Facts of the Case

The assessee, Rakesh Kumar, engaged in real estate development activity through land development agreements, filed his return of income for Assessment Year 2015-16 declaring income of ₹3,06,294. The assessment was reopened under Sections 147 and 148 of the Income-tax Act. The assessee did not file a return in response to the notice under Section 148 and did not comply with subsequent notices. Consequently, the Assessing Officer completed the reassessment ex parte under Section 144 read with Section 147 on 26.11.2019, computing long-term capital gains of ₹20,24,862. The assessee filed an appeal before the CIT(A) with a delay of 438 days. The CIT(A) declined to condone the delay and dismissed the appeal without adjudicating the merits.


Issues Involved

Whether the CIT(A) was justified in rejecting the appeal solely on the ground of delay without examining the merits, whether the ex parte reassessment deserved reconsideration in the interest of justice, and whether the matter required remand for fresh adjudication after granting opportunity to the assessee.


Petitioner’s Arguments

The assessee submitted that the delay in filing the appeal was due to bona fide reasons, including non-receipt of notices and disruption caused by the Covid-19 pandemic. It was argued that there was no deliberate non-compliance and that the assessee should be granted an opportunity to present the case on merits. It was contended that dismissal of the appeal without adjudication on merits resulted in grave injustice.


Respondent’s Arguments

The Revenue relied on the orders of the Assessing Officer and the CIT(A) and supported the rejection of the appeal on account of non-compliance and delay.


Court Order / Findings

The ITAT Patna observed that the reassessment was completed ex parte due to non-cooperation and that the appeal before the CIT(A) was dismissed solely on the ground of delay without considering the merits of the case. Considering the submissions of the assessee and in the interest of justice, the Tribunal held that the matter required reconsideration. The Tribunal remitted the issue to the file of the Assessing Officer for de novo adjudication in accordance with law after granting reasonable opportunity of being heard to the assessee. The Tribunal also cautioned the assessee to substantiate the claim with cogent documentary evidence and not to seek unnecessary adjournments.


Important Clarification

The Tribunal clarified that while procedural lapses and delays cannot be encouraged, substantive justice should prevail and matters should ordinarily be decided on merits, especially where ex parte orders have been passed without effective opportunity to the assessee.


Final Outcome

The appeal filed by the assessee was allowed for statistical purposes, the orders of the lower authorities were set aside, and the matter was remanded to the Assessing Officer for de novo adjudication in accordance with law after providing due opportunity of hearing to the assessee.

 

Link to download order     https://www.mytaxexpert.co.in/uploads/1769072867_RAKESHKUMARPATNAVS.ITOWARD62PATNAPATNA.pdf 

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