Loading judgment…
Facts
The assessee filed an appeal with a delay of 33 days due to the auditor's preoccupation. The assessee also claimed that the order was passed without a sufficient opportunity to be heard, violating principles of natural justice. The assessee stated they had limited education and were unaware of proceedings.
Held
The Tribunal condoned the delay of 33 days, preferring substantial justice over technicality, citing Apex Court judgments. The Tribunal noted that the lower authorities did not consider relevant CBDT circulars regarding demonetization and passed the order ex-parte.
Key Issues
Whether the delay in filing the appeal should be condoned and whether the order passed by the lower authorities was in violation of principles of natural justice and failed to consider relevant CBDT circulars.
Sections Cited
Section 250, Section 69A, Section 234A, Section 234B, Section 274, Section 271AAC, Section 270A, Section 271A, Section 271B, Section 271F
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A’’BENCH: BANGALORE
Before: PRASHANT MAHARISHI & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of assessee is directed against the order of CIT(A)/NFAC dated 20.6.2024 vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1065860778(1) passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”) for the Assessment year (in short “AY) 2017-18. 2. The assessee has raised following grounds of appeal:
1. The Order of the learned Commissioner passed under section 250 of the Act is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant's case.
2. The Appellant denies to be assessed for income of Rs. 15,72,103/- as against the actual total income NIL in the facts and circumstances of the case.
3. The learned Commissioner of Income-tax (Appeals) erred in passing the order without giving sufficient opportunity of being heard thus Guntur Vinay, Bangalore Page 2 of 7 violating the principles of natural justice renderingthe order liable to be cancelled on the facts and circumstances of the case.
The learned Commissioner of Income-tax (Appeals) erred in dismissing the appeal on the basis that the Appellant is not interested in prosecuting the appeal despite the fact that the Appellant was unaware of the notices issued in the facts and circumstances of the case.
The learned Commissioner of Income-tax (Appeals) ought to have held that the learned Assessing Officer grossly erred in holding the sum of Rs.6,54,246/- found credited in the bank account of the appellant as unexplained money u/s 69A of the Income Tax Act, 1961 in the facts and circumstances of the case.
The learned Commissioner of Income-tax (Appeals) ought to have held that the learned Assessing Officer grossly erred in holding the amount deposited in the bank account of Rs.4,01,808/- as unexplained money u/s 69A of the Income Tax Act, 1961 in the facts and circumstances of the case.
The learned Commissioner of Income-tax (Appeals) ought to have held that the learned Assessing Officer grossly erred in confirming the addition of Rs.4,12,000/- as income from business or profession for the impugned year in the facts and circumstances of the case.
The learned Commissioner of Income-tax (Appeals) ought to have held that levying interest under section 234A and 234B of the is bad in law and facts and circumstances of the case.
The learned Commissioner of Income-tax (Appeals) ought to have held that the penalty proceedings-initiated u/s 274 r.w.s 271AAC, 270A(1) r.w.s270A(9)(a), 271A, 271B and 271F of the Act is contrary to law on the facts and circumstances of the case.
The Appellant craves leave to add, alter, delete or substitute any of the grounds urged above.
In the view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the interest of justice andequity.
There is a short delay of 33 days in filing the present appeal before this Tribunal. The assessee has filed the application for condonation of delay along with an affidavit dated 18.9.2024 stating that the appeal could not be filed within the time for the reason that the auditor was pre-occupied with the tax audit works and accordingly prayed that a lenient view may be taken in the interest Guntur Vinay, Bangalore Page 3 of 7 of justice. Further, ld. A.R. of the assessee vehemently submitted that the delay was neither deliberate nor within the control of the assessee.
3.1 The Ld. DR though opposed for the condonation of delay could not controvert the submissions made therein.
We have gone through the reasons explained by the assessee for filing the appeal belatedly before this Tribunal. At this juncture, it is appropriate to mention the judgment of the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) which laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:
(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 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. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner. (4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a nondeliberate delay. (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A Guntur Vinay, Bangalore Page 4 of 7 litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.
4.1 Thus, when substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay. Moreover, no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the belated appeal was filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. Therefore, in our opinion, by preferring the substantial justice, the short delay of 33 days has to be condoned. Keeping in view of the circumstances, under which the assessee’s appeal was filed belatedly, we condone the short delay of 33 days and admit the appeal for adjudication.
At the outset, the ld. A.R. of the assessee vehemently submitted that both the authorities below have passed the order without giving sufficient opportunity of being heard which is a clear violation of the principles of natural justice. Further, the ld. A.R. of the assessee submitted an affidavit dated 11/11/2024 sworn before the Notary Public stating reasons that no physical copies were received by the assessee and merely uploaded on the portal. Further, it is also stated that the assessee has no knowledge in income tax proceedings as he has studied only upto SSLC and therefore, the submissions could not be made within the time specified by both the lower authorities. Further the ld. A.R. of the assessee undertakes to appear along with necessary Guntur Vinay, Bangalore Page 5 of 7 documents/records/submissions before the AO, if the matter is remitted back to the file of AO for fresh consideration. 5.1. Further, ld. A.R. of the assessee also submitted that the case of the assessee was solely selected for scrutiny for the for the reason of substantial cash deposits during the demonetization period in the bank accounts and the AO has not followed the mandatory CBDT Circular/instructions with regard to the demonetization while passing the assessment order.
The ld. D.R. on the other hand supported the Order of the Authorities below and submitted that the assessee could not substantiate his case by submitting documents/explanations before both the Authorities below and further submitted that the revenue has no objection if the case is remitted back to the AO for fresh adjudication subject to levy of cost.
We have carefully considered the rival submissions and perused the orders of lower authorities & materials on Record. We note that the authorities below have not considered the CBDT circulars in order to verify the substantial cash deposits during the demonetization period. Even the AO during the assessment proceedings has not considered the relevant CBDT circulars that was issued for the purposes of verifying the demonetized cash deposited during the year under consideration. Admittedly, the order has been passed by the authorities below ex-parte without giving reasonable opportunity of being heard. Being so, we are of the opinion that in the interest of justice and fair play and as requested by the ld AR of the Assessee, one more opportunity may be given to the assessee to substantiate his claim and accordingly we set-aside the entire issue in dispute to the file of AO for fresh consideration in accordance with Law. Needless to say the reasonable opportunity of being heard must be granted to the Guntur Vinay, Bangalore Page 6 of 7 assessee. We also direct the AO to verify the Gross Receipts made by the assessee that is deposited into the bank accounts during the year under consideration in accordance with the following circulars whichever is applicable to the facts of the case- a) The 1st instruction was issued on 21/02/2017 by instruction number 03/2017. b) The 2nd instruction was issued on 03/03/2017 instruction number 4/2017. c) The 3rd instruction was in the form of a circular dated 15/11/2017 in F.No. 225/363/2017-ITA.II and the last one dated 09/08/2019 in F.no.225/145/2019-ITA.II. and decide the issue in the light of above CBDT instructions issued for dealing with the demonetization. The assessee is also directed to submit all the evidences/documents/records within 90 days from the date of service of the notice(s) and cooperate with the proceedings before the revenue authorities for proper adjudication of the case. We clarify that in case of further default, the assessee shall not be entitled for any leniency.
In the result, appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 25th Nov, 2024 Sd/- Sd/- (Prashant Maharishi) (Keshav Dubey) Vice President Judicial Member Bangalore, Dated 25th Nov,2024. VG/SPS Copy to:
The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order
Asst. Registrar, ITAT, Bangalore.