Vidya Shankar Jaiswal Bhagat Singh, Ward v. The Income Tax Officer, Ward-2, Ambikapur, C.g

NAFR HIGH COURT OF CHHATTISGARH, BILASPUR TAXC No. 86 of 2024 Vidya Shankar Jaiswal Bhagat Singh, Ward No. 09, Pratappur,Sarguja District- Sarguja, C.G.- 497223 Pan- Algpj6801p ---- Appellant Versus The Income Tax Officer, Ward-2, Ambikapur, C.G. ---- Respondent (Cause-title taken from Case Information System) For AppellantFor Respondent : Mr. Manoj Kumar Sinha, holding the brief of Mr. S. Rajeshwar Rao, Advocate. :Ms. Naushina Afrin Ali, Advocate Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Smt. Rajani Dubey, Judge Order on BoardPer Ramesh Sinha, Chief Justice12/04/2024 1.Heard Mr. Manoj Kumar Sinha, learned counsel for the appellant aswell as Ms. Naushina Afrin Ali, learned counsel for the respondent.well as Ms. Naushina Afrin Ali, learned counsel for the respondent. 2.By the present appeal under Section 260A of the Income Tax Act,1961 (for short, the Act), the appellant/assessee seeks to challengethe order passed by the Income Tax Appellate Tribunal, RaipurBench (for short, the ITAT) dated 13.02.2024 passed in ITA No.351/RPR/2023 arising out of order passed by the Commissioner ofIncome-Tax (Appeals) {for short, the CIT(A)}, National FacelessAppeal Center (NFAC), Delhi, dated 29.03.2023, which in turn arisesfrom the order passed by the Assessing Officer (for short, the AO)1961 (for short, the Act), the appellant/assessee seeks to challengethe order passed by the Income Tax Appellate Tribunal, RaipurBench (for short, the ITAT) dated 13.02.2024 passed in ITA No.351/RPR/2023 arising out of order passed by the Commissioner ofIncome-Tax (Appeals) {for short, the CIT(A)}, National FacelessAppeal Center (NFAC), Delhi, dated 29.03.2023, which in turn arisesfrom the order passed by the Assessing Officer (for short, the AO) under Section 144/147 of the Act dated 16.12.2018 for theAssessment Year (for short, the AY) 2014-15. under Section 144/147 of the Act dated 16.12.2018 for theAssessment Year (for short, the AY) 2014-15. 3.The facts, in brief, are that the appellant, on account of his illness,could not file his income tax return for the AY 2014-2015, theAssessing Officer i.e. the Income Tax Officer, Ward 2, Ambikapur,(for short, the AO) assessed the income of the appellant to be Rs.34,67,700/- on the basis of information available in the ActionableInformation Monitoring System of the Income Tax BusinessApplication and was also imposed with penalty and interest for notsubmitting the return within time, vide its order dated 16.12.2018. Theappellant submitted its return for the AY 2014-2015 declaring his totalincome to be Rs. 9,99,250/- on 27.12.2018. Thereafter, the order ofthe AO dated 16.12.2018 was was challenged before theCommissioner of Income Tax (Appeals) {for short, the CIT(A)} whichwas also dismissed vide order dated 29.03.2023 on the ground thatdespite giving several opportunities during the appellate proceedings,the appellant failed to explain the nature and source of cashdeposited to the tune of Rs. 34,67,700/- in the Savings BankAccount. The order of the CIT(A) was further challenged before thelearned ITAT which also stood dismissed on 13.02.2024 on theground that the said appeal was barred by 166 days.could not file his income tax return for the AY 2014-2015, theAssessing Officer i.e. the Income Tax Officer, Ward 2, Ambikapur,(for short, the AO) assessed the income of the appellant to be Rs.34,67,700/- on the basis of information available in the ActionableInformation Monitoring System of the Income Tax BusinessApplication and was also imposed with penalty and interest for notsubmitting the return within time, vide its order dated 16.12.2018. Theappellant submitted its return for the AY 2014-2015 declaring his totalincome to be Rs. 9,99,250/- on 27.12.2018. Thereafter, the order ofthe AO dated 16.12.2018 was was challenged before theCommissioner of Income Tax (Appeals) {for short, the CIT(A)} whichwas also dismissed vide order dated 29.03.2023 on the ground thatdespite giving several opportunities during the appellate proceedings,the appellant failed to explain the nature and source of cashdeposited to the tune of Rs. 34,67,700/- in the Savings BankAccount. The order of the CIT(A) was further challenged before thelearned ITAT which also stood dismissed on 13.02.2024 on theground that the said appeal was barred by 166 days. 4.Mr. Manoj Kumar Sinha, learned counsel for the appellant submitsthat the case was re-opened and in assessment made on 16.12.2018under Section 147 read with Section 144 of the Act, total income wasdetermined at Rs. 34,67,700/- treating amount of cash deposit of inbank account as deemed income under section 69A of the Act. Thefirst appeal filed under Section 246A was dismissed on the groundsthat the case was re-opened and in assessment made on 16.12.2018under Section 147 read with Section 144 of the Act, total income wasdetermined at Rs. 34,67,700/- treating amount of cash deposit of inbank account as deemed income under section 69A of the Act. Thefirst appeal filed under Section 246A was dismissed on the grounds 4.Mr. Manoj Kumar Sinha, learned counsel for the appellant submitsthat the case was re-opened and in assessment made on 16.12.2018under Section 147 read with Section 144 of the Act, total income wasdetermined at Rs. 34,67,700/- treating amount of cash deposit of inbank account as deemed income under section 69A of the Act. Thefirst appeal filed under Section 246A was dismissed on the groundsthat the case was re-opened and in assessment made on 16.12.2018under Section 147 read with Section 144 of the Act, total income wasdetermined at Rs. 34,67,700/- treating amount of cash deposit of inbank account as deemed income under section 69A of the Act. Thefirst appeal filed under Section 246A was dismissed on the grounds of non-compliance and it appears that the notices under Section 250and order of learned CIT(A) were uploaded on appellant's ITBA e-filing portal and he came to know about this only on 02.11.2023 whilerandomly checking the portal. The second appeal before learnedITAT was filed on 10.11.2023 along with application for condonationof delay of 166 days along with affidavit. The learned ITAT hasdismissed the appeal on grounds of delay without considering thefact that the notices and order under Section 250 of the Act were notserved upon the appellant as required under Rule 46 of Income TaxRules, 1962 but were merely uploaded on his e-filing portal withoutany real time alert. The scheme of filing and disposal of appealsunder Income-tax Act has been converted from physical mode tofaceless mode and various notifications were issued by CBDT in thisregard. 5.As per Mr. Sinha, the faceless appeal scheme was initially launchedw.e.f. 01.04.2020 and most of the period was covered under Covid-19 period and several notifications were issued subsequently statingthe procedure. As per faceless mechanism, all communications needto be sent electronically with real time alert and it appears that orderof learned CIT(A) was dropped on the e-filing portal of the appellantwithout any further real time alert which is contrary to legal provisions.Such delays have also occurred in several cases and appellant couldget list of 26 cases mentioned at paragraph Nos. 21 and 22 of appealmemorandum. This substantiates genuineness of ill-effects ofmigration from physical mode to faceless mode, which is faced byincome-tax assessees at large. Out of 26 appeals, 17 appeals weredismissed mainly on the grounds of delay on the presumption that appellants were not alert and delay is attributable to the lackadaisicalconduct; while they were allowed in 9 cases. In all these casesmandate of Rule 46 of Income Tax Rules, 1962 was overlooked. 6.It is further submitted that as per Rule 46 of IT Rules and provisionsof Section 282 of the Act read with Rule 127 of IT Rules and Section13 of the Information Technology Act, 2000, in case of dropping thenotices and order on e-filing portal, the date of receipt is deemed tobe the date when the addressee has downloaded the communication.Accordingly, the delay in this case is neither deliberate norattributable to lackadaisical attitude of the appellant as presumed bylearned ITAT.of Section 282 of the Act read with Rule 127 of IT Rules and Section13 of the Information Technology Act, 2000, in case of dropping thenotices and order on e-filing portal, the date of receipt is deemed tobe the date when the addressee has downloaded the communication.Accordingly, the delay in this case is neither deliberate norattributable to lackadaisical attitude of the appellant as presumed bylearned ITAT. 7.In support of his contentions, Mr. Sinha relies on a decision of thePunjab & Haryana High Court in in Munjal BCU Centre ofInnovation and Entrepreneurship vs. CIT(E)- 2024(3)TM1479(P&H HC), wherein it has been held that it is essential that before anyaction is taken, a communication of the notice must be in terms of theprovisions and a pragmatic view has to be adopted always in thesecircumstances. An individual or company is not expected keep the e-portal open all the time so as to have knowledge of departmentsactions. Further, in Shakti Steel Trading v. The Asstt.Commissioner (ST) WP No.4122 & 4255 & 4256 in GST matters,which are analogous to IT matters, the Hon'ble Madras High Courthas held that it is advisable for the Department to serve notice onsuch assessee through other mode of communications prescribedwhen they failed to respond to the summons, orders, notices andother communications through e-mail. There has to be some amountof flexibility. Rigidity in administration of tax in such matters may notPunjab & Haryana High Court in in Munjal BCU Centre ofInnovation and Entrepreneurship vs. CIT(E)- 2024(3)TM1479(P&H HC), wherein it has been held that it is essential that before anyaction is taken, a communication of the notice must be in terms of theprovisions and a pragmatic view has to be adopted always in thesecircumstances. An individual or company is not expected keep the e-portal open all the time so as to have knowledge of departmentsactions. Further, in Shakti Steel Trading v. The Asstt.Commissioner (ST) WP No.4122 & 4255 & 4256 in GST matters,which are analogous to IT matters, the Hon'ble Madras High Courthas held that it is advisable for the Department to serve notice onsuch assessee through other mode of communications prescribedwhen they failed to respond to the summons, orders, notices andother communications through e-mail. There has to be some amountof flexibility. Rigidity in administration of tax in such matters may not serve the purpose and can be counter productive. Mr. Sinha furtherrelies on the decision of the Supreme Court in Collector, LandAcquisition v. Mst. Katiji & Others, {(1987) 167 ITR 471},Sandhya Rani Sarkar v. Sudha Rani Debi {1978 AIR 537}, SeniorBhosale Estate (HUF) v. The Assistant Commissioner ofIncome Tax {(2019) 419 ITR 732 SC}, decision of the KarnatakaHigh Court in Karnataka Forest Development Corpn. Ltd. v.Assistant Commissioner of Income Tax (TDS) Circle 11(3),Bangalore {2010 (8) TMI – 1134} and the decision rendered by theITAT in The Deputy Commissioner of Income Tax, Circle -4(1)Raipur v. M/s. Chhattisgarh State Electricity Board (ThroughChhattisgarh State Power Holding Company Ltd.). 8.On the other hand, Ms. Naushina Afrin Ali, learned counsel for therespondent/Revenue submits that the order passed by the AO whichwas affirmed by the CIT(A) as well as learned ITAT, does not sufferfrom any illegality and the appeal filed by the appellant/Assesseedeserves to be rejected.respondent/Revenue submits that the order passed by the AO whichwas affirmed by the CIT(A) as well as learned ITAT, does not sufferfrom any illegality and the appeal filed by the appellant/Assesseedeserves to be rejected. 9.We have heard learned counsel for the parties, perused thepleadings and documents appended thereto.pleadings and documents appended thereto. 8.On the other hand, Ms. Naushina Afrin Ali, learned counsel for therespondent/Revenue submits that the order passed by the AO whichwas affirmed by the CIT(A) as well as learned ITAT, does not sufferfrom any illegality and the appeal filed by the appellant/Assesseedeserves to be rejected.respondent/Revenue submits that the order passed by the AO whichwas affirmed by the CIT(A) as well as learned ITAT, does not sufferfrom any illegality and the appeal filed by the appellant/Assesseedeserves to be rejected. 9.We have heard learned counsel for the parties, perused thepleadings and documents appended thereto.pleadings and documents appended thereto. 10.From perusal of the documents available on record, it transpires thatas per the information obtained from the Annual Information Return, itwas observed by the AO that though the assessee made cashdeposits of Rs. 34,67,700/- in his savings bank account during theyear under consideration but had not filed his return of income. As theassessee failed to come forth with any explanation as regards thesource of the aforesaid cash deposits, the AO reopened his caseunder Section 147 of the Act. During the course of the assessmentas per the information obtained from the Annual Information Return, itwas observed by the AO that though the assessee made cashdeposits of Rs. 34,67,700/- in his savings bank account during theyear under consideration but had not filed his return of income. As theassessee failed to come forth with any explanation as regards thesource of the aforesaid cash deposits, the AO reopened his caseunder Section 147 of the Act. During the course of the assessment proceedings, though the AO had issued several notices to theassessee but he did not comply with the same. Accordingly, the AOvide his order passed under Section 144 read with Section 147 of theAct dated 16.12.2018, determined the income of the assessee atRs.34,67,700/- after treating the entire amount of cash deposits ofRs.34,67,700/- as the assessee's unexplained money under Section69A of the Act. The assessee carried the matter in appeal before theCIT(Appeals) but without success. As the assessee had failed toparticipate in the course of the proceedings before the CIT(Appeals),therefore, he dismissed the appeal of the assessee after consideringmaterial available on record. 11.Though the AO had provided sufficient opportunities to the assessee to represent his case, it was the assessee who, for reasons bestknown to him, despite being well informed about the ongoingassessment proceedings, had not only failed to file his return ofincome but had also evaded his participation in the said proceedings.Also, the assessee had failed to file any reply to the notices that wereserved on him during the assessment proceedings. Accordingly, theA.O., in the absence of any return of income and also any explanationforthcoming about the source of the cash deposits in the bankaccount of the assessee, who had chosen to lie low and neitherparticipate in the assessment proceedings nor furnished any reply tothe notices that were issued to him, thus, was constrained to treat thecash deposits of Rs.34,67,700/-(supra) as the assessee'sunexplained money under Section 69A of the Act, and framed thebest judgment assessment vide his order under Sections 144/147 ofthe Act vide its order dated 16.12.2018. Even before the CIT(Appeals), the conduct of the assessee was no better than that hehad adopted during the assessment proceedings. Although theCIT(Appeals) afforded sufficient opportunities to the assessee to putup his case on merits before him but he had once again adopted anevasive approach and on no occasion, participated in theproceedings before the first appellate authority. The CIT(A) has givenproper opportunity to the assessee to participate in the hearing. Fournotices were issued to the assessee informing the assessee aboutthe date of hearing but the assessee did not participate in theproceedings before the CIT(A). The CIT(Appeals) taking notice of thefact that the assessee had adopted an evasive approach and,despite being well informed, had not only chosen not to participate inthe proceedings before him but also, despite sufficient opportunities,had not placed on record any submissions whatsoever, whetherdocumentary or otherwise to substantiate his claim that the A.O haderred in treating the cash deposit of Rs.34,67,700/- in his bankaccount as unexplained money under Section 69A of the Act, thus,upheld the order passed by the AO under Sections 144/147 of theAct, dated 16.12.2018. 12.In the course of the proceedings before the Tribunal, the conduct ofthe assessee remains the same as was there before the learnedCIT(A) and the A.O. The appeal filed by the assessee before thelearned ITAT involves a delay of 166 days. On a careful perusal ofthe facts leading to the delay in filing of the present appeal, thereason that the bonafides of the reasons leading to the delay in filingof the appeal by the assessee cannot be gathered from theapplication filed by the assessee seeking condonation of the delaythe assessee remains the same as was there before the learnedCIT(A) and the A.O. The appeal filed by the assessee before thelearned ITAT involves a delay of 166 days. On a careful perusal ofthe facts leading to the delay in filing of the present appeal, thereason that the bonafides of the reasons leading to the delay in filingof the appeal by the assessee cannot be gathered from theapplication filed by the assessee seeking condonation of the delay involved in filing the appeal. The facts that can be gathered from theaforesaid application of the assessee are, viz. (i) the assessmentorder was passed by the A.O on 16.12.2018 and was issued on29.12.2018 without any reasons for keeping the same with him; (ii)reasons recorded under Section 148(2) of the Act were not suppliedto the assessee by the A.O; and (iii) appeal of the assessee wasdismissed by the CIT(Appeals) vide an ex-parte order dated29.03.2023 etc. 13.Under section 69A of the Act, what is provided is that if an assesseeis found to be the owner of any money, jewellery or any other valuablearticles and such money is not recorded in the books of account andfails to offer any explanation about the nature and source thereof or incase any such explanation, if offered, is not satisfactory in the opinionof the AO, then it may be deemed to be the income of the assesseefor such financial year. Ultimately, therefore, it would be dependenton the nature of the explanation submitted by the assessee and thesatisfaction of the AO about the acceptability thereof, which is thesine qua non for invoking the provisions contained in section 69A ofthe Act. In the present case, the assessee has failed to file his returnof income but had also evaded his participation in the proceedings. Inabsence of any plausible explanation of the assessee as regards thedelay in filing of the appeal, his request for condonation of the same,when read in the backdrop of his conduct before the authoritiesbelow cannot be summarily accepted on the very face of it. There isno substance in the claim of the assessee that the delay involved infiling of the appeal was due to bonafide reasons, as the same clearlysmacks of the lackadaisical conduct on his part. In the totality of the facts leading to the delay in filing of the appeal read with the conductof the assessee appellant before the AO and the CIT(Appeals), therequest of the assessee for condoning the delay involved in filing ofthe appeal does not merit acceptance. 14.The learned ITAT, vide paragraph 12 has observed that “In fact, if Icondone the delay involved in the present case where the assesseehad not even participated in the proceedings either before the A.O orCIT (Appeals), then, it would send a wrong message and would laydown a wrong precedent for the times to come. ...” condone the delay involved in the present case where the assesseehad not even participated in the proceedings either before the A.O orCIT (Appeals), then, it would send a wrong message and would laydown a wrong precedent for the times to come. ...” 15.As has been rightly relied on by the learned ITAT that in the case ofState of West Bengal Vs. Administrator, Howrah, reported in1972 AIR SC 749,the Hon’ble Apex Court had held that theexpression “sufficient cause” should receive a liberal construction soas to advance substantial justice, particularly when there is no motivebehind the delay. The expression “sufficient cause” will always haverelevancy to reasonableness. The action which can be condoned bythe Court should fall within the realm of normal human conduct ornormal conduct of a litigant. However, as the assessee appellant inthe present case is habitually acting in defiance of law, where he hadnot only delayed in filing of the present appeal but also had adopted alackadaisical approach and not participated in the course of theproceedings before the CIT(A), therefore, there can be no reason toallow his application and condone the substantial delay of 166 daysinvolved in preferring of the captioned appeal. Now, when in thepresent appeal the appellant / assessee had failed to come forth withany good and sufficient reason that would justify condonation of thesubstantial delay involved in preferring of the captioned appeal, weState of West Bengal Vs. Administrator, Howrah, reported in1972 AIR SC 749,the Hon’ble Apex Court had held that theexpression “sufficient cause” should receive a liberal construction soas to advance substantial justice, particularly when there is no motivebehind the delay. The expression “sufficient cause” will always haverelevancy to reasonableness. The action which can be condoned bythe Court should fall within the realm of normal human conduct ornormal conduct of a litigant. However, as the assessee appellant inthe present case is habitually acting in defiance of law, where he hadnot only delayed in filing of the present appeal but also had adopted alackadaisical approach and not participated in the course of theproceedings before the CIT(A), therefore, there can be no reason toallow his application and condone the substantial delay of 166 daysinvolved in preferring of the captioned appeal. Now, when in thepresent appeal the appellant / assessee had failed to come forth withany good and sufficient reason that would justify condonation of thesubstantial delay involved in preferring of the captioned appeal, we hereby dismiss the present appeal upholding the reasons assigned by the learned ITAT. 16.Resultantly, this appeal stands dismissed. Sd/- Sd/- (Rajani Dubey) (Ramesh Sinha) Judge Chief Justice