R P BUILDERS AND DEVELOPERS, BILASPUR,BILASPUR V. .ASSISTANT COMMISSIONER OF INCOME TAX, BILASPUR, BILASPUR

ITA 453/RPR/2024

AI Insights

The case involves R P Builders and Developers appealing against the orders of the Assistant Commissioner of Income Tax and the Commissioner of Income Tax (Appeals), which confirmed an addition of Rs. 1,36,02,456 under section 69B of the Income Tax Act, 1961, for unexplained investment in construction. The tribunal noted procedural lapses in communication, where notices were sent to an incorrect email ID, leading to the assessee's non-representation. The tribunal decided to restore the matter to the CIT(A) for a fresh examination on merits, ensuring the assessee is given a fair opportunity to be heard.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 106807 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Other Referred Cases: Dinesh Saraogi vs ITO-1(1), CIT vs. Premkumar Arjundas Luthra (HUF)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: R. B. DOSHI
• Keywords: Condonation of delay; Set aside; Unexplained investment; Bonafide belief; Principle of natural justice; Valuation report
• Section: 143(3); 142(1); 143(2); 250; 251; 69B; 133A; 246A

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: 453/RPR/2024 (िनधाŊरण वषŊ / Assessment Year: 2017-18) R P Builders and Developers, Village- Parsada, Raipur Road, Bilaspur-C.G.- 495001, V s Assistant Commissioner of Income Tax, Aaykar Bhawan, Vyapar Vihar, Bilaspur, C.G.-495001 PAN: AAKFR5088B (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से /Assessee by : Shri R. B. Doshi, CA राजˢ की ओर से /Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई की तारीख / Date of Hearing : 17.12.2024 घोषणा की तारीख/Date of Pronouncement : 18.12.2024 आदेश / O R D E R Per Arun Khodpia, AM: The captioned appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals), ADDL/ JCIT (A)-2, Lucknow, (in short “JCIT(A)”), vide order dated 24.05.2024, u/s 250 of the Income Tax Act, 1961 (in short “The Act”), for the Assessment Year 2017-18, which in turn arises from the order of Asstt. Commissioner of Income Tax, DC/ACIT 2 (1), Bilaspur, (in short “The AO”), u/s 143(3) of the Act, dated 04.02.2020. 2 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur 2. The Grounds of appeal raised by the assessee are extracted as under: 1. That order u/s 250 of Income tax Act, 1961 passed by the Hon'ble CIT(Appeal) for the AY 2017-18, in the case of the assessee is bad in law and on facts. 2. That order passed by the Assessing Officer u/s 143(3) for the AY 2017-18 in the case of the assessee is bad in law and on facts. 3. That CIT(A) has wrongly confirmed the addition made of Rs. 1,36,02,456/- u./s 69B on account of unexplained investment in construction of building and the Assessing Officer has also wrongly made the said addition in the facts and circumstances of the case. Therefore, addition made by the Assessing Officer and confirmed by the CTI(A) of Rs. 1,36,02,456/- u/s 69B is requested to be deleted. 4. When two technical reports of estimating valuation of cost of construction One by registered approved valuer and other by DVO then the report which is in favour of the assessee, since the report given by both the qualified persons, should be considered by the AO and as well as by the CIT(A) in the facts and circumstances of the case. 5. That the DVO estimated the cost of construction based on CPWD rates while registered approved valuer made the estimation on the basis of local PWD rates which is very near to truth and reality therefore report given by the Registered approved valuer should have been taken into the account in the facts and circumstances of the case. 6. That both CIT(A) and Assessing Officer brushed aside principles of natural justice on many occasions in this case. Therefore, both the order suffers from legal infirmity which cannot be cured on since it goes to the root of the matter and such a failure makes their order void and against the provisions of law. 7. That appellate prays for justice and may please be allowed to add/amend/alter further or any grounds of appeal on or before hearing on the case. 3. Concisely stated, the facts of the present case are that the assessee has filed return of income on 31.10.2017 declaring total income at Rs. 4,17,70,840/- . Subsequently, the case was selected for scrutiny assessment and proceedings were initiated. Statutory notices u/s 143(2) and 142(1) along with questionnaire 3 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur were issued, to which after certain non-compliances, the assessee had furnished its response electronically. Various queries are raised by the Ld. AO during the assessment proceedings, under which a particular issue regarding valuation of construction of office and residential building which was done by the registered valuer during the survey u/s 133A was conducted in the business premises of the assessee. Ld. AO observed that the assessee has surrendered an amount of Rs. 2,78,60,000/- on account of value of construction on the basis of valuation report given by the registered valuer, therefore, during the assessment proceedings the assessee was asked to furnish the basis of discloser and clarification of undisclosed investment in the office and residential building project. In absence of any compliance of the assessee, the matter is referred to District Valuation Officer (DVO), Bhopal. In turn, a valuation report is received from DVO on 17.12.2019, stating the estimated valuation of the impugned properties at Rs. 4,58,92,000/- as against the value declared by the assessee to Rs. 2,78,60,000/-. The assessee was, therefore, show cause to explain the discrepancy resulted on account of difference in these two figures. The assessee made a submission towards the aforesaid query of the Ld. AO but the same was not found acceptable, further the DVO has also made certain modifications in his final report dated 04.02.2020 by reducing the valuation at Rs.4,14,62,456/-, therefore, after deliberations the amount of difference between Rs.4,14,62,456/- and Rs. 2,78,60,000/-, of Rs.1,36,02,456/- has been 4 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur treated as unexplained investment of the assessee and added u/s 69B of the IT Act. 4. Aggrieved with aforesaid additions, assessee preferred an appeal before the Ld. CIT(A), wherein the appeal of the assessee has been dismissed on account of non-prosecution after considering the merits of the case on the basis of the facts on record and the findings of Ld. AO in the assessment order. The relevant observations of Ld. CIT(A), for the sake of clarity and completeness is culled out as under: 5 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur 6 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur 7 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur 5. Dissatisfied with the aforesaid order of Ld. CIT(A), the assessee has filed the present appeal before us for our consideration. 6. At the outset, it is pointed out by the registry that the appeal filed by the assessee is delayed by 86 days. When the Authorized Representative of the assessee, Shri R. B. Doshi, CA (in short “Ld. AR”) was confronted with such defect in the appeal, he come forth with the explanation supported with the application for condonation of delay along with affidavit of the assessee, which are extracted as under for the sake of appreciation of facts qua the delay involved. 8 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur 9 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur 10 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur 11 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur 7. Based on aforesaid submissions, Ld. AR argued that the reason for delayed in filing of appeal is mainly for the reasons beyond the control of assessee, that the notices were not sent on email ID mentioned in Form No. 35 by the assessee before the First Appellate Authority. In support of such contention, Ld. AR drew our attention to the Form No. 35 in appeal memo, the relevant portion is extracted as under: 12 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur 8. On perusal of the aforesaid Form No. 35, it is transpired that the assessee has mentioned email ID as [e-mail], and the question in the appeal memo that “whether notices/ communications may be sent on email?”, the assessee opted “YES”. 9. Ld. AR further clarified that the email were sent on a different email ID, i.e., [e-mail], whereas the email ID filled in Form 35 was [e-mail]. 10. A summary of notices issued u/s 150 along with copies of the screen shot of e-filing portal and notices reflecting the email ID are placed before us. On the basis of such evidence, it is claimed by the Ld. AR that the information for passing of appellate order had come to the knowledge of assessee on 11.10.2024 only, when he enquired about status of appeal from his counsel. It is argued that the assessee was under genuine and bonafide belief that the notices / order etc. would be received by him on email id [e-mail], however, the same were send on a different ID i.e., [e-mail], therefore, the assessee was unaware of such communications and accordingly, could not have attended the appellate proceedings before the Ld. CIT(A). 13 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur 11. Backed by such submission, it was the prayer by Ld. AR that the delay involved in the present case was on account of bonafide belief of the assessee to receive the communication in the specified email ID i.e., [e-mail], but there was no communication on the said email. It is the submission that there were no intentional lapses on the part of the assessee, therefore, the delay may kindly be condoned. 12. Contradicting the aforesaid submission on behalf of the assessee, Dr. Priyanka Patel, the Senior Departmental Representative (in short “Sr. DR”) on behalf of the revenue, submitted that the delay involved in present case for 86 days is an inordinate delay, therefore, such delay shall not be allowed to be condoned. It is the submission that the email i.e., [e-mail] might be the other email provided by the assessee on the ITBA portal, therefore, it cannot be presumed that the assessee was not validly informed. Ld. Sr. DR vehemently supported the order of LD. CIT(A) and have requested to uphold the same. 13. We have considered the rival submissions, perused the material available on record and the orders of Ld. Revenue Authorities. In present case, while deliberating upon the assertions by the Ld. AR qua the delay involved in filing of the appeal, it is noted that there was an option in appeal memo in form no. 35 14 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur for filing of appeal before the first appellate authority, wherein the assessee is required to furnish an email ID, in this case the Email ID furnished by the assessee was [e-mail] (as evident from the copy of Form 35 submitted before us, relevant portion extracted supra). However, the communications were made to assessee on email ID [e-mail], which is not the preferred email ID while furnishing the Form 35 before the Ld. CIT(A), such facts borne from records are not disputed by either party. It is further brought to our knowledge by way of placing the copies of screen shot of the web portal of the Income Tax Department, extracted therefrom copies of notices / communications bearing reference ID 100030625983 dated 25.01.2021, 100030626186 dated 25.01.2021, 100054099325 dated 10.11.2022, 100056578951 dated 19.11.2023, 100057516972 dated 09.02.2023, 100075434605 dated 29.02.2024 and 100079428221 dated 07.05.2024 having attachments “Hearing Notice us 250_ 1030358387(1)_04022021.pdf”, respectively, such documents shows that the notices for hearing were issued to the assessee on various occasions, however at each time the notices were send on the email ID [e-mail], which is not the email ID mentioned by the assessee in Form No. 35. 14. In view of aforesaid admitted facts of the present case, we find force in the contentions of the Ld. AR that there was bonafide and sufficient reasons for the assessee justifying the delay in filing of the appeal, as the communications 15 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur were sent on a different email ID, than the email ID preferred by the assessee in form no. 35. We, therefore, are of the considered view that there was no intentional lapse or negligence on the part of assessee in the delay involved in filing of the present appeal, therefore, we allow the condonation of delay. 15. At the outset, Ld. AR placed before us the fact that the appeal of the assessee has been dismissed, mainly on account of non-prosecution by the assessee before the Ld. CIT(A). It was the prayer that, since there was no adjudication by the Ld. CIT(A) on the merits of the issues assailed before him, in all fairness, the matter may be restored back for fresh adjudication. Ld. AR also placed his reliance on the order of the case of Dinesh Saraogi vs ITO-1(1), in ITA No. 417/RPR/2024 dated 21.10.2024, wherein under similar circumstances, the matter is restored back to the files of Ld. CIT(A). 16. Ld. Sr. DR, also on perusal of the order of Ld. CIT(A) have fairly admitted that the contentions raised by the Ld. AR on behalf of the assessee appears good and logical, therefore, in the interest of justice, to consider the matter on merits, it may be set aside to the files of Ld. CIT(A) for fresh adjudication. 17. We have considered the rival submissions, perused the material available on record and orders of the authorities below. Admittedly, the assessee 16 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur was not served with valid notices pertaining to the date of hearing / compliance before the Ld. CIT(A), as the communications were sent on an email ID, which is not the email ID, the assessee had furnished in the appeal memo in form no. 35. Under such circumstances, the order of Ld. CIT(A) cannot sustained for the reason that the assessee was not afforded with valid notices, therefore, being unaware of the proceedings the assessee was unable to represent itself before the Ld. CIT(A), we find that non communication of notices or communications at a different email ID have a parallel standing in the eyes of law, therefore, there was a violation of principle of natural justice, which makes the order of Ld. CIT(A) liable to be set aside. Since there was no deliberation on the merits of issue, in absence of any representation on behalf of the assessee, on merits merely the findings of Ld. AO are summarized by the Ld. CIT(A), therefore, in our considered opinion, it would be appropriate to allow the request of the assessee, as fairly admitted by both the parties to restore the matter back to the file of Ld. CIT(A) to adjudicate the same afresh on merits. 18. Our aforesaid view is fortified and supported with view enshrined in the judgment of Hon’ble Mumbai High Court in the case of CIT vs. Premkumar Arjundas Luthra (HUF) reported in [2016] 240 taxman 133, wherein Hon'ble Bombay High Court has held as under: 17 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur “…………It is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(l)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it dear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus, once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact, the CIT(A) is obliged to dispose of the appeal on merits. In fact, with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is co-terminus with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore, just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply dear from the Section 251(l)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to at the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.” 19. In back drop of aforesaid judicial pronouncement, a/w the facts, circumstances, and observations in the instant case, the issues raised in the present appeal of the assessee, without adverting to the merits of the same, restore back to the file of Ld. CIT(A) for de novo adjudication. Needless to say, the assessee shall be afforded with reasonable opportunities of being heard in the set aside appellate proceedings, in accordance with law. 18 ITA No.453/RPR/2024 R P Builders and Developers vs ACIT, Bilaspur 20. Resultantly, the present appeal of assessee is partly allowed, in terms of our aforesaid observations. Order pronounced in the open court on 18/12/2024. Sd/- (RAVISH SOOD) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 18/12/2024 Vaibhav Shrivastav 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- R P Builders and Developers 2. ŮȑथŎ / The Respondent- ACIT, Bilaspur 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 // "