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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
These six appeals by the assesse are directed against six separate orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centers,(NFAC) Delhi dated 17.05.2023 & 05.06.2023 arising from assessment order passed u/s 147 r.w. section 144 and penalty orders passed u/s 270A, 271-F,272A(1)(d), 271B & 271AAC(1) respectively for A.Y.2017-18.
2. There is a delay of 195 days for filing the appeal in ITANo.75/Ind/2024 and 84 days for filing the appeal in ITANo.76 to ITANo.75 to 80/Ind/2024 Najma Pathan 80/Ind/2024. The assessee has explained the cause of delay in the affidavit. Ld. AR of the assessee has submitted that the assessment order was passed ex-parte and thereafter the notice of CIT(A) as well as the impugned orders were not served physically to the assesse and e-mail ID of the assessee was not in use and therefore, the notices as well as impugned orders passed by the CIT(A) were not in the knowledge of the assessee till the recovery proceedings were initiated by the department. Thus, Ld. AR has submitted that the delay in filing the appeal arising from the assessment order is 195 days whereas the delay in filing the appeal against penalty orders is 84 days each is neither intentional nor deliberate but due to non-receipt of the orders passed by the CIT(A). Hence the Ld. AR has submitted that the appeals of the assessee may be admitted for hearing and adjudication. On the other hand, Ld. DR has raised no objection if the delay in filing these appeals are condoned as all the orders by the AO as well as by the CIT(A) are passed ex-parte.
Having considered rival submissions and careful perusal of the averments made by the assessee in the affidavit explaining the cause of delay we are satisfied that the assessee has explained a reasonable cause for not filing these appeals within the period of limitation. Accordingly in the facts and circumstances of the case when the orders were passed ex-parte by the AO as well as by the CIT(A) and in the interest of justice we condoned the delay for filing these appeals.
ITANo.75 to 80/Ind/2024 Najma Pathan 4. In the quantum appeal the assesse has raised following grounds:
“1.The learned CIT (A) has erred and rejected the appeal without considering the request for condonation of delay.
The learned CIT (A) failed to consider specific reason for delay in filling of appeal.
3. The learned CIT (A) has erred in law as well as on fact by not interpreting the word reasonable and sufficient cause in this regard.
The learned CIT (A) has erred in law as well as on fact by applying the case laws which are irrelevant in this case. Even though latest judgments are available in favour of appellant.
5. The learned CIT (A) has erred in law as well as on fact by rejecting the appeal without verifying and without considering submission made by appellant in response to the notice issued by the learned CIT (A). 6.The learned CIT (A) has erred in law as well as on fact by applying the rule of limitation Act, Section 5 which is irrelevant and not applicable under the Income Tax Act, 1961 having specific provision in this regard. The appellant aggrieved by this denial of grant of justice just on the ground of the submission of the appeal papers in specific period. The appellant prays to grant relief by deleting the additions made by the assessing officer fully and oblige. 7.That the appellant craves to leave add alter or amend any of the ground at or before hearing.
Ld. AR of the assessee has submitted that the assessee is stamp vendor as per the license issued by Collector of Stamps and earning the income in the shape of commission @1.5%. The total ITANo.75 to 80/Ind/2024 Najma Pathan income of the assesse is less than the minimum slab of taxable income and therefore, the assesse did not file any return of income u/s 139 of the Act. The AO while passing assessment u/s 147 r.w. section 144 has assessed the total income of the assessee as presumptive business income u/s 44AD @8% of the total deposit in the current account of the assessee and also made addition u/s 68 of Rs. 2,44,000/- on account of deposit in S.B account. Thus the AO has assessed the total income of assessee at Rs.11,21,064/- whereas the income of the assessee was below the minimum taxable income. The Ld. CIT(A) has dismissed the appeal of the assessee as barred by limitation after declining to condone the delay of 264 days in filing the appeal. The ld. AR has submitted that the assessee explained the cause of delay in filing the appeals as non-receipt of the assessment order passed u/s 147 r.w.s 144 of the Act which was not accepted by the CIT(A) and consequently the appeal was dismissed in limine.
5.1 Ld. AR has submitted that non-deciding the appeal of the assesse on merits by the CIT(A) has resulted a gross injustice to the assessee as the AO has assessed the total income of the assesse which is five times more than the actual income otherwise not taxable due to below the minimum taxable income. Thus, the Ld. AR has submitted that the delay in filing the appeal before the CIT(A) be condoned and the matter may be remanded to the record of the AO for fresh adjudication after considering relevant details and evidences to show that the assessee has earned only a commission income @1.5% on the total sale of stamp papers. He Page 4 of 8 ITANo.75 to 80/Ind/2024 Najma Pathan has referred to the copy of the license issued by the Collector of stamps dated 22nd June 2015 and the details of the transactions of purchase and sale of stamp papers by the assessee during the year on which a total commission of Rs.2,74,921/- was received and the net income/total income of the assessee would be much less the minimum limit of taxable income. Thus, Ld. AR has submitted that the AO may be directed to consider the relevant record and then decide the case of the assessee.
5.2 On the other hand, Ld. DR has raised no objection if the matter is remanded to the record of the jurisdictional AO for fresh adjudication after considering relevant details and evidences produced by the assessee.
We have considered the rival submissions as well as relevant material on record. The CIT(A) has dismissed the appeal of the assessee as barred by limitation and has not decided the same on merits. The assessee has explained the cause of delay as non- receipt of the orders of the AO which were stated to be send to the e-mail ID. The cause of delay was explained by the assessee is reproduced by the CIT(A) in para 7.2 as under:
"The assessee was not aware of the assessment and penalty proceedings going on and also did not receive any order or notice by post. Further the assessee did not have the credentials of the Income Tax Portal and also the counsel of the assesse did not intimate her about the proceedings going on. Only through demand notice on IT Portal, she got to know about Page 5 of 8 ITANo.75 to 80/Ind/2024 Najma Pathan the proceedings. As a result the assessee decided to change the counsel and file the appeals."
6.1 The above explanation of the assessee was not accepted by the CIT(A) on the ground that the orders and notices were send by the AO at e-mail ID “ abdulhakimpathan123@gmail.com” and there is no requirement of sending physically therefore, the CIT(A) held that notices as well as orders passed by the AO were duly served on the assessee. It is pertinent to note that the E-mail ID on which the notices as well as orders of the AO were send do not belong to the assessee but may be the e-mail ID of the tax consultant of the assessee. In view of our finding on the condonation of delay for filing appeals before this tribunal as well as in view of the facts and circumstances of the case that the orders were passed ex-parte at the level of the AO as well as at the level of the CIT(A, we in the interest of justice condone the delay of 264 days in filing the appeals before the CIT(A).
6.2 In the assessment order the AO has taken the deposit made in the current year of the assesse as business receipts and adopted the presumptive business income u/s 44AD @ 8% amounting to Rs.8,77,064/-. The Ld. AO further made an addition u/s 68 in respect of the deposit made by the assessee in the saving bank account of Rs.2,44,000/-. Thus, the total income was assessed by the AO at Rs.11,21,064/-. The assesse has now produced relevant record to show that the total commission receipt for the year under consideration is Rs.2,74,921/- and therefore, the net income of the ITANo.75 to 80/Ind/2024 Najma Pathan assessee would be much less than the minimum taxable income. Accordingly in the facts and circumstances of the case and in the interest of justice we are of the considered view that the matter requires a proper verification and examination at the level of the Assessing Officer. Hence, the impugned order of the CIT(A) is set aside and matter is remanded to the record of the AO for fresh adjudication after considering the relevant evidence and details produced by the assessee.
6.3 All other appeals are arising against the penalty levied by the AO for various defaults of not filing the return of income, non- compliance of notices, non-submission of audit report, under reporting of income and for addition made u/s 68 of the Act. Since we have set aside the quantum appeal to the record of the AO for fresh adjudication and all these penalty orders passed by the AO are consequential/depending upon the outcome of the quantum proceedings specifically when the assessee has claimed that the total income is less than the minimum taxable income and therefore, there was no requirement of filing any return of income and consequently no default as alleged by the AO leading to the levy of penalties under various provisions therefore, impugned orders of the CIT(A) arising from penalty levied u/s 270A, 271-F,272A(1)(d), 271B & 271AAC(1) are set aside and remanded to the record of the AO for deciding the same afresh as per outcome of the quantum remand proceedings.
ITANo.75 to 80/Ind/2024 Najma Pathan 7. In the result, all six appeals of the assessee are allowed for statistical purposes.
Order pronounced in the open court on 18.06.2024.