ITAT imposes Rs.1000 Cost on Assessee for being Negligent in Handling Appeal [Read Order]

The Income Tax Appellate Tribunal (ITAT), Jabalpur bench has recently imposed a cost of Rs. 1000 on the assessee for being negligent in handling the appeal proceedings and failed to ensure the representation.

The assessee filed an appeal challenging the rectification order passed under section 154 of the Income Tax Act in the year 2010. The assessee, before the Tribunal, contended that the notice for hearing was issued after seven years, i.e., in 2017. In the meantime, the assessee had in fact died soon thereafter, and his son, Sumit Bahune, who received the notice, was completely unaware of income-tax matters of his father, and neither did he have the documents in respect thereof for him to proceed in the matter. The next opportunity of hearing followed for 26.4.2018, which also could not be responded to for the same reason/s.

The Tribunal observed that even granting that the assessee’s son was not aware of the pending proceedings (before the income-tax authorities) of his father, all he needed was to approach the counsel who had prepared the appeal papers, and thus engaged to represent his father before the first appellate authority.

“Even otherwise, time, to locate or to create the appeal file anew, were not available, could be sought. However, none appeared nor any representation made, despite adequate opportunity allowing sufficient time; the assessee being put to notice on the receipt of the first notice dated 08.11.2017. The assessee’s conduct, which is deliberate, is thus clearly negligent,” the Tribunal said.

“The impugned order, however, being not on merits, as contemplated by law (s. 250(4) r/w s. 250(6)), is not sustainable in law. The matter is accordingly set aside subject to the imposition of a nominal cost of Rs.1,000/- (INR one thousand only) to be deposited with the Prime Ministers’ National Relief Fund by 31.7.2020. The amount has been deliberately kept low in view of the poor financial position of the representative assessee, who has also since sold his parental house, as explained by the L’d. counsel during the hearing. Further, Shri Bardia assured of responsible conduct by the assessee in the set-aside proceedings. The L’d. CIT(A) shall adjudicate afresh, on merits, after allowing the reasonable opportunity of being heard to the assessee, in a time-bound manner,” the Tribunal added.