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Facts
The assessee's appeal before the ITAT was filed with a delay of 111 days. The delay was attributed to the use of an incorrect email address by the previous consultant, which prevented the assessee from receiving notices from the CIT(A). The ITAT condoned the delay, stating it was not intentional and for the interest of justice.
Held
The Tribunal noted that the assessee had not been cooperative during the appellate proceedings with the CIT(A), who had issued multiple notices. Despite the assessee's non-compliance, the Tribunal, invoking principles of natural justice, decided to set aside the CIT(A)'s order.
Key Issues
Whether the delay in filing the appeal should be condoned, and if the case should be remanded to the CIT(A) for fresh adjudication after the assessee failed to appear before the CIT(A) despite multiple notices.
Sections Cited
250, 68, 69A, 36(1)(iii), 40(a)(ia), 194A, 194C, 2(24), 36(1)(va), 253(3), 143(2), 142(1), 129
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Before: SHRI SANJAY GARG & 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 02.08.2024 by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2013-14.
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 Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.7,95,000/- on account of not proving genuineness loan disallowed u/s 68 of the Income-tax Act, 1961.
2. On the facts and in circumstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals) has erred in. confirming the 2013-14 Kishor Rameshbhai Mehta action of the Assessing Officer in making addition of Rs.25,000/- on account of capital introduced taxed u/s 68 of the Income-tax Act, 1961.
3. On the facts and in circumstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals) has erred in. confirming the action of the Assessing Officer in making addition of Rs.3,81,645/- on account of treated as unexplained money u/s 69A of the Income-tax Act, 1961 4. On the facts and in circumstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.1,36,574/- on account of repayment of loan treated as income.
5. On the facts and in circumstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Office in making addition of Rs.18,000/- on account of deemed interest on advances gifted u/s 36(1)(iii) of the Income-tax Act, 1961.
6. On the facts and in circumstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.4,42,627/- on account of non-deducted TDS on interest payment to finance company u/s 194A. Expenses disallowed u/s 40(a)(ia) of the Income-tax Act,1961.
7. On the facts and in circumstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Office in making addition of Rs.9,65,927/- on expenses u/s 194C. Expenses disallowed u/s 40(a)(ia) of the Income-tax Act, 1961.
8. On the facts and in circumstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Office in making addition of Rs.9,156/-.Late payment of EPF added u/s 2(24) r.w.s 36(1)(va) of the Income-tax Act, 1961.
9. On the facts and in circumstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.96,441/- disallowance of expenses on ad hoc basis.
10. On the facts and in circumstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals) has not offered adequate opportunities to hear, hence, the case may please be set aside and restored back to the CIT(A) or AO for sake of the interest of natural justice.
11. It is therefore prayed that above addition may please be deleted as learned Members of the Tribunal may deem it proper.
2013-14 Kishor Rameshbhai Mehta 12. Appellant craves leave to add, alter or delete any of the ground(s) either before or in the course of hearing of the appeal.”
The appeal filed by the assessee is barred by limitation by 81 days in terms of provisions of section 253(3) of the Act. The assessee has filed an affidavit giving reasons for delay in filing the appeal of appeal before the Tribunal. In the affidavit, the assessee stated that his consultant had filed physical appeal on 29.04.2016 and mentioned communication address in Form 35 against the assessment order. The NFAC issued notices on e-mail id, i.e., ‘shreeadityainfra@yahoo.com’, which had created by his earlier consultant. But his regular and current e-mail id is ‘rudriinfra@gmail.com’, so the assessee had not received any hearing notices and could not response to the order passed by the CIT(A). When it came to know about the order of CIT(A), he immediately contacted his Authorized Representative (AR) and filed the appeal before the Tribunal, hence, the delay of 111 days has occurred. The learned Authorized Representative (ld. AR) of the assessee submitted that the delay was not intentional and was beyond control of assessee. The ld. AR of the assessee requested to condone the delay the admit the appeal for hearing.
On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue opposed the prayer for condonation of delay. He, however, submitted that the Bench may decide the issue as it thinks fit.
We have heard both the parties on this preliminary issue and note that his old tax consultant had given his own e-mail address instead of assessee’s current e-mail address. Due to this, the assessee has not received any notices 2013-14 Kishor Rameshbhai Mehta issued by CIT(A). The delay was neither deliberate nor intentional. The reasons given in the affidavit for condonation of delay would constitute sufficient cause for the delay in filing this appeal. We, therefore, condone the delay and admit the appeal for hearing, in the interest of justice.
The facts of the case in brief are that the assessee had filed his return of income on 14.10.2013, declaring total income of Rs.19,79,930/-. The case was selected for scrutiny through CASS. Various notices u/s 143(2) and 142(1) r.w.s. 129 of the Act were issued and served upon the assessee. The assessee derived business income from his proprietorship concern M/s Shree Aditya Infrastructure and partnership firm M/s R. R. Construction. The Assessing Officer (in short, ‘AO’) observed that the assessee accepted total unsecured loans was at Rs.7,95,000/- (i.e., Rs.7,00,000/- from M/s R. R. Construction and Rs.95,000/- from Shri Vaman Mehta). The assessee was asked to furnish confirmation of accounts, documentary evidence to prove identity, genuineness of transaction and creditworthiness. In absence of documentary evidences, the AO treated the alleged loan of Rs.7,95,000/- remained unexplained. Thereafter, the AO issued a show cause notice dated 15.03.2016. In response, the assessee had submitted his reply, but neither any documentary evidences/explanation had furnished. The AO relied upon various decision, viz. (i) Sumati Dayal vs. CIT, 214 ITR 801 (SC), (ii) Kale Khan Mohammad Hanif vs. CIT, 50 ITR 1 (SC), (iii) Roshan Di Hatti vs. CIT, 107 ITR 938 (SC), (iv) CIT vs. M. Ganapathi Mudaliar, 53 ITR 623 (SC), (v) A. Govindarajulu Mudaliar vs. CIT, 34 ITR 807 (SC), (vi) Shankar Industries vs. CIT, 2013-14 Kishor Rameshbhai Mehta 114 ITR 689, (vii) Shreelekha Banerjee vs. CIT, 49 ITR 112, (viii) CIT vs. Devi Prasad Vishwanath Prasad, 72 ITR 194 (SC), (ix) Bomin P. Ltd. vs. CIT, 160 ITR 477 (Guj.), (x) ITO vs. Diza Holdings (P.) Ltd., 255 ITR 573 (Ker.) and (xi) Smt Iva Gogoi vs. CIT, 254 ITR 576 (Gau.). The AO made total additions/disallowances of Rs.28,70,370/-, which is mentioned at para (i) to (ix) of the assessment order. He assessed the total income of Rs.48,50,300/- against the returned income of Rs.19,79,930/-.
Aggrieved by the addition made by AO, the assessee filed appeal before the CIT(A). During the appellate proceedings, the appellant had not filed any written submission against the order of the AO. The CIT(A) had fixed the date of hearing on 13 occasions and notices were also delivered to the e-mail address on ‘shreeadityainfra@yahoo.com’. There was non-compliance to the notices issued by the CIT(A). The CIT(A) observed that the appellant is not interested in pursuing the appeal before the CIT(A). He relied upon the decision of Hon’ble Supreme Court in cases of B. N. Bhattacharjee and Another., 118 ITR 461 (SC) and decision of Hon’ble Bombay High Court in case of M/s Chemipol vs. UOI, in Excise Appeal No.62 of 2009. The CIT(A) also held that the burden of proof is always on the person who makes the claim. The CIT(A) upheld the addition made by AO and dismissed the appeal.
Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee submitted that during the appellant proceedings, the notices of hearing were 2013-14 Kishor Rameshbhai Mehta sent to the wrong e-mail address, i.e., ‘shreeadityainfra@yahoo.com’ instead of ‘rudriinfra@gmail.com’, therefore, the assessee could not receive notices issued by the CIT(A). He submitted that assessee could not represent his case before the CIT(A) and the order being ex parte order, stood vitiated on account of violation of principles of natural justice. He also submitted that the assessee could not appear before the CIT(A) due to circumstances beyond his control. Therefore, the ld. AR requested that one more opportunity should be given to the assessee to plead his case before the CIT(A).
We have heard both the parties and perused the materials available on record. It is an undisputed fact that assessee has been non-cooperative during the appellate proceedings. The CIT(A) issued notices 13 times from 10.11.2017 to 15.07.2024. Therefore, the assessee was certainly not alert and diligent in the appeal matter. The ld. AR submitted that the CIT(A) has passed the ex-part order. He submitted that appellant is ready with all details and, therefore, he requested one more opportunity to plead its case on merit. The ld. CIT-DR also did not object if the matter is set aside for fresh adjudication. We are of the view that the principles of natural justice would call for giving another opportunity of hearing to the assessee. However, repeated non-compliance would entail some cost on the assessee. Accordingly, we set aside the order of CIT(A) and remit the matter to the file of CIT(A) for fresh adjudication in accordance with law after granting adequate opportunity of hearing to the assessee subject to payment of cost of Rs.10,000/- (Rupees Ten Thousand only)