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Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR
Before: SHRI RAVISH SOOD
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 10.01.2023, which in turn arises from the order passed by the A.O under Sec. 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) dated 06.12.2016 for the assessment year 2014-15. The assessee has assailed the impugned order on the following grounds of appeal:
“1. Ld. CIT(A) erred in dismissing the appeal without adjudicating the appeal on merits. The appellate order passed by Ld. CIT(A) is illegal inasmuch as the same is contrary to principles of natural justice and the requirements of law.
2. Ld. CIT(A) erred in confirming addition of Rs.50,605/- made by AO on account of balance outstanding in balance sheet under the head current liabilities. The addition made by AO and confirmed by Ld. CIT(A) is arbitrary and not justified.
3. Ld. CIT(A) erred in confirming addition of Rs.5,37,600/- made by AO on account of long-term capital gain claimed exempt by the appellant alleging it to be bogus invoking sec.
The addition made by AO and confirmed by Ld. CIT(A) is arbitrary and not justified.
4. The appellant reserves the right to amend, modify or add any of the ground/s of appeal.”
Before proceeding any further, I may herein observe that the present appeal is time-barred by 164 days. Elaborating on the reasons leading to the aforesaid delay in filing of the appeal, Shri R.B. Doshi, Ld. Authorized Representative (for short, “AR”) for the assessee submitted that the same had occasioned for the reason that 3 Lalchand Ramnani Vs. ITO-3(1), Raipur the assessee, being an octogenarian who is not at all tech-friendly, had remained unaware of the order of the CIT(Appeals) that was dropped in the e-mail of his son, viz.ajayramnani@hotmail.com. Elaborating further, it was submitted by the Ld. AR that the assessee learned about the order of the CIT(Appeals) only when his counsel, at the time of filing his income tax return for A.Y.2023-24, had enquired from his son as to whether or not any order of the CIT(Appeals) was received in his e- mail. Carrying his contention further, it was submitted by the Ld. A.R that as the email regarding the fixation of appeal was received in the spam folder; therefore, because of such a technical glitch it had never come to the knowledge of his son. The Ld. AR, in support of the aforesaid factual position, had drawn my attention to the “affidavit” of the assessee wherein he had deposed the said facts.
Per contra, the Ld. Departmental Representative (for short, “DR”) raised an objection to the seeking of the condonation of the delay involved in filing of the present appeal by the assessee.
I have thoughtfully considered the aforesaid facts. I am of the considered view that as the assessee is an octogenarian, i.e., aged about 88 years, who is not at all tech-savvy (as informed by the Ld. AR), therefore, in all fairness, the bonafide reasons leading to the aforesaid delay merits to be condoned. Accordingly, the delay involved in the present appeal is condoned.
Succinctly stated, the assessee had e-filed his return of income for A.Y.2014- 15 on 27.09.2014, declaring an income of Rs.4,26,100/-. Subsequently, the case of 4 Lalchand Ramnani Vs. ITO-3(1), Raipur the assessee was selected for scrutiny assessment u/s.143(2) of the Act. The assessment was thereafter, framed by the A.O vide his order passed u/s.143(3) dated 06.12.2016 determining the income of the assessee at Rs.10,77,310/- after making the following additions /disallowances: -
Sr. No. Particulars Amount Disallownace out of packing charges Rs.8000/-
1. 1.
2. Disallowance of car expenses Rs.15,000/- 3. Disallowance on shop expenses Rs.15,000/- 4. Disallowance on telephone expenses Rs.5000/- 5. Disallowance on travelling expenses Rs.20,000/- 6. Addition on account of unexplained Rs.50,605/- cash credit u/s.68 of the Act 7. Addition on account of Rs.5,37,600/- recharacterization of LTCG on sale of shares held as unexplained cash credit u/s.68 of the Act
6. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals). As the assessee, despite having been afforded sufficient opportunity, failed to participate in the appellate proceedings before the CIT(Appeals), therefore, he had dismissed the appeal of the assessee for non-prosecution. For the sake of clarity, the relevant observations of the CIT(Appeals) are culled out as follows: “5.3 However in spite of numerous opportunities provided, the appellant failed to file any submissions with documentary evidences in respect to sustain the claim made in statement of facts filed with form 35.
5 Lalchand Ramnani Vs. ITO-3(1), Raipur
The aforesaid non compliances reveals beyond doubt that the appellant has nothing to say in the matter of present appeal. Thus, it appears that the assessee is not interested in prosecution of the present appeal and the same is liable to be dismissed on this ground itself. The law assists those who are vigilant and not those who sleep over their rights. This principle is embodied in the well known dictum "VIGILATIBUS, NON DORMENTIBUS, JURA SUBVENIUNT". Considering the facts and relying on the decision of the Hon'ble, ITAT, Delhi Bench, in the case of CIT Vs Multiplan India Ltd. reported in 38-ITD-320 and the judgement of the Hon’ble Madhya Pradesh High Court in the case of Estate of Late Tukoji Rao Holker Vs. CWT (1997) reported in 223-ITR-480 the present appeal is hereby dismissed.
7. The appellant has raised grounds of appeal
No. 1 to 3 which challenge the additions made by AO of Rs.50.605/- and Rs.5,37,600/- u/s. 68 of the Act. However no written submissions were filed in respect of Grounds of Appeal No. 1 to 3. It is noted that the appeal of the appellant has been dismissed by me for non-prosecution in para
6. In view thereof the various grounds raised in appeal have become academic in nature. Grounds of Appeal No. 1 to 3 are hereby dismissed. GOA no. 4 is general and routine in nature and does not require separate adjudication.
8. As a result, the appeal is dismissed.”
The assessee, being aggrieved with the order of the CIT(Appeals), has carried the matter in appeal before me.
I have heard the ld. Authorized Representatives of both parties, perused the orders of the lower authorities as well as material available on record. As is discernible from the order of the CIT(Appeals), the assessee, despite having been afforded sufficient opportunity, had failed to participate in the appellate proceedings on either of the four occasions on which hearing of the appeal was fixed before him, as under:
Date of notice Date of hearing fixed Remark 24.01.2021 08.02.2021 No reply
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20.10.2021 08.11.2021 No reply 23.09.2022 10.10.2022 No reply 29.12.2022 05.01.2023 No reply Holding a conviction that the assessee was not interested in prosecuting the appeal, the CIT(Appeals) dismissed the same.
At the very threshold of hearing of the appeal, Ld. AR for the assessee submitted that the CIT(Appeals) while disposing off the appeal had grossly erred in observing that no written submissions were filed by the assessee before him. Rebutting the aforesaid observation of the CIT(Appeals), it was averred by the Ld. AR that the assessee in the course of the proceedings before him (during physical hearing) had filed “written submissions” dated 06.06.2018 wherein, he had placed his contentions as regards the various additions/ disallowances that were made by the A.O. The Ld. AR in order to fortify his aforesaid contention had taken me through the “written submissions” that were filed by the assessee before the CIT(Appeals), Page 1 to 11 of APB.
Apart from that, it was submitted by the Ld. AR that though the assessee had filed an application for admission of additional evidence under Rule 46A of the Income Tax Rules, 1962, the CIT(Appeals) did not take any cognizance of the same while disposing off the appeal. The Ld. A.R drew my attention to the letter dated 05.06.2018 that the assessee had filed with the CIT(Appeals)-1, Raipur, under Rule 46A of the Income Tax Rules, 1962. Also, it was submitted by the Ld. A.R that the 7 Lalchand Ramnani Vs. ITO-3(1), Raipur CIT(Appeals) had grossly erred in dismissing the appeal of the assessee in limine without adverting to the specific grounds of appeal which were raised before him. The Ld. AR submitted that considering the aforesaid facts, the matter may be restored to the file of the CIT(Appeals) with a direction to him to re-adjudicate the same after affording a reasonable opportunity of being heard to the assessee.
On the other hand, the Ld. DR relied on the orders of the lower authorities.
I have given thoughtful consideration and concur with the claim of the Ld. AR that the CIT(Appeals) had omitted to take cognizance of the “written submissions” that were filed by the assessee with him on 06.06.2018, Pages 1 to 11 of APB. Also, it is a matter of fact borne from the record that the request letter dated 15.06.2018 filed by the assessee with the CIT(Appeals) for admission of the additional evidence under Rule 46A of the Income Tax Rules, 1962 had not been considered by him while disposing of the appeal. Apart from that, I am unable to persuade myself to subscribe to the manner in which the CIT(Appeals) had disposed off the appeal without dealing with the specific issues/grounds on the basis of which additions/disallowance made by the A.O were assailed by the assessee before him.
As observed hereinabove, the CIT(Appeals) had disposed off the appeal for non-prosecution and had failed to apply his mind to the issues which did arise from the impugned order and was assailed by the assessee before him. I am unable to persuade myself to accept the manner in which the appeal of the assessee has been disposed off by the CIT(Appeals). In my considered view, once an appeal is preferred
8 Lalchand Ramnani Vs. ITO-3(1), Raipur before the CIT(Appeals), it becomes obligatory on his part to dispose off the same on merit, and it is not open for him to summarily dismiss the appeal on account of non-prosecution of the same by the assessee. In fact, a perusal of Sec.251(1)(a) and (b), as well as the “Explanation” to Sec.251(2) of the Act, reveals that the CIT(A) remains under a statutory obligation to apply his mind to all the issues which arise from the impugned order before him. As per mandate of law the CIT(Appeals) is not vested with any power to summarily dismiss the appeal for non-prosecution. The aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom). In the aforementioned case, the Hon’ble High Court observed as under:
"8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the AO to make further inquiry and report the result of the same to him as found in Sec. 250 of the Act. Further, Sec. 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Sec. 251(1)(a) and (h) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-s. (2) of s. 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under s. 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) are co-terminus with that of the AO i.e. he can do all that A.O could do. Therefore, just as it is not open to the AO to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw
9 Lalchand Ramnani Vs. ITO-3(1), Raipur and/or the CIT(A) to dismiss the appeal on account of non- prosecution of the appeal by the assessee. This is amply clear from the s. 251(1)(a) and (b) and Explanation to Sec. 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.”
Considering the aforesaid facts, I am of the view that the present appeal, in all fairness, requires to be restored to the file of the CIT(Appeals) with a direction to re-adjudicate the matter after considering the assessee’s “written submissions” dated 06.06.2018, and taking a call as regards his request for admission of additional evidence under Rule 46A of the Income Tax Rules, 1962 that was filed before him vide letter dated 05.06.2018. Needless to say, the CIT(Appeals), shall afford a reasonable opportunity of being heard to the assessee who shall remain at liberty to substantiate his claim /contention on the basis of fresh documentary evidence.
As I have restored the matter to the file of the CIT(Appeals) for fresh adjudication, therefore, I refrain from dealing with the additions/disallowances made by the A.O which had been sustained by the CIT(Appeals), and the same are left open.
In the result, the appeal of the assessee is allowed for statistical purposes in terms of the aforesaid observations. Order pronounced in open court on 16th day of October, 2023. Sd/- (रवीश सूद /RAVISH SOOD) �या�यक सद�य/JUDICIAL MEMBER
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