Anita Devi vs Income Tax Officer

PER RAMIT KOCHAR, AM:

This appeal in ITA No. 2338/Del/2026 for Assessment Year: 2011-12 has arisen form the learned CIT(A)’s appellate order u/s 250 of the Income-tax Act, 1961(in Short “Act”) dated 29.07.2024 in DIN & Order No: ITBA/NFAC/S/250/2024-25/1067092196(1), which in turn has arisen from the assessment order dated 10.12.2018 passed by the AO u/s 144 r.w.s 147of the 1961 Act.

At the outset, it is observed that this appeal is filed belatedly by the assessee with delay of 1 year 7 months. The assessee has duly filed application for condonation of delay supported by affidavit . In the said application/affidavit filed by the assessee, It is averred that the assessee is a old lady of around 60 years and not very accustomed with the Income Tax Proceedings . It is further averred that she is not acquainted with the Income Tax Portal, and she was not aware with the notices received. It is further stated that she did not received notice either through email or through post , and hence was not aware that an ex-parte order was passed by the Ld. CIT(A). It is stated that her case was handled by Mr. Sandeep Gulati (Chartered Accountant) having his office at Meerut who has not properly handled the case, and now She has appointed a new counsel to look after her tax matter. It is further stated that she is very serious in pursuing this matter, and great irreparable damage will be caused to her if the delay in filing this appeal is not condoned. The assessee has also relied upon judicial precedents to support her contention that for mistake of counsel, the assessee should not be penalized. It is prayed in her application/affidavit that delay of 1 year 7 months in filing this appeal belatedly beyond the time prescribed u/s 253(3) be condoned. The affidavit and application filed are placed on record in file.

The brief facts of the case are that the assessee has not filed return of income for the impugned assessment year. The case of the assessee was reopened for framing reassessment u/s 147 on the basis of AIR information regarding cash deposits of Rs.14,84,000/- by the assessee in her saving bank account during the F.Y. 2010-11. Notice u/s. 148 was issued by the AO on 24.03.2018 after recording reasons and after obtaining satisfaction of the ld. Pr. CIT, Meerut . It is claimed by the AO that the aforesaid notice was duly served on the assessee on her alternative address of Village Mahroli, Meerut. Notices u/s 142(1) along with questionnaire were also issued and served by the AO upon the assessee. The assessee appeared personally before the AO and filed part replies. However, the assessee did not file return of income in pursuance to notice issued by the AO u/s 148. The AO framed an assessment u/s 144 r.w.s 147 of the 1961 Act. The assessee has deposited cash of Rs.14,84,000/- in her saving bank account no.4841 maintained with the Indian Overseas Bank. Police Line, Meerut. The AO asked assessee to explain the nature and source of cash deposits . The assessee stated that she has sold an immovable property being residential house No. G-49 situated at Village Baral Partapur, Meerut for Rs. 18,55,000/- on 06.01.2011. Computation of capital gain was filed by the assessee claiming purchase cost of Rs.18,66,948/-. The AO observed that the said property was purchased for a prices of Rs. 1,20,000/- on 22.07.2005 on which stamp duty of Rs. 13,600 was paid. The total purchase cost was Rs. 1,33,600/- . The assessee claimed total purchase cost of Rs. 1,35,880/- after taking into effect registration and other charges. The AO observed that the assessee has claimed cost of construction at Rs. 12,50,000/- for constructing house of first class, but no substantial evidence were submitted. The AO after considering that there was construction being made and covered area is 194.16 square meters as mentioned in sale deed as also circle rate is Rs. 7000/- per square meters during financial year 2010-11, took no adverse view of the same.

Being Aggrieved, the assessee filed appeal with Ld. CIT(A) but there was no compliances by the assessee to the notices issued by the Ld. CIT(A). The Ld. CIT(A) issued as many as nine notices to the assessee as are mentioned in the appellate order passed by ld. CIT(A) , but the same remained un-complied with by the assessee. The ld. CIT(A) passed an ex-parte order dismissing the appeal of the assessee and upholding the assessment order , wherein operating part of the appellate order passed by ld. CIT(A) reads as under:-

Still Aggrieved, the assessee has filed second appeal with the Tribunal. The Ld. Counsel for the assessee submitted that the ld. CIT(A) has passed an ex-parte appellate order. There is no discussion on the merits of the issue by ld. CIT(A) in its appellate order. It was submitted that this order is not sustainable as the Ld. CIT(A) is obligated to pass an appellate order on merits.

I have considered the rival contention and perused the materials available on record. The brief facts of the case as well contentions of both the parties are recorded in the preceding para’s of this order and are not repeated. I have observed that the ld. CIT(A) has not decided the issues arising in the appeal on merits and has simply dismissed the appeal of the assessee ex-parte in limine by upholding the assessment order passed by the AO by holding that the same does not warrant interference. The ld. CIT(A) issued as many nine notices as stated in appellate order but there was no compliance by the assessee. The ld. CIT(A) simply dismissed the appeal of the assessee by a non-speaking cryptic order , and upheld the assessment order without deciding the issues arising in the appeal on merits, mainly on account of non compliance by the assessee to the nine notices issued by ld. CIT(A). The appellate order passed by ld. CIT(A) is reproduced in the preceding para’s of this order and is not repeated again. Even, there is no mention as to the service of the notices being effected by ld. CIT(A) on to the assessee. The ld. CIT(A) is required and obligated to pass appellate order in compliance with the provisions of section 250(6), as ld. CIT(A) is required to pass reasoned and speaking order on merits in accordance with law. Reference is drawn to provisions of Section 250(6), wherein ld. CIT(A) has to state point for determination, his decision and reasons thereof. The ld. CIT(A) did not called for the assessment records from the AO , and did not made enquiries of the claim made by the assessee w.r.t. loans raised , trading activities in the name of Shagun Trading Company as well claim of the assessee that cash withdrawals from the bank were used to deposit back the cash in the bank account. Reference is drawn to provisions of Section 250(4).The appellate order passed by ld. CIT(A) is subject to further appeal with ITAT u/s 253. The appellate order passed by ITAT is subject to further appeal before Hon’ble High Court u/s 260A. The judgment and order passed by Hon’ble High Court is also subject to challenge before Hon’ble Supreme Court. Thus, the appellate order passed by ld. CIT(A) is not a final order, as it is subject to challenge before higher appellate authority. Thus, Reasons which weighed in the minds of the adjudicating authority while adjudicating appeal on merits of the issues are cardinal as the higher appellate authority can then adjudicate appeal on the issues arising in appeal before them, based on decision and reasoning of ld. CIT(A) in deciding the issues. If the ld. CIT(A) simply dismiss the appeal merely because the assessee did not comply with the notices issued by ld. CIT(A) in limine without adjudicating issues arising in the appeal on merits , such order is not sustainable in the eyes of law keeping in view provisions of Section 250(6) , and also higher appellate authorities will be deprived to see what weighed in the mind of the ld. CIT(A) while adjudicating appeal as it will be an order passed without reasoning on the issues on merits . The appellate order of the CIT(A) is clearly in violation of section 250(6) of the Act and liable to be set aside. Merely stating the assessment order passed by AO is upheld and does not warrant interference is not sufficient, and that the assessee has not submitted details/documents during appellate proceedings is not sufficient. The ld. CIT(A) is not toothless as his powers are co-terminus with the powers of the AO, which even includes power of enhancement. It is equally true that the assessee also did not complied with the notices issued by ld. CIT(A) and did not file the requisite details/documents to support his contentions. Thus, the assessee is equally responsible for its woes as the assessee did not comply with the notices issued by the ld. CIT(A) and also it is observed that part replies were filed before the AO. The ld. Counsel for the assessee has made statement before the Bench that if one more opportunity is provided, the assessee will provide all details/documents/evidences to justify the cash deposits in the bank account. Keeping in view the entire factual matrix as culled out above in the preceding para’s of this order, it will be fair to both the parties as well in the interest of justice, that the appellate order of ld. CIT(Appeals) be set aside and the matter be remanded back to the file of ld. CIT(Appeals) for fresh adjudication after giving proper opportunity of being heard to both the parties w.r.t. the issues arising in the appeal .The assessee is directed to comply with the notice issued by ld. CIT(Appeals) during the appellate proceedings in set aside remand proceedings, otherwise ld. CIT(A) shall be free to decide the appeal ex-parte on merits in accordance with law, after complying with provisions of Section 250(6). I clarify that I have not commented on merits of the issues. Thus, the appellate order passed by ld. CIT(A) is set aside and matter is restored back to the file of ld. CIT(A) for fresh adjudication. The appeal of the assessee is allowed for statistical purposes. I order accordingly.

In the result,the appeal filed by the assessee is allowed for statistical purposes.