Shri Ghanshyambhai Virjibhai Patel(HUF), Surat V. The Income tax Officer,Ward-9(2), Surat

ITA 1047/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1692 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-04-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 14-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: R N VEPARI
• Keywords: Condonation of delay
• Section: 133A

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ ITA NO.1047/AHD/2012 / ASSTT. YEAR: 2003-2004 GHANSHYAMBHAI VIRJIBHAI PATEL (HUF) 15, MAHESHWARI SOCIETY OPP: BARODA PRESTIGE VARACHHA ROAD SURAT 395 006. PAN : AACHG 4030 J VS THE ITO, WARD - 9(2) SURAT. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI R.N. VEPARI, AR REVENUE BY : SHRI DINESH SINGH, SR.DR / DATE OF HEARING : 11/04/2016 / DATE OF PRONOUNCEMENT: 17/05/2016 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF THE LD.CIT(A)-V, SURAT DATED 8.3.2010 PASSED FOR THE AS STT.YEAR 2003-04. 2. THE ASSESSEE HAS TAKEN FOUR GROUNDS OF APPEAL, W HEREBY, HE HAS CHALLENGED REOPENING OF THE ASSESSMENT, ADDITION OF RS.6,63,973/- ADDED AS UNEXPLAINED CAPITAL CREATION AND ADDITION OF RS.1,56,510/- BY DISBELIEVING THE AGRICULTURE INCOME. 3. BRIEF FACTS OF THE CASE ARE THAT A SURVEY ACTION UNDER SECTION 133A OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT AT THE PREMISES OF SHRI ITA NO.1047/AHD/2012 2 PANKAJ DANAWALA, A PRACTICING CHARTERED ACCOUNTANT. DURING THE COURSE OF SURVEY, HE WAS FOUND TO HAVE CREATED LARGE NUMBE R OF CAPITAL BUILD UP CASES. MODUS OPERANDI WAS FRAUDULENT, AND THEY ARE OF MAINLY TWO CATEGORIES. IN THE FIRST CATEGORY AN INFLATION OF OPENING CAPITAL HAS BEEN MADE. FOR EXAMPLE, IN THE CLOSING BALANCE OF THE F INANCIAL YEAR ENDING ON 31.3.2001 OF RS.1 LAKH, THE OPENING CAPITAL BALA NCE AT THE BEGINNING OF THE YEAR I.E. 1.4.2001 HAS BEEN MADE TO RS.16 LA KHS. HENCE, CAPITAL BALANCE HAS JUMPED UPTO RS.15 LAKHS. THE AO HAS G OT INFORMATION ABOUT SUCH CAPITAL CREATION IN THE CASE. HE REOPEN ED THE ASSESSMENT AND OBSERVED THAT AN OPENING CAPITAL BALANCE OF RS. 6,63,973/- HAS BEEN SHOWN INVESTED IN THE FORM OF LOANS AND ADVANCES. HE MADE ADDITION ON SUBSTANTIVE BASIS IN THE CASE OF SHRI DEVSHIBHAI PATEL GROUP AND ON PROTECTIVE BASIS IN THE CASE OF THE ASSESSEE. SIMI LARLY, THE AO DID NOT ACCEPT THE CLAIM OF AGRICULTURE INCOME OF RS.1,56,5 10/- AND DETERMINED THE TAXABLE INCOME OF THE ASSESSEE AT RS.8,72,680/- AS AGAINST RS.52,200/- DECLARED BY THE ASSESSEE. 4. APPEAL OF THE ASSESSEE WAS DISMISSED BY THE CIT( A) ON 8.3.2010. 5. THE ASSESSEE HAS PRESENTED THIS APPEAL BEFORE TH E TRIBUNAL ON 14.5.2012. THUS, THERE WAS A HUGE DELAY OF ONE YEA R AND NINE MONTHS. THE REGISTRY HAS POINTED OUT THE DELAY TO THE ASSES SEE. IN ORDER TO EXPLAIN THE DELAY, THE ASSESSEE HAS FILED AN APPLIC ATION FOR CONDONATION OF DELAY UNDER SECTION 253(3) OF THE INCOME TAX ACT , 1961. THE AFFIDAVIT OF THE ASSESSEE, DEPOSED ON 11.5.2012, HA S BEEN ANNEXED ALONG WITH APPLICATION. IN THE APPLICATION, THE AS SESSEE HAS PLEADED THAT HE REMAINED UNDER IMPRESSION THAT HIS APPEAL W AS PENDING BEFORE THE CIT(A). WHEN THE AO HAS PRESSED FOR RECOVERY O F THE TAX, THEN, HE ENQUIRED ABOUT THE STATUS OF THE APPEAL. HE APPROA CHED SHRI R.N. VEPARI, CA AND THROUGH HIS ASSISTANT HE GOT COPY OF THE ORDER. HE ALLEGED THAT THE COPY OF THIS ORDER HAS BEEN SERVED ON THE ASSESSEE, MORE SO, ON THE AUTHORIZED REPRESENTATIVE OF THE AS SESSEE. IT IS ALSO ITA NO.1047/AHD/2012 3 PLEADED THAT WHEN HE INQUIRED ABOUT THIS ASPECT, TH EN, THE OFFICE OF CIT(A) HAS INFORMED THE ASSESSEE THAT ORDER WAS REC EIVED BY ONE MS. D.P. BHAMGARA. THE ASSESSEE WROTE A LETTER TO D.P. BHAMGARA ON 26.4.2012. HE SOUGHT AN EXPLANATION AS TO WHY NONE HAS ATTENDED THE PROCEEDING BEFORE THE LD.CIT(A). IN RESPONSE TO HI S LETTER, HE ALLEGED THAT D.P. BHAMGARA WROTE A LETTER TO SHRI R.N. VEPA RI ON 28.4.2012. IN THIS LETTER, SHE HAS DISCLOSED THAT SHE WAS WORKING WITH ADVOCATE SHRI JAY LALIT DEPUTY AND SHRI VASANT A. SHAH. SHE HAD LEFT THE OFFICE IN THE YEAR 2005. SHE HAS NOT RECEIVED ORDER OF THE ASSES SEE. SOMEBODY HAS PLAYED A DIRTY MISCHIEF. ON THE STRENGTH OF THIS I NFORMATION, THE ASSESSEE SOUGHT CONDONATION OF DELAY. 6. ON THE OTHER HAND, THE LD.DR POINTED OUT THAT TH ERE IS NO PLAUSIBLE EXPLANATION AT THE END OF THE ASSESSEE FO R CONDONATION OF DELAY. 7. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. SUB-SECTION 5 OF SECTION 253 EM POWERS THE TRIBUNAL TO ADMIT THE APPEAL, WHICH HAS BEEN FILED AFTER EXP IRY OF LIMITATION IN CASE THE APPELLANT GIVES SATISFACTORY REASONS FOR N OT PRESENTING THE APPEAL WITHIN THE LIMITATION. NOW DOUBT, THERE IS A DELAY OF ONE YEAR AND NINE MONTHS. IT IS ALSO UNDISPUTED THAT IN LAR GE NUMBER AUTHORITATIVE PRONOUNCEMENTS, IT HAS BEEN LAID DOWN THAT LENGTH OF DELAY IS IMMATERIAL. IT IS THE PLAUSIBILITY OF EXP LANATION GOAD THE ADJUDICATING AUTHORITY TO DECIDE WHETHER DELAY IS T O BE CONDONED OR NOT. IT IS ALSO UNDISPUTED THAT IN THE CASE OF DELAY A S YMPATHETIC AND COMPASSIONATE APPROACH OUGHT TO BE ADOPTED BY THE A DJUDICATING AUTHORITY. WE HAVE KEPT THESE ASPECTS IN MIND, WHI LE ANALYSING THE EXPLANATION OF THE ASSESSEE FOR CONDONATION OF DELA Y. ON DUE CONSIDERATION OF ALL THESE FACTS, WE ARE OF THE VIE W THAT THE ASSESSEE FAILED TO GIVE ANY PLAUSIBLE EXPLANATION. IT IS A COOKED UP STORY. THE SUBSTANTIVE ADDITION WAS MADE IN THE HANDS OF SHRI DEVSHIBHAI PATEL. ITA NO.1047/AHD/2012 4 TWELVE APPEALS INVOLVING IDENTICAL ISSUE WERE DISPO SED BY THE TRIBUNAL INCLUDING SHRI DEVSHIBHAI PATEL ON 17.2.2012. THE TRIBUNAL HAS QUASHED THE ASSESSMENT ORDERS ON THE GROUND THAT TH E AO FAILED TO REOPEN THE ASSESSMENT IN ACCORDANCE WITH LAW. THE ORDER WAS PRONOUNCED ON 17.2.2012. AFTER THIS DATE, ONLY TAX ABILITY CAME UPON THE ASSESSEE, AND HE BECAME ALL OF A SUDDEN VIGILAN T. THE LD.CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE ON 8.3.2010. THE CIT(A) HAS OBSERVED THAT SINCE IN THE HANDS OF THE ASSESSEE, T HESE ARE ONLY PROTECTIVE ADDITION, NO PREJUDICE WILL BE CAUSED BY THE PROTECTIVE ADDITION MADE IN THIS CASE, THEREFORE, NO REASON TO INTERFERE WITH THE FINDINGS OF THE AO. IT APPEARS THAT THE ASSESSEE W AS SATISFIED WITH THIS FINDING AND REMAINED UNDER IMPRESSION THAT HE IS NO T LIABLE TO PAY TAX. HE DID NOT CHALLENGE THIS ORDER AT APPROPRIATE TIME . AS FAR AS THE REASONS PUT FORTH FOR EXPLANATION OF THE DELAY IS T HAT THIS ORDER WAS NOT SERVED UPON THE ASSESSEE, AND THEREFORE, THE LIMITA TION SHOULD BE COUNTED FROM THE DATE OF KNOWLEDGE OF THE ORDER. W E DO NOT FIND ANY FORCE IN THIS STORY OF THE ASSESSEE, BECAUSE, THIS ORDER WAS RECEIVED BY ONE D.P. BHAMGARA. SHE WAS JUNIOR TO SHRI JAY LALI T DEPTY AND SHRI VASANT A. SHAH. THE ASSESSEE HAS ENGAGED THEM TO P ROSECUTE THE APPEAL BEFORE THE CIT(A). HAD THERE WAS NO POWER O F ATTORNEY, IN FAVOUR OF D.P. BHAMGARA, NO ORDER COULD HAVE BEEN G IVEN TO HER. EXPLANATION GIVEN BY HER IS CONTRADICTORY. ON THE OTHER HAND, SHE HAS BEEN ALLEGING THAT SHE LEFT OFFICE OF JAY LALIT DEP TY AND SHRI VASANT A. SHAH IN THE YEAR 2005. THE APPEAL WAS INSTITUTED B EFORE THE CIT(A) ON 5.12.2008. IF SHE HAS LEFT THE OFFICE IN THE YEAR 2005, AND THEN HOW HER POWER OF ATTORNEY WAS ANNEXED WITH THE APPEAL FILED BEFORE THE LD.CIT(A). THE ASSESSEE INSTEAD OF ASKING D.P. BHA MGARA OUGHT TO HAVE WROTE A LETTER TO JAY LALIT DEPTY AND SHRI VASANT A . SHAH WHO HAVE HANDLED HIS CASE BEFORE THE AO AND FILED APPEAL BEF ORE THE CIT(A). THUS, WE ARE OF THE OPINION THAT AFTER THE DECISION OF THE TRIBUNAL IN THE CASE OF SHRI DEVSHIBHAI PATEL, THE ASSESSEE BECAME VIGILANT AND COOKED UP A STORY ONLY WITH A VIEW TO GET THE DELAY CONDON ED, OTHERWISE, THERE ITA NO.1047/AHD/2012 5 WAS NO BONA FIDE IN THE EXPLANATION OF THE ASSESSEE. WE DO NOT FIN D ANY PLAUSIBLE REASON TO CONDONE THE DELAY. ACCORDI NGLY, THE APPEAL OF THE ASSESSEE IS DISMISSED, BEING TIME BARRED. 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON 17 TH MAY2016 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER