STAR BIOTECH,PANCHKULA vs. INCOME TAX OFFICER, WARD- PARWANOO, HIMACHAL PRADESH

The affidavit clarifies that the assessee remained genuinely unaware of the dismissal of the appeal by the CIT(A). The situation resulted in a bonafide and unintentional delay in filing the appeal before the Tribunal, which was filed only upon coming to know about the appellate outcome belatedly. In support, the assessee has relied upon the decision of the Hon'ble Punjab & Haryana High Chandigarh [CWP No. 21028 of 2023 (O&M), dated 04.03.2024], wherein it was held that uploading of orders or notices solely on the income tax portal, without proper physical or email service, does not amount to due service and cannot impute knowledge to the assessee. 4. In order to further verify the claim, the Bench had directed the Revenue to submit a report regarding recovery action on the demand raised in the assessment order dated 28.03.2016. The Assessing Officer, in his report dated 02.05.2025, categorically admitted that no steps were taken to recover the demand of Rs.1,85,24,940/- for more than four years since the order. This official admission reinforces the assessee’s plea that there was no awareness of the proceedings or the outcome thereof. 5. We are of the considered view that the delay has been satisfactorily explained and is neither deliberate nor motivated by gain. In fact, the record clearly shows that the assessee has not derived any benefit by remaining absent before the CIT(A). The delay has resulted in the denial of appellate remedy, which is fundamental under the scheme of the Income Tax Act. Accordingly, we condone the delay of 416 days in filing the present appeal, subject to the payment of cost of Rs.3,000/- by the assessee to the Revenue within 30 days of the date of this order. 6. We would also like to express our concern on the administrative failure on part of the Revenue authorities, especially the Assessing Officer, who despite raising a demand of Rs.1,85,24,940/-, failed to initiate any recovery or follow-up action for more than four years. Such administrative lethargy undermines the credibility and efficiency of the Department. We direct the Ld. Pr. CIT having juri iction over the AO concerned to take note of this lapse and consider appropriate remedial or corrective measures to ensure accountability in such cases of prolonged inaction. 7. Coming to the facts of the case, the assessee filed its return of income for A.Y. 2013–14 declaring income of Rs. 75,000/- after claiming deduction of Rs.18,45,521/- under Section 80IC of the Act. The case was reopened under Section 147 and assessment was completed ex parte under Section 144 on 28.03.2016, making three additions: (i) disallowance of deduction under Section 80IC - Rs.18,45,521/- ii) addition of unsecured loans

Though the CIT(A) was justified in proceeding ex parte, considering the absence of the assessee, the fact remains that the lack of communication was not attributable to deliberate conduct by the assessee. Rather, it arose from miscommunication and service defects. Hence, we are of the opinion that the matter deserves to be re-adjudicated in the interest of justice. 11. Accordingly, the impugned order of the Ld. CIT(A) dated 24.02.2023 is set aside and the matter is restored to his file for de novo adjudication. The CIT(A) shall provide reasonable opportunity to the assessee and decide the appeal on merits in accordance with law. The assessee is also directed to fully cooperate and not seek unnecessary adjournments. 12. In the result, the appeal is allowed for statistical purposes with directions as above. Order pronounced in the open Court on 27/05/2025 कृणवȶ सहाय

अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File