Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax(Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre, (in short “NFAC”), Delhi vide order dated 12.12.2023 passed for A.Y. 2010-11. 2. The Assessee has taken the following grounds of appeal:-
“1. The learned CIT(A) NFAC has erred in law and on facts in Dismissing the appeal of the assessee in limine.
He has erred in law and on facts in not considering the submissions furnished during course of appeal proceedings from time to time.
He has grievously erred in law and on facts in treating the appeal filed manually has not in order.
He has erred in law and on facts in not considering the ground of appeal disputing the re assessment proceedings being without juri iction on the ground of Mayursinh Jayandrasinh Jadeja vs. ITO Asst.Year –2010-11 - 2– notice U/s 148 not served to the appellant and non issue of valid notice U/s 143(2) of the Act.
He has erred in law and on facts not considering the ground of addition of Rs. 48,35,282/- as unexplained investment for the loss incurred in the share transactions.
He has erred in law and on facts in not considering the ground of addition of Rs. 11,50,736/- as unexplained cash credit being amount credited in bank account.
On the facts of the assessee the appeal of not to have been rejected in limine without considering the ground of appeal.
The appellant craves leave to add, to alter and or modify any ground of Appeal.”
The brief facts of the case are that the assessee is an individual who failed to file a return of income for the impugned year under consideration. The case of the assessee was reopened based on information received under the Annual Information Return (AIR), which indicated that the assessee had engaged in share transactions amounting to Rs.1,07,17,000/-. Consequently, a notice under section 148 of the Act was issued on March 30, 2017. Despite this, the assessee did not file a return in response to the notice, nor did he respond to subsequent notices issued under section 142(1) of the Act. Based on the available material, the Assessing Officer (AO) made two additions during the course of assessment: an unexplained investment of Rs. 48,35,282/- under section 69A, and unexplained credit entries totaling to Rs. 11,50,736/-. The assessment was completed under section 144 read with section 147 of the Act, determining the total income at Rs. 59,86,020/-.
The assessee filed an appeal before the Commissioner of Income Tax (Appeals), asserting several grounds. Firstly, the assessee contended that the assessment order was issued without juri iction because the notice under section 148 of the Act was allegedly not served on the assessee, and therefore, Asst.Year –2010-11 - 3– the assessment should be annulled. Secondly, the assessee claimed that the AO erred in framing the assessment under section 144 of the Act, and specifically argued that a valid notice under section 143(2) of the Act was not issued, which invalidated the assessment. Thirdly, the assessee contested the addition of Rs. 48,35,282/- as unexplained investment, and submitted that it should be deleted due to losses incurred in these transactions. Finally, the assessee challenged the addition of Rs. 11,50,736/- as unexplained cash credits, requesting that the same should be removed. The Commissioner of Income Tax (Appeals) noted that there was a delay of 34 days in filing the appeal (owing to personal circumstances involving a family member's injury that caused emotional stress and prevented timely action on part of the assessee). The assessee requested that this delay be condoned, allowing the appeal to be considered on its merits. However, Ld. CIT(Appeals) held that the appeal was manually filed on March 5, 2018, despite e-filing being mandated at that time. The appellant submitted before Ld. CIT(Appeals) that the assessee had the option to file a manual appeal since their case related to the assessment year 2010-11, and submitted that the assessee had complied with the Rules allowing for paper filings. Nevertheless, Ld. CIT(Appeals) did not agree to the interpretation put forth by the assessee. Ld. CIT(Appeals) observed that the Central Board of Direct Taxes (CBDT) had amended the Income Tax Rules to require electronic filing for appeals since March 1, 2016, with a specific Circular extending the deadline for e-filing until June 15, 2016. Ld. CIT(Appeals) was of the view that the assessee's assertion that they could file manually based on their option to submit a paper return was not found to be valid. Ld. CIT(Appeals) was of the view that the Rules clearly stated that the conditions for manual filing did not apply to the assessee, who Asst.Year –2010-11 - 4– did not meet the age or income criteria specified for paper return filing, since the appellant was neither 80 years old nor had an income below Rs. 5 lakhs. Consequently, Ld. CIT(Appeals) held that given that the assessee had not filed the requisite return in the proper forms, and the manually filed appeal was deemed defective and infructuous. As a result, the appeal of the assessee was dismissed in limine, meaning that it was rejected by Ld. CIT(Appeals) without hearing the appeal of the assessee on the merits, due to procedural shortcomings.
The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A) dismissing the appeal of the assessee.
Before us, the Counsel for the assessee submitted that the order of Ld. CIT(A) is erroneous and Ld. CIT(A) had proceeded to dismiss the appeal of the assessee in limine, only by taking records to technical grounds even when for the impugned assessment year the assessee had an option to file paper appeal, in physical format. Further, it was submitted that even at the time of dismissing the appeal of the assessee, the assessee was not confronted or given an opportunity to e-file the appeal, so that the matter relating to substantial additions made by the AO in the hands of the assessee, could be decided on merits. The Counsel for the assessee submitted that Ld. CIT(A) had dismissed the appeal of the assessee in a high handed manner without giving a reasonable opportunity to the assessee to present it’s case on merits.
In response, the Ld. D.R. placed reliance on the observation made by Ld. CIT(A) in the appellate order. Asst.Year –2010-11 - 5–
We have heard the rival contention and perused the material on record.
We observe that in the case of LRs Management K/s vs. DCIT in ITA No. 300/Rjt/2017 for A.Y. 2013-14, the ITAT Rajkot Bench made the following observations which are reproduced as below:
“5. We have heard both the parties. We find that the dismissal by the ld.CIT(A) of the assessee’s appeal filed before it manually was highly unjustifiable and wasnot evenin accordance with the notification issued by the CBDT No.S.O.637(E) dated 1.3.2016 as referred to by the ld.CIT(A) himself. As per the said notification, as noted in para 1.2 of the CIT(A)’s order,all assesses whose returns were required to be filed electronically, had to file their appeals to the Ld.CIT(A) also electronically. The assessee had demonstrated that being an agent of freight beneficiary, voyage return which were required to be filed by the assessee in the return form VVR was required to be filed manually. The ld.CIT(A) has not controverted this contentions of the ld.counsel for the assessee. On the contrary, the ld.CIT(A) has countered by stating that the assessee being a corporate entity, it was required to file return electronically. The moot fact for determining the return form for filing return of income wasbeing a voyage return filed by the agent on behalf of the freight beneficiary, as per the provisions of section 172(3) of the Act, the filing of the return was to be in form VVR i.e. voyage return, as canvassed by the Ld.Counsel for the assessee both to the Ld.CIT(A) and even before us. Without controverting this fact and finding it to be incorrect the Ld.CIT(A) clearly was in error in stating that being a corporate assessee the return should have been filed electronically. Therefore, dismissal by the ld.CIT(A) of the assessee’s appeal, we find was based on incorrect appreciation of the facts. Even otherwise, mere mode of filing appeal - electronically or in physical mode ,alone should not take away the assessee’s right to appeal, being just a technical/ procedural aspect that too not mandated by statute but by CBDT notification which has no persuasive value and is binding only on its Revenue Officers.. Therefore also the order of the ld.CIT(A) dismissing the assessee’s appeal as not admitted is set aside.”
Further, in the case of Bhaveshbhai Arvindbhai Buha vs. ITO in ITA No. 252 to 254/Srt/2022 for A.Y. 2011-12 & 2013-14, the Tribunal made the following observations while dealing with the issue:
“8. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We note that ld. CIT(A) did not admit the appeal for adjudication on the ground that the PAN Number of Bhaveshbhai Arvindbhai Buha (individual) was used to file appeal for M/s. Sai Ashish Developers (AOP). The ld. CIT(A) Asst.Year –2010-11 - 6– held that Association of Person (AOP) was different entity than the case of the individual Mr. Bhavesh Kumar Arvindbhai Buha and it was wrong on the part of the said AOP to use the PAN of the individual in filling the appeals of the said AOP. In view of the above facts, ld. CIT(A) noted that appeals have been filed by the AOP by using the PAN of the individual and as AOP is a separate entity assessed as such by the Assessing Officer, therefore, ld. CIT(A) did not admit these three appeals for adjudication and dismissed these three appeals. We note that ld. CIT(A) did not adjudicate the issue on merits in accordance with the provisions of section 250(6) of the Act, rather dismissed the appeal of the assessee, stating that AOP has used Individual PAN Number. We note that defect in form no. 35 is a curable defect. The ld. CIT(A) should have asked the assessee to correct form no.35, and remove the defect. With these facts, we are of the view that appeal of the AOP is maintainable in law. Therefore, we direct the Ld. CIT(A) to issue defect memo to the assessee to remove the detect in Form No.35 filed before the ld. CIT(A) and in turn assessee should remove the defect. Therefore, we set aside the order of ld. CIT(A) and remit this matter back to the file of ld. CIT(A) to adjudicate assessee’s (AOP) appeal on merit. For statistical purposes, these three appeals filed by the assessee are allowed.”
Accordingly, looking into the assessee’s particular set of facts and judicial precedents on the subject, we are of the considered view that Ld. CIT(A) erred in facts and in law in not giving opportunity to the assessee to cure the defect, if any, in the filing of appeal form and dismissing the appeal of the assessee in limine, against the principles of natural justice. Accordingly, the appeal of the assessee is restored to the file of Ld. CIT(A) for de-novo consideration, after giving an opportunity to the assessee to cure defects in filing of appeal, if any, and thereafter, decide the appeal of the assessee on merits, in accordance with law.
In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 23/10/2024 (ANNAPURNA GUPTA) JUDICIAL MEMBER Ahmedabad; Dated 23/10/2024 TANMAY, Sr. PSITA No. 233/Ahd/2024 Asst.Year –2010-11 - 7–
आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant
""थ" / The Respondent. 3. संबंिधत आयकर आयु" / Concerned CIT 4. आयकर आयु"(अपील) / The CIT(A)- 5. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड" फाईल / Guard file. आदेशानुसार/ BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt.