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Facts
The assessee, a partnership firm, failed to file Income Tax Returns and respond to reassessment notices under Section 147. The CIT(A) dismissed their appeals for delay due to alleged medical reasons of the managing partner, without providing an opportunity for hearing.
Held
The tribunal held that the CIT(A) erred by not providing the assessee an opportunity to explain the delay and present medical records, violating the principles of natural justice. The delay was attributed to the managing partner's continuous medical supervision.
Key Issues
Whether the CIT(A) correctly dismissed the appeals for delay without affording the assessee an opportunity to be heard and present medical evidence. Whether the managing partner's medical condition constituted a reasonable cause for the delay.
Sections Cited
147, 115BBE, 69A, 264
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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH
Before: DR. BRR Kumar & Shri T. R. Senthil Kumar
: 2197 to 2200/Ahd/2024 Assessment Years: 2015-16 to 2018-19 Subham Sugar Suppliers Income Tax Officer, 419 Madhupura Comm. Ward-1(1)(3), Center, Hathipur Chowk Vs Ahmedabad Madhupura, Ahmedabad, Gujarat PAN: ACOFS2276E (Appellant) (Respondent) Assessee Represented: Shri Jignesh Parikh, A.R. & Shri Mehul Doshi, A.R. Revenue Represented: Shri Kavan Limbasiya, Sr. D.R. Date of hearing : 18-03-2025 Date of pronouncement : 21-03-2025 आदेश/ORDER PER BENCH:-
These four appeals are filed by the Assessee as against separate appellate orders all dated 28.11.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), refusing to condone the delay in filing the appeals relating to Assessment Years 2015- 16 to 2018-19. Since common issues are involved in all the above to 2200/Ahd/2024 A.Ys. 2015-16 to 2018-19 Page No 2 Subham Sugar Suppliers vs. ITO appeals for the sake of convenience, the same are disposed of by this common order.
Brief facts of the case is that the assessee is a Partnership Firm engaged in the business of trading of sugar. The assessee failed to file Returns of Income since the assessee did not carry out business activities post 2016-17. Further the Managing Partner Mr. Manoj V Mohta was diagnosed with Cancer in the year 2014. The assessments were reopened by issuing u/s. 148 notice dated 30- 06-2021 on the ground that the credit transactions in the account maintained with Yes Bank Ltd., Ahmedabad Branch was not offered for tax. In spite of service of notices, the assessee failed to respond to the notices as well as the assessee not filed the Return of Income which has resulted in passing exparte assessment orders treating the credit transactions in the bank account as the unexplained income and also taxed u/s. 115BBE of the Act for the Asst. Years 2015-16 to 2018-19 and demanded tax thereon.
3. Aggrieved against the assessment orders, assessee filed four appeals before Ld. CIT(A) with a delay of 127 days for the Asst. Years 2015-16 to 2017-18 and 191 days relating to the Asst. Year 2018-19. The Ld. CIT(A) held that there is no medical documentation provided namely treatment records, hospitalization details, or a medical certificate to establish how medical condition specifically impacted compliance with assessment or appellate timelines. The cancer diagnosis dates back to 2014, whereas the assessment proceedings pertain to later periods. Thus no reasonable cause was made out by the assessee in the delay of 127 to 2200/Ahd/2024 A.Ys. 2015-16 to 2018-19 Page No 3 Subham Sugar Suppliers vs. ITO days and 191 days in filing the appeals, thereby dismissed the appeals as in limine.
Aggrieved against the appellate order, the assessee is in appeal before us raising the following Grounds of Appeal in 1. The learned Commissioner of Income-tax (Appeals) erred in not condoning the delay in filing the appeal despite the delay being attributable to genuine medical reasons (cancer of the managing partner) and the time required for extensive discussions with Chartered Accountants and Advocates.
2. The learned CIT(A) further erred in rejecting the appeal without issuing a Show Cause Notice to the appellant, thereby violating the principles of natural justice.
The learned CIT(A) has overlooked the submissions made by the appellant, including reliance on the recent decision of the Hon'ble Supreme Court in the case of Rajeev Bansal, which supports the appellant's claim that reassessment proceedings are illegal and bad in law and deserve to be quashed.
4. The Ld AO has erred in law and in facts in carrying out reopening u/s 147 of the Income Tax Act, 1961.
The Assessment Unit, the National Faceless Assessment Centre, Delhi has erred in law and in facts in making addition u/s 69A to the tune of Rs.1,14,42,510/- 6. The appellant prays that the delay in filing the appeal be condoned, the order of the CIT(A) be set aside, and the matter be remanded for fresh consideration.
The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal
at the time of or before the hearing of the appeal.
5. Ld. Counsel filed a Notarised Affidavit from the Managing Partner stating that the reassessment orders for the Asst. Years 2015-16 to to 2200/Ahd/2024 A.Ys. 2015-16 to 2018-19 Page No 4 Subham Sugar Suppliers vs. ITO 2017-18 passed on 24-05-2023 and assessment order for Asst. Year 2018-19 passed on 21-03-2023 and he was undergoing continuous medical consultation from March 2023 to October 2023, which significantly impaired his ability to engage in legal proceedings and make timely decisions regarding the appeal process or to file Revision application u/s. 264 of the Act. A Medical Certificate dated 01-03-2025 was enclosed from Dr. Bhargav Maharaja, Senior Onco Surgeon stating that he was under continuous medical supervision from March 2023 to October 2023. Thus the assessee did not gain any undue advantage on the delay which is neither intentional nor due to negligence on the part of the assessee but solely due to circumstances beyond control and medical reasons, therefore requested to condone the delay in filing the above appeals.
6. Per contra Ld. Sr. D.R. appearing for the Revenue submitted that even in the assessment proceedings, nine opportunities of hearing including to two show cause notices were given to the assessee, which were not even replied by the assessee and no Return of Income filed in response to the notices. Therefore the Ld. CIT(A) is correct in dismissing the appeal, which does not require any interference.
7. We have given our thoughtful consideration and perused the materials available on record. From the impugned appellate orders, the Ld. CIT(A) has not given any opportunity of hearing to the assessee to explain the delay in filing the above appeals and also adduce necessary medical records in support for the delay. Without to 2200/Ahd/2024 A.Ys. 2015-16 to 2018-19 Page No 5 Subham Sugar Suppliers vs. ITO giving such an opportunity by the Ld. CIT(A) is against the Principle of Natural Justice. However before us, the assessee has filed Notarized Affidavit as well as Medical Certificate for continuous medical supervision from March 2023 to October 2023. Further perusal of records, we find that the assessee was justified in not responding to the notices issued by the Assessing Officer from June 2021 till May 2023 which has resulted in passing exparte assessment orders by the Assessing Officer. Thus the appellate orders passed by the Ld. CIT(A) is hereby set aside with a direction to pass fresh orders on merits by giving proper opportunity of hearing to the assessee. Needless to say the assessee to make use of this opportunity and file all necessary documents and details before Ld. CIT(A) for passing order on merits of the case.
In the result, the appeals filed by the Assessee are allowed for statistical purposes.
Order pronounced in the open court on 21-03-2025 Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 21/03/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) to 2200/Ahd/2024 A.Ys. 2015-16 to 2018-19 Page No 6 Subham Sugar Suppliers vs. ITO