2014 (12) TMI 217 - AT - Income Tax

Appeal dismissed as being time barred u/s 249 - violation of principles of natural justice Admission of appeal - Held that - It is immaterial to discuss, whether assessment order was served through affixture validly or not but the assessee obtained the copy of assessment order from the AO for the first time and filed appeal within the limitation period after obtaining the assessment order - the assessee s wife was under treatment for cancer at Christian Medical College, Vellore during this period of delay - the cause is reasonable for filing of appeal belatedly i.e. after expiry of limitation period, if there is any the delay is condoned and the CIT(A) is directed to admit the appeal. In case CIT(A) chose not to condone the delay, he has no business to adjudicate the appeal on merits - first of all, the appeal should be admitted for making a decision on merits because the right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications - The right to appeal is statutory right and it can be circumscribed by the conditions in the grant - If the statute gives a right to appeal upon certain conditions, it is upon fulfillment of those conditions that the right becomes vested in and exercisable by the appellant - the assessee s appeal is delayed as alleged by CIT(A) and without admitting the appeal he has adjudicated the same on merits - Once the appeal is not admitted nothing is pending before him relying upon CIT Vs. Mysore Iron & Steel Works 1949 (3) TMI 17 - BOMBAY HIGH COURT - once CIT(A) not admitted the appeal as barred by limitation, he should not have adjudicated on merits - The findings given by CIT(A) on merits will have no bearing on fresh adjudication by CIT(A), in the set aside appellate proceedings thus, the morder fo the CIT(A) is set aside and the matter is remitted back for adjudication decided in favour of assessee.

Summary

Issues Involved:
1. Dismissal of appeals as time-barred.
2. Validity of assessment orders served by affixation.
3. Confirmation of assessment orders and additions.
4. Condonation of delay in filing appeals.
5. Merits of the case and specific additions.

Issue-wise Detailed Analysis:

1. Dismissal of Appeals as Time-Barred:
The first issue revolves around the dismissal of the assessee's appeals by the CIT(A) as time-barred. The CIT(A) observed that the appeals were filed nearly 310 days late, beyond the prescribed period under section 249 of the Income-tax Act, 1961. The CIT(A) noted that the assessment orders were served by affixation on the assessee's residence, and the delay in filing the appeals was not condoned due to insufficient cause. The CIT(A) emphasized that the assessee was aware of the completion of the assessment proceedings as early as 14.06.2012, yet the appeal was filed only on 27.11.2012.

2. Validity of Assessment Orders Served by Affixation:
The assessee contended that the assessment orders were not received by affixation following due process of law. The CIT(A) examined the assessment records and found that the orders were served by affixation by the Department's Inspector on 06.01.2012. The Inspector's report detailed multiple attempts to serve the orders personally, which were unsuccessful due to the assessee's absence. Consequently, the orders were affixed to the entrance of the assessee's flat.

3. Confirmation of Assessment Orders and Additions:
The CIT(A) confirmed the assessment orders and the additions made therein. The assessee challenged the confirmation of the addition of Rs. 12,58,000/- deposited in the bank account, arguing for the allowance of peak credit. Additionally, the assessee contested the inclusion of Rs. 2,10,780/- deposited by cheque and the disallowance of Rs. 50,000/- under section 80D. The CIT(A) did not provide specific findings on these grounds, leading to further grievances from the assessee.

4. Condonation of Delay in Filing Appeals:
During the hearing, the assessee's counsel argued for the condonation of the delay, citing the assessee's wife's critical illness and treatment at Christian Medical College, Vellore. The counsel presented a discharge summary as evidence of the medical condition, explaining that the assessee could not concentrate on tax matters during this period. The Tribunal found the cause reasonable and condoned the delay, directing the CIT(A) to admit the appeal.

5. Merits of the Case and Specific Additions:
The Tribunal observed that the CIT(A) had adjudicated the issues on merits despite dismissing the appeal as time-barred. The Tribunal held that once the appeal was not admitted due to the delay, the CIT(A) had no jurisdiction to decide on the merits. The Tribunal cited the Bombay High Court's judgment in CIT Vs. Mysore Iron & Steel Works, which clarified that an appeal must be admitted before any adjudication on merits. Consequently, the Tribunal set aside the CIT(A)'s orders and remanded the matter for fresh adjudication on merits.

Conclusion:
The Tribunal allowed the assessee's appeals for statistical purposes, condoning the delay in filing the appeals and remanding the case to the CIT(A) for fresh adjudication on merits. The Tribunal emphasized that the CIT(A) should first admit the appeal before deciding on the substantive issues raised by the assessee.