The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, restored an income tax appeal involving a ₹1 crore addition made under a best judgment assessment after condoning a 273-day delay in filing the appeal.
However, the bench of Laliet Kumar (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) made the relief conditional upon the assessee depositing ₹3,000 in the Poor Patient Relief Fund of PGI Hospital, Chandigarh.
The assessee challenged an order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), dated 13 November 2024, which had upheld a best judgment assessment framed under Section 144 of the Income-tax Act, 1961 on 18 December 2018.
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The Registry noted that the appeal before the Tribunal had been filed with a delay of 273 days. The assessee sought condonation of the delay by filing an affidavit. At the hearing, however, no one appeared on behalf of the assessee, while the Departmental Representative argued that the appeal deserved dismissal.
The assessment had been completed on a best judgment basis under Section 144, during which the Assessing Officer made an addition of ₹1 crore, treating it as investment in certain immovable property.
Since the assessee had not effectively represented the case before the appellate authority, the CIT(A) confirmed the assessment without examining the merits of the dispute. Dissatisfied with this outcome, the assessee approached the ITAT.
The Tribunal observed that the dispute involved a substantial addition and that the principles of natural justice warranted giving the assessee one more opportunity to present the case.
Accordingly, the Bench admitted the appeal despite the delay and directed that the matter be remanded to the Commissioner (Appeals) for de novo adjudication on merits.
The Tribunal made it clear that the fresh opportunity would be available only if the assessee deposited ₹3,000 within 30 days from receipt of the order in the Poor Patient Relief Fund of PGI Hospital, Chandigarh.
The assessee has also been directed to furnish proof of the payment before the CIT(A), who will thereafter proceed to decide the appeal afresh on merits. The Tribunal further directed the assessee to diligently plead and substantiate the case during the remanded proceedings.
The Chandigarh Bench allowed the appeal for statistical purposes, effectively setting aside the earlier appellate order and restoring the matter to the Commissioner (Appeals) for fresh adjudication.
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