Chopal Plywood V. Commissioner of Income Tax, Panchkula

ITA/136/2012

AI Insights

The case involves Chopal Plywood, a partnership firm engaged in manufacturing and trading plywood, which appealed against the orders of the Income Tax Appellate Tribunal, Chandigarh. The appeal was belatedly filed, challenging the Tribunal's decision regarding the inclusion of a capital addition of 11,69,000 INR as income for the assessment year 2005-06. The Tribunal had earlier dismissed the appeal due to delay, and the firm sought condonation for this delay, citing discussions with their Chartered Accountant about the interpretative issues under Section 68 of the Income Tax Act. However, the court found the reasons for the delay insufficient, noting the appellant's consistent negligence in handling the tax proceedings.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 808003 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 13-09-2012
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Limitation Act, 1963
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: PANKAJ JAIN
• Keywords: Capital accounts; Condonation of delay; Income Tax; Penalty; Scrutiny assessment
• Section: 143(1); 271(1)(c); 68

Judgement Text

"C.M. No. 16634-CII of 2012 and ITA No. 136 of 2012 -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH C.M. No. 16634-CII of 2012 and ITA No. 136 of 2012 (O&M) Date of Decision: 13.9.2012 Chopal Plywood ....Appellant. Versus Commissioner of Income Tax, Panchkula. ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MR. JUSTICE G.S. SANDHAWALIA. PRESENT: Mr. Pankaj Jain, Advocate for the appellant. AJAY KUMAR MITTAL, J. 1. The assessee has filed the present appeal belatedly challenging the order of the Income Tax Appellate Tribunal, Chandigarh Bench “A”, Chandigarh (in short “the Tribunal”) in ITA No. 1022/CHD/2009 dated 22.12.2009 for the assessment year 2005-06 which was received by the assessee on 26.2.2010. There is an application under Section 5 of the Limitation Act, 1963 for condonation of delay of 695 days in filing the appeal. 2. The factual matrix leading to the filing of the present application for condonation of delay as well as the appeal is that the appellant was engaged in the business of manufacturing and trading of C.M. No. 16634-CII of 2012 and ITA No. 136 of 2012 -2- plywood, block board etc. having sales in and around the city of Yamuna Nagar and other States too. The assessee is a partnership firm consisting of two partners and had filed its return of income for the assessment year 2005-06 on 31.10.2005 declaring an income of ` 1790/-. The said return was processed under Section 143(1) of the Income Tax Act, 1961 (in short “the Act”). Proceedings were initiated for scrutiny assessment. During the course of assessment proceedings, the assessee was asked to explain the source of addition in the capital accounts of partners totaling ` 11,69,000/-. The assessee vide letter dated 18.12.2007 surrendered the said amount of ` 11,69,000/- subject to no penalty under Section 271(1) (c) of the Act. The Assessing Officer vide order dated 20.12.2007 (Annexure A-6) computed the income for the assessment year 2005-06 by including the said amount of ` 11,69,000/- as income of the year. The demand notice as well as the assessment order were served on the assessee on 26.12.2007. The Assessing Officer vide order dated 18.6.2008 (Annexure A-7) levied the penalty under Section 271(1)(c) of the Act. Feeling aggrieved, the assessee filed appeals before the Commissioner of Income Tax (Appeals) [hereinafter referred to as “the CIT(A)”] on 14.7.2008 challenging the penalty order as well as assessment order. The appeal against the assessment order was filed after a delay of five months and nineteen days. The CIT(A), vide order dated 24.3.2011 (Annexure A-9) dismissed the appeal qua penalty order. The appeal against the assessment order dated 20.12.2007 was also dismissed being time barred by the CIT(A) vide order dated 12.10.2009 (Annexure A-10). Still dissatisfied, the assessee filed an appeal against the order C.M. No. 16634-CII of 2012 and ITA No. 136 of 2012 -3- dated 12.10.2009 before the Tribunal. The Tribunal vide order dated 22.12.2009 (Annexure A-12) dismissed the appeal of the assessee. Against the order of the Tribunal dated 22.12.2009, the assessee has filed the present appeal. As the appeal was barred by time, an application for condonation of 695 days' delay in filing the appeal has also been filed. 3. The plea taken by Sunil Chopal, partner of the assessee-firm, is that the matter was discussed with the Chartered Accountant Shri H.K. Luthra and the order of the Tribunal dated 22.12.2009 was shown to him and his opinion was sought on the issues involved therein. Sh. H.K. Luthra had opined that interpretation of provision of Section 68 of the Act was involved and, therefore, it was a fit case for filing the appeal in this Court. This had delayed the filing of the appeal. 4. After hearing the learned counsel for the appellant, perusing the record and the affidavit in support of the application, we do not find that sufficient cause has been shown for condoning the delay. The plea so taken by the assessee does not require such a huge period for deciding whether it was a fit case or not. One another fact which may be noticed is relating to the conduct of the appellant that even the appeal filed before the CIT(A) against the assessment order passed by the Assessing Officer was also belated by five months and nineteen days. The assessee has been negligent throughout in pursuing the proceedings. There is a colossal delay of 695 days in filing the present appeal. The explanation so furnished would not fall within the expression “sufficient cause” so as to entitle the assessee for condonation of inordinate delay of 695 days in filing the appeal. Accordingly, the application is dismissed. C.M. No. 16634-CII of 2012 and ITA No. 136 of 2012 -4- Consequently, the appeal also stands dismissed as barred by time. (AJAY KUMAR MITTAL) JUDGE September 13, 2012 (G.S. SANDHAWALIA) gbs JUDGE "