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Judgment
PER VIMAL KUMAR, JM:
The application for condonation of delay of 12 days in filing appeal and the appeal filed by the assessee is against order dated 16.12.2024 of ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [hereinafter referred to as “the CIT(A)”] under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) arising out of assessment order dated 19.12.2019 of ld. Assessing Officer/ACIT, Circle 59(1), New Delhi (hereinafter referred to as ‘the AO’) u/s 144 r.w.s. 147 of the Act for assessment year 2012-13.
Brief facts of the case are that the assessee filed return of income of Rs. 17,14,977/- on 30.03.2013 which was processed u/s 143(1) of the Act. Subsequently, the case was reopened u/s 147 of the Act. Notice u/s 148 of the Act dated 26.03.2019 was issued. The case was transferred u/s 127 of the Act from Ward 55(1), New Delhi to Circle 59(1), New Delhi on 19.07.2019. Notice u/s 142(1) of the Act was issued. In response to notice u/s 148 the AR & CA Sh. Sanjay Sehgal furnished the copy of return. Notice u/s 143(2) of the act dated 05.09.2019 was issued. On completion of proceedings, Ld. AO vide order dated 19.12.2019 made addition of Rs. 1,24,54,000/-.
Against order dated 19.12.2019 of ld. Assessing officer, the appellant/assessee preferred appeal before Ld. CIT(A) which was dismissed vide order dated 16.12.2024.
Being aggrieved, the appellant/assessee preferred application for condonation of delay of 12 days in filing appeal and present appeal.
Ld. Authorized Representative for appellant/assessee submitted that there is delay of 12 days in filing appeal due to lack of knowledge of Income Tax provisions and Kidney disease and hospitalization from 23.01.2025 to 31.01.2025 and subsequent quarantine for three months. The explanation for delay does not smack of malafide since, it is supported affidavits and medical documents. Therefore, the delay of 12 days in filing appeal is condoned.
Ld. Authorized Representative for appellant/assessee submitted that assessment order dated 19.12.2019 of Ld. AO u/s 144 r.w.s. 147 of the Act is illegal and submitted written submissions as under:
“The Appellant in pursuance of the issuance of the notice U/s 148 of the Act complied under protest by duly submitting the returns for A.Y 2012-13 dt 25.06.2019 however the appellant also duly filed their reply dt 01.07.2019 seeking for 'Reasons Recorded' which was never provided to the Appellant even after multitude of reminders. This is further clearly outlined U/s 148(2) which states: -
"The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so."
It is submitted that even after repeatedly highlighting this fundamental jurisdictional error vide its replies dt 01.07.2019 and 27.11.2019 before the Ld. Assessing Officer and vide its written submissions before the Ld CIT(A) vide replies dt 22.04.2022, 05.07.2022, 15.01.2024 & 24.10.2024.
Even subsequent to these reminders both authorities have failed to rectify this jurisdictional defect which renders all subsequent proceedings illegal, bad in law and without jurisdiction.
That the assertion can be further corroborated by the observation of the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd. vs. Income-tax Officer [2003] 259 ITR 19 (SC):-
"However, we clarify that when a notice under section 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the Assessing Officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years.
It is vehemently submitted that the proper and due supply of a notice U/s 148 of the Act is a fundamental requirement for opening assessment, a non-supply would render the entirety of the assessment conducted subsequently illegal bad in law and without jurisdiction the same was upheld by the Hon'ble Apex Court in Principal Commissioner of Income Tax vs V. Ramaiah [2019] 103 taxmann.com 202(SC) & by the Hon'ble High Court of Delhi in Principal Commissioner of Income Tax-16 vs. Jagat Talkies Distributors [2017] 85 taxmann.com 189 (Delhi).”
Ld. CIT(A) failed to appreciate that the addition of Rs. 1,24,54,000/- u/s 69A of the act was unsustainable in written submission which was pleaded as under:
“During the assessment proceedings the Appellant-Assessee had duly complied with said notice by proceeding to file a reply to notice u/s 142(1) of the Act dt. 19.12.2019. It is submitted that even when the Appellant-assessee has ventured forth to explain the nature and source of the transactions entered into by providing: -
1.The agreement to sell for GC Grand Vaibhav Khand, A-034 and A-033,
2.Cash Inflow and outflow statement explaining the cash payments made to facilitate the purchase of property with corroborating bank statements,
3.ITR declaration of all close family members
4.Bank Loan Confirmation of 30 lakhs each for purchase of said property
5.Sale Deeds of both properties (GC Grand A-034 & A-033)
6.Reference to booking confirmations in 2009 and cheque payments made to the developer in A.Y. 2010-11.
In the break of the cash flow statements the Assessee has clearly detailed the following: -
It is clearly discernable from the aforesaid facts the appellant had not only declared the Asset in his ITR but also explained each and every facet and source of the transaction thereby verifying the legitimacy of the transaction, therefore no addition u/s 69A of the Act can be made.”
Ld. Departmental Representative submitted that Ld. AO had passed ex parte order. Ld. CIT(A) did not admit additional evidences and call for remand report. So, the matter may be sent back to Ld. CIT(A).
From examination of record in light of aforesaid contention, it is crystal clear that Ld. CIT(A) vide order dated 16.12.2024 confirmed assessment order dated 19.12.2019 u/s 144 r.w.s. 147 of the act providing addition of Rs. 1,24,54,000/-for purchase of two properties 2A-033 in Tower No. 2 GC grand, Vaibhav Khand, Ghaziabad for consideration of Rs. 66,51,000/- and Rs. 58,03,000/- u/s 69A of the Act. The appellant/assessee during assessment proceedings had submitted documents i.e. agreement to sell for GC Grand Vaibhav Khand, A-034 and A-033, (2) Cash Inflow and outflow statement explaining the cash payments made to facilitate the purchase of property with corroborating bank statements, (3) ITR declaration of all close family members (4) Bank Loan Confirmation of 30 lakhs each for purchase of said property (5) Sale Deeds of both properties (GC Grand A-034 & A-033) (6) Reference to booking confirmations in 2009 and cheque payments made to the developer in A.Y. 2010-11.
From above, it is evident that the assessee had explained each and every facet and sources of transaction to prove legitimacy of the transaction. Therefore, the addition of Rs. 1,24,54,000/- u/s 69A of the Act being illegal is set aside. Accordingly, ground of appeal no. 2 is accepted. Ground of Appeal No. 1, 3 to 8 being academic in nature are left open.
The application of condonation of delay of 12 days in filing appeal and appeal are allowed.