M/S. TILES GALLERY ,SHIVAMOGGA vs. INCOME TAX OFFICER, WARD-1 & TPS , SHIVMOGA

The Present Chartered Accountant resumed attending to his office sometime in the last week of May 2024 after the tragedy. The Petitioner / Appellant visited the office of the Present Chartered Accountant in the second week of June 2024 and while discussing the partner of the Petitioner / Appellant enquired about the status of the appeal before the Hon’ble Tribunal and then the Petitioner / Appellant came to know that an appeal has not been filed and thereafter, the present Chartered Accountant suggested the Petitioner / Appellant to approach the present counsel office of Sri. V. Chandrasekhar, Advocate office at Bangalore for doing the needful and for taking necessary steps for filing appeal before the Hon’ble Tribunal.

Thereafter, the Petitioner / Appellant based on the suggestion of Sri. Ravisha P G, approached the present counsel and explained the entire facts and circumstances leading to passing of best judgment assessment order by the learned assessing officer and also ex-parte order passed by the learned Commissioner of Income-tax [Appeals]. Further, Petitioner / Appellant explained that there are no business activity carried on by the Petitioner / Appellant from the year 2020 due to certain serious differences among the partners and have stopped doing the business. 12. The present counsel after obtaining the relevant papers, prepared the appeal papers and the present appeal was lodged before this Hon’ble Tribunal on 28/06/2024. 13. It is submitted that as per the provisions of section 253 of the Act the Petitioner / Appellant ought to have filed the statutory appeal against the impugned order passed by the learned Commissioner of Income-Tax [Appeals], within 60 days from the date of receipt i.e. 02/01/2024 of the said order i.e. on or before 02/03/2024, before this Hon’ble Tribunal.

However, for the reasons mentioned in the earlier paragraphs Petitioner / Appellant was prevented from filing the statutory appeal within the time stipulated in the statute i.e. within 60 days i.e. on or before 02/03/2024 and by the time the Petitioner / Appellant filed this present appeal, there arose a total delay of about 118 number of days in filing this present appeal before this Hon’ble Income-tax Appellate Tribunal as per the provisions of the Act.

It is humbly prayed that this Hon’ble Tribunal takes a lenient and compassionate view and condone the delay of about 118 days in filing the present appeal against the ex-parte order passed by the learned Commissioner of Income-tax [Appeals], NFAC, Delhi, dated 02/01/2024 for the Assessment Year 2017- 18 and hear the same on merits for the advancement of substantial cause of justice.

Wherefore, in view of the above factual background, the Petitioner / Appellant could not file the present Appeal before this Hon’ble Tribunal well in time as per the scheme of the Act and there arose of delay of about 118 days in filing this present appeal before this Hon’ble Tribunal and the said act of the Petitioner / Appellant in not filing the present appeal within time is not deliberate or intentional and the Petitioner / Appellant by not filing the appeal in time will not gain any benefit and for the reasons as stated above the Petitioner / Appellant could not file the present appeal within the stipulated time which fact requires to be appreciated by this Hon’ble Tribunal.

It is humbly submitted that if this application for condonation of delay in filing the appeal is not allowed, the Petitioner / Appellant would be put to great hardship and irreparable injury and on the other hand no hardship or injury would be caused to the Respondent if this application of condonation of delay is allowed. Reliance is placed on the decision of the Hon’ble Apex Court in the case of Collector, Land Acquisition Vs. MST. Katiji and Others [1987] 167 ITR 471 and also in the case of Concord of India Insurance Co. Ltd., Vs. Smt. Nirmala Devi and Others 118 ITR 507. Further the Appellant relies on other decisions of the Hon’ble Apex Court in the case of Radha Krishna Rai Vs. Allahabad Bank & Others [2009] 9 SCC 733; and another decision of the Hon’ble Apex Court in the case of Ram Nath Sao alias Ram Nath Sahu & Others Vs. Gobardhan Sao & Others, reported in [2002] 3 SCC 195 and another decision of the Hon’ble Apex Court in the case of CIT Vs. West Bengal Infrastructure Development Finance Corporation Limited [2011] 334 ITR 269 [SC].

Wherefore the Petitioner / Appellant once again humbly pray before this Hon’ble Tribunal to kindly consider the submissions made and considering the submissions the Petitioner / Appellant humbly pray before this Hon’ble Tribunal to condone the delay in filing the present appeal of about 118 days and hear the same on merits of the matter for the advancement of substantial cause of justice.”

Considering the above affidavit filed by the assessee, the assessee has given reasons for delay in filing the appeal which are reasonable cause and therefore relying on the judgment of the Hon'ble Apex Court in the case of Collector, Land Acquisition Vs. MST. Katiji and Others (1987) 167 ITR 471, delay in filing the appeal before the Tribunal is condoned.

Briefly stated the facts of the case are that assessee is a partnership firm. The assessee deposited cash of Rs.1,29,80,132 into its bank account maintained at Axis Bank during the FY 2016-17 relevant to AY 2017-18 and the assessee has not filed return of income. Accordingly the case was reopened by notice u/s. 148 dated 27.03.2021 and served on the assessee. The assessee did not file return after issuing notice u/s.142(1) and sufficient opportunities. Accordingly the entire cash deposit was added u/s. 68 and applied tax rate u/s. 115BBE and the AO passed order on 26.3.2022 u/s. 144 r.w.s. 147 of the Act. Aggrieved from the above order, the assessee filed appeal before the First Appellate Authority (FAA) on 16.9.2022.

The ld. CIT(Appeals), NFAC provided four opportunities and there was only one adjournment sought by the assessee against noticed issued on 7.11.2023. Thereafter there was no response from the assessee’s side, accordingly the ld. FAA dismissed the appeal of the assessee for non-prosecution and not furnishing cogent evidence in respect of its grounds of appeal. Aggrieved, the assessee is in appeal before the ITAT.

The ld. AR submitted that during the course of assessment proceedings the assessee could not participate in the assessment proceedings because of COVID-19. During the course of appellate proceedings there were difference among the partners and business of appellant was discontinued and there were no employees and the posting of hearing were inadvertently not communicated by the appellant to its tax consultant. Consequently notice of hearing sent to appellant could not be attended which was not deliberate or intentional. He further submitted that the entire cash deposits in bank account should not be added. Cash was deposited out of sale proceeds. He requested that if a chance is given to the assessee, he undertook to respond to the notices and substantiate the case of the assessee with evidence before the lower authorities.

The ld. DR relied on the order of lower authorities and submitted that assessee is a non-filer. During the impugned AY, the assessee has deposited significant amount of cash of Rs.1,29,80,130 in spite of knowing the fact, assessee did not file return of income, even it did not respond to the notices issued by both the authorities below. The AO has completed assessment u/s. 144 and the ld. FAA has also passed order ex parte. Therefore he objected to sending back the matter to lower authorities.

Considering the rival submissions we note that assessee has deposited significant cash as noted above and he has not filed return of income and accordingly the AO issued notice u/s. 148 and case was completed u/s. 144 of the Act during Covid-19 period. During appellate proceedings before the CIT(Appeals), the assessee sought adjournment for notice dated 7.11.2023, but subsequently there was no response from assessee’s side. Considering the above facts of the case and in the interest of justice, we remit the issue to the Assessing Officer for fresh consideration and decision as per law. The assessee is directed to update its email id, communication address and other details and file necessary documents that would be essential and required for substantiating his case and for proper adjudication by the revenue authorities. Needless to say that reasonable opportunity of being heard be given to the assessee. The assessee is directed to cooperate with the proceedings and in case of further default, the assessee shall not be entitled to any leniency.

In the result, the appeal by the assessee is allowed for statistical purposes.