IN THE HIGH COURT OF KARNATAKA AT BENGALURU ON THE 15TH DAY OF APRIL, 2019 BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH AND THE HON'BLE MR. JUSTICE S. G. PANDIT I.T.A.NO.257 OF 2019 BETWEEN:
SMT. SHOBHA LAKSHMAN WIFE OF LAKSHMAN AGED ABOUT 62 YEARS NO.A-204 TEMPLE MEADOW APARTMENTS 27TH CROSS, KAIGARIKA LAYOUT KAVERI NAGAR, BSK 2ND STAGE BENGALURU-560070.
(BY SRI. K L SREENIVAS, ADVOCATE) AND:
1. THE COMMISSIONER OF INCOME TAX (APPEALS)-7, BENGALURU 7TH FLOOR, BMTC BUILDING 80 FEET. ROAD, KORAMANGALA BENGALURU-560095.
...APPELLANT 2. THE INCOME TAX OFFICER WARD-7(2)(4), ROOM NO. 322, 3RD FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA BENGALURU - 560 095.
... RESPONDENTS THIS APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED: 19.11.2018 PASSED IN ITA NO.228/BANG/2018, FOR THE ASSESSMENT YEAR 2013-2014.
THIS APPEAL COMING ON FOR ADMISSION THIS DAY, S.G.PANDIT J., DELIVERED THE FOLLOWING:
JUDGMENT Aggrieved by the order dated 19.11.2018 passed by the Income Tax Appellate Tribunal, Bengaluru Bench ‘B’, Bengaluru in ITA No.228 of 2018 by which the appeal was dismissed, the assessee is in appeal.
2. The appellant-assessee filed returns for the assessment year 2013-2014 electronically on 31.03.2014 declaring gross total income of Rs.2,86,000/- and offered total income of Rs.2,66,000/- for tax. The case of the assessee was taken up for scrutiny under Section 143(2) of the Income Tax Act, 1961 (for short ‘the Act’). The Assessing Authority issued notice dated 05.09.2014 and 06.10.2015. The assessee was represented by authorized representative Chartered Accountant, who filed information before the Assessing Authority. The Assessing Authority on scrutiny of the documents furnished by the assessee with regard to investment made in acquisition of site, cash payments made in respect of purchase of site and amount paid towards stamp duty and registration charges, was of the view that the assessee has furnished inaccurate particulars of income and therefore, decided to initiate penalty proceedings under Section 271(1)(c) of the Act for the assessment year 2013-2014. Further, it arrived at tax liability of Rs.82,94,720/-. Aggrieved by the assessment made the assessee filed appeal before the Commissioner of Income Tax (Appeals) on 13.06.2016. The appeal was filed in paper and manual form. The appellate authority addressed a letter to the assessee on 06.09.2017 bringing it to the notice of the assessee that appeal is required to be filed in e-mode, which is mandatory w.e.f. 1.3.2016.
Further the assessee was asked to explain as to why the appeal should not be considered as invalid within 15 days from the date of the receipt of the letter. The husband of the assessee, who represented the assessee before the Appellate Authority stated that he is not aware about the income tax procedure. The appeal filed by the assessee in the paper form was not accepted and the Appellate Authority treated the appeal as invalid. Hence, dismissed the appeal. The assessee aggrieved by the order of dismissal of the appeal, filed appeal before the Income Tax Appellate Tribunal, Bengaluru Bench, Bengaluru, (for short ‘the ITAT’). The appeal was registered as ITA No.228 of 2018 and the assessee was issued notice to appear for hearing on 19.11.2018. As the assessee failed to appear before the Tribunal on the date of hearing, the appeal was dismissed for non-prosecution observing that the assessee is not interested in prosecuting the case. Hence, the assessee is in appeal before this Court.
3. Heard learned counsel for the appellant and perused the appeal papers.
4. Learned counsel for the appellant would submit that the order passed by the Assessing Authority, Appellate Authority as well as the Tribunal are the result of non- appreciation of the facts and law. Further, he contends that the Assessing Officer disallowed the deduction claimed without any basis and there is no proper adjudication. As the appellant was not in station, he was not able to appear before the Tribunal on the date of hearing. It is stated that the appellant was out of country and returned only on 08.01.2019. Hence prays for allowing the appeal.
5. Having heard the learned counsel for the appellant and on perusal of the orders passed by the Assessing Authority, Appellate Authority and the Tribunal, we are of the view, that the orders are neither capricious nor erroneous, so as to interfere with the same. Further no substantial question of law would arise for consideration.
The assessee filed returns for the assessment year 2013- 2014 electonically on 31.03.2014. The case of the assessee was taken up for scrutiny and notice under Section 143(2) of the Act was issued. On receipt of the notice the assessee was represented by authorized representative before the Assessing Authority. On scrutiny of the materials made available before the Assessing Authority, the Assessing Authority was of the view, that the assessee has furnished inaccurate particulars of income and he is not entitled to deduction under Section 54(F) of the Act. It is noted that the case of the appellant was taken up for scrutiny since there were large investments in property compared to the total income and large deduction claimed under Section 54(F) of the Act. The Assessing Authority passed the assessment order and found that the assessee is liable to pay balance tax of Rs.86,94,720/-. The assessee filed the appeal being aggrieved by the assessment order before the Commissioner of Income Tax (Appeals) Bangalore. The appeal filed by the assessee was in paper and manual form. The appeal as per Rule 45 of the Income Tax Rules 1962, required compulsory e-filing of appeals w.e.f. 1.3.2016. The assessee had filed appeal on 13.06.2016. The Appellate Authority was gracious enough to inform the assessee by addressing a letter dated 06.09.2017 bringing to the notice of the assessee that as per Rule 45 it requires compulsory e-filing of appeal. On the hearing date i.e. 22.12.2017 the husband of the assessee, who represented the assessee before the Appellate Authority submitted that he is not aware about the income tax procedure. Neither the assessee nor her representative made any efforts to e- file the appeal, even though it was brought to their notice that e-filing of appeal is compulsory from 01.03.2016. It is to be observed here that the assessee had filed returns electronically and as such the husband of the appellant who represented before the Appellate Authority could not have stated that he was not aware of e-filing of the appeal. When the Appellate Authority brought to the notice of the assessee that e-filing of appeal is compulsory and when the assessee had failed to file e-appeal even after assessee was made known that e-filing is compulsory, we find no error or illegality in dismissing the appeal of the assessee as invalid by the Appellate Authority.
6. The appeal filed by the assessee before the ITAT against the order passed by the Commissioner of Income Tax (Appeals) dated 22.12.2017 was numbered as ITA No.228 of 2018 and the assessee was informed the date of hearing as 19.11.2018. As on the date of hearing the assessee failed to appear before the Tribunal nor was there any representation before the Tribunal. The Tribunal noting the absence of the assessee and observing that the assessee is not interested in prosecuting the case dismissed the appeal for non-prosecution. It is the case of the assessee that the assessee was out of country and she returned to India only on 08.01.2019 and as such she could not be present before the Tribunal on the date of hearing. If that is so, the assessee could have made arrangements to represent her before the Tribunal by any authorized representative or she could have addressed a letter seeking for another date of hearing as she was out of country. The assessee failed to make arrangement to represent her before the Tribunal and failed to seek for another date of hearing. When there was no representation on behalf of the assessee, the Tribunal had no option but to dismiss the appeal for non-prosecution observing that the assessee had no interest in prosecuting the case. Looking to the conduct of the assessee before the Commissioner of Income Tax (Appeals) and before the ITAT, it could be said that the assessee was not interested in prosecuting the case. Before the Commissioner of Income Tax (Appeals), even though it was brought to the notice of the assessee that appeal is required to be filed in e-mode, the assessee failed to file appeal through e-mode. Before the ITAT also the assessee failed to make arrangements for representation on the date of hearing. Even though delay is considered liberally, in the facts of this case, there are no bonafides and the appellant cannot take benefit of ones own inaction. Hence, we are of the view, that the orders passed by the ITAT is neither perverse nor erroneous. No substantial question of law would arise. Accordingly, the appeal is dismissed.
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JUDGE JUDGE NG* CT:bms