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Facts
The assessee's appeal against an assessment order for AY 2014-15, which significantly enhanced income with additions under various sections, was dismissed ex-parte by the CIT(A)/NFAC for non-compliance to hearing notices. The assessee contended that notices were not received or accessed during the COVID-19 pandemic, and being technologically unaware, relied on a CA whose office was also closed, preventing interaction and compliance.
Held
The Tribunal found the ex-parte dismissal by CIT(A)/NFAC unjustified, set aside the order, and remanded the matter back to the CIT(A) for fresh adjudication. It directed the CIT(A) to provide a reasonable opportunity of hearing and the assessee to comply with notices and submit documents without seeking adjournments.
Key Issues
1. Whether the CIT(A) erred in dismissing the appeal ex-parte for non-compliance to hearing notices, considering the COVID-19 period and the assessee's reliance on a CA for e-filing. 2. Whether the CIT(A) violated Section 250(6) and principles of natural justice by not deciding the appeal on merits.
Sections Cited
143(2), 142(1), 143(3), 56(2)(vii), 250, 250(6)
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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 12.09.2023 passed by Ld. CIT(A)/NFAC for the assessment year 2014-15.
There is delay in filing of the present appeal. We are satisfied with the reasons mentioned in the application for condonation of delay duly supported by an affidavit that the applicant was prevented by sufficient cause for not filing the appeal within the prescribed time limit. After hearing Ld. DR, we condone the delay and proceed to adjudicate the appeal.
3. The appellant has raised the following grounds of appeal :-
1. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, NFAC, Delhi erred dismissing the appeal of the appellant for non-compliance to the notices of hearing issued by him during the appellant proceedings on 15/10/2019, 08/11/2019, 06/12/2019, 05/03/2020 and 15/01/2021 ignoring and without appreciating the facts that such notices had not been received/accessed by the appellant and/or by his CA & Accountant who had the access in assessee's e-filing portal having password and ID with him and such notices could not be accessed and replied due to closure of the offices for Covid-19 Pandemic during the said period and the declaration of Lockdown by the Government of India time and again during the said period and therefore question of compliance to the notices issued by the NFAC did not arise. The appellant therefore so passed ignoring the said facts and for non-compliance to the notices thereby dismissing the appeal of the appellant being arbitrary, illegal and bad-in-law be quashed/set-aside.
2. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, NFAC, Delhi erred dismissing the appeal of the appellant for non-compliance to the notices of hearing issued by him during the appellant proceedings on 15/10/2019, 08/11/2019, 06/12/2019, 05/03/2020 and 15/01/2021 ignoring and without appreciating the facts that no such notices had been received by the appellant or by his CA/Accountant due to closure of the office of the CA/Accountant during the Covid-19 Pandemic in the said period of issuing notices and therefore the appellant had no occasion to interact with the CA/Accountant and comply to the notices even if the same had been received in appellant's e- filing portal where in the accessed to such portal was only with the said CA/Accountant since the appellant was totally ignorant about the operation of e-filing portal and was fully dependent on him for any response to any notice for income tax proceedings. The appellate order therefore so passed by the Ld. CIT(A), NFAC ignoring and without appreciating the above facts being arbitrary, illegal and bad-in-law be quashed/set-aside.
On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, NFAC, Delhi erred in dismissing the appeal of the appellant for non-compliance to the hearing notices issued u/s. 250 of the Act by him during the appellate proceedings merely quoting to the entire Assessment Order in the appellate order passed by him with grounds of appeal
and statement of facts raised by the appellant without any application mind or giving any observation and findings in respect of the grounds of appeal raised by the appellant and without point wise discussion and analysis in the appellate order in violation of the provisions of section 250(6) of the IT Act, 1961 wherein it was categorically stated that the appeal was required to be disposed of "in writing and shall state the points for determination, the decision there on and the reason for the decision". The appellate order therefore so passed by the Ld. CIT(A), NFAC dismissing the appeal in violation of the said section being arbitrary, illegal and bad-in- law be quashed/set-aside.
4. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, NFAC, Delhi erred in dismissing the appeal of the appellant thereby merely referring to the statement of facts and grounds of appeal raised by the appellant in Form No. 35 in the said appellate order without addressing the issues raised in the grounds by the appellant and giving his specific findings as to why such grounds and contentions in the grounds raised were not acceptable to the CIT(A) and therefore such order passed by merely quoting the entire Assessment Order in appellate order in violation of principles of natural justice and further in violation of section 250(6) of the Act being arbitrary, illegal and bad-in- law be quashed/set-aside.
5. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, NFAC, Delhi erred in dismissing the appeal of the appellant and consequently confirming the various arbitrary additions made by the Ld. Assessing Officer in the Assessment Order ignoring and without properly appreciating the detailed submission made with documentary evidences during such assessment proceedings thereby only quoting the entire Assessment Order in the appellate order passed by him when such additions made by the Assessing Officer were not factually and legally justified in view of the facts of the case of the appellant. The appellate order therefore so passed thereby mechanically following the Assessment Order by the Ld. CIT(A), NFAC being arbitrary, illegal and bad-in-law be quashed/set- aside.
6. The appellant craves leave to add, alter, delete, amend, withdraw, modify, change or substitute any ground or grounds of appeal or to add any new ground or grounds of appeal during or before the hearing of the appeal.”
4. Facts of the case, in brief, are that the assessee is an individual and deriving income from agricultural activities and income from house property and has furnished its return of income on 17.07.2014 declaring total income of Rs.2,52,000/-. The case was selected for scrutiny under CASS and statutory notices u/s 143(2) and 142(1) respectively were issued to the assessee. In response to the above notices, the assessee made part compliance and after considering the submissions of the assessee, the Assessing Officer completed the assessment proceedings and vide order dated 29.12.2016 passed u/s 143(3) of the IT Act determined total income at Rs.4,14,76,460/- as against the income returned by the assessee at Rs.2,52,000/- only. The above assessed income includes addition of Rs.61,30,280/- u/s 56(2)(vii) of the IT Act and addition of Rs.76,00,000/- on account of unexplained investments and also an addition of Rs.2,74,94,181/- on account of capital gain on development/joint venture agreement.
Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. Since the assessee remained absent, Ld. CIT(A)/NFAC dismissed the appeal for want of prosecution.
It is the above order against which the assessee is in appeal before this Tribunal.
Ld. AR appearing from the side of the assessee submitted before us that the ex-part order passed by Ld. CIT(A)/NFAC is not justified. Ld. AR further submitted that initially the hearing notices were issued by Ld. CIT(A)/NFAC during covid period i.e. between 05.03.2020 and 15.01.2021 and final notice of hearing was issued for 08.09.2023. Ld. AR submitted that somehow the notice could not be seen by the counsel of the assessee and the hearing notice remained un-complied. Ld. AR submitted that the counsel of the assessee was having access to the income tax portal of the assessee and the assessee was not well versed with technology, therefore, in the absence of knowledge of notice of hearing the assessee could not reply before Ld. CIT(A)/NFAC which resulted in ex-parte order. Accordingly, Ld. AR requested before the Bench to set-aside the order passed by Ld. CIT(A)/NFAC and further requested to provide one final opportunity to appear before Ld. CIT(A)/NFAC so that the assessee can substantiate the grounds of appeal
8. Ld. DR appearing from the side of the Revenue relied on the orders passed by the subordinate authorities and requested to confirm the same.
9. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee for want of prosecution without going into merits of the case. It is the sole prayer of the counsel of the assessee that if one final opportunity is provided to the assessee, he is in a position to substantiate grounds of appeal before Ld. CIT(A)/NFAC. Considering the totality of the facts of the case and in the interest of justice and without going into merits of the case, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and remand the matter back to his file with a direction to decide the appeal afresh and as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard and produce relevant