Dineshbhai Vrajlalbhai Lumbhani, Surat V. Income Tax Officer, Ward-3(3)(2), Surat, Surat

ITA 746/SRT/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5921 (ITAT-SURAT)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-07-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 31-10-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No. 746/Srt/2023 (AY: 2017-18 Quantum appeal) ITA No. 747/Srt/2023 [AY: 2017-18 Penalty u/s 271AAC(1)] (Hybrid hearing) Dineshbhai Vrajlalbhai Lumbhani, 7, Patel Chambers, Kamalbaug Society, Khodiyar Nagar Road, Surat-395006 (Gujarat). PAN No. ADJPD 2490 D Vs. I.T.O., Ward-3(3)(2), Room No. 421, 4 th Floor, Aayakar Bhavan, Near Majura Gate, Surat. Appellant/ assessee Respondent/ revenue Assessee represented by Shri P.M. Jagasheth Sheth, C.A. Department represented by Shri S.M. Keshkamat, CIT-DR with Shri Vinod Kumar, Sr. DR. Date of institution of appeals 01/11/2023 & 03/11/2023 Date of hearing 04/07/2024 Date of pronouncement 08/07/2024 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by the assessee are directed against the separate orders of National Faceless Appeal Centre, Delhi (NFAC)/Commissioner of Income Tax (Appeals), (in short, the ld. CIT(A)) both dated 31/08/2023 for the Assessment Year (AY) 2017-18. In ITA No. 746/Srt/2023 the assessee has challenged the validity of addition in quantum assessment and in ITA No. 747/Srt/2023, the assessee has challenged the validity of penalty levied under Section 271AAC(1) of the Income Tax Act, 1961 (in short, the Act). Certain facts in both the appeals are common and interconnected, thus, both the appeals were clubbed, heard together and are decided by consolidated order to avoid the conflicting decision. ITA No.747 & 747/Srt/2023 Dineshbhai Vrajlalbhai Lumbhani Vs ITO 2 2. Rival submissions of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that the assessment was completed under Section 144 of the Act on 15/10/2019. The Assessing Officer during the assessment while issuing notices, has given very short time either of one day or two days and not more weeks’ time. Therefore, the assesse could not submit/furnish required details. The assessment was ultimately completed under Section 144 of the Act by making addition on account of cash deposit in bank and also levied penalty. 3. Aggrieved by the addition, the assessee filed appeal before the ld. CIT(A). There was delay of 85 days in filing appeal before the ld. CIT(A), though the ld. CIT(A) recorded that there was delay of 49 days. The delay was not condoned by the ld. CIT(A) and appeal was dismissed in limine. Even on merit, the appeal was dismissed for want of submission on merit. The ld. AR of the assessee submits that during the assessment as well as the first appellate stage, notices were served on the e-mail address of Chartered Accountant who has not promptly acted and furnished required details. The ld. AR of the assessee submits that the substantial right of assessee are involved in the present appeal, both the lower authorities passed the order ex parte, thus the assessee may be allowed at least one more opportunity to contest the case on merit. On the plea of delay, the ld. AR of the assessee submits that the assessee has filed affidavit of assessee explaining the cause of delay in filing appeal. In the affidavit, the assessee has categorically contended that the substantial part of delay in filing appeal was covered by the decision of Hon’ble Supreme Court in Suo Moto Writ Petition No. 3 of 2020 wherein the time period ITA No.747 & 747/Srt/2023 Dineshbhai Vrajlalbhai Lumbhani Vs ITO 3 for taking recourse of law from 20 th March 2020 was extended up to 01/03/2022 and further 90 days’ time period was allowed. The assessee filed appeal within time limit allowed by the Hon’ble Apex Court. Copy of order of Hon’ble Supreme Court in Misc. Application No. 21/2022 in Suo Moto Writ Petition No. 3/2020 dated 10/01/2022 is also filed on record. The ld. AR of the assessee submits that the delay was not intentional and deliberate but due to the reasons that copy of assessment order passed on 15/10/2019 was served on the e-mail of their earlier Chartered Accountant and the assessee was not aware. The assessee is not going to be benefitted by filing appeal belatedly. The ld. AR of the assessee submits that the assessee may be given at least one opportunity to explain the source of cash deposit. The ld AR for the assessee submits that he undertakes on behalf of assessee to be more careful in future and not to make default in future in making timely compliance before tax authorities and prayed to restore the appeal to the file of Assessing Officer. The ld AR of the assessee submits that in case the appeal in quantum assessment is restored to the file of Assessing Officer, the penalty order will not survive. 4. On the other hand, the learned Commissioner of Income Tax-Departmental Representative (ld. CIT-DR) for the revenue submits that the assessee has not properly explained the cause of delay in filing appeal before the ld. CIT(A). The cause of delay so disclosed by assessee, is not sufficient. The assessee is taking plea that the assessment was not communicated by the Chartered Accountant whose e-mail was provided at the time of assessment. However, the same e-mail address was given while filing appeal before the ld. CIT(A) as ITA No.747 & 747/Srt/2023 Dineshbhai Vrajlalbhai Lumbhani Vs ITO 4 the assessee has not shown reasonable and sufficient cause to explain, thus the delay in filing appeal may not be condoned. If the delay is condoned, some cost may be imposed on the assessee. The ld Sr DR for the revenue who is representing the revenue in ITA No. 747/Srt/2023 in appeal against the penalty also support the order of lower authorities. 5. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. Firstly, we are considering the plea of condonation of delay in filing appeal before the ld. CIT(A). We find that the ld. CIT(A) while considering the plea of assessee noted that the assessment order was passed on 15/10/2019 and that it was served upon the assessee on 17/10/2019 as mentioned in Form-35; so the appeal should have been filed latest by 17/11/2019 though it was filed on 22/01/2022. The ld. CIT(A) on referring and considering various decisions, held that there was a delay of 49 days in filing appeal before him. The ld CIT(A) not condoned the delay by taking view that the assessee failed to file any evidence for showing sufficient cause. We find that as per the statutory provision, the assessee was required to file appeal within 30 days from the date of communication of assessment order. We find that the appeal was filed on 22/01/2022. We find Hon’ble Apex Court in order dated 10/01/2022 passed in Suo Moto Writ Petition No. 3/2020 allowed time period for filing appeal/suit or quasi-judicial proceeding was extended from 15/03/2020 till 28/02/2022 and further 90 days’ time period was further allowed. We find that before starting COVID period there was a delay of about 85 days from 17/11/2019 till 15/03/2022, rest of the period is allowed by the Hon’ble Apex Court. Considering the facts ITA No.747 & 747/Srt/2023 Dineshbhai Vrajlalbhai Lumbhani Vs ITO 5 that the delay is not inordinate and now the assessee is interested in pursuing his appeal as been assured by ld AR of the assessee. The period of delay disputed by ld CIT(A) is not very big. Further, the Assessing Officer has passed ex parte order, thus there is strong possibility that the assessee was not aware of even passing the order under Section 144 of the Act. Thus, we have no reasons to disbelieve that the explanation of assessee that delay in filing appeal is not intentional. Considering the fact that substantial rights of assessee are involved as the Assessing Officer has made huge addition on account of cash deposit, therefore, delay in filing appeal before the ld. CIT(A) is condoned. 6. On merits, we find that the ld. CIT(A) passed the order ex parte for want of proper submission. We find that the appeal was fixed for making compliance of four occasions out of which on one occasion on 22/08/2023, the assessee filed adjournment application on 22/08/2023 and order was passed on 31/08/2023. Thus, we find that it is not a case of total non-compliance rather on one occasion, the assessee obtained/ sought adjournment, therefore, keeping in view the principles of natural justice and the fact that the assessment as well as first appellate order are ex parte orders, therefore, grounds of appeal raised by the assessee are restored back to the file of Assessing Officer to decide all the issues afresh after giving reasonable and fair opportunity of hearing to the assessee. The assessee is also directed to be more vigilant in future and not to cause further delay by seeking adjournment without any valid reason and to furnish all the details and his submissions and evidences, as soon as possible, if so desired without any ITA No.747 & 747/Srt/2023 Dineshbhai Vrajlalbhai Lumbhani Vs ITO 6 further delay. In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes. 7. In the result, this appeal of assessee is allowed for statistical purpose. ITA No. 747/Srt/2023 for the A.Y. 2017-18 8. Considering the fact that we have condoned the delay in quantum assessment appeal in ITA No. 746/Srt/2023, therefore, similar delay in filing of present appeal before the ld. CIT(A) is also condoned with similar direction. Further considering the fact the we have set aside the assessment order dated 15/09/2019 and restored the matter back to the file of Assessing Officer, therefore, the penalty levied under Section 271AAC(1) of the Act will not survive. However, the Assessing Officer would be at liberty to initiate fresh proceedings in accordance with law. 9. In the result, this appeal of assessee is allowed. Order pronounced in the open court on 08 th July, 2024. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 08/07/2024 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR 5. Guard File By order Sr. Private Secretary, ITAT, Surat