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Facts
The assessee's ROI for AY 2010-11 was Rs. 7,89,970/-, but information suggested an undeclared long-term capital gain of Rs. 29,19,000/- from shares. The case was reopened u/s 147, and the AO made an addition u/s 68 r.w.s. 115BBE after the assessee repeatedly failed to respond to notices and an assessment u/s 144 was issued. The CIT(A) dismissed the first appeal due to non-compliance, and though the ITAT remanded it for a fresh opportunity, the assessee again failed to comply with multiple hearing notices from the CIT(A) in the second round.
Held
The ITAT upheld the CIT(A)'s decision to dismiss the appeal due to the assessee's persistent non-compliance and evasion of the legal process across two rounds of appeal, despite being given ample opportunities. The Tribunal emphasized that such deliberate attempts to prolong litigation should be curbed to maintain faith in the judicial process, finding no reason to interfere with the CIT(A)'s findings.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte due to the assessee's consistent non-compliance with hearing notices, even after a remand by the ITAT, and the validity of the addition made by the AO under Sections 68 read with 115BBE.
Sections Cited
147, 148, 142(1), 144, 68, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM
This appeal preferred by the assessee emanates from the order of the Ld. CIT(Appeals)/NFAC, Delhi dated 28.01.2025 for the assessment year 2010-11 as per the following grounds of appeal:
1. The ld. CIT(A) was not justified in confirming the addition of Rs.29,19,000/-without considering the facts and circumstances of the case.
2. The ld. AO was not justified in passing the order, which is bad in law, void ab initio, barred by limitation, illegal, contrary the facts and circumstances of the case, liable to be annulled.
3. The Ld. CIT(A) was not justified in confirming the order which is bad in law, void ab initio, barred by limitation, illegal, contrary the facts and circumstances of the case, liable to be annulled.
4. The ld. CIT(A) was not justified in ex-parte dismissing the appeal of the appellant, without deciding the appeal on merits, and that a fair and meaningful opportunity was not available to the appellant to present his case.”
2. The relevant facts emanating in this case have been well enshrined in the order of the Ld. CIT(Appeals)/NFAC from Para 2.1 to Para 2.3 which are extracted as follows: “2.1 The appellant is an individual and had filed her ROI for the AY 2010-11 on 14.03.2011 declaring total income of Rs. 7,89,970/-. As per information available, the appellant had earned long term capital gain on sale of shares of Konark Commerce Industries Ltd. The appellant had sold 30,000 shares of Konark Commerce Industries Ltd. in 19 counts amounting to Rs.29,19,000/-. Accordingly, the case was reopened as per the procedure u/s 147 of the Act and the notice u/s 148 of the Act was issued on 29.03.2017. During the assessment proceedings, the AO had issued notice u/s 142(1) of the Act dt. 26.10.2017 along-with questionnaire which was not responded. Then another notice u/s 142(1) alongwith relevant queries was issued on 08.11.2017. However, the appellant did not file any response again. The AO had also issued a final show-cause notice on 15.11.2017 but again it remained unattended by the appellant. Accordingly, the AO had passed the assessment order u/s.147 r.w.s. 144 dt. 08.12.2017 making addition of Rs.29,19,000/- as income from unexplained sources u/s.68 of the Act r.w.s. 115BBE of the Act. 2.2 Aggrieved from the said order the appellant had filed its first appeal before CIT(A) on 31.01.2018, which was subsequently migrated to faceless appeal. During the course of faceless appeal proceedings, 5 opportunities of hearing were provided to the appellant vide hearing notices dtd. 18.02.2021, 24.03.2021, 24.05.2021, 07.07.2021 & 04.08.2021. However, the appellant all along remained non-complaint before the CIT(A). Under these circumstances, the said appeal was dismissed vide order dated 16.11.2021. 2.3 Aggrieved against the order dtd. 16.11.2021 of CIT(A), NFAC, the appellant had filed her second appeal before Hon'ble ITAT, Indore with a delay of 269 days. On request of the appellant for condonation of the delay in filing the appeal on the ground of imprisonment of appellant's husband, Hon'ble ITAT, Indore condoned the delay and has set aside the matter to CIT(A), NFAC with direction to provide one more opportunity to the appellant who was also directed to file relevant and necessary documents and to cooperate with the CIT(A) to enable him to decide the appeal on merits of the case. Hon'ble ITAT in its order dtd.21.04.2023 has given following directions: - "8. We have given our thoughtful consideration and perused the materials available on record. After considering the submissions of the rival parties, we are of the considered opinion that in the interest of natural justice, the matter be set aside to the file of the Ld. CIT(A) to give one more opportunity to the assessee to make out its case by filing relevant and necessary documents before the Ld. CIT(A)-NFAC.
9. With these observations, the appeal filed by the assessee is allowed for statistical purpose. Needless to say, the assessee should cooperate with the Ld. CIT(A) to decide the appeal on merits of the case."
3. In these background, when the matter came up for hearing before the first appellate authority, the Ld.CIT(Appeals)/NFAC had issued several notices of hearing to the assessee but there was no compliance at all by the assessee as evident from Para 4 to 4.2 of the impugned order. For the sake of clarity, Para 4 to 4.2 of the Ld. CIT(Appeals)/NFAC order is culled out as follows: “4. NON-ATTENDANCE:- As discussed supra, the said appeal has been se: aside by the Hon'ble ITAT, Indore to provide one more opportunity to the appellant. Accordingly, a fresh notice of hearing was issued on 26.07.2024, fixing the date of hearing on or before 12.08.2024, but on the appointed date no submission was furnished. Subsequently, several opportunities of hearing were given to the appellant as narrated below:- Sr. Date of notice Date of hearing Particulars No. issued 1. 26.07.2024 12.08.2024 Notice issued, but no response from the appellant. 2. 20.08.2024 04.09.2024 Notice issued, but no response from the appellant. 3. 01.10.2024 16.10.2024 Notice issued, but no response from the appellant. 4. 13.12.2024 30.12.2024 Notice issued, but no response from the appellant. As can be seen from the above table the appellant was given ample opportunities by way of notices issued as narrated above. However, the appellant/AR has neither filed any submission nor any document or evidence which are in clear defiance of the directions issued by Hon'ble ITAT.
4.1. It is seen that the assessment year involved is A.Y. 2010-11 and the assessment order was passed on 08.12.2017 u/s.147/144 due to non-compliance of multiple notices issued by the AO. The CIT(A), NFAC in the first cycle of the appeal had disposed off the appeal in view of persistent non-compliance by the appellant even after allowing five opportunities of hearing. It is also noted that the second appeal was filed by the appellant before Hon'ble ITAT with a delay of 269 days though the same was condoned by Hon'ble Tribunal. Now, in the present set-aside appeal proceedings, which is second cycle of first appeal, the appellant is not coming forward with any response despite four opportunities allowed to her and despite the categorical directions of Hon'ble ITAT that too even after a period of about 21 months from the date of issue of such directions. In view of these facts and circumstances, the persistent non- compliant & non-cooperative attitude of the appellant is evident which doesn't inspire any confidence to keep the appeal pending for long. 4.2 Therefore in the given facts & circumstances, the set aside appeal proceedings is decided on the basis of documents that are available as part of the appeal memo. i.e. grounds of appeal, statement of facts, assessment order, order dtd. 16.11.2021 of CIT(A), NFAC and order dtd. 21.04.2023 of Hon'ble ITAT etc.”
This is the second round of litigation. In this second round of litigation, as evident from Paras 4, 4.1 and 4.2 the Ld. CIT(Appeals)/NFAC observed that in this round also, the assessee has not come forward with any response despite four opportunities to the assessee and despite categorical directions of the ITAT that too even a period of 21 months from the date of issue of such directions. The assessee has neither filed any submissions or evidence which are in clear defiance to the directions of the Tribunal in the first round while providing one more opportunity to the assessee. The assessee has been persistently non complier of the hearing notices and has always evaded the process of law. Therefore, the Ld. CIT(Appeals)/NFAC has dealt with the entire matter on merits and dismissed the appeal of the assessee.
I am of the considered view that as per the aforesaid facts and circumstances of the case, the assessee has always evaded the process of law and had tried to make mockery of the judicial process by repeatedly not complying with the hearing notices provided to the assessee. In the first round of appeal, the Tribunal was lenient and on the ground of natural justice, one opportunity was provided to the assessee and the matter was remanded to the file of the Ld. CIT(Appeals)/NFAC. However, unfortunately in the second round of appeal also before the Ld. CIT(Appeals)/NFAC, the assessee once again failed to comply with the hearing notices and thereby, closing all doors in respect of natural justice regarding the assessee. If any further leniency is provided that would go against the order of the Hon’ble Supreme Court in the case of Ishwarlal Mali Rathod Vs. Gopal and Ors., passed in Special Leave Petition (Civil) Nos. 14117-14118 of 2021, order dated 20.09.2021 wherein it has been held that judicial approach must be taken in such manner that there should not be any prolonged pendency of any litigation. Any deliberate attempt to prolong litigation due to malafide conduct of the assessee should be nipped in the bud itself so that the faith in the judicial process amongst the litigants is maintained.
In the present case, as had been examined afore-stated, the assessee has least bothered about the legal process and in spite of being granted two round of appeal, the assessee has failed to provide any response regarding hearing notices issued by the first appellate authority. That further on a careful consideration of the decision on merits by the Ld. CIT(Appeals)/NFAC, I do not find any reason to interfere with the findings of the Ld.CIT(Appeals)/NFAC and accordingly, the same is upheld.
The grounds of appeal raised by the assessee are dismissed.
In the result, appeal of the assessee is dismissed.
Order pronounced in open court on 16th day of April, 2025.