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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Per Vijay Pal Rao, JM:
This appeal by the Assessee is directed against the revision order dated 22.03.2022 of Pr. Commissioner of Income Tax passed u/s 263 of the Income Tax Act for assessment year 2017-18.
There is a delay of 11 months in filing the present appeal. The assessee has filed an affidavit to explain the cause of delay. The ld. AR of the assessee has submitted that the Pr. CIT has passed the impugned order ex-parte as the alleged notice issued by the Pr. CIT were sent on the e-mail ID of the regular counsel of the assessee
ITANo.142/Ind/2023 Sandeep Raghuvanshi however, due to inadvertence the same were not communicated to the assessee and therefore, the assesse was not aware about the proceedings pending before the Pr. CIT u/s 263 as well as impugned order passed by the Pr. CIT. He has further submitted that the assessee has been regularly appearing before the AO in the proceedings u/s 143(3) and therefore, there was no reason for the assessee for non-compliance of the notices issued by the Pr. CIT except that the assessee was not aware about these proceedings and also not served physically the impugned order. Thus, only in the Month of February 2023 when the assesse’s regular counsel came cross the fact that the impugned order u/s 263 has been passed by the Pr. CIT and pursuant to the said order proceedings were initiated by the AO u/s 143(3) r.w.s 263 of the Act. Hence, only at the time of initiation of proceedings u/s 143(3) r.w. section 263 and subsequent order passed by the AO on 25.03.2023 the assessee and his counsel consulted a senior counsel for appropriate remedy against the impugned order u/s 263 of the Act. The assessee was advised to immediately file an appeal before the Tribunal against the impugned order and therefore, there is a delay of 320 days in filing the present appeal. Thus, Ld. AR has pleaded that the delay in filing the appeal is neither willful nor deliberately but due to the facts and circumstances beyond control of the assessee and hence, prayed that the same may be condoned and the appeal of the assessee be decided on merits.
On the other hand Ld. DR has objected to the condonation of delay as the assessee has not explained a reasonable or sufficient Page 2 of 9
ITANo.142/Ind/2023 Sandeep Raghuvanshi cause of delay in filing the present appeal. He has further submitted that there was no response to various notices issued by the Pr. CIT sent to the E-Mail ID given by the assesse.
We have considered rival submissions as well as relevant material on record. There is a delay of about 11 months in filing the present appeal and the assessee has explained the cause of delay in the affidavit as under:
“1. My case for the Assessment Year 2017-18 was selected for 'Limited Scrutiny' through CASS for the reason "assessee has claimed large agriculture income as compared to its total income as per ITR" wherein me and my regular counsel duly complied with all the notices issued under section 143(2) / 142 * (1) of the Income-Tax comp Act, 1961 from time-to-time during the course of assessment proceedings as all those notices were issued online as well as served physically to me since Assessment Year 2017-18 was the first year of conducting proceedings online. 2. The show cause notices and order passed by the Ld. Principal Commissioner of Income Tax-1, Bhopal under section 263 of the Income-Tax Act, 1961 were served only on the E-Mail ID of my regular counsel who inadvertently missed these mail correspondences received during the month of March, 2022. As stated above, I along with my regular counsel complied with all the notices issued time-to-time during the course of assessment proceedings since those notices were in our knowledge as they were served physically. However, show cause notices and order passed by the Ld. Principal Commissioner of Income Tax-1, Bhopal was never served physically to me as a result of which I was totally unaware of the fact that show cause notices had been issued and order had been passed in my case under section 263 of the Income- Tax Act, 1961 on 22-03-2022. 3. It was only recently in the month of February, 2023 that my regular counsel came across the fact that order under section 263 of the Income-Tax Act, 1961 had been passed by the Ld. Principal Commissioner of Income Tax-1, Bhopal on 22-03- 2022 since
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ITANo.142/Ind/2023 Sandeep Raghuvanshi proceedings had been initiated by the Assessing Officer under section 143(3) r.w.s. 263 of the Income-Tax Act, 1961 in pursuance to such order. Subsequently, my regular counsel advised me to comply with the notices issued during the course of set-aside assessment proceedings under section 143(3) r.w.s. 263 of the Income-Tax Act, 1961. The Assessing Officer thereafter passed order under section 143(3) r.w.s. 263 of the Income-Tax Act, 1961 on 25- 03-2023 after making addition of Rs. 18,96,575/- as per the direction of the Ld. Principal Commissioner of Income Tax-1, Bhopal. 4. It was just recently after passing of such assessment order that my regular counsel consulted a senior counsel who advised my counsel to immediately file an appeal before the Hon'ble ITAT, Indore Bench challenging the validity of revisionary order passed by the Ld. Principal Commissioner of Income Tax-1, Bhopal under section 263 of the Income-Tax Act, 1961. My regular counsel was under a bona fide belief that we could file an appeal before the Ld. CIT(A) against the assessment order passed by the Assessing Officer as a result of which my regular counsel did not advise me for filing appeal before the Hon'ble ITAT, Indore Bench against the order passed under section 263 of the Income-Tax Act, 1961. 5. It was for the aforesaid reason that the present appeal is being filed before the Hon'ble Bench with a delay of 320 days (till 6th April, 2023). However, I would like to submit before the Hon'ble Bench that as soon as the senior counsel advised my regular counsel to file an appeal before the Hon'ble ITAT, Indore Bench against the order passed under section 263 of the Income-Tax Act, 1961, my regular counsel asked me to pay the challan for appeal fees immediately and accordingly the present appeal is being filed without any further delay.” 4.1 Thus, the assessee has explained cause of delay that he was not aware about proceedings u/s 263 initiated by the Pr. CIT and the impugned order passed u/s 263 of the Act. It is matter of record that the impugned order has been passed by the Pr. CIT when there was no response by the assessee to the show cause notice and reminders issued by the Pr. CIT as stated in para 3.1 and 3.2 of impugned order as under: Page 4 of 9
ITANo.142/Ind/2023 Sandeep Raghuvanshi “3.1 There has been no compliance on part of the assessee to give detailed explanation regarding the issue taken for review u/s 263 for A.Y. 2017-18. It clearly shows that the assessee is not keen to pursue the matter. It is undisputed that the notice was served upon the assessee. The action of assessee of not availing the opportunity provided can be said to be vigilantibus non dormientibusjurasubveniunt which means law will help only those who are vigilant. Law will not assist those who are careless of their rights. 3.2 Accordingly, it is held that the assessee has no evidence/submissions to make with regard to the issues raised as there is nothing in possession of the assessee to contend the issues raised in show cause notices u/s263. Accordingly, I proceed with my findings on the basis of information/facts available on record.” 4.2 Thus, it was observed by the Pr. CIT that there was no compliance on the part of the assessee to give detailed explanation regarding the issue taken up for review u/s 263 and thereby he was of the view that the assesse is not keen to pursue the matter. The revenue has not disputed the fact that show cause notice and reminders as well as the impugned order passed by the Pr. CIT were issued to the e-mail ID of counsel of the assessee available with the department and due to inadvertence the assesse did not receive the relevant information about the show cause notice as well as the impugned order passed by the Pr. CIT. Considering the reasons and cause of delay explained by the assessee in the affidavit we are satisfied that the assessee was having a reasonable cause for the delay in filing the present appeal. Accordingly the delay of 320 days in filing the present appeal is condoned.
The assessee has raised following grounds of appeal:
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ITANo.142/Ind/2023 Sandeep Raghuvanshi “1.That on the facts and in the circumstances of the case and in law, the Ld. Pr. CIT erred in setting-aside the order passed by the Assessing Officer by invoking the provisions of section 263 of the Income-Tax Act, 1961 even when the assessment order was passed after conducting necessary enquiries and after due application of mind and such order was neither erroneous nor prejudicial to the interests of the revenue. 2.That on the facts and in the circumstances of the case and in law, the Ld. Pr. CIT erred in setting-aside the order passed by the Assessing Officer under section 143(3) of the Income-Tax Act, 1961 by invoking the provisions of section 263 of the Income-Tax Act, 1961 merely on the basis of Internal Audit Objection which is not permissible in the garb of revisionary proceedings. 3.That on the facts and in the circumstances of the case and in law, the Ld. Pr. CIT erred in setting-aside the order passed by the Assessing Officer by invoking the provisions of section 263 of the Income-Tax Act, 1961 E and directing the Assessing Officer to re-☐ examine the amount of agriculture income earned and declared by the appellant in his income-tax return even when the same was duly examined by the Assessing Officer at the time of original assessment proceedings.”
Ld. AR of the assessee has submitted that the Pr. CIT has invoked the provisions of section 263 on the issue of claim of agricultural income which was allowed by the AO and consequently there was an under assessment of income in accordance with the provisions of section 69A of the Act. Ld. AR has referred to the assessment order and submitted that the case of the assessee was selected for limited scrutiny on the issue of agricultural income. The AO vide show cause notice u/s 142(1) dated 19.11.2019 asked the assessee to furnish the details of all sources of income and the details of agricultural land owned by the assessee along with copies of Khashra/Katauni. Further the AO also asked the assessee to Page 6 of 9
ITANo.142/Ind/2023 Sandeep Raghuvanshi furnish the detail note of irrigation facility, agricultural equipment owned by the assesse, number of crops grown and details of receipt and expenditure of agricultural operations along with bills and vouchers. The assessee was also asked to submit the copy of the sale bills of agricultural produce. He has then referred to the reply of the assessee to show cause notice u/s 142(1) and submitted that the assessee furnished all the relevant details called for by the AO for examination and verification. The AO after verification of the relevant record filed by the assessee was satisfied with the claim of the assessee and passed the assessment order u/s 143(3). Thus Ld. AR has submitted that when the assessee produced all the relevant details including details of land holding with supporting evidence, receipt and payment account, sales bills as well as the confirmations of the family members regarding their land was taken by the assessee on lease which were considered and examined by the AO then the case of the assessee does not fall in the category of lack of inquiry. He has then submitted that the Pr. CIT has invoked the provisions of section 263 based on the proposal of the AO and the objection of the Internal Audit Party and therefore, the initiation of the proceedings and consequential order passed u/s 263 is not sustainable because the Pr. CIT has not taken its own independent decision but the proceedings were initiated on the basis of the proposal of the AO and objection of the internal Audit Party.
On the other hand, Ld. DR has submitted that the Pr. CIT has given all the relevant facts which were examined at the time of initiating proceedings u/s 263 as referred in para 2 of the Page 7 of 9
ITANo.142/Ind/2023 Sandeep Raghuvanshi impugned order. Further the Pr. CIT has also discussed all the relevant facts which led to the conclusion that the AO has not considered the relevant points on the issue of agricultural income while passing the scrutiny assessment. The Pr. CIT has specifically pointed out that the assessee has not produced the relevant record to show the land holding of the assessee and the evidences regarding the lands of the relatives allegedly taken on lease by the assesse. He has relied upon the impugned order of the Pr. CIT.
We have considered rival submissions as well as relevant material on record. There is no dispute that the case of the assessee was taken up for the limited scrutiny of the agricultural income declared by the assessee of Rs. 25,73,375/-. The AO has mentioned in the assessment order that in the faceless proceedings notice u/s 142(1) was issued along with questionnaire. In response to that the assessee submitted online reply which has been placed on record. The reply of the assesse was comprising of the details of all expenditure in respect of the agricultural operations includes the fertilizers, pesticides, seeds, labour and other expenses. The AO also stated that in support of the claim of expenditure the assessee also submitted bills and accordingly the AO accepted return income of the assessee at Rs.87,840/-. The Ld. AR of the assessee has raised various objections against validity of the impugned order passed by the Pr. CIT. However, all these relevant facts and objections were not filed before the Pr. CIT in the proceedings u/s 263 of the Act. The impugned order was passed by the Pr. CIT ex- parte when there was not response to the various notices issued by Page 8 of 9
ITANo.142/Ind/2023 Sandeep Raghuvanshi the Pr. CIT. Thus in the facts and circumstances of the case when the assesse could not participated in the proceedings u/s 263 due to lack of knowledge as explained in the affidavit filed for the explanation of cause of delay in filing the present appeal we are of the considered view that in the interest of justice the assesse be given one more opportunity of representing his case before the Pr. CIT. Accordingly the impugned order of the Pr. CIT is set aside and matter is remanded to the record of the Pr. CIT for re-adjudication of the same after giving one more opportunity of hearing to the assesse. 9. In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 11.01.2024.
Sd/- Sd/- (B.M. BIYANI) (VIJAY PAL RAO) Accountant Member Judicial Member
Indore,_ 11.01.2024 Patel/Sr. PS
Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore
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