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Facts
The assessee, an agriculturist, did not file an Income Tax Return for AY 2011-12. Information revealed the sale of an immovable property, the capital gain from which was not declared. The AO initiated reassessment proceedings, but the assessee failed to respond to notices, leading to an ex-parte assessment where long-term capital gain was added under Section 68 read with Section 115BBE. The CIT(A) also dismissed the assessee's appeal ex-parte as notices were sent to an incorrect email ID due to a spelling error.
Held
The Tribunal condoned the 281-day delay in filing the appeal, recognizing the communication error (email ID spelling mistake). It held that the ex-parte orders by both the AO and CIT(A) violated the principles of natural justice. Therefore, the matter was remanded back to the Assessing Officer to provide the assessee a fresh opportunity to be heard and decide the issues on merits in accordance with the law.
Key Issues
Condonation of delay in filing appeal due to communication error in email ID; Ex-parte assessment and appellate orders by lower authorities; Violation of natural justice; Addition of long-term capital gain under Section 68 read with Section 115BBE.
Sections Cited
144, 147, 148, 142(1), 250, 68, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 1332/JPR/2024
fu/kZkj.k o"kZ@Assessment Years : 2011-12 Sh. Mukesh cuke The ITO, Chhadel Khurd, Village Chandel Vs. Ward-2(1), Kalam, Tehsil-Chaksu, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: BCYPM1614B vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Ashish Khandelwal, C.A.(Thr. V.C.) jktLo dh vksj ls@ Revenue by : Sh. Gautam Singh Choudhary, JCIT-Sr. DR a lquokbZ dh rkjh[k@ Date of Hearing : 19/02/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 01 /04/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM By way of present appeal, the assessee challenges the order of National Faceless Appeal Centre, Delhi [for short CIT(A)] dated 20.11.2023. The dispute relates to the assessment year 2011-12. Ld. CIT(A) passed that the order because the assessee challenged the order of assessment of income passed u/s 144 w.r.s. 147 of the Income Tax Act, 1961 (for short “Act”) dated 11.12.2018 passed by ITO, Ward-2(1), Jaipur [ for short AO] before him.
Sh. Mukesh vs. ITO 2.1 At the outset of hearing, the Bench observed that there is delay of 281 days in filing of the appeal by the assessee for which the ld. AR of the assessee relied upon the content recorded in an affidavit for condonation of delay. The affidavit reads as under:-
“I, Mukesh S/o Shri Kanhaiya Lal Gurjar, resident of Chandel Khurd, Village Kalam, Tehsil Chaksu, Jaipur hereby affirm as under:-
1. 1. That deponent is all me agriculturist, illiterate and appellant of the case.
2. That the appellant filed appealbefore the CIT(A), NFAC against the assessment order of the ITO, Ward-2(1), Jaipur on 12.01.2019 where in the e-mail ID was mentioned as ashishkhandelwal_ca@yahoo.com on the face of form 35.
3. That the appellate order u/s 250 of the Income Tax Act was passed ex-parte by CIT(A) on 20.11.2023, however the same was served to some non-existing email ID i.e. ashishkandelwal ca@yahoo.com.
4. That it is not in knowledge of the appellant that from where CIT(A) incarnated the erroneous email ID and moreover all appeal fixation notices were also communicated to non-existing erroneous email ID which triggered the ex-parte disposal of appeal for no fault of the appellant.
5. The factum of ex-parte appellate order came to the knowledge of the appellant only on 16.10.2024 when the counsel logged on to portal as a regular exercise and thus the date of communication/knowledge of appellate order have been construed as date of service of order in form No. 36.”
2.2 The ld. AR of the assessee appearing in this appeal submitted that the assessee is serious on the duties and the delay of 281 days is because of the reason that ld. CIT(A)
Sh. Mukesh vs. ITO communicated the notices to erroneous e-mail ID which triggered the ex-parte disposal resulted in delay. The reasons advanced for this delay is apparent as from the supporting evidence filed by the assessee that while writing spelling of Khandelwal it was written as Kandelwal. That email spelling were different and therefore, the assessee has sufficient reason of non appearance before the ld. CIT(A) and that is why even the appeal was delayed. Considering the facts of the case on hand and decision of the apex court in the case of Collector, Land & Acquisition Vs. Mst. Katiji& Others 167 ITR 471(SC) wherein it was directed the other courts to consider the liberal approach in deciding the petition for condonation as the assessee is not going to achieve any benefit for the delay in fact the assessee is at risk. 2.3. While hearing, the ld. DR objected to assessee’s application for condonation of delay and prayed that the reasons advanced are not sufficient and reasonable cause but at the same time he did not object the contention raised in the affidavit.
2.4 We have heard both the parties and perused the materials available on record. The Bench noted that the reasons advanced by assessee for condonation of delay of 281 days are sufficient to condone the delay which has merit as there was mistake in making Sh. Mukesh vs. ITO the correct spelling as the email were sent on ashishkandelwal instead of ashishkhandelwal. Thus, we concur with the submission of the assessee and condone the delay of 281 days in filing the appeal by the assessee in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee was prevented by sufficient cause.
In this appeal, the assessee has raised following grounds: - “1. That the Id CIT (A) has grossly erred in law as well in facts of the case in dismissing the appeal owing to non-compliance without effecting proper service of appeal fixation notice, in as much all notices were sent to non-existing email address.
2. That the lower authorities have erred in law as well in facts in making/confirming addition of Rs. 10,48,366/- as long-term capital gain on account of sale of immovable property without allowing the benefit of cost of acquisition.
3. That the lower authorities have erred in law as well in facts of the case bringing alleged long term capital gain under ambit of section 68 and calculated tax on higher rate as specified u/s 115BBF without understanding appreciating that the provisions of section 115BBE were introduced into statute book w.e.f. Α.Υ. 2013-14.
4. That the lower authorities have erred in law as well in facts in providing reasonable opportunity of being heard to the appellant thereby violated fundamental principle of natural justice.
4. The brief facts of the case are that the assessee is an individual has not filed his return of income for the assessment year 2011-12. In this case, notice issued u/s 148 of the I. T. Act, 1961 on dated 25.03.2018 after recording the reasons for reopening the case & getting necessary approval by the Pr. Commissioner of Income Tax-1. Jaipur, which was duly served upon the assessee through speed post. In compliance with this notice, assessee not filed its e-ROI. Again, notice issued u/s 142(1) dated 24.08.2018 for compliance of notice issued u/s 148 and for query mentioned therein and was duly served at the last known address of the assessee through Inspector of the ld. AO. As per inspector' report that address of the assessee was not found, hence could not be served notice to the assessee. Notices issued at the last known address available with office of the ld. AO could not be served. During entire assessment proceedings, the assessee not made any compliance against the notice issued u/s 148 and the notice issued u/s 142(1) for submission of 4.1 As there was an information from the office of the DIT (I&CI), Jaipur vide letter no. DIT(I&CI)/ITO(Hqrs)/[PR/2017-18/813 dated 26.10.2017 where in it was communicated that the assessee has sold immovable property at Room No. F6 First Floor, House No. 329, Lalaniyon Ka Chowk Inside Gopal Ji Ka Rasta, Jaipur for sale consideration of Rs 9,50,000/-, the DLC rate was of Rs.10,48,366/ The assessee has not shown the above transaction of sale of immovable properties in the ITR. The assessee has not considered DLC value of Rs.10,48,366/-for computation of capital gain. Accordingly notice u/s. 148 of the Act issued but the assessee did not response to the notice u/s. 148 and thereafter notice u/s. 142(1). During entire assessment proceedings, assessee has failed to disclosed income on sale of immovable property at Rs. 10,48,366/- therefore the same was treated the undisclosed income of the year u/s 68 r.w.s 115BBE of the Act.
5. Feeling dissatisfied with the order of assessment the assessee preferred the appeal before the ld. CIT(A). The Ld. CIT(A) observed that various notices were issued on 20.12.2019, Sh. Mukesh vs. ITO 30.03.2021, 20.04.2021, 12.04.2023 & 04.05.2023 and requiring the assessee to file the details in support of grounds taken by the assessee. Since the assessee has not complied with the notices issued the ld. CIT(A) dismissed the appeal of the assessee ex- parte order. The extract of the finding of the ld. CIT(A) is reproduced as under:-
“I have gone through the facts of the case. For reasons best known to him, the appellant had not complied at all to any of the notices/letters issued by the AO during the course of hearing. In such an instance, the AO had no other option but to pass an ex-parte penalty order. Notice issued to her by this 20.12.2019,30.03.2021,20.04.2021, 12.04.2023,04.05.2023 have yielded no replies. All I have on record filed by the appellant is the Form 35, where the appellant submits that the AO's action is bad in law, and that he objects to the addition. There are no other supportings, and none have been filed even after serving of the notices referred to above. In such a situation, it is obviously difficult for me to accept the appellant's submission, since he has provided me with absolutely no documents. The number of opportunities granted to the appellant are innumerable, and yet, he chose to remain silent. APPEAL IS DISMISSED.”
Sh. Mukesh vs. ITO 6. During the course of hearing, the ld. AR for the assessee prayed that the Ld. CIT(A) and the AO has passed the ex-parte order and the assessee was not provided adequate opportunity of being heard. The reasons for non compliance before the ld. CIT(A) is discussed with dealing with he condonation of appeal before us and that is why even the compliance to the notice of the ld. CIT(A) was not made. Thus, the assessee may be provided one more opportunity to advance his arguments/submissions before the ld. AO in the interest of equity and justice.
Per contra, Ld. DR objected to the prayer of the assessee and submitted that even the assessee did not represent case before the ld. AO and therefore, in that case the Bench feels the matter may be restored to the file of the Assessing Officer.
We have heard both the parties and perused the materials available on record. The bench noted from the order of ld. CIT(A) that the appeal of the assessee was dismissed by the ld. CIT (A) for want of non-prosecution of the appeal on the various notice issued by him, but the assessee did not appear or filed any reply to the notices. The bench noted whatever notices which were issued should have to be addressed on the email id Sh. Mukesh vs. ITO containing ashishkhandelwal_ca@yahoo.com but by mistake the same were made at kandelwal and that is why the assessee has not responded to that notice. The email id was written correctly in Form no.
Thus, the bench feels that in this case the principles of natural justice is violated and same being the soul of an administration of justice and need to be adhered to in order to make the order as a just and fair order. We are also of the view that lis between the parties must be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Thus, the bench noted that considering the overall facts of the case the assessee be given a chance to represent their case before the ld. AO as the order passed in both proceedings are ex-parte. Considering that peculiar aspect of the matter we deem it fit to remand the matter to the file of the ld. AO who will consider the factual aspect of the matter and decide the issue after providing sufficient opportunity to the assessee and decided the issue in accordance with the law. However, the assessee will not seek any adjournment on frivolous ground and remain cooperative during proceedings before the ld. AO.
Sh. Mukesh vs. ITO 9. Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. AO independently in accordance with law. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 01/04/2025.