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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Shri Ramit Kochar
आदेश/ORDER
This appeal in 2011-12 has arisen from the appellate order vide DIN & Order No. ITBA/APL/S/250/2023-24/1059137792(1) dated 28-12-2023 passed by ld. Addl/JCIT(A)-11, Delhi , which in turn has arisen from the assessment order dated 13-12-2018 passed by Assessing Officer u/s. 143(3) r.w.s. 147 of the Act.
Page No. Khengarsinh Jadavbhai Gohel v. ITO
The brief facts of the case are that the assessee has not filed return of income for the relevant assessment year u/s. 139 of the Act. As per information available with the Department that the assessee has made cash deposits of Rs. 10,00,000/- in the bank account maintained with Bank of Baroda during the year under consideration, the case of the assessee was reopened by the AO and also reasons were recorded on 06.03.2018 u/s. 147 to verify the source of cash deposits. Notice u/s. 148 dated 27-03-2018 was issued by the Assessing Officer to the assessee. The assessee did not file return of income in pursuance to notice u/s. 148 issued by the Assessing Officer. Thereafter, various letters/notices were issued by the Assessing Officer but the same were un- complied with. The show cause notice was issued by the AO to the assessee on 15.11.2018. The assessee filed return of income only after issuance of show cause notice dated 15-11- 2018. Thereafter, the reasons recorded by the Assessing Officer was supplied to the assessee. Notice u/s. 143(2) dated 06-12-2018 was issued to the assessee. The assessee submitted that cash deposit under the bank account has been received from Shree Talapada Patel Gnati Vidhyarthi Bhuvan (referred to as Mandal) and the amount was collected by way of donation and sale of land. The assessee furnished hand written documents containing name and amount only. The assessee furnished the sale deed executed by Narsimbhai
Page No. Khengarsinh Jadavbhai Gohel v. ITO Chaturbhai Solanki. The assessee also submitted a letter wherein it has been mentioned that the money collected by the Mandal for the construction of Vidharthi Bhavan has been deposited in his account. The Assessing Officer rejected the reply of the assessee as the assessee could not furnish the trust registration deed or registration under co-operative society registration and annual account of the society of the trust and identifying the address of the members/trustee. The assessee has not furnished the details as required by the Assessing Officer. The assessee neither filed details of person from whom the Mandal has received the donation nor any details regarding registration of trust/society. Thus, the Assessing Officer made addition of total cash deposit of Rs. 26,64,750/- made by the assessee in his bank account maintained with Bank of Baroda in the hands of the assessee as unexplained money under the provisions of section 69A of the Act. Further, addition of Rs. 10,800/- was made towards interest income in the hands of the assessee by the AO as the same was not offered to tax by the assessee.
The Assessee being aggrieved filed first appeal with ld. Commissioner of Income-tax Appeals ( transferred to and Adjudicated by ld Addl/JCIT(A)) . The ld.Addl/JIT(A) issued notices to the assessee as are mentioned in the appellate order, but the same remained un-complied with by the assessee..The appeal of the assessee was dismissed ex-parte
Page No. Khengarsinh Jadavbhai Gohel v. ITO in-limine by ld. Addl./JCIT(A) without deciding the issues on merit on the grounds that the assessee did not filed any documents or submissions despite being given opportunity , and ld. Addl/JCIT(A) upheld the assessment order passed by the AO.
Still aggrieved , the assessee filed second appeal with Tribunal. None appeared on behalf of the assessee when this appeal was called for hearing before SMC Bench, nor any adjournment application has been filed. It is observed that this appeal is filed belatedly by the assessee with Tribunal beyond the time stipulated u/s 253(3) , by 33 days. The assessee has filed the application for condonation of delay praying for condoning the delay of 33 days in filing this appeal beyond the prescribed time u/s. 253(3) of the Act. The assessee has stated in his condonation application that the appellant came to know of the appellate order dated 28.12.2023 passed by ld. Addl/JCIT(A) only on 31.01.2024. The order has been passed by the faceless appeal center. The appeal was filed on 30.03.2024. The assessee claimed that he appointed advocate and handed over documents in connection with filing of appeal with ITAT, but the advocate was busy in filing GST return. The advocate Mr. Amit Panchal informed him that there is sufficient time till 31.03.2024 to file appeal with ITAT. Then thereafter assessee could not meet the said advocate , and when he called the advocate he refused to Page No. Khengarsinh Jadavbhai Gohel v. ITO file the appeal on the ground that he has no time. The assessee claimed that he searched for other consultant but he could not find , and in the meantime 3 days were lost and finally original advocate took up the matter and filed the appeal of the assessee. Thus, it is claimed that it is because of the non-availability of Advocate/consultant, the assessee could not file the appeal in time and further that the assessee came to know of the order dated 28.12.2023 only on 31.01.2024. The ld. Departmental Representative has no objection to the condonation of delay in filing this appeal belatedly, and he left the matter to the Bench to decide about the condonation of delay. After considering the material on record and also after hearing ld. Departmental Representative, I am of the view that this delay of 33 days need to be condoned as the assessee has shown sufficient and reasonable cause for filing this appeal belatedly and there is no malafide at writ large on the part of the assessee in filing this appeal belatedly beyond the time stipulated u/s 253(3) before the Tribunal. When justice is pitted against technicalities, the Courts will lead 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 by 33 days before the ITAT. 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
Page No. Khengarsinh Jadavbhai Gohel v. ITO (1987 AIR 1353(SC)). Thus, I condone the delay of 33 days and proceed to adjudicate this appeal on merits in accordance with law. 4b) The ld. Departmental Representative submitted and prayed that the order of ld. Addl/JCIT(A) be confirmed. On being asked about the compliance of Section 250(6) by ld. Addl/JCIT(A) while passing the appellate order, the ld. Departmental Representative fairly submitted that ld. Addl/JCIT(A) has not decided the issues arising in the appeal on merits of the issue, and has dismissed the appeal of the assessee ex-parte in-limine on the grounds of non compliance by the assessee of the notices of hearing issued by ld. Addl/JCIT(A). The ld. DR fairly submitted that the matter can go back to the file of ld. Addl/JCIT(A) for fresh adjudication of the appeal of the assessee on merits in accordance with law.
I have considered the contention of ld. Departmental Representative and perused the materials on record. I have observed that the ld. Addl./JCIT(A) has passed an ex-prate appellate order in-limine without deciding the issues arising in the grounds of appeal on merits in accordance with law, as is obligated and required under the provisions of section 250(6) of the Act. The ld. Addl./JCIT(A) dismissed the appeal of the assessee on the grounds that the assessee has not complied with the notices issued by ld. Addl./JCIT(A) and has not submitted details/documents to support his contentions. I
Page No. Khengarsinh Jadavbhai Gohel v. ITO have observed that the assessee has raised the issue before the AO that the money by way of donations received by Mandal to build Vidyarthi Bhawan and also from sale of land, was deposited in his account. The assessee furnished the copy of sale deed. The assessee also furnished certain details/documents which were not accepted by the AO. The ld. Addl./JCIT(A) ought to have called for assessment record from the AO. Further, I have observed that the ld. Addl./JCIT(A) has dismissed the appeal of the assessee ex-parte in-limine without making any further inquiry/verification , and has simply confirmed the assessment order of the Assessing Officer by holding that no details/documents are filed by the assessee in pursuance to notices issued by ld. Addl/JCIT(A), which is not in consonance with the provisions of section 250(6).The ld. Addl./JCIT(A) is obligated to state the points for determination, his decision thereof and reasons for these decisions as provided u/s 250(6), and ld. Addl. CIT(A) is to pass a speaking and reasoned order. The appellate order of ld. Addl/JCIT(A) is subject to challenge before the higher authorities. The ld. Addl./JCIT(A) ought to have adjudicated the appeal on merits by making such inquiries/verification considered appropriate by ld. Addl./JCIT(A). The ld. Addl./JCIT(A) has not given his independent reasoning while dismissing the appeal of the assessee. I have observed that the ld. Addl./JCIT(A) has passed appellate order without deciding
Page No. Khengarsinh Jadavbhai Gohel v. ITO the issues on merit. The power of ld. Addl./JIT(A) are co- terminus with the power of Assessing Officer which even includes power of enhancement(Section 251(1)(a) and 251(1A)(a)). The ld. Addl/JCIT(A) could have issued summons u/s. 131 to the assessee or could have called for information from third parties u/s. 133(6) , in case there is non- compliance on the part of the assessee. There are other powers vested with ld. Addl./JCIT(A) as is provided under the 1961 Act. The ld. Ld. Addl/JCIT(A) has not rebutted the claim of the assessee, but dismissed the appeal of the assessee on ground of non filing of documents/details by the assessee. The ld. Addl/ JCIT(A) is required and obligated to pass order in compliance with the provisions of section 250(6), as ld Addl/JCIT(A) is required to pass reasoned order on merits in accordance with law. The appellate order passed by ld.Addl/JCIT(A) is subject to further appeal with ITAT u/s 253. The appellate order passed by ITAT is subject to further appeal before Hon’ble High Court u/s 260A. The judgment and order passed by Hon’ble High Court is also subject to challenge before Hon’ble Supreme Court. Thus, the appellate order passed by ld. CIT(A) is not a final order, as it is subject to challenge before higher appellate authority. Thus, Reasons which weighed in the minds of the adjudicating authority while adjudicating appeal on merits of the issue are cardinal as the higher appellate authority can then adjudicate appeal
Page No. Khengarsinh Jadavbhai Gohel v. ITO on the issues arising in appeal before them, based on decision and reasoning of ld. Addl/JCIT(A) in deciding the issues. If the ld.Addl/JCIT(A) simply dismiss the appeal merely because the assessee did not appear before ld. Addl/JCIT(A) or did not comply with the notices in limine without adjudicating issues arising in the appeal on merits , such order is not sustainable in the eyes of law keeping in view provisions of Section 250(6) , and also higher appellate authorities will be deprived to see what weighed in the mind of the ld. Addl/JCIT(A) while adjudicating appeal as it will be an order passed without reasoning on the issues on merits . In the present case, it is observed that ld. Addl/JCIT(A) has dismissed the appeal of the assessee ex-parte without deciding the issues arising in the appeal before him on merits, and hence the appellate order of the ld. Addl/JCIT(A) is clearly in violation of section 250(6) of the Act and liable to be set aside. Merely stating the assessment order passed by AO is upheld , and that the assessee has not submitted details/documents is not sufficient . The ld. Addl/JCIT(A) is not toothless as his powers are co-terminus with the powers of the AO. He could have made enquiries himself or have caused enquiries to be made by the AO and submit remand report to him to enable ld. CIT(A) to adjudicate the appeal(Section 250(4). There are other vast powers vested under the 1961 Act with ld.Addl/JCIT(A). It is equally true that the assessee also did not complied with Page No. Khengarsinh Jadavbhai Gohel v. ITO the notices issued by ld. Addl/JCIT(A) and did not file the requisite details/documents to support his contentions. Under these circumstances and fairness to both the parties, in the interest of justice, the appellate order of ld. Addl/JCIT(A) is set aside and the matter can go back to the file of ld. Addl/JCIT(A) for fresh adjudication of the appeal of the assessee on merit in accordance with law after giving opportunities to both the parties. The ld. Addl/JCIT(A) shall pass speaking and reasoned order in compliance with the provision of section 250(6) of the Act on merit in accordance with law, in set aside proceedings ,after giving opportunity to both the parties in compliance with principles of natural justice. The assessee on his part is also directed to comply with the direction/notices of ld. Addl/JCIT(A) , and in case of failure of the assessee, the ld.Addl/JCIT(A) shall be free to pass such order as deemed fit ex-parte in accordance with law on merits and after complying with the provisions of section 250(6) of the Act. Thus, the appeal of the assessee is allowed for statistical purposes and the matter is restored back to the file of ld. Addl/JCIT(A) for fresh adjudication of the appeal of the assessee on merit in accordance with law. I clarify that I have not commented on the merits of the issues in the appeal. Thus, the appeal of the assessee is allowed for statistical purposes.
Page No. Khengarsinh Jadavbhai Gohel v. ITO
In the result, the appeal of the assessee is allowed for statistical purposes.