Loading judgment…
Facts
The assessee challenged an ex-parte order by the NFAC/CIT(A) confirming an addition of Rs. 25,13,500 for unexplained cash deposits. The assessee claimed lack of proper opportunity to be heard due to non-receipt of notices, attributing it to business loss and relocation.
Held
The Tribunal condoned the 150-day delay in filing the appeal, finding sufficient cause. It set aside the ex-parte order of the CIT(A) and remanded the matter back for de novo adjudication, emphasizing the violation of natural justice principles and the need for adequate opportunity to be heard.
Key Issues
The key legal issues were the condonation of delay in filing the appeal and whether the CIT(A) violated principles of natural justice by passing an ex-parte order without ensuring proper service of notice to the assessee.
Sections Cited
Section 143(3), Section 148, Section 147, Section 69A, Section 234A, Section 234B, Section 234C, Section 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR
ORDER DR. MITHA LAL MEENA, A.M.: The appeal by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi[hereinafter referred to as “the NFAC/CIT appeal”] dated 30/05/2023 with respect to assessment year 2009-10 challenging therein confirmation of the addition of Rs.25, 13,500/- on account of cash deposits in the bank account in violation of principles of natural justice. 2. The appellant has raised the following grounds of appeal:
1. The impugned assessment order u's 143(3) rws 148 dated 28.11.2016 as well as the notice u/s 148 and the action taken by the Id. AO u/s 147 are bad in law and on facts of the case, for want of Year - 2009-10) jurisdiction, barred by limitation, without proper approval or satisfaction and various other reasons and hence the same may kindly be quashed.
2. The Id. CIT(A) has grossly erred in law as well as on the facts of the case in passing exparty order without providing adequate and reasonable opportunity of being heard in the gross breach of law. Hence the additions so made by the ld. AO may kindly be quashed and delete.
3. The Id. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs.Rs.25, 13,500/- on account of cash deposits in the bank account as alleged unexplained money income u/s 69A. Hence the addition so made by the AO and confirmed by the Id. CIT(A) is being totally contrary to the provisions of law and facts on the record and hence the addition may kindly be deleted in full.
4. The Id. AO has grossly erred in law as well as on the facts of the case in charging interest u/s 234A,234B and 234C.. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, may kindly be deleted in full.
5. The appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.
3. There was delay of 150 days in filing the appeal by the assessee. The Ld. AR submitted that the CIT (A) has passed the ex-parte order without any discussion or observation on the merit of the case.The Ld. AR explained that due to heavy loss in business, he had to shift to Assam for a job in private service after shutting down cloth trading business. Since the assessee was not available at his Sujangarh address, hence no communication from the Income tax department was received. On return to Sujangarh, he came to know that the notices from the income tax were sent on the email id of his counsel at Year - 2009-10) Jaipur and there was no communication with the counsel. On back to Sujangarh, he came to know about dismissal of its appeal and Demand notice and then he made efforts to contact the counsel who informed that the email was of counsel and not of the assessee on the portal. The advocates advised to file the appeal against the CIT (A) order having the strong arguable case on merits as the Id. CIT(A) has dismissed, appeal ex-parte qua the assessee. In support, he filed an affidavit for the reason of the delay of 150 days in filing the appeal and placed reliance on the Hon’ble Supreme Court in the case of Collector, Land & Acquisition v. Mst. Katiji & Others (1987) 167 ITR 471 (SC) where it has advocated for a very liberal approach while considering a case for condonation of delay and N. Balakrishnan v. M. Krishna Murthy (1998) 7 SCC 123 published in 30 BCAJ 922, Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi and Anothers 1 18 ITR 507 for reasonable and sufficient cause. The Ld. DR objected to the condonation of delay, but he failed to rebut the reasonable and sufficient cause explained by the assessee with support of affidavit and judicial precedents.
The Hon’ble SUPREME COURT OF INDIA in the case of Senior Bhosale Estate (HUF)vs.Assistant Commissioner of Income Tax[2019] 112 taxmann.com 134 (SC) on the matter of condonation of delay of 1754 days has observed vide para 6 as under:
Year - 2009-10) 6. The Income Tax Department, for the first time, filed copies of the orders passed by the Tribunal and as such it was on 24.7.2008 that the appellant came to know about passing of the impugned orders and huge liabilities on account of income tax dues. Thereafter they contacted Advocate Rajan Gupta who was appearing on behalf of the Court of Wards and representing the estate of the appellant and after obtaining the necessary documents filed appeals accompanied by applications for condonation of delay on 24.10.2008.
In the present case, the Ld. DR did not expressly refute stand taken by assessee that he had no knowledge about passing of order, dated 30/05/2023, until Dec. 2023. In our view, unless this fact was to be refuted, question of disbelieving stand taken by assessee on affidavit, could not arise and for which reason, following the Hon’ble Apex court in the case of Senior Bhosale Estate (HUF) (Supra), it is justified to condone the delay of 150 days in filing the appeal. Accordingly, the delay is condoned and appeal is admitted.
Ground No. 1 is legal issue which is not pressed and it is dismissed as not pressed.
In the all other grounds the appellant challenged that CIT(A) passed impugned order ex-parte qua the assessee in violation of principles of natural justice.
Having heard both the sides and perusal of the record we find that the Ld. CIT(A) has passed the order ex-parte qua the assessee. The ld. CIT(A) has rejected the appeal of the assessee by stating that appellant was not Year - 2009-10) interested in pursuing its appeal, as there was no response to the notice of hearings from the assessee. The law aids those who are vigilant, not those who sleep upon their rights.The Ld. CIT(A) has neither discussed the facts of the case and nor given observation on merits of the case. The counsel contended that none of the notices issued u/s 250 of the Act was received by the assessee to enable the assessee to present his submissions in defence of the claims made in the grounds of appeal
. In the present case, the factum of service of notice of hearing on the assessee is neither mentioned nor inferred from the record that would certainly tantamount to violation of principles of natural justice and debarred the assessee an adequate opportunity to argue it case before the CIT (A) on merits.
9. In our view, the Ld. CIT (A) ought to have adjudicated the appeal on merits after granting adequate opportunity by proper service of notice on the assessee physically or email address given in Form 35 and he ought to have disproved the claim of the assessee by rebutting its contention with support of corroborative documentary evidence on record. The Hon’ble Supreme Court of India in the case of Tin Box Company vs. CIT reported in 249 ITR 216 has observed as under: “Assessment - Opportunity of being heard - Setting aside of assessment - Assessment order must be made after the assessee has been given Year - 2009-10) reasonable opportunity of setting out his case - Same not done - Fact that the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is assessment order that counts — Assessment order set aside and matter remanded to assessing authority for fresh consideration.”
Considering the principles of natural justice, it would be appropriate to restore the matter back to the file of the ld. CIT(A) to adjudicate the appeal of the assessee afresh by addressing the grounds of appeal
on merit of the case after granting adequate opportunity of being heard to the assessee and considering the written submissions and documentary evidences filed on record and may be filed in the de novo appellate proceedings. In the case, the CIT (A) is not satisfied with the reply of the assessee, and he intends to take any adverse view, the appellant-assessee may be allowed an opportunity to rebut. The appellant shall cooperate with the CIT(A)/NFAC in de novo proceeding.
11. Accordingly, the impugned order is set aside and the matter is remanded back to the file of the ld. CIT(A)/NFAC to adjudicate the issue de novo in accordance with law.
12. In the result, this appeal is allowed for statistical purposes.