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Income Tax Appellate Tribunal, SURAT (SMC
Before: SHRI DR. A. L. SAINI
आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2012-13, is directed against the order passed by the National Faceless Appeal Centre, Delhi (in short ‘the NFAC/Ld.CIT(A)’ dated 30.03.2023, which in turn arises out of an assessment order passed by Assessing Officer u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), dated 13.11.2019.
The appeal filed by the assessee, before the Tribunal, for Assessment Year 2012-13, is barred by limitation by 3 days. The Ld. Counsel for the assessee submitted that delay in filing the appeal before the Tribunal, is only three (3) days, and this delay has occurred due to sending the appeal memo/ papers of appeal by post to the Surat Bench, therefore such minor delay may be condoned. However, ld DR
ITA.393/SRT/2023/AY.2012-13 Bharatbhai Nagjibhai Patel for the Revenue, opposed the plea taken by ld Counsel for the assessee and stated that delay should not be condoned. I have heard both the parties on this preliminary issue. Having regard to the reasons given in the petition, I condone the delay and admit the appeal for hearing.
On merits, Learned Counsel for the assessee submitted that there was a delay in filing the appeal before the NFAC/Ld.CIT(A) by 649 days. Since, advocate of the assessee, did not file the petition for condonation of delay before NFAC/ld CIT(A), therefore the NFAC/Ld.CIT(A) did not condone the delay and dismissed the appeal of the assessee. The ld Counsel pointed out that this happened because of mistake committed by the advocate of the assessee. Since the advocate of the assessee has committed the mistake, therefor assessee should not be penalized and hence the matter may be remitted back to the file of the NFAC/Ld.CIT(A) to adjudicate the issue on merit after considering the delay.
On the other hand, ld. Sr. DR for the Revenue submitted that delay before the NFAC/ld. CIT(A) should not be condoned by the Tribunal. Let the assessee be filed a petition for condonation of delay before the NFAC/ld. CIT(A) and NFAC/ld. CIT(A) should take independent decision to condone the delay of (649) days. The ld. Sr. DR for the Revenue also stated that assessee was negligent in his approach, therefore delay in filing the appeal before the NFAC/ld. CIT(A) should not be condoned by the Tribunal and matter should not be remitted back to the file of the NFAC/ld. CIT(A) for condonation of delay and thereafter adjudication on merit. Therefore, ld. Sr. DR contended that assessee’s appeal may be dismissed, at this stage.
ITA.393/SRT/2023/AY.2012-13 Bharatbhai Nagjibhai Patel 5. I have heard the rival arguments made by both the sides and perused the material available on record. Admittedly, there is delay in filing the appeal before NFAC/ld CIT(A) by 649 days. The ld Counsel for the assessee stated three reasons for delay, viz: i) since, the notice of hearings during the appellate proceedings were not served on the assessee, therefore assessee could not participate in appellate proceedings, and ii) The assessee`s Advocate/CA, who used to look after taxation matters of assessee, committed mistake and did not file the petition for condonation of delay and affidavit for condonation of delay before ld CIT(A) and iii) The assessee is an agriculturalist and uneducated and was feeling sickness and does not have experience. I note that NFAC/ld. CIT(A) did not condone the delay of six hundred forty nine (649) days in filing the appeal, stating that it is an inordinate delay and assessee has not explained the sufficient cause. Therefore, NFAC/ld. CIT(A) did not condone the delay and dismiss the appeal of assessee. I also observed that NFAC/ld. CIT(A) did not adjudicate the issue on merit based on the assessment records and assessment order and simply dismissed the appeal of the assessee in limine in view of the non-compliance of the provision of section 249(3) of the Income Tax Act, 1961 read with Faceless Appeal Scheme 2020 Paragraph 5(1)(ii)(b).
The ld Counsel has filed the petition for condonation of delay, explaining the reasons of delay in filing the appeal before NFAC/ld CIT(A), which is reproduced below: “1.Appellant is an agriculturist and has no economic activity or business. Assessee has deposited cash of Rs.10,40,000/- into his bank account number: 107 920 76 289 maintained by appellant with State Bank of India. Such cash receipt deposited into bank account by appellant is nothing else but sale proceeds of agricultural produce.
2. In view of residence at village and complete lack of experience of functioning of Income-Tax as well as reassessment proceedings; appellant
ITA.393/SRT/2023/AY.2012-13 Bharatbhai Nagjibhai Patel is not alert as to outcome of income-tax proceedings and therefore appellant filed return of income in pursuance of notice u/s 147 of the IT Act, 1961 through an accountant and such accountant was also requested and assigned to attend hearing during assessment proceedings. During the period of assessment, appellant was sick and complete lack of experience as to functioning of income-tax, appellant was unaware about various notices of assessment as well as the accountant assigned the task of attending income-tax proceedings during assessment has failed to guide appellant or said accountant also failed to inform appellant about service of notices and consequently appellant failed to present any evidences and any explanation or information for submission of fact of arising sale proceeds of agricultural produce having nature of agricultural income and therefore exempt. But unfortunately due to various factors adverse to appellant; appellant neither has knowledge of functioning of income-tax department nor accountant also remained alert to attend notices by assessing officer and consequently appellant has failed to attend assessment proceedings as well as presenting any evidence or explanation or information of fact of agriculture income. 3.Appellant came to know of fact of assessment order dated 13/11/2019 only on 07/09/2021 and thereafter appellant approached Chartered Accountant at Surat to file appeal before CIT(A) and said Chartered Accountant filed the appeal on 22/09/2021 within 15 days therefore it is urged that period of 13/11/2019 till 07/09/2021 may be discarded for considering delay in filing appeal before CIT(A) and accordingly filing of appeal on 22/09/2021 shall be within the period of limitation as laid down in Section 249(2) of the IT Act, 1961. Secondly failure to have knowledge of assessment order is also due to abrasion of right leg and hand due to slippage of motorcycle resulting into lack of physical movement preventing attending office of accountant to know about outcome of reassessment proceedings. In view of such factual history; it is also submitted that filing of appeal before CIT(A) without prejudice and alternatively is within the time as prescribed in Section 249(2) of the IT Act, 1961. 4.The Chartered Accountant at Surat was also not having any experience or exposure in attending appeal before CIT(A) therefore said Chartered Accountant has not filed any Miscellaneous Application or Affidavit for Condonation of Delay and such miscellaneous application and affidavit is being filed before Hon'ble Surat for the first time. 5.It is also submitted that appellant being agriculturist having no other economic activity or business and residing at village has added to the fact of lack of experience as to functioning of income-tax proceedings and also fact that such lack of experience appellant has chosen an accountant to file return u/s 148 of the IT Act, 1961 and assigning task of attending assessment proceedings. Accountant also having no experience has failed to attend any notice and also presented any evidence or information or explanation hence agriculture income being exempt; appellant was saddled with addition of Rs.10,40,000/- and consequential tax liability. Thus, failure and lack of experience and knowledge of accountant should ITA.393/SRT/2023/AY.2012-13 Bharatbhai Nagjibhai Patel also not be considered as default on the part of appellant for not attending any notice for proceedings of assessment. 6.It is submitted that since profile and background of appellant and default by accountant in attending notices of assessment and also failure to inform about assessment order dated 13/11/2019 which fact came to knowledge of appellant only upon service of notice of penalty u/s 271(l)(c) of the IT Act 1961, dated 07/09/2021 by fortuitous circumstances and hence appellant ceased to rely upon accountant and assign task of preparing appeal and filing to a Chartered Accountant in Surat who has filed appeal within 15 days on 22/09/2021. 7.It is therefore submitted appellant has good cause and should not be punished for his profile, background and lack of experience which resulted into delay in knowledge of assessment order only on 07/09/2021 coupled with failure of accountant to attend appropriately assessment proceeding notice. It is therefore submitted that appellant may not be punished for his profile and background as well as failure of accountant to inform about assessment order dated 13/11/2019 which fact came to know to appellant only on 07/09/2021 therefore it is also submitted that there is no delay in filing appeal before CIT(A). However out of abundant caution, lest submission of filing of appeal within 15 days after knowledge of assessment order on 7/09/2021; therefore this miscellaneous application for condonation of delay is preferred. 8.It is therefore earnestly urged that as appellant having good cause or agriculture income and sickness of appellant as well as lack of experience and knowledge on the part of accountant as to functioning of proceedings of assessment; appellant may not be punished for failure of accountant hence it is urged humbly to condone the delay if any in preferring appeal before CIT(A).”
I note that assessee is an agriculturist. I also note that assessee may not be punished for his profile and background as well as failure of accountant/advocate. I note that in the assessee’s case under consideration, the assessment was carried out u/s 143(3) r.w.s.147 of the Act and the impugned order passed by the NFAC/ld. CIT(A), is an ex parte order and non-speaking order, therefore, I do not wish to make any comments on the merits of the grounds raised by the assessee. I note that assessee should not be penalized because of the mistake committed by his CA/Advocate. For this reliance is also placed on the decision of ITAT ‘C’ Bench, Kolkata in the case of M/s. Garg Bros. Pvt. Ltd. & Others vs. DCIT [ITA Nos.2519 to ITA.393/SRT/2023/AY.2012-13 Bharatbhai Nagjibhai Patel 2521/Kol/2017, order dated 18.04.2018], wherein under similar set of facts and reasons, the Hon'ble Tribunal was pleased to condone the delay of 211 days by holding as under: “3. We have heard both the parties on this preliminary issue. Having regard to the reasons given in the application for condonation of delay, we are of the considered opinion that assessee was under a bona fide belief that the impugned order of Pr. CIT was not appealable before this Tribunal since they were not advised by their Tax Consultants about this legal right. Later on, when a Senior Lawyer advised them to file an appeal, the assessees immediately took steps to file the appeals. Therefore, the delay caused. We note that delay was occurred because of the wrong advice of the Tax Professional for which assessees cannot be penalized. For the ends of justice, we condone the delay and admit the appeal for hearing.”
I am of the view that provisions of law have to be adhered strictly and that one cannot be allowed to act in leisure and make a mockery of enacted law, because law and provisions are laid down to benefit both sides of litigation. Be that as it may, I have to do justice and the Hon’ble Supreme Court in the case of Collector, Land Acquisition vs Mst. Katiji and others, reported in 167 ITR 471, (1988 SC 897) (7) observes .... “4. 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.”
When I weigh these two aspects then the side of justice becomes heavier and casts a duty on us to deliver justice. I, therefore, condone the delay in filing the appeal before ld CIT(A).
On merit, ld Counsel submitted assailed the impugned order by contending that the assessee could not represent his case before NFAC/Ld. CIT(A) and the order being an ex parte order, stood vitiated on account of violation of principle of natural justice. The ld. Counsel for the assessee contended that in the interest of justice,
ITA.393/SRT/2023/AY.2012-13 Bharatbhai Nagjibhai Patel another opportunity to contest the appeal before the Ld. first appellate authority may be granted to the assessee.
On the other hand, ld DR for the Revenue submitted that appeal of the assessee should be dismissed.
I note that the Hon’ble Supreme Court in M. S. Gill vs. The Chief Election Commission 1978 AIR SC 851 held “The dichotomy between administrative and quasi-judicial function vis-à-vis the doctrine of natural justice is presumably obsolescent after Kraipak (A.K. Kraipak vs UOI AIR 1970 SC 150) which makes the water- shed in the application of natural justice to administrative proceedings. The rules of natural justice are rooted in all legal systems and are not any new theology. They are manifested in the twin principles of nemo judex in parte sua (no person shall be a judge in his own case) and audi alterem partem (the right to be heard). It has been pointed out that the aim of natural justice is to secure justice. Considering the above facts, I note that assessee has not given sufficient opportunity of being heard and could not plead his case successfully before the NFAC/ld. CIT(A). I note that the NFAC/ld. CIT(A) did not discuss the assessee’s case on merits based on the material available before him. I note that it is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving much deeper into the merits of the case, in the interest of justice, I restore the matter back to the file of Ld. CIT(A) for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee, who in turn, is also directed to contest his stand forthwith. Therefore, I deem it fit and proper to set aside the order of the NFAC/ld. CIT(A) and ITA.393/SRT/2023/AY.2012-13 Bharatbhai Nagjibhai Patel remit the matter back to the file of the NFAC/ld. CIT(A) to adjudicate the issue afresh on merits. For statistical purposes, the appeal of the assessee is treated as allowed.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order is pronounced on 30/10/2023 in the open court.