Sh. Rahul Batta, Nabha V. The ITO, Ward, Nabha

ITA 78/CHANDI/2023

AI Insights

The case involves an appeal by Shri Rahul Batta against the order of the CIT(A), NFAC, Delhi, which dismissed his appeal in limine due to a delay in filing. The delay was attributed to the illness and subsequent death of the father of the assessee's counsel. The original assessment was made under sections 144 and 147 of the Income Tax Act, alleging that the assessee had not disclosed income from trading in penny stocks. The Tribunal found that there was a reasonable cause for the delay and that the additional evidence submitted could potentially impact the assessment, warranting a fresh examination of the case on its merits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127768 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 16-02-2023
• Other Referred Cases: CIT vs Smt. Paramjit Kaur [2008] 168 Taxman 39, CIT v. S. Goyanka Lime and Chemical Ltd. [2015] 237 Taxman 378 (SC), Mehta Parikh St Co. 30 ITR 181 (SC), GurFateh Films and Sippy Grewal Productions (P) Ltd. ITA No. 31/ASR/2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Reasonable cause; Condonation of delay; Set aside
• Section: 147; 148; 144; 143(1); 250

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “बी” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH ी आकाश द प जैन, उपा य एवं ी $व%म 'संह यादव, लेखा सद,य BEFORE: SHRI. AAKASH DEEP JAIN, VP & SHRI. VIKRAM SINGH YADAV, AM ITA NO. 78/Chd/ 2023 Assessment Year : 2011-12 Shri Rahul Batta, S/o Rajnish Batta, Gillan Street Nabha-147201, Punjab The ITO Ward, Nabha PAN NO: AFMPB3595E Appellant Respondent ! " Assessee by : Shri Sudhir Sehgal, Advocate # ! " Revenue by : Shri Dharamvir, JCIT, Sr. DR $ % ! & Date of Hearing : 26/07/2023 '()* ! & Date of Pronouncement : 27/07/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A), NFAC, Delhi dt. 07/12/2022 pertaining to Assessment Year 2011-12. 2. In the present appeal, the assessee has raised the following grounds of appeal: 1. That the CIT(A) NFAC has erred in dismissing the appeal of the assessee vide order dated 07.12.2022, in limine, against the assessment order u/s 144 r.w.s. 147 of the Act dated 06.12.2018, after rejecting the application for condonation of delay of 53 days in filing the appeal, despite the fact that the assessee was prevented by sufficient cause being illness of the father of the counsel, which resulted in death, filing the appeal. 2. That the CIT(A) NFAC has erred in dismissing the appeal of the assessee vide order dated 07.12.2022, in limine, against the assessment order u/s 144 r.w.s. 147 of the Act dated 06.12.2018, after rejecting the application for condonation of delay of 53 days in filing the appeal, despite the fact that the assessee filed an application for condonation of delay dated 13.06.2019 alongwith affidavit of the CA before the CIT(A), Patiala. 2 3. That the CIT(A) NFAC has erred in dismissing the appeal of the assessee vide order dated 07.12.2022, in limine, against the assessment order u/s 144 r.w.s. 147 of the Act dated 06.12.2018, after rejecting the application for condonation of delay of 53 days in filing the appeal, despite the fact that in the Notification No.5429(E) dated 28.12.2021 the Ministry of Finance [CBDT] sub clause (a) of Clause (1) that the delay, if any, may be condoned by the CIT(A) & the notice shall only be issued to the appellant, after condoning the delay, to file the submissions& in the present case notice u/s 250 was issued to the assessee on 16.02.2021 which proves that the notice u/s 250 was issued after condoning the delay. Hence, the action of the CIT(A) is against the procedure laid down in the above stated notification. 4. Notwithstanding the grounds of appeal as above, the proceedings initiated u/s 147/148 are void ab-initio because: (i) There was no reason to believe that the income of the assessee had escaped assessment. (ii) The AO had initiated the reassessment proceedings on the basis of information received which has neither been examined nor corroborated by the AO before recording the satisfaction for initiating the re-assessment proceedings and, as such, proceedings u/s 148 are liable to be quashed in view of the judgment of Hon'ble P&H High Court in the case CIT vs Smt. Paramjit Kaur [2008] 168 Taxman 39. (iii) there was mechanical approval of the prescribed authority with regard to reopening of the case u/s 148 and, as such, proceedings u/s 148 are liable to be quashed in view of the judgement of the Hon'ble Apex Court in the case of CIT v. S. Goyanka Lime and Chemical Ltd. as reported in [2015] 237 Taxman 378 (SC). 5. That the CIT(A), NFAC has erred in dismissing the appeal of the assessee, in limine, vide order dated 07.12.2022, without adjudicating on merits, the appeal filed by the assessee. 6. That the CIT(A), NFAC has erred in dismissing the appeal of the assessee, in limine, vide order dated 07.12.2022, in limine, without considering the additional evidence submitted by the assessee during the course of appellate proceedings despite the fact that the AO submitted the remand report on the additional evidence forwarded to her by the CIT(A) during the course of appellate proceedings. 7. That the appellant craves leave to add or amend the grounds ofappeal before the appeal is finally heard or disposed of. 3. During the course of hearing, the Ld. AR submitted that this is a case of an assessee who is an individual. For the year under consideration, the assessee 3 filed his return of income on 17.05.2011 declaring a total income of Rs. 1,98,950/-. The return of income filed by the assessee was processed u/s 143(1) of the Act. Thereafter, the case of the assessee was selected for reassessment u/s 147 of the Act on the allegation that the assessee is the beneficiary and has traded in penny stock i.e. M/s. Ashutosh Paper Mill and has not shown the LTCG of Rs. 4,80,000/-in his return of income filed on 17.05.2011. The AO issued a notice u/s 148 of the Act on 30.03.2018. Thereafter, the assessee appointed a Chartered accountant as his Counsel for the said proceedings and executed a power of attorney in his favor on 06.08.2018. However, the Counsel of the assessee was unable to attend the assessment proceedings due to prolonged illness of father of the Counsel. Consequently, the assessment was concluded ex-parte and the assessment order dated 06.12.2018 was passed u/s 144 r.w.s. 147 of the Act. In the said order, the AO made additions of Rs. 4,80,000/- to the total income of the assessee on the allegation that the Rs. 4,80,000/- represent the undisclosed income of the assessee which is liable for taxation. 3.1 It was submitted that the assessee received the assessment order so passed by the AO for AY 2011-12 on 11.12.2018. Thereafter, again the assessee handed over the said assessment order to the Counsel of the assessee for filing an appeal before the Worthy CIT(A) but, the appeal before Worthy CIT(A) was filed on 05.03.2019 i.e. after a delay of 53 days. The reason for such delay in filing the appeal was only the illness of the father of the counsel of the assessee, who ultimately died on 03.04.2019. 3.2 During the course of appellate proceedings, it was submitted that the assessee filed an application for condonation of delay in filing the appeal dated 13.06.2019 along with the copy of affidavit of Counsel of the assessee affirming the above said facts and the affidavit of the assessee himself. The 4 copy of the request letter dated 13.06.2019 for condonation of delay along with the copy of affidavits is placed in the paper book at page no. 1-5. 3.3 Thereafter, the assessee also filed a request letter for admission of additional evidence u/r 46A dated 10.07.2019. The copy of the said application is placed in the paper book at page no. 6-8. 3.4 Further, the assessee on 10.12.2020 filed his detailed submissions before the Worthy CIT(A), Patiala. Along with the said submissions, the assessee also filed the copy of the relevant documents in support of his claim in the form of Bank account statement of the assessee, Transaction statement of the share broker M/s. Relegare Securities and Client Cash Global Net Outstanding Position for FY 2010-11. The copy of the submissions filed by the assessee before the Worthy CIT(A) is placed in the paper book at page no.9-13. 3.5 Furthermore, during the course of appellate proceedings, the assessee filed an application for condonation of delay in filing the appeal for AY 2011-12 and along with the said application, the asseessee also filed a copy of affidavit of the counsel to the effect that the delay in filing of appeal of the assessee was only on account of prolonged illness of his father who subsequently died on 03.04.2019. In addition to this, the assessee submitted copy of his own affidavit. However, the Worthy CIT(A) while passing the appellate order has mentioned at page no. 8 of the order that no documentary evidences are brought on record viz the copy of medical certificate, affidavit of CA admitting his fault etc. whereas the affidavit of the CA was duly submitted with the Worthy CIT(A) and if the CIT(A) had asked for the copy of the medical certificate, the same could have been submitted and further, the fact that the father of the counsel was not well is evident from the intimation of death given in the affidavit and reliance in this regard is placed on the judgment of Mehta Parikh St Co. as 5 reported in 30 ITR 181 (SC) wherein, it has been held that the contents of an affidavit should be considered as true uncles there is any adverse finding to prove to the contrary. The copy of the application for condonation of delay in filing the appeal along with the copy of the affidavit of the assessee and the counsel is placed in the paper book at page no. 1-5. 3.6 It was submitted that while passing the appellate order, the Ld. CIT(A) has failed to consider the judgment of the Hon'ble Amritsar Bench of ITAT in the case of GurFateh Films and Sippy Grewal Productions (P) Ltd. in ITA No. 31/ASR/2021, wherein, there was a delay of 665 days and after relying upon the judgment of Hon'ble Apex Court in the case of 'Esha Bhatacharjee' as quoted in the judgment at page 4, it has been held that condonation of delay in filing the appeal should receive liberal are construction to advance substantial justice and generally, the delay in preferring the appeal are required to be condoned in the interest of justice and equity. Furthermore, it is hereby pertinent to mention here that the Worthy CIT(A) simply dismissed the appeal without discussing the merits of the case of the assessee. (Relevant page no. 9 of the appellate order dated 07.12.2022) only on account of delay in filing the appeal. 3.7 Now, against the said order of the Worthy CIT(A), the assessee is in appeal before the Bench and it was requested that the delay in the case of the assessee for filing the appeal may kindly be condoned, the additional evidence be admitted and the case, may kindly be set aside to the file of Worthy CIT(A), so that the case of the assessee be decided on merits. 4. Per contra, the Ld. DR relied on the orders of the authorities below. It was submitted that the assessee has not appeared before the AO resulting in passing of best judgment order and even before the ld CIT(A), there was delayed filing of appeal and which has been rightly rejected by the ld CIT(A). 6 5. We have heard the rival contentions and purused the material available on record. We find that there was reasonable cause beyond the control of the assessee for delayed filing of appeal before the ld CIT(A), thus, the delay in filing the appeal before the ld CIT(A) is hereby condoned. Further, given the fact that the assessment order has been passed u/s 144 of the Act and the additional evidences so submitted goes to the route of the matter, we hereby admit the same in the interest of substantial justice and the matter is set-aside to the file of the ld CIT(A) to decide the matter a fresh after taking into consideration the additional evidence so admitted and after providing reasonable opportunity to the assessee. 6. Needless to say, the assessee shall participate in the appellate proceedings and file requisite information/documentation as called for/as advised. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 27/07/2023. Sd/- Sd/- आकाश द प जैन $व%म 'संह यादव (AAKASH DEEP JAIN) ( VIKRAM SINGH YADAV) उपा य / VICE PRESIDENT लेखा सद,य/ ACCOUNTANT MEMBER AG Date: 27/07/2023 ( + ! , - . - Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. $ / CIT 4. - 0 ग 2 3 & 2 3 456 ग7 DR, ITAT, CHANDIGARH 5. ग 6 8 % Guard File ( + $ By order, 9 # Assistant Registrar