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Facts
The assessee filed their return for AY 2014-15 declaring Rs.3,20,570. The case was reopened under Section 147 for failure to declare sale of immovable property and capital gains. The assessee failed to respond to notices, leading to an ex-parte order adding Rs.80,59,000 as income from other sources and Rs.2,40,58,430 as unexplained income.
Held
The Tribunal condoned the delay in filing the appeal, set aside the appellate order, and remanded the case back to the Jurisdictional AO for a fresh assessment. The assessee was given one more opportunity of hearing with a cost of Rs. 10,000/-.
Key Issues
Whether the CIT(A) was justified in not admitting additional documents and dismissing the appeal without considering them, and whether the delay in filing the appeal should be condoned.
Sections Cited
147, 144, 148, 142(1), 250, 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER:
This appeal is filed by the assessee against the appellate order dated 20.12.2023 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (in short ‘CIT(A)’) arising out of the ex parte re-assessment order passed under Section 147 r.w.s. 144 of the Income Tax Act, 1961, (hereinafter referred to as ‘the Act’) relating to Assessment Year 2014-15.
(Pravinbhai Patel vs. ITO) A.Y. 2014-15 2. Brief facts of the case is the assessee is an individual filed his return of income for A.Y. 2014-15 on 22.12.2014 declaring total income of Rs.3,20,570/-. As the assessee failed to declare sale of immovable property and not offered for capital gain for taxation. Therefore, the case was reopened by issuing notice u/s. 148 of the Act. The assessee failed to file return of income in response to 148 notice and repeated notices issued u/s.142(1) of the Act were also not replied by the assessee, which resulted in passing ex parte assessment order treating the sale consideration of Rs.80,59,000/- received by the assessee as a confirming party as income from other source. Further, the bank transaction of Rs.2,40,58,430/- has not been explained by the assessee was also added as unexplained income of the assessee and determining the total income at Rs.3,24,38,000/- and demanded tax thereon.
3. Aggrieved against the re-assessment order, the assessee filed an appeal before the Ld. CIT(A) and also filed additional evidences, namely, sale deed, bank statements, etc. However, the Ld. CIT(A) has not admitted above additional documents, since the assessee has not made out valid reason for not filing the above documents before the AO, thereby, rejected the additional documents and also dismissed appeal filed by the assessee.
Aggrieved against the same, the assessee is in appeal before us raising the following grounds of appeal:
“1. The order passed by U/s.250 passed on 20-12-2023 for AY 2014-15 by National Faceless Appeal Centre, CIT(A), Delhi (for short NFAC) upholding the addition of Rs. 3.21.17.430/-made by A.O, as unexplained cash credit and Income from (Pravinbhai Patel vs. ITO) A.Y. 2014-15 Other Sources is wholly illegal. unlawful and against the principles of natural justice.
The NFAC erred in disallowing the appellant's claim and submission stating that "adequate or many opportunities had been provided to the Appellant in favor of natural justice, however all the notices sent & served by the Assessing officer remained un-complied"
However, NFAC failed to consider that the appellant does not possess specialized knowledge of tax law compliance and related notices. Upon receiving the notice, the appellant forwarded it to his tax consultant for handling. Unfortunately, the tax consultant failed to comply with the notice and did not inform the appellant of this non-compliance. The appellant had no ill intent in failing to comply with the notice.
4. NFAC erred in uphelding addition of Rs. 80,59,000 as Income from Other Sources, despite the fact that the appellant has very well submitted during appeal proceeding that he had sold a land at Ghuma on which he is incurring Long Term Capital Loss due to benefit of indexation.
NFAC failed to consider that the appellant has submitted during the appeal proceeding clarification regarding each and every credit transaction in all the 3 bank accounts which were duly disclosed in the income tax return.
6. In view of the above facts, circumstances and grounds, your honor the appellant prays that (i) The order of the NFAC may please be quashed, set aside in totally. (ii) The upward adjustment of Rs. 3,12,17,430/-made in the said order be deleted. (iii) Any other relief that your honor may deem fit is necessary.”
5. The registry has noted that there is a delay of 121 days in filing the appeal before this Tribunal. The assessee by way of notarized affidavit submitted the e-mail ID given for appellate proceedings is belonged to his daughter, which was not in regularly watched. The dismissal of appellate order passed by the Ld. CIT(A) came to the knowledge of the assessee on 07.06.2024, when the Authorized Representative checked the status of the appeal in the e-filing portal. The assessee was of the bonafide view that the additional documents (Pravinbhai Patel vs. ITO) A.Y. 2014-15 filed before the Ld. CIT(A) will be entertained and CIT(A) will call for a remand report from the AO. However, on perusal of the CIT(A)’s order, it is found that the Ld. CIT(A) has not entertained the additional documents filed under Rule 46A of the IT Rules. Thus, there is a delay of 121 days in filing the appeal and requested to condone the same. Ld. Counsel further submitted that though the assessee could not file the details before the AO during the re- assessment proceedings, however, filed the same before the Ld. CIT(A). Therefore, in the interest of justice, the matter may be set aside to the file of the Jurisdictional AO to pass the order on merits of the case.
Per contra, Ld. SR. DR appearing for the Revenue supported the order passed by the Ld. CIT(A) and submitted that the assessee was not justified for not filing the relevant documents before the AO in spite of five opportunities given to the assessee. Therefore, in the interest of justice, some cost be levied to set aside the matter back to the file of the Jurisdictional AO.
We have heard the rival submissions and perused the materials available on record. Though, the assessee has not attended the hearing before the Ld. CIT(A) but filed additional documents invoking Rule 46A of the IT Rules. Therefore, in the interest of justice, we deem it fit to condone the delay of 121 days in filing the appeal and also set aside the appellate order to the file of the Jurisdictional AO to pass fresh re-assessment order by giving one more opportunity of hearing to the assessee by imposing a cost of Rs.10,000/- payable by the assessee in favour of the Income Tax Department within 15 days (Pravinbhai Patel vs. ITO) A.Y. 2014-15 of receipt of this order copy. On production of necessary receipt of payment of cost of Rs.10,000/-, the Jurisdictional AO should pass fresh re-assessment order in accordance with law.
In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in Open Court on 31- 01-2025
Sd/- Sd/- (MAKARAND V. MAHADEOKAR) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 31-01-2025 S. K. SINHA True Copy आदेश क� �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,