INDERJIT SINGH ROSHA,NEW DELHI vs. ITO, WARD- 38(4), NEW DELHI

This appeal by the assessee has been directed against the order of Ld.CIT(A)-25, Delhi dated 29.05.2017 for AY 2009-10.

Briefly facts of the case are that the assessee filed a return of income on 25.11.2009 by declaring income of Rs.1,45,400/-. The AO issued several statutory notices for completion of the assessment, however, none has been complied with. The AO noted as per AIR information received, the assessee has deposited Rs.19,60,091/- in cash in a saving bank account of Indian Bank. In the absence of any explanation filed by the assessee, the AO passed an ex- parte order u/s 144 of the Income Tax Act, 1961 (in short “Act”) dated 30.12.2011 making addition of Rs.19,60,091/- on account of unexplained cash deposits. The assessee filed the appeal before Ld.CIT(A), challenging the ex- parte order as well as the addition on merit. The assessee in Form No.35 (appeal paper) mentioned on 27.06.2012 as the date of the service of the relevant notice of demand. The appeal was, however, filed before Ld.CIT(A) on 14.12.2015. Thus, the appeal of the assessee was time barred before Ld.CIT(A). Ld.CIT(A) as regards ex-parte assessment order after discussing the issue of service of the notice upon the assessee at the old address and others, found that the claim of the assessee that he did not receive any notice during the assessment proceedings are clearly false. The assessee also moved application under Rule 46A of Income Tax Rules, 1962 (in short “Rules”) before Ld.CIT(A) for admission of the additional evidences. However, Ld.CIT(A) noted that the conditions of Rule 46A are not satisfied, therefore, application for admission of additional evidences was also rejected. The addition on merit was confirmed in the absence of any evidence on record. Ld.CIT(A) also noted that since the appeal is time barred, the assessee filed application dated 14..12.2015 requesting for condonation of delay in filing the appeal. Ld.CIT(A) noted that the assessee has been unable to show any sufficient cause for not presenting the appeal within the period of limitation , therefore, the appeal was dismissed.

I have heard Ld. Representatives of both the parties and perused the material available on record. The assessee in the present appeal has challenged the ex-parte assessment order u/s 144 of the Act and ex-parte assessment order be bad in law without serving notice u/s 143(2) of the Act, addition of Rs.19,60,091/- on merits, rejection of application for admission of additional evidences under Rule 46A of the Rules and that the assessee was prevented by sufficient cause in not presenting the appeal before Ld.CIT(A) within the period of limitation.

The AO in the assessment order noted that notice u/s 143(2) alongwith notice u/s 142(1) of the Act have been issued to the assessee but none have been complied with. The assessee has been ultimately served by affixture. The assessee, however, submitted before Ld.CIT(A) that he did not receive any notice during the assessment proceedings. The plea of the assessee was rejected by Ld.CIT(A). The assessee claimed that there was a change in the address, therefore, no notice has been served upon the assessee. Ld.CIT(A) noted that notice for disposal of the appeal was issued on 27.04.2017 for compliance on 09.05.2017 and notice has been sent by speed post at the address given in the return of income. Ld.CIT(A) also noted that Ld. Counsel for the assessee attended on 12.05.2017 and explained that he would be appearing in this case on behalf of the assessee for the date fixed on 09.05.2017. On the request of Ld. Counsel for the assessee, the appeal was re- fixed on 24.05.2017. Ld.CIT(A) in this background noted that when Ld. Counsel for the assessee attended on 12.05.2017, it would show that the assessee has linked with the old address, therefore, claim of the assessee was not accepted. Ld.CIT(A) did not discuss all other notices issued by the AO for compliance and did not verify from the record if any notice u/s 143(2) and 142(1) of the Act have been actually served upon the assessee and what is the report given on the same. Ld.CIT(A) also did not verify the report of the process servor who has served the notice through affixture, whether due compliance of provision of law have been complied with while serving the notice through affixture. Once, the assessee denied services of any notice, it is duty of Ld.CIT(A) to verify the facts from the assessment records. Ld.CIT(A) rejected the explanation of the assessee merely because Ld. Counsel for the assessee attended subsequently at appellate proceedings without verifying the facts from the assessment records. It is not verified if notice u/s 143(2) have been served upon the assessee or not which is condition precedent for passing a valid assessment order. The findings on both the issues would be relevant to satisfy the conditions of Rule 46A of I.T. Rules for admission of the additional evidences. If the assessee has not been served at the assessment stage of any statutory notice or notice served through affixture was not as per Rules, the assessee would be justified in contending that there was sufficient cause in not filing the evidences before the AO. The assessee as regards the condonation of delay in filing the appeal before Ld.CIT(A) filed application dated 14.12.2015 explaining the reasons for delay in filing the appeal before Ld.CIT(A). The contents of the same have also been not appreciated and considered by Ld.CIT(A). The above discussion would clearly show that matter requires re- consideration at the level of Ld.CIT(A on all the grounds of appeal. The order of Ld.CIT(A) cannot be sustained in law because it is non-speaking and passed in haste without verifying the facts from the assessment records.

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