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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Shri Ramit Kochar
आदेश/ORDER
Page No. Amish Umesh Jani L/H/ of Late Shrimati Smitaben Umesh Jani v. ITO This appeal in 2010-11 is filed by the assessee before the ITAT, Ahmedabad Bench, Ahmedabad against the appellate order dated 28.02.2024 passed by the office of learned Commissioner of Income-tax(Appeals) , Addl/JCIT(A)-1, Kolkatta vide DIN & Order No. ITBA/APL/S/250/2023- 24/1061685114(1) , which in turn has arisen from the assessment order dated 16-10-2017 passed by the Assessing Officer u/s. 144 r.w.s. 147 of the Act.
The brief facts of the case are that the notice u/s. 148 of the Act was issued by the AO to the assessee on 29-03-2017 directing the assessee to file return of income within 30 days of the receipt of the notice which was claimed to have been served by the AO on the assessee by email as well as by speed post. The assessee did not file the return of income in pursuance to the aforesaid notice. The reminder letter was issued to the assessee by the AO on 29th May, 2017 which was claimed by the Assessing Officer to have been served on to the assessee. Further, statutory notices u/s. 142(1) were issued by the AO, but there was no compliance on the part of the assessee. Thereafter, show cause notice was issued by the AO to the assessee dated 6th October, 2017 which was claimed by the AO to have been served on the assessee by speed post , which reads as under:-
Page No. Amish Umesh Jani L/H/ of Late Shrimati Smitaben Umesh Jani v. ITO
“ Sub: Assessment for the A.Y. 2010-11 – Assessment u/s 144 of the I.T. Act , 1961 -Show Cause Notice-Reg. In connection with the assessment in your case for the assessment year 2010-11 , served notices as per the following details , have been issued and served on you.
S.No. Details of notices Date of issue Date of Remarks issued Service 1. Notice u/s 148 of the 29.03.2017 30.03.2017 Non I.T. Act Compliance 2. Reminder Letter 29.05.2017 By speed post Non Compliance 3. Notice u/s 142(1) of 28.06.2017 By speed post Non the I.T. Act Compliance 4. Notice u/s 142(1) of 01.09.2017 By speed post Non the I.T.Act compliance
2. From the above-mentioned details, it can be seen that you have neither complied to any of the above-mentioned notices served on you nor you have submitted the details as mentioned in the notice above notices. Earlier, a letter dated 01-09-2017 duly served upon you asking as to why the assessment should not be finalized ex-parte u/s 144 of the I.T. Act. However, it is noticed that you have neither attended the hearing nor submitted any details. In view of these circumstances, I propose to finalise the assessment as per my best judgment u/s 144 of the I.T. Act.
On verification of details available on record, it is noticed that you have made an investment of Rs. 10,00,000/- for purchase of Bond from National Highway Authority of India on 24.09.2009 for which you have not offered any explanation by not complying to notices issued to you. You has also received Rs. 3,95,595/- from M/s. Landmark Education Breakthrough Technologies Put Ltd. and have not offered to tax the above amount. At the same time, you have not filed your return of income for A.Y. 2010-11 disclosing truly and correctly your investment made in the above mutual funds.
4. You are requested submit the details of source of investment made during A.Y. 2010-11. It is to bring to your notice that if you fail to submit the details and not satisfactorily clarified these transactions and not submitted any documentary evidence, the entire investment amount and receipt will be treated unexplained and added to your total income.
Your explanation/evidences on the above point may please be furnished on the next date of hearing which is fixed on 13.10,2017 at 12.1O PM. It is once again reiterated that if you fail to submit the-details/clarifications, the assessment will be finalized u/s 144 of the I.T. Act as proposed on the basis of Page No. Amish Umesh Jani L/H/ of Late Shrimati Smitaben Umesh Jani v. ITO
material available on record as mentioned above, apart from invoking penal provisions u/s. 271(l)(b) of the I. T. Act, 1961 for non-compliance. This letter may be treated as notice u/s. 142(1) of the I. T. Act 1961.”
2.2 However, the assessee did not responded to the SCN , and the Assessing Officer proceeded to frame assessment u/s. 144 r.w.s 147, wherein addition of Rs. 10,00,000/- was made by the AO as income of the assessee on account of unexplained investment made by the assessee in the purchase of bonds of NHAI on 24-09-2009 of Rs. 10,00,000/-. Second addition was made by the AO to the income of the assessee on account of amount of Rs. 3,95,595/- received by the assessee from Landmark Education Breakthrough Technologies Pvt. Ltd. which was not offered to tax by the assessee as she has not filed the return of income and the same was also added to the income of the assessee by the AO , vide assessment order 16th October, 2017 passed by the AO u/s 144 read with Section 147 of the 1961 Act.
3. Aggrieved , the assessee filed first appeal before the ld. CIT(A). The assessee in statement of facts as well as grounds of appeal
filed before ld. CIT(A) , stated as under:- “A. Statement of Facts 1.The Appellant is Individual and shifted to Mumbai after the death of her husband.
2. The assessee did not file the Return of Income for AY 2010-11 as there was only one source of income and the entire tax liability on the same was discharged by the TDS being deducted on same. Hence, she was under the belief that there was no need to file the Income-Tax Return.
Page No. Amish Umesh Jani L/H/ of Late Shrimati Smitaben Umesh Jani v. ITO
3. The A.O. issued several notices us 142(1) of the Act. However, the notices sent by the A.O were delivered to the Ahmedabad address where no one resided as the Appellant shifted to Mumbai.
The Appellant had no knowledge about the issuance of such notices by the A.O. as the appellant was not residing at the address where the notices were sent. 5. Due to no reply by the appellant, the learned A.O. passed an ex-parte order us 144 r.w.s. 147 of the Income-Tax Act on 16.10.2017. 6. During the year, the appellant had invested Rs. 10,00,000 in NHAI bonds out of the sale proceeds of residential flat during the F.Y. 2008-09. Further, the appellant had earned rent income of Rs. 3,95,595. While passing the assessment order, the A.O. considered both of the above as income and passed the order determining total income at Rs. 13,95,595. 7. It is only when the Appellant visited the house in Ahmedabad, she received the various notice and orders. 8. Aggrieved with the above addition, this appeal is being preferred as per separate grounds of appeal
. B. Grounds of Appeal Ground No. 1 : Addition of Rs. 10,00,000/- to the income of the assessee.
1. That the learned AO has acted arbitrarily in adding the investment in NHAI bonds of Rs 1000000 to the total income of the appellant and the addition is uncalled for. Ground No. 2: Order passed in violation of Natural Justice a. The appellant humbly submits that the impugned order is bad in law and liable to be set aside. Further, the impugned order has been passed without properly considering the relevant facts and is based on assumptions, presumptions, conjectures and surmises of the Id. A.O. b. That the ld. A.O. has grossly erred in law while passing the impugned order. The order is arbitrary, misconceived, unjustified and not consistent with the facts and circumstances of the case. c. That ld. A.O. had passed the impugned order in haste denying the Appellant reasonable opportunity to represent her case appropriately which are against the principles of natural justice.”
4. The ld. CIT(A) dismissed the appeal of the assessee ex- parte on the ground that the appeal has been filed belatedly by Page No. Amish Umesh Jani L/H/ of Late Shrimati Smitaben Umesh Jani v. ITO 124 days as ld. CIT(A) did not condone the delay and the appeal stood dismissed by ld. CIT(A), by holding as under:-
“Decision The appellant has filed appeal on 16.08.2019 but the order of assessment was served on 18.12.2019. There is delay of 124 days in filing the appeal. The appellant has mentioned in Form No 35 that "The appellant is Individual and shifted to Mumbai after the death of her husband. The appellant did not file the Return of Income for A.Y. 2010-11 as there was only one source of income and the entire tax liability on the same was discharged by the TDS being deducted on same. Hence, she was under the belief that there was no need to file the Income- Tax Return. The A.O. issued several notices u/s 142(1) of the Act. However, the notices sent by the A.O were delivered to the Ahmedabad address where no one resided as the Appellant shifted to Mumbai. The Appellant had no knowledge about the issuance of such notices by the A.O. as the appellant was not residing at the address where the notices were sent. Due to no reply by the appellant, the learned A.O. passed an exparte order u/s 144 r.w.s. 147 of the Income-Tax Act on 16.10.2017. It is only when the Appellant visited the house in Ahmedabad, she received the various notice and orders. Thus, the appellant was prevented by sufficient cause in not presenting the appeal within time." The plea of the appellant is not acceptable as the appellant has not submitted any documentary evidence in support of her claims. In absence of any such documentary evidence, the delay in filing the appeal is not condoned. Hence, the appeal is dismissed.”
5. Still Aggrieved , the assessee has filed appeal before the Tribunal which appeal has been filed in time and assessee has raised four grounds of appeal before the Tribunal, as under:-
Ground NO. 1 : Non-acceptance of condonation of delay That on the facts and the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in not passing order and not dealing with the grounds of appeal
raised by the Appellant, on the legal infirmities in the impugned assessment order dated 16th October, 2017 and as well as on the merits of the addition made therein, and rather dismissing the appeal filed by the Appellant in limine for delay in filing of appeal. The appellant prays that the delay in filing of appeal before CIT(A) be condoned, and appeal should be taken up for hearing on merits of the case.
2. Ground NO. 2 :Dismissal of appeal after a prolonged period of over four years (1532 days) from the date of filing the appeal
Page No. Amish Umesh Jani L/H/ of Late Shrimati Smitaben Umesh Jani v. ITO That on the facts and the circumstances of the case, the learned Commissioner of Income Tax (Appeals) has erred in dismissing the appeal after a prolonged delay of over four years (1532 days) and at any rate is opposed to the principles of equity, natural justice and fair play.
3. Ground No.
3. Addition of Rs. 10,00,000/- to the income of the assessee That on the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals) erred in not deciding the issue on merits and not deleting the addition of Rs. 10,00,000/- made by the Assessing Officer to the total income of the assessee. The appellant prays that the addition be deleted.
4. That the appellant craves leave to add to, alter, amend, modify, substitute, delete and resend all or any of the grounds of appeal
on or before the final bearing if necessary so arises.”
6. When this appeal was called for hearing before SMC Bench the ld. counsel for the assessee at the outset submitted that there was a delay of almost 2 years in filing the appeal by the assessee with ld. CIT(A) , although the ld. CIT(A) has mentioned that there is a delay of 124 days in filing the appeal , which shows that there is lack of application of mind by the CIT(A). Further, it was submitted that ld. CIT(A) has stated in his order that the assessee has filed an appeal on 16.08.2019 while assessment order was served on 18.12.2019, which again shows non application of mind. It was submitted that assessee has duly filed affidavit dated 17.12.2019 before ld. CIT(A) explaining the reasons for delay. The said affidavit along with application for condonation of delay is placed on record in file in paper book at page 77-81. It was averred in the affidavit that the assessee’s husband died in 2011 , and the assessee shifted to Mumbai in August 2014. It is averred in the affidavit that various notices issued by the AO at the Ahmedabad
Page No. Amish Umesh Jani L/H/ of Late Shrimati Smitaben Umesh Jani v. ITO address were not received by the assessee as no one was residing at the Ahmedabad Address. Even assessment order was not received. The assessee had no knowledge of the notices issued by the AO as well the assessment order passed by the AO. It is averred in the affidavit that the assessee was not aware of the penalty proceedings initiated by the AO u/s 271(1)(c) as well of the penalty order passed therein. It is only at the fag end of 2019,when the assessee visited Ahmedabad , she came to know of the various proceedings being conducted by the AO against the assessee. Then, the assessee took immediate steps to file appeal with ld. CIT(A) . The assessee in its application as well affidavit prayed for the condonation of delay in filing appeal with ld. CIT(A). It was submitted that the house/flat at Ahmedabad was lying closed and hence the assessee did not receive the notices issued by the Assessing Officer , and the ex-parte assessment order was framed by the Assessing Officer. It was submitted that assessee has also now passed away on 19.04.2021(death certificate enclosed at PB/Page 48), and legal heirs have been brought on record.As per death certificate the assessee died in Navi Mumbai at Dr. D.Y.Patil Hospital Nerul Navi Mumbai, and address of the deceased at the time of death was Navi Mumbai, Thane. It was submitted that since this is the main reason for not receiving the notices of the Assessing Officer as the assessee has shifted to Mumbai to live with her son after the death of Page No. Amish Umesh Jani L/H/ of Late Shrimati Smitaben Umesh Jani v. ITO her husband, and the house/flat at Ahmedabad was lying closed . The Ld. counsel for the assessee also drew our attention to the electricity bill issued by the Torrent Power Limited where the minimal charges are coming w.r.t. electricity at Ahmedabad Address, which is filed as an additional evidence before ITAT as an evidence to demonstrate that the house/flat was lying closed. It was submitted that when the assessee went to her flat around fag end of 2019, she found orders of the Assessing Officer and immediately she proceeded to file the appeal before the CIT(A) , which was filed belatedly by two years. It was submitted that ld CIT(A) has dismissed the appeal of the assessee by not condoning the appeal. It was further submitted that detailed submissions were made before the ld. CIT(A) as well as before the Assessing Officer during the remand proceedings as the CIT(A) called for remand report from the AO. Such submissions which were filed by the assessee before the Assessing Officer during the remand proceedings , are placed in paper book at page nos. 6 to 30 as well as submissions filed by the assessee before the CIT(A) during the appellate proceedings are placed at paper book at page nos. 31 to 39. It was submitted that remand report issued by the Assessing Officer is placed at paper book page nos. 40 to 44. It was further brought to our notice that in remand report issued by the Assessing Officer dated 31st October, 2023, the Assessing Officer has accepted the Page No. Amish Umesh Jani L/H/ of Late Shrimati Smitaben Umesh Jani v. ITO investment of Rs. 10,00,000/- as was made by the assessee in NHAI bond stood explained. The ld. Departmental Representative on the other hand submitted that the CIT(A) dismissed the appeal by not condoning the delay. It was submitted that no documentary evidence was filed for shifting the address to Mumbai by the assessee and change of address was not notified to the Assessing Officer as well as to CIT(A).
I have heard the rival contentions and perused the material on record. I have observed that the assessee has not filed return of income u/s.
Re-assessment proceedings was initiated against the assessee u/s 147, and notice u/s. 148 was issued by the Assessing Officer on 29th March, 2017. The assessee did not file return of income in pursuance to the notice issued by the Assessing Officer u/s. 148 of the Act. Further, I have observed that statutory notices were issued by the Assessing Officer u/s. 142(1), but the assessee did not responded to these notices . The AO issued SCN but the same also remained un-complied with by the assessee. Finally, an ex-parte assessment order dated 16th October, 2017 was issued u/s. 144 r.w.s. 147 of the Act wherein two additions were made by the AO, firstly with respect to the investment made by the assessee during the impugned assessment year on 24.09.2009 with NHAI of Rs. 10,00,000/- , and secondly income of Rs. 3,95,595/- from M/s Landmark Education Breakthrough Technologies Private Limited which was not Page No. Amish Umesh Jani L/H/ of Late Shrimati Smitaben Umesh Jani v. ITO disclosed by the assessee to the Department as no return of income has been filed. The assessee has claimed that this income of Rs. 3,95,595/- was rental income on which TDS was duly deducted , and since this was the only income on which TDS was deducted, she did not filed any return of income. This income of Rs. 3,95,595/- is also not subjected to challenge before me in the grounds of appeal filed by the assessee before the Tribunal. I have observed that assessee has claimed that her husband died on 12.01.2011 , and she moved to Mumbai in 2014 to live with her son.The death certificate of husband is enclosed in paper book. It is claimed that her premises at Ahmedabad was lying closed since 2014 , as the assessee shifted to Mumbai at Thane to live with her son. The assessee has also filed bill of Torrent Power Limited as additional evidences wherein there is minimal charges towards electricity bill been charged by the electricity company w.r.t. Ahmedabad Premises as it is claimed that the said premises was lying closed since 2014. The assessee died in 2021 at hospital at Nerul , Navi Mumbai and her address is of Thane District at the time of death as per death certificate. It is not un-common that old and aged parents move to live with their sons/daughters in their old age for moral and emotional support as well look for support from their sons/daughters in case of any health emergency, more-so when one of the husband or wife dies. So Far Service of notice , merely sending
Page No. Amish Umesh Jani L/H/ of Late Shrimati Smitaben Umesh Jani v. ITO notices are not sufficient. Reference is drawn to Section 282 of the 1961 Act. The AO could have deputed inspector to paste the notice at the premises of the assessee at Ahmedabad. The inspector could have made enquiries with the neighbours , and then factual position could have emerged that the assessee has moved to Mumbai. The assessee has claimed that she has not received the notices issued by the Assessing Officer during the reassessment proceedings nor received the re-assessment order dated 16th October, 2017 , and it is only when she visited the Ahmedabad premises in 2019, she came to know about the proceedings initiated against her by the Department. It is claimed by her that she filed the appeal with CIT(A) immediately after coming to know that the re- assessment order has been passed by the Department against her. She has filed affidavit and application praying for condonation of delay before CIT(A) as the appeal before the CIT(A) is filed belatedly filed by 2 years , in which she has elaborately explained that she moved to Mumbai in 2014 after death of her husband and the premises at Ahmedabad was lying closed. She has filed submission before the CIT(A) . The CIT(A) called for the remand report from the Assessing Officer and during remand proceedings before the AO she has filed the submissions before the Assessing Officer. The Assessing Officer has submitted remand report dated 31st October, 2023 in which the Assessing Officer has accepted that the Page No. Amish Umesh Jani L/H/ of Late Shrimati Smitaben Umesh Jani v. ITO investment made of Rs. 10,00,000/- by the assessee with NHAI on 24.09.2008 stood duly explained being made out of the sale of the property in the preceding financial year 2008- 09. It is unfortunate that despite calling of Remand Report from the AO and the remand report of the AO being in favour of the assessee, that the CIT(A) at that stage dismissed the appeal of the assessee on the ground of not condoning the delay. So far as other additions of Rs. 3,95,595/-, the assessee has submitted that this is rental income received from Landmark Education Breakthrough Technologies Pvt. Ltd. on which TDS has been duly deducted. Thus, assessee has accepted an amount of Rs. 3,95,595/- as her income from house property, and there is no dispute as to the said income. The only dispute is w.r.t. unexplained investment of Rs. 10,00,000/- in NHAI Bonds made on 24.09.2009, which has been accepted by AO in remand report as being explained being made out of the sale proceed of property in the preceding financial year i.e. 2008-09. Now the assessee has also expired and legal heir has been brought on record. The legal heir has filed the death certificate as well as pedinama. Keeping in view facts and circumstances of the case and in the interest of justice, I condone the delay in filing the appeal belatedly by the assessee with ld. CIT(A) as reasonable and sufficient cause has been made out/shown by the assessee, and I do not find any malafide on the part of the assessee in Page No. Amish Umesh Jani L/H/ of Late Shrimati Smitaben Umesh Jani v. ITO filing the appeal belatedly before ld. CIT(A) beyond the time stipulated under the 1961 Act. When justice is pitted against technicalities, the Courts will lean towards advancement of substantial rather than technicalities unless the malafide is at writ large.I donot see any malafide on the part of the assessee in filing this appeal belatedly before ld. CIT(A) Reference is drawn to the judgment and order of Hon’ble Supreme Court in the case of Collector of Land Acquisition, Anantnag v. Mst. Katiji (1987 AIR 1353(SC)). Further, in the interest of justice and fairness to both the parties keeping in view the entire facts and circumstances of the case, I restore the matter back to the file of ld. CIT(A) to adjudicate the appeal of the assessee on merit in accordance with law. The ld. CIT(A) is also directed that the appeal should be adjudicated and disposed expeditiously preferably within six months of the service of this order, as prima-facie the assessee has a strong case in her favour. Further, CIT(A) shall also consider that the remand report has already been given by the Assessing Officer in which the AO has accepted that the investment of Rs. 10,00,000/- in NHAI bond stood explained. I clarify that I have not commented on the merits of the issue. The ld. CIT(A) shall give proper opportunity to both the parties in accordance with principles of natural justice. The assessee is also directed to comply with the directions/notices issued by ld. CIT(A). The Page No. Amish Umesh Jani L/H/ of Late Shrimati Smitaben Umesh Jani v. ITO appeal of the assessee is allowed for statistical purposes. I order accordingly. 8. In the result, the appeal of the assessee is allowed for statistical purposes.