Maintainability of appeal must be decided at the outset not at fag end – ITAT
In a recent judgment, ITAT Chandigarh has observed that whether the appeal is maintainable and is filed within the prescribed time limit must be decided at the outset and not at the fag end of the impugned order.
ABCAUS Case Law Citation:
4357 (2024) (12) abcaus.in ITAT Chandigarh
In the instant case, the assessee had challenged the order passed by the CIT(A) in dismissing the appeal of the assessee on the ground of delay.
The Income Tax Department (ITD) had information that the assessee had purchased land during the relevant financial year but had not filed his return of income. Consequently, proceedings under section 147 of the Act were initiated against the assessee as source of the investment remained unexplained.
However, despite all the notices u/s 148 and 142(1), the assesse failed to comply with these notices and even the return of income. The Assessing Officer (AO) observed that where the assessee fails to prove satisfactorily the source and nature of certain investment during the accounting year, the revenue is entitled to draw the inference that the investment made is of an assessable nature.
Since, the assessee failed to bring on record any evidence to establish that the investment made was out of genuine sources. The AO completed the assessment within the meanings of Section 144 of the Act to the best of judgment making the addition towards unexplained investment.
Aggrieved by the dismissal of the appeal by the CIT(A), the assessee appealed in ITAT and inter alia took the ground that CIT(A) was not justified in dismissing the appeal only on the ground that the appellant has failed to provide any sufficient cause for the delay in filing of appeal.
The Tribunal opined that delay in preferring the first appeal ought to have been decided by the CIT(A) at the outset and threshold as limitation issue goes to the root of the matter.
The Tribunal observed that whether the appeal is maintainable and is filed within the prescribed time limit must be decided at the outset and not at the fag end of the impugned order as happened in the instant case.
The Tribunal further observed that even in cases where CIT(A) is of the considered view that delay in preferring first appeal is not required to be condoned then also such decision should be taken at the outset and not after dealing with grounds taken up in Form No. 35 i.e; Form of appeal to CIT(A) as per Rule 45.
The Tribunal observed that in the instant case the CIT(A) had dealt with preliminary ground at fag end of the impugned order and has infact not condoned the delay. In such circumstances the Tribunal expressed unwillingness to sustain the order of the AO passed under section 147/144 of the Act.
The Tribunal opined that AO was left with no other alternative but to pass the order in terms of section 144 which exercise of power was correct and appropriate. However ends of justice required that the CIT(A) to consider first the condonation of delay application and then to decide merits of the case after the assessee had submitted all necessary and required material in support of his case.
Accordingly, the Tribunal set aside the impugned order and remanded the case back to the file of CIT(A) with direction to afford sufficient opportunity to assessee to place all the papers and document in support of his case and thereafter should pass a reasoned and speaking order on merits of the case.
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