GUNTNUR VINAY ,BENGALURU V. INCOME TAX OFFICER, WARD-5(2)(5), BENGALURU

ITA 1828/BANG/2024

AI Insights

The case involves Guntur Vinay, the appellant, contesting an order from the Commissioner of Income-tax (Appeals) which was based on an assessment by the AO for the Assessment Year 2017-18. The primary contention was the incorrect assessment of income and unexplained money credited to the appellant's bank account, along with procedural grievances regarding the lack of adequate opportunity to present his case. The Tribunal noted procedural lapses and the failure to consider relevant CBDT circulars concerning the assessment of cash deposits during the demonetization period. The Tribunal's decision to remit the case back to the AO was influenced by the need to adhere to principles of natural justice and proper procedural conduct.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 34331 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 13-11-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 20-09-2024
• Other Referred Cases: Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GANESH R GALE; STANDING COUNSEL
• Assessee Lawyers: LAKSHMI
• Keywords: Condonation of delay; Opportunity of being heard; Principle of natural justice
• Section: 250; 69A; 274; 234B; 271B

Judgement Text

"ITANo.1828/Bang/2024 Guntur Vinay, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “A’’BENCH: BANGALORE BEFORE PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.1828/Bang/2024 Assessment Year: 2017-18 Guntur Vinay 4/1, 9th Main DR Raj Road Srinivasanagar Bangalore 560 050 PAN NO :AFJPV6061Q Vs. ITO Ward-5(2)(5) Bangalore APPELLANT RESPONDENT Appellant by : Smt. Lakshmi, A.R. Respondent by : Sri Ganesh R Gale, Standing Counsel for department Date of Hearing : 13.11.2024 Date of Pronouncement : 25.11.2024 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of assessee is directed against the order of CIT(A)/NFAC dated 20.6.2024 vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1065860778(1) passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”) for the Assessment year (in short “AY) 2017-18. 2. The assessee has raised following grounds of appeal: 1. The Order of the learned Commissioner passed under section 250 of the Act is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant's case. 2. The Appellant denies to be assessed for income of Rs. 15,72,103/- as against the actual total income NIL in the facts and circumstances of the case. 3. The learned Commissioner of Income-tax (Appeals) erred in passing the order without giving sufficient opportunity of being heard thus ITA No.1828/Bang/2024 Guntur Vinay, Bangalore Page 2 of 7 violating the principles of natural justice renderingthe order liable to be cancelled on the facts and circumstances of the case. 4. The learned Commissioner of Income-tax (Appeals) erred in dismissing the appeal on the basis that the Appellant is not interested in prosecuting the appeal despite the fact that the Appellant was unaware of the notices issued in the facts and circumstances of the case. 5. The learned Commissioner of Income-tax (Appeals) ought to have held that the learned Assessing Officer grossly erred in holding the sum of Rs.6,54,246/- found credited in the bank account of the appellant as unexplained money u/s 69A of the Income Tax Act, 1961 in the facts and circumstances of the case. 6. The learned Commissioner of Income-tax (Appeals) ought to have held that the learned Assessing Officer grossly erred in holding the amount deposited in the bank account of Rs.4,01,808/- as unexplained money u/s 69A of the Income Tax Act, 1961 in the facts and circumstances of the case. 7. The learned Commissioner of Income-tax (Appeals) ought to have held that the learned Assessing Officer grossly erred in confirming the addition of Rs.4,12,000/- as income from business or profession for the impugned year in the facts and circumstances of the case. 8. The learned Commissioner of Income-tax (Appeals) ought to have held that levying interest under section 234A and 234B of the is bad in law and facts and circumstances of the case. 9. The learned Commissioner of Income-tax (Appeals) ought to have held that the penalty proceedings-initiated u/s 274 r.w.s 271AAC, 270A(1) r.w.s270A(9)(a), 271A, 271B and 271F of the Act is contrary to law on the facts and circumstances of the case. 10. The Appellant craves leave to add, alter, delete or substitute any of the grounds urged above. 11. In the view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the interest of justice andequity. 3. There is a short delay of 33 days in filing the present appeal before this Tribunal. The assessee has filed the application for condonation of delay along with an affidavit dated 18.9.2024 stating that the appeal could not be filed within the time for the reason that the auditor was pre-occupied with the tax audit works and accordingly prayed that a lenient view may be taken in the interest ITA No.1828/Bang/2024 Guntur Vinay, Bangalore Page 3 of 7 of justice. Further, ld. A.R. of the assessee vehemently submitted that the delay was neither deliberate nor within the control of the assessee. 3.1 The Ld. DR though opposed for the condonation of delay could not controvert the submissions made therein. 4. We have gone through the reasons explained by the assessee for filing the appeal belatedly before this Tribunal. At this juncture, it is appropriate to mention the judgment of the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) which laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder: (1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late (2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner. (4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a nondeliberate delay. (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A ITA No.1828/Bang/2024 Guntur Vinay, Bangalore Page 4 of 7 litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 4.1 Thus, when substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay. Moreover, no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the belated appeal was filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. Therefore, in our opinion, by preferring the substantial justice, the short delay of 33 days has to be condoned. Keeping in view of the circumstances, under which the assessee’s appeal was filed belatedly, we condone the short delay of 33 days and admit the appeal for adjudication. 5. At the outset, the ld. A.R. of the assessee vehemently submitted that both the authorities below have passed the order without giving sufficient opportunity of being heard which is a clear violation of the principles of natural justice. Further, the ld. A.R. of the assessee submitted an affidavit dated 11/11/2024 sworn before the Notary Public stating reasons that no physical copies were received by the assessee and merely uploaded on the portal. Further, it is also stated that the assessee has no knowledge in income tax proceedings as he has studied only upto SSLC and therefore, the submissions could not be made within the time specified by both the lower authorities. Further the ld. A.R. of the assessee undertakes to appear along with necessary ITA No.1828/Bang/2024 Guntur Vinay, Bangalore Page 5 of 7 documents/records/submissions before the AO, if the matter is remitted back to the file of AO for fresh consideration. 5.1. Further, ld. A.R. of the assessee also submitted that the case of the assessee was solely selected for scrutiny for the for the reason of substantial cash deposits during the demonetization period in the bank accounts and the AO has not followed the mandatory CBDT Circular/instructions with regard to the demonetization while passing the assessment order. 6. The ld. D.R. on the other hand supported the Order of the Authorities below and submitted that the assessee could not substantiate his case by submitting documents/explanations before both the Authorities below and further submitted that the revenue has no objection if the case is remitted back to the AO for fresh adjudication subject to levy of cost. 7. We have carefully considered the rival submissions and perused the orders of lower authorities & materials on Record. We note that the authorities below have not considered the CBDT circulars in order to verify the substantial cash deposits during the demonetization period. Even the AO during the assessment proceedings has not considered the relevant CBDT circulars that was issued for the purposes of verifying the demonetized cash deposited during the year under consideration. Admittedly, the order has been passed by the authorities below ex-parte without giving reasonable opportunity of being heard. Being so, we are of the opinion that in the interest of justice and fair play and as requested by the ld AR of the Assessee, one more opportunity may be given to the assessee to substantiate his claim and accordingly we set-aside the entire issue in dispute to the file of AO for fresh consideration in accordance with Law. Needless to say the reasonable opportunity of being heard must be granted to the ITA No.1828/Bang/2024 Guntur Vinay, Bangalore Page 6 of 7 assessee. We also direct the AO to verify the Gross Receipts made by the assessee that is deposited into the bank accounts during the year under consideration in accordance with the following circulars whichever is applicable to the facts of the case- a) The 1st instruction was issued on 21/02/2017 by instruction number 03/2017. b) The 2nd instruction was issued on 03/03/2017 instruction number 4/2017. c) The 3rd instruction was in the form of a circular dated 15/11/2017 in F.No. 225/363/2017-ITA.II and the last one dated 09/08/2019 in F.no.225/145/2019-ITA.II. and decide the issue in the light of above CBDT instructions issued for dealing with the demonetization. The assessee is also directed to submit all the evidences/documents/records within 90 days from the date of service of the notice(s) and cooperate with the proceedings before the revenue authorities for proper adjudication of the case. We clarify that in case of further default, the assessee shall not be entitled for any leniency. 8. In the result, appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 25th Nov, 2024 Sd/- (Prashant Maharishi) Vice President Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 25th Nov,2024. VG/SPS ITA No.1828/Bang/2024 Guntur Vinay, Bangalore Page 7 of 7 Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. "