Income Tax Appellate Tribunal - Amritsar
Shaheen Service ... vs Ito Ward 1 Srinagar, Srinagar on 18 September, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH, AMRITSAR
(HYBRID COURT)
BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER
AND SH. UDAYAN DASGUPTA, JUDICIAL MEMBER
I.T.A. No. 285/Asr/2024
Assessment Year: 2017-18
Shaheen Service Station Vs. Income Tax Officer,
Nadihal, Bandipora 193502 Ward 1, Srinagar
Jammu & Kashmir
[PAN: AAAJS1805P]
(Appellant)
(Respondent)
Appellant by : Sh. Sudhir Sehgal, AR
Respondent by : Sh. Rishi Kumar, Sr. D.R.
Date of Hearing : 09.09.2024
Date of Pronouncement : 18.09.2024
ORDER
Per Dr. M. L. Meena, AM:
The captioned appeal has been filed by the assessee against the order of the ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 15.03.2024 which is arising out of the Assessment Order dated 27.12.2019 u/s 144 of the I.T. Act, 1961 passed by the Income Tax Officer, Ward, 2 ITA No. 285/Asr/2024 Shaheen Service Station v. ITO Baramulla (hereinafter referred to as the "AO")in respect of Assessment Year: 2017-18.
2. At the outset, the ld. counsel for the assessee has submitted that the ld. CIT(A) has rejected the grounds of appeal ex-parte qua the assessee by applying Multiplan by observing that since the assessee has not filed any documentary evidences, in support of its claim in statements of facts and grounds of appeal, therefore, the claim of the assessee cannot be considered in absence of any supporting documents. The ld. AR further submitted that the appellant assessee is running a Petrol pump where he has made cash deposit during the demonetization period. The ld. AR filed an affidavit duly notarized by the Notary Public; J&K High Court dated 10.07.2024 of one of the partner in partnership firm stating therein that the notices were sent on the e-mail id. i.e. [email protected] appearing in Form No. 35 of the previous counsel who did not inform about the hearing, to the appellant assessee. The counsel of the appellant firm did not inform the partners of the appellant. No notice was sent by physical mode to the assessee. In the last date of hearing the counsel of the assessee was out of station, so failed to comply. The relevant part of notarized affidavit reads as under: 3 ITA No. 285/Asr/2024
Shaheen Service Station v. ITO 4 ITA No. 285/Asr/2024 Shaheen Service Station v. ITO The Ld. counsel humbly requested before us that the said case may, be set-aside either to the file of worthy CIT(A)-NFAC Delhi or Assessing Officer on account of natural justice.
3. Per contra, the Ld. DR stands by the impugned order.
4. Heard rival contentions, perused the material on record, impugned order, written submission and case law cited before us. Admittedly, the revenue authorities have passed orders ex parte qua the assessee. The Ld. AR argued that the worthy CIT(A) decided the case ex-parte without granting opportunity of the hearing against the ex parte assessment order passed under section 144 of the act and that while deciding the case ex-parte, the Ld. CIT(A) has not appreciated the facts of the case and arbitrary confirmed the assessment order passed u/s 144 of the I.T. Act. It is seen that neither the AO nor the Ld. CIT(A) has addressed the relevant issue on merits of the case that the appellant has been running a petrol pump and the disputed cash deposit in the bank account was made out of business receipt of sales as per norms prescribed under the demonetization scheme of the Govt.
5. From the record, it is seen that the business of the assessee is the purchase and sale of petrol and diesel items on a retail basis. The Ld. 5 ITA No. 285/Asr/2024 Shaheen Service Station v. ITO Assessing Officer has made an addition of Rs. 1,37,95,943/- on account of cash deposited during the demonetization period as deemed income under section 69A of the Income tax Act, 1961 in the order passed under section 144 of Income Tax Act, 1961.
6. The counsel argued that the appellant had filed two requests for adjournment of different dates as all the notices were sent on the email of the counsel only as the Counsel did not intimate to the appellant about the fixation of hearing. In the last date of hearing when the notice has been issued by the CIT(A) for 04.03.2024, could not be complied by the counsel of the appellant. As a result, the assessee was not able to file his detailed submissions during appellate proceedings, therefore, the Worthy CIT(A) has passed the ex-parte order dated 15.03.2024. The details of appeal fixed and various notices for hearing have been sent by the Worthy CIT(A)-NFAC Delhi on the email of the counsel i.e. [email protected] reads as under:-
SR. NO. DATE OF DATE OF STATUS OF RESPONSE
NOTICE COMPLIANCE
1. 08.08.2023 16.08.2023 No compliance
2. 26.10.2023 31.10.2023 No Compliance
6
ITA No. 285/Asr/2024
Shaheen Service Station v. ITO
3. 03.11.2023 10.11.2023 No Compliance
4. 13.11.2023 21.11.2013 Response filed seeking
adjournment.
5. 05.01.2024 12.01.2024 No Compliance
6. 15.01.2024 22.01.2024 Response filed seeking
adjournment.
7. 26.02.2024 04.03.2024 No Compliance
7. It is observed from the notarized affidavit as above, that the partners of the appellant Firm were dependent upon the counsel who has filed the appeal against the assessment order and who did not inform the partners of the appellant. Consequently, they were not aware of the notices sent by the department on their email and further none of notice was sent by physical mode to the assessee. Lastly, in the last date of hearing the counsel of the assessee was out of station and as such he could not file the response to the notice as sent by the Worthy CIT(A) NFAC Delhi. In our view, the lack of knowledge of electronic services of notice may constitute a sufficient cause for non-compliance of notice u/s 250 of the Act.
8. The Delhi Bench of the Hon'ble ITAT in the case of Egis international S.A. vs. ACIT (ITA No. 1663/Del/2021) A.Y. 2016-17, vide order Dt. 03.08.2023, while dealing with the identical facts has restored the matter 7 ITA No. 285/Asr/2024 Shaheen Service Station v. ITO back to the file of the CIT(A) NFAC for de novo adjudication on merits after allowing reasonable opportunity of hearing to the assessee because it was brought on record before the Bench that the notices sent to the e- mail of the employee did not reach the assessee and the non-compliance was not deliberate.
9. In another case of Mohammad Saleem vs. ITO in ITA NO. 28/Del/2023 Dt. 07.06.2023 the delay in filing the appeal against the order of the CIT(A) NFAC has been condoned by the Hon'ble Bench on the ground that the orders of the NFAC were sent through e-mail and assessee due to lack of means and knowledge, the assessee had no access to the electronic communication mode.
10. The Mumbai Bench of the ITAT has recently accepted the contentions of the employees company in the case of Triumph International Finance India Limited Vs. DCIT ITA N0.1870/MUM/2020(A.Y.2017-18), that they were not aware of the fact that the notices were being issued electronically and deleted the penalty imposed u/s 272A(1)(d) of the Act as according to the Bench the assessee was prevented by sufficient cause for non- compliance of the notices u/s 142(1) of the Act.
8ITA No. 285/Asr/2024
Shaheen Service Station v. ITO
11. In the present case, the CIT(A) has dismissed the appeal without deciding the matter on merits and considering the submissions, and documents filed before the AO as Ld. AR referred to the paper book. Thus, the order passed by the CIT(A) NFAC is held to be a non-speaking order passed in arbitrary manner. On similar facts, Delhi Bench of the ITAT in the case of Fujitsu Consulting India (P) Ltd. vs. ACIT [2019] 110 taxmann.com 177 while relying on the judgment of Hon'ble Apex Court in the case of Kapurch and Shrimal vs. CIT [1981] 7 Taxman 6 (SC) held that the CIT(A) NFAC has to pass a speaking order after duly examining and considering the contentions raised by the assessee. The relevant part reads as under:
"While dismissing the grounds raised by the assessee, the impugned order is woefully silent on the reasons as to why the Ld. CIT (A) agrees to the observations of the assessing officer. Thus, it is very much evident that there has been a failure on the part of the Ld. first appellate authority to properly adjudicate the grounds before her. There is no independent application of mind by the Ld. first appellate authority and she has failed to consider all of the contentions raised by the assessee in the appeal before her. The Ld. first appellate authority has simply dittoed the observations of the assessing officer and has upheld the findings of the assessing officer without even examining the observations of the AO vis-a-vis the objections/contentions of the assessee. It is our considered opinion that it was incumbent upon Ld. first appellate authority to pass a speaking order after proper appreciation of the facts before her. It may not be out of place here to note that as held by the Hon'ble Apex Court in the case of KapurchandShrimal v. CIT [1981] 7 taxmann 6/131 ITR 451 (SC) in connection with the appeal before the Ld. CIT (A) that it is the duty of appellate authority to remove the errors in the order of authorities below and remit the issue with or without direction for reconsideration unless prohibited by law. Accordingly, since the Ld. CIT (A) has not passed a speaking order on this issue, we are of the considered opinion that the interest of justice will be served 9 ITA No. 285/Asr/2024 Shaheen Service Station v. ITO if this issue is remitted to the file of the Ld. CIT (A) with a direction to pass a speaking order after duly examining and considering all the contentions raised by the assessee. Accordingly, the appeal is restored to the file of the Ld. First Appellate Authority with a direction to re-adjudicate the issue after duly considering all the contentions of the assessee which it may raise in this regard and after giving proper opportunity to the assessee. Needless to say, passing of a speaking order is mandatory."
12. Considering the facts and judicial precedent, we hold that the Ld. CIT (A) has not passed a speaking order on this issue. We are therefore of the considered opinion that the interest of justice will be served if this issue is remitted to the file of the Ld. CIT (A) with a direction to pass a speaking order after duly examining and considering all the contentions raised by the assessee. Accordingly, we restore the appeal to the file of the Ld. CIT(A) with a direction to re-adjudicate the issue after duly considering all the contentions of the assessee which it may raise in this regard and after giving proper and sufficient opportunity to the assessee. That the assessee shall cooperate in fresh proceeding before the CIT(A).
13. In the above view, we accept the grievance of the appellant as genuine. Accordingly, the impugned order is set-aside, and the matter is restored to the file of the Ld. CIT(A)-NFAC Delhi.
10ITA No. 285/Asr/2024
Shaheen Service Station v. ITO
14. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 18.09.2024
Sd/- Sd/-
(Udayan Dasgupta) (Dr. Mitha Lal Meena)
Judicial Member Accountant Member
*GP/Sr.PS*
Copy of the order forwarded to:
(1)The Appellant:
(2) The Respondent:
(3) The CIT concerned
(4) The Sr. DR, I.T.A.T.
True Copy
By Order