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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI NABIN KUMAR PRADHAN
Instant appeal by the assessee is directed against the order dated 19th March 2014, passed by the learned Commissioner (Appeals)–35, Mumbai, for the assessment year 2006–07.
As pointed out by the Registry, there is a delay of 230 days in filing the appeal. Assessee has filed an affidavit explaining the cause of delay and seeking condonation for the same. It is submitted by the learned Authorised Representative that as the assessee was not 2 Shri Haresh A. Mody carrying on his day–to–day activities in the given address the notices and orders issued by the Department could not be served upon the assessee in time which has resulted in delayed filing of the appeal. Learned Authorised Representative submitted, only after the assessee came to know about the learned Commissioner (Appeals)’s order, he filed the present appeal. He, therefore, submitted the delay being unintentional should be condoned. Learned Departmental Representative, however, opposed the condonation of delay.
Having heard the parties and perused the material on record, we are satisfied that the delay in filing the appeal was for sufficient cause. Accordingly, we condone the delay and admit the appeal for hearing on merit.
The assessee has raised various grounds both on legal issues as well as on merits.
Brief facts are, assessee an individual is engaged in the business of trading in chemicals and dyes through his proprietorship concern M/s. Modychem. For the assessment year under consideration, he filed his return of income on 27th October 2005, declaring total income of ` 7,38,918. The assessment in case of the assessee was originally completed under section 143(3) vide order dated 27th August 2007 by accepting the return of income. Subsequently, the Assessing Officer
3 Shri Haresh A. Mody having reason to believe that income assessable to tax has escaped assessment re–opened the assessment under section 147 and ultimately passed the assessment order under section 143(3) r/w section 147, determining the total income at ` 8,02,850. Being aggrieved of the assessment order so passed, assessee preferred appeal before the learned Commissioner (Appeals) challenging the assessment order both on the legal and jurisdictional issue of re– opening of assessment after expiry of four years from the end of relevant assessment year as well as merits of the addition made. However, as observed by the learned Commissioner (Appeals), in spite of opportunities being given since no one appeared to represent the case learned Commissioner (Appeals) dismissed the appeal.
Learned Authorised Representative submitted before us, the assessment in case of the assessee was completed originally under section 143(3) after proper verification and scrutiny. Therefore, the Assessing Officer could not have re–opened the assessment after expiry of four years from the end of relevant assessment year in the absence of any tangible material and also without demonstrating that there is any escapement of income on account of non–disclosure of material facts truly and correctly by assessee. Learned Authorised Representative explaining the cause of non–appearance before the learned Commissioner (Appeals) submitted that as the assessee was 4 Shri Haresh A. Mody mostly not available in the given address, he failed to respond to the notices issued. Learned Authorised Representative, however, submitted that if one more opportunity is given, the assessee undertakes to appear before the first appellate authority to represent his case.
Learned Departmental Representative on the other hand submitted, learned Commissioner (Appeals) had no other option but to dispose off assessee’s appeal ex–parte as the assessee failed to avail the repeated opportunities granted to him.
We have considered the submissions of the parties and perused the material available on record. It is evident from the order of the learned Commissioner (Appeals) that in spite of repeated opportunities being granted the assessee failed to appear before her. Therefore, in our view, learned Commissioner (Appeals) to certain extent was justified in disposing off the appeal ex–parte. However, we have noted that the learned Commissioner (Appeals) while dismissing the appeal of the assessee has not decided each of the grounds raised by the assessee independently and has dismissed the appeal in a mechanical manner. As could be seen, one of the grounds raised by the assessee is in relation to validity of re–opening of assessment after expiry of four years from the end of the relevant assessment year.
5 Shri Haresh A. Mody Undisputedly, originally assessment in case of assessee was completed under section 143(3). Therefore, in terms of proviso to section 147, escapement of income must be as a reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. Therefore, unless such failure by the assessee is established / demonstrated by bringing relevant facts on record, assessment under section 147 cannot be re–opened in a case where already an assessment has been made under section 143(3) of the Act. Similarly, validity of the addition made by the Assessing Officer should also have been considered by the learned Commissioner (Appeals) on its own merit and the conclusion drawn by her should have been on the basis of proper reasoning which is absent in the order. This, may be possibly due to lack of representation by the assessee. We must mention, the assessee is also not free from blemishes. If the assessee was not carrying out his day–to–day activities in the address mentioned in the memorandum of appeal, then it was his duty to furnish proper address before the learned Commissioner (Appeals) for communication of notices and orders. The assessee should have been more vigilant and diligent in his approach since he has filed the appeal. Therefore, it was his duty to enquire about the fate of his appeal. Be that as it may, considering the fact that the learned Commissioner (Appeals) has disposed off assessee’s
6 Shri Haresh A. Mody appeal ex–parte, that too, in a non–speaking manner, we are inclined to set aside the impugned order of the learned Commissioner (Appeals) and restore the matter back to her file for deciding denovo on all the issues / grounds raised by the assessee after providing due opportunity of being heard to the assessee. We direct the assessee to appear before the learned Commissioner (Appeals) after receiving the copy of the order passed by the Tribunal to obtain a suitable date of hearing and should appear before the learned Commissioner (Appeals) on the date fixed to represent his case for finalization of the proceeding. We must mention, learned Authorised Representative has assured us that the assessee would be diligent and will be appearing before the learned Commissioner (Appeals) for representing his case. Accordingly, grounds raised are allowed for statistical purposes.
In the result, assessee’s appeal is allowed for statistical purposes. Order pronounced in the open Court on 12.08.2016