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Facts
The assessee, a Non-Resident Indian (NRI), filed two appeals against orders of the CIT(A) which dismissed his appeals due to delays of 334 days and 162 days respectively, without adjudicating on merits. The assessee claimed that he was unaware of the proceedings as notices were not received and that he had a sufficient cause for the delay.
Held
The Tribunal held that the assessee had demonstrated sufficient cause for the delay in filing the appeals, attributing it to non-receipt of notices and lack of awareness of the proceedings. The CIT(A) was not justified in dismissing the appeals solely on the ground of limitation.
Key Issues
Whether the appeals filed with delays were condonable due to sufficient cause, and whether the CIT(A) erred in dismissing the appeals on limitation without considering the merits.
Sections Cited
147, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES “A” :: JAIPUR
Before: DR.S.SEETHALAKSHMI & DR. DIPAK P. RIPOTE
ORDER PER DR. DIPAK P. RIPOTE, AM: These two appeals filed by the assessee i.e.Mr.Sanjay Sharma against two separate orders of ld.Commissioner of Income Tax(Appeals)[NFAC] both dated 29.04.2024 for A.Y.2015-16, one emanating from the assessment order u/sec.147 dated 27.03.2023 & 782/JPR/2024 Sh. Sanjaya Sharma, Sikar [A] and another emanating from penalty order u/sec.271(1)(c) dated 13.09.2023. The assessee in has raised the following ground of appeal : “1. The Ld. CIT(A), NFAC has erred on facts and in law in dismissing the appeal filed by the assessee on the ground that appeal filed with a delay of 334 days is inadmissible as barred by limitation without giving any finding on the application filed by the assessee giving reasons for delay in filing the appeal.
2. The Ld. CIT(A), NFAC has erred on facts and in law in upholding the validity of order passed by AO in the status of resident whereas the assessee is non-resident and thus the jurisdiction over the assessee lies with AO, International Taxation and not with National Faceless Assessment Centre.
3. The Ld. CIT(A), NFAC has erred on facts and in law in not deciding the appeal on merit relating to addition of Rs. 1,17,38,065/- made on account of alleged unexplained investment in FDR with Bank of Baroda.
4. The Ld. CIT(A), NFAC has erred on facts and in law in not deciding the appeal on merit relating to addition of Rs.70 lacs made on account of alleged unexplained investment in property at Mumbai.
5. The appellant craves to alter, amend and modify any ground of appeal.
6. Necessary cost be awarded to the assessee.” 1.1 The assessee in has raised the following grounds of appeal : “1. The Ld. CIT(A), NFAC has erred on facts and in law in dismissing the appeal filed by the assessee on the ground that appeal & 782/JPR/2024 Sh. Sanjaya Sharma, Sikar [A] filed with a delay of 162 days is inadmissible as barred by limitation without giving any finding on the application filed by the assessee giving reasons for delay in filing the appeal and thereby not deciding the appeal on merit relating to levy of penalty of Rs.63,69,069/- u/s 271(1)(c) of IT Act.
The Ld. CIT(A), NFAC has erred on facts and in law in upholding the validity of order passed by AO in the status of resident whereas the assessee is non-resident and thus the jurisdiction over the assessee lies with AO, International Taxation and not with National Faceless Assessment Centre.
3. The appellant craves to alter, amend and modify any ground of appeal
4. Necessary cost be awarded to the assessee.” Submission of ld.AR :
2. The ld.AR submitted that since assessee is an NRI was staying outside India and has not received notices, one more opportunity may kindly be given to the assessee. The ld.AR also submitted that in the last ten years, assessee had stayed in India only for 171 days and that chart was submitted to ld.CIT(A) which has been reproduced by the ld.CIT(A) in the order. Assessee do not have source of income in India during the respective period. Therefore, addition made is unjust. The ld.Assessing Officer has reopened the assessee’s case on the ground that assessee had & 782/JPR/2024 Sh. Sanjaya Sharma, Sikar [A] purchased immovable property during the A.Y.2015-16 but no Return of Income was filed by the assessee. The ld.AR submitted that since assessee was not staying in India and he was not having any income accruing/arising in India, he was not liable to file Income Tax Return. As far as purchase of immovable property is concerned, assessee had obtained bank loan for purchasing the impugned immovable property. The fixed deposits mentioned in the assessment order were sourced from the income earned outside India. Therefore, it is not taxable in India. The said fixed deposits are made under “NRE Scheme” on which no tax is payable in India. The details of assessee stay in India is as under, which will explain that assessee is “Not Resident of India for the purpose of Income Tax : Period Days stayed in India 01.04.2014 to 31.03.2015 15 01.04.2015 to 31.03.2016 9 01.04.2016 to 31.03.2017 14 01.04.2017 to 31.03.2018 14 01.04.2018 to 31.03.2019 24 01.04.2019 to 31.03.2020 32 01.04.2020 to 31.03.2021 - & 782/JPR/2024 Sh. Sanjaya Sharma, Sikar [A]
01.04.2021 to 31.03.2022 - 01.04.2022 to 31.03.2023 38 01.04.2023 to 31.03.2024 25 Total 171 2.1 The Assessee filed written submission as under : Ground No.1 (ITA No.781/JP/2024-Quantum) The Ld. CIT(A), NFAC has erred on facts and in law in dismissing the appeal filed by the assessee on the ground that appeal filed with a delay of 334 days is inadmissible as barred by limitation without giving any finding on the application filed by the assessee giving reasons for delay in filing the appeal. Ground No.1 (ITA No.782/JP/2024-Penalty u/s 271(1)(c)) The Ld. CIT(A), NFAC has erred on facts and in law in dismissing the appeal filed by the assessee on the ground that appeal filed with a delay of 162 days is inadmissible as barred by limitation without giving any finding on the application filed by the assessee giving reasons for delay in filing the appeal and thereby not deciding the appeal on merit relating to levy of penalty of Rs.63,69,069/- u/s 271(1)(c) of IT Act. Facts & Submission:-
1. 1. The assessee is a Non-Resident Indian. He is carrying out a business in the name of Vinayak International Limited at Hong Kong/ China since 2005. He has not filed any return of income in India after AY 2010-11 since he has no income chargeable to tax in India.
2. The AO on the basis of information that assessee has purchased an immovable property for Rs.70,00,000/- and made time deposit of Rs.1,17,38,065/- issued notice u/s 148 to the assessee on 29.03.2022. Thereafter AO issued notices dt. 27.10.2022, 06.01.2023. 31.01.2023 & 07.03.2023 but since none of these notices came to the knowledge of the assessee, they remain un-responded. Accordingly AO passed the assessment order on 27.03.2023 at total income of Rs. 1,87,38,065/-. & 782/JPR/2024 Sh. Sanjaya Sharma, Sikar [A]
Thereafter the AO issued show cause notice dt. 28.03.2023, 26.05.2023, 26.06.2023, 17.07.2023 and 28.07.2023 u/s 271(1)(c) of the Act but since none of these notices came to the knowledge of the assessee, they remain un-responded and accordingly AO vide order dt. 13.09.2023 imposed penalty of Rs.63,69,069/- u/s 271(1)(c) of the Act.
For the first time, a letter through registered post was sent at the parental house of the assessee on 18.08.2023 through which it came to the notice that certain proceedings are going against assessee. Thereafter the brother of assessee Advocate Naveen Sharma vide letter dt. 09.11.2023 (PB 4) requested the AO to provide all the notices and the assessment order if any passed against the assessee. Again vide letter dt. 13.11.2023 (PB 5-6) request was made to provide all the notices and the assessment order. Since the notices and orders were not provided, the brother of assessee approached Advocate Naresh Bhagaria of Sikar who suggested getting these documents online by registering the assessee on income tax portal. Accordingly after registering on the income tax portal the assessment and penalty orders were downloaded and appeal against both the orders was filed on 23.03.2024 through CA Anil Nuhal of Kalani & Company, Jaipur. 5. The Ld. CIT(A), NFAC issued notice dt. 10.04.2024 (Page 5 of the order) stating that no reason has been furnished till date for delayed filing of appeal. Thereafter reproducing the reasons for delay in filing the appeal as mentioned in Form No.35 and reply dt. 29.03.2024 as reproduced at Page 7 & 8 of the order, it was observed that there is a delay of 334 days in filing the quantum appeal and delay of 162 days in filing the penalty appeal. Accordingly hy relying on the various case laws it was held that there exists no sufficient or good reason for condoning the inordinate delay in filing the appeal and thereby both the appeals were dismissed as barred by limitation. 6. It is submitted that the Ld. CIT(A), NFAC has not written a single line in the order as to how the reasons given by the assessee for delay in filing the appeal are not due to sufficient cause. The assessee in Form No.35 as well as in reply dt. 29.03.2024 has narrated the reasons as to why the appeal could not be filed in time. The reason given by the assessee that these orders never came to his notice till it & 782/JPR/2024 Sh. Sanjaya Sharma, Sikar [A] was downloaded from the income tax portal after registration on the income tax portal in view of the receipt of letter through registered post is not questioned. Thus when assessee downloaded the orders from the Income Tax Portal, it is the date of service of order and therefore there is good and sufficient cause for delay in filing the appeal when considered from the date of order.
The Ld. CIT(A), NFAC has referred to various judgements in its order. The law laid down in all these judgements rather favors the assessee. In these judgements it is held that where there is no negligence or inaction or want of bonafide, liberal construction should be made to advance the substantial justice. In the present case assessee has demonstrated the sufficient cause for delay in filing the appeal. Such delay is not on account of any negligence or inaction or on account of any mala-fide intention. Hence, CIT(A) NFAC was not justified in not admitting the appeal. Reliance in this connection is placed on the following cases:- 2.2 The assessee relied on the following decisions : Ram Sumiran & Others Vs. D.D.C. AIR 1985 (SC) 606. Esha Bhattacharjee Vs. Managing Committee of Raghunathpur, Nafar Academy and Others 2013 (5) CTC 54. Vedabai Alias Vaijayantabai Baburao Patil Vs. ShantaramBaburao Patil & Ors. (SC) [2002] 253 ITR 0798. CIT Vs. West Bengal Infrastructure Development Finance Corporation Ltd., (SC) [2011] 334 ITR 0269. K.S.Bilawala Vs. PCIT [2024] 297 Taxman 464 (Bom HC). Submission of ld.DR : 3. The ld.Departmental Representative(ld.DR) for the Revenue took us through the order of ld.CIT(A) and Assessing Officer. The & 782/JPR/2024 Sh. Sanjaya Sharma, Sikar [A] ld.DR submitted that assessee had been given more than sufficient opportunities by ld.CIT(A), however assessee failed to produce any document before the ld.CIT(A). The ld.DR submitted that seven notices were served on assessee by the Assessing Officer and assessee has not complied to any of the notices. Therefore, ld.DR submitted that the order of ld.CIT(A) and Assessing Officer may be confirmed.
Findings & Analysis : 4. We have heard both the parties and perused the records. On perusal of the ld.CIT(A)’s order it is observed that ld.CIT(A) has dismissed the appeal of the assessee only on one ground i.e.Delay in filing of appeal. In , assessee filed appeal against assessment order before the ld.CIT(A) on 23.03.2024. There was delay of 334 days in filing appeal. In Form No.35, in Column No.15 assessee has elaborately explained the reason for delay in filing appeal. & 782/JPR/2024 Sh. Sanjaya Sharma, Sikar [A] 4.1 In appeal No.782/JPR/2024 assessee filed appeal before the ld.CIT(A) against the order u/sec.271(1)(c) on 23.03.2024 with a delay of 162 days. In Form No.35, assessee has elaborately explained the reasons for the delay in filing appeal. Assessee has also explained in both the appeals, the basic fact that assessee is an NRI and for the period 01.04.2014 to 25.03.2024, assessee has stayed in India only for 171 days. In the Form No.35, assessee has also mentioned that for purchasing immovable property assessee has obtained Loan from Bank of Baroda on 07.11.2014. In Form No.35, assessee has also mentioned that assessee’s PAN was not registered on Income Tax Portal, therefore, no online notices were received by assessee.
4.3 In this case, it is a fact that assessee is an NRI. Ld.CIT(A) has dismissed the appeal of the assessee only on the reason of delay without discussing the merits of the case. Ld.Assessing Officer has observed that assessee had purchased immovable property of Rs.70,00,000/- and assessee was having fixed deposits & 782/JPR/2024 Sh. Sanjaya Sharma, Sikar [A] Rs.1,17,38,065/- in Bank of Baroda. Assessing Officer(AO) made addition of Rs.1,87,38,065/- (Rs.1,17,38,065 + Rs.70,00,000). The Assessee submitted that he had obtained Loan from Bank of Baroda. Coincidentally, the fixed deposits were also in Bank of Baroda. The AO could have easily found out the source of fixed deposits from the Bank of Baroda. However, AO had not made any attempt in this direction. Neither AO has proved that the entire fixed deposit was income of the assessee for A.Y.2015-16. The AO made addition stating that assessee failed to file any reply. Ld.CIT(A) dismissed the appeal on account delay without discussing any merits.
In these facts and circumstances of the case, we are of the view that there was sufficient cause for non-compliance from the assessee side. Therefore, in the interest of justice, we set-aside the order of the Assessing Officer to Assessing Officer for denovo adjudication. The AO shall provide opportunity of hearing to the & 782/JPR/2024 Sh. Sanjaya Sharma, Sikar [A] assessee. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.
In the result, both appeals of the assessee in are allowed for statistical purpose. Order pronounced in the open Court on 24th July, 2024.