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Facts
The assessee's appeal was dismissed by the CIT(A) for non-compliance with notices, leading to a delay in filing the appeal before the Tribunal. The assessee claimed not to have received the notices and sought condonation of delay, explaining the issue with communication addresses and opt-out from e-communication. The Assessing Officer had re-opened the assessment and made an addition on account of alleged bogus purchases.
Held
The Tribunal condoned the delay in filing the appeal subject to payment of costs, considering the principles of natural justice and substantial justice. The Tribunal set aside the order of CIT(A) and restored the issue back to the AO for fresh assessment, directing the assessee to be more vigilant and cooperative.
Key Issues
Whether the appeal delay should be condoned and if the CIT(A)'s ex-parte order was justified. Whether the reopening of assessment and addition for bogus purchases were valid.
Sections Cited
250, 147, 148, 144, 37, 253(3), 270A
AI-generated summary — verify with the full judgment below
Before: SHRI DINESH MOHAN SINHA & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), dated 31.01.2024 by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘CIT(A)’] for the assessment year (AY) 2018-19.
The grounds of appeal
raised by the assessee are as under: “1. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(A) has erred in passing ex-parte order without giving reasonable and sufficient opportunity of being heard.
2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in dismissing the appeal without passing speaking order.
3. On the facts and circumstances of the case as well as law on the subject, the learned assessing officer has erred in re-opening assessment u/s 147 by issuing notice u/s 148 of the I.T. Act, 1961.
2018-19 Siddeshwar Sizer 4. On the facts and circumstances of the case as well as law on the subject, the learned assessing officer has erred in making the addition of Rs. 40,96,053/-u/s. 37 of the Act on account of alleged bogus purchases.
5. It is therefore prayed that the matter may be set aside to the file of learned CIT(A) or assessing officer or the order passed u/s. 147 r.w.s. 144 of the Act may please be quashed and/or above addition made by the assessing officer may please be deleted.
6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”
The appeal filed by the assessee is late by 419 days in terms of provisions of section 253(3) of the Act. The assessee has filed affidavit giving reasons for delay in filing appeal before this Tribunal. In the affidavit, the assessee submitted that the e-mail Id, i.e., ‘aamfs6450q@mbzalavadiaco.com’ was mentioned in Form 35 and the appellant opted ‘no’ for sending notices/communication. In clause 17 of Form 35, the assessee mentioned address ‘203, Maitri Building, Surat City, Varachha Road S.O, Surat, Gujarat – 395006’. Despite opted ‘no’ for sending notice through e-mail, appellate order was not served physically at the said address. It came to know about the impugned order when penalty order u/s 270A of the Act was received by it. Thereafter, the assessee logged into the ITD portal and downloaded the same. The assessee consulted Shri Rasesh Shah, CA who advised to file appeal before the Tribunal. The assessee submitted that there is no delay in filing appeal if the date of downloading the order is considered to be the date of the service. He submitted that the delay was not intentional and it was prevented by sufficient and reasonable cause for not filing the appeal in time. The learned Authorized Representative (ld. AR) of the assessee requested the delay may be condoned in 2018-19 Siddeshwar Sizer the interests of justice and the assessee may be given one more opportunity to plead its case on merit.
On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue submitted that the Tribunal may decide the matter as it thinks fit.
We have considered the reasons given by the ld. AR and perused the accompanying documents along with the affidavit. Though the appellant was not alert, the delay in filing the appeal was not deliberate and intentional on the part of assessee. Moreover, the assessee was not going to be benefitted by filling appeal belatedly. It is now fairly settled that when technical consideration and cause of substantial justice are pitted against each other, the cause of substantial justice may be preferred. Hence, delays in filling appeal are condoned in the interest of justice subject to payment of cost of Rs.10,000/- (Rupees ten thousand only) by the assessee to the credit of the “Prime Minister’s National Relief Fund” within one month from receipt of this order.
The facts of the case in brief are that assessee filed return of income on 04.08.2018, declaring total income of Rs.5,28,140/-. The case was re-opened by issue of notice u/s 148 dated 31.03.2022. In response, the assessee filed return declaring the same income. After considering replies of the assessee, the Assessing Officer (in short, ‘AO’) held that purchases amounting to Rs.40,96,053/- from SK Enterprises was fictitious purchase and added the same to the total income.
2018-19 Siddeshwar Sizer 7. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). The CIT(A) issued 3 notices, which remained non-complied. Therefore, the CIT(A) observed that assessee is not serious in prosecuting the appeal. He, accordingly, dismissed the appeal of the appellant.
Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The ld. AR submitted that assessee could not filed the details and reply due to non-receipt of the notices issued by the CIT(A). he requested that the appellant should be given one more opportunity to plead its case on merit.
On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of lower authorities. He, however, submitted that the Bench may decide the matter as it thinks fit.
We have heard both the parties and perused the materials available on record. It is an undisputed fact that the assessee has been totally non-cooperative to the notices issued to him by the AO and the CIT(A). The ld. AR submitted that the appellant did not receive any notice issued by the CIT(A) and therefore, he requested that another opportunity may be given to it. Having regard to the larger cause of substantive justice, we are of the considered view that the assessee should not be denied adjudication on merits merely for the technical or procedural lapses, particularly when the matter has not been examined by the CIT(A) at all on factual and legal aspects. The principles of natural justice require that every litigant be given a meaningful opportunity to present its case on merit before the competent authority. In view of the facts discussed above and in the interests of