Loading judgment…
Facts
The assessee purchased a property with a 20% share for Rs.6.16 crores, paying Rs.40 lakhs. Notices regarding reassessment were sent to an old address, and the assessee was unaware of the assessment order until a lien was placed on their bank account. The assessee filed an appeal after a significant delay due to the COVID-19 pandemic.
Held
The Tribunal held that there was a reasonable cause for the assessee's delay in filing the appeal before the CIT(A) due to the COVID-19 pandemic and the failure of the Assessing Officer to serve notices properly. The CIT(A) was not justified in not condoning the delay.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was justifiable and whether the case should be restored to the Assessing Officer for fresh examination on merits.
Sections Cited
147, 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: JUSTICE (RETD.) C V BHADANG, HON’BLE& SHRI B.R. BASKARAN
PER B.R. BASKARAN, ACCOUNTANT MEMBER :
The assessee has filed this appeal challenging the order dated 27/09/2023 passed by learned Commissioner of Income Tax (Appeals), NFAC, Delhi (hereinafter referred to as “ld. CIT(A)”) and it relates to assessment year 2012-13. The assessee is aggrieved by the decision of ld. CIT(A) in dismissing the appeal of the assessee in-limine without condoning the delay in filing the appeal before him.
The ld. A.R submitted that the assessee along with some other persons had purchased a property on 31-12-2011, wherein the share of the assessee was only 20%. The cost of the property was Rs.6.16 crores while the stamp duty value was Rs.6.18 crores. The assessee had paid only a sum of Rs.40.00
2 lakhs during the year under consideration. The assessee did not file any return of income for this year. Based on the information about the purchase of property, the Assessing Officer reopened the assessment of the instant year u/s. 147 of the Act. However, the Assessing Officer has served all the notices to the old address of the assessee. However, the assessee had sold the same in June,2018 itself. Further, the e-mail id of earlier tax consultant had been given to the department and he also did not inform about the notices issued by the AO. Hence, the assessee was not aware of the notices issued by the Assessing Officer and hence the assessee could not respond to any of the notices. Since, there was no response from the assessee, the Assessing Officer completed the assessment to the best of his judgment u/s. 144 r.w.s. 147 of the Act on 09/12/2019. The assessee was also not aware of the order so passed by the Assessing Officer.
Subsequently, a lien was created on the balance outstanding in the bank account of the assessee on 20/03/2020. At that point of time only, the assessee came to know about the assessment order passed by the Assessing Officer. The Ld A.R submitted that the date of service of assessment order should be reckoned as 20/03/2020 only, since the assessee became aware of the assessment order on that date only. Immediately, the assessee took steps to file appeal before the ld. CIT(A). By that time, COVID-19 pandemic started and all the private offices were shut. Hence the assessee could not file appeal within 30 days from the date when he came to know of the passing of assessment order. Despite the prevailing COVID situation, the assessee could file appeal before Ld.CIT(A) on 01/03/2021. The Ld A.R submitted that there was no delay in filing appeal in view of the facts mentioned above. However,
The ld.AR reiterated that the assessee came to know about the assessment order only on 20/03/2023 and the said date should be reckoned as date of service of the assessment order. Further, the time limit was extended by the Hon’ble Supreme Court of India due to COVID -19 pandemic till May, 2022. Accordingly, the ld.A.R submitted that there was no delay in filing of the appeal before the ld.CIT(A). The Ld A.R further submitted that the order passed by Ld CIT(A) should be set aside.
The ld A.R further submitted that the Ld CIT(A) has not passed the order on merits. Further, the assessing officer has also passed the order u/s 144 of the Act. Thus, the assessee did not get proper opportunity before the AO to explain his case properly. He submitted that the AO has assessed the entire value of property in the hands of the assessee, while the share of assessee in that was only 20%. Accordingly, she prayed that entire issues may be restored to the file of the AO for examining them afresh and the assessee would be in a position to explain the sources for the investments made in the purchase of property.
We heard Ld D.R and perused the record. We notice that the assessee did not get opportunity to represent before the AO. It is stated that the notices were sent to the old address of the assessee and the said premises had been sold in June, 2018 itself. It is stated that the e-mail given to the department belonged to earlier tax consultant, who also did not inform about the notices. It is stated that the assessee came to know of the assessment order, only when he came to know about the lien marked in his bank account. Thereafter, the 4 assessee could file before Ld CIT(A), even though the covid pandemic was continuing. In view of the above explanations given by the assessee, we are of the view that there was reasonable cause for the assessee in filing the appeal belatedly before Ld CIT(A). Accordingly, we are of the view that the Ld CIT(A) was not justified in not condoning the delay. Considering the explanations given by the assessee, we condone the delay in filing the appeal before Ld CIT(A).
Since the ld CIT(A) has not adjudicated the appeal of the assessee on merits, normally, all the issues need to be restored to his file for adjudicating them on merits. However, it is submitted that the share of the assessee in the property purchased was only 20%, while the entire value of property has been assessed in his hands by the AO. Further, it is the submission of the assessee that he has paid only a sum of Rs.40.00 lakhs during the year under consideration. Thus, we notice the facts relating the addition also require detailed examination. Hence, we find merit in the prayer of Ld A.R. Accordingly, we restore all the issues to the file of the AO for examining them afresh, after affording adequate opportunity of being heard. The assessee is also directed to fully co-operate with the assessing officer for expeditious completion of set aside proceedings.
In the result, the appeal of the assessee is allowed.