VIVEK VAZIRCHAND KHANNA,NEW DELHI vs. ITO, WARD 28(5), NEW DELHI
Facts
An intimation order under Section 143(1) of the Income Tax Act for A.Y. 2016-17 made an adjustment of Rs. 24,95,579/- on account of exempt income. The assessee filed an appeal before the CIT(A) with a delay of 1707 days, claiming non-receipt of the intimation order and a bonafide belief that the return was accepted. The CIT(A) dismissed the appeal solely due to the inordinate delay.
Held
The ITAT condoned the delay of 1707 days in filing the appeal before the CIT(A) in the interest of justice and fair play, noting the assessee's contention of non-service of the intimation order was not disproved. The matter is restored to the file of the Assessing Officer for fresh adjudication on merits, ensuring the assessee is given a reasonable opportunity of being heard.
Key Issues
1. Whether the CIT(A) erred in not condoning the delay in filing the appeal when the assessee claimed non-receipt of the intimation order and acted on a bonafide belief. 2. Whether the principles of natural justice and proper service of notice were adhered to by the tax authorities regarding the intimation order and subsequent appeal proceedings.
Sections Cited
Section 143(1) of the Income-tax Act, 1961, Section 12A (1) (ac)(iii) of the Income Tax Act, 1961, Section 282(1) of the Income Tax Act, Rule 127(1) of the Income Tax Rules, 1962
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘SMC’ BENCH,
Before: SHRI ANUBHAV SHARMA, & SHRI NAVEEN CHANDRA
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the
ld. CIT(A), Delhi dated 14.02.2024 pertaining to A.Y 2016-17.
The grievances of the assessee read as under:
“1. That the Ld. CIT(A) has erred in facts and on law in upholding the intimation order u/s 143(1) of the Act passed by CPC thereby computing the total income of the Appellant at Rs.28,51,720/- as against the returned income of Rs. 3,56,140/-. 2. That the Ld. CIT(A) has erred in facts and on law in not condoning the delay in filing of appeal before it, on the ground of absence of sufficient cause for delay in filing the appeal. 3. That the CPC as well as the Ld. CIT(A) has erred in facts and on law in not providing a sufficient opportunity of hearing to the Appellant, which is in violation of principle of natural justice 4. That having regard to the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in upholding the action of CPC in making an addition of Rs.24,95,579/- on account of Exempt Income and that too by recording incorrect facts and findings and without observing the principle of natural justice. 4.1 That the action of Ld. CIT(A) in upholding the action of CPC in making the addition of Rs.8,96,382/- on account of exempted Dividend Income is bad in law and against the facts and circumstances of the case. 4.2 That the action of Ld. CIT(A) in upholding the action of CPC in making the addition of Rs.15,99,197/- on account of exempted Long Term Capital Gain is bad in law and against the facts and circumstances of the case.
4.3 That the intimation order so passed and upheld suffers from perverse findings and is contrary to the facts on record and the same needs to be set aside. 5. That the levy of interest under the Act is disputed and as such unsustainable in law besides being excessive. 6. The Appellant craves leave for adducing necessary evidence, amendments and explanations including written one to the aforesaid grounds and also raise additional grounds in the course of hearing of the appellate proceedings.”
Brief facts of the case are that an intimation order u/s 143(1) of
the Income-tax Act, 1961 [the Act, for short] was passed on 26.03.2019
making an adjustment of Rs. 24,95,579/- on account of exempt
income.
Aggrieved, the assessee went in appeal before the ld. CIT(A) who
dismissed the appeal on account of inordinate delay of 1707 days.
Now the assessee is in appeal before us against this action of the
ld. CIT(A) vide Grounds as above.
The ld. counsel for the assessee submitted that the assessee had
not received any intimation or correspondence from the department
and, therefore, the assessee was under the impression that the return
of income was accepted as such. It is the say of the ld AR of the
assessee that intimation order u/s 143(1) dated 26.03.2019 was not
served on the assessee either though SMS or e-mail.
Before us, the ld. counsel for the assessee vehemently stated
that the assessee has submitted a condonation of delay application
alongwith the supporting Affidavit before the Ld. CIT(A) which was not
disproved.
The ld. counsel for the assessee relied upon the decision of the
Hon'ble High Court of Punjab and Haryana in the case of Munjal BCU
Centre of Innovation and Entrepreneurship v. CIT(Exemptions) CWP
21028-2023 (O&M) wherein it has been held as under:
"5. It is a case where show cause notice dated 10.11.2022 was issued to the petitioner for initiating proceedings under Section 12A (1) (ac)(iii) of the Income Tax Act, 1961 (for short "the Act of 1961") by the Commissioner of Income Tax Exemptions, Chandigarh, but the said notice was not sent on the petitioner's email or otherwise and was only reflected on the e-portal of the Department. Thereafter, two reminders dated 13.12.2022 and 28.12.2024 in respect to the aforesaid show cause notice were also published that too on the e-portal of the Department. However, it is an admitted position that the said notice and
reminders were not served upon the petitioner as there is no e- mail sent by them....
In view of the above, it is essential that before any action is taken, a communication of the notice must in terms of the provisions as enumerated hereinabove. The provisions do not mention of communication to be "presumed" by placing notice on the e-portal. A pragmatic view has to be adopted always in these circumstances. An individual or a Company is not expected to keep the e-portal of the Department open all the time so as to have knowledge of what the Department is supposed to be doing with regard to the submissions of forms etc..The principles of natural justice are inherent in the income tax provisions and the same are required to be necessarily followed."
The ld. counsel for the assessee further relied upon the decision
of the ITAT Chandigarh in the case of Goodrich Foundation v. CIT
(Exemptions) in ITA No. 298 & 299/CHD/2023 wherein it has been held
as under:
"5. We have heard the parties and have perused the material on record. The ld. Counsel for the assessee submitted that the ld. CIT(Exemptions) has dismissed the appeal of the assessee overlooking and ignoring the facts, material on record and without providing proper and reasonable opportunity of being heard to the assessee. We have found that the notices were issued
electronically. The matter now stands covered by the decision of the Hon'ble jurisdictional High Court in the case of Munjal BSU Centre of Innovation and Entrepreneurship, Ludhiana through its authorized signatory Shri Bharat Goyal Vs Commissioner of Income Tax (E), Chandigarh" in CWP 21028-2023 (O&M), wherein, vide order dated 04.03.2024, their Lordships have held that the provisions of Section 282(1) of the Income Tax Act and Rule 127(1) of the Income Tax Rules, 1962, envisage that it is essential that before any action is taken, a communication of the notice must be in terms of these provisions; that these provisions do not make mention of communication to be "deemed" by placing the notice on the e-portal of the Department; that an pragmatic view has always to be adopted in these circumstances; that an individual or a company is not expected to keep the e-portal of the Department open all the times so as to have knowledge of what the Department is supposed to be doing with regard to the submissions of forms, etc.; and that the
In the facts and circumstances of the case, we are of the considered opinion that the assessee was not afforded proper and reasonable opportunity of being heard. Therefore, in the interest of justice, the file is restored to the file of ld. CIT(Exemptions) to decide the matter afresh in accordance with law after giving a reasonable opportunity of being heard to the assessee. The assessee, no doubt, shall cooperate in the fresh proceedings before the CIT(Exemptions)."
The ld. counsel for the assessee vehemently contended that the
said case of the assessee is squarely covered by the Judgement of
Hon'ble Supreme Court of India in the case of Senior Bhosale Estate
(HUF) v. Assistant Commissioner of Income Tax reported in [2019] 112
taxmann.com 134 (SC) wherein it has been held as under:
“3. The appellant(s) had asserted that they had no knowledge about passing of order dated 29.12.2003, until they were confronted with the auction notices in June 2008 issued by the competent authority.
Soon thereafter, the appellant(s) filed appeal(s) accompanied by the subject application(s) on 19.07.2008. Notably, the respondent(s) did not expressly refute the stand taken by the appellant (s) - that they had no knowledge about passing of order dated 29.12.2003 until June, 2008. Unless that fact was to be refuted, the question of disbelieving the stand taken by the appellant(s) on affidavit, cannot arise and for which reason, the High Court should have shown indulgence to the appellant(s) by condoning the delay in filing the concerned appeal(s). This aspect has been glossed over by the High Court.
Accordingly, these appeals are allowed. We set aside the impugned order of the High Court and relegate the parties before the High Court, by allowing the civil application(s) filed by the appellant(s) for condonation of delay in filing the concerned appeal."
Lastly, it was submitted that the Ld. CIT(A) has not given any
hearing notice to the assessee so as to put forward the submission on
the delay application. This shows that the Ld. CIT(A) has passed the
impugned order with a predetermined approach to dismiss the appeal
of the assessee on the ground of delay only.
The ld. DR relied upon the orders of the appellate authority.
We have heard the rival submissions and have perused the
relevant material on record. At the very outset, we find that the
whole controversy revolves around the delay of 1707 days in filing the
appeal before the CIT(A) and the dismissal of the application filed by
the assessee for condonation of delay.
The assessee filed his return of income declaring income of Rs.
3,56,140/-. The assessee’s contention that no intimation or
correspondence was received from the department, and that the
assessee was under the bonafide belief that the return filed was
accepted as such, has not been disproved. Only after receiving a call
from the department about the demand raised, the assessee visited
the income tax portal and came to know of the alleged demand. The
assessee immediately thereafter filed appeal before the ld. CIT(A)
against the said intimation. However, the ld. CIT(A) dismissed the
appeal on the ground that there was inordinate delay in filing the
appeal. The assessee has relied upon several judicial decisions
mentioned hereinabove.
After considering the facts and submissions and the case laws
relied upon, we are of the considered opinion that in the interest of
justice and fair play, the delay in filing the appeal before the CIT(A)
may be condoned and the issue is required to be restored to the file of
the assessing officer for fresh adjudication of the issues raised in the
appeal. The assessee is directed to furnish the original documents for
verification and the assessing officer is directed to examine the same
and decide the issues as per the provisions of law after affording
reasonable and sufficient opportunity of being heard to the assessee.
Ground No. 2 is allowed for statistical purposes.
Since we have set aside order of the CIT(A) as raised in ground 2
to the file of the Assessing Officer, the remaining grounds are also
directed to be decided afresh as per law.
In the result, the appeal of the assessee in ITA No.
1699/DEL/2024 is allowed for statistical purposes.
The order is pronounced in the open court on 11.10.2024.
Sd/- Sd/-
[ANUBHAV SHARMA] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 11th OCTOBER, 2024.
VL/
