AVDHESH,PATEL NAGAR vs. INCOME TAX OFFICER, DHAR

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ITA 802/IND/2024Status: DisposedITAT Indore23 June 2025AY 2017-1812 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal, finding that the assessee had "sufficient cause" for the delay, citing the principle of preferring substantial justice over technical considerations as per Collector, Land Acquisition Vs Mst. Katiji and others. The Tribunal noted that the assessee admitted to holding two PANs (CDSPR2994D and BOZPA9769J) and had filed a return of income for AY 2017-18 under PAN CDSPR2994D, disclosing an income of Rs. 3,04,290/-. The assessment order, however, was passed under PAN BOZPA9769J, assessing a deposit of Rs. 12,56,000/- without awareness of the other PAN. The Tribunal held that piecemeal assessments of the same individual under different PANs are not permissible, and the total income must be assessed holistically. Considering the ex-parte nature of the lower authorities' orders, the admission of holding two PANs, and the new evidence of the bank certificate, the Tribunal found the case fit for remand to the AO for fresh adjudication. The delay was condoned subject to the assessee paying a cost of Rs. 7,000/- to the Prime Minister National Relief Fund. The AO was directed to provide a fresh opportunity of hearing, and the assessee was directed to participate diligently.

What were the facts?

The assessee, Avdhesh, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the order of the Commissioner of Income-Tax (Appeals) (NFAC), Delhi, dated 14.09.2023. This order upheld the assessment order dated 06.12.2019 passed by the Income Tax Officer (AO), Dhar, under Section 144 of the Income-tax Act, 1961, for Assessment Year 2017-18. The appeal was filed on 11.11.2024, which was approximately one year after the CIT(A)'s order, leading to a delay. The assessee contended that the delay was due to a lack of knowledge of tax laws and technological systems, and that notices from the CIT(A) were sent to an incorrect email address. The AO had made an addition of Rs. 12,56,000/- for unexplained deposits in a bank account, which the assessee claims does not belong to him.

What were the issues?

1. Whether the appeal filed by the assessee is within the prescribed time limit, or if the delay in filing the appeal should be condoned on the grounds of sufficient cause, as per Section 253(5) of the Income-tax Act, 1961? - Assessee's Contention: The delay was caused by the assessee's lack of knowledge of tax laws and technological systems, and notices from the CIT(A) were sent to the wrong email address, leading to an ex-parte order. The assessee claims no lethargy or mala fide intention and seeks condonation in the interest of justice, relying on the principle of substantial justice over technical considerations as laid down in Collector, Land Acquisition Vs Mst. Katiji and others. - Revenue's Contention: The Revenue left the issue of condonation of delay to the wisdom of the bench without objection. 2. Whether the assessment order passed under Section 144 of the Income-tax Act, 1961, by the AO and upheld by the CIT(A) is sustainable, particularly concerning the addition of Rs. 12,56,000/- for unexplained deposits in a bank account that the assessee claims does not belong to him? - Assessee's Contention: The addition of Rs. 12,56,000/- is unsustainable as the bank account in question does not belong to the assessee. The assessee also submitted a bank certificate as new evidence and requested a remand to the AO for fresh adjudication, especially since the assessment order was ex-parte and the assessee possesses two PANs. - Revenue's Contention: The Revenue agreed that the case is suitable for remand to the AO due to the ex-parte assessment order, the filing of new evidence by the assessee, and the assessee admitting to possessing two PANs.

Which sections of the Income-tax Act were involved?

Section 144,Section 69A,Section 253(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI

For Appellant: Shri Milind Wadhwani, AR
For Respondent: Shri Ashish Porwal, Sr. DR
Hearing: 19.06.2025Pronounced: 23.06.2025

आदेश/ O R D E R

Per B.M. Biyani, A.M.:

1.

Feeling aggrieved by order of first appeal dated 14.09.2023 passed by learned Commissioner of Income-Tax (Appeals), NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 06.12.2019 passed by learned ITO, Dhar [“AO”] u/s 144 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18, the assessee has filed this appeal on following grounds:

“1. On the facts and in the circumstances of the case the Ld. C.I.T.(Appeals) (NFAC) erred in upholding the assessment order passed by ld. A.O. by making assessment u/s 144 of Act, without considering the fact that Page 1 of 12

2.

On the facts and in the circumstances of the case, the Ld. C.I.T.(Appeals)

(NFAC) erred in upholding the assessment order passed by ld. A.O. by making addition of Rs. 12,56,000/- without considering his SCN dt.

16.09.2019 issued for Rs. 3,90,000/-.

3.

On the facts and in the circumstances of the case, the Ld. C.I.T.(Appeals)

(NFAC) erred in upholding the non-speaking order passed by Id. A.O. on the basis of information available on record about filing of return of income, nature and source of receipt of money and how income is taxable u/s 69A of the Income Tax Act, 1961.”

2. The registry has informed that the present appeal has been filed on 11.11.2024 against impugned order dated 14.09.2023 of first-appeal passed by Ld. CIT(A), therefore it is delayed by about 1 year and hence time-barred.

Ld. AR for assessee firstly submitted that the assessee has filed an application for condonation of delay supported by a notarized affidavit. The affidavit so filed is scanned and re-produced below:

Page 4 of 12 having rural background and does not have sufficient knowledge of tax laws and technological systems (Para 2). That while conducting proceedings of first-appeal, Ld. CIT(A) served initial three notices of hearing dated 11.01.2021, 28.07.2023 and 10.08.2023 to the email id: mahendramittalandco@gmail.com which belonged to assessee’s previous counsel who never informed to assessee (Para 5, 6, 7). That, although the Ld.

CIT(A) served fourth and last notice of hearing dated 06.09.2023 to assessee’s email id: awadeshrathore1994@gmail.com besides serving on previous counsel but this last notice required assessee to submit reply by 11.09.2023 and since the assessee does not check-up his email a/c regularly, the email could not be noticed and reply could not be filed to CIT(A) which has led the CIT(A) to pass ex-parte order on 14.09.2023 of first-appeal (Para 8, 9, 10). Ld. AR submitted that neither the notices of hearing nor the impugned order passed by CIT(A) was physically served upon assessee. He submitted that the impugned order came to the knowledge of assessee only on 25.09.2024 when the recovery steps were taken by department through inspector (Para 11). That prior to 25.09.2024, the assessee had no knowledge of impugned order having been passed by CIT(A) as ex-parte (Para 13). Immediately, the assessee paid fee on 11.11.2024 and filed present appeal on 11.11.2024. This has only resulted in delayed filing of appeal. He very humbly submitted that there is no lethargy, negligence, mala fide intention or ulterior motive of assessee in Page 5 of 12 of delay. He submitted that the sole reason of delay is as explained by assessee in the affidavit and therefore the delay should be condoned having regard to the reason explained and in the interest of justice.

3. Ld. AR next submitted that that the AO has, in the assessment framed, made an addition of Rs. 12,56,000/- for unexplained deposit in “Narmada Jhabua Grameen Bank, Kukshi – A/c No. 601130110000019” but the said a/c belongs to some other person and not to assessee which is evident from following certificate issued by bank to assessee:

Page 7 of 12 impugned bank a/c picked by AO for making addition does not belong to assessee. Therefore, the case of assessee has a strong merit. He made a further request that since the assessment-order passed by AO is u/s 144 and the assessee is filed a new evidence in the form of bank certificate (as re-produced above), the present matter may be remanded to the file of AO for adjudication afresh.

4.

Ld. DR for Revenue left the issue of condonation of delay for the wisdom of bench without raising any objection. He, however, agreed that the present case is suitable for remanding back to the file of AO since (i) the assessment-order is ex-parte u/s 144, (ii) the assessee has filed a new evidence by way of bank-certificate, and (iii) the assessee is admitting to possess two PANs.

5.

We have considered the explanation advanced by assessee in the solemnized affidavit and in absence of any contrary fact or material on record, the assessee is found to have a “sufficient cause” for delay in filing present appeal as narrated above. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if Page 8 of 12 It is also a settled position by Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting a justice-oriented approach.

6.

So far as merit of the case is concerned, we find that the assessee has admitted in Para 3 of affidavit that he is holding two PANs: CDSPR2994D and BOZPA9769J. The assessee has further admitted to have filed income- tax return of AY 2017-18 under consideration on 16.03.2018 in PAN:

CDSPR2994D, the following document being acknowledgement of return is filed in Paper-Book according to which the assessee disclosed a total income of Rs. 3,04,290/- and paid tax liability of Rs. 470/- in PAN: CDSPR2994D:

Page 10 of 12 accounts in another PAN: BOZPA9769J. We also take note that the impugned assessment-order has been passed by AO in PAN: BOZPA9769J and the AO has only assessed the deposit in bank a/c without being aware of other PAN: CDSPR2994D held by assessee. Thus, the impugned addition of Rs. 12,56,000/- has been assessed in PAN: BOZPA9769J and the income of Rs. 3,04,290/- belonging to very same person/assessee has been separately assessed in PAN: CDSPR2994D. Since the assessee-individual is one and same, there cannot be piecemeal assessments, the ‘total income’ of assessee has to be assessed under the provisions of Income-tax Act, 1961.

Further, the assessee has also filed a new evidence of bank-certificate as discussed earlier. Therefore, looking to all these aspects, the present case is fit for remand to the file of AO for a vehement adjudication.

7.

We, however, note that the assessee has not participated before both of the lower-authorities due to which the lower authorities had to pass ex- parte orders. Further, the assessee has filed return in one PAN and claiming to hold bank a/cs in other PAN. Because of these lapses which are attributable to assessee, the present case has to be remanded to the file of AO for a fresh adjudication. Further, as noted earlier, there is a delay of about 1 year in filing present appeal. Therefore, taking into account these

Page 11 of 12 file of AO subject to payment of a cost of Rs. 7,000/- by assessee to “Prime Minister National Relief Fund” and submission of proof before AO. Needless to mention that the AO shall give necessary opportunity of hearing to assessee and pass an appropriate order. The assessee is also directed to ensure participation in the hearings as may be fixed by AO and do not seek unnecessary adjournments failing which the AO shall be at liberty to pass appropriate order in accordance with law. Ordered accordingly.

8.

Resultantly, this appeal is allowed for statistical purpose.

Order pronounced in open court on 23/06/2025

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