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Facts
The assessee is aggrieved by the order of the CIT(A) confirming additions made by the AO under Section 144 r.w.s. 263 of the Income Tax Act. The assessee's first appeal was dismissed by the CIT(A) for non-prosecution, as notices were not responded to. The assessee claims the delay in filing the present appeal was due to an incorrect email ID being used for communication.
Held
The Tribunal held that the ex-parte orders passed by the lower authorities were not on merits and were passed without proper communication with the assessee, which is not permitted in law. The Tribunal found that the assessee had shown sufficient cause for the delay.
Key Issues
Whether the ex-parte orders passed by the AO and CIT(A) were valid when proper communication was not established with the assessee, and whether the delay in filing the appeal should be condoned.
Sections Cited
253, 144, 263, 246A, 250, 68A, 36(1)(va), 40(a)(i), 142(1), 271B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
the order bearing Number ITBA/NFAC/S/250/2023- 24/1055181952(1) dated 17.08.2023 passed by the Ld. CIT(A) u/s 250 of the Act which is hereinafter referred to as the “Impugned order”. The relevant Assessment Year is 2014-15
Page 1 of 9 and the corresponding previous year period is from 01.04.2013 to 31.03.2014.
FACTUAL MATRIX 2.1 That as and by way of an assessment order made u/s 144 r.w.s. 263 of the Act, total income of the assessee exigible to tax was assessed and computed at Rs.80,29,452/-. That the aforesaid assessment order bears No.ITBA/COM/F/17/2019- 20/1021390870(1) and is dated 30.11.2019 which is hereinafter referred to as “impugned assessment order”.
2.2 That the assessee being aggrieved by the aforesaid “impugned assessment order” prefers first appeal u/s 246A of the Act before Ld. CIT(A) who by the “impugned order” has dismissed the appeal of the assessee on grounds stated therein.
Core ground was as under:
“5. Decision I have carefully gone through the facts of the case. Moreover, all notices were duly served upon the appellant through email. The appellant opted not to respond the above notices for the reason best known to him. No documents were produced before me in support of his GOA or to rebut the assessment order. In view of the above facts, it is clear that the appellant is not interested in prosecuting the present appeal and therefore in absence of any rebuttal of the assessment order, the assessment order is CONFIRMED and accordingly the appeal is dismissed. Hence Ground of appeal raised by the appellant is dismissed.
6. In result, the assessment order is CONFIRMED”.
Page 2 of 9 2.3 That the assessee being aggrieved by the “impugned order” has preferred the instant second appeal before this Tribunal and has raised following grounds of appeal in Form No.36 against the “impugned order” which are as under:-
“1. On the facts and in the circumstances of the case and in law and without prejudice to other grounds, the order passed by Hon. CI T(A) may please be set aside as the Hon. CIT (A)erred by confirming additions of RS.2272456.00(Mr.A.K.Gupta 849572.00 and Mr.H.K. Gupta 1422884.00) u/s68A by ignoring nature of receipts in their individual hands amount given to Company which was due to sale of their Long Term Equity 1 Shares executed in Mumbai Stock Exchange by paying STT on these transaction backed by Contact Notes as ruled out by Hon. ITAT Mumbai Bench in case of ITR 149 case No 298 that share transactions executed through Stock Exchange backed by contact note should not be considered as bogus unless concrete evidence. Furthermore statement of demat holding as on 31-03-202 and 31-03-2013 to verify holding period is submitted for consideration.
On the facts and in the circumstances of the case and in law and without prejudice to other grounds, the order passed by Hon. CI T(A) may please be set aside as the Hon CIT (A) erred by confirming additions of RS. 1265116.00 (FDRs of RS.609586.00 and RS.655530.00) u/s 68A by ignoring that it was credited to the company's OD Loan a/c due to reason that this FDR was in individual name but lien was marked by banker as it stand as collateral security in a/c. Further more company applied afresh to Lender for converting it to loan a/c which was sanctioned and a fresh loan agreement to that effect was executed. How ever it was repaid on 31-03-2014.
Hon CIT (A) erred by confirming additions of RS.1900000.00(1000000.00 on 01-10-2013 by bank transfer and 900000.00 on 07-05-2013by cheque no 607640) u/s 68A by ignoring that these were given by H. K. Gupta out of it is bank a/c of SB a/c holding that amount in it due to realization of Loan Repayment before these dates. Further more company applied afresh to Lender
Page 3 of 9 for converting it to loan a/e which was sanctioned and a fresh loan agreement to that effect was executed. How ever it was repaid on 28- 02-2014 by cheque no 641574 on 28-02-2014 31-03-2014 by cheque no.604608.
On the facts and in the circumstances of the case and in law and without prejudice to other grounds, the order passed by Hon. CI T(A) may please be set aside as the Hon CIT (A) erred by confirming additions of RS. 127544.00(50-428.00by Mr.A. K. Gupta and RS.77116.00 by Mr. H. K. Gupta by bank transfer/Cheque) u/s 68A by ignoring that these both lenders were having other source of income in addition to salary income of 25000.00 PM each received and deposited in bank in SB a/c.
On the facts and in the circumstances of the case and in law and without prejudice to other grounds, the order passed by Hon. CI T(A) may please be set aside as the Hon CIT (A)erred in 5 confirming the imposition of penal y u/s271B for belated obtaining and furnishing Tax Audit Report ignoring fact that due date was extended by CBDT vide its circular no 255 dated 14-08-2014.
On the facts and in the circumstances of the case and in law and without prejudice to other grounds, the order passed by Hon. CI T(A) may please be set aside as the Hon CIT (A) erred in passing order leaving unsettled issues raised through Grounds of Appeal, their reason(s) for allowing/rejecting them as per section 250(6). Appellant hereby request to consider additional grounds of appeal evidences given during hearing and alteration, deletion, modification in grounds of appeal given here in above.
7. On the facts and in the circumstances of the case and in law and without prejudice to other grounds, the order passed by Hon. CI T (A)may please be set aside as the CIT (A)erred by confirming order without verifying mail id used for communication which was other than given in para 17 of the Form No.35 which was reason for delayed submission of appeal and an affidavit requesting to condone delay is attached herewith.
8. On the facts and in the circumstances of the case and in law and without prejudice to other grounds, the order passed by Hon. CI T(A) may please be set aside as the Hon. CIT (A)erred 8 confirming order by verifying reason of not using postal address Rs. 0 given in Form No 35 at para 17 for communication i.e. failed to use other mode of communication as prescribed mode of communication.
9. On the facts and in the circumstances of the case and in law and without prejudice to other grounds, the order passed by Hon. C1 T(A)
Page 4 of 9 may please be set aside as the Hon. CIT (A)erred in confirming additions of RS.739326.00 u/s36(1)(va)by not considering Circular No.128 issued by PF Commissioner regarding days of grace allowed in depositing employee contribution after due date but within days of grace allowed. Also Hon. ITAT Mumbai Bench in case of M/S GODAVERI MANNER SHEKARI SAKHAR KERNATAKA ruled that benefits of days of grace for delayed depositions of employee PF contributions after due date but within days of grace be allowed to employer.
On the facts and in the circumstances of the case and in law and without prejudice to other grounds, the order passed by Hon. CI T(A) may please be set aside as the Hon. CIT (A)erred by confirming additions of RS.480000.00 u/s40(a)(i)by considering amount reported in para 23(for payments u/s40A(2)(b)) considering it as reported by Tax Auditor in para 34(a),34(b) and 34 (c) of Form 3CA-CD and asked for disallowance due to non-compliances of provisions for TDS and disallowed amount u/s40(a)(i)same. Whereas Tax Auditor reported NIL in these paras”.
Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 08.07.2025 when the Ld. AR for and on behalf of the assessee appeared before us and contended that the registry has pointed out delay of 531 days in preferring the instant appeal. That the “impugned order” is dated 17.08.2023. Appeal was filed on 14.04.2025. The date of receipt of “impugned order” is 17.08.2023. Hence there is a delay beyond 60 days in preferring the second appeal. A condonation of delay application is placed on record along with an affidavit in support of the same. It is stated therein that the assessee received a letter dated
Page 5 of 9 27.01.2025 from the Department of Income Tax calling upon them to pay sum of Rs.29,33,800/- due on account of tax + interest. That after that assessee contacted their CA who after login on the portal found that the Ld. CIT(A) had passed the “impugned order” on profiled e-mail Id Scpinagda@gmail.com and had disallowed the 1st appeal due to non response to the notice(s) u/s 250 of the Act and that “impugned assessment order” was thus confirmed. The assessee was surprised and shocked as in Form 35 the e-mail Id given was different for communication i.e. jain.1404@gmail.com in column No.17.
The CA was requested to file an appeal and hence delay occured.
An affidavit is placed on record. Per contra Ld. DR has left it to the wisdom of this Tribunal to take an appropriate decision according to law. We therefore hold that assessee has shown sufficient cause and delay is condoned. Appeal is admitted and taken up for hearing.
3.2 The Ld. AR then submitted that the “impugned assessment order” is u/s 144 of the Act. The Ld. A.O had issued notice(s) whereby time for the compliances was too short.
Notice u/s 142(1) of the Act was dated 06.11.2019 for Page 6 of 9 13.11.2019. Again time was given till 26.11.2019 and thereafter “impugned assessment order” was passed on 30.11.2019. In so far as “impugned order” is concerned it was submitted that no notice(s) ever came to the assessee at the e-mail address provided in the Form 35 at the column 17. Hence the nature of “impugned order” is ex-parte. Per contra Ld. DR appearing for the revenue has fairly submitted that it would be in the fitness of things under the facts and circumstances narrated that the matter be relegated back to the file of Ld. A.O.
Observations,findings & conclusions.
4.1 We now have to decide the legality, validity and the proprietary of the “Impugned Order” basis records of the case and rival contentions canvassed before us.
4.2 We have carefully perused the records of the case.
4.3 We basis records of the case and after hearing and upon examining the contentions are of the considered opinion that the “impugned assessment order” as well as “impugned order” are not on merits. We are of the considered view that the income of the assessee is required to be computed and assessed according to law by following due process. In the instant case at both the Page 7 of 9 levels below unfortunately this has not happened. The e-mail address of the assessee in Form No.35 was jain1404@gmail.com on which no notice(s) was received. Ex-parte order came to be passed behind back of the assessee which is not permitted in law. In these facts and circumstances we set aside the “impugned order” and remand the case back to the file of Ld.
A.O for fresh adjudication and adjudgment on denovo basis with a direction to the assessee to furnish correct e-mail for communication purposes.
Order 5.1 The “impugned order” is set aside as and by way of remand back to the file of Ld. A.O for fresh adjudication and adjudgment on denovo basis with direction as aforesaid.
5.2 In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in open court on 17.07.2025.
Sd/- Sd/- (B.M. BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER Indore िदनांक / Dated : 17/07/2025 Dev/Sr. PS
Page 8 of 9 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File
By order COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore
Page 9 of 9