Case Law Details
Alps Construction Vs ITO (ITAT Mumbai)
In Alps Construction vs ITO, the Income Tax Appellate Tribunal (ITAT) Mumbai addressed an appeal against an ex-parte order passed by the Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), for the assessment year 2017-18. The appellant had failed to present its case before the CIT(A), resulting in the dismissal of its appeal. The assessee sought condonation for a 216-day delay in filing the ITAT appeal, citing reliance on their Chartered Accountant, who failed to inform them about the NFAC order in time. The ITAT found that the delay was not intentional and condoned it.
The tribunal further noted that the assessee did not receive an effective hearing before the CIT(A), as there was no conclusive proof that notices were properly served. Under Section 250(2) of the Income Tax Act, 1961, an appellant has the right to be heard, and denying this violates principles of natural justice. ITAT Mumbai set aside the CIT(A)’s order and remanded the case for fresh adjudication, directing the assessee to present its case within 60 days. This ruling reinforces the necessity of due process in faceless appeal proceedings.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
1. The aforesaid appeal is filed by the appellant/assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the “CIT(A)”],passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] dated 06.11.2023 for the A.Y. 2017- 8, wherein the Ld. CIT(A) has dismissed the appeal ex parte as despite services of notice, the assessee failed to present its case before the Ld. CIT(A).
2. An application for condonation of delay has been filed by the appellant/assessee stating that statistically there is delay of 216 and narrated the reasons for filing the appeal after the due date as under:-
16. The entire compliance of income tax department is handled by our chartered accountant and therefore my brother was assured about the compliance of any notices that were received from income tax
17. On enquiry made by brother with our Chartered Accountant, he checked on the website of income tax about the status of appeal preferred by us for assessment year 2017-18 and informed him about the order passed by CIT APPEAL – NATIONAL FACELESS APPEAL CENTRE on 6th November 2023, and also downloaded copy thereof and handed over to my brother.
18. On further enquiry being made by my brother with the Char Accountant, for future course of action, we have been advised that the appeal is required to be filed with ITAT Mumbai, within a period of 60 days from 6th November 2023, however, the period of 60 days from the date of Order passed under section 250 of the Act by CIT APPEAL, NATIONAL FACE APPEAL CENTRE, have expired and therefore the present appeal is being filed with prayer for condonation for delay in filing an appeal under section 253 of the Income Tax Act.
19. I say that, the order of CIT(A)- NFAC, was passed on 6th November 2023 and was uploaded on the website on the same day and served on registered email id and accordingly the last day for filing an appeal u/s 253 of the Act, was 6th January 2024. However the appeal is being delayed and filed on 8th August 2024. Thus there is a delay of 216 days.
20.1 further say that, the entire series of events narrated herein above has caused delay in filing the present appeal before ITAT, however the said delay is neither deliberate nor with any malicious intention. The default, if any, was due to the bonafide inadvertent mistake an circumstances beyond the control of the Appellant.
3. The application is supported by affidavit of the assessee. The assessee put reliance upon the judgment of the Hon’ble Supreme Court in the case of Collector, Land Acquisition Vs. MST. Katiji& Ors., [1987] 167 ITR 471 (SC),dated 19.02.1987, was pleased to hold regarding the condonation of delay as under:
“The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits”. The expression “sufficient cause” employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subseries the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making of justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy.
And such a liberal approach is adopted on principle as it is realized that:
1. Ordinarily, a litigant does not stand to benefit by lodging an appeal
2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.”
4. We have heard the Ld. AR on behalf of the assessee and Ld. DR on behalf of the revenue. The Ld. DR supported the judgment of the Ld. CIT(A). we have considered the arguments and examined the record.Since the assessee has filed affidavit in support of condonation of delay and no contradictory facts has been brought on record by the revenue to the effect that contents of the affidavit are false, we find it expedient in the interest of justice that the assessee has shown sufficient cause for condonation of delay in filing the appeal before The delay in filing the appeal is accordingly condoned.
5. It was argued on behalf of the appellant/assessee that the notice issued by the Ld. CIT(A) were never received or served upon the assessee and as such they could not present its case before the Ld. CIT(A) who proceeded ex parte and decided the appeal on merit without giving effective opportunity of hearing to the assessee and as such the assessee was prevented from presenting its case before the Ld. CIT(A). Therefore, the impugned order suffers from illegality and liable to be set aside. The Ld. DR on the other hand supporting the judgment of the Ld. CIT(A) stating that there is no merit in the appeal and same is liable to be dismissed.
6. We have considered the rival submissions. Section 250 sub section 2(a) of “the Act” provides as under:
“Section 250 (2) The following shall have the right to be heard at the hearing of the appeal: –
a. The appellant, either in person or by an authorised representative;”
7. It is evident from the provision that the hearing to be given is not a formality but an effective hearing is sine qua non for the purpose of upholding the principal of natural justice. We have examined the impugned order and in para no. 5 of the Ld. CIT(A) observed as under: –
5. Appellate Findings:
4.1 During the course of appellate proceedings, appeal notices were issued to the appellant on 31.12.2020, 29.08.2022 and 06.10.2023 fixing the case for 06.01.2021, 13.09.2022 and 23.10.2023 respectively at e-mail id kalokhandwala@gmail.com and mustansir.lokhandwala@gmail.com which are Primary Email Id as per Latest Return filed. In this regard, the appellant has not filed any written submission as well as not given any satisfactory evidence in support of grounds of appeal, hence the case is being decided on merits.
8. It is thus evident from the contents of the impugned order extracted above that no effective opportunity of hearing has been given and there is no proof that the notice sent on various dates were duly served or brought to the notice of the appellant/assessee.
9. For these reasons, we are of the considered opinion that matter needs to be restored to the file of the Ld. CIT(A) for giving effective hearing to the assessee who shall present its case before the Ld. CIT(A) within 60 days. The impugned order is accordingly set aside and appeals filed by the assessee are allowed in above terms.
10. In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 03.01.2025.
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