The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the failure to disclose closure of business to income tax department amounts to deliberate malicious act of concealment.
The bench of T.R.Senthil Kumar (Judicial Member) and Ramit Kochar (Accountant Member) has observed that the true, complete and correct facts are to be brought on record and the onus is on the assessee to bring the facts on record. It is second round of litigation , and still the assessee acted negligently by not complying with the notices issued by ld CIT(A).It could not be accepted that the assessee and/or its partners (or legal representatives) were not aware of the proceedings conducted by CIT(A). Moreover, the assessee did not intimate the department about the discontinuance of its business.
It is the second round of litigation before the Income-tax Appellate Tribunal. The appeal for assessment year 2010-11, was filed by the appellant/assessee before Income Tax Appellate Tribunal, Ahmedabad Division Bench, Ahmedabad has arisen from the appellate order passed by Commissioner of Income-Tax (Appeals), NFAC, Delhi.
The appeal was belatedly filed by the assessee with ITAT by 83 days beyond the time prescribed under section 253(3) of the Income Tax Act, 1961. The application for condonation was filed by the assessee, praying for condonation of delay in filing this appeal belatedly with ITAT by the assessee beyond the time prescribed under section 253(3) of the Income Tax Act, 1961 by 83 days. In the application filed by the assessee for condoning the delay, it is averred that the appellate order dated 25.09.2023 passed by CIT(A) was e-communicated to the assessee on 25.09.2023, but it was downloaded by the assessee from the IT Portal only on 04.01.2024. It is averred that there was SMS message received from the department by former accountant on 04.01.2024 to submit online response in response to notice issued by Department which was notice for recovery of tax- demand, and at this stage on making further enquiry, the assessee became aware that the CIT(A) has passed an ex- parte appellate order.
The appeal was filed with ITAT with a delay of 83 days. The tax-consultants of the assessee who was looking after the tax-matter of the assessee expired, which is also the reasons for delay in filing this appeal belatedly with ITAT, as the firm of the tax-consultant closed down due to the aforesaid death and only one old peon used to come to office premises occasionally to hand over the documents to the clients. The assessee has also closed down its business, and partners have shifted after closing of the business, and hence they were not aware of the status of the pending matters.Â
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It is only after an alert message received from Income Tax Department on 04.01.2024 by the previous accountant who is of age of 70 years, about filing on-line response to notice issued by department which was in context of outstanding demand against the assessee firm, that it came to notice of the assessee after making enquiry that an ex-parte appellate order has been passed by CIT(A), and then steps were taken to file appeal with ITAT.
In nut-shell, prayers are made to condone the delay in filing this appeal belatedly by the assessee with ITAT by 83 days beyond the time prescribed u/s 253(3) of the 1961 Act.
The CIT submitted that the matter is left to the discretion of the Bench, although the department has objection to the aforesaid delay. One of the reasons for the delay as averred by the assessee in its application for delay in filing this appeal was that the appellate order was posted on ITBA on 25.09.2023 but it was downloaded by the assessee when the SMS alert was received on the mobile of former accountant on 04.01.2024 asking assessee to submit online response to notice issued by the department which notice was in context of recovery of tax demand outstanding against the assessee.
In the second round, the AO framed the denovo assessment reiterating the additions made in the first round of litigation. The assessment order was challenged by the assessee before CIT(A). In the second round of litigation, the CIT(A) dismissed the appeal of the assessee. The assessee is now on appeal before ITAT in this second round of litigation.
The tribunal noted that the assessee did not participate at all in the appellate proceedings conducted before CIT(A), for the reasons cited in SOF. This is the second round of litigation. Huge additions were made by the AO even in the second round of litigation and huge demand of tax and interest was raised by Revenue against the assessee.
The ITAT held that a complete inquiry is warranted keeping regard to provisions of Section 176(3), 189(3) and 189(4) and Assessee is required to furnish complete, true and correct facts before CIT(A) as its powers are co-terminus with the powers of AO. Thus, remands the matter back to CIT(A) for fresh adjudication of the appeal of the Assessee on merits.
Case Details
Case Title: Real Cargo Mumbai Versus ITO
Citation: ITA No. 268/Ahd/2024
Decision date: 30/08/2024
