2020 (8) TMI 64 - AT - Income Tax

Validity of assessment framed u/s 144 r.w.s. 147 - Appeals arising from the ex- parte orders - Non service of Notice - Condonation of delay - HELD THAT - After knowing the fact that the assessee is not residing at the address where the notice was sent through speed post the AO attempted to serve the notice through alternative mode of affixture. Since, the assessee has not left his current address or any other address where the authorities can send the communication or notice, therefore, the Assessing Officer cannot be held as fault for the service affected through affixation at the last non address. Hence, in the facts and circumstances of the case the contention of the ld. AR cannot be accepted that the assessment orders framed by the AO for want of valid notice is void and liable to set aside. Appeals filed by the assessee against the assessment orders were dismissed by the ld. CIT(A) due to the delay in filing the appeal - CIT(A) held that these appeals filed by the assessee are not maintainable. It is pertinent to note that when the assessee was undisputedly out of India and residing in Australia and has not received the notices issued by the AO as well as assessment orders passed U/s 144 r.w.s. 147 then the reasons explained by the assessee for delay in filing the appeals ought to have been accepted as a reasonable cause. AO has accepted the fact that the assessee vacated the premises at which the assessee was earlier living as a tenant as back as 6-7 years back from the date of the notice issued u/s 148 - Even otherwise the assessee has explained the reasons for delay in the affidavit that he was out of India and holding passport of Australia. In the absence of receipt of notice as well as orders by the assessee there was a delay in filing the appeals.Assessee has explained a reasonable cause for delay in filing the appeal accordingly, the delay in filing the appeals before the ld. CIT(A) is condoned. Penalty orders passed U/s 271(1)(c) of the Act were also ex- parte order as nobody has appeared and the reasons for non appearance are the same as explained by the assessee in respect of the quantum of appeals -appeals arising from the penalty orders are also set aside to the record of the ld. CIT(A) for deciding the same afresh after giving one more opportunity of hearing to the assessee as well as disposal of the quantum appeals - Appeals filed by the assessee are allowed for statistical purposes.

Summary

Issues:
Delay in filing appeals, Validity of assessment orders, Service of notices, Condonation of delay, Quantum of appeals, Penalty orders, Opportunity of hearing, Ex-parte orders, Merits of the case, Statutory provisions.

Delay in filing appeals:
The assessee filed four appeals against orders of ld. CIT(A)-II, Jaipur for assessment years 2007-08 & 2008-09 with a delay of 4 days. The delay was attributed to the assessee being an overseas citizen of India with an Australian passport. The delay was condoned by ITAT considering the reasons provided by the assessee and in the interest of justice.

Validity of assessment orders and service of notices:
Assessments were made under section 144 r.w.s. 147 for the mentioned years. The AO issued notices under section 148 and 142(1) but failed to serve them as the assessee was not available at the address. The AO attempted service through affixture. The contention that the assessment orders were invalid due to lack of valid notice service was rejected by ITAT. The delay in filing appeals was attributed to the assessee not receiving notices and orders due to being outside India.

Opportunity of hearing and merits of the case:
The assessee contended that expenditure incurred through a credit card was on behalf of the company and not personally. The delay in filing appeals was due to the assessee being out of India and holding an Australian passport. ITAT accepted the reasons for the delay and set aside the appeals to provide an opportunity to explain the source of payment made through the credit card.

Penalty orders and ex-parte proceedings:
The penalty orders under section 271(1)(c) were also ex-parte due to non-appearance, similar to the quantum appeals. ITAT set aside the penalty orders for fresh consideration along with the quantum appeals after giving the assessee an opportunity for a hearing.

In conclusion, all four appeals were allowed for statistical purposes by ITAT, emphasizing the importance of providing a fair opportunity for the assessee to present their case and explain the source of expenditures made through credit cards.