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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI RAVISH SOOD & SHRI ARUN KHODPIA
आदेश / ORDER
PER RAVISH SOOD, JM:
The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 02.06.2023, which in turn arises from the order passed by the A.O under Sec.144 r.w.s. 147 of the Income-tax Act, 1961 (in short ‘the Act’) dated 07.12.2018 for the assessment year 2013-14. The assessee has assailed the impugned order on the following grounds of appeal:
“1. On the facts and circumstances of the case and in law, ld. CIT(A) has erred in sustaining addition of Rs.66,31,100/- on count of undisclosed income being sale proceeds of immovable property. 2. The appellant craves leave to add, urge, alter, modify or withdraw any ground/s before or at the time of hearing.”
At the threshold of hearing of the appeal, we find that the appeal filed by the assessee is time-barred by 2 days. The assessee has filed a letter dated a/w. an “affidavit” dated 18.08.2023 seeking condonation of the delay involved in filing of the appeal, stating as under:
“1. The company has filed Form No 36 with Hon'ble Income Tax Appellate Tribunal, Raipur Bench, Raipur on 03-08-2023 for AY 2013-14 bearing No 268/RPR/2023. 2. That there was a delay of 2 days in filing the Appeal in Form No 36 as detailed above.
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3. That the delay was due to the reason, that it is a procedural delay, in following the procedure of appeal filing (i.e. Signing the Form No 36, payment of challan) 4. That the delay caused on account of genuine reasons and due to circumstances beyond my control.”
The Ld. A.R submitted that there was a procedural delay involved, i.e., signing of Form 36, payment of challan etc. which took some time to file the present appeal; therefore, the same having occasioned for no fault on his part, thus, may kindly be condoned.
Per contra, the Ld. Departmental Representative (for short ‘DR’) raised an objection to seeking of condonation of delay involved in the appeal filed by the assessee.
After thoughtful consideration of the reasons stated in the application for condonation of delay, it transpires that as the delay of 2 days in filing of the present appeal had occasioned because of circumstances that could neither be attributed to any deliberate conduct or lackadaisical approach on the part of the assessee appellant, thus, we condone the same.
On the basis of information gathered by the A.O through NMS (Non- filters Monitoring System) module that the assessee company had sold immovable property worth Rs.66.31 lacs vide registered deed dated
4 Shreemangal Rolling Mills Pvt. Ltd. Vs. ACIT-2(1), Bilaspur 18.07.2012 but had not filed its return of income, the A.O initiated proceedings u/s.147 of the Act.
Notice u/s.148 dated 01.09.2017 was issued and duly served upon the assessee company. However, the assessee company failed to comply with the aforesaid notice and did not file any return of income in compliance to the notice issued by the A.O u/s.148 of the Act dated 01.09.2017.
During the course of assessment proceedings, it was observed by the A.O that the assessee company was engaged in trading of iron & steel products and allied items. Information was called for by the A.O from the assessee company vide notice u/s.142(1) of the Act dated 03.11.2018 but, the assessee company had failed to comply with the same. The A.O issued notice u/s. 133(6) of the Act to the Sub-Registrar, Bilaspur. In reply, the copy of registered sale deed dated 19.07.2012 was received by the A.O from the Sub-Registrar Office, Bilaspur. As the assessee had failed to comply with the notice issued u/s.148 of the Act and not filed its return of income and also failed to provide requisite details as were called for in the course of the assessment proceedings, therefore, the A.O on the basis of details gathered by him held the entire sale proceeds of Rs.66.31 lacs (supra) as the assessee’s income for the year under consideration. Accordingly, the A.O on the basis of his aforesaid observations vide order passed u/s.144 r.w.s. 147
5 Shreemangal Rolling Mills Pvt. Ltd. Vs. ACIT-2(1), Bilaspur of the Act dated 07.12.2018 determined the income of the assessee at Rs.66.31 lacs (approx.).
Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without success. As is discernible from the order of the CIT(Appeals), it transpires that it was observed by him that as the assessee had neither furnished details as regards the investment in the property that was sold during the year under consideration, nor offered for tax the income arises on the sale of the same, therefore, the A.O had rightly held the entire amount of sale proceeds as the undisclosed income of the assessee company. Although, the assessee has stated to have filed certain submissions on 18.01.2023 and 26.04.2023 on ITBA portal, but the CIT(Appeals) observed that as it had failed to substantiate the source of its investments on the basis of supporting documents, therefore, finding no infirmity in the addition made by the A.O, he upheld the same. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under:
“4. DECISION: During the appellate proceedings, notice of hearing issued on 06-01- 2021, 11-01-2023, 06-3-2023, 20-04-2023 and 15-05-2023 under section 250 of the Act, no written submissions were made by the appellant. The appeal is disposed after considering the submission of the appellant, facts on record and position of law. During the assessment proceedings, the assessing officer has observed that the assessee has sold property worth Rs.66,31,100/- during the year under consideration. The assessee failed to comply
6 Shreemangal Rolling Mills Pvt. Ltd. Vs. ACIT-2(1), Bilaspur the notices of the assessing officer therefore the assessing officer has made an addition of Rs.66,31,100/-. The assessee failed to submit source of investment before the assessing officer during the assessment proceedings, despite of the several opportunities given by assessing officer. During the appellate proceedings, the appellant has neither submitted any supporting documents nor explained the reasons. Therefore, I do not find any reason to interfere with the finding given by the AO on these issues. The action of the assessing officer is justified, therefore, grounds of appeal is dismissed.”
The assessee, being aggrieved with the order of the CIT(Appeals), has carried the matter in appeal before us.
Shri Sunil Kumar Agrawal, Ld. Authorized Representative (for short ‘AR) for the assessee company submitted that the CIT(Appeals) had grossly erred in dismissing the assessee's appeal vide an ex-parte order without dealing with the specific issues raised before him. The Ld. A.R. submitted that the CIT(Appeals) had not adjudicated the merits involved in the case and had summarily dismissed the assessee's appeal. Based on his contention above, it was submitted by the Ld. AR that the matter, in all fairness, may be restored to the CIT(Appeals) file for fresh adjudication.
Per contra, the Ld. Departmental Representatives (for short, ‘DR’) relied on the orders of the lower authorities. It was submitted that by the Ld. DR that as the assessee company had neither pursued its case before the A.O. during the assessment proceedings nor furnished the requisite
7 Shreemangal Rolling Mills Pvt. Ltd. Vs. ACIT-2(1), Bilaspur details/explanation before the CIT(Appeals), therefore, both the lower authorities had rightly made/sustained the addition.
We have heard the ld. Authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record.
On a perusal of the assessment order, it transpires that though the A.O. had provided sufficient opportunities to the assessee company to represent its case, it was the assessee which, for reasons best known to it, despite being well informed about the ongoing assessment proceedings, had not only failed to file its return of income in compliance to notice u/s.148 of the Act, but had also evaded its participation in the said proceedings. Also, the assessee had failed to file any reply/explanation to the query letters/notices that were served on it during the assessment proceedings. Accordingly, the A.O., in the absence of any return of income and also any explanation forthcoming about the sale transaction carried out by the assessee company, which had chosen to lie low and neither participate in the assessment proceedings nor furnish any reply to the query letters that were issued to it, thus, was constrained to treat the entire amount of sale proceeds of Rs. 66.31 lacs (supra) as the assessee’s undisclosed income
8 Shreemangal Rolling Mills Pvt. Ltd. Vs. ACIT-2(1), Bilaspur and frame the best judgment assessment vide his order u/s. 144 r.w.s. 147 of the Act dated 07.12.2018.
The CIT(Appeals), taking notice of the fact that the assessee appellant despite sufficient opportunities, had not placed on record any evidence whatsoever, whether documentary or otherwise, to substantiate the source of its investment in the property that was sold during the year for a consideration of Rs.66.31 lacs (supra) nor had filed the income/profit from the sale transaction for tax, thus, upheld the order passed by the A.O u/s 144 r.w.s. 147 of the Act, dated 07.12.2018.
Considering the facts of the case, we find that it is not a case where the CIT(Appeals) had discarded any material available on the record and summarily dismissed the assessee's appeal in limine for want of prosecution. Instead, it is a case where in the absence of any evidence whatsoever, whether documentary or otherwise, which would substantiate that the A.O was unjustified in treating the unexplained investment a/w. profit accruing/arising to the assessee company on sale of the property as the latter’s undisclosed income, the CIT(Appeals) had sustained the addition made by the A.O u/s 144 r.w.s. 147 of the Act, dated 07.12.2018.
Now, when the assessee company, as per its volition, had not filed any return of income for the year under consideration, i.e., either voluntarily
9 Shreemangal Rolling Mills Pvt. Ltd. Vs. ACIT-2(1), Bilaspur u/s 139 or in compliance to notice u/s 148 of the Act; nor appeared before the A.O during the assessment proceedings or placed on his record any written submission or filed replies to the queries that were raised vide notice(s) issued u/s.142(1) of the Act; nor despite sufficient opportunities substantiated the source of its investment in the property in question, then, in the absence of any evidence whatsoever, whether documentary or otherwise, which would reveal that there was no justification for the CIT(Appeals) to uphold the addition of Rs.66.31 lacs (supra) made by the A.O, we are of a firm conviction that no infirmity emerges from the order of the CIT(Appeals) who had rightly approved the order passed by the A.O u/s 144 r.w.s. 147 of the Act, dated 07.12.2018.
Although Section 253 of the Act, inter alia, vests with an assessee a statutory right to assail before the Income-Tax Appellate Tribunal an order passed by the Commissioner (Appeals), but a careful perusal of the aforesaid statutory provision reveals that the same can be triggered only where the assessee appellant is, inter alia, aggrieved with “….any order of assessment”. For the sake of clarity, Sec. 253 (relevant extract) is culled out as under:
“253 (1) Any assessee aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order:
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(a) . an order passed by a Deputy Commissioner (Appeals) [before the 1st day of October, 1998] [or , as the case may be, a Commissioner (Appeals)] under [section 154], section 250, [section 270A,] [section 271, section 271A[section 271J] or section 272A]’ or (b) To (f).) ……………………………………………………………….”
(emphasis supplied by us)
Thus, considering the scope of Sec. 253 of the Act, it transpires that the same lays down as a pre-condition a grievance of the assessee appellant arising from the order passed by the Commissioner (Appeals).
On a perusal of the “grounds of appeal” based on which the assessee appellant has assailed the order of the CIT(Appeals) before us, we find that is the claim of the assessee that the CIT(Appeals) had grossly erred in confirming the addition of Rs.66.31 lacs (supra) that was made by the A.O. by treating the unexplained investment a/w. profit accruing/arising to the assessee company on the sale of the property as its undisclosed income.
19. We shall hereinafter deal with the aforesaid grievance of the assessee appellant before us, as under:
(A). Disposing off the appeal by the CIT(A) without affording a reasonable opportunity of being heard to the assessee :
11 Shreemangal Rolling Mills Pvt. Ltd. Vs. ACIT-2(1), Bilaspur (i). The Ld. AR’s claim that the CIT(Appeals) had grossly erred in disposing of its appeal without affording it a reasonable opportunity of being heard is factually incorrect. As observed by us herein above, the conduct of the assessee company before the CIT(Appeals) was no better than that it had adopted during the assessment proceedings. Although the CIT(Appeals) had afforded sufficient opportunities to the assessee to put up its case on merits before him, but it had once again adopted an evasive approach and had failed to come forth with any documents or explanation to support its claim in the proceedings before the first appellate authority (that were spread over two years, i.e. 06.01.2021 to 02.06.2023) that the A.O had erred in making an addition of Rs.66.31 lacs (supra) in its hand. Also, the assessee company failed to substantiate the source of its investment in the property that was sold during the year on the basis of any supporting documents before the CIT(Appeals). It is a matter of fact borne from record that the assessee company, despite being put to notice about the hearing of the appeal, had adopted a lackadaisical approach and, despite being well informed, had evaded from participating in the proceedings before the CIT(Appeals), which were spread over a time span of two years failed to come forth with any explanation that as to why no addition was called for in its case.
12 Shreemangal Rolling Mills Pvt. Ltd. Vs. ACIT-2(1), Bilaspur (B). The CIT(Appeals) had grossly erred in confirming the addition of Rs.66.31 lacs (supra) made by the A.O by treating the entire sale proceeds of the property as assessee’s undisclosed income. (i). The aforesaid claim of the assessee, i.e. the CIT(Appeals), had erred in confirming the addition of Rs. 66.31 lacs (supra) made by the A.O as assessee’s undisclosed income is misconceived. As observed by us hereinabove, in the absence of any evidence whatsoever, whether documentary or otherwise, which would reveal that there was no justification for treating the sale proceeds of the property of Rs. 66.31 lacs (supra) as assessee’s undisclosed income, the CIT(Appeals) had approved the well-reasoned addition made by the A.O. The CIT(Appeals) observing that no material/evidence was placed on record by the assessee appellant to either substantiate the sources of investment in the property that was sold during the year; or any explanation as regards the profit/income arising from the said sale transaction, thus, was constrained to sustain the addition made by the A.O.
Thus, in terms of our observations above, we find no merit in the grounds on which the assessee company has assailed the order of the CIT(Appeals) before us.
13 Shreemangal Rolling Mills Pvt. Ltd. Vs. ACIT-2(1), Bilaspur
Apropos, the claim of the Ld. A.R. that the matter in all fairness be restored to the file of the A.O. for fresh adjudication, the same does not favor us. We are of a firm conviction that the right vested with an appellant to approach the tribunal by preferring an appeal before it is for a limited purpose, i.e. a grievance that the assessment framed by the AO, or for that matter, order of the CIT(Appeal) were not accordance with the letter of the law. In no case can the Tribunal be taken as a forum for an appellant who, as per his volition, had either adopted an evasive or lackadaisical approach before the lower authorities and not participated in the assessment or appellate proceedings to come up with its case for the first time before the Tribunal and, as a matter of right seek restoring of the impugned order to the file of the lower authorities for fresh adjudication.
Considering the facts mentioned above, finding no infirmity in the view taken by the lower authorities who had rightly made/sustained the addition of Rs.66.31 lacs (supra), we uphold the same.
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