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TMI Blog2024 (10) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... osed 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 15.02.2011. 6. With these and such other grounds that might be urged at the time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice, 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 Division Bench, it is the averment of the ld. counsel for the assessee that the assessee filed the appeals before the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51 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 as per the PAN and it would not be sent to the Authorised Representative's address. Considering the same, you are advised to get the PAN address of the appellant up to date. In view of the above, you may take app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 appeal with Ld. CIT(A) on 31.05.2019 despite dismissal of first appeal by ld. CIT(A) on 30.01.2018, which appeal filed again with ld. CIT(A) on 31.05.2019 stood dismissed by ld. CIT(A) vide appellate order passed on 12.02.2024 as infructuous and non maintainable. The appeal filed by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 rectification applications dated 7.02.2018 and 15.06.2018 with Ld. CIT(A). The Ld. CIT(A) issued letter dated 18.06.2018 in response to the aforestated rectification applications filed by the assessee, wherein ld. CIT(A) stated that the Form No. 35 filed by the appellate has not been signed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AN 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 ld. CIT(A) vide its communication dated 18.06.2018 gave an observation contrary to scheme of the Act asking the assessee to file appeal again with ld. CIT(A) along with condonation application, despite knowingly well that the first appeal of the assessee was dismissed for non-prosecution by ld. CIT(A) vide appellate order dated 30.01.2018, which observations/directions issued by ld. CIT(A) were contrary to the scheme of Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. 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 assessee is at writ large. Under the facts and circumstances, we do not find any malafide on the part of the assessee in filing this appeal belatedly, and in the interest of justice, we condone the delay w.r.t. this appeal and proceed to adjudicate this appeal on merits in accordance with law. We Reference is drawn to the decision of Hon'ble Supreme Court in the case of Collector of Land Acquisition, Anantnag v. Mst. Katiji (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision 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, the ld. CIT(A) has issued only one notice of hearing fixing the date of hearing on 30.01.2018. The said notice was not served on the assessee and returned unserved. The assessee is contending that the notice was sent to wrong address and was not sent to the address mentioned in Form No. 35. The return of notice of hearing is also confirmed by ld.CIT(A), and further in communication dated 18.06.2018, the ld. CIT(A) stated that notice will be issued onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Further reference is also drawn to provisions of Section 189(4), which stipulates that where such discontinuance or dissolution takes place after any proceedings in respect of an assessment year have commenced, the proceedings may be continued against the person referred to in sub-section (3)(i.e partners of the firm, and the legal representative of any such person who is deceased) from the stage at which the proceedings stood at the time of such discontinu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness 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 this regard thereto keeping in view provisions of Section 176(3), 189(3) and 189(4), and the assessee is directed to furnish complete, true and correct facts in connection thereto before ld. CIT(A) to enable ld. CIT(A) to conduct aforesaid inquiry, the powers of ld. CIT(A) being co-terminus with the powers of the AO. 7.6 Thus, keeping in view entire facts and circumstances of the case, we are inclined to set aside the appellate order dated 30.01.2018 passed by ld. CIT(A), and restore the matter back to the file of ld. CIT(A) for denovo adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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