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Facts
The assessee's appeal was dismissed by the CIT(A) ex-parte due to non-compliance with notices, which were sent to an ex-employee's email address. The assessee contended that they were unaware of these notices and the subsequent order. The appeal before the tribunal was filed with a delay of 30 days, which the tribunal condoned.
Held
The tribunal held that the CIT(A) did not adjudicate the appeal on merits as required. Since the assessee was prevented from filing their submissions due to notices being sent to an incorrect email address, and they have now expressed willingness to file submissions, the matter is restored to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without adjudicating on merits, and whether the delay in filing the appeal should be condoned.
Sections Cited
69A, 234A, 234B, 271AAC(1), 250(6)
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SUNIL KUMAR SINGH
This appeal by the assessee is directed against order dated 17.01.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds:
Jansevak Nagari Sahakari Patpedhi Ltd. Jansevak Nagari Sahakari Patpedhi Ltd. 2 ITA No. 2224/MUM/2024
Ground No. 1 1. Ground No. 1 - Incorrect facts established 1.1. On the facts 1.1. On the facts and in the circumstances of the case and in law, CIT(A) and in the circumstances of the case and in law, CIT(A) has erred in confirming the order of the Assessment Officer (hereinafter has erred in confirming the order of the Assessment Officer (hereinafter has erred in confirming the order of the Assessment Officer (hereinafter referred to as the 'Learned Assessing Officer') by dismissing the Appeal referred to as the 'Learned Assessing Officer') by dismissing the Appeal referred to as the 'Learned Assessing Officer') by dismissing the Appeal filed. 1.1 The CIT(A) has The CIT(A) has erred in confirming the following incorrect facts owing incorrect facts determined by the determined by the Learned Assessing Officer: 1.2.1. The Learned Assessing Officer has failed to appreciate the fact that 1.2.1. The Learned Assessing Officer has failed to appreciate the fact that 1.2.1. The Learned Assessing Officer has failed to appreciate the fact that the Appellant has regularly filed its return of income as per the provisions the Appellant has regularly filed its return of income as per the provisions the Appellant has regularly filed its return of income as per the provisions of the Act. 1.2.2. The Learned Asses 1.2.2. The Learned Assessing Officer has blatantly stated that the sing Officer has blatantly stated that the Appellant has accepted the illegal currency notes from its members during Appellant has accepted the illegal currency notes from its members during Appellant has accepted the illegal currency notes from its members during the demonetisation period and deposited the same without appreciating the demonetisation period and deposited the same without appreciating the demonetisation period and deposited the same without appreciating the fact that the Appellant is a co the fact that the Appellant is a co-operative credit society having c operative credit society having cash-in- hand as it regularly accepts savings of its members in the form of daily hand as it regularly accepts savings of its members in the form of daily hand as it regularly accepts savings of its members in the form of daily deposits, monthly deposits, quarterly deposits, etc. deposits, monthly deposits, quarterly deposits, etc. 1.2.3. The Learned Assessing Officer has erred in understanding the risk 1.2.3. The Learned Assessing Officer has erred in understanding the risk 1.2.3. The Learned Assessing Officer has erred in understanding the risk involved in safe deposit of public money and thus involved in safe deposit of public money and thus stated that the Appellant stated that the Appellant is not prudent in its timing for depositing the specified bank notes. is not prudent in its timing for depositing the specified bank notes. is not prudent in its timing for depositing the specified bank notes.
2. Ground No. 2 Ground No. 2 - Provisions of Section 69A of the Act are not Provisions of Section 69A of the Act are not applicable 2.1 On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the CIT(A) has erred is accepting the Learned Assessing Officer's action for erred is accepting the Learned Assessing Officer's action for erred is accepting the Learned Assessing Officer's action for invoking the provisions of Section 69A of the Act by ignoring the material invoking the provisions of Section 69A of the Act by ignoring the material invoking the provisions of Section 69A of the Act by ignoring the material available on record. available on record. 3. Ground No. 3 Ground No. 3 - Erroneous determination of income 3.1 On the facts and in the circumstances of t On the facts and in the circumstances of the case and in law, the he case and in law, the CIT(A) has erred in confirming that deposits accepted by the Appellant from CIT(A) has erred in confirming that deposits accepted by the Appellant from CIT(A) has erred in confirming that deposits accepted by the Appellant from its members which are eventually deposited in the bank account of the its members which are eventually deposited in the bank account of the its members which are eventually deposited in the bank account of the Appellant on account of Appellant on account of 2emonetization is the income of the Appellant. is the income of the Appellant. 4. Ground No. 4 4. Ground No. 4 – Incorrect levy of interest 4.1. On the facts and in the circumstances of the case and in law, the 4.1. On the facts and in the circumstances of the case and in law, the 4.1. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in confirming the levying interest under section 234A and CIT(A) has erred in confirming the levying interest under section 234A and CIT(A) has erred in confirming the levying interest under section 234A and 234B of the Act and the said levy of interest being wholly unjustified, 234B of the Act and the said levy of interest being wholly unjustified, 234B of the Act and the said levy of interest being wholly unjustified, ought to be deleted. be deleted. Ground No. 5 Ground No. 5 – Initiation of the penalty proceedings 5.1 On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the learned Assessing Officer erred in initiating penalty proceedings under learned Assessing Officer erred in initiating penalty proceedings under learned Assessing Officer erred in initiating penalty proceedings under section 271AAC(1) of the Act section 271AAC(1) of the Act
Jansevak Nagari Sahakari Patpedhi Ltd. Jansevak Nagari Sahakari Patpedhi Ltd. 3 ITA No. 2224/MUM/2024
Before us, the L Before us, the Ld. counsel for the assessee submitted that the d. counsel for the assessee submitted that the impugned appeal has been filed with the delay of 30 days from date impugned appeal has been filed with the delay of 30 days impugned appeal has been filed with the delay of 30 days of limitation. He submitted that delay was . He submitted that delay was for the reason that for the reason that order of ld CIT(A) was received on e received on e-mail address, which belong which belonged to ex- employee of the organization employee of the organization and same was not communicated to same was not communicated to the board of the assessee the board of the assessee trust. While going through the through the year end compliance, the assessee came to the assessee came to know the impugned order of ld know the impugned order of ld CIT(A) from the income income-tax web portal and thereafter immed portal and thereafter immediately filed this appeal. The relevant submission filed this appeal. The relevant submission of the assessee of the assessee are reproduced as under: reproduced as under:
We understand that there has been a delay of 30 days in filing the appeal We understand that there has been a delay of 30 days in filing the appeal We understand that there has been a delay of 30 days in filing the appeal before Your Honour. before Your Honour. There is a delay as the order was received received on the email addresses addresses (R p joshi2000@yahoo.com joshi2000@yahoo.com and and apurva.malshe@gmail.com) which belongs to the ex apurva.malshe@gmail.com) which belongs to the ex-employee of the employee of the organisation. The same was not communicated to the Board for rightful organisation. The same was not communicated to the Board for rightful organisation. The same was not communicated to the Board for rightful action. Further, due to the year Further, due to the year-end compliances, we were able to Login in end compliances, we were able to Login in to the Income Tax Por to the Income Tax Portal in the month of April wherein we realised that the tal in the month of April wherein we realised that the Commissioner of Income Commissioner of Income-tax (Appeals) had issued various notices which tax (Appeals) had issued various notices which were left unanswered and resultantly an order was also issued. On were left unanswered and resultantly an order was also issued. On were left unanswered and resultantly an order was also issued. On becoming aware of the order, the Appellant immediately hired a Ch becoming aware of the order, the Appellant immediately hired a Ch becoming aware of the order, the Appellant immediately hired a Chartered Accountant for prompt action. Accountant for prompt action. In order to avoid such errors, we request you to send all the In order to avoid such errors, we request you to send all the In order to avoid such errors, we request you to send all the correspondences on: correspondences on: Email address Email address - maheshbhi@yahoo.co.in and jansevakpat92@gmail.com maheshbhi@yahoo.co.in and jansevakpat92@gmail.com Office address Office address - 4 Suraj Mani CHS, Gupte Cross Road, Near Everest 4 Suraj Mani CHS, Gupte Cross Road, Near Everest Colony, Dombivli West ny, Dombivli West-421202.
We have heard rival submission of the parties on the issue of We have heard rival submission of the parties on the issue of We have heard rival submission of the parties on the issue of delay in filing the appeal. We find that assessee was prevented by delay in filing the appeal. We find that assessee was prevented by delay in filing the appeal. We find that assessee was prevented by sufficient cause for not filing the appeal on time and therefore, the sufficient cause for not filing the appeal on time and therefore, the sufficient cause for not filing the appeal on time and therefore, the delay in filing the appeal delay in filing the appeal is condoned and the appeal is admitted for is condoned and the appeal is admitted for adjudication.
Jansevak Nagari Sahakari Patpedhi Ltd. Jansevak Nagari Sahakari Patpedhi Ltd. 4 ITA No. 2224/MUM/2024
Before us, the Ld. counsel for the assessee submitted that the Before us, the Ld. counsel for the assessee submitted that the Before us, the Ld. counsel for the assessee submitted that the Ld. CIT(A) has passed the order ex Ld. CIT(A) has passed the order ex-parte due to non parte due to non-compliance of the notices. The Ld. counsel for the assessee submitted that notices the notices. The Ld. counsel for the assessee submitted that notices the notices. The Ld. counsel for the assessee submitted that notices were issued at the e were issued at the e-mail address of ex-employee(s) (s) and therefore, same could not be complied. He submitted that assessee is willing same could not be complied. He submitted that assessee is willing same could not be complied. He submitted that assessee is willing to appear before the Ld. CIT(A) and file all the submissions required to appear before the Ld. CIT(A) and file all the submissions required to appear before the Ld. CIT(A) and file all the submissions required for adjudication for issue in dispute. for adjudication for issue in dispute.
We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. We find that the Ld. CIT(A) has nt material on record. We find that the Ld. CIT(A) has nt material on record. We find that the Ld. CIT(A) has dismissed the appeal in default observing as under: dismissed the appeal in default observing as under:
“4.1 The appeal was filed by the assessee on 17.02.2020 against order The appeal was filed by the assessee on 17.02.2020 against order The appeal was filed by the assessee on 17.02.2020 against order u/s 143(3) of the Act dated 10.12.2019 for the AY: 2017 u/s 143(3) of the Act dated 10.12.2019 for the AY: 2017-18. In connection 18. In connection to the appeal, opportunities were provided to the assessee to substantiate the appeal, opportunities were provided to the assessee to substantiate the appeal, opportunities were provided to the assessee to substantiate his grounds of appeal on or before the following dates: his grounds of appeal on or before the following dates: 1)11.01.2021 2) 11.03.2021 3) 27.12.2023 4) 08.01.2024 5) 16.01.2024 On verification of the ITBA portal, it is observed that al On verification of the ITBA portal, it is observed that all the notices got l the notices got successfully successfully successfully delivered delivered delivered to to to email: email: email: R_p_joshi2000@yahoo.com R_p_joshi2000@yahoo.com R_p_joshi2000@yahoo.com and and and apurva.malshe@gmail.com. Against all these notices, apurva.malshe@gmail.com. Against all these notices, assessee is not assessee is not interested in filling any details during the appellate proceedings and avail interested in filling any details during the appellate proceedings and avail interested in filling any details during the appellate proceedings and avail the opportunity under the princi the opportunity under the principle of natural justice. In response to the ple of natural justice. In response to the notices issued, even adjournment was not sought. In such situation, the notices issued, even adjournment was not sought. In such situation, the notices issued, even adjournment was not sought. In such situation, the only conclusion which can be drawn is that the appellant is not interested only conclusion which can be drawn is that the appellant is not interested only conclusion which can be drawn is that the appellant is not interested in pursuing the appeal. in pursuing the appeal. 4.2 It has been held by the Hon'ble Suprem It has been held by the Hon'ble Supreme Court in the case of e Court in the case of B.N.Bhattacharjee and another (118 ITR 461) that appeal does not mean B.N.Bhattacharjee and another (118 ITR 461) that appeal does not mean B.N.Bhattacharjee and another (118 ITR 461) that appeal does not mean merely filing of memo of appeal but also pursuing it effectively. In cases merely filing of memo of appeal but also pursuing it effectively. In cases merely filing of memo of appeal but also pursuing it effectively. In cases where the appellant does not want to pursue the appeal, appellate where the appellant does not want to pursue the appeal, appellate where the appellant does not want to pursue the appeal, appellate authorities have inher authorities have inherent power to dismiss the appeal for non ent power to dismiss the appeal for non-prosecution
Jansevak Nagari Sahakari Patpedhi Ltd. Jansevak Nagari Sahakari Patpedhi Ltd. 5 ITA No. 2224/MUM/2024 as held by the Hon'ble Bombay High Court in the case of M/s Chemipol vs. as held by the Hon'ble Bombay High Court in the case of M/s Chemipol vs. as held by the Hon'ble Bombay High Court in the case of M/s Chemipol vs. Union of India in Excise Appeal No. 62 of 2009. While deciding the issue, Union of India in Excise Appeal No. 62 of 2009. While deciding the issue, Union of India in Excise Appeal No. 62 of 2009. While deciding the issue, the Hon'ble High Court of Bombay has referred to the obse the Hon'ble High Court of Bombay has referred to the obse the Hon'ble High Court of Bombay has referred to the observations of Hidayatullah, Chief Justice (as His Lordship then was) in Sunderlal Hidayatullah, Chief Justice (as His Lordship then was) in Sunderlal Hidayatullah, Chief Justice (as His Lordship then was) in Sunderlal Mannalal Vs. Nandramdas Dwarakadas AIR 1958 MP 260 wherein it was Mannalal Vs. Nandramdas Dwarakadas AIR 1958 MP 260 wherein it was Mannalal Vs. Nandramdas Dwarakadas AIR 1958 MP 260 wherein it was observed: "Now the Act does not give any power of dismissal. But it is "Now the Act does not give any power of dismissal. But it is "Now the Act does not give any power of dismissal. But it is axiomatic that no court or tribunal is axiomatic that no court or tribunal is supposed to continue a supposed to continue a proceeding before it when the party who has moved it has not proceeding before it when the party who has moved it has not proceeding before it when the party who has moved it has not appeared nor cared to remain present. The dismissal, therefore, is appeared nor cared to remain present. The dismissal, therefore, is appeared nor cared to remain present. The dismissal, therefore, is an inherent power which every tribunal possesses...." an inherent power which every tribunal possesses...." an inherent power which every tribunal possesses...." 4.3 This appeal has been filed by the appellant wit This appeal has been filed by the appellant with a prayer to this office h a prayer to this office that the additions made by the AO be deleted. In such situation, it is for that the additions made by the AO be deleted. In such situation, it is for that the additions made by the AO be deleted. In such situation, it is for the appellant to furnish submissions with relevant evidence(s), case laws, the appellant to furnish submissions with relevant evidence(s), case laws, the appellant to furnish submissions with relevant evidence(s), case laws, if any, to support the claim. The burden of proof is always on the person if any, to support the claim. The burden of proof is always on the person if any, to support the claim. The burden of proof is always on the person who has made the claim by filing the appeal. Further, if the appellant s made the claim by filing the appeal. Further, if the appellant s made the claim by filing the appeal. Further, if the appellant claims that the addition made should be deleted, the burden is on the claims that the addition made should be deleted, the burden is on the claims that the addition made should be deleted, the burden is on the appellant to prove it why it should be deleted. Same is the position in case appellant to prove it why it should be deleted. Same is the position in case appellant to prove it why it should be deleted. Same is the position in case of all allowances, deduction, exemptions, cl of all allowances, deduction, exemptions, claims or loss etc. aims or loss etc. Since an appeal is nothing but the claim of the appellant that he has been unduly appeal is nothing but the claim of the appellant that he has been unduly appeal is nothing but the claim of the appellant that he has been unduly unjustifiably taxed or levied fee/interest, it is for the appellant to prove its unjustifiably taxed or levied fee/interest, it is for the appellant to prove its unjustifiably taxed or levied fee/interest, it is for the appellant to prove its case. The appellant has not availed any opportunity to do so. case. The appellant has not availed any opportunity to do so. case. The appellant has not availed any opportunity to do so. From the conduct of the appellant as per the facts noted above, it is clear uct of the appellant as per the facts noted above, it is clear uct of the appellant as per the facts noted above, it is clear that the appellant does not wish to pursue the appeal. Even otherwise on that the appellant does not wish to pursue the appeal. Even otherwise on that the appellant does not wish to pursue the appeal. Even otherwise on the merits of it also, I do not see any reason to differ with the findings of the merits of it also, I do not see any reason to differ with the findings of the merits of it also, I do not see any reason to differ with the findings of the AO since no attempt has been made by t the AO since no attempt has been made by the assessee to discharge its he assessee to discharge its onus. Hence, respectfully following the above mentioned judicial onus. Hence, respectfully following the above mentioned judicial onus. Hence, respectfully following the above mentioned judicial pronouncements and in view of the facts of the case, the appeal is hereby pronouncements and in view of the facts of the case, the appeal is hereby pronouncements and in view of the facts of the case, the appeal is hereby dismissed.” 5.1 We find that the Ld. CIT(A) has not adjudicated the appeal on We find that the Ld. CIT(A) has not adjudicated the appeal on We find that the Ld. CIT(A) has not adjudicated the appeal on merit. Under the provisions of section 250(6) of the Income er the provisions of section 250(6) of the Income-tax Act, er the provisions of section 250(6) of the Income 1961 (in short ‘the Act’), t 1961 (in short ‘the Act’), the Ld. CIT(A) is required to adjudicate the he Ld. CIT(A) is required to adjudicate the appeal on the merit even without representation on the part of the appeal on the merit even without representation on the part of the appeal on the merit even without representation on the part of the assessee. Further, the Ld. counsel for the assessee has submitted assessee. Further, the Ld. counsel for the assessee has su assessee. Further, the Ld. counsel for the assessee has su before us that due to notices issued on the ex before us that due to notices issued on the ex-employee employee(s) the assessee could not comply assessee could not comply before ld CIT(A) and now assessee and now assessee has expressed his willingness to file submissions and comply before the expressed his willingness to file submissions and comply before the expressed his willingness to file submissions and comply before the Ld. CIT(A) if matter is restored. In view of the above facts and Ld. CIT(A) if matter is restored. In view of the abov Ld. CIT(A) if matter is restored. In view of the abov
Jansevak Nagari Sahakari Patpedhi Ltd. Jansevak Nagari Sahakari Patpedhi Ltd. 6 ITA No. 2224/MUM/2024 circumstances of the case and in the interest of substantial justice, circumstances of the case and in the interest of substantial justice circumstances of the case and in the interest of substantial justice we set aside the orde we set aside the order of the Ld. CIT(A) and restore the matter back the matter back to him for deciding afresh after considering submission of the to him for deciding afresh after considering submission of the to him for deciding afresh after considering submission of the assessee.
In the result, the appeal of In the result, the appeal of the assessee is allowed for the assessee is allowed for statistical purposes.