SANJAY STORE,NEW DELHI V. INCOME TAX OFFICER WARD 49(1), NEW DELHI

ITA 4795/DEL/2024

AI Insights

The case involves Sanjay Store, the appellant, who faced multiple appeals concerning the assessment year 2017-18. The primary issues revolved around the non-compliance with notices under section 142(1) of the Income-tax Act, 1961, and the subsequent penalties imposed under sections 271AAC and 272A(1)(d) of the Act. The AO had treated the cash and cheque deposits during the demonetization period as undisclosed income under section 69, completing the assessment under section 144 due to non-compliance by the assessee. The CIT (A) dismissed the appeals without adjudicating on merits, leading to the current appeals before the Tribunal. The Tribunal found that the assessee was not given a fair opportunity to present their case and thus remitted the matter back to the AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471585 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYA CHOUDHARY
• Assessee Lawyers: SATYAJEET GOEL
• Keywords: Condonation of delay; Opportunity of being heard
• Section: 144; 142(1); 69; 139; 272A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’: NEW DELHI BEFORE SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI YOGESH KUMAR, JUDICIAL MEMBER ITA No.4795/DEL/2024 (Assessment Year: 2017-18) ITA No.4796/DEL/2024 (Assessment Year: 2017-18) ITA No.4797/DEL/2024 (Assessment Year: 2017-18) Sanjay Store, vs. ITO, Ward 49 (1), Flat No.16, Third Floor, New Delhi. MCD Market, Ramesh Nagar, Delhi – 110 015. (PAN : ABEFS1064K) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Satya Jeet Goel, Advocate REVENUE BY : Ms. Jaya Choudhary, CIT DR Date of Hearing : 17.02.2025 Date of Order : 25.02.2025 O R D E R PER S.RIFAUR RAHMAN,AM: 1. These appeals have been filed by the assessee against the order of ld. Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC) [for short ‘ld. CIT (A)], New Delhi dated 22.08.2024 for the Assessment Year 2017-18. 2 ITA Nos.4795 to 4797 /DEL/2024 2. Since the issues are common and the appeals are connected, therefore, the same are heard together and being disposed off by this common order. 3. First we take up ITA No.4795/Del/2024 being the quantum appeal. At the time of hearing, it is brought to our notice that the case of the assessee was reopened by issue of notice under section 142(1) of the Income-tax Act, 1961 (for short ‘the Act’) considering the fact that the assessee has not filed any return of income u/s 139 (1) of the Act and through the Income Tax Data, it was found that that the assessee has deposited huge cash during demonetization period to the extent of Rs.4,16,90,000/- and accordingly several other notices were also issued to the assessee through ITBA Portal. In the notices, the assessee was asked to file the return of income on or before 03.01.2018. Since assessee has not complied with the notices issued by the AO on several occasions as reported at page 4 of the assessment order, the AO observed that the assessee has deposited cash as well as cheque in the bank account maintained at SBI, Bali Nagar, New Delhi and treated the whole cash and cheque deposited in the bank account as undisclosed income u/s 69 of the Act and AO has completed the above assessment u/s 144 of the Act dated 30.12.2019. 4. Aggrieved with the above order, assessee preferred appeal before the ld. CIT (A)/NFAC, Delhi and assessee has filed the appeal only on 20.12.2021 with delay. The assessee filed an application for condonation 3 ITA Nos.4795 to 4797 /DEL/2024 of delay and it is brought to our notice that the actual delay of filing the return is only 45 days after elimination of the period of COVID pandemic. However, it was submitted that the ld. CIT (A) has dismissed the condonation of delay application by observing that condonation of delay cannot be a regular affair and assessee has not explained the reasons with supporting documentary evidences, observed that condonation of delay of filing the appeal is almost two years, cannot be condoned. Accordingly, he dismissed the appeal without adjudicating anything on merits and basically sustained the findings of the AO. 5. At the time of hearing, ld. AR of the assessee prayed that one of the partners, Shri Ashok Dhingra was suffering from serious mental depression on account of financial stress, closure of business and untimely death of his father, Shri N.L. Dhingra. He submitted that assessee has attached the details of medication since 2019 and also death certificate of his father, Shri N.L. Dhingra during pandemic period. He prayed that ld. CIT (A) has not condoned the actual delay of 45 days and not adjudicated on merits. Therefore, he prayed that the issue under consideration may be remitted back to the AO considering the fact that the assessee has not received any communication due to the fact that Gulshan Dhingra who was attending the proceedings and assessee was unaware of the whole proceedings, therefore, assessee could not make 4 ITA Nos.4795 to 4797 /DEL/2024 submissions or represent before the AO. Therefore, the assessment was completed u/s 144 of the Act and prayed to remit the issue back to the file of AO. 6. On the other hand, ld. DR of the Revenue could not controvert the above submissions and agreed that the issue under consideration may be remitted back to the AO. 7. Considered the rival submissions and material placed on record. We observed that the assessee never had an opportunity to represent his case before the AO and also before ld. CIT (A). We observed that the ld. CIT (A) has not condoned the delay of 45 days before the pandemic period and subsequent to that the period was already excluded by Hon’ble Supreme Court and provisions of TOLA. Therefore, the case of the assessee has to be considered on the basis of rendering complete justice. Therefore, we are inclined to condone the abovesaid delay before the ld. CIT (A) and to achieve the complete justice, we remit this issue back to the file of AO to redo the assessment de novo after giving proper opportunity of being heard to the assessee. 8. In the result, the appeal being ITA No.4795/Del/2024 filed by the assessee is allowed for statistical purposes. 9. Coming to the appeal filed by the assessee in ITA No.4796/Del/2024 relating to penalty imposed u/s 271AAC of the Act and the penalty was 5 ITA Nos.4795 to 4797 /DEL/2024 levied based on the addition made u/s 69 of the Act. Since we remit the issue back to the file of AO to redo the assessment de novo, the above penalty levied by the AO is infructuous. Accordingly, this appeal is also remitted back to the file of AO and impose penalty de novo after deciding the issue in appeal being ITA No.4795/Del/2024. 10. In the result, the appeal being ITA No.4796/Del/2024 is allowed for statistical purposes. 11. Coming to the appeal being ITA No.4797/Del/2024, we observed that the AO has imposed penalty of Rs.10,000/- u/s 272A(1)(d) of the Act for non-compliance to the notice issued u/s 142(1) of the Act. It is a fact on record that assessee has not complied to the various notices issued and served on the assessee on 04.12.2017. Assessee has not complied with the above notices and filed no response within the stipulated time. The AO has completed the assessment u/s 144 of the Act. Accordingly, the AO has made the penalty u/s 272A(1)(d) of the Act. Further several notices were issued u/s 142(1) of the Act dated 04.12.2017, 09.04.2019, 02.08.2019, 14.08.2019, 29.08.2019 and 09.09.2019. Since assessee has not complied to any of the notices, AO proceeded to levy the penalty u/s 272A(1)(d) of the Act. 12. Aggrieved assessee preferred an appeal before the NFAC, Delhi and this issue under consideration also was appealed before the ld. CIT (A) with 6 ITA Nos.4795 to 4797 /DEL/2024 the delay. Similar to the issue in quantum appeal, ld. CIT (A) has not condoned the delay in the appeal proceedings also. Since ld. CIT (A) has not decided the issue after being heard to the assessee and dismissed the appeal without condoning the delay. 13. In our considered view, assessee should be given one more opportunity of being heard for the reasons for non-appearance before the lower authorities. Since the principles of section 272A are covered under section 273B, we are inclined to remit this issue also to the file of Assessing Officer. In the result, the appeal filed by the assessee is allowed for statistical purposes and we direct Assessing Officer to consider the issue after hearing the assessee’s side and decide the issue de novo as per law. 14. In the result, the appeal filed by the assessee being ITA No.4797/Del/2024 is allowed for statistical purposes. 15. To sum up : all the appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open court on this 25th day of February, 2025. Sd/- sd/- (YOGESH KUMAR) (S.RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 25.02.2025 TS 7 ITA Nos.4795 to 4797 /DEL/2024 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A). 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "