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Facts
The assessee, engaged in a computer information technology business, did not file a return of income as they believed their income to be non-taxable. The Assessing Officer (AO) reopened the assessment based on information regarding cash deposits in the bank and made an addition of Rs.17,94,160/- on account of unexplained money.
Held
The assessee appealed to the CIT(A) with a significant delay. The CIT(A) dismissed the appeal solely on the ground of delay without deciding the merits. The Tribunal observed that the CIT(A) had not decided the matter on merits as required by law and that substantial justice should be preferred over technical considerations.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal solely on grounds of delay without adjudicating the merits of the case, and whether the delay should be condoned.
Sections Cited
147, 148, 142(1), 143(2), 69A, 143, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH : NAGPUR
Before: SHRI V. DURGA RAO
ORDER PER V. DURGA RAO, J.M. : This appeal has been filed by the assessee against the order dated 12.02.2024, of the learned Addl./JCIT(A)-1, Jaipur, relating to assessment year 2013-2014. 2. Succinctly, the facts of the case are that the assessee is an individual and engaged on the sole proprietary business of computer information technology and has non-taxable income and, therefore, he had not filed return of income. However, the department was in 2 ITA.No.221/NAG./2024 possession of information that the assessee has involved in transactions vide information code TDS-194A, TDS-194C and AIR- 001 to the tune of Rs.30,574, Rs.8,900/- and Rs.35,88,320/-, totaling to Rs.36,27,794/- respectively. Therefore, the jurisdictional Assessing Officer reopened the assessment u/sec.147 of the Act by taking necessary approval from the Competent Authority and issued statutory notices to the assessee u/sec.148, 142(1) and 143(2) of the Act. In response to the said notices, the assessee furnished copy of ITR-V, copy of Form 26AS and copy of bank statement which are placed on record. The Assessing Officer noted that the assessee had deposited a sum of Rs.17,94,160/- with State Bank of India, Gadchiroli during the period from 01.04.2012 to 31.03.2013 and issued notice u/sec.142(1) calling the assessee to offer his explanation with respect to the above cash deposit. Since there were no response from the side of the assessee, the Assessing Officer made the addition of Rs.17,94,160/- on account of unexplained money u/sec.69A of the Act and completed the assessment u/sec.143 r.w.s.147 of the Act by determining the total income of the assessee at Rs.18,33,630/- vide order dated 20.12.2018.
3 ITA.No.221/NAG./2024 3. Aggrieved by the assessment order of the Assessing Officer, the assessee carried the matter in appeal before the learned CIT(A) with a delay of more than 09 months.
Learned Counsel for the Assessee during the course of hearing submitted that the Assessing Officer is not justified in making the impugned addition of Rs.17,94,160/- on account of cash deposit in the Bank. It was the submission of the Learned Counsel for the Assessee that he has furnished copy of bank statement and Form 26AS. However, the Assessing Officer without considering the documents placed on record, made the impugned addition of Rs.17,94,160/- as unexplained money u/sec.69A of the Act. He submitted that when the appeal has been carried-out before the learned CIT(A), he explained that the delay could not be filed in-time due to illness and he paid tax of Rs.1,40,574/- against the order passed and pleaded that the delay may please be condoned and decide the matter in issue on merits. However, the learned CIT(A) has not satisfied with the explanation of the assessee and dismissed the appeal of assessee without condoning the delay. He submitted that since the learned CIT(A) has not decided the appeal on merits as contemplated u/sec.250(6) of the Act, the matter may be restored 4 ITA.No.221/NAG./2024 back to the file of learned CIT(A) with a direction to condone the delay and pass orders as per law by giving due opportunity of being heard to the assessee.
The Learned DR on the other hand, relied on the orders of the lower authorities and strongly opposed for condonation of delay. He submitted that the assessee has taken a conscious and considered decision in not filing the appeal before the learned CIT(A) and, therefore, the learned CIT(A) has rightly confirmed the order of the Assessing Officer. He assessee that the order of the learned CIT(A) be confirmed.
I have heard the arguments of both the sides and perused the material on record. I find that the learned CIT(A) has dismissed the appeal of assessee on the ground of delay of more than 09 months in filing the appeal before him but had not decided the appeal on merits. The Learned Counsel for the Assessee has prima facie pointed out that the learned CIT(A) has not decided the matter in issue on merits as contemplated u/sec.250(6) of the Act, according to which, the learned CIT(A) has to give reasons for decision and adjudication thereof, even if the assessee did not appear before him. In this factual backdrop, I note that it is the settled position of law by the Hon’ble 5 ITA.No.221/NAG./2024 Supreme Court in the case of Collector, Land Acquisition vs., MST Katiji [1987] 167 ITR 471 (SC) wherein it has been held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. It has further been held that refusing to condone delay can result in a meritorious matter being thrown-out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. In view of the above decision of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs., MST Katiji (supra); considering the totality of the facts and circumstances of the case and in the larger interest of substantial justice, the learned CIT(A) is directed to condone the delay and decide the appeal on merits as per fact and law. Needless to say, it is for the assessee to plead and prove his case before the learned CIT(A) by furnishing all the requisite documents as called for in consequential proceedings. I hold and direct accordingly.