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Facts
The assessee's assessment for A.Y. 2016-17 was completed ex-parte under Section 144, estimating business income, due to non-compliance with notices under Sections 143(2) and 142(1). The assessee's subsequent appeal to the CIT(A) was dismissed in-limine due to a significant delay of 1795 days, which the CIT(A) found to lack bonafides.
Held
The Tribunal condoned the delay in filing the appeal before the CIT(A), excluding the COVID-19 period as per Supreme Court directions, finding the remaining delay of 1080 days to be bonafide based on the detailed affidavit provided by the assessee. Consequently, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for a decision on merits, ensuring a reasonable opportunity of being heard for the assessee.
Key Issues
Condonation of significant delay in filing an appeal before the CIT(A) due to various personal and professional circumstances, and the validity of an ex-parte assessment under Section 144.
Sections Cited
144, 143(2), 142(1), 131, 133A, 179, 154, 156
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Visakhapatnam “SMC” Bench, Visakhapatnam
Before: Shri V.Durga Rao, Hon’ble & Shri Balakrishnan.S., Hon’ble
आदेश / ORDER
PER V.DURGA RAO, J.M. This appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals) [“CIT(A)”], National Faceless Appeal Centre, Delhi, dated 16.01.2024 for the A.Y.2016-17, which in turn arises from the order passed by the AO u/s 144 of the Income Tax Act, 1961 (for short “the Act”) dated 29.12.2018 for the A.Y.2016-17.
The brief facts of the case are that the assessee company deriving income from business of carrying out contract works filed its return of income for the A.Y.2016-17 on 25.04.2017 admitting Rs.Nil income. The case was selected for scrutiny and notice u/s 143(2) and 142(1) of the Act were issued and served on the assessee on 28.09.2018 and 15.12.2018 respectively, but the assessee failed to comply with the notices. Accordingly, the AO completed the assessment u/s 144 of the Act by estimating business income @12.5% on gross receipts of Rs.71,55,735/- and arrived at Rs.8,94,467/-.
Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A), but with the delay of 1795 days. The CIT(A) dismissed the appeal filed by the assessee in-limine, holding that there is lack of bonafides and inaction or negligence on the part of the appellant relying solely on the chartered accountant and even when the chartered accountant had expired on 22.07.2019, the appellant has not established that he appointed a new one and that even the new chartered accountant failed to do his duty. Therefore, held that the overall delay in filing the appeal is not condonable.
Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal :
1. 5. At the outset, the Ld.AR drawn our attention to the affidavit filed by the assessee and submitted that there is miscommunication between the chartered accountant and the assessee as the chartered accountant has given his email id, to which all notices and other correspondence was delivered. Besides, the assessee was facing family dispute since 2015, also faced challenge of several civil, criminal cases and was also attending to his ailing mother, who expired on 23.11.2023. The Ld.AR further submitted that the assessee came to know of the ex-parte order passed by the department only when the notice u/s 179 of the Act dated 01.03.2022 was served at the residential address of the assessee. The assessee tried to get back the impounded books of accounts and other documentary evidence to enable him to file the appeal. Thus, the Ld.AR submitted that the delay in filing the appeal was neither intentional nor willful, but was bonafide for the reasons mentioned in the affidavit. He, therefore, pleaded to condone the delay and remit the matter back to the file of the Ld.CIT(A) to decide the appeal on merits.
6. Per contra, the Ld.DR submitted that the Ld.CIT(A) was justified in dismissing the appeal of the assessee ex-parte as the assessee was given sufficient opportunity to present his case, but the assessee failed to avail the same. She, therefore, pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal filed by the assessee.
We have heard both the parties, perused the material on record and gone through the orders of the authorities below. It is evident that the assessee had preferred appeal before the Ld.CIT(A) with the delay of 1795 days for the reasons mentioned in the affidavit filed by the assessee, as extracted below :
Going by the affidavit filed by the assessee, we find that there are justifiable reasons for the assessee to file the appeal belatedly before the Ld.CIT(A) after excluding the period of 715 days from 15.03.2020 to 28.02.2022 due to COVID as per the directions of the Hon’ble Supreme Court in M.A.No.665/2021 dated 23.03.2020 and 21/2022 dated 10.01.2022. In view of the foregoing facts and circumstances of the case, we are inclined to condone the delay of 1080 days after excluding the covid period (1795-715=1080 days). We therefore, set aside the order passed by the Ld.CIT(A) and remit the matter back to the file of the CIT(A) to decide the matter on merits, after providing reasonable opportunity of being heard to the assessee. The assessee is also directed to adhere to the notices issued by the department and cooperate during the appeal proceedings.
In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the Open Court on 09th June, 2025.