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Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI
Before: SHRI S. RIFAUR RAHMAN & SHRI RAJ KUMAR CHAUHAN
O R D E R PER RAJ KUMAR CHAUHAN (J.M.): 1. This appeal is filed by the assessee /appellant against the order of Learned Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the “CIT(A)”], passed under section 250 of the Income Tax Act, 1961 [hereinafter East and Apartment CGHS Ltd. referred to as “the Act”] dated 27.06.2025 for the A.Y. 2015-16, wherein the appeal was dismissed in limine and delay of 159 days in filing the appeal was not condoned.
2. The facts in brief as culled out from the proceedings of the authorities below are that the appellant is a Co-operative Group Housing Society, having almost 1300 members and has inexistence since 18.01.1994. For the concerned assessment year due to negligence of CA of the society, the ITR was not filed. The Jurisdictional Assessing Officer, ITO, Ward 60(1), New Delhi (hereinafter called ‘JA.O.’), was in possession of information through insight portal, in relation to certain transactions entered into by the appellant during the year under consideration and accordingly issued notice under section 148A(b) of the Act dated 14th March, 2022. The said notice was allegedly sent on the email “mukesh@mjra.co.in” which is neither the email ID of the appellant society, nor of the appellant’s chartered accountant or auditor and the correct email ID “eastend.society@gmail.com”. It is stated that for that reason, notice was never received and no response was filed by the assessee. Subsequently, the statutory notice under section 142(1) of the Act were issued by the NFAC and for the above reasons assessee/appellant was not aware of the ongoing proceedings. 2 East and Apartment CGHS Ltd. Subsequently, the NFAC issued the show cause notice dated 3rd February, 2023, proposing to add total amount of Rs. 2,44,35,082/- to the income of the appellant. The said show cause notice was also sent to the above mentioned email i.e. “mukesh@mira.co.in” and the appellant/assessee did not receive the said show cause notice.
3. Before the Ld. CIT(A) as per contents of Form No. 35, the appellant has sought condonation of delay giving various reasons including sending service of notice on the wrong email ID. The ld. CIT(A) was of the opinion that the appellant has not given any plausible explanation for huge delay of 159 days and accordingly, dismissed the appeal by refusing to condone the delay.
Aggrieved by the impugned order, the assessee is in appeal before us and raised following grounds of appeal:
“1. The CIT (Appeals)/National Faceless Appeal Centre (NFAC) has grievously erred in law and on facts, confirming the order passed under section 144 r.w.s. 147 and 144B of Income Tax Act, 1961 (hereinafter called "the Act") by the National Faceless Assessment Centre (hereinafter called "NFAC"), and the consequent demand raised. The same having been passed based on unverified information, without conducting any inquiry, without application of mind over the information on record, without considering the facts and circumstances of the case, and in violation of principles of natural justice. 3 East and Apartment CGHS Ltd.
The CIT (Appeals)/National Faceless Appeal Centre (NFAC) has grievously erred in law and on facts, in dismissing the appeal, holding the appeal to be inadmissible on account of delay of 159 days in filing of appeal, not appreciating that a. This is a case of cooperative group housing society which functions as a mutual benefit organization through a Managing Committee whose members and office bearer spare their own valuable time for the common purpose without any benefit. b. The managing committee and office bearers of the cooperative group housing society are generally not found aware with Income Tax Laws and other related laws, what to speak of making compliance thereof through the portal. They are mostly dependent on the office staffs and on the professionals who are outsourced only. c. The office staffs or the professionals who are outsourced for some work or for making compliance related to Act, often put their own email id, which later on not being accessed by new coming staffs and newly hired professional. This causes non communication of notice and orders as the case may be. d. The difficulties faced by the appellant on account of above mentioned points constituted sufficient cause as mandated by section 249(3) of the Act and therefore the delay in filing of appeal before CIT (Appeals)/National Faceless Appeal Centre (NFAC) may kindly be condoned and the appeal be directed to be decided on merits or alternatively should be restored back to the Assessing officer (A0) as the assessment order has been passed under section 144 of the Act.
The CIT (Appeals)/National Faceless Appeal Centre (NFAC) has grievously erred in law and on facts, confirming the order passed under section 148A (d) of the Act as the same being without 4 East and Apartment CGHS Ltd. jurisdiction, and has been passed based on unverified information, without conducting any inquiry, without application of mind over the information on record, and without considering the facts and circumstances of the case.
4. The CIT (Appeals)/National Faceless Appeal Centre (NFAC) has grievously erred in law and on facts, confirming the order and consequently the Notice under Section 148 of the Act. The same being without jurisdiction and in violation of the sections 147, 149, and 151 of the Act.
The CIT (Appeals)/National Faceless Appeal Centre (NFAC) has grievously erred in law and on facts, confirming the order making an additions of Rs. 1,25,34,022/- on account of cash deposits in bank, under section 69A of the Act, as the same has been done solely based on unverified and uncorroborated information, without conducting any independent inquiry in relation to the veracity of the information.
The CT (Appeals)/National Faceless Appeal Centre (NFAC) has grievously erred in law and on facts, confirming the additions of Rs. 1,25,34,022/- under section 69A of the Act on account of cash deposits in bank, as the same is on account of contribution received from the members of the society for running and maintenance of the society, and hence it is not part of income of the society based on the "Principle of Mutuality".
7. The CIT (Appeals)/National Faceless Appeal Centre (NFAC) has grievously erred in law and on facts, confirming the order where in an addition of Rs. 1,19,01,060/- under section 69A of the Act on account of alleged term deposits made with State Bank of Patiala has been made. This addition is totally hypothetical, unverified and uncorroborated, and hence must be deleted.
8. The CIT (Appeals)/National Faceless Appeal Centre (NFAC) has grievously erred in law and on facts, confirming the additions of 5 East and Apartment CGHS Ltd. Rs. 1,19,01,060/- under section 69A of the Act on account of alleged term deposits made with State Bank of Patiala are completely. In fact the appellant has not made any such term deposits and this amount is whimsical and imaginary based on some wrong and incomplete information received.
9. The CIT (Appeals)/National Faceless Appeal Centre (NFAC) has grievously erred in law and on facts, confirming the order treating the return filed by the appellant in response to the notice under section 148 of the Act as invalid, as the same has been duly e-verified.
10. The appellant seeks leave to consider all of the above grounds as being without prejudice to each other.
11. The appellant seeks leave to add, amend, modify, or delete any grounds of appeal
before or at the time of hearing.”
5. We have heard the ld. Authorized Representative (‘AR’) who at the very outset submitted that refusal to condone the delay by the Ld. CIT(A), despite being shown sufficient cause for condonation of delay, has resulted into miscarriage of justice. Since, the ITR was not e-verified by the assessee and accordingly, the same was considered as invalid and assessment was completed ex parte. On the basis of information /material available on record a total sum of Rs. 2,44,35,082, was treated as unexplained cash credit in the books of accounts and added under section 69A of the Act. It is therefore, submitted that delay in filing the 6. On the other hand, the Ld. DR supported the assessment order as well as Ld. CIT(A) order stating that the appellant has failed to show sufficient cause for condoning of delay and has failed to e-verify the ITR and the ld. AO has rightly passed the assessment order, therefore prayed for dismissal of the appeal.
We have considered the rival submission and examined the record of Para 4.1 and 4.2 of the AO which are extracted below would show that the assessment order was passed ex parte:
4.1 It is pertinent to mention here that this office has given an ample opportunities by issuing various notices, letters etc. to the assessee to file valid return of Income and also to file his reply in respect of cash deposits made with GRO, KRIBHCO, Noida of Rs.1,25,34,022/- and the sources of investments made on a/c. of Term Deposits with State Bank of Patiala of Rs.1,91,01,060/-. But the assessee has not filed e-verified return of income nor filed any reply in respect of cash deposits made alongwith documentary evidence. Assessee has also not furnished the details of bank statements and the list of society members and cash received from them. 4.2 In absence of any valid response from assessee’s side, I do not have any option but to complete the assessment Ex-parte as East and Apartment CGHS Ltd. per information and materials available on record. The said sum of Rs.1,25,34,022/- (Rs.59,93,169 + Rs.53,55,898 + Rs.11,84,955) deposited with GRO KRIBHCO, Noida and Rs.1,19,01,060/- term deposits made with State Bank of Patiala, Noida, totaling to Rs.2,44,35,082/- (Rs.1,25,34,022 + Rs.1,19,01,060) are treated as unexplained cash credits in the books of account earned from unexplained sources of income as per provisions of section 69A of the Act and the same is treated as income for the Financial Year 2014-15 relevant to Asst. Year 2015-16. (Addition Rs.2,44,35,082/-)
The assessee put reliance upon the judgment of the Hon'ble Supreme Court in the case of Collector, Land Acquisition Vs. MST. Katiji & Ors., [1987] 167 ITR 471 (SC), dated 19.02.1987, was pleased to hold regarding the condonation of delay as under: “The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits”. The expression “sufficient cause” employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making of justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that:
1. 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.”
We have considered the submissions and examined the record. We have noticed that the reason for delay in filing the appeal as per appellant/assessee are that appellant remained unaware of the ongoing proceedings because the show cause notice dated 3rd February, 2023 was also sent to the email mukesh@mjra.co.in which was not the email of assessee or their accountant or auditor or CA and the appellant did not get any real time alert in relation to the said show cause notice. Since the communication were sent on the wrong email, the appellant/assessee did not get the opportunity to know about the passing of the impugned order and further the management of the appellant society was not aware of the order having been passed in this matter till the Income Tax portal was locked in at the time of audit and preparation of Income Tax Return for A.Y. 2023-24.
Section 250 sub section 2(a) of "the Act" provides as under:
Section 250 (2) The following shall have the right to be heard at the hearing of the appeal: - a. The appellant, either in person or by an authorised representative;
It is evident from the provision that the hearing to be given is not a formality but an effective hearing is sine qua non for the purpose of upholding the principal of natural justice.
It is evident from the contents of the impugned order as well as the assessment order that no effective opportunity of hearing has been given to the assessee which has resulted into miscarriage of justice. We are of the considered opinion that the assessee has shown sufficient cause for condonation of delay and we accordingly deem it fit to condone the delay in filing the appeal and for these reasons the impugned order passed by Ld. CIT(A) needs to be set aside and matter needs to restore to the file of the AO for deciding it afresh after effective opportunity of hearing to the assessee. The assessee is directed to present its case before the Ld. AO within 60 days of this order.
In the result, the appeal of the assessee is accordingly allowed as above terms for statistical purposes.