Loading judgment…
Facts
The assessee filed an appeal against the order of CIT(A) sustaining additions of Rs. 41,86,815/-, comprising unexplained deposit and interest income. The assessment was completed ex-parte under Section 144 r.w.s. Section 147 as no return was filed.
Held
The Tribunal held that the deficiency notices were issued on a wrong email address, and the assessee was unaware of the defects, thus being prevented by sufficient cause. Consequently, the matter was remitted to the CIT(A) for de novo consideration.
Key Issues
Whether the appeal before CIT(A) was rightly dismissed for non-compliance with deficiency notices sent to incorrect email, and whether Section 249(4) was correctly invoked.
Sections Cited
147, 148, 144, 249(4)
AI-generated summary — verify with the full judgment below
आयकर अपीलीय अिधकरण,च"ीगढ़ "ायपीठ “एस.एम.सी” , च"ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCHES, “SMC” CHANDIGARH HEARING THROUGH: VIRTUAL MODE "ी िव"म िसंह यादव, लेखा सद" BEFORE: SHRI. VIKRAM SINGH YADAV, AM आयकर अपील सं./ िनधा"रण वष" / Assessment Year : 2012-13 Harjit Singh बनाम The ITO C/o M/s VV Bhalla & Company, Ward 6(1), E-64, Rishi Nagar, Ludhiana- 141001 Mohali "ायी लेखा सं./PAN NO: BLAPS8802E अपीलाथ"/Appellant ""थ"/Respondent िनधा"रती की ओर से/Assessee by : Shri Pankaj Bhalla, C.A राज" की ओर से/ Revenue by : Shri Vivek Vardhan, JCIT सुनवाई की तारीख/Date of Hearing : 01/01/2025 उदघोषणा की तारीख/Date of Pronouncement : 09/01/2025 आदेश/Order
PER VIKRAM SINGH YADAV, AM
This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/ NFAC Delhi dt. 28/12/2023 pertaining to Assessment Year 2012-13 wherein the assessee has challenged the sustenance of addition of Rs. 41,86,815/-, being the unexplained deposit of Rs. 7,50,000/- and interest income received from Land Acquisition Collector amounting to Rs. 34,36,815/-.
During the course of hearing, the Ld. AR submitted that the assessee is a resident of Village Sohana, District Mohali and he was not having any income chargeable to tax, hence no return of income was filed for the impugned assessment. Thereafter, notice under section 148 was issued on 30/03/2019 and assessment proceedings were completed ex-parte by ITO Ward 6(5), Mohali under section 144 r.w.s 147 vide order dt. 16/12/2019 at an assessed income of Rs. 41,86,515/- on account of unexplained deposit and unexplained interest income received from the Land Acquisition Collector.
It was submitted that the assessee thereafter, preferred an appeal before the Ld. CIT(A) who passed the impugned order on 28/12/2023 dismissing the appeal of the assessee by invoking the provisions of Section 249(4)(b) of the Act. In this regard, it was submitted that the defect notice issued by the Ld. CIT(A) before passing of the impugned order were sent on the wrong email id which doesn’t belong to the assessee and an affidavit from Advocate Hunny Bajaj who was entrusted with filing the appeal has been placed on record wherein he has confirmed that he has provided his email id for the purpose of receiving the necessary communications and he did not receive any notice of hearing on this email id throughout the course of the appellate proceedings.
It was further submitted that the assessee has also updated his primary and secondary email id on 08/04/2012 the day appeal was filed and even on this email id, no notice was received by the assessee. It was accordingly submitted that given that the notices were not served on the assessee and assessee was totally unaware in respect of any defect in the filing of the appeal before the Ld. CIT(A), the assessee was prevented by the sufficient cause in making the necessary submissions. 5. It was further submitted that the Ld. CIT(A) has invoked the provisions of Section 249(4) of the Act which provides that the appeal shall not be admitted unless at the time of filing of the appeal, the assessee has paid the taxes on the income returned by him and in a case where no return has been filed, the assessee has paid the amount equal to the amount of advance tax which was payable by him. It was submitted that the requirement of the statute therefore relates to the admitted tax and not to dispute income on which the tax become payable. It was submitted in the instant case, the AO has made certain additions and which are challenged by the assessee and is the subject matter of the appeal and therefore the same constitutes the disputed tax and the provisions of Section 249(4) therefore cannot be invoked to deny the right of the assessee to be heard on the merits of the addition so made by the AO. It was accordingly submitted that the tax payment requirement under section 249(4) applies only to the undisputed admitted income and not to disputed income or tax arising on additions made by the AO and therefore the Ld. CIT(A) has wrongly dismissed the appeal invoking the provisions of Section 249(4) of the Act. 6. It was further submitted that since ex-parte assessment order has been passed by the AO, the matter may be set aside to the file of the AO to examine the same on merits of the case and the assessee shall file the necessary evidence in support of the source of the deposit as well as non taxability of the interest income before the AO. 7. Per contra, the Ld. DR is heard who has relied on the order of the lower authorities. 8. Heard the rival contentions and purused the material available on record. The appeal of the assessee has been dismissed as non-maintainable by the ld CIT(A) due to alleged non-payment of tax in terms of Section 249(4) of the Act. Prior to dismissal of the appeal, deficiency notices were issued admittedly on the email id which doesn’t belong either to the Counsel or the assessee and thus remained uncomplied with and in absence of any compliance thereto, the appeal was dismissed vide the impugned order invoking provisions of section 249(4) of the Act. In view of the same, I deem it appropriate that the matter be remitted to the file of the ld CIT(A) who shall consider the explanation of the assessee in terms of advance tax liability u/s 249(4) and all the contentions raised before us are thus left open. Where the same is found to be in order and the appeal is held to be maintainable, decide the matter on merits of the case as per law. Needless to say, reasonable opportunity be provided to the assessee and the latter shall attend to the notices so issued and proceedings as so conducted by the ld CIT(A) and shall be at liberty to raise the necessary contentions and file necessary submissions/documentation, as so advised. 9. In the result, the appeal of the assessee is allowed for statistical purposes.