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Facts
The assessee filed appeals with a delay of 332 days, explaining that the ex-parte order was passed by the Ld. CIT(A) due to non-receipt of notices. The assessee had opted for offline communication, but notices were sent via the ITBA portal, which were not received. The Revenue opposed the condonation of delay, arguing it was malafide.
Held
The Tribunal held that the assessee was not provided with an adequate opportunity of being heard as notices were not received. Citing the Supreme Court's decision in Land Acquisition Collector vs. MST Katiji & Others, the Tribunal condoned the delay, stating that substantial justice should be preferred over technical considerations. The appeals were ordered to be heard on merits.
Key Issues
Whether the delay in filing the appeals should be condoned due to ex-parte orders passed by the CIT(A) without providing adequate opportunity of hearing to the assessee?
Sections Cited
143(3), 147, 148, 68, 132, 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI KULDIP SINGH & SHRI AMARJIT SINGH
Present for: Assessee by : Shri Aditya Maheshwari, A.R. Revenue by : Shri S. Arunkumar, D.R. Date of Hearing : 28 . 02 . 2024 Date of Pronouncement : 29 . 02 . 2024 O R D E R Per : Kuldip Singh, Judicial Member: Since common question of law and facts have been raised in both the inter-connected appeals, the same are being disposed of by way of composite order to avoid repetition of discussion.
At the very outset it is brought to the notice of the Bench that the appellant M/s. Nirwan Monetary Services Pvt. Ltd. (hereinafter referred to as ‘the assessee’) could not file the present appeals & 3745/M/2023 2 M/s. Nirwan Monetary Services Pvt. Ltd.
within the period of limitation, rather same have been filed with a delay of 332 days and sought to condone the same on the grounds inter-alia that the impugned order have been passed ex-parte by the Ld. CIT(A) on 21st September 2022 and as such the due date to file the appeal before the Tribunal was November 20th, 2022; that at the time of filing form No.35 in the column “whether notice/communication be sent on e-mail”, the assessee had mentioned “No” and as such was under legitimate impression that the notices would not be served online but it would be served offline; that the assessee has received no communication from the department in the next 4 & ½ years barring one communication via email; that notices of hearing were sent on Income Tax Portal and emailed to lalit@angelbroking.com, which were not read by the designated person and further emails were marked Mr. Lalit Thakkar whose email was mentioned while filing of Form no. 35, further, emails were marked in cc (carbon copy) to harikrishna.negi@angelbroking.com. However. Mr. Harikrishna Negi did not receive the emails and it might went to the spam folder; that the reason for opening of the case was sent offline and thereafter assessment order was passed under section 143(3) r.w.s. 147 of Income Tax Act, 1961 (in short ‘the Act’) on December 17, 2017 was also received offline by the assessee; that on visiting the income tax office by the counsel of the assessee it has come to the notice that the order has been passed by the Ld. CIT(A)/NFAC ex-parte; that the appeal against the same was filed on January 20, 2018; that delay in filing appeals was neither intentional nor willful.
However, on the other hand, the Ld. D.R. for the Revenue opposed the application for condonation of delay on the ground that & 3745/M/2023 3 M/s. Nirwan Monetary Services Pvt. Ltd.
the late filing of appeals in this case is apparently malafide due to callous attitude of the assessee and prayed for dismissal of the application.
Keeping in view the facts inter-alia that the assessee has filed the appeals offline before the Ld. CIT(A) which was subsequently transferred to NFAC of which no notice is claimed to have been received by the assessee; that due to shift of the hearing of the appeal by the first appellate authority from physical hearing to NFAC few technical glitches have occurred causing disadvantage to the litigant by not receiving the notices issued by the first appellate authority; that in form No.35 the assessee has also opted for receiving the notices/communication through physical mode but notices have been stated to have been sent by the Ld. CIT(A) (NFAC) through email which the assessee has not received, we find sufficient reason to condone the delay because when the order has been passed by the Ld. CIT(A) ex-parte for want of prosecution the assessee might not have received the copy of order sent through email. Keeping in view the law laid down by the Honourable Supreme Court in case of Land Acquisition Collector vs. MST Katiji & Others 167 ITR 471 (SC) wherein it is held that “it is on contention of delay that when substantial justice and technical considerations are pitted against each other, the case of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non deliberate delay,” the delay of 332 days in filing the present appeal is hereby condoned and present appeals are ordered to be registered and heard on merits today itself by the Bench. & 3745/M/2023 4 M/s. Nirwan Monetary Services Pvt. Ltd.
The assessee by filing the aforesaid appeals, sought to set aside the impugned orders both dated 21.09.2022 passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] qua the assessment years 2011-12 & 2013-14 by raising identical grounds (grounds of 2011-12 are extracted for the sake of brevity) inter-alia that:- “1. On the facts & circumstance of the case the learned Commissioner of Income Tax Appeals passed ex parte order. The CIT Appeals could have decided appeal on merits and details on record. Due to non-receipt of notices from CIT (Appeals) the appellant could not filed the submission. 2. On the facts & circumstance of the case the learned F Income Tax Officer erred in adding Rs. 500,000/- being amount received as alleged accommodation entries u / s 68 of the Income Tax Act, 1961 whereas no loan or any other kind of transaction in books of account in the year under consideration.”
Briefly stated facts necessary for consideration and adjudication of the issues at hand are : the assessee filed its return for the years under consideration declaring its total income at nil. Subsequently the assessee filed revised return of income for the years under consideration and case was reopened by initiating the proceedings under section 147/148 of the Act. On the basis of information received from investigation wing, Mumbai a search under section 132 of the Act was conducted in case of M/s. Vipul Vidhur Bhatt and his other related entities on 05.02.2016. During the search M/s. Vipul Vidhur Bhatt has got recorded the statement that he is an entry operator and provided various accommodation entries to the numerous beneficiaries and one such accommodation entry was given to the assessee company of Rs.5,00,000/- in the name of M/s. Routine Investment. Information was called under section 133(6) of the Act from M/s. Routine Investment but no & 3745/M/2023 5 M/s. Nirwan Monetary Services Pvt. Ltd.
information has been received till date nor the assessee has provided details for transaction done by the assessee thus the said transaction becomes suspicious. On failure of the assessee to prove the identity & creditworthiness of the parties to establish the genuineness of the transactions the Assessing Officer (AO) proceeded to make the addition of Rs.5,00,000/- each for A.Y. 2011-12 & 2013-14 by framing the assessment under section 143 read with section 147 of the Act.
The assessee carried the matter before the Ld. CIT(A) by way of filing appeals who has upheld the assessment order by dismissing the appeals for want of prosecution. Feeling aggrieved with the impugned orders passed by the Ld. CIT(A) the assessee has come up before the Tribunal by way of filing present appeals.
We have heard the Ld. Authorised Representatives of the parties to the appeal, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and law applicable thereto.
At the very outset it has come on record that the impugned orders have been passed by the Ld. CIT(A) ex-parte for want of prosecution by the assessee. In para 2 of the impugned order the Ld. CIT(A) stated to have issued 4 notices to the assessee through ITBA portal, which the assessee has claimed not to have received as they had opted for receiving the notice offline as per option exercised in form No.35. No doubt different procedure cannot be made for the assessee because all the appeals by the NFAC are to be decided under the rules by issuing notices through ITBA portal, & 3745/M/2023 6 M/s. Nirwan Monetary Services Pvt. Ltd.
but since the assessee has initially filed the present appeals physically but subsequently they were transferred to NFAC, we are of the considered view that the notices issued by the Ld. CIT(A) have not been received by the assessee. Moreover, for argument sake even if it is assumed that the notices were received by the assessee but he has failed to appear before the Ld. CIT(A), in that eventuality the Ld. CIT(A) was required to decide the appeals on merits as he has no authority to dismiss the appeal ex-parte for want of prosecution by the assessee. In these circumstances, it is proved that the assessee has not been provided with adequate opportunity of being heard. To decide the issue once for all and in the interest of justice the impugned order passed by the Ld. CIT(A) is hereby set aside to be decided afresh by the Ld. CIT(A) after providing opportunity of being heard to the assessee.
Resultantly, both the appeals filed by the assessee for A.Y. 2011-12 & 2013-14 are hereby allowed for statistical purposes.
Order pronounced in the open court on 29.02.2024.