2024 (8) TMI 805 - AT - Income Tax

Delay filling appeal before CIT(A) - Assessee has given the reason that the delay has been caused on account of he being outside India - assessment order was collected by his Brother in law on 3.1.2019 personally, thus caused delay -CIT(A) has rejected the request for condonation of delay mentioned in Form No.35 stating that the date of service of order is 3.1.2019 and the appeal was filed on 14.2.2019 in form No.35 - HELD THAT - We find that the Ld. CIT(A) rejected it on technical grounds that the Assessee did not file any affidavit showing that assessment order was received by his Brother in law on 3.1.2019. Assessee was not in India till 5.2.2019. The appeal was filed on 14.2.2019. If we consider that Assessee was not in India till 5.2.2019 and appeal was filed on 14.2.2019, we find that the Assessee came to India only on 5.2.2019 that should be the date of receipt of order by the Assessee. Accordingly, as per Section 249(2)(b), the appeal is required to be filed within 30 days from the date of service of notice of demand relating to assessment. If the Assessee is not in India, we fail to understand that how he has received the order prior to that. CIT(A) has taken a pedantic approach in considering the fact and merely rejecting the cause shown by the Assessee as insufficient only for the reason that it is not supported by an affidavit. There is a sufficient cause in delay in filing of the appeal. In view of this we did not find that the Ld. CIT(A) is correct in not condoning the delay. Further, it could be seen that the notice to the Assessee by the assessing officer was also sent to the address that was not available with the Assessee during the course of assessment proceedings as the impugned property was already sold. Therefore, it is clear that the Assessee did not have any opportunity before the assessing officer. In view of the above fact, we restore the matter before the AO to decide the issue afresh by issuing notice at the address given in Form No.36. The notices may also be given to e-mail address mentioned in the form No.36. On receipt of such notices, the Assessee is directed to respond to the same by filing any submissions or contentions that he would like to raise. AO may decide the issue afresh.

Summary

Issues:
1. Delay in filing appeal before the CIT(A).
2. Disposal of appeals on the merits.
3. Addition made by Assessing Officer as short term capital gain.
4. Unexplained cash credits in bank accounts.
5. Opportunity for Assessee to respond before the assessing officer.

Detailed Analysis:
1. The appeal was filed by the Assessee against the assessment order passed under section 144 r.w.s. 147 of The Income-tax Act, 1961. The Assessee raised grounds of appeal regarding the delay in filing the appeal, which the Ld. CIT(A) failed to appreciate. The Assessee argued that the delay was not of 27 days but of only days due to specific reasons mentioned in Form No. 35. The Ld. CIT(A) erred in not condoning the delay and in not considering the reasonable and sufficient reasons provided by the Assessee for the delay.

2. The Ld. CIT(A) did not dispose of the appeals on the merits in respect of additions made under section 68 and as short term capital gain without proper consideration of the facts. The Assessee contended that there were no such credits in the bank account as confirmed by the Assessing Officer in the Remand Report. Additionally, the Ld. CIT(A) did not address the issue of term capital gain calculation based on AIR data, overlooking the fact that the property was acquired in 2002.

3. The assessment order passed by the Assessing Officer included an addition of short term capital gain of Rs. 23,00,000/- on the sale of immovable property. Furthermore, unexplained cash credits totaling Rs. 2,20,20,000/- were added based on transactions in the Assessee's bank accounts. The total income was determined at Rs. 2,43,20,000/-. The Assessee challenged these additions in the appeal before the Ld. CIT(A).

4. The Assessee was not given a fair opportunity to respond before the assessing officer due to notices being sent to an address that was not available to the Assessee as the property was already sold. The Tribunal found that the Assessee's delay in filing the appeal was justified as he was outside India until a certain date, and the Ld. CIT(A) should have considered this fact. The Tribunal directed the matter to be restored before the Assessing Officer for a fresh decision after providing proper notices to the Assessee.

5. Ultimately, the Tribunal allowed the appeal of the Assessee for statistical purposes without deciding on the merits of the grounds of appeal. The matter was remanded back to the Assessing Officer to decide the issues afresh after providing the Assessee with a fair opportunity to respond. The Tribunal emphasized the importance of ensuring that the Assessee receives proper notices and has the chance to present submissions or contentions.