. The assessee has filed application for condonation of delay along-with an Affidavit for delay of 293 days in filing of the present appeal. The assessee has submitted that the delay in filing the appeal occurred due to bona fide reasons beyond its control. The assessee submitted that that the order of the learned CIT(A) was received by the assessee on 12.03.2023, and thereafter, the matter was referred to the tax consultant for further action. However, due to change of accountant and misplacement of the papers inadvertently relating to the appellate order, the matter escaped attention for some time. Upon discovery of the omission during internal review of pending tax matters, the appeal papers were immediately prepared and filed without any further delay. The assessee has thus contended that the delay was neither deliberate nor intentional but due to reasonable and bona fide cause. We have carefully considered the reasons advanced by the assessee and find that the delay in filing the appeal is satisfactorily explained. It is well-settled that while considering an application for condonation of delay, a liberal and justice-oriented approach has to be adopted. The Hon'ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji & Others [(1987) 167 ITR 471 (SC)] has held that a litigant does not stand to benefit by lodging an appeal late, and that substantial justice deserves to be preferred over technical considerations. The Hon'ble Apex Court further observed that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. Similarly, in N. Balakrishnan v. M. Krishnamurthy [(1998) 7 SCC 123], the Hon'ble Supreme Court held that the length of delay is immaterial and that what is material is the acceptability of the explanation offered. It was held that unless the delay is found to be deliberate or due to mala fide intention, the same deserves to be condoned in the interest of justice. Respectfully following the ratio laid down by the Hon'ble Supreme Court in the aforesaid decisions, and considering the reasons explained by the assessee, which in our view constitute a sufficient cause, we are satisfied that the delay in filing the present appeal deserves to be condoned. Accordingly, the delay in filing the appeal is hereby condoned, and the appeal is admitted for hearing on merits. On merits
We have heard the rival submissions and perused the material available on record. The brief facts of the case have already been narrated hereinabove. It is observed that despite repeated opportunities at various stages of proceedings, both before the Assessing Officer and the learned CIT(Appeals), the assessee either failed to appear or failed to file any substantive evidence in support of his claim. The conduct of the assessee clearly reflects non-cooperation and disregard towards the due process of law. Nevertheless, in the interest of substantial justice, and keeping in view that tax proceedings are not strictly adversarial but quasi-judicial in nature, we are of the considered opinion that one more opportunity deserves to be granted to the assessee to substantiate his case before the Assessing Officer. In taking this view, we derive support from the decisions of the Hon'ble Supreme Court in Guduthur Bros. v. ITO [(1960) 40 ITR 298 (SC)], where it was held that procedural lapses should not result in denial of justice and the matter can always be restored for fresh consideration when the principles of natural justice are not satisfied, and from Tin Box Company v. CIT [(2001) 249 ITR 216 (SC)], wherein the Apex Court held that when the assessee has not been provided a fair opportunity of being heard or the assessment is made without proper participation, the matter should be restored to the Assessing Officer for fresh adjudication. Similar view was also taken by the Hon'ble Delhi High Court in CIT v. Jansampark Advertising and Marketing (P.) Ltd. [(2015) 375 ITR 373 (Delhi)], holding that the Assessing Officer must afford a fair opportunity and pass a reasoned order after examining the evidence on record. Respectfully following the above judicial precedents and considering the totality of facts, we deem it fit and proper to set aside the impugned order of the learned CIT(Appeals) and restore the matter to the file of the Assessing Officer with a direction to re-adjudicate the issue afresh after providing due opportunity to the assessee to substantiate his claim with necessary documentary evidences. At the same time, we also note that the assessee has been non-compliant and non-cooperative at all stages of the proceedings, thereby causing unnecessary delay in finalization of the matter. Therefore, in order to ensure proper participation in the re-adjudication proceedings and to discourage casual approach towards statutory obligations, we impose a cost of Rs. 10,000/- (Rupees Ten Thousand only) on the assessee, which shall be deposited in the Government treasury before the next hearing before the Assessing Officer and proof thereof shall be furnished at the time.
In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 29/10/2025 at Ahmedabad. (NARENDRA PRASAD SINHA) ACCOUNTANT MEMBER (SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER अहमदाबाद/Ahmedabad, दिनांक/Dated 29/10/2025 टी. सी. नायर, व.नि.स./T.C. NAIR, Sr. PS आदेश की प्रतिलिपि अग्रेषित/Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. संबंधित आयकर आयुक्त / Concerned CIT 4. आयकर आयुक्त (अपील) / The CIT(A)- (NFAC), Delhi 5. विभागीय प्रतिनिधि, आयकर अपीलीय अधिकरण, /DR, ITAT, Ahmedabad, 6. गार्ड फाईल /Guard file. आदेशानुसार / BY ORDER, सत्यापित प्रति //// सहायक पंजीकार (Asstt.