Case Law Details
Agrawal Pathshala Vs ITO (ITAT Delhi)
In a recent judgment between Agrawal Pathshala and the Income Tax Officer (ITO), ITAT Delhi overturned a dismissal made by the Commissioner of Income Tax (Appeals) or CIT(A) due to lack of merit analysis in the case. The case revolves around a penalty imposed by the Assessing Officer (AO) related to cash deposits made by the assessee in the State Bank of India during the Financial Year 2009-10.
According to the records, the AO made an addition to the cash deposits amounting to Rs.29,82,399/-, on which a penalty of Rs.8,99,682/- was imposed. The assessee filed an appeal against this penalty before the CIT(A). However, the CIT(A) dismissed the appeal, attributing the dismissal to an 8-month delay in filing the appeal, without substantively addressing the case’s merits.
The assessee, represented by its Authorized Person, Surendra Prakash Bansal, claimed that the delay resulted from not receiving the assessment order on time and only becoming aware of it when notices under sections 221(1) & 226(3) of the Income Tax Act were received. The Assessee’s representatives requested another opportunity to present their case before the CIT(A), pledging to provide all necessary documents and information to the authorities.
Upon hearing both parties, ITAT Delhi noted that the CIT(A) had dismissed the appeal mainly due to the delay in filing, without considering the merits of the case. Considering the affidavit provided by the assessee and the absence of any contrary material, ITAT Delhi concluded that the delay was not due to malafide intentions and should be condoned.
Conclusion: The verdict by ITAT Delhi sets a critical precedent, emphasizing the importance of evaluating the merits of a case, even when there has been a delay in filing. The ruling, in the Agrawal Pathshala Vs ITO case, showcases the ITAT’s commitment to justice and fairness in adjudicating tax disputes. This could potentially influence future judgments where an appeal has been dismissed primarily due to delays in filing, rather than substantive assessment of the case’s merits.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal filed by the assessee is directed against the order dated 29.11.2019 of the Commissioner of Income Tax (Appeals)-Ghaziabad relating to Assessment Year 2010-11.
2. Brief facts of the case as culled out from the material on record are as under:-
3. The perusal of the assessment order passed by AO u/s 144 r.w.s 147 of the Act dated 14.12.2017 reveals that AO has noted that AIR information was received that assessee had made cash deposits aggregating to Rs.29,82,399/- in the Saving Bank account with State Bank of India during the Financial Year 200910. AO has noted that assessee was asked to explain the source of cash deposits but no submissions were made by assessee. AO, thereafter, issued notice u/s 148 of the Act dated 31.03.2017. Subsequently, various notices u/s 143(2) and 142(1) of the Act were issued and in absence of any compliance by the assessee, AO in the aforesaid assessment order passed u/s 144 r.w.s 147 of the Act made addition of cash deposits aggregating to Rs.29,82,399/-. On such addition made, AO vide penalty order passed u/s 271(1)(c) read with Section 274 of the Act dated 25.05.2018 levied the penalty of Rs.8,99,682/-.
4. Aggrieved by the penalty order passed by AO, assessee carried the matter before CIT(A) who vide order dated 29.11.2019 in Appeal No.436493090190319 dismissed the appeal of the assessee. Aggrieved by the order of CIT(A), assessee is now in appeal and has raised the following grounds:
1. “That the Ld. Commissioner of Income (Appeals) was erred in passing Order u/s 250 without considering the reply of the assessee filed
2. That the Ld CIT(A) had not given proper opportunity of being heard.
3. That the Addition made by Ld. AO was u/s 68 of the IT Act which is not justify and penalty u/s 271(1)(c) of the IT. Act was levied on Assessment Order which was voidable in nature.
4. That the assessee craves liberty to add or alter or amend any of the Grounds of Appeal.
5. That the order of the Ld AO and Ld CIT(A) was against the Law and facts of the case and based on surmises and conjecture.”
5. Before us, at the outset, Learned AR submitted that though the assessee has raised various grounds but he submitted that CIT(A) has not passed a speaking order on merits and he has dismissed the appeal for the reason that there was delay of more than 8 months in filing the appeal before CIT(A). Before us, Learned AR submitted that the reason for delayed filing of the appeal was not on account of any malafide intention. Assessee has also filed its sworn affidavit of Shri Surendra Prakash Bansal, Authorized person, wherein it is stated that assessee did not receive the assessment order on time and he became aware about passing the assessment order only when the notice u/s 221(1) & 226(3) of the Income Tax Act was received by the assessee. Assessee thereafter, filed an application before the AO for getting certified copies of the assessment order, Demand Notice and the same were received only on 12.03.2019 and the appeal was thereafter filed on 19.03.2019. He, therefore, submitted that delay in filing the appeal was not due to any malafide intention and was on account of the reasons stated in the affidavit. He, therefore, submitted that in the interest of justice, one more opportunity be granted to assessee to appear before the CIT(A) to plead its case. He submitted that given a chance, assessee would appear before CIT(A) and furnish all the documents, information called for by the authorities.
6. Learned DR on the other hand strongly supported the order of lower authorities and objected to seeking second innings by the Assessee.
7. We have heard the rival submissions and perused the material available on record. The impugned order of CIT(A) reveals that he has not passed the order on merits and he has dismissed the appeal of the assessee for the reason that there was delay of more than 8 months in filing of appeal. Before us, assessee has placed affidavit of the authorized person wherein the reasons have been stated which had led to the delayed filing of appeal. Considering the averment made in the affidavit and in absence of any material to the contrary, we are of the view that the delay in filing the appeal was not due to any malafide intention and therefore the delay needs to be condoned. We accordingly condone the delay in filing the appeal by the assessee before CIT(A). In view of the aforesaid facts, and since we have condoned the delay, we set aside the impugned order of CIT(A) dated 29.11.2019 and restore the appeal back to the file of CIT(A) for re-adjudication of the issues. Needless to state that CIT(A) shall grant sufficient opportunity of hearing to both the parties. Assessee is also directed to promptly furnish the details called for by the authorities. In view of our decision to restore the appeal back to CIT(A), we are not adjudicating on merits the grounds raised by the assessee. Thus the ground of assessee is allowed for statistical purposes.
8. In the result, appeal of assessee is allowed for statistical purposes.
Order pronounced in the open court on 13.06.2023
