KETAN KHANDELWAL ,GHATTABILLOD vs. ITO, DHAR

Feeling aggrieved by order of first-appeal dated 12.10.2023 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 06.12.2019 passed by learned ITO, Dhar [“AO”] u/s 144/147 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2012-13, the assessee has filed this appeal on the grounds as mentioned in Form No. 36 (Appeal Memo).

Ld. AR for assessee filed an adjournment request but on perusal of case file, it is observed that the case can be heard and decided instantly.

The registry has informed that the present appeal is delayed by 539 days and therefore time-barred. The assessee has filed an application/ affidavit for condonation of delay; the same is scanned and re-produced for an immediate reference:

The averments made by assessee in above affidavit, which are self- explanatory and which do not require repetition, were discussed and the Ld. DR for revenue does not have any objection if the bench condones delay and accordingly left it to the wisdom of bench. We have considered the explanation advanced by assessee and in absence of any contrary fact or material on record, the assessee is found to have a “sufficient cause” for delay in filing present appeal. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a “sufficient cause” for not presenting appeal within prescribed time.

The background facts leading to present appeal are such that the assessee-individual is engaged in trading business of cement, building material, etc. The AO, on the basis of information in his possession revealing that the assessee made deposits in a/c with Bank of India during the previous year 2011-12, issued a notice dated 28.03.2019 u/s 148 to make assessment u/s 147. However, the said notice remained non-complied by Page 6 of 10 assessee. The AO thereafter issued notice u/s 142(1) and show-cause notice u/s 144 which also remained non-complied by assessee. Thus, finding non response from assessee, the AO ultimately passed ex-parte assessment- order u/s 144 assessing the deposits of Rs. 56,05,000/- in bank a/c as unexplained money u/s 69A (+) salary income of Rs. 32,000/- found in Form No. 26AS of assessee, thereby totalling to Rs. 56,37,000/-. Aggrieved, the assessee carried matter in first-appeal but did not make any response to the notices of hearing issued by CIT(A) whereupon the Ld. CIT(A) passed ex- prate order dismissing assessee’s appeal and upholding AO’s order. Now, the assessee has come before us in next appeal.

Ld. AR for assessee submits that in present case, the Ld. CIT(A) passed ex-parte order dismissing assessee’s first appeal and merely approving the order of AO, although due to non-prosecution by assessee on the dates of hearing, but the order passed by Ld. CIT(A) is against the mandate of section 250(6) which provides: “The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision”. It is further submitted that the non-prosecution by assessee was due to bona fide reason that the assessee is located in a smaller place and not aware of income-tax procedures as well as technological matters, hence the notices of hearing issued by Ld. CIT(A) did not come to the knowledge of assessee.

The Ld. DR for revenue, though not opposing the prayer of the assessee for restoration, submitted that the assessee had remained non- compliant during the assessment proceedings as well as proceedings of first- appeal, which constrained the lower authorities to pass ex-parte orders. It was, therefore, submitted that while restoring the matter, appropriate directions may be issued to ensure strict compliance by the assessee and, if deemed fit, reasonable cost may also be imposed.

In rejoinder, Ld. AR for assessee prayed that the assessee is from a smaller place, hence the cost should not be imposed.

In view of above submissions of parties; having regard to the principle of natural justice and also bearing in mind that no prejudice would be caused to revenue if the present matter is restored at the level of AO, we remand this matter back to the file of AO for adjudication afresh, at the risk and responsibility of assessee. The AO shall give necessary opportunity of hearing to assessee and pass an appropriate order uninfluenced by his earlier order. The assessee is also directed to remain vigilant and ensure participation in the hearings as may be fixed by AO without seeking

However, we find that the assessee has remained non-compliant to various notices issued by AO as well as CIT(A). Further, there is a delay in filing present appeal before us. Therefore, taking into account these facts and in order to offset the revenue’s efforts in dealing assessee’s case, we impose a small cost of Rs. 5,000/- to be paid by assessee to Income-tax Department through appropriate challan. The assessee shall submit a copy of duly paid challan to AO during the proceeding of fresh adjudication and shall not claim any credit or refund of such payment.

Resultantly, this appeal is allowed for statistical purpose, subject to payment of cost by assessee as mentioned above.