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Facts
The assessee filed an appeal against an order of the Ld. Addl./JCIT(A) for AY 2015-16. The appeal was filed with a delay of 49 days due to an employee's oversight. The Ld. CIT(A) had passed an ex-parte order confirming the AO's additions of Rs. 18,37,784/- and Rs. 6,14,323/- on account of alleged unexplained expenditure for imported machinery and related charges.
Held
The Tribunal condoned the delay in filing the appeal. While the Ld. CIT(A) dismissed the appeal ex-parte due to the assessee's failure to provide submissions, the Tribunal felt the matter should be decided on merits. Therefore, the case was restored to the Ld. CIT(A) for fresh adjudication.
Key Issues
Whether the assessee was given a proper opportunity of being heard by the Ld. CIT(A)? Should the appeal be decided on merits or dismissed ex-parte due to procedural lapse?
Sections Cited
143(3), 271(1)(c), 44AD
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI GAGAN GOYAL, AM vk;dj vihy la-@ITA No. 923/JP/2025
ORDER PER: DR. S. SEETHALAKSHMI, J.M. The assessee has filed an appeal against the order of the Ld. Addl. / JCIT(A), Faridabad dated 13-02-2025 for the assessment year 2015-16 raising therein following grounds of appeal. ‘’1. The order passed u/s 143(3) of the Act is bad in law as well as on the facts of the present case being without jurisdiction and for several other reasons and hence the same is prayed to be quashed.
2. The Id.CIT(A) erred in rejecting the appeal of the assessee without providing the proper opportunity of being heard which is SHRI ARUN AGARWAL VS ITO, WARD 1(2), JAIPUR against the principle of natural justice and settled judicial precedents and hence prayed to be quashed 3. Rs.1837784/- The Id. AO erred in law as well as on the facts of the present case in making addition of Rs.1837784/- on account of alleged unexplained expenditure in respect of import machinery, actually not imported by the assessee and the Id. CIT(A) erred in confirming the same and hence the addition so made is prayed to be deleted 4. Rs.614323/- The Id. AO erred in law as well as on the facts of the present case in making addition of Rs.614323/- on account of alleged unexplained expenditure in respect of custom duty, clearing charges and freight charges on import of machinery, actually not paid by the assessee and the Id. CIT(A) erred in confirming the same and hence the addition so made is prayed to be deleted 5. Without prejudice to above, the assessee could not attend the proceedings for genuine and bonafide circumstances and therefore, Id. CIT(A) erred in law as well as on the facts of the present case in passing ex parte order and hence the matter be sent back to the Id. CIT(A), NFAC for fresh adjudication after providing proper opportunity of being heard.’’ 2.1 At the outset of hearing of the appeal, the Bench noticed that there is delay of 49 days in filing the appeal by the assessee for which the assessee has filed an application for condonation of delay narrating the reason that order was received by him on 14-02-2025 and appeal was to be filed on or before 30-04-2025 within two months from the end of receiving of order. However, he had given the copy of order to Shri Zainul Aabeddin, employee of the counsel SHRI ARUN AGARWAL VS ITO, WARD 1(2), JAIPUR to file the appeal before ITAT. The employee Shri Zainul Aabeddin omitted to inform about the receipt of order to Shri Nikhlesh Kataria, AR and he kept the same with him along with other papers. On June 16th, 2025, the assessee asked about the status of the action taken in the matter and then Shri Zainul Aabeddin realized his mistake and immediately updated the order to A.R. Shri Nikhlesh Kataria. Thus this appeal was filed on 18-06-2025 before ITAT and the delay was not on account of assessee’s fault but it was on account of omission on the part of an employee Shri Zainul Aabeddin. Hence, the assessee prayed to condone the delay as it was not intentional delay but omission on the part of the employee Shri Zainul Aabeddin. The assessee has filed an affidavit of Shri Zainul Aabeddin who deposed therein that there was no error on the part of the assesee but he was not aware of the time limits for filing of appeal and this mistake happened due to oversight only and without any malafide intention. In last, the ld. AR of the assessee thus prayed that this application may kindly be allowed by condoning the delay, taking a sympathetic view, in the interest of justice. 2.2 On the other hand, the ld. DR supported the order of the ld.CIT(A).
SHRI ARUN AGARWAL VS ITO, WARD 1(2), JAIPUR 2.3 We have heard both the parties and perused the materials available on record and from the submissions of the assessee, the Bench feels that the assessee was prevented with sufficient reason for not filling the appeal in time and therefore, we condone the delay considering the affidavit of the employee Shri Zainul Aabeddin and thus delay occurred due to omission on his part and not on the part of the assessee. Hence, the delay so made by the assessee in filing the appeal before us is condoned. 3.1 Apropos grounds of appeal (supra), it is noticed that the Ld. Addl. / JCIT(A), has passed an ex-parte order as the assessee had not furnished any written submission before him in spite of repeated opportunities and thus he confirmed the action of the AO by dismissing the appeal of the assessee. The relevant narration as made by the Ld. Addl. / JCIT(A) in his order is reproduced as under:- ‘’4.1 Grounds of Appeal No. 01 to 03: These grounds of appeal are against the addition of Rs. 18,37,784/- on account of unexplained expenditure in respect of import of machinery, actually not imported and addition of Rs.6,14,323/- on account of unexplained expenditure in respect of payment of custom duty, clearing charges and freight charges on import of machinery. 4.1.1 As stated above, no written submissions except those mentioned in statement of facts were furnished by the appellant in-spite of repeated opportunities. No evidence whatsoever has been filed in support of its contention.
SHRI ARUN AGARWAL VS ITO, WARD 1(2), JAIPUR 4.1.2 The reasons for making the addition by the Assessing Officer as per the assessment order is re-produced below:- [It is not required to repeat the AO order para 3 to 20.] 4.1.3 In the appellate proceedings, burden of proof lies on the appellant to prove that the facts and the findings of the AO are incorrect. As stated above, no documentary evidence whatsoever regarding the assertions made by appellant in his ground of appeal have been filed during the appellate proceedings to disprove the finding of the AO. Considering the fact and circumstances of the case, no infirmity is observed in the order of the AO. Thus there is no merit in the grounds of appeal taken by the appellant and accordingly the same is rejected / dismissed.
5. In lieu of the above, the appeal is dismissed.
3.2 During the course of hearing, the ld.AR of the assessee submitted that he may be provided one more opportunity to contest the case before the ld. CIT(A) with a view to adducing the submissions / documentary evidence as to the addition of Rs.18,37,784/- (on account of unexplained expenditure in respect of import of machinery, actually not imported) and addition of Rs.6,14,323/- (on account of unexplained expenditure in respect of payment of custom duty, clearing charges and freight charges on import of machinery) made by the AO. He further submitted that the ld. CIT(A) passed an ex-parte order and it is not disposed off on SHRI ARUN AGARWAL VS ITO, WARD 1(2), JAIPUR merit. Therefore, the appeal may kindly be restored to the file of the ld. CIT(A) for afresh adjudication. 3.3 On the other hand, the ld. DR did not controvert the submissions of the assessee. 3.4 We have heard both the parties and perused the materials available on record. From the assessment order it is noted that the AO made total addition of Rs.24,52,107/-in the hands of the assessee by observing as under:- ‘’18. In view of above facts and circumstances it is evident that the assessee has made import of machines and paid custom duty thereon. Even if, the assessee is not maintaining regular Books of Accounts and following the provisions of sec.44AD of the Income-tax Act, 1961, the assessee is liable to explain a transaction and the source thereof which has been made by him. During the course of assessment proceedings the assessee has failed to explain the above transaction by not submitting relevant details and source of expenditure incurred thereon. Moreover, the assessee has tried to manipulate the facts just to escape from the tax net. Thus, in view of above facts the following expenses made by the assessee on said import are treated as unexplained and accordingly added to the total income of the assessee:-
Import Value (Cost of machine): Rs. 18,37,784/- 2. Custom Duty on above import Rs. 4,83,802/- 3. Clearing Charges Rs. 56,521/- 4. Freight charges Rs. 74,000/- Total Rs.24,52,107/- SHRI ARUN AGARWAL VS ITO, WARD 1(2), JAIPUR 19. Accordingly, addition of Rs.24,52,107/- is hereby made to the total income on account of unexplained expenses incurred by the assessee. Since, the assessee has concealed the particulars of his income, Penalty proceeding under section 271(1)(c) of the Income tax Act, 1961 is hereby initiated.’’ In first appeal, the ld. CIT(A) has confirmed the action of the AO as the assessee had not adduced any written submission or evidence to counter the assessment order in spite of providing opportunities. It is an admitted fact that the assessee is ex-parte before the ld. CIT(A). Therefore, he could not put forth his defence. It was the bounded duty of the assessee to appear before the statutory authorities as and when called for. It is noticed that various opportunities were provided to the assessee for settling the issue but the assessee remained lethargic and unserious in pursuing his case. However, we are of the view that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Hence, the matter is restored to the file of the ld. CIT(A)to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus the appeal of the assessee is allowed for statistical purposes.