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Facts
The assessee, Mohan Kumar Jain, filed appeals against a best judgment assessment of Rs. 1,42,44,506/- for AY 2017-18, made under Section 147 read with Section 144, and a subsequent penalty order under Section 271AAC(1). The assessee's first appeal to the CIT(A) was dismissed due to a significant delay (210 days) in filing, which the CIT(A) deemed insufficiently explained despite reasons like receiving the order via speed post, illiteracy with digital media, and the demise of a tax consultant.
Held
The ITAT, noting that the assessee did not file an ITR and was non-responsive to AO's notices, allowed the assessee's request for a fresh opportunity. Both the quantum appeal and the penalty appeal were remanded to the CIT(A) for de novo adjudication. The assessee was directed to pay Rs. 10,000/- as cost to the Prime Minister National Relief Fund and make proper submissions to the CIT(A) without seeking adjournments. The CIT(A) was instructed to pass a fresh order uninfluenced by the previous decision.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal due to delay; whether the best judgment assessment under Section 147 read with Section 144 was valid; and the applicability of penalty under Section 271AAC(1) when the underlying assessment is in question, leading to a demand for remand for fresh consideration.
Sections Cited
147, 144, 148, 142(1), 271AAC(1), Rule 34 of ITAT Rules, 1963
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI TR SENTHIL KUMAR & SHRI B.M. BIYANI
आदेश / O R D E R
Per B.M. Biyani, A.M.:
These are two appeals filed by assessee as under:
15.02.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 14.03.2022 passed by learned ITO, NFAC, Delhi [“AO”] u/s 147 r.w.s. 144 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18.
Mohan Kumar Jain, Vidisha & 231/Ind/2024 - AY 2017-18 is a penalty-appeal directed against another order of first-appeal dated 16.02.2024 passed by CIT(A) which in turn arises out of penalty order dated 21.09.2022 passed by learned ITO,
Vidisha [“AO”] u/s 271AAC(1) of the Act for same AY 2017-18.
We first take up quantum-appeal and thereafter penalty-appeal.
Having heard learned Representatives of both sides, we find that the assessee filed first-appeal in this matter to CIT(A) on 25.11.2022 against assessment-order dated 14.03.2022 passed by AO. The assessee declared date of service of assessment-order as 28.09.2022 in Form No. 35 filed to CIT(A) and accordingly claimed that there was a delay of 28 days in filing first-appeal. The assessee also filed a delay-condonation request to CIT(A) stating that the assessment-order was received through speed-post but the appellant could not note down the date of service of order and also due to illiteracy of digital media and demise of tax consultant, the appeal could not be filed in time. However, the CIT(A) was not convinced with assessee’s submission. Ultimately, the CIT(A) concluded that there was a delay of 210 days in filing first-appeal which could not be explained by sufficient reason.
Accordingly, the CIT(A) dismissed assessee’s first appeal. Going further, we find from assessment-order that the assessee did not file any return for AY 2017-18 under consideration. The AO initiated proceedings u/s 147 through notice u/s 148 calling the assessee to file return of income. Thereafter, the Page 2 of 4
Mohan Kumar Jain, Vidisha & 231/Ind/2024 - AY 2017-18 AO also issued various statutory notices u/s 142(1) repeatedly and final show-cause notice alongwith draft assessment-order but the assessee neither filed any return nor made any response to the notices. Ultimately, the AO marked assessee’s case as ‘non-responsive’ in accordance with the SOP issued by CBDT and passed assessment-order to the best of his judgement u/s 147 r.w.s. 144 assessing total income at Rs. 1,42,44,506/- and also invoked various penalty provisions including section 271AAC(1).
During hearing before us, Ld. AR for assessee prayed that in the interest of justice, one more opportunity should be given to assessee to file better explanation to CIT(A) qua the delay in filing first-appeal as well as merits of the case and therefore this case must be remanded to CIT(A) for adjudication afresh. Per Contra, Ld. DR for revenue opposed the request of Ld. AR.
We have considered submissions of both sides and carefully perused the orders of lower-authorities. After a judicious consideration, we agreed during hearing to Ld. AR’s request for restoring this matter to CIT(A) subject to payment of Rs. 10,000/- by assessee as cost. We apprised Ld. AR of assessee that the assessee shall be directed to pay a cost of Rs. 10,000/- to Prime Minister National Relief Fund and submit receipt of same to CIT(A) during proceeding and we direct accordingly. Further, the assessee is also directed to make a proper submission before CIT(A) without seeking unnecessary adjournments. The CIT(A) is also directed to pass order afresh
Mohan Kumar Jain, Vidisha & 231/Ind/2024 - AY 2017-18 after considering assessee’s submissions without being influenced in any manner by his earlier order.
ITA No. 231/Ind/2024 – Penalty appeal:
This appeal involves penalty u/s 271AAC(1) which is dependent on outcome of quantum appeal. Since we have already remanded quantum appeal to CIT(A), this matter is also remanded to CIT(A) for adjudication afresh after considering outcome of quantum appeal and also considering submissions of assessee.
Resultantly, these appeals are allowed for statistical purpose.
Order pronounced by putting on notice board as per Rule 34 of ITAT Rules, 1963 on _10/01/2025.