Loading judgment…
Facts
The assessee challenged an order from the CIT(A) that dismissed their appeal against an assessment order. The original assessment was made ex-parte under Section 144 of the Income Tax Act. The assessee claimed they were not given a reasonable opportunity to be heard due to severe family medical emergencies.
Held
The Tribunal condoned the delay of 106 days in filing the appeal, acknowledging the genuine personal difficulties faced by the assessee. The CIT(A)'s ex-parte order was set aside, and the issues of cash deposits and unexplained investment in property were restored to the Assessing Officer for de novo adjudication.
Key Issues
Whether the assessee was denied a reasonable opportunity of being heard, leading to an ex-parte assessment and appellate order, and whether the delay in filing the appeal should be condoned.
Sections Cited
Section 144, Section 68, Section 69, Section 69A, Section 271(1)(c), Section 271F, Section 234A, Section 234B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, F BENCH, MUMBAI
Per Rahul Chaudhary, Judicial Member:
By way of the present appeal the Assessee has challenged the order, dated 15/06/2023, passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] for the Assessment Year 2016-17, whereby the Ld. CIT(A) had dismissed the appeal of the Assessee against the Assessment Order, dated 24/12/2018, passed under Section 144 the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
The Assessee has raised the following grounds of appeal: “General Grounds
The appellant's contentions are that ex-parte order has been passed without giving a reasonable opportunity of being heard. No notices were served upon the appellant for the subject assessment year. The appellant had not been given a reasonable opportunity of being heard.
The learned AO has not "served any notices / summons" to the appellant before passing an ex-parte order. Such an order passed is bad in law since the appellant was not given an opportunity of being heard by serving a physical notice and represent his case before making an addition of INR 1,11,92,627 to the total income. Hence, the order passed by the learned AO, dated 24/12/2018 may please be set aside and matter be remanded back to the AO for fresh assessment.
Impugned order passed by the Ld. CIT(A) and the Learned Assessing Officer ("Ld. AO") are based on incorrect appreciation of facts and incorrect interpretation of law, and therefore, bad in law.
Without prejudice to ground no 1 mentioned above, in the final assessment order passed. the learned AO has doubly taxed the same sum of money in the form of cash deposits made and purchase of property. Hence, the appellant prays that such addition be disallowed by your good self's office.
Without prejudice to ground no 1 mentioned above, it is hereby submitted that the purchase of flat in society named "Sukur Garden" is by way of co-ownership and the appellant is having only 50% share in the said property, which has not been considered by AO before passing the final order.
Without prejudice to ground no 1 mentioned above, it is hereby submitted that the cash deposits made by the appellant is on account of excess cash withdrawn during the year under consideration.
The Ld. AO, erred in assessing the total income of the Appellant at INR 1,16,76,450 as against returned income of INR 5,55,250. 2 Consequential grounds: The Ld. AO has erred, in law and in facts in,
Initiating penalty proceedings under Section 271(1)(c) and under section 271F of the Act.
Consequential Interest:
1 Levying an interest of INR 5,00,877 in the assessment order under Section 234A of the Act.
2 Levying an interest of INR 12,71,457 in the assessment order under Section 234B of the Act.”
When the appeal was taken up for hearing, the Ld. Authorised Representative for the Appellant pressed into service Ground No. 1 & 2 of the appeal stating that the order passed by the CIT(A) was ex-parte order which has been passed without giving a reasonable opportunity of being heard to the Appellant. Opposing the aforesaid submission, the Ld. Departmental Representative submitted that the present appeal has been filed after a delay of 106 days and the Appellant has not been participating in the assessment as well as appellate proceedings. In response, the Ld. Authorised Representative for the Appellant took us through the documents forming part of the paper-book filed along with letter, dated 22/04/2024, and explained that the circumstances prevailing during the assessment and appellate proceedings leading to filing of the present appeal before the Tribunal. The Learned Authorised Representative for the Appellant reiterated the submission that a reasonable opportunity of being heard was not granted in the appellate proceedings before the CIT(A). Further, on a without prejudice basis, the Learned Authorised Representative for Appellant submitted that even otherwise, given the facts and circumstances prevailing at the relevant time, the Appellant be 3 granted another opportunity to make good his submission before the authorities below on merits as the Appellant has a good case on merits and has filed relevant documents and details before the Tribunal.
We have heard both the sides application for condonation of delay, as well as Ground No. 1 & 2 raised in the present appeal. The Appellant has, inter alia, sought remand back of the issues raised in the present appeal back to the file of Assessing Officer for denovo adjudication in view of the prevailing facts and circumstances.
On perusal of material on record and from the submissions made by both the sides during the course of hearing, it emerges that the Appellant was working in the capacity of Director in Indian Company. The Appellant filed original return of income on 01/08/2017, declaring a total income of INR 5,55,250/-. The case was selected for scrutiny on account of cash deposits of INR 44,64,000/- and purchase of immovable property having agreement value of INR 66,57,200/-. Though notices were issued during the assessment proceedings between August, 2018 and December, 2018, the Appellant could not respond to the same due to a medical emergency in the family. The brother of the Appellant (i.e. Mr. Prakash Jain), had to undergo an open heart bypass surgery during the said period and there were consistent follow ups thereafter. Additionally, the Appellant's mother, a cancer patient, was also facing medical problems requiring treatment and hospitalization. Due to the aforesaid family problems, the Appellant was not in a position to respond to the notices issued during the assessment proceedings. As a result the Appellant was proceeded ex-parte and best judgment assessment under Section 144 of the Act was framed on the 4 Appellant vide Assessment Order dated 24/12/2018 making an addition of INR 44,64,000/- under Section 68 of the Act in respect of cash deposits and an addition of INR 66,57,200/- under Section 69 of the Act on account of unexplained investment in immovable property. Being aggrieved, the Appellant preferred appeal before the CIT(A) challenging the aforesaid addition. The CIT(A) issued notices for hearing in the month of February 2020 and February 2021. However, on account of the COVID pandemic the aforesaid notices could not be attended to. Thereafter, the Appellant was served notice of hearing between April, 2023 to June, 2023, which the Appellant not able to attend as Appellant’s brother (i.e. Mr. Prakash Jain), a heart patient, had to undergo medical diagnosis for accelerated hypertension. The family was under deep mental distress, and the Appellant was not able to pursue the appeal before CIT(A) properly. On 15/06/2023, the CIT(A) dismissed the appeal. Due to prevailing circumstances explained hereinabove, the Appellant could only get the present appeal filed before the Tribunal after a delay of 106 days. From the aforesaid, it is clear that the Appellant was facing family problems in relation to the health issues faced by the brother and mother. In our view, the Appellant has been provide reasonable explanation for not being able to comply with the notices issued during the course of assessment/appellate proceedings and for the delay in filing the present appeal. The explanation offered by the Appellant stands corroborated by the medical records placed at page 6 to 28 of the paper-book. Therefore, we hold that both, the non- compliance on part of the Appellant during the assessment/appellate proceedings as well as delay in filing the present appeal was on account of personal difficulties faced by the Appellant. Accordingly, the delay of 106 days in filing the present appeal is condoned. The ex-parte order, dated
5 15/06/2023, passed by the CIT(A) is set aside and keeping in view the facts and circumstances of the present case, the issue raised in the present appeal relating to (a) addition of INR 44,64,000/- under Section 69A of the Act in respect of cash deposits made in the bank account of the Appellant; and (b) addition of INR 66,57,200/- made under Section 69 of the Act in respect of purchase consideration paid by the Appellant for purchase of immovable property are restored back to the file of Assessing Officer for denovo adjudication. The Appellant is directed to file all the documents/details on which the Appellant wishes to place reliance in support of its submission/contention before the Assessing Officer forthwith on receiving the notice of hearing. The Appellant is also directed to be vigilant and track the proceedings on the ITBA Portal. In terms of the above, Ground No. 1 and 2 raised by the Appellant are allowed for statistical purposes while all the other grounds raised by the Appellant are dismissed as being infructuous.
In result, the present appeal preferred by the Assessee is treated as allowed for statistical purposes.
Order pronounced on 29.04.2024. (Om Prakash Kant) Judicial Member मुंबई Mumbai; िदनांक Dated : 29.04.2024 Alindra, PS
6 आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant
""थ" / The Respondent. 3. आयकर आयु"/ The CIT
"धान आयकर आयु" / Pr.CIT 5. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai 6. गाड" फाईल / Guard file.
आदेशानुसार/ BY ORDER, स"ािपत "ित //// उप/सहायक पंजीकार /(Dy./Asstt.