SHRI DEEPAK AMBADAS NAGARGOJE,AHMEDNAGAR vs. ITO WARD 2, AHMEDNAGAR(JAO), AHMEDNAGAR

Although a number of grounds have been raised by the assessee, however, these all relate to the order of the CIT(A) / NFAC in not condoning the delay and thereby dismissing the appeal filed by the assessee against the ex-parte order of the Assessing Officer making the addition of Rs.1,02,12,720/- as unexplained investment u/s 69 r.w.s. 115BBE of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

Facts of the case in brief, are that the case of the assessee was reopened u/s 147 of the Act and notice u/s 148 of the Act was issued. Subsequently, statutory notice u/s 142(1) of the Act was also issued to the assessee. Since the assessee did not reply to the notices issued by the Assessing Officer nor attended the proceedings, the Assessing Officer in the order passed u/s 144 r.w.s. 147 r.w.s. 144B of the Act made addition of Rs.1,02,12,720/- as unexplained investment u/s 69 r.w.s. 115BBE of the Act. The above amount was determined by the Assessing Officer on the ground that the assessee had purchased an immovable property at Nimbalak, Ahmednagar during financial year 2012-13 and made a joint payment of Rs.2,04,25,440/- and the share of the assessee works out to Rs.1,02,12,720/-.

Since the assessee filed the appeal before the CIT(A) / NFAC with a delay of 3 months, he did not condone the delay and dismissed the appeal. Further, he noted that the assessee failed to respond to the notices issued during the course of appellate proceedings also. In other words, the assessee failed to furnish the source of investment. He, therefore, dismissed the appeal filed by the assessee for belated filing of the appeal memo as well as non submission of the requisite details on the dates of hearing.

Aggrieved with such order of CIT(A) / NFAC, the assessee is in appeal before the Tribunal.

The Ld. Counsel for the assessee at the outset submitted that the Ld. CIT(A)/ NFAC has not condoned the delay and due to non appearance before him, sustained the addition on merit also by passing a cryptic order. He submitted that given an opportunity, the assessee is in a position to substantiate his case by filing the requisite details explaining the source of investment. He also relied on various decisions including the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) for condoning the delay in filing of the appeal before the Ld. CIT(A) / NFAC.

The Ld. DR on the other hand strongly objected to the arguments advanced by the Ld. Counsel for the assessee and submitted that the assessee has scant regard to the statutory notices issued by the Department, therefore, no further opportunity should be granted to the assessee.

We have heard the rival arguments made by both the sides and perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. It is an admitted fact that the assessee did not appear before the Assessing Officer nor filed the return in response to the notice issued u/s 148 of the Act for which the Assessing Officer was constrained to make the addition of Rs.1,02,12,720/- being the share of the assessee in making the investment of Rs.2,04,25,440/- jointly with another person for purchase of an immovable property at Nimbalak, Ahmednagar during the financial year 2012-13. We find that since there was a delay of 3 months in filing of the appeal, therefore, the CIT(A) / NFAC did not condone the delay in filing of the appeal and thereby dismissed the appeal on account of delay. Further, in absence of any details from the side of the assessee, he held that the assessee failed to explain the source of such investment. The Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (supra) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.

In view of the above, we direct the CIT(A) / NFAC to condone the delay and decide the appeal on merit by giving an opportunity to the assessee to substantiate his case. The CIT(A) / NFAC shall decide the issue as per fact and law after providing due opportunity of being heard to the assessee. The assessee is also hereby directed to submit the requisite details before the CIT(A) / NFAC on the appointed date without seeking any adjournment under any pretext, failing which the CIT(A) / NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes.