Six Years of Reassessments Remanded for De-Novo Consideration

M S Thanigaive Vs ITO (ITAT Chennai)

One Last Chance—With Cost: ITAT Sets Aside Ex-parte Reassessments, Remands 6 Years to AO for De-novo Orders

The Chennai ITAT has condoned a delay of 284 days and set aside ex-parte reassessment orders u/s 147 r.w.s. 144 for AYs 2012-13 to 2017-18, granting the Assessee one final opportunity to contest the additions on merits.

The Assessee, engaged in real estate & film production, had not filed returns for the impugned years and did not respond to reassessment notices. The AO consequently framed ex-parte orders, making additions towards unexplained bank credits, unsecured loans, 90% of expenses as unexplained & income from other sources, aggregating to substantial sums across six years. The NFAC-CIT(A) confirmed the additions due to non-prosecution.

Before the Tribunal, the Assessee explained the default citing medical issues, change of authorised representative, COVID-19 disruptions, jurisdictional changes & delayed uploading of s.148 notices. Accepting these as reasonable cause, the ITAT:

• Condoned the delay in filing appeals,
• Noted lack of effective opportunity and principles of natural justice,
• Set aside the orders of CIT(A) and AO, and
• Remanded all six assessments to the AO for de-novo adjudication after granting reasonable opportunity.

However, to balance equities and deter repeated non-compliance, the ITAT imposed a cost of ₹5,000 per appeal (₹30,000 in total), payable to the State Legal Aid Authority, Madras High Court, with proof to be filed within 30 days.

All six appeals were allowed for statistical purposes.

FULL TEXT OF THE ORDER OF ITAT CHENNAI

These six appeals by the assessee are arising out of the orders passed by the Learned Commissioner of Income Tax (Appeal), NFAC, Delhi (in short “ld.CIT(A)”) against the order u/s.144 r.w.s 147 of the Income Tax Act, 1961 (hereinafter the ‘Act’) passed by the Assessing Officer as detailed below:

2. At the outset, we find that registry has recorded a delay of 284 days before us in all the six appeals filed by the assessee, for which the assessee has filed affidavit stating the reasons for delay, wherein, it is submitted that the assessee was facing various medical issues and further the change of authorised representative, collection of files, documents and details from old auditor took additional time. Hence, there was a delay in filing these appeals by the assessee. After considering the Affidavit filed by the assessee and also hearing both the parties, we find that there is a reasonable cause for the assessee in not filing these appeals on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of these appeals and admit the appeals filed by the assessee for adjudication.