Purushothama Charya Tirumala, Hyderabad, Hyderabad V. ITO, Ward-4(1), Hyderabad, Hyderabad

ITA 1408/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2389 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 19-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Keywords: Condonation of delay
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B SMC : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT ITA.NO.1407/HYD/2016 (ASSESSMENT YEAR 2009-2010) ITA.NO.1408/HYD/2016 (ASSESSMENT YEAR 2009-2010) PURUSHOTHAMA CHARYA TIRUMALA, FLAT NO.201, 1-8-677/13, PADMA COLONY, NALLAKUNTA, HYDERABAD. PAN:AAWPT7636B VS. INCOME TAX OFFICER, WARD-4(1), HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE: SHRI MOHD AFZAL FOR REVENUE : SMT. N. SWAPNA, DR DATE OF HEARING : 22.06.2017 DATE OF PRONOUNCEMENT : 22.06.2017 ORDER PER D. MANMOHAN, VP. THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS PASSED BY THE LD CIT (A)-1, HYDERABAD AND THEY PERTAIN TO ASSESSM ENT YEAR 2009-2010. 2. THE ASSESSEE IS ENGAGED IN LEGAL PROFESSION AND ADMITTED INCOME OF RS. 2,50,511/- FOR THE A.Y. 2009-2010. SINCE THIS CASE WAS SELECTED FOR SCRUTINY, THE A.O. CALLED FOR DETAILS OF THE NATURE OF INCOME. SHRI R . LAKSHMAN RAO, CHARTERED ACCOUNTANT, APPEARED FROM TIME TO TIME AND FILED TH E NECESSARY INFORMATION WHEREIN, THE A.O. NOTICED THAT A CASH DEPOSIT OF RS. 4 LAKHS WAS MADE IN ANDHRA BANK, GAGANMAHAL COLONY BY THE ASSESSEE. WHEN THE SOURCE FOR THE SAID DEPOSIT WAS ASKED FOR, A CONFIRMATION LETTER FROM SHRI M. RAMESHWER, A RETIRED BANK OFFICER WAS FILED STATING THAT A HAND LOAN OF RS. 4 LAKHS WAS GIVEN, WHICH WAS SUBSEQUENTLY PAID BY THE ASSESSEE. IN PROOF OF CREDITWORTHINESS, A LETTER F ROM S.B.H. MALAKPET BRANCH WAS ALSO FILED WHICH INDICATES THAT SHRI M. RAMESHWER HAS AV AILED A LOAN OF RS. 3.5 LAKHS ON 6.6.2006. 3. THE ASSESSING OFFICER DOUBTED THE GENUINENESS OF THE LOAN MAINLY ON THE GROUND THAT THERE IS NO OBLIGATION ON THE PART OF T HE BANK OFFICER TO OBTAIN A LOAN FROM 2 THE BANK, ON INTEREST, TO GIVE A HAND LOAN TO THE A SSESSEE WITHOUT INTEREST. HE ACCORDINGLY TREATED THE SUM OF RS. 4 LAKHS AS UNDIS CLOSED INCOME U/S 69 OF THE ACT. CONSEQUENTLY, PENALTY WAS ALSO LEVIED U/S 271(1)(C) OF THE ACT. 4. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE LD. CIT (A) THAT DURING THE PERIOD, RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION , THE ASSESSEES SON INTENDED TO GO ABROAD FOR HIGHER EDUCATION AND IT IS A COMMON P RACTICE THAT THE APPROPRIATE AUTHORITIES, WHILE GRANTING VISA FOR HIGHER EDUCATI ON, SEEK DETAILS INDICATING THE CREDITWORTHINESS OF THE CANDIDATE AND HIS PARENTS. ONE OF THE BENCH MARKS TO JUDGE THE CREDITWORTHINESS OF THE PARENTS / STUDENT IS TO LOOK AT THE BANK BALANCE ON A PARTICULAR DATE AND MERELY TO FULFIL THIS CONDITION , THE ASSESSEE REQUESTED HIS FRIENDS TO ACCOMMODATE HIM FOR A FEW DAYS WITH REQUIRED AMO UNT. TO HELP THE ASSESSEE, ONE OF HIS FRIENDS SHRI M. RAMESHWAR, A RETIRED BANK OF FICER AGREED TO ACCOMMODATE AN AMOUNT OF RS. 4 LAKHS, WHICH WAS DEPOSITED IN THE A SSESSEES BANK ACCOUNT AND RETURNED IMMEDIATELY AFTER A SHORT PERIOD. IT WAS, THUS, CONTENDED THAT THERE IS NO GROUND TO DOUBT THE GENUINENESS AND CREDITWORTHINES S OF THE TRANSACTION. BUT, THE A.O. MADE ADDITION AND LEVIED PENALTY. 5. IT CAN BE NOTICED THAT THE ASSESSEE FILED AN APP EAL BEFORE THE LD. CIT(A), WITH A DELAY OF 52 DAYS. WITH REGARD TO THE DELAY IN FI LING OF APPEAL, LD. CIT(A) WAS OF THE OPINION THAT THE MISTAKE ON THE PART OF THE CHARTER ED ACCOUNTANT CANNOT BE TREATED AS A VALID GROUND FOR CONDONATION OF DELAY AND IN T HIS REGARD HE RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF M.S. NULON INDIA LTD VS. CIT (DEL) 219 ITR 736 AS WELL AS THE DECISION OF THE IT AT, CHENNAI BENCH (TM) IN THE CASE OF JCIT VS. TFE LTD, 104 ITR 149. ACCORDINGLY, QUA NTUM APPEAL IS DISMISSED, WITHOUT GOING INTO THE MERITS OF THE CASE. CONSEQUENTLY, P ENALTY LEVIED BY THE ASSESSING OFFICER WAS CONFIRMED. 6. AGGRIEVED BY BOTH THE ORDERS, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A SSESSEE HAS A STRONG PRIMA FACIE CASE ON MERITS SINCE, THERE IS NO DISPUTE WITH REGA RD TO THE CREDITWORTHINESS OF THE CREDITOR AND THE ADDITION WAS MADE MERELY ON SU RMISES AND SUSPICION, MORE ON PRESUMPTION. THAT THERE IS NO NEED FOR A RETIRED B ANK OFFICER TO GIVE LOAN TO THE ASSESSEE FOR A SHORT PERIOD, OVERLOOKING THE FACT T HAT SUCH TRANSACTIONS ARE NORMAL FOR 3 THE PURPOSE OF ENSURING THAT VISA AUTHORITIES GIVE CLEARANCE TO THE SON OF THE ASSESSEE WHO WAS INTENDING TO GO ABROAD FOR HIGHER EDUCATION . EVEN, WITH REGARD TO THE DELAY IN FILING THE APPEAL, LD COUNSEL FOR THE ASSESSEE R ELIED UPON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF N. BALAKRISHNAN VS. M. KR ISHNAMURTHY (1998) 7 SCC 123, WHEREIN THE COURT OBSERVED THAT MERELY THERE IS SOME LAPSE ON THE PART OF THE ASSESSEE, THAT CANNOT BE THE SOLE REASON TO TURN DO WN HIS PLEA SO LONG AS THE EXPLANATION DOES NOT SMACK OF MALA FIDES. IN THE SAID CASE, THE COURT FURTHER OBSERVED THAT CONDONATION OF DELAY IS A MATTER OF DISCRETION OF THE COURT AND IT DOES NOT SAY THAT SUCH DISCRETION CAN BE EXERCISED ONLY IF THE D ELAY IS WITHIN A CERTAIN LIMIT. IF THE EXPLANATION APPEARS TO BE PROPER TO THE BENCH, IT C AN BE ACCEPTED AS SUFFICIENT CAUSE. IN THE AFORESAID CASE, THERE WAS A LAPSE ON THE PAR T OF THE ADVOCATE, WHICH RESULTED IN DELAY IN FILING THE APPEAL IN TAKING APPROPRIATE PROCEEDINGS. LD COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT EVEN IN THIS CA SE, THE ADDITION HAVING BEEN MADE MERELY ON SURMISES AND SUSPICION, MERELY BECAUSE TH E ASSESSEE COULD NOT FILE THE APPEAL WITHIN THE STIPULATED PERIOD, ON ACCOUNT OF LAPSE OF A CHARTERED ACCOUNTANT, THE RIGHT OF THE ASSESSEE IN FILING AN APPEAL SHOUL D NOT BE CLOSED ON THAT GROUND ALONE. 8. I HAVE HEARD THE LD DR AND PERUSED THE RECORD. IN THE LIGHT OF THE DECISION OF THE HONBLE APEX COURT AND HAVING REGARD TO THE EXP LANATION GIVEN BY THE ASSESSEE, I AM OF THE VIEW THAT IT IS A FIT CASE FOR CONDONAT ION OF DELAY. UNDER THESE CIRCUMSTANCES, THE ORDER PASSED BY THE LD. CIT(A) I S HEREBY SET ASIDE AND I DIRECT THE LD. CIT(A) TO CONDONE THE DELAY AND DISPOSE OF THE APPEAL ON MERITS. CONSEQUENTLY, THE APPELLATE ORDER PASSED WITH REFERENCE TO THE PE NALTY LEVIED IS ALSO SET ASIDE FOR A FRESH CONSIDERATION. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JUNE, 2017. SD/- (D. MANMOHAN) VICE PRESIDENT HYDERABAD, DATED: 22 ND JUNE, 2017 4 OKK, SR.PS COPY TO 1. PURUSHOTHAMA CHARYA TIRUMALA, FLAT NO.201, 1 - 8 - 677/13, PADMA COLONY, NALLAKUNTA, HYDERABAD. 2. INCOME TAX OFFICER, WARD-4(1), HYDERABAD. 3. CIT(A)-1, HYDERABAD. 4. PR. CIT-1, HYDERABAD. 5. D.R. ITAT B BENCH, HYDERABAD. 6. GUARD FILE