2024 (10) TMI 1196 - AT - Income Tax

Tax Tribunal Overturns Assessment Due to Procedural Errors; Orders Fresh Hearing with Fair Opportunities for Appellant.

Rajendra Vishwambhar Shete Versus Asstt. Commissioner of Income Tax Circle-2, Kolhapur.

The ITAT set aside the impugned assessment order by the Asstt. Commissioner of Income Tax, which was upheld by the NFAC, due to procedural irregularities ... Condonation of delay in filing appeal - Ex-parte dismissal of appeal by the first appellate authority - HELD THAT:- Assessee explaining the reasons of delay occurred in instituting the present appeal and reasons behind his non-compliance before first appellate authority capable of suggesting that such non-compliance was accidental & undeliberate. After vouching the reasons behind such accidental & undeliberate non-compliance, in the larger interest of justice we are of the view that the assessee for sufficient reasons prevented from representing himself before Ld. NFAC. Relying on judgement in ‘St. Paul’s Anglo Indian Education Society’ [2003 (2) TMI 41 - PATNA HIGH COURT] we are mindful to hold that the appellant assessee was deprived of reasonable opportunity and time to produce all relevant documents to substantiate his claims therefore any adjudication without such evidential documents would be violative of principle of natural justice and rendered itself irregular, thus deserving to be set-aside. In the event and in view of the aforestated discussion we deem it proper to accord one more opportunity to the assessee to place evidential material before the Ld. NFAC. Appeal allowed for statistical purposes. Issues:Challenge to order of assessment passed by Asstt. Commissioner of Income Tax, Ex-parte dismissal of appeal by first appellate authority, Condonation of delay in filing appeal, Violation of principles of natural justice, Setting aside of impugned order, Remitting the matter back to the first appellate authority.Analysis:1. The appellant challenged the order of assessment passed by the Asstt. Commissioner of Income Tax, which was confirmed by the National Faceless Appeal Centre (NFAC). The appellant failed to appear for the case, leading to an ex-parte hearing as per rule 24 of ITAT Rules, 1963. The Tribunal decided to adjudicate on the limited issue based on the order-sheet entries.2. After verifying the reasons for the delay in filing the appeal, the Tribunal decided to condone the delay. Citing relevant case laws, the Tribunal deemed it necessary to advance in the interest of justice.3. The Tribunal noted that the appellant, an individual, had filed the return of income declaring total income and agricultural income. The issue under scrutiny was the increase in the capital account, specifically regarding agricultural income and a gift received. The assessment order had disallowed a portion of the agricultural income and added the entire gift amount to the income.4. The appellant's appeal against the assessment was dismissed by the NFAC due to non-compliance during the COVID-19 pandemic. The appellant later provided reasons for the delay and non-compliance, which the Tribunal found accidental and undeliberate. Considering the principles of natural justice, the Tribunal decided to set aside the order and remit the matter back to the NFAC for fresh adjudication.5. Relying on a judgment from the High Court of Patna, the Tribunal held that the appellant was deprived of a reasonable opportunity to present relevant documents, rendering the previous adjudication irregular. Consequently, the Tribunal directed the NFAC to provide three effective opportunities to the appellant for presenting evidential material.6. The Tribunal allowed the appeal for statistical purposes and pronounced the order in open court on a specified date. The decision aimed to uphold the principles of natural justice and provide the appellant with a fair opportunity to present their case before the NFAC.