SHANKAR RAMKUMAR MUNDRA,SURAT vs. NFAC, DELHI, DELHI

Brief facts Brief facts of the case are that the assessee is an individual and has filed his Return of Income for the AY 2019-20 on 31.10.2019 declaring the total income at Rs Nil after set-off the profit of Rs.13,08,141/- against the carry forward loss of AY 2017-18 & 2018-19, During the year under consideration, the assessee was engaged in a business of wholesale and retail trade of textiles under the trade name "Vinayak Fabrics' Assessee maintains complete books of account which were duly audited under the provisions of section 44AB of the Act. The assessment order was passed u/s. 147 r.w.s. 144 of the Act on 18.03.2024 after making addition of Rs 6,36,79,147/- u/s. 68 of the Act on account of alleged bogus sale transactions. The assessee was not able to comply with the notices issued in the course of assessment proceedings as the assessee was not aware about the assessment proceedings initiated on ITBA portal since the primary and secondary email id i.e., pawansethia200@gmail.com & pawansethia20@gmail.com is of the Chartered Accountant who failed to communicate the same to the assessee. Further, the assessee was dependent on his Chartered Accountant for the compliance of notices. In the course of penalty proceedings, show cause notice u/s 272A(1)(d) was issued on 18.03.2024 and 07.06 2024 requiring the assessee to show 2 (A.Y.19-20) Shankar R Mundra cause as to why order imposing penalty should not be passed for non- compliance of notice u/s 142(1) dated 08.09.2023 A letter was issued on 19.06.2024 requiring the assessee to furnish a reply to the said notices. In response to the said notice, assessee filed reply vide letter dated 08.07.2024 requesting to drop the penalty proceedings. However, the AO didn't consider the reply of the assessee and passed penalty order after levying penalty u/s 272A(1)(d) to the tune of Rs. 10,000/- for non- compliance of notice dated 08.09.2023.

Aggrieved by the order dated 17.09.2024 of the AO, the assessee filed an appeal before Ld. CIT(A). The said appeal was dismissed with following observation:

It is a well-settled principle that "vigilantibus non dormientibus jura subveniunt"- the law assists those who are vigilant, not those who sleep over their rights. Given the appellant's consistent failure to act within prescribed timelines and the absence of a justified cause for delay, I conclude that there is no sufficient cause for non- compliance.

In view of the above considerations, I find no grounds to interfere with the AO's order. The penalty, therefore, stands confirmed.

In the result, the appeal of the assessee is hereby dismissed”

During the course of argument, the Ld. AR of the assessee submitted the assessee could not comply with the notices because the CA of the assessee did not inform to the assessee about proceedings going on before the Ld. CIT(A) and the assessee was having no knowledge about proceedings. That the Ld. AR prayed for an opportunity to explain the case before the Lower Authority.

On the other hand, Ld. Sr-DR for the revenue, relied upon the order of the Ld. CIT(A) and do not object to the prayer of the Ld. AR.

We have heard both the parties and perused the material available on record and also perused the order of Ld. CIT(A). We note that several notices have been issued by the Ld. CIT(A), but there was no compliance to the notice by the assessee, because the CA of the assessee did not inform to the assessee about notices. The Ld. CIT(A) disposed off the appeal by an ex-parte order without adjudication on merit. In this situation the assessee remained unheard. After considering the facts and circumstances of the case, in the interest of justice, we are of the view that an opportunity should be given to the assessee to present his case before the Lower Authority. We remand the matter back to 4

In the result, the appeal of the assessee is allowed, for statistical purposes.