Bipin Jain’s Appeal Against Ex-Parte Order in ITA 6575/DEL/2019 for AY 2011-12

Bipin Jain’s Appeal Against Ex-Parte Order in ITA 6575/DEL/2019 for AY 2011-12

In the case of ITA No. 6575/DEL/2019, the appellant, Bipin Jain, New Delhi, challenged the ex-parte order passed by the Commissioner of Income Tax (Appeals) [CIT(A)]-11, New Delhi, dated 13th June 2019, related to the assessment year 2011-12. The appeal was heard and decided by the Income Tax Appellate Tribunal (ITAT), Delhi Bench “SMC-1” on 2nd March 2021.

Background of the Case

Bipin Jain, an individual taxpayer, was the subject of an income tax assessment for the assessment year 2011-12. The case was initiated based on an individual transaction statement retrieved from the Income Tax Department (ITD), indicating that the appellant had made an investment in bonds/debentures amounting to Rs. 5 lakhs during the financial year 2010-11. Despite this substantial investment, the appellant had not filed a return of income for the assessment year 2011-12.

The Assessing Officer (AO), after recording reasons for reopening the assessment, issued a notice under Section 148 of the Income Tax Act on 24th March 2018. Subsequent statutory notices under Section 142(1) were also issued on 7th August 2018 and 2nd November 2018. However, the appellant did not comply with these notices.

Appellant’s Defense

In response, the appellant submitted a letter dated 14th December 2018, arguing that the PAN quoted by the AO did not belong to him and that his PAN was different. He also stated that he had been filing his returns of income continuously from assessment years 2010-11 to 2018-19. Despite this defense, the AO was not convinced, noting that the PAN in question (AELPJ5353A) belonged to the appellant as the ITD system data showed matching details, including the name and date of birth, with the appellant’s PAN (AAFPJ6246A).

Due to the appellant’s failure to explain the source of the Rs. 5 lakhs investment, the AO treated the amount as undisclosed income under Section 69 of the Income Tax Act and made an addition to the appellant’s total income in the order passed under Sections 144/147.

CIT(A)’s Ex-Parte Order

When the appellant appealed the AO’s decision, the CIT(A) dismissed the appeal for want of prosecution, citing non-compliance and non-cooperation by the appellant. The CIT(A) based the dismissal on precedents set by the Hon’ble Supreme Court in CIT vs. BN Bhattacharya (1997) 118 ITR 461 (SC) and the Tribunal in CIT vs. Multiplan India Pvt. Ltd., 38 ITD 320 (Delhi), as well as the Hon’ble Gujarat High Court’s decision in PCIT vs. Ashokji Chanduji Thakor, ITA No. 710/2018.

Appeal to the ITAT

Aggrieved by the CIT(A)’s ex-parte order, Bipin Jain appealed to the ITAT. The appellant’s counsel argued that the notice issued by the CIT(A) was never received, and the CIT(A) had failed to consider the facts of the case presented with the appeal. The appellant requested that, in the interest of justice, he should be granted an opportunity to substantiate his case.

On the other hand, the Departmental Representative (DR) argued that the appellant was non-cooperative before both the AO and the CIT(A), and therefore, a heavy cost should be imposed for such non-appearance before the lower authorities.

ITAT’s Findings and Decision

The ITAT carefully considered the arguments from both sides and reviewed the orders of the AO and CIT(A). The Tribunal noted that the AO had completed the assessment under Sections 147/144, determining the appellant’s total income at Rs. 5 lakhs due to the appellant’s failure to explain the source of the investment.

The Tribunal further observed that the CIT(A) dismissed the appeal without addressing the merits of the case, solely on the grounds of non-prosecution. The ITAT emphasized that, according to Section 250(6) of the Income Tax Act, 1961, the order of the CIT(A) disposing of an appeal must be in writing, state the points for determination, and provide the decision and reasons for the decision. However, the CIT(A) failed to adhere to these provisions and dismissed the appeal without considering the case’s merits.

In light of these findings and considering the interest of justice, the ITAT deemed it appropriate to restore the issue to the file of the CIT(A). The Tribunal directed the CIT(A) to grant one final opportunity to the appellant to substantiate his case and decide the issue based on the facts and applicable law. The ITAT also directed the appellant to cooperate fully with the CIT(A) and present his case, failing which the CIT(A) would be at liberty to pass an appropriate order in accordance with the law.

Conclusion

The ITAT allowed the appeal for statistical purposes, restoring the case to the CIT(A) with clear instructions to consider the merits of the case and provide a reasoned decision. The order highlights the importance of ensuring that appellants receive a fair hearing and that tax authorities follow due process in disposing of appeals.

Order pronounced in the Open Court on 2nd March 2021.

Sd/-
(KULDIP SINGH)
JUDICIAL MEMBER

Sd/-
(R.K. PANDA)
ACCOUNTANT MEMBER

Dated: 02/03/2021

Bipin Jain’s Appeal Against Ex-Parte Order in ITA 6575/DEL/2019 for AY 2011-12