ABDUL VAHEED KHAN,RAIPUR V. THE INCOME TAX OFFICER, WARD-2(1), RAIPUR

ITA 202/RPR/2024

AI Insights

The case involves Abdul Vaheed Khan, who appealed against the order of the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center, Delhi, which itself arose from an order under Sec. 144 of the Income-tax Act, 1961. The primary contention was the non-compliance and subsequent dismissal of the appeal by the CIT(Appeals) due to alleged non-interest in prosecuting the appeal, which the assessee attributed to his previous counsel's failure to inform him about the notices. Additionally, the assessee contested the additions made to his income regarding unexplained cash deposits and profit additions under section 44AD of the Act. The Tribunal found that the assessee was not properly notified of the CIT(Appeals) order, leading to the decision to remand the case for a fresh hearing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 35740 (ITAT-RAIPUR)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 10-05-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: ASHISH BANSAL
• Keywords: Period of limitation; Principle of natural justice; Non compliance
• Section: 144; 143(2); 44AD; 69A

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR (Through Virtual Hearing) Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No. 202/RPR/ 2024 Ǔनधा[रण वष[ / Assessment Year : 2017-18 Abdul Vaheed Khan H. No.3142, Bajrang Chowk, Mahoba Bazar, Raipur (C.G.)-492 099 PAN: BJWPK7669D .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer Ward-2(1), Raipur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Ashish Bansal, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 23.10.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 25.10.2024 2 Abdul Vaheed Khan Vs. ITO, Ward-2(1), Raipur ITA No. 202/RPR/2024 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 04.11.2022, which in turn arises from the order passed by the A.O under Sec. 144 of the Income-tax Act, 1961 (in short ‘the Act’) dated 15.12.2019 for the assessment year 2017- 18. The assessee has assailed the impugned order on the following grounds of appeal: “1.1. BECAUSE the learned CIT(A) has erred in law and on facts in summarily dismissing the appeal by holding that the appellant is not interested in prosecuting the appeal inasmuch as he remained non compliant despite service of several notices. 1.2. BECAUSE various notices as issued by the learned CIT(A) could not complied on account of the fact that the appellant's previous counsel who was looking after the income tax matters as also was in possession of login id and password of the Income Tax Portal, did not inform the appellant about issue of such notices and as such, there was no mala fide on part of the appellant. 1.3. BECAUSE the non compliance, if any, was due to the reasons beyond control of the appellant and therefore, the same ought not to have been adversely viewed by the CIT(A). WITHOUT PREJUDICE TO THE ABOVE 2.1. BECAUSE the learned CIT(A) has erred in law and on facts in sustaining the addition of Rs. 2,34,000.00 under section 69A read with section 115BBE of the Income Tax Act, 1961 (hereinafter referred to as the Act) as unexplained cash deposits in bank accounts during demonetization period. 2.2. BECAUSE the source of cash deposits during demonetization period in Specified Bank Notes (SBN) was out of 3 Abdul Vaheed Khan Vs. ITO, Ward-2(1), Raipur ITA No. 202/RPR/2024 normal sale proceeds and therefore, the same ought not to have been treated as unexplained cash deposits. 3.1. BECAUSE the learned CIT(A) has erred in law and on facts in sustaining the addition of Rs. 22,01,158.00 (being 8% of the turnover of Rs. 2,75,14,478.00) under section 44AD of the Act. 3.2. BECAUSE the very premise on which the said addition of Rs. 22,01,158.00 has been made is not apposite. 3.3. BECAUSE in any case and without prejudice to the grounds raised in paragraphs 3.1 and 3.2 above, the working of addition of Rs.22,01,158.00 itself is erroneous. 4. BECAUSE the order appealed against is contrary to the facts, law and the principles of natural justice to the extent above.” 2. Shri Ashish Bansal, Ld. Authorized Representative (for short 'AR') for assessee at the threshold submitted that the present appeal involves a delay of 493 days. Elaborating on the reason leading to delay of 493 days involved in filing of the present appeal, the learned AR had drawn my attention to the \"affidavit\", dated 01.07.2024 filed by the assessee. It was deposed by the assessee in his aforesaid “affidavit” (supra), viz. (i) the email-id provided in the income tax portal at the relevant point of time was [e-mail] which belonged to his earlier counsel Shri Abdul Rafiq Khan and all notices/intimations for passing the appellate order dated 04.11.2022 were sent on it; (ii) that assessee had changed his earlier counsel and appointed Shri Sanjay Jain, Chartered Accountant for looking after his income tax matters; and (iii) that the assessee had changed his email id registered with the department as [e-mail]. For the sake of clarity, the contents of the “affidavit” dated 01.07.2024 are culled out as under: 4 Abdul Vaheed Khan Vs. ITO, Ward-2(1), Raipur ITA No. 202/RPR/2024 5 Abdul Vaheed Khan Vs. ITO, Ward-2(1), Raipur ITA No. 202/RPR/2024 6 Abdul Vaheed Khan Vs. ITO, Ward-2(1), Raipur ITA No. 202/RPR/2024 3. Also, the learned AR submitted that though the assessee had specifically stated in “Form No. 35” that all the notices/communications be sent in a mode otherwise then through email but, till date, no physical/hard copy of the impugned order of the CIT (A) had been received by him. The learned AR to fortify his contention has taken me through “Form No. 35”, which revealed that the assessee had opted for receiving all the notices/communications from the CIT(A) office otherwise than through email. The Ld. AR in support of his aforesaid contention had placed on record an “affidavit” dated 17.10.2024. For the sake of clarity, the contents of his “affidavit”, dated 17.10.2024 are culled out as under: 7 Abdul Vaheed Khan Vs. ITO, Ward-2(1), Raipur ITA No. 202/RPR/2024 8 Abdul Vaheed Khan Vs. ITO, Ward-2(1), Raipur ITA No. 202/RPR/2024 9 Abdul Vaheed Khan Vs. ITO, Ward-2(1), Raipur ITA No. 202/RPR/2024 4. Per contra, Dr. Priyanka Patel, Ld. Senior Departmental Representative (for short, 'Sr.DR') objected to the assessee’s request for condonation of delay. The Ld. DR submitted that as the delay involved in filing the appeal was inordinate, therefore, the same does not merit to be condoned. 5. I have heard the learned authorized representatives of both the parties regarding the issue of delay involved in filing the present appeal. Ostensibly, a perusal of “Form No. 35” reveals that the assessee had opted out of service of notices/communications from the office of the CIT(A) through email. For the sake of clarity, the relevant extract of “Form No. 35” is culled out as under: 6. Although, the assessee had specifically stated that all the notices/communications be sent otherwise than through email, but as deposed by him in his “affidavit”, dated 17.10.2024 no physical/hard copy of the order of the CIT(A) had been served upon him. The Ld. AR stated that 10 Abdul Vaheed Khan Vs. ITO, Ward-2(1), Raipur ITA No. 202/RPR/2024 it was only when the assessee’s new counsel had logged into the assessee’s e-portal account on 20.04.2024 and gathered about the disposal of his appeal by the CIT(A)’s order dated 04.11.2022, it was only pursuant thereto the fact of disposal of the appeal had come to the assesse’s notice. 7. Admittedly, as the department, despite the fact that the assessee had opted out of service of notices/communications through e-mail, had failed to serve upon him a hard/physical copy of the order passed by the CIT(A), therefore, I find no justification in reckoning the period of limitation from the date on which the impugned order is stated to have been dropped in his email account. As the assessee claims that the impugned order of the CIT(A) had come to his notice on 20.04.2024 (supra), therefore, I am of the view, that in all fairness, the period of limitation has to be reckoned from the said date. As the present appeal has been filed by the assessee on 10.05.2024 i.e. within the stipulated time period of 60 days from the aforesaid date, i.e. 20.04.2024, therefore, the same can safely be held to have been filed within the prescribed time. 8. I, thus, in terms of my aforesaid observations, condone the impugned delay of 493 days (as pointed out by the registry) in filing of the present appeal by the assessee. 9. Succinctly stated, the assessee had filed his return of income for A.Y.2017-18 on 18.03.2018, declaring an income of Rs.5,36,420/-. 11 Abdul Vaheed Khan Vs. ITO, Ward-2(1), Raipur ITA No. 202/RPR/2024 Subsequently, the case of the assessee was selected for scrutiny assessment u/s. 143(2) of the Act. 10. Assessment was, thereafter, framed by the A.O vide his order passed u/s.144 of the Act, dated 15.12.2019, determining the income of the assessee at Rs.29,71,578/- after, inter alia, making the following additions /disallowances: Sl. No Particulars Amount 1. Addition on account of unexplained money u/s. 69A r.w.s. 115BBE of the Act Rs.2,34,000/- 2. Addition on account of profit @8% of the turnover of Rs.2,75,14,478/- Rs.22,01,158/-. 11. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without success. As the assessee despite having been afforded four opportunities had failed to participate in the proceedings before the first appellate authority, therefore, the latter was of the view that the assessee was not interested in prosecuting the matter and, thus, dismissed the appeal. 12. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the tribunal. 13. On a perusal of the order of the CIT(Appeals), it transpires that all the notices were sent to the assessee on the email id i.e. 12 Abdul Vaheed Khan Vs. ITO, Ward-2(1), Raipur ITA No. 202/RPR/2024 [e-mail] and [e-mail] as was mentioned in the “Form 35” filed by himt. As the assessee had specifically opted out of service of notices/communications from the CIT(Appeals)’s office through e- mail, therefore, I find substance in the Ld. AR’s claim that the alleged dropping of the notices/communications in his e-mail account cannot be construed as a valid service of the same. Also, I find substance in the Ld. AR’s contention that though the assessee in the memorandum of appeal filed before the CIT(Appeals) in “Form 35” had specifically opted out of receipt of notices/communication from his office through email but despite that all the notices were allegedly served upon him electronically. I am of the view that as the assessee for no fault on his part had remained divested of an opportunity to put forth his contentions qua the issues which were assailed by him before the CIT(Appeals), therefore, it would be unjust to approve the order of the CIT(Appeals) who had dismissed the appeal for want of prosecution. As the assessee had suffered dismissal of his appeal without being validly put to notice about fixation of the hearing of the same on different dates, therefore, the matter in all fairness requires to be restored to the file of the CIT(Appeals). Needless to say, the CIT(Appeals) shall in the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee who shall remain at a liberty to substantiate his claim/contentions before him based on fresh documentary evidence, if any. 13 Abdul Vaheed Khan Vs. ITO, Ward-2(1), Raipur ITA No. 202/RPR/2024 14. 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 25th day of October, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 25th October, 2024 **#SB, Sr. PS. आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "