2016 (11) TMI 379 - AT - Income Tax

Condonation of delay - sufficient cause - Held that - We have observed that the assessee was prevented by sufficient cause for not presenting appeal in time before the Tribunal as the CA of the assessee , Mr Shankarlal Jain of M/s Shankarlal Jain and Associates at 12, Engineer Building, 265, Princess Street, Mumbai-400002 has not co-operated with the assessee and retained the possession of the relevant documents disabling the assessee to take appropriate action in this matter despite the assessee paying hefty fees to the said CA which has led to delay in filing appeal before the Tribunal which is supported by an affidavit of Director, Mr Manoj Shah of the assessee and also affidavit of new CA, Mr. R R Mandali and hence keeping in view peculiar facts and circumstances of the case we are inclined to condone the delay of 458 days in filing the appeal by the assessee before the Tribunal. We would at the same time like to place on record our un-happiness in the manner in which CA Sh Shankarlal Jain conducted himself professionally with the assessee company which led to the serious prejudice to the assessee as detailed in the affidavits of the Director of the assessee and new CA of the assessee , which professional conduct is not healthy for growth and development of profession of CA. We, accordingly set aside the order of the ld. CIT(A) and restore the matter to the file of learned CIT(A) for redetermination of the entire assessment in accordance with law as indicated above. The assessee is directed to co-operate in the proceedings and produce all necessary and relevant documents including the books of account etc. in support of its claim before the authorities below in accordance with provisions of law as called by the authorities below to comply with our directions. Needless to say that sufficient and adequate opportunity to the assessee of being heard in accordance with principles of natural justice in accordance with law shall be granted by the authorities below.

Issues:
1. Ex parte order by CIT(A) without proper opportunity to the appellant.
2. Non-cooperation of the assessee during assessment and appellate proceedings.
3. Delay in filing the appeal before the Tribunal.
4. Conduct of the Chartered Accountant representing the assessee.
5. Decision to set aside the order of the CIT(A) and restore the matter for redetermination.

Analysis:

Issue 1: Ex parte order by CIT(A) without proper opportunity to the appellant
The appellant contended that the CIT(A) erred in passing an ex parte order without granting a fair opportunity to be heard, violating principles of natural justice. The appellant requested the cancellation of the ex parte order and a fresh hearing. The Tribunal acknowledged the appellant's submissions and directed the CIT(A) to hear the appeal afresh, considering the details filed with the application under Rule 46A of the Income Tax Rules.

Issue 2: Non-cooperation of the assessee during assessment and appellate proceedings
The AO made substantial additions to the income of the assessee due to non-compliance with notices and summons. The CIT(A) confirmed the additions, citing lack of cooperation by the assessee during both assessment and appellate proceedings. The Tribunal observed the non-compliance was attributed to the previous Chartered Accountant's behavior, causing prejudice to the assessee. Consequently, the Tribunal set aside the CIT(A)'s order and restored the matter for redetermination, emphasizing the need for the assessee's cooperation and production of relevant documents.

Issue 3: Delay in filing the appeal before the Tribunal
The appellant filed the appeal 458 days late, attributing the delay to the non-cooperation of the previous Chartered Accountant who retained relevant documents. The Tribunal, considering the peculiar circumstances, condoned the delay, expressing dissatisfaction with the conduct of the Chartered Accountant and emphasizing the importance of professional ethics.

Issue 4: Conduct of the Chartered Accountant representing the assessee
The Tribunal criticized the conduct of the previous Chartered Accountant for not cooperating with the assessee, causing significant prejudice. The Tribunal highlighted the importance of professional behavior and expressed disapproval of the CA's actions, which led to the delay in filing the appeal and subsequent complications for the assessee.

Issue 5: Decision to set aside the order of the CIT(A) and restore the matter for redetermination
In light of the non-cooperation and conduct of the previous Chartered Accountant, the Tribunal set aside the CIT(A)'s order and remanded the matter for redetermination. The Tribunal directed the assessee to cooperate fully, produce necessary documents, and granted the CIT(A) the authority to scrutinize the accounts and records for a fresh assessment in accordance with the law.

In conclusion, the Tribunal allowed the appeal for statistical purposes, emphasizing the importance of cooperation, professional conduct, and adherence to legal procedures in tax assessment proceedings.

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