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Facts
The assessee filed an appeal against the order of the CIT(A) for AY 2012-13. The appeal was delayed by 113 days, for which a condonation application was filed and allowed. The assessee's grounds included allegations of a wrongful addition of Rs. 1,41,53,773 and confirmation of assessment proceedings without adequate opportunity.
Held
The Tribunal condoned the delay in filing the appeal. The assessee argued that the CIT(A) passed an ex-parte order without providing adequate opportunity. The Tribunal found that it is the duty of the CIT(A) to decide the issue on merits even if the assessee failed to appear.
Key Issues
Whether the CIT(A) rightly dismissed the appeal without deciding on merits and without providing adequate opportunity to the assessee.
Sections Cited
147, 148, 143(3), 54B
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आदेश/Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 29/05/2023 pertaining to Assessment Year 2012-13.
At the outset the Registry has pointed out that the appeal is barred by limitation by 113 days for which the assessee has filed the condonation application which is placed on record.
After considering the condonation application filed by the assessee in the present appeal, we condone the delay for which sufficient cause is shown, and admit the appeal for adjudication.
In the present appeal Assessee has raised the following grounds: 1. That the Ld. Commissioner of Income Tax-(Appeals) has wrongly upheld addition of Rs. 1,41,53,773 without giving any reasonable opportunity of being heard it is requested to set aside the order and restore the appeal to CIT Appeal for adjudication on merit.
1. 2. That the Ld CIT(A) has wrongly confirmed the action of assessing officer for initialing assessment proceedings u/s 143(3) r.w.s 147 of Income Tax Act.
3. The learned CIT appeal has wrongly upheld the action of assessing officer who taxed the Capital Gam in the hand of assessee whereas land sold belongs to assessee HUF.
4. That the CIT Appeal has wrongly upheld the sale consideration of Agriculture land at RS 6,41.87,500 in place of actual sale consideration Rs. 2,20,00,000. 5. The learned CIT has erred by upholding the disallowance of Rs. 10.29,233 u/s 54B
Briefly the facts of the case are that is an agriculturist and not filed return for A.Y 2012-13. The AO had information that the assessee, who had one-half share in land measuring 29 Bigha 14 Biswa, had entered into an agreement with Sh. Baldev Chand Bansal, Director M/s BCL Homes Ltd. for sale of land and as per sale deed, sale of 13 bighas was made during the year under consideration. The AO issued notice u/s 148 of the Act on 24.03.2019. In response to notice u/s 148 of the Act, the assessee furnished return on 26.04.2019 declaring total income at Rs.1,61,900/- under the head income from other sources. The assessee had shown Long Term Capital Gain of (-) Rs.86,15,000/-, against the sale consideration of land declared at Rs.2,20,00,000/-. The assessee also claimed to have invested Rs.2,03,65,820/- eligible for deduction u/s 54B of the Act. The AO passed order u/s 143(3) rws 147 on 29.11.2019 determining total assessed income at Rs.1,43,15,673/- and made addition of Rs. 1,41,53,773/- on account of income from Long Term Capital Gain.
Against the order of the Ld. AO the assessee went in appeal before the Ld. CIT(A) who has since dismissed the appeal of the assessee.
Feeling aggrieved the assessee carried the matter in appeal before us.
During the course of hearing, the Ld. AR submitted that the Ld. CIT(A) has passed an ex-parte order without providing adequate opportunity to the assessee. It was submitted that the notices so issued by him has not been served on the assessee and therefore, the assessee was prevented by sufficient cause for not attending to the proceedings before CIT(A). It was submitted that assessee be allowed one last opportunity and the matter may be remitted to the file of the Ld. CIT(A) to decide the same afresh and it was submitted that the assessee shall attend to the proceedings before the Ld. CIT(A) and file the necessary information/documentation.
Per contra, the Ld. DR relied on the order of the Ld. CIT(A) wherein the Ld. CIT(A) has held as under:
5.0 DECISION The right to appeal under Chapter XX of the Income-tax Act, 1961, is a invaluable right of a tax payer, therefore, it needs to be exercised with due caution and care by him. It is also worthwhile to mention the famous saying as under: “VIGILANTIBUS, NO DORMENTIBUS JURS SUBVENIUNT” (“Law assists those who are vigilant and not those who sleep over their rights”) The facts on record indicate that the appeal was filed on 26.12.2019, which is almost 3 and ½ years ago and thereafter in response to various notices of hearing issued by this Office, from time to time, the appellant remained non-cooperative. The events and details of the non-attendance by the appellant, on the said dates are as under: SR. No. Date of issue Date on which Remarks of notice hearing fixed 1 22.01.2021 08.02.2021 Hearing Notice has been sent to the appellant via mail Ids mentioned below, the appellant has not responded. jaswindermanku2@gmail.com 2 17.04.2023 24.04.2023 Hearing Notice has been sent to the appellant via mail Ids mentioned below, the appellant has not responded. jaswindermanku2@gmail.com 3 25.04.2023 02.05.2023 Hearing Notice has been sent to the appellant via mail Ids mentioned below, the appellant has not responded. jaswindermanku2@gmail.com 4 15.05.2023 22.05.2023 Hearing Notice has been sent to the appellant via mail Ids mentioned below the appellant has not responded. jaswindermanku2@gmail.com
5.1 Hearing Notice has been sent to the appellant via mail Ids mentioned below, the appellant has not responded. jaswindermanku2@gmail.com During the course of appellate proceedings, as is discussed above, neither the appellant nor his AR has made any submission to support his claim. Keeping in view the facts of the case, it is apparent that, the appellant has nothing to offer any explanation in support of his grounds of appeal
. The conduct of the appellant shows that, the appellant is approaching the appeal in a very casual manner and not showing any interest in pursuing the appeal. In this regard, reliance is placed on Gujarat High Court Judgment in case of Fairdeal Filaments Ltd vs. C.I.T. 302 ITR 173. Therefore, it is not required to give further opportunity to such recalcitrant assessee 5.2 The section 114(g) of Indian Evidence Act, 1872 lays a presumption that evidence which could be and is not produced, would, if produced, be unfavourable to the person who withholds it. In the appellate proceedings, burden of proof lies on the Assessee to prove that facts and findings of the AO are incorrect. If the assessee fails to disprove or rebut with cogent evidence such facts and findings, no interference is required. In this case, the assessee did not choose to avail several opportunities in appellate proceedings which entails conclusion that he had no evidence or say or explanation against the order of the AO. In case of tax evasion, sometimes compliance is more detrimental than non-compliance because compliance can lead to more investigation or more points to be explained whereas non-compliance lead to mere penalty u/s 271(1)(b) and / or ex-parte decision on the basis of available material only. It also brightens chance against levy of concealment penalty. Ex- parte assessment/other order has its own inherent limitations as to its scope and extent. Hence, the assessee should not be allowed to be enriched or benefited unjustly for act of his own wrongs, i.e., non compliance or non attendance of hearing. The Hon’ble High Court of Delhi, in the case of CIT v. Gold Leaf Capital Corporation Ltd. on 02.09.2011 (ITA No.798 of 2009) that a negligent assessee should not be given many opportunities just because that quantum of amount involved is high. Necessary course of action is to draw adverse inference; otherwise it would amount to give premium to the assessee for his negligence. When the assessee is non cooperative, it can naturally be safely concluded that the assessee did not want to adduce evidence as it would expose falsity and non genuineness. In this regard, the decision of the Hon’ble High Court of Mumbai in the case of M/s. Chemipol v/s. Union of India [Central Excise Appeal No.62/2009 dated Dec.12th 2009] clearly, states that every court judicial body or authority, which has a duty to decide a list between two parties, inherently possesses the power to dismiss the case in default. For case of reference, relevant extract of the judicial pronouncement rendered by the Hon’ble High Court of Mumbai in the said case, quoting decision of Hon’ble Supreme Court in case of Nandramdas Dwarkadas, AIR 1958 MP 260, is reproduced below : “Now the Act does not give any power of dismissal. But it is axiomatic that no court or tribunal is supposed to continue a proceeding before it when the party who has moved it has not appeared nor cared to remain present. The dismissal, therefore, is an inherent power which every tribunal possesses.” 5.3 The above proposition has been upheld by the Hon’ble Supreme Court in case of Dr. P. Nalla Thampy Vs. Shankar (1984 (Supp) SCC 63). Further Hon’ble Supreme Court in case of New India Assurance vs. Srinivasan (2000)
3. SCC 242, has stated as under: “That every court or judicial body or authority, which has a duty to decide a list between two parties, inherently possesses the power to dismiss a case in default. Where a case is called up for hearing and the party is not present, the court or the judicial or quasi-judicial body is under no obligation to keep the matter pending before it or to pursue the matter on behalf of the complainant who had instituted the proceedings. That is not the function of the court or, for that matter of a judicial or quasi judicial body. In the absence of the complainant, therefore, the court will be will within its jurisdiction to dismiss the complaint for non prosecution. So also, it would have the inherent power and jurisdiction to restore the complaint on good cause being shown for the non appearance of the complainant.
5.4 The Hon’ble Bombay High Court has finally laid down proposition as under: “An appellant who on account of his place or residence or business being far away from the place of sitting for the Tribunal may not except at a high cost be able to attend the hearing especially when as we know that the matters are adjourned for several times. In such an event, if the appellant files on record his submissions in writing, the Tribunal must decide the appeal on merits on the basis of the said submissions. In that case, the Tribunal would not have a power to dismiss the appeal for but where the appellant inspite of notice is persistently absent and the Tribunal on facts of the case is of the view that the appellant is not interested in prosecuting the appeal, it can in exercise its inherent power to dismiss the appeal for non-prosecution. Of course, the conclusion of the Tribunal that the appellant is not interested in prosecuting the appeal must be reached on the facts of each case and not merely on account of absence of an appellant on a solitary occasion.” 5.5 The Hon’ble High Court of M.P. in the case of Estate of Tukojirao Holkar V. CWT 23 ITR 480) had held that “ If the party, at whose instance – the reference is made at, fails to appear at hearing – the court is not bound to answer the reference” 5.6 Similarly their lordship, in case of CIT vs. B.N. Bhattacharya (118 ITR 461) (Relevant pages 477 & 478) had held that- “ appeal does not mean merely filing of appeal but effectively pursuing it.” 5.7 The Hon’ble ITAT Delhi (ITR No.2006/Del/2011 dt.19.12.2001) in the case of Whirlpool of India Ltd. v. DCIT had dismissed appeal for not attending hearing inferring that assessee is not interested in prosecuting of appeal. Thereafter in another decision in the case of Chadha Finlease Ltd. V. ACIT (ITA No.3013/Del/2011 date of order 20.12.2011) the Hon’ble ITAT had dismissed the appeal for non attending hearing inferring that the assessee is not interested in pursuing the appeal. 5.8 In view of the aforesaid discussion and relevant judicial pronouncements, the appeal filed by the appellant may be dismissed without going into merits of the case.
We have heard the rival contention and perused the material available on the records. In the present case the Ld. CIT(A) has given the four dates namely 22/01/2021, 17/04/2023, 25/04/2023 and 15/05/2023 to the assessee to present the appeal and thereafter had decided the appeal by applying decision in the case of Multiplan (supra). In our considered opinion it is the duty of the Ld. CIT(A) to decide the issue on merits even if the assessee failed to appear in the appellate proceedings. The ld. CIT(A) cannot dismiss the appeal of the assesse merely because the assessee failed to participate in the appellate proceedings. In view of the above we find that the assessee deserves one last opportunity and cannot be condemned unheard and therefore, keeping in view principles of substantial justice, the matter is remitted to the file of the Ld. AO to decide the same afresh after providing reasonable opportunity to the assessee. Needless to say the above said exercise shall be carried out by the Ld. CIT(A) after affording an opportunity of hearing to the ass and following the principles of natural justice.
In the result, appeal of the Assesee is allowed for statistical purposes.