ITAT Condonation of Delay & Remand due to Consultant’s Negligence (Appeal Allowed for Statistical Purposes)
Issue
Whether an ex-parte dismissal by the CIT(A) for non-prosecution can be set aside and the delay of 198 days in filing the ITAT appeal condoned, given that the assessee was not informed by their tax consultant about the proceedings or the final order.
Facts
Parties: Assessee vs. Commissioner of Income Tax (Appeals), Ludhiana.
Assessment Year: 2019-20.
Background: The CIT(A) dismissed the assessee’s appeal ex-parte without deciding on the merits, citing want of prosecution.
The Delay: The assessee filed the appeal before the ITAT with a delay of 198 days.
Reason for Delay: The assessee claimed they were unaware of the hearing dates and the final order because:
The tax consultant received the order via email but did not forward it.
No physical copy of the order was received by the assessee.
Merits of the Case: The assessee contested an addition of Rs. 1,20,000/- and argued that the Assessing Officer wrongly applied the higher tax rate under Section 115BBE on an income of Rs. 9,70,000/-, which should have been taxed at normal rates.
Decision
Delay Condoned: The Tribunal accepted the assessee’s explanation regarding the communication gap with the consultant and condoned the 198-day delay.
Principle Applied: The Tribunal noted that under the Income Tax Act and Rules, the CIT(A) is obligated to pass an order on merits even if the assessee does not participate, rather than dismissing it summarily for non-prosecution.
Ruling: The ITAT set aside the impugned order of the CIT(A).
Direction: The matter is restored to the file of the CIT(A) for a fresh decision on merits.
Condition: The restoration is subject to the assessee depositing a cost of Rs. 5,000/- in the Prime Minister’s Relief Fund and furnishing proof of this deposit to the CIT(A).
Key Takeaways
CIT(A)’s Duty: Appellate authorities cannot dismiss appeals solely for non-prosecution; they must apply their mind and decide the case on merits based on available records.
Consultant’s Negligence: A taxpayer is often granted relief if they can prove that procedural defaults (like delay or non-appearance) were due to their consultant’s failure to communicate.
Conditional Relief: Tribunals often impose a monetary cost (to charity) as a deterrent against negligence while ensuring that the substantive right to appeal is preserved.
Section 115BBE: The dispute highlights that the applicability of the steep tax rate under Section 115BBE (for unexplained credits) vs. normal slab rates remains a litigative issue requiring proper adjudication.
THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH
BENCH “SMC” CHANDIGARH
Shri Ravinder Singh,
M/s Khullar Auto Parts,
G.T. Road, Ferozepur Cantt.
Vs
The DCIT,
Central Circle-2,
Ludhiana.
Source :- 1762508513-uxWtam-1-TO