MANI TRANSPORT,NAVSARI V. INCOME TAX OFFICER, WARD(3), NAVSARI

ITA 562/SRT/2024

AI Insights

The case involves three appeals by Mani Transport Company against the orders of the National Faceless Appeal Centre, Delhi, concerning the assessment year 2016-17. The appeals challenged the additions made in the quantum assessment and the penalties levied under sections 271(1)(c) and 271(1)(b) of the Income Tax Act, 1961. The primary issues revolved around the non-condonation of delay in filing appeals and the validity of the penalties imposed. The Tribunal found that the assessee was not adequately notified about the assessment orders and penalties, leading to the decision to condone the delay and remand the case for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 106865 (ITAT-SURAT)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Next Hearing Date: 14-10-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 14-05-2024
• Other Referred Cases: Anil Kumar Nehru vs. ACIT, Jayvantsinh N Vaghela vs. ITO, Gujarat Electricity Board vs. DCIT, Naveen Kishor Mohnot vs. ITO, Mahaveer Prasad Jain vs. PCIT, Satyadeo Prasad Shaw CRR 1299 of 2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: CHAITALI SHAH
• Keywords: Condonation of delay; Business income; Reasonable cause; Corroborative evidences; TDS
• Section: 147; 144; 142(1); 271(1)(c); 153; 133(6); 69A; 191; 194C; 207; 101

Judgement Text

"आयकर अपीलीय अिधकरण, सुरत Ɋायपीठ, सुरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT “SMC” BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER आ.अ.सं./ITA No.562 to 564/SRT/2024 (AY 2016-17) (Physical court hearing) Mani Transport Company H.No.622 Rajput Nagar, Bansda, Manekpore (Chikhli). B.O. Kukeri, Navsari-396560 [PAN No: AASFM 3194 M] बनाम Vs Income Tax Officer, Ward-3, Navsari-396 445 अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Ms. Chaitali Shah, CA राजˢ की ओर से /Revenue by Shri Mukesh Jain, Sr-DR अपील पंजीकरण/Appeal instituted on 15.05.2024 सुनवाई की तारीख/Date of hearing 14.10.2024 उद ्घोषणा की तारीख/Date of pronouncement 14.10.2024 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. These three appeals by assessee are directed against separate order of National Faceless Appeal Centre, Delhi [for short to as “Ld. NFAC/Ld.CIT(A)”] dated 25.04.2024 and 26.04.2024 for same assessment year i.e., 2016-17. In ITA No.562/SRT/2024, the assessee has challenged the addition in the quantum assessment, wherein in ITA No.563 and 564/SRT/2024, the assessee has challenged the validity of penalty levying under section 271(1)(c) and 271(1)(b) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) both dated 15.09.2022. As certain facts in all the three appeals are common / inter-connected, thus, all the three appeals were clubbed, heard together and are decided by a consolidated order to avoid conflicting decision. In all three appeals, there was delay in filing appeal before ld CIT(A). The Ld.CIT(A) has not condoned such delay in filing appeals, ITA No.562-564/SRT/2024 (A.Y 16-17) Mani Transport 2 resultantly all appeals were dismissed as unadmitted. For the purpose of discussion of fact, facts in ITA No.562/SRT/2024 is treated as “lead” case The assessee has raised the following ground of appeal:- “1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in not condoning the delay in filing the appeal before ld. CIT(A). 2. On the facts and circumstanced of the case as well as law on the subject, the Ld. Assessing Officer has erred in reopening the assessment u/s 147 by issuing notice u/s 148 of the Income Tax Act. 3.On the facts and circumstances of the case as well as law on the subject, the Assessing Officer has erred in making an addition of Rs.39,61,560/- u./s 69A of the Income Tax Act on account of alleged unexplained money. 4. It is therefore prayed that the assessment framed u/s 147 r.w.s.144 r.ws. 144B of the Act may please be quashed and./or addition made by Assessing Office may please be deleted. 5. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 2. Brief facts are that assessee is a firm engaged in business of transport. No return of income was filed by assessee for assessment year 2016-17. The Assessing Officer found that as per information available in his office, the assessee was in receipt of Rs.4.95 crores on which Tax was Deducted at Sources (TDS) under section 194C. As no return of income was filed by assessee, the Assessing Officer has reasoned to believe that income of assessee has escaped assessment. The Assessing Officer issued notice under section 133(6) to the assessee on 17.03.2021 to explain the receipt of Rs.4.95 crores on which TDS under section 194C was deducted. No reply was furnished by assessee. Thus, Assessing Officer recorded the reasons and issued notice under section 148 on 31.03.2021. No return of income was filed by assessee, even in response to notice under section 148 of the Act. The Assessing Officer recorded that despite issuing various show cause notice ITA No.562-564/SRT/2024 (A.Y 16-17) Mani Transport 3 fixing date of hearing on different occasions the assessee neither filed any reply nor furnished required details. The Assessing Officer levied penalty under section 271F for non-filing return of income as well as initiate penalty under section 271(1)(b) for non-compliance of notices. The Assessing Officer completed assessment under section 144 of the Act by treating @ 8% of total receipt as income of assessee thereby made addition of Rs.39.61 lakh (8% of Rs.4.95 crores). The Assessing Officer also initiated penalty under section 271(1)(c) of the Act. The Assessing Officer completed the assessment under section 147/ 144/144B on 17.03.2022. 3. Aggrieved by the addition made in the assessment order, the assessee filed appeal before Ld.CIT(A) on 10.01.2024. There was delay of 664 days in filing appeal before ld CIT(A). The assessee while filing statement of fact before Ld.CIT(A) made a prayer for condonation of delay of 664 days in filing appeal. The assessee in its fact stated that e-mail i.d. of [e-mail] mentioned in the ITBA portal, which was inoperative as it belonged to their previous Chartered Accountant. Further the mobile number of ITBA portal was one of the partner, namely Rakesh Amrutlal Parmar, who left India and shifted to USA and his phone number also became inoperative. The assessee was not aware about assessment order which passed by Assessing Officer, when order under section 188A dated 30.10.2023 was received, the assessee came to know about passing of such assessment order. The Ld. CIT(A) on considering the statement of fact and the assessment order dismissed the appeal of assessee without condoning the delay in filing appeal, resultantly appeal was not admitted and ITA No.562-564/SRT/2024 (A.Y 16-17) Mani Transport 4 dismissed in limine. Further aggrieved, the assessee has filed present appeal before the Tribunal. 4. I have heard the submission of Ld. Authorized Representative (Ld.AR) for the assessee and submission of Ld. Senior Departmental Representative for the Revenue (Ld. Sr-DR). The Ld. AR for the assessee submits that assessee was not served with the notice during assessment nor received physical copy of assessment order. Thus, assessee was not aware about passing of assessment order or any penalty orders. The assessee came to know for the first time when orders under section 188A dated 30.10.2023 for assessment years 2016-17, 2017-18 and 2018-19 were served about outstanding demands of partners, Shri Amrutsinh Chhitubhai Parmar, in treating the partner in default. The assessee immediately down loaded copy of ex parte assessment order, for various assessment years and penalty levied upon assessee. The assessee filed before CIT(A) without further delay. The assessee made a prayer for condonation of delay. The assessee also filed appeals against the levy of penalty under section 271(1)(b) as well as penalty levied under section 271(1)(c) of the Act. The assessee in its statement, specifically contended that e-mail i.d. of partners was inoperative as well as phone number of the partner was also not working. The partner of assessee was given telephone number, has left India and shifted in USA. The Ld. AR of the assessee submits that assessee-firm was running business of transport by taking trucks/vehicle on lease basis. The Assessing Officer taxed @ 8% of total receipt reflected in Form-26AS. The additions made in the assessment order is unreasonable. The Ld. AR of the assessee submits that ITA No.562-564/SRT/2024 (A.Y 16-17) Mani Transport 5 assessee has shown reasonable cause in filing appeal belatedly and delay in filing appeal was not intentional or deliberate, rather due to the fact that assessee was prevented by sufficient cause. The Ld. AR for the assessee submits that assessee has a good case on merit and is likely to succeeds, if one more opportunity is given to contest the case on merit. To support her submission, Ld. AR for the assessee relied upon following decisions:  Anil Kumar Nehru vs. ACIT [2019] 101 taxmann.com 191 (SC)/[2019] 260 Taxman 372 (SC)[03-12-2018]  Jayvantsinh N Vaghela vs. ITO [2013] 40 taxmann.com 491 (Guj)  Gujarat Electricity Board vs. DCIT [2013] 36 taxmann.com 340 (Guj)  Naveen Kishor Mohnot vs. ITO [2023] 152 taxmannn.com 658 (Mumbai- Trib.)  Mahaveer Prasad Jain vs. PCIT [2023] 153 taxmann.com 207 (Jaipur-Trib.)  Satyadeo Prasad Shaw CRR 1299 of 2022 5. On the other hand, Ld. Sr-DR for the Revenue submits that assessee is relying upon a self-serve story and without any supporting evidence. The assessee has received about Rs.6.00 crores as business receipt as reflected in their Form-26AS, despite receiving huge amount on account of business receipt, the assessee has not filed return of return from assessment year 2013-14 onwards. The Assessing Officer before issuing notice under section 148 of the Act issued various notices to assessee including notice under section 133(6) of the Act and assessee always remain non-compliant. The assessee has not filed its return of income in response to notice under section 148 of the Act. When notice under section 188A was served the partner of assessee in treating him in default, he has taken the plea that they came to know for the first time, even if the stand taken by Ld. AR for ITA No.562-564/SRT/2024 (A.Y 16-17) Mani Transport 6 the assessee is considered as true, the alleged notice under section 188A dated 30.10.2023. the assessee was required to file appeal within thirty days. However, the appeal before Ld. CIT(A) was filed on 10.01.2024. The assessee does not deserve any leniency. The Ld. Sr-DR for the Revenue submits that assessee has not shown any reasonable and plausible cause for condoning the delay. Thus, the action of Ld.CIT(A) in not condoning the delay may be affirmed. 6. I have considered the contention of both the parties and have gone through the orders of lower authorities carefully. I have also deliberated the various case law relied by Ld. AR for the assessee. I find that assessment order was completed under section 144 r.w.s. 144B r.w.s 147 of the Act on 17.03.2022. Before passing the assessment order, Assessing Officer issued numerous notices, neither the assessee complied nor filed return of income in response to notice under section 148 of the Act. Even assessee has not responded to the notice under section 133(6) of the Act. Resultantly, the Assessing Officer assessed @ 8% of income out of total receipt of Rs.4.95 crores on which TDS deduction under section 194C of the Act. On further appeal before Ld. CIT(A) the action of Assessing Officer was upheld by dismissal appeal in limine by not condoning the delay of 664 days. I find that before dismissal appeal not condoning the delay, the Ld. CIT(A) has not recorded whether any date of hearing was fixed for seeking comments / written submission of assessee or not. The appeal was filed on 10.01.2024 and same was dismissed vide order dated 25.04.2024. In my considered view, the Ld.CIT(A) ITA No.562-564/SRT/2024 (A.Y 16-17) Mani Transport 7 dismissed the appeal without giving show cause notice or minimum opportunity of hearing, on the issue of condoning the delay. 7. Besides the aforesaid observations, I have independently examined the facts and find that the Assessing Officer passed ex parte assessment order on 17.03.2022. the ld AR of the assessee claimed that the assessee came to know about passing of assessment order on service of order under section 188A dated 31.10.2023, thus, the assessee should have filed appeal on or before 30.11.2023, yet appeal before Ld.CIT(A) was filed on 10.01.2024, though the assessee was required to file appeal within thirty days from the receipt of assessment order. The case of assessee is that they were not aware about passing the assessment order as contended in para-6 of statement of fact. I find that despite receiving more than Rs.5.00 crores by way of business receipt on which TDS was deducted under section 194C of the Act, the assessee has not even think to file return of income nor responded on various notices and just took excuse that telephone number and e-mail i.d. provided on the ITBA portal was inoperative. I find that assessee is raising all excuses instead of fulfilling their obligation / duty to update or provide operative telephone number or e-mail address with the Department/ITBA portal. The conduct of assessee is not fair. I find that Ld.CIT(A) has dismissed the appeal of assessee without giving any opportunity as reflected from the impugned order. Therefore, instead of going into further controversy I deem it appropriate that assessee may be allowed one more opportunity to contest the appeal on merit, but subject to payment of cost of Rs. 15,000/- (Rupees fifteen thousand only) to be paid to ITA No.562-564/SRT/2024 (A.Y 16-17) Mani Transport 8 District Court Legal Aid Authority, Surat within 10 days on receipt of this order. Copy of the receipt be place on record of this case. With the above observation, the delay in filing before Ld.CIT(A) is condoned. Since I have condoned the delay in filing appeal before Ld.CIT(A) and keeping in view the fact that Ld.CIT(A) has not adjudicated the grounds of appeal on merit. Further I find that the Assessing Officer also passed ex-parte order, therefore, the matter is restored back to the file of Assessing Officer who decide all the issue afresh in accordance with law. Needless to direct that the Assessing Officer shall pass order after giving fair and reasonable opportunity to assessee. The assessee is also directed to be more vigilant in future in making compliance in time and not to seek further adjournment without any valid reason and furnish all relevant and necessary evidences if so desire. With these directions the appeal of assessee is allowed for statistical purposes. 8. In the result, assessee’s appeal ITA No.562/SRT/2024 is allowed for statistical purposes. ITA No.563/SRT/2024 in the matter of penalty levied u/s 271(1)(c) 9. I find that there is similar delay of 454 days in filing appeal before Ld. CIT(A). Considering the fact that I have condoned the delay in quantum assessment and restore the matter back to the file of Assessing Officer, therefore, penalty order dated 15.09.2022 would not survive, however, the Assessing Officer would be at liberty to initiate penalty as per law after giving effect to the order in quantum assessment. In the result, assessee’s appeal ITA No.563/SRT/2024 is allowed. ITA No.562-564/SRT/2024 (A.Y 16-17) Mani Transport 9 ITA No.564/SRT/2024 in the matter of penalty levied u/s 271(1)(b) 10. I find that Assessing Officer levied penalty under section 271(1)(b) for non- compliance of notice under section 142(1) of the Act on 15.11.2021, 25.01.2022 and 15.02.2022 in not furnishing the required details. The Assessing Officer levied penalty @ Rs.10,000/- for each default thereby levied total penalty of Rs.30,000/-. On appeal before Ld. CIT(A) the delay of 454 days was not condoned. Resultantly, appeal was dismissed as unadmitted. Considering the fact that addition in quantum assessment is restored back to the file of Assessing Officer. Therefore, I deem it appropriate to restore this appeal back to the file of Assessing Office with the direction to allow opportunity to assessee to contest the penalty proceedings on merit. The assessee is also directed to furnish document and reply to the show cause notice of proposed penalty for non-compliance of notices on 11.04.2022 and pass order after considering the reply of assessee. In the result, assessee’s appeal ITA No.564/SRT/2024 is allowed for statistical purposes. 11. In combined result, all the appeals of the assessee are allowed for statistical purposes. Order pronounced in open court on 14th October, 2024. Sd/- (PAWAN SINGH) [Ɋाियक सद˟ JUDICIAL MEMBER] सूरत /Surat, Dated: 14/10/2024 Dkp Outsourcing Sr.P.S* ITA No.562-564/SRT/2024 (A.Y 16-17) Mani Transport 10 आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to :  अपीलाथȸ/ The Appellant  Ĥ×यथȸ/ The Respondent  आयकर आयुÈत/ CIT  आयकर आयुÈत (अपील)/ The CIT(A)  ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, सूरत/ DR, ITAT, SURAT  गाड[ फाईल/ Guard File // True Copy // By order/आदेश से, सहायक पंजीकार आयकर अपीलȣय अͬधकरण, सूरत "