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Facts
The assessee filed an appeal against an ex-parte order passed by the CIT(A) for assessment year 2011-12. The appeal was delayed by 105 days, with the assessee citing reasons such as personal health issues, family emergencies, and lack of proper communication regarding the CIT(A)'s order. The assessee had also not filed his return of income during assessment proceedings.
Held
The Tribunal condoned the delay in filing the appeal, citing bonafide and genuine reasons presented by the assessee, consistent with Supreme Court guidelines on condonation. The Tribunal set aside the impugned order and restored the matter to the AO for fresh adjudication on merits, granting the assessee an opportunity to present their case.
Key Issues
Whether the delay in filing the appeal before the CIT(A) and the Tribunal was justifiable, and whether the case should be remanded to the Assessing Officer for de novo adjudication on merits after providing adequate opportunity to the assessee.
Sections Cited
250, 148, 144, 142(1), 147, 80C, 80D
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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI OM PRAKASH KANTSHRI SANDEEP SINGH KARHAIL
Date of Hearing – 27/11/2024 Date of Order – 02/12/2024
O R D E R PER SANDEEP SINGH KARHAIL, J.M.
The assessee has filed the present appeal challenging the impugned order dated 02.05.2024, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT(A)”], for the assessment year 2011-12.
In this appeal, the assessee has raised the following grounds: - “1. On the facts and in the circumstances of the case and in law, the Ld. NFAC erred in confirming the order of the Learned Assessing Officer (*Ld. A.O."), without providing reasonable opportunity of being heard.
2. On the facts and in the circumstances of the case and in law the Ld. NFAC erred in not considering that the assumption of jurisdiction by the Ld. A.O. is bad in law as the conditions laid down under the Act for initiating reassessment proceeding u/s 147 of the Act have not been fulfilled.
3. On the facts and in the circumstances of the case and in law, the Ld. NFAC erred in confirming 100% addition of purchase made from M/s Harshil Ferommet Pvt. Ltd., Dinesh Industrial Corporation, Sidhivinayak Steel, Navkar Corporation, Surat Tube Corporation, Asian Steel, Subh Enterprises, Varsha Enterprises, Vandhana Steel Engineering Co., Pradeep Enterprises, Neelam Industries, Hirani Metal Industries, Jindutt Corporation, Shubham Steel Impex, Shrilabh Impex, Gold Star Trading Co., Puspak Metal Industries and Avinash Enterprises as alleged bogus purchases without appreciating the facts that the transaction of Rs. 3,36,65,779/- from party is genuine purchases, and the payments was made through banking channel and the quantity details of the purchase are matching with the sales.
4. On the facts and circumstances of the case and in law, the Ld. NFAC erred in confirming the addition of genuine loan amounting to Rs. 26,94,848/- as unexplained loan without appreciating the fact that the appellant taken the loan through banking channel and was utilized for business purpose.
5. On the facts and circumstances of the case and in law, the Ld. NFAC erred in confirming the disallowance of interest on loan of Rs. 1,35,479/- as unexplained without appreciating the fact that the appellant has paid the said interest on the loan taken for business purpose.
6. On the facts and circumstances of the case and in law, the Ld. NFAC erred in confirming the disallowance of commission paid of Rs. 13,23,717/- without appreciating the fact that the appellant has paid the commission through banking channel after deducting TDS and the same was incurred for business purpose.
7. On the facts and circumstances of the case and in law, the Ld. NFAC erred in confirming the disallowance of deduction of Rs. 100,000/- u/s. 80C and Rs. 6,755/- u/s. 80D under chapter VI-A.”
3. The present appeal is delayed by 105 days. Along with the appeal, the assessee has filed an application seeking condonation of delay. In the application, the assessee submitted that the impugned order was passed by the learned CIT(A) on 02.05.2024, however, the assessee did not receive any sort of communication through email or via post that the order was passed by the learned CIT(A). It is further submitted that subsequently, the assessee found out about the impugned order through NFAC only after logging into the ITBA portal for the purpose of filing the return of income. Thereafter, the assessee downloaded the order on 13.08.2024 and took the necessary steps for filing the appeal before the Tribunal. Therefore, it has been submitted that due to the aforesaid circumstances, the present appeal was delayed by 105 days which is not due to any mala fide intentions on the part of the assessee.
4. In the present case, at the outset, it is evident that the learned CIT(A) has passed the order ex-parte due to the non-appearance of/on behalf of the assessee. We further find that the learned CIT(A) not only dismissed the appeal filed by the assessee on the ground of delay but also dismissed the same due to non-compliance with hearing notices by the assessee. We find that even during the assessment proceedings, the assessee did not file his return of income in response to the notice issued under section 148 of the Act and therefore, the assessment was concluded on a best judgment basis under section 144 of the Act. The assessee also did not comply with the statutory notices issued under section 142(1) of the Act. Accordingly, the Assessing Officer (“AO”) vide order dated 28.03.2014 passed under section 144 read with section 147 of the Act computed the total income of the assessee at Rs.3,89,20,970 on the basis of the material available on record.
5. In order to explain the delay in filing the appeal before the learned CIT(A) and also to explain the reason for non-compliance with notices issued during the assessment proceedings and before the learned CIT(A), the assessee filed an affidavit stating as follows: -
“1) I, Satish Rajaji Rathod aged 52 years, son of Rajaji Rathod, having PAN AACPR2872D at present residing at 302, Sai Sadan CHS, Dadarkar Compound, Opp. Film Centre, Tardeo, Mumbai - 400034, do solemnly affirm and state on oath as under: 2) That the order u/s 144 r.w.s. 147 of the Income Tax Act, 1961 dtd. 28.03.2014 passed by the Ld. ITO 15(3)(1) for A.Y. 2011-12 was received on 03.04.2014. 3) That, in the year 2012, my wife, Mrs. Kamala Rathod, was in an accident because of which she suffered extreme injury and had to undergo multiple surgeries from 2012-2015 and that, during the course of her treatment, I was the sole caretaker of my wife. 4) That, my proprietorships, in the style of M/s Phinolek Steels & Engg. Co. and M/s United Metal Industries, had been shut down in 2014. 5) That I briefly resumed my work in March, 2016 and it was only then that I became aware of the assessment order. 6) That after consultation on the matter I immediately filed the appeal on 15.06.20216 before the Hon'ble Commissioner of Income Tax (Appeals) - 30, Mumbai accompanied by an application for condonation of delay stating the above facts. 7) That the said delay is a bonafide delay and due to genuine reasons and that I had no purposeful intention in delaying the filing of the appeal and the circumstances were beyond my control. 8) That, in the year 2016, my father, Mr. Rajaji Rathod, was diagnosed with cancer and I had undertaken the responsibility for his treatment. 9) That, my father, Mr. Rajaji Rathod, tragically passed away in the year 2021. 10) That, because of such unfortunate and devastating circumstances, I was not able to properly consult with professionals in the matter of assessment proceedings and appeal proceedings before Hon'ble CIT(A) and therefore, I could not comply to the notices issued. 11) That the order u/s 250 of the Income Tax Act, 1961 dtd. 02.05.2024 passed by the Hon'ble CIT(A), NFAC for AY 2011-12 was uploaded on the Income Tax Portal. 12) That I was not informed by the Hon'ble CIT(A), NFAC about the said order passed under section 250 of the Act either by registered EMAIL or through Post or any other mode of communication except uploaded on the Portal for which I was not aware. 13) That I came across the above said order u/s 250 of the Act of Hon'ble CIT(A), NFAC only after logging into the ITBA Portal for the purpose of filing of return of income and I was only able to download the order on 13.08.2024.
14) That, after becoming aware of the order of the Hon'ble CIT(A), I only recently sought proper consultation in the matter following which I filed an appeal before the Hon'ble ITAT, Mumbai on 16.10.2024 and collated and compiled the documentary evidences necessary to prove the genuineness of my case. 15) That the non-compliance to the notices issued during the assessment proceedings and appeal proceedings were due to bonafide, genuine and unfortunate reasons and that, I had no purposeful intention in not complying with the notices.”
We find that the reasons stated by the assessee for seeking condonation of delay in filing the present appeal and the delay in filing the appeal before the learned CIT(A), as noted in the preceding paragraphs, fall within the parameters for grant of condonation laid down by the Hon’ble Supreme Court in the case of Collector Land Acquisition, Anantnag Vs. MST Katiji and others: 1987 SCR (2) 387. It is well established that rules of procedure are handmaid of justice. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. In the present case, the assessee did not stand to benefit from the late filing of the appeals. In view of the facts and circumstances of the present case, as noted above, we are of the considered view that the assessee has proved sufficient cause for not filing the appeal before the learned CIT(A) and before the Tribunal within the prescribed limitation period. Accordingly, we are of the view that the said delay should be condoned. Hence, we deem it appropriate to set aside the impugned order.
We find that the assessee has also duly explained the circumstances for non-compliance with the notices issued during the assessment proceedings and before the learned CIT(A) in his affidavit as noted in the foregoing paragraph. In the present appeal before us, the assessee is duly represented by the learned Authorized Representative and wishes to pursue the litigation against the addition made by the AO.
In the facts and circumstances as noted above, we are of the considered view that in the interest of justice and fair play, the assessee be granted one more opportunity to represent his case on merits and produce all the documents in support of his claim. Since in the present case, the assessee neither appeared before the AO nor before the learned CIT(A), we deem it fit and proper to restore the matter to the file of the jurisdictional AO for de novo adjudication on merits after considering all the details/submissions as may be filed by the assessee and after providing due opportunity of hearing to the assessee. The assessee is directed to cooperate in the assessment proceedings and furnish all the details as may be sought by the AO for complete adjudication. As the matter is being restored to the jurisdictional AO for adjudication on merits, the other grievance raised by the assessee in the present appeals does not call for adjudication at this stage. Accordingly, the impugned order is set aside and the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 02/12/2024