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Facts
The assessee failed to file an Income Tax Return, leading to proceedings under Section 148, an assessment under Section 144 with additions under Sections 69A, 69C, and a penalty under Section 270A. The assessee filed appeals against these orders with a 150-day delay, citing post-COVID health issues, but the Ld.CIT(A) rejected the delay condonation and did not admit additional evidence due to the lack of a Rule 46A application.
Held
The Tribunal condoned the 150-day delay, acknowledging the assessee's reason as genuine, especially given that the original assessment was made ex-parte under Section 144. Both the quantum and penalty appeals were remitted back to the Ld.CIT(A) for fresh consideration on their merits, ensuring the assessee is provided a reasonable opportunity of being heard.
Key Issues
Whether the delay in filing appeals should be condoned; whether additional evidence can be admitted without a formal Rule 46A application; and the merits of quantum additions and penalty when the assessment is made ex-parte under Section 144.
Sections Cited
148, 144, 69A, 69C, 270A, Rule 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH : COCHIN
Before: SHRI INTURI RAMA RAO & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
These are the appeals filed by the assessee challenging the orders of the NFAC, Delhi dated 24/06/2024 and 25/06/2024 in respect of the A.Y. 2018-19. & 741/Coch/2 “A. The Appellate Authority went wrong in failing to condone the delay of 150 days in filing the appeal. B. The appellate authority failed to appreciate that no litigant would intentionally avail a statutory remedy belatedly so that it is detrimental to the interest. C. The Appellate Authority failed to appreciate that the Appellant has come on record that he is not a tech savy person and he depended on persons who access these mails. D. The Appellate authority failed to appreciate that in application for condonation of delay, he had a specific contention that the Appellant was down with serious post covid health conditions which prevented him regularly checking the mails/notices. E. The Appellate Authority failed to appreciate that as a result of covid, he could not regularly accessing the portal and emails which he was for the first time put to notice when the verification unit informed that the arrears of demand is payable by him. F. The Appellate Authority failed to appreciate that the Assessee has a good case to succeed on merits but was not advised to file an Application under Rule 46A for the introduction of documents for the first time before the Authorities. G. The Appellate Authority went wrong in rejecting the additional evidence for want of Rule 46A without putting notice to the Appellant to the same for want of a prayers under Rule 46A. H. It is therefore prayed that the Tribunal be pleased to condone the delay of days and remand the matter back to the Commissioner (Appeals) for de nov consideration. If orders as prayed for are not granted, the Petitioner would be put to irreparable loss and hardship. It is therefore accordingly prayed. For these and other grounds and documents to be submitted at the time of hearing and it is humbly prayed that the Tribunal be pleased to allow the appeal.”
& 741/Coch/2024 “A. The impugned order of the first Appellate Authority to the extent objected to hereunder is illegal, arbitrary and unauthorized. B. The Appellate authority failed to appreciate that the appeal against the quantum assessment was disposed off on the premise that there was no sufficient cause for condoning the delay of 150 days in filing the appeal and the same was not on merits. C. The Appellate Authority failed to appreciate that the levy of 200% of the tax as penalty under Sec.270A was highly exaggerated. During the course of appeal, the Appellant had produced documents to substantiate that the quantum assessment would not be sustained and that he was entitled to indulgence from the Appellate Authority. However for the reasons best known to the Appellate Authority, in the appeal, the same indulgence was not granted and the Appeal came to be disposed of on the premise that the quantum appeal being dismissed. D. The appellant says and submits that the appellant has filed an appeal against the order of the Appellate Authority. The quantum assessment also is pending before this Hon’ble Court. For these and other grounds and documents to be submitted at the time of hearing and it is humbly prayed that the Tribunal be pleased to allow the appeal.”
The brief facts of the case are that the assessee had not filed their return of income and based on the information received, proceedings u/s. 148 was initiated for which also the assessee had not filed their return of income and also not replied to any of the notices issued by the AO. Therefore the assessment was made u/s. 144 of the Act in which the AO had made addition u/s. 69A, 69C and estimated the short term capital gains. Subsequently, the AO also proposed to impose penalty u/s. 270A of the Act for which also the assessee had not filed their objections except the reply stating that he is about to file an appeal before the Ld.CIT(A). The AO confirmed the penalty since the period for filing the appeal was over and no plausible explanation was offered by the assessee. Thereafter, the assessee & 741/Coch/2024 filed an appeal against the quantum on 24/08/2023 and against the penalty on 26/09/2023. The quantum appeal was filed by the assessee with a delay of 150 days for which the assessee filed an application to condone the said delay and submitted that he was taking treatment for the post covid health issues and therefore he was not able to view the emails and attend the proceedings before the authorities. Later on, he came to know about the order and immediately the appeal was filed with a delay of 150 days. The assessee also along with the submissions had filed some additional documents but not filed any application under Rule 46A of the Rules. Even though the assessee filed an explanation for the said delay, the Ld.CIT(A) had not accepted the said reasons since the assessee had not filed any medical certificates and therefore rejected the said condonation application. The Ld.CIT(A) also observed that the assessee had not filed any applications under Rule 46A of the Rules in order to consider the said additional documents filed along with the written submissions and therefore on both the counts, i.e. delay in filing the appeal and also non-filing of any application under Rule 46A, the Ld.CIT(A) had rejected all the grounds raised by the assessee insofar as the quantum appeal is concerned. The Ld.CIT(A) had also confirmed the levy of penalty by extracting the provisions of 270A of the Act and also observed that the quantum appeal was decided against the assessee. As against the orders, the assessee is in appeals before this Tribunal.
At the time of hearing, the Ld.AR submitted that the reasons stated in the delay condonation application is a genuine reason and also contended that the assessment order is made u/s. 144 of the Act and therefore the Ld.CIT(A) ought to have condoned the said delay and decided the appeal on merits. The Ld.AR further submitted that the order of the Ld.CIT(A) on technical grounds is also not correct. Insofar as the penalty order, the Ld.AR submitted that the assessee having all the details to show that the additions made u/s. 69A and 69C are not correct and in such circumstances, the penalty would not be sustained. Finally, the Ld.AR & 741/Coch/2024 submitted that one more opportunity may be granted to decide the issue on merits.
The Ld.DR relied on the order of the lower authorities and submitted that the assessee had not responded to the AO both under the assessment proceedings as well as the penalty proceedings and therefore no leniency could be shown to the assessee.
We have heard the arguments of both sides and perused the materials available on record.
We have perused the assessment order in which the assessment was made u/s. 144 of the Act since the assessee had not responded to any of the notices. But before the Ld.CIT(A), while filing the written submissions, the assessee had submitted various documents in support of the grounds raised by him but unfortunately the Ld.CIT(A) had no occasion to consider the same since the appeal was dismissed on the ground of limitation. Further, the Ld.CIT(A) had not considered the said documents for the reason that no application under Rule 46A of the Rules was filed along with the additional documents. In such circumstances, the assessee was denied an opportunity to establish their case before the First Appellate Authority.
We have considered the reasons stated in the delay condonation application and the Ld.CIT(A) had not accepted the reasons as genuine since the assessee had not filed any medical certificates. By considering the fact that the assessment is made u/s. 144 of the Act, in order to render substantial justice, we are of the view that the reason adduced by the assessee seems to be genuine one and on that basis, we are accepting the said delay of 150 days in filing the appeal and set aside the order of the Ld.CIT(A) and remit the same to the file of the Ld.CIT(A) to decide the issue afresh on merits after granting a reasonable opportunity of being heard to the assessee.
& 741/Coch/2024 9. Since the quantum appeal filed by the assessee is remitted back to the Ld.CIT(A), the penalty order confirmed by the Ld.CIT(A) based on the result of the quantum appeal, is also remitted to the file of the Ld.CIT(A) and directed the Ld.CIT(A) to take up both the quantum appeal as well as the penalty appeal simultaneously and decide the issues afresh after considering the objections filed by the assessee.
In the result, both the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open court on 27th February, 2025.