AI Insights
The case involves an appeal by the legal heir of the late Shri Rajinder Singh Sadana against the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961, for alleged inaccurate particulars of income. The penalty was initially confirmed by the Commissioner of Income Tax (Appeals), despite the main additions in the assessment order being deleted in a prior appeal. The legal heir contested the penalty on several grounds, including the improper issuance of the penalty order in the name of a deceased person and the violation of principles of natural justice due to lack of proper notice. The Tribunal found that the legal heir had not been served with the necessary notices and that the submissions made during the pre-faceless regime were not considered, leading to the decision to remand the case back for a fresh hearing.
Appeal Details
Counselvise Citation
[2024] 140 COUNSELVISE.COM (IT) 106809 (ITAT-RAIPUR)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
1 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
21-11-2024
Appeal Filed By
Assessee
Order Result
Partly Allowed
Next Hearing Date
19-11-2024
Assessment Year
2012-2013
Appeal Filed On
21-10-2024
Judgement Text
"आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR ŵी रिवश सूद, Ɋाियक सद˟ एवं ŵी अŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM आयकर अपील सं. / ITA No: 459/RPR/2024 (िनधा[रण वष[ Assessment Year: 2012-13) Late Shri Rajinder Singh Sadana, Through Legal Heir Shri Karan Sadana, D-102, Jainam Plannet, First Floor, Mandi Road, Tatibandh, Raipur, 492009, Chhattisgarh V s Income Tax Officer-4(1), Raipur PAN: AJJPS4449P (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से /Assessee by : Shri Veekaas S Sharma, CA राजˢ की ओर से /Revenue by : Shri Mohal Agrawal, Sr. DR सुनवाई की तारीख / Date of Hearing : 19.11.2024 घोषणा की तारीख/Date of Pronouncement : 21.11.2024 आदेश / O R D E R Per Arun Khodpia, AM: The captioned appeal of late Shri Rajinder Singh Sadana, assessee is filed though the legal heir Shri Karan Sadana against the order of Commissioner of Income Tax, NFAC, Delhi [in short “Ld. CIT(A)”] u/s 250 of the Income Tax Act, 1961 (for short “the Act”), for the Assessment Year 2012- 13 dated 06.06.2023, resulted from the penalty order u/s 271(1)(c) of the Act passed by the Assistant Commissioner of Income Tax, 4(1), Raipur dated 30.07.2015. 2 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 2. The brief facts and grounds of appeal submitted by the assessee are extracted as under: 1. On the facts and in the circumstances of the case, the Learned A.O has erred on facts and in law in imposing penalty of Rs.14,39,000/- u/s 271(l)(c) on account of alleged inaccurate particulars of income on several grounds and the Learned CIT (Appeals), National Faceless Appeal Centre, Delhi has erred in confirming the same as the additions made in the assessment order passed u/s 143(3) dated 30.01.2015 stood deleted vide order in Appeal No. 177/15-16 dated 21.03.2019 passed by the Learned CIT (Appeal)-ll, Raipur, as such, the penalty is contrary to facts, law and legislative intent, hence, it is prayed that the penalty of Rs. 14,39,000/- confirmed by the Learned CIT (Appeal) may kindly be cancelled. 2. Without prejudice to the above, the order passed by the Learned CIT (Appeals) in the name of deceased person is liable to be set-aside as the assessee had passed away on 11.06.2020, thus, the order passed by NFAC may kindly be set-aside. 3. On tic. facts and in the circumstances of the case, the order passed by the Learned CIT (Appeal), NFAC is e al bad-in-law and unsustainable inasmuch as the Learned CIT (Appeal) has passed the order without considering the detailed written submission dated 28.08.2020 filed on 31.08.2020 before the then Learned CIT (Appeal)-II, Raipur during pre-faceless resume, as such, the penalty order u/s 271(l)(c) confirmed by the Learned CIT (Appeal) deserves to be set-aside. 4. Without prejudice to the above, alternatively, it is submitted that on the facts and in the circumstances of the case, the Learned CIT (Appeal) is not justified in passing the order and confirming the penalty in an exparte order providing sufficient opportunity of being heard to the assessee as no real time alert was ever received on the registered mobile number of the legal heir regarding notices/order issued/passed u/s 250 of the Income Tax Act, 1961 by the Learned CIT (Appeal), NFAC, Delhi has erred in passing the order and without independently deciding the grounds on merit and thereby violating the principles of natural justice. Hence, the impugned order passed by the Learned CIT (Appeal) is liable to be dec; as illegal and bad-in-law. It is prayed that the order passed by the Learned CIT (Appeal) may kindly be declared as illegal and bad- in-law on account of violation of principles of natural justice. 3 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 5. The Appellant craves leave to add, amend, alter vary and / or withdraw any or all the above grounds of appeal. STATEMENT OF FACTS (before Ld CIT(A)) 1. The assessee is an individual aged about 57 years. 2. The return of income for the A. Y 2012-13 filed on 31.03.2013 electronically declaring total income of Rs. 11,42,260/- comprising of capital gain of Rs. 10,96,066/- and other income of Rs. 87,130/- 3. The case was selected for scrutiny assessment u/s 143(3), and during the course of bearing the assessee had submitted the copy of ITR, computation of total income, purchase deed and sale deed of that gave rise to capital gain. 4. During the year under consideration. the assessee had sold his capital asset against consideration of Rs. 72,12,150/- The assessee had claimed exemption u/s 54F to the tune of Rs. 69,84,833/- 5. The Ld. ACIT-I(I), Raipur (hereinafter referred to as ‘A.O’) has stated in the assessment order that the assessee did not furnish evidence of investment in house property and as such the exemption claimed u/s 54F remained unverified. In this regard, it is pertinent to mention here that the A.O did not give any further opportunity to furnish the desired documents. 6. No Notice u/s 142(1) was issued by the A.O nor any notice u/s 144 was ever issued by the A.O. The A.O hurriedly came to a conclusion that the assessee is not entitled to claim exemption u/s 54F as the ROI was filed after the due date u/s 139(1). 7. The A.O never issued any notice conveying his intention to deny the lawful exemption claimed u/s 54F and ultimately make addition of huge amount of 4 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur Rs.69,84.833/- when the assessee had made due compliance that entitled him to claim exemption u/s 54F. 8. The assessment order u/s 143(3) dated 30001.2015 was served on the assessee as late as on 31.07.15, along with assessment order u/s 143(3), the assessee also received Order u/s 271(l)(c) dated 30.07.15 imposing penalty of Rs. 14,38,875/- on the very same date i.e. on 31.07.15. The Ld. AO herself has stated in the penalty order that the show cause notice was not served on the assessee and penalty has been imposed in view of limitation period and in the absence of any submission from the assessee in his defence on the matter. Hence the assessee is in appeal against such arbitrary and unlawful order, the following grounds are raised for a judicious decision. 3. At the very outset, it is informed that the present appeal is filed by the assessee, involved a delay of 443 days. When, this defect is confronted to the Ld. AR of the assessee, it is submitted that the appeal of the present case is filed by the assessee Rajinder Singh Sadana on 14.08.2015 before the Ld. CIT(A) under the pre-faceless regime of the appellate proceedings. Later on, case of the assessee has been transferred to the faceless regime and the same was decided by Commissioner of Income Tax (Apppeals), NFAC on 06.06.2023. It was the submission that, meanwhile the assessee Shri Rajinder Singh Sadana passed away on 11.06.2020. That a written submission was furnished before the Ld. CIT(A) through his counsel on 31.08.2020, but the said written submissions were not considered by the Ld. CIT(A), while deciding the appeal 5 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur of the assessee. For delay in filing the appeal before us, Ld. AR placed before us an application for condonation of delay along with supporting documents, the same is extracted as under: 6 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 7 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 8 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 9 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 10 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 11 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 12 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 13 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 4. Ld. AR placed his reliance on the order of Hon’ble High Court of Chhattisgarh, Bilaspur in Tax No. 25/2024 on 14.03.2024 in the case of Murli Kumar Agrawal (HUF) vs ACIT, Circle-1(1), Raipur, wherein under the similar circumstances, the delay was considered to be on account of sufficient cause, therefore, condoned by the Hon’ble Jurisdictional High Court. The relevant finding of the Hon’ble High Court referred to are as follows: 7. The perusal of the medical record would show that the original Karta, Murli Kumar Agrawal underwent the continuous frequent treatment and was frequently admitted to the hospital. It is obvious that the nature of the hospitalization and the infrequence would show that the entire focus was to cure the ailment and eventually the state of affairs continued, and Murli Kumar Agrawal has died on 15.05.2022. and 29.05.2022 the time limit for filing the appeal before the ITAT expired. 8. Learned ITAT has dismissed the appeal solely on the ground that it is barred by time. Section 253(5) of Income Tax Act 1961 gives the power to the Appellate Tribunal to admit an appeal, If it is satisfied that there was sufficient cause for not presenting it within that period. It is obvious that after death of Murli Kumar Agrawal on 15.05.2022, as has been stated by Hitesh Agrawal, who resumed the business activities, received the recovery notice then he filed the appeal before the ITAT. The ailment, which was being suffered by Murli Kumar Agrawal, who was the original Karta, has eventually died in May, 2022 and thereafter the son Hitesh Kumar Agrwal, who stepped into the shoes of Karta resumed the business activities appears to be reasonable and logical. 14 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 9. Accordingly, after considering the medical record and events of facts, we are of the view that sufficient cause was shown by Hitesh Agrawal before ITAT which warrants the condonation of delay. Accordingly, we answer the question of law in favour of the appellant to hold that the sufficient cause was shown by Hitesh Agrawal to condone the delay. Consequently, the order dated 18.10.2023 is set aside. The appeal is remanded back to the learned ITAT to decide afresh on merits. 5. Considering the above facts and respectfully following the ratio of observations by the Hon’ble High Court, since the appeal was filed in the pre faceless regime and the assessee (since demised) as well as the legal heir are under Bonafide belief that they will be served with notices through post on the address furnished by him in their Form 35 submitted before the Ld. CIT(A), therefore, considering the facts and circumstances of the present case, we are of the view that there was sufficient cause beyond the control of assessee for which the appeal could not be filed within prescribed time by the assessee, thus, we condone the delay and take up the matter for adjudication on its merits. 6. On perusal of order of Ld. CIT(A), we find that Ld. CIT(A) had dismissed the appeal of the assessee, observing that that the basic appeal documents like form 35 was not available in the system. He further observed that the assessee was requested to upload the relevant appeal documents, but the assessee did not produce or uploaded, either the form or any document despite adequate opportunities provided. The appeal of assessee, thus, treated as defective and dismissed. 15 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 7. Considering the facts and circumstances of the present case, as emanating from the record, the assessee has submitted form 35, copy of which is placed before us with the appeal memo, the same is extracted as under: 16 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 17 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 18 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 8. Also, the assessee through his counsel have made submission before the Ld. CIT(A), Raipur dated 31.08.2020, Copy of which placed before us at page no. 10-17 of Assessee’s Paper Book, the same is also extracted hereunder for the sake of completeness of the facts: 19 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 20 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 21 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 22 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 23 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 24 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 25 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 26 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur 9. In terms of aforesaid submissions by the Ld. AR, it was the request that the issues which are not dealt with on merits by the Ld. CIT(A) under presumption that there was no submission by the assessee, whereas the assessee had made necessary submissions during the pre-faceless regime itself, but might not furnished before the Ld CIT(A), NFAC, due to departments internal setup. It is submitted that the assessee’s legal heir was never served with any notice in physical form, so he was unaware of any proceedings going on. It is therefore the prayer that the matter in all fairness should be restored back to the files of Ld. CIT(A) for adjudication afresh. 10. Ld. Sr. DR on the other hand vehemently supported the order of Revenue Authorities. 11. We have considered the rival submissions, perused the material available on record and case relied upon by the Ld. AR. Considering the facts and circumstances of the present case, wherein there were compliances by the assessee before the Ld. CIT(A) under the pre faceless regime, however it seems that such documents like Form 35 and submission of assessee are not made available before the Ld. CIT(A) under faceless regime and, therefore, issues could not have been addressed by him. It is also, the fact that the communications could 27 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur not reached to the legal heirs of the assessee as the assessee filed his appeal in pre faceless regime, was under bonafide belief that notice, and orders will be served on / received by him in physical form through post. 12. In backdrop of such factual matrix of the present case, following the principle of natural justice, it would be appropriate to restore this matter back to the files of Ld. CIT(A), with liberty to the assessee to furnish all the necessary documents, submissions and explanations before him in support of his contentions. 13. Needless to say, reasonable opportunity of being heard shall be provided to the assessee in the set aside appellate proceedings. 14. In result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 21/11/2024. Sd/- (RAVISH SOOD) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 21/11/2024 Vaibhav Shrivastav 28 ITA No. 459/RPR/2024 Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana vs ITO- 4(1), Raipur आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur 1. अपीलाथŎ / The Appellant- Late Shri Rajinder Singh Sadana Through Legal Heir Shri Karan Sadana 2. ŮȑथŎ / The Respondent- ITO-4(1), Raipur 3. आयकर आयुƅ(अपील) / The CIT(A), 4. The Pr. CIT, Raipur (C.G.) 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 6. गाडŊ फाईल / Guard file. // स×याǒपत Ĥित True copy // "
Other Referred Cases
Murli Kumar Agrawal (HUF) vs ACIT, Circle-1(1), Raipur
Laws Referred To
Income Tax Act, 1961
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