ITAT orders CIT(A) to re-judge with due consideration for the merits and the evidence

Fact and issue of the case

The appeal filed by the assessee is against the order passed by the Ld. Commissioner of Income Tax (Appeals)-5, (in short “Ld. CIT(A)”), Vadodara on 18.02.2019 for A.Y. 2008-09.

The grounds of appeal raised by the assessee are as under:

The learned CIT(Appeals) has erred in estimating profits @ 25% thereon, making addition of Rs. 9,19,883/- as Income from business without considering the facts and circumstances of the case. CIT(Appeals) has also ignored other returns filed by the assessee. Assessee only demands another opportunity to submit business expense evidences as he was not in a position to submit the same before due to reasons which are not in control of assessee.

Your assessee also demands that if he be able to satisfy his lower profit percentage and reduce his tax liability, his Interest liability should also be deleted.

Further assessee had no intentions to conceal the income. He is a regular tax payer. He just missed to file his Income tax return for the AY 2008-09. He has filed his return for all other assessment years. Also on receipt of Notice, he himself declared that he had business receipts of Rs. 36,79,531/- Due to the circumstances he just could not submit evidences to prove his profits. He prays to set aside the demand notice issued u/s 156.

That having regard to the facts and circumstances of the case, the 1d. Assessing Officer has erred both on facts and in law in deciding the appeal ex parte in violation of the principles of natural justice and without granting to the assessee a fair, proper and meaningful opportunity and the findings of the 1d. Assessing Officer that the assessee is not serious and sincere to pursue the case is wholly incorrect and in disregard of the fact that there was reasonable cause for alleged non-compliance on the dates fixed for hearing.

That the relief prayed for may kindly be allowed and the order of the CIT(Appeals) may kindly be quashed, set aside, annulled or modified.”

There is a delay of 1397 days in filing the present appeal. The assessee has explained the detailed affidavit that the assessee is a farmer was doing trading business in drumstick which is purely seasonal and highly price sensitive business. The Ld. D.R. during the hearing submitted that the assessee is an illiterate person and is not well-versed with the English language and therefore, despite engaged in the professional C.A. / consultant was not aware that the same has to be followed up. Due to the death of the assessee’ s A.R. and the closure of the office of the said A.R. assessee was not in possession of the required documents to file the appeal before the Tribunal in due course.

From the perusal of the records the Ld. D.R. submitted that the assessee has not explained the details of the delay from 18.02.2019 when the CIT(A) pass the order till the demand notice i.e. dated 20.03.2020 which is prior to the Covid period. Thus, the Ld. D.R. vehemently oppose the condonation of delay.

Observation of the court

Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has taken advice of legal consultant and the said legal consultant hence given the reference of the C.A. to the assessee, after taking advice the assessee was not aware that the said matter has to be pursued with legal consultant as well as the C.A. In fact, the assessee’s ignorance due to his illiteracy cannot be the reason to not to condone the delay. This is a peculiar circumstances in the present assessee’ s case where the consultant had died and therefore, the asses see could not file the appeal within the time limit. The explanation given by the assessee appears to be genuine and therefore, in the interest of justice the delay is condoned. This delay condonation should not be taken a precedent but is the exception in the present case only.

Now coming to the facts of the case, it appears that the assessee has not furnished is return of income for A.Y. 2008-09 and from the information gathered by the Revenue it appears that the assessee deposited cash of Rs. 35,00,000/- in his bank account. The case was reopen under Section 147 and statutory notices were issued but was not able to furnish any documentary evidences and therefore, the Assessing Officer made addition of Rs. 9,19,883/-. The assessment order is under Section 144 r.w.s. 147 of the Act. From the perusal of the order of the CIT(A) it appears that the CIT(A) has dismissed the matter on the basis of not representation of the case. There was no discussion on the merit of the case.

The Ld. A.R. submitted that the matter may be remanded back to the file of the CIT(A) for proper adjudication of the evidences and the reopen of the assessee for giving opportunity of hearing and thereafter pass the order.

The Ld. D.R. relied upon the assessment order and the order of the CIT(A).

Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the CIT(A) has not passed the order on merits of the issued contested by the assessee. Therefore, in the interest of justice it will be appropriate to remand back this matter to the file of the CIT(A) for proper adjudication of the issues contested therein and after taking cognizance of the evidences filed by the assessee decide the case on Needless to say, the assessee be given opportunity of hearing by following principle of natural justice. It is pertinent to note that the assessee will fully cooperate in the appellate proceedings before the CIT(A).

In result, appeal of the assessee is partly allowed for statistical

This Order pronounced in Open Court on 14/07/2023