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Facts
The appeals were filed against ex-parte orders passed by the CIT(A) and NFAC. There was a significant delay in filing one of the appeals due to the assessee's partners' lack of education, computer knowledge, and financial struggles after their business wound up. The assessee claimed the ex-parte orders were not known to them.
Held
The Tribunal condoned the delay in filing the appeal, noting sufficient cause. The Tribunal observed that the First Appellate Authority's orders were ex-parte due to non-compliance with notices, and assessments were made on a best judgment basis. While deprecating the assessee's non-chalant attitude, the Tribunal deemed it appropriate to restore the matter for fresh adjudication in the interest of justice.
Key Issues
Whether the delay in filing the appeal can be condoned, and if the ex-parte orders passed by the lower authorities should be set aside for fresh adjudication.
Sections Cited
250, 144, 144B
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Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA
आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: These appeals filed by the assessees are directed against two different orders of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 19.11.2025 & 30.09.2024 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Years are 2020-21 & 2018-19.
2. There is a delay of 394 days in filing the appeal in before the Tribunal. The assessee has filed an affidavit along with petition for condonation of delay stating therein the following reasons for belated filing of the appeal:- “The appellant firm submits that the partners of the firm are not well educated and are not well versed with computer knowledge. The firm hired a Chartered Accountant for filing of return and maintenance of books of accounts. All the electronic communications were sent to their address and the Chartered Accountant only had access to IT Password as well. Due to the loss faced by the appellant firm huge fees demanded by the Chartered Accountant could not be paid. Hence the chartered accountant has not properly followed up the Appeal filed. The order passed under section 250 of the Income Tax act that the appeal was dismissed itself was not known to the appellant.
The appellant firm’s business itself winded up their Moon Light Jewellery business in the 2021 due to unbearable loss. The appellant firm’s partners have filed cases against some parties for recovery of their gold who cheated the appellant due to the ongoing legal battle, financial struggle, hardship, lack of knowledge the appellant couldn’t pursue to their appeal efficiently before the CIT appeal. The delay for said period may be condoned and the appellant firm may be given an opportunity to represent their case.”
On perusal of the reasons stated, we are of the view that no latches can be attributed to the assessee as there is sufficient cause for belated filing of this appeal. Hence, we condone the delay and proceed to dispose off the appeal on merits.
At the very outset, we notice that the orders of First Appellate Authority (FAA) are ex-parte, since there was no compliance from the assessee to various notices issued from the office of the First Appellate Authority. Further, we also note that the assessments have been completed on best judgment basis u/s.144 r.w.s. 144B of the Act.
The Ld.AR for the assessees submitted that FAA had dismissed the appeals by passing ex-parte orders, on the ground that assessees did not submit any information nor filed any evidence in support of his claim nor complied with the various notices issued from time to time. The Ld.AR submitted that the assessee is an individual and a partner in the partnership firm ‘M/s. Moonlight Jewellers’. The assessee’s partnership firm business has faced huge loss and has become defunct and the business has been winded up and consequently, the assessee was not in a position to get the details with regard to the additions made. Hence, the assessee was seeking adjournment to the hearing notices issued from the office of the FAA during the appellate proceedings. However, the FAA had dismissed the appeals since the assessee has not produced the necessary evidences in support of its claim. The Ld.AR further submitted that the assessments have been also ex-parte since the assessee did not respond to the hearing notices issued by the AO.
The Ld.DR submitted that adequate opportunities were provided from the offices of the AO and the FAA and there is no violation of principles of natural justice. Therefore, it was prayed the appeal of the assessee may be dismissed.
We have heard rival submissions and perused the materials on record. The proceedings before the AO as well as the FAA were ex- parte, since the assessees did not respond to various notices issued except seeking adjournments. We strongly deprecate the nonchalant attitude of the assessee in not responding to the notices issued from the offices of the FAA and the AO. However, in the interest of justice and fair play, we are of the view that the matter ought to be restored to the files of the AO with a condition assessee & 4092/Chny/2025 :- 5 -: pays a cost of Rs.10,000/- each (Rupees ten thousand each) to be paid to Tamil Nadu State Legal Services Authority at the Hon’ble High Court of Madras. The amount of Rs.20,000/- shall be paid within a month’s time from the date of receipt of this order and assessee shall produce the receipt for the said payment before the AO. Accordingly, the matter is remitted to the files of the AO for fresh adjudication. The AO shall afford reasonable opportunity of hearing to the assessee. The assessee is directed to co-operate with the Revenue and shall not seek unnecessary adjournment. It is ordered accordingly.
In the result, the appeals filed by the assessee are allowed for statistical purposes.