SANJAY VASANTRAO PATIL,SATANA vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - MALEGAON

There is a delay of 128 days in filing of this appeal before the Tribunal for which the assessee has filed an application along with affidavit explaining the reasons for such delay which are as under : “3. I hereby state that the said delay in filing the appeals is attributable to a reasonable cause as explained hereinbelow. I am residing in small town of Satana which is around 90 kms from Nashik. I am a senior citizen aged around 67 yea years and I was completely dependent on my Tax Consultant, Mr. Sunil Deshmukh, ITP for income tax appeal matters and compliance. I wish to state that the assessment order u/s 143(3) for A.Y.2015 16 was passed on 13.12.2017 and the appeal against the same was filed in January, 2018 by the ITP. Similarly, the assessment order u/s 147 for A.Y.2014-15 was passed on 22.11.2019 and the appeal against the same was filed in December, 2019 by the ITP. As informed to me by the tax consultant, at that point of time, the notices of hearing by the CIT(A) used to be issued in physical manner and the hearings also used to be conducted in physical manner. In the Form 35 filed for A.Y.2014 15 and 2015 16, the taxpayer was provided an option to choose whether he would like to receive the notices of hearing on email. In my case, the ITP had opted 'NO' in response to the said option given in Form 35. However, the filing of appeal in electronic

Although, a number of grounds have been raised by the assessee, however, these all relate to the ex-parte order of the Ld. CIT(A)/NFAC confirming the addition of Rs.51,47,000/- u/s 56(2)(vii)(b) of the Income Tax Act, 1961 (the “Act”) on account of transfer of immovable property and addition of Rs.1,85,00,000/- as cash credits u/s 68 of the Act made by the Ld. Assessing Officer (“AO”) vide his order dated 22.11.2019 passed u/s 143(3) r.w.s. 147 of the Act.

Briefly stated the facts are that the assessee is an individual, practicing as a Doctor at Satana, Nashik. For AY 2014-15, the assessee filed his e-return of income on 30.03.2015 declaring income of Rs.54,44,938/-. The case of the assessee was selected for limited scrutiny under CASS and the assessment was completed u/s 143(3) of the Act on 21.10.2016 at assessed income of Rs.56,69,840/- thereby making an addition of Rs.1,24,899/- on account of disallowance of interest expenses. Subsequently on review of case records by the Pr. CIT-1, Nashik the case of the assessee was reopened u/s 147 of the Act for AY 2014-15 by issuing of notice u/s 148 on 25.03.2019. In response thereto, the assessee filed his return of income on 06.05.2019 declaring income of Rs.56,69,837/-. Statutory notice(s) u/s 143(2) and 142(1) of the Act were issued and served upon the assessee for compliance. The case of the assessee was reopened to examine the issue relating to transfer of immovable property by the assessee during the relevant AY and unsecured loans obtained by the assessee from seven lenders during the relevant AY under consideration. The reply/explanation offered by the assessee was not found to be acceptable by the Ld. AO. He proceeded to complete the assessment by

Aggrieved, the assessee carried the matter before the Ld. CIT(A)/NFAC. Despite services of notice of hearing issued during the appellate proceedings from time to time there was non-compliance which resulted in an ex-parte decision by the Ld. CIT(A)/NFAC dismissing the appeal of the assessee for non-prosecution and endorsing the findings of the Ld. AO, against which the assessee is in appeal before the Tribunal.

We have heard the Ld. Representatives of the parties and perused the material available on record. Admittedly, there was non-compliance to the various notices issued by the Ld. CIT(A)/NFAC. The Ld. AR submitted that the non-compliance before the Ld. CIT(A)/NFAC was not intentional but resulted on account of certain unavoidable circumstances beyond the control of the assessee. The Ld. AR submitted that the Ld. CIT(A)/NFAC has dismissed the appeal of the assessee in limine without passing any speaking order adjudicating the grounds of appeal and the detailed contentions raised in the statements of facts. It is the submission of the Ld. Counsel for the assessee that the assessee has a strong case on merits and given an opportunity the assessee is in a position to explain and substantiate his case before the Ld. CIT(A)/NFAC by furnishing all the requisite supporting documents/evidence in support of his claim. The Ld. AR, therefore, urged that the matter may be sent back to the file of the Ld. CIT(A)/NFAC for adjudication afresh on merits after affording an opportunity of hearing to the assessee. The Ld. DR had no objection to the said proposition of the Ld. AR.

The appellate order reveals that the Ld. CIT(A) has applied the decision of the Hon’ble Supreme Court in CIT Vs. B.N. Bhattarcharjee and Another, 10 CTR 354 (SC). No doubt, the Ld. CIT(A)/NFAC may decide the appeal ex-parte where the assessee does not prosecute his appeal inspite of several opportunities. None-the-less, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereon and the reason for the decision. We observe that the Ld. CIT(A)/NFAC has passed the order in concurrence of the order of Ld. AO without himself

On the above facts and in the circumstances of the case, we deem it fit, in the interest of justice and fair play to set aside the order of Ld. CIT(A)/NFAC and restore the matter back to his file for denovo adjudication and pass speaking order on merits as per fact and law after allowing reasonable opportunity of being heard to the assessee. Needless to say, the assessee shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order in accordance with law. The assessee is also hereby directed to provide his active and latest email id to the Department for receiving notice(s) of hearing and remain vigilant in accessing and responding to the notices. We direct and order accordingly. The grounds raised by the assessee are thus allowed for statistical purposes.

In the result, the appeal of assessee is treated as allowed for statistical purpose.