Negligence of Assessee throughout Assessment Proceedings: ITAT rejects Appeal [Read Order]

The Income Tax Appellate Tribunal ( ITAT ) Raipur Bench rejects the appeal of the assessee to restore the matter back to the file of Commissioner of Income Tax (Appeals) (CIT(A)) as the assessee was negligent throughout the assessment proceedings that lasted for more than 08 Years, even after the assessee was given proper opportunity. The assessee remained non-attentive and negligent even after adequate opportunities have been afforded.

The facts of the case are, the assessee namely, Nitesh Kumar Goyal, is an individual engaged in the trading of computer and computer accessories and has various business premises at Raipur, Bhilai and Ambikapur. Return of income (ROI) for AY 2013-14 has been filed by the assessee on 31.03.2014, showing a total income of Rs.16,87,250/-.

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The original assessment of assessee was completed under section 143(3) of the Income Tax Act on 28.03.2016, assessing the total income at Rs.1,50,84,533/- by estimation of net profit @ 8% of sales and thereby making addition of Rs.1,33,97,283/-.

Aggrieved by the order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) - II (CIT(A)-II), Raipur, but the appeal was dismissed with the observation that the appellant is not interested is not interested in pursuing the appeal and had nothing to say against the additions made by the 'Assessing Officer’ (AO). So the addition was confirmed by the CIT(A)-II Raipur.

Dissatisfied by the decision of CIT(A), the assessee carried the matter to the Income Tax Appellate Tribunal (ITAT), Raipur. The appeal of the assessee was disposed off by the tribunal in ITA No.234/RPR/2017 on 16.05.2019, on the grounds that the Counsel made a statement at Bar that the assessee would make proper representation before CIT(A) this time and the CIT(A) cannot reject the assessee his right of natural justice of granting due opportunity of being heard by the quasi-judicial authorities under the law, due to the non-attendance before the CIT(A).So the appeal of the assessee was allowed.

In view of all these, the assessee was provided with another opportunity and a questionnaire was issued to the assessee and was provided through ITBA portal, but still the assessee remains non-compliant and no reply was filed for the questionnaires. The AO furthur issued a show cause notice to the assessee on proposing to complete the assessment proceedings, and thereafter with verification of assessment record has prepared a statement showing the lack of integrity, responsiveness and accountability of the assessee.

AO, in backdrop of aforesaid events, reflecting lackadaisical and careless approach of the assessee, having no option left with him, has to proceed to complete the set aside reassessment proceedings taking recourse of best judgment assessment available with him.  The assessment was completed on 20.09.2021 u/s 144 r.w.s 254/ 144B of the Act. AO again mentioned in the order about the non compliance of the assessee to the statutory notices.

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The assessment culminated the total assessed income at Rs.1,50,84,533/-.

Assessee, aggrieved by the order of AO, preferred an appeal before the CIT(A), but as usual did not turn up with any submissions, or explanations. CIT(A) discussing the merit of the case dismissed the appeal. Consequently, the appeal of the assessee before the First Appellate Authority in the second round of the proceedings was also dismissed on account of non-prosecution.

The impugned order of the CIT(A) dated 14.02.2024 was not found justifiable by the assessee,therefore carried an appeal before the ITAT.

The Authorized Representative (AR), prayed that the assessee was not provided with the right opportunity of being heard either by the AO or by the CIT(A). The submission was that during appellate proceedings before the First Appellate Authority were served on the email id comconindia@yahoo.co.in but the mail id has been furnished to caraipur.agarwal@gmail.com . As the notices were sent to the old email id, which the appellant is not aware of, the appellant was unable to attend the proceedings. And no communication was made on the  comconindia@yahoo.co.in said new mail id. Even after resetting the passwords with recharging and reactivation of the connected numbers, he was able to access the old email id, but the emails received from the IT department were appearing in dark, and was unable to read.

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The DR, Satya Prasad, on behalf of the respondent, Deputy Commissioner of Income Tax strongly opposed the request of the AR to set aside the matter back to the file of CIT(A). Sr.DR submitted that both the revenue authorities have afforded ample opportunities of being heard to the assessee. The assessee was found irresponsible and have shown disrespect towards the department by the actions.

Already ex parte order was provided over the case, still the assessee was given more opportunities by making a statement at the bar that the assessee would make proper representation but the assessee remained negligent.

It further submitted that in the present case as the proceedings are endlessly continuing since last more than 08 years, which are in started with the first assessment in March, 2016 and are still in process till July, 2024, therefore, such a disobedient assessee, having no reverence towards the prescribed procedures laid down by the legislature and to follow the mandatory timelines, should not be allowed with further opportunities to prolong the litigations for which no assistance could be provided in the preceding 08 years of time.

With such submissions, it was the request of Ld. Sr. DR that the order of Ld. CIT(A) wherein merits of the issue are duly dealt with based on material available on records, deserves to be upheld.

The ITAT Bench consisting of Ravish Sood, Judicial Member and Arun Khodpia, Accounting Member observed that it is an undisputed fact that the communications were dropped in the ITBA portal which was downloaded and copies were served. But the communication was done on the old email, but was aware of the order. So the assessee from the aforesaid facts was careless throughout all the tax proceedings.

While there is said to be violation of Natural Justice, there is also a well-known dictum of law "VIGILANTIBUS, NO DORMENTIBUS, JURA SUBVENIUNT" which means law will help only those who are vigilant. Law will not assist those who are careless of his/her right. In order to claim one's right, he/she must be watchful of his/her right. Only those persons, who are watchful and careful of using his/her rights, are entitled to the benefits of law. Law confers rights on persons who are vigilant of their rights.

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After the consideration facts and circumstances the tribunal expressed the opinion that the request of the assessee to restore the matter back to the file of CIT(A) cannot be acceded to, especially in a case wherein the assessee has chosen not to represent its matter for more than 08 years, even  after the opportunity by the tribunal, the assessee remain non-attentive, thus, have not furnished required information and explanation before the lower authorities when adequate opportunities have been afforded.

In view of aforesaid observations, in absence of any explanation regarding the merits of issue, rejecting the prayer of the assessee to restore the matter to the file of CIT(A), the appeal of the assessee was dismissed.

The assessee was represented by Shri Prafulla Pendse, CA. The revenue was represented by Shri Satya Prakash Sharma, CA.

To Read the full text of the Order CLICK HERE

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