TaxTMI 
TaxTMI 
2024 (10) TMI 582
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....issioner of Income Tax(Appeals)-1, Bangalore is opposed to law and facts of the case. 2. The learned Commissioner of Income Tax(Appeals) has erred in dismissing the appeal filed by the appellant on the only ground that no one appeared for the hearing on 30.01.2018, However, the hearing notice was sent by Commissioner of Income Tax(Appeals) to appellant's postal address at "No. 6 & 7, St. Patrix, 157, Brigade Road, Bengaluru-560038" though appellant had mentioned in form 35 its Authorised representative postal address for serving notice viz. " Digliya & Co., L Block Unity Buildings, JC Road, Bangalore" 3. The learned CIT(Appeals) has erred in not deciding the appeal on the merits and has dismissed the appeal without proper servicing of hearing notice. 4. The Learned CIT(Appeals) has erred in not considering the grounds raised on facts and law with regard to disallowance of Rs. 4,27,076/- u/s 40(a)(ia) of the Income Tax Act, 1961 and disallowance of Rs. 5,50,820/- u/s 37 of the Income Tax Act, 1961. 5. The appellant prays before this court to direct the CIT(Appeals) to hear the appellant as per grounds of appeal submitted in the Form 35 dated 15.02....
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.... to plead the appeal. The appellant apart from not showing up, it has neither replied to the hearing notice, nor furnished any written submissions. Further, it is seen that the notice issued to the address mentioned on the appeal document by the appellant returned back by the postal authorities with the remark that "addressee left and returned to the sender", The appellant has not updated the address on the appeal record. In the circumstances it won't serve any purpose by issuing any further notice in this matter. 3. In view of the same I am of the opinion that the appellant is not interested in pursuing its appeal. The law aids those who are vigilant and those who sleep upon/over their rights. This principle is embodied n well known dictum vigilantibus non Dormantibus Jura Subveniunt which has been followed in the case of CIT Vs. Multiplan India Ltd. reported in 38 ITD 320 by the Hon'ble ITAT. Therefore, the appeal is dismissed for want of prosecution." 5. The assessee has now filed an appeal belatedly with ITAT on 24.07.2024, aggrieved with the appellate order passed by ld. CIT(A) dated 30.01.2018. 6.1 When this appeal came for the hearing before the Divisi....
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.... CIT(A) is reproduced, as hereunder:- "Office of the Commissioner of Income Tax (Appeals)-1, Bengaluru Room No.751 7th Floor BMTC Bldg. 80 Ft. Road Telephone:25625023 Fax:2562503 6th Block, Koramangala Bangalore-560095 F. No. ITA 94/CIT(A)-1/BR/18-19 Dated:18th June, 2018 To M/s Dagliya & Co., Chartered Accountants "1" Block, Unity Buildings J.C. Road, Bengaluru-560002 Sirs, Sub: Income tax appeal-M/s. Manohar Catering, Bengaluru-(PAN:AALFM1212B) - Asst. Year 2008-09-reg Ref: Your letter dated 15.06.2018. --------------- It is seen from the record that the Form No. 35 filed by the appellant has not been signed in the form of verification by the Authorised Signatory. Hence, the appeal in Form No. 35 filed in the above case is invalid and the same is not maintainable. Even otherwise, the name of the Authorised Signatory has not been mentioned anywhere in the appeal documents in Form 35. Further, you are informed that as per the new procedure for online appeal proceedings initiated, the notice would only be sent to the address of the appellant....
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....me Tax Appellate Tribunal against the appellate order dated 12.02.2024 passed by ld. CIT(A), and the ITAT dismissed the appeal of the assessee vide appellate order dated 04.06.2024 in ITA No. 663/Bang/2024, by holding as under:- "6. Admittedly, the first appellate order dated 30/01/2018 was not challenged by the assessee under the bona-fide belief that the assessee has filed another appeal. If assessee wishes to challenge such order dated 30/01/2018, he can do so, as per the provisions of law. The Id. DR also submitted that the appeal filed by the assessee against the second appellate order is not maintainable. In view of the above and after considering the facts in totality, we hold that the appeal filed by the assessee before us against the order of Id. CIT(A) dated 12/02/2024 is non-est and not maintainable. Accordingly, we dismiss the same as infructuous. 7. In the result, the appeal filed by the assessee is dismissed." 6.4. The Tribunal dismissed the appeal of the assessee vide appellate order dated 04.06.2024 as the assessee did not challenged the first appellate order dated 30.01.2018 passed by ld CIT(A) before the ITAT, and instead again filed fresh app....
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....e enclosed by the assessee with the aforestated affidavit, which are placed on record in file. 6.5. The ld. JCIT DR, on the other hand, submitted that there is a delay in filing this appeal with the Tribunal and the assessee ought to have been more careful in choosing the correct and appropriate legal forum, and the ld. JCIT DR fairly left the matter to be decided by the Tribunal. 7. We have considered the rival contention and perused the material on record. We have observed that the assessee has filed this appeal with Tribunal belatedly beyond the time stipulated u/s 253(3). We have also observed that the assessee's first appeal filed with Ld. CIT(A) was dismissed by ld. CIT(A) ex-parte in limine vide appellate order dated 30.01.2018, for non prosecution of its appeal. The assessee has claimed that no notice of hearing was received from ld. CIT(A) fixing appeal for hearing on 30.01.2018, as the notice was not sent to the wrong address and was not sent to the address stated in Form No. 35 for service of notice of hearing. The assessee, admittedly received the appellate order passed by Ld. CIT(A) dated 30.01.2018. The assessee did not filed appeal with ITAT, rather filed two r....
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....to date. In view of the above, you may take appropriate action to file a fresh appeal with a request for condonation of the delay. Yours faithfully, Sd/- (L. Raja Sekhar Reddy) Commissioner of Income-tax (Appeals)-1, Bengaluru 7.2 In the aforesaid letter dated 18.06.2018, the ld. CIT(A) has stated that the notices of hearing shall be issued only to the address mentioned in the PAN and not to the address mentioned in Form No. 35 for service of notice, which observation of the ld. CIT(A) is contrary to provisions of Section 282 of the 1961 Act read with first proviso to Sub-rule (2) to Rule 127 of the Income-tax Rules, 1962. The ld. CIT(A) has stated in its appellate order dated 30.01.2018 that notice of hearing was received back unserved, then in that situation the ld. CIT(A) had to follow the procedure for serving of notice of hearing as is contemplated u/s 282 read with Rule 127, but instead ld. CIT(A) dismissed the appeal of the assessee ex-parte in limine, without complying with principles of natural justice. There is clearly a breach of principle of natural justice by ld. CIT(A), and prejudice has been caused to the assessee. The ....
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....h appeal is listed by ITAT as ITA no. 1393/Bang/2024, of which presently we are seized off. We have observed that the delay which occurred in filing this appeal with ITAT is both on account of wrong observations and directions given by ld. CIT(A) vide letter dated 18.06.2018 as well there are certainly delays and latches on the part of the assessee also as its conduct was of carelessness, for which we admonish and reprimand assessee. But, it could not be said that there was a malice in the conduct of the assessee, and the assessee has been through persuing legal remedy albeit at wrong forum. The assessee has filed affidavit dated 23.07.2024 praying for condonation of delay in filing this appeal, which is placed on record. Under these facts and circumstances and in the interest of justice, we are of the considered view that the delay in filing of this appeal with ITAT in the instant case needs to be condoned, but at the same time we admonish and reprimand the assessee for its carelessness. When technicalities are pitted against the substantial justice, the Courts will lean towards advancement of substantial justice rather than technicalities, unless the malafide on the part of the a....
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....AT. Therefore, the appeal is dismissed for want of prosecution." 7.4 It is observed that the ld. CIT(A) dismissed the appeal of the assessee vide appellate orders dated 30.01.2018 ex-parte in limine without deciding the issues on merits, which is not in consonance with mandate of Section 250(6). The ld. CIT(A) is required to adjudicate the issues on merit in accordance with law, as is provided u/s. 250(6), by stating point for determination, his decision thereon and reason for the decision. The ld. CIT(A) has power to make such inquiries as he thinks fit and may also direct AO to make such enquiries and report the result of the same to ld. CIT(A), as is provided u/s 250(4). Thus, ld. CIT(A) has to adjudicate issues arising in the appeal on merits in accordance with law. There are other powers vested with ld. CIT(A) as is provided under the 1961 Act, including power of enhancement. Thus, the appellate order dated 30.01.2018 passed by ld. CIT(A) ex-parte in limine without deciding the issues arising in appeal on merits, is not in consonance with the scheme of the Act particularly Section 250(6), and hence not sustainable in the eyes of law and is liable to be set aside. Further, t....
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.... 176(3), 189(1) 189(3) and 189(4) of the 1961 Act. Section 176(3) of the 1961 Act, which clearly stipulates that in case of discontinuance of business, it is obligatory on the part of the assessee to give notice to the AO of such discontinuance of business within fifteen days thereof. There is no evidence brought on record by the assessee that the assessee did inform the AO about such discontinuance of its business. An evidence which could be produced but is not, shall be deemed to be against the person who withheld the same. Thus, there is a failure on the part of the assessee in making compliance of Section 176(3). The assessee is a partnership firm, and Reference is drawn to Section 189(1), which is relevant. Similarly Section 189(3) provides that in case the firm is dissolved or business discontinued, every person who has at the time of such discontinuance or dissolution a partner of the firm, and the legal representative of any such person who is deceased, shall be jointly and severally liable for the amount of tax, penalty or other sum payable, and all the provisions of this Act, so far as may be, shall apply to any such assessment or imposition of penalty or other sum. Furth....
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....an assessment year have commenced, the proceedings may be continued against the person referred to in sub-section (3) from the stage at which the proceedings stood at the time of such discontinuance or dissolution, and all the provisions of this Act shall, so far as may be, apply accordingly. (5) Nothing in this section shall affect the provisions of sub-section (6) of section 159" 7.5.1 These are especial facts which are within the knowledge of the assessee and the same were to be brought on record by the assessee whether the business stood discontinued or there was dissolution of the firm. It was the duty of the assessee to have brought complete, true and correct facts on record before the authorities, as to whether the assessee firm stood dissolved or the business stood discontinued. The assessee has filed appeal in its own name as well ITR's are filed in its own name, which indicate that the assessee firm did not stood dissolved although business might have been discontinued, but it required inquiry so that true, correct and complete facts are brought on record. Under these facts and circumstances, we are of the considered view, that complete inquiry is required in ....