Ajay Devendrasinh Gohil vs Income Tax Officer, Ward-40(1)

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), Ahmedabad-13 [in short ‘the CIT(A)’] dated 14.11.2025, for Assessment Year 2011-12.

Shri Viranch Modi, appearing on behalf of the assessee submits that the assessee is a non-resident based in United States (US) and is holding US passport. The assessment in the case of assessee was completed u/s.147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) making addition of Rs.50,00,000/-. The notice issued 148 of the Act and the subsequent notices were never served on the assessee, hence, the assessee could neither reply to the notices nor could participate in the assessment proceedings. The assessment for AY 2011-12 was completed at the back of the assessee/appellant. Since, the assessee was oblivious of the assessment order, the assessee could not file appeal before the CIT(A) in time. Admittedly, the appeal before the First Appellate Authority was time barred by 1981 days. As soon as, the assessee came to know about outstanding demand for AY 2011-12, the assessee approached the Assessing Officer (AO) vide letter dated 29.04.2024 for providing certified copy of the assessment order dated 15.12.2018. He further pointed that the assessee could not download the said assessment order from the official website of the Income Tax Department due to technical glitches. This fact was mentioned in the letter to the AO vide which the certified copy of assessment order was sought. In order to substantiate that the assessment order was not available on the official portal of the Department, the ld. AR referred to the screen short of the portal at page 6 of the paper book. The CIT(A) without appreciating the reasons given by the assessee causing delay in filing of appeal dismissed appeal of the assessee on the ground of limitation.

On merits of the addition of Rs.50,00,000/-, the ld. AR submits that the assessment has been reopened on the ground that Rs.50,00,000/- cash has been deposited in the bank account of the assessee during Financial Year 2010-11. The ld. AR submits that no such cash was ever deposited in the bank account of the assessee with HDFC Bank Ltd. There were deposits of Rs.50,00,000/- on 10.02.2011 through cheque. The bank statement is at page 29 of the paper book. The aforesaid amount was transferred to the bank account of the assessee on sale of residential property during the relevant Financial Year. The sale deed is at page 31 to 60 of the paper book. The ld. AR thus prayed for deleting the addition and allowing appeal of the assessee.

Per contra, Shri Manoj Kumar representing the department submits that there was inordinate delay of nearly 2000 days in filing of appeal by the assessee before the CIT(A). In absence of valid explanation for delay, the CIT(A) has rightly dismissed appeal of the assessee.

Both sides heard, orders of the authorities below examined. The CIT(A) has dismissed appeal of the assessee in limine on the ground of limitation. Undisputedly, there was substantial delay of 1981 days in filing of appeal before the First Appellate Authority. The assessee is a non-resident and is US passport holder. This clearly shows that the assessee was not ordinarily residing in India. A perusal of the assessment order shows that the AO had issued notice u/s.148 of the Act on 29.03.2018, however, it is no emanating from the assessment order that the said notice was served on the assessee. The requirement of section 148 of the Act is service of notice and not merely issuance of notice. Since, the assessment proceedings were completed without the knowledge of the assessee, the assessee was unaware about the tax demand that was created by virtue of ex-parte assessment order dated 15.12.2018 for AY 2011-12. As a consequent, the assessee could not avail the remedy of appeal against the assessment order in time. After examining the reasons for delay in filing of appeal before the First Appellate Authority, I am satisfied that for bonafide reasons the assessee could not file appeal within limitation.

The Hon’ble Apex Court in an unequivocal manner has repeatedly held that acceptance of reason given by the appellant/petitioner explaining delay should be the rule and refusal an exception. By taking a pedantic and hyper technical view the explanation furnished should not be rejected, causing loss and irreparable injury to the party against whom the lis terminates. The expression “sufficient cause” should be liberally construed so as to sub-serve the ends of justice.

Without commenting on merits of the addition, I deem it appropriate to restore this matter back to the AO for denovo examination. The AO before passing fresh assessment order shall grant reasonable opportunity of making submissions to the assessee, in accordance with law.

The AO shall issue notice to the assessee on the email address provided by the assessee in Form No. 36 i.e. [email protected]. The assessee upon service of notice shall respond to the same, without fail.

In the result, impugned order is set aside and appeal of the assessee is allowed for statistical purpose.