CHANDRA KAILASH BHASIN, MUMBAI V. ITO 19(1)3, MUMBAI

ITA 2432/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4206 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 12-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: TRIPUR SUNDRI
• Assessee Lawyers: MANDER VAIDYA
• Keywords: Unexplained cash credit; Bonafide belief; Period of limitation; Reasonable cause; Time period of passing order
• Section: 68; 54; 2; 11

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - C BENCH. . .. . . .. . , ,, , / !'# !'# !'# !'# , ' ' ' ' BEFORE S/SH. B.R. MITTAL, JUDICIAL MEMBER & RA JENDRA, ACCOUNTANT MEMBER ./ ITA NO.2432/MUM/2012, $ $ $ $ % % % % / ASSESSMENT YEAR-2006-07 CHANDRA KAILASH BHASIN FLAT NO. 301, SUVARNA, 15 TH ROAD, SANTACRUZ(W) MUMBAI-400054 VS. ITO 19(1)3 MUMBAI- PAN: AABPB 9486G ( &' / APPELLANT ) ( ()&' / RESPONDENT ) &' &' &' &' * * * * ' ' ' ' / APPELLANT BY : SHRI MANDER VAIDYA ()&' + * ' / RESPONDENT BY : MS. TRIPUR SUNDRI $ $ $ $ + ++ + ,- ,- ,- ,- / DATE OF HEARING : 08-07-2013 ./% + ,- / DATE OF PRONOUNCEMENT : 08-07-2013 $ $ $ $ , 1961 + ++ + 254(1) ' '' ' ,0, ,0, ,0, ,0, ' ' ' '1 11 1 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, A.M. CHALLENGING THE ORDER DT.30-07-2010 OF THE CIT(A)-3 0,MUMBAI,ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1)THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRE D IN UPHOLDING THE ADDITION ON ACCOUNT OF CAPITAL GAINS BY HOLDING THAT WHERE A RESIDENTIAL UNIT IS A CQUIRED BY THE ASSESSEE, IN A SCHEME OF DEVELOPMENT , FROM THE DEVELOPER SUCH ACQUISITION DOES NOT AMOUNT TO EITHER PURCHASE OR CONSTRUCTION AND HENCE I S INELIGIBLE FOR EXEMPTION U/S. 54 OF THE ACT. 2)THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FAIL ED TO NOTE THAT ACQUISITION OF A NEW FLAT FROM A DEVELOPER, UNDER A SCHEME OF REDEVELOPMENT, AMOUNTS TO CONSTRUCTION OF RESIDENTIAL HOUSE THROUGH A DEVELOPER AND HENCE THE APPELLANT/ASSESSEE IS ENTIT LED FOR EXEMPTION U/S. 54 OF THE ACT. 3)THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN HOLDING THAT THE NEW RESIDENTIAL F LAT ACQUIRED FROM A DEVELOPER IS CONSIDERATION TOWARDS TRANSFER OF OLD FLAT AND HENCE CANNOT BE TREATED AS PURCHASE OR CONSTRUCTION. 4)THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRE D IN UPHOLDING THE ADDITION. OF BANK DEPOSITS OF RS .1 ,60,000/-, AS UNEXPLAINED CREDIT U/S. 68 OF THE AC T. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERR ED IN NOT APPRECIATING THAT SECTION 68 HAS NO APPLICAT ION TO DEPOSITS IN BANK. 5)WITHOUT PREJUDICE TO THE ABOVE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING THE ADDITION U/S. 68 OF BANK DEPOSITS. 6)THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY ANY GROUNDS OF APPEAL HE HAS ALSO FILED AN APPLICATION,FOR CONDONING DELA Y OF 553 DAYS IN FILING APPEAL BEFORE THE TRIBUNAL,ALONG WITH HIS AFFIDAVIT DATED 16 TH APRIL 2012. 2. ASSESSEE,AN INDIVIDUAL, FILED HIS RETURN OF INCOME ON 14.07.2006 DECLARING TOTAL INCOME OF RS2,97,571.ASSESSING OFFICE (AO) FINALISED THE ASSE SSMENT ORDER U/S.143(3) OF THE ACT,ON30.1.2. 2008,DETERMINING THE TOTAL INCOME AT RS. 45.58 LAKH S. DURING THE ASSESSMENT PROCEEDINGS, ASSESSING OFFICE R (AO) HAD MADE CERTAIN ADDITIONS TO THE INCOME OF THE ASSESSEE. ONE OF THE ADDITIONS WAS AB OUT EXEMPTION CLAIMED BY THE ASSESSEE U/S 54 2 ITA NO.2432/MUM/2012,(AY-2006-07) CHANDRA KAILASH BHASIN OF THE ACT. IN THE APPELLATE PROCEEDINGS,FIRST APPE LLATE AUTHORITY (FAA) UPHELD THE ORDER OF THE AO AND DENIED THE CLAIM OF THE ASSESSEE MADE U/S 54 OF THE ACT. AO HAD ALSO MADE ADDITIONS U/S 68 OF THE ACT FOR THE CASH DEPOSITS MADE IN ACCOUNT OF THE ASSESSEE FROM MAY 2005 TO NOVEMBER 2005. AFTER HEARING THE ASSESSEE, FAA UPHELD THE AD DITION OF CASH DEPOSITS AMOUNTING TO RS. 1.6 LACS. 2.1. AS PER THE APPLICATION FILED FOR CONDONING DELAY AN D THE AFFIDAVIT OF THE ASSESSEE ORDER OF THE FAA DATED 30 TH JULY 2010 DATED 30 TH JULY 2010,WAS RECEIVED BY HIM ON OR AROUND 15 TH AUGUST 2010,THAT HE IS A SENIOR CITIZEN AND HAD LIMITED EX CESS TO LEGAL ADVICE,THAT HE DID NOT GET CORRECT ADVICE AND WAS UNDER A BONAFIDE BELIEF THAT HIS CAS E HAD NOT MERITS,THAT ON DISMISSAL OF HIS APPEAL BY THE FAA HE DID NOT PURSUE THE MATTER IN FURTHER APPEAL, THAT AFTER HE GOT THE PENALTY ORDER DATED 2 ND APRIL 2010 HE WAS ADVISED THAT HIS CASE HIS CASE W AS HIGHLY MERITORIOUS AS FAR AS THE ISSUE OF EXEMPTION U/S 54 OF THE ACT WAS CONCERNED,THAT AFTE R RECEIVING SAID ADVICE HE DECIDED TO FILE BELATED APPEAL. 2.2. BEFORE US,AUTHORISED REPRESENTATIVE(AR) SUBMITTED T HAT THE ASSESSEE WAS PREVENTED BY A REASONABLE CAUSE FOR NOT FILING THE APPEAL IN TIME, THAT BECAUSE OF WRONG LEGAL ADVICE HE FAILED TO AGITATE THE MATTER BEFORE THE TRIBUNAL, THAT DELAY SHOULD BE CONDONED.DEPARTMENTAL REPRESENTA - TIVE (DR) SUBMITTED THAT NO EXPLANATION HAD BEEN FU RNISHED BY THE ASSESSEE FOR INORDINATE DELAY IN FILING APPEAL BEFORE THE TRIBUNAL,THAT REASONS GIVE N BY THE ASSESSEE IN HIS AFFIDAVIT AND IN THE APPLICATION FILED FOR CONDONING THE DELAY WERE VAGU E, THAT SHOULD BE CONDONED. 2.3. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE APPLICATION FOR CONDONING THE DELAY WAS FILED AFTER THE PENALTY ORDER WAS RECEIVED BY THE ASSESSEE IN APRIL 2010. HE ASSESSEE HAS FILED AN AFFIDAVIT O F ONE CHARTERED ACCOUNTANT NAMELY SHRI SANDEEP RATHI DATED 15.04.2013. AS PER THE AFFIDAVI T, ASSESSEE HAD RECEIVED A NOTICE U/S.156 OF THE ACT DATED 26.03.2012 ALONG WITH AN ORDER PASSED BY THE AO U/S 271(C) OF THE ACT, THAT HE ADVISED THE ASSESSEE TO OBTAIN AN OPINION OF A COUN SEL, THAT AFTER SEEKING OPINION THE ASSESSEE WAS ADVISED TO FILE APPEAL BEFORE THE TRIBUNAL. AFTER GOING THROUGH THE AFFIDAVITS OF THE ASSESSEE AND THE CHARTERED ACCOUNTANT AS WELL AS THE APPLICATION FILED FOR CONDONING THE DELAY,WE ARE OF THE OPINION THAT IT IS NOT A FIT CASE WHERE DELAY OF MORE THAN 550 DAYS COULD CONDONED. AS PER THE SE TTLED LAW OF CONDONATION OF DEALY,IF SUFFICIENT CAUSE FOR EXCUSING DELAY IS SHOWN,DISCRETION IS GIV EN TO THE PRESIDING OFFICERS TO CONDONE THE DELAY AND ADMIT THE APPEAL.THE EXPRESSION 'SUFFICIE NT CAUSE' IS NOT DEFINED IN THE ACT,BUT IT MEANS A CAUSE WHICH IS BEYOND THE CONTROL OF AN ASSESSEE. FOR INVOKING THE AID OF THE SECTION ANY CAUSE WHICH PREVENTS A PERSON APPROACHING THE TRIBUNAL WI THIN TIME IS CONSIDERED SUFFICIENT CAUSE.IN DOING SO,IT IS THE TEST OF REASONABLE MAN IN NORMAL CIRCUMSTANCES WHICH HAS TO BE APPLIED.THE TEST WHETHER OR NOT A CAUSE IS SUFFICIENT IS TO SEE WHET HER IT COULD HAVE BEEN AVOIDED BY THE PARTY BY THE EXERCISE OF DUE CARE AND ATTENTION. IN OTHER WO RDS, WHETHER IT IS BONA FIDE CAUSE,INASMUCH AS NOTHING SHALL BE DEEMED TO BE DONE BONA FIDE OR IN GOOD FAITH WHICH IS NOT DONE WITH DUE CARE AND ATTENTION. WHAT MAY BE SUFFICIENT CAUSE IN ONE CASE MAY BE OTHERWISE IN ANOTHER. WHAT IS OF ESSENCE IS WHETHER IT WAS AN ACT OF PRUDENT OR REAS ONABLE MAN.IN OUR OPINION,CAUSE SHOWN BY THE ASSESSEE IS NEITHER REASONABLE NOR BONA FIDE. NON-F ILING OF APPEAL IN DUE COURSE OF TIME WAS NOT AN ACT DONE WITH DUE CARE AND ATTENTION.NO DOUBT THAT LITIGANTS ARE ENTITLED TO WAIT UNTIL THE LAST DATE OF THE LIMITATION FOR FILING OF THE APPEAL,BUT WHEN IT ALLOWS THE LIMITATION TO EXPIRE AND COME FORWARD WITH A EXPLANATION ENUMERATING REASONABLE C AUSES FOR NOT FILING THE APPEAL WITHIN THE TIME PRESCRIBED UNDER THE STATUTE,THEN THE CAUSES S O SHOWN MUST ESTABLISH THAT BECAUSE OF SOME EVENT OR CIRCUMSTANCES ARISING BEFORE LIMITATION EX PIRED, ASSESSEE WAS NOT ABLE TO FILE THE APPEAL WITHIN THE STIPULATED TIME MANDATED IN LAW.ANY EVEN T, CAUSE OR CIRCUMSTANCE ARISING AFTER THE EXPIRY OF THE LIMITATION PERIOD CANNOT CONSTITUTE A SUFFICIENT CAUSE.IN THIS CASE THE SERVICE OF NOTICES U/S.156 OF THE ACT,ALONG WITH THE PENALTY O RDER,WAS THE REASON FOR FILING APPEAL BEFORE THE TRIBUNAL.THOUGH ASSESSEE CLAIMS THAT HE WAS ILL ADV ISED WHEN HE RECEIVED THE ORDER OF THE FAA. BUT,IT IS NOT KNOWN AS WHO WAS THE PERSON WHOM THE ASSESSEE HAD CONTACTED AND WHAT WERE THE QUALIFICATIONS OF THE SAID ADVISOR.BECAUSE OF ABSE NCE OF REASONABLE AND SUFFICIENT CAUSE AND NOT 3 ITA NO.2432/MUM/2012,(AY-2006-07) CHANDRA KAILASH BHASIN THE LENGTH OF THE PERIOD THAT APPEAL FILED BY THE A SSESSEE CANNOT BE ALLOWED.THEREFORE, REJECTING HIS APPLICATION,WE DISMISS HIS APPEAL. AS A RESULT,APPEAL FILED B Y THE ASSESSEE STANDS DISALLOWED. 2 ,3 $2, 4 5 + 0 2! + !, 67 . ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH JULY,2013 . '1 + ./% ' 8 9$ 8 ! , 2013 / + 0 ? SD/- SD/- ( . @ @ @ @ . . B.R.MITTAL ) ( !'# !'# !'# !'# / RAJENDRA ) / JUDICIAL MEMBER ' ' ' ' /ACCOUNTANT MEMBER / MUMBAI, 9$ /DATE: 8 TH JULY,2013 '1 '1 '1 '1 + ++ + (,A (,A (,A (,A B'A%, B'A%, B'A%, B'A%, / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / &' 2. RESPONDENT / ()&' 3. THE CONCERNED CIT (A) / C D 4. THE CONCERNED CIT / C D 5. DR C BENCH, ITAT, MUMBAI / AE0 (,$ , . . . 6. GUARD FILE/ 0 F )A, (, //TRUE COPY// '1$ / BY ORDER, G / 6 ! DY./ASST. REGISTRAR , /ITAT, MUMBAI