Shri Vikram Mohanlal Rawal, Ahmedabad V. The Income Tax Officer, Ward-6(4), Ahmedabad

ITA 2981/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0120 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 13-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANTONY PARIATH
• Keywords: Unexplained investment
• Section: 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.2981/AHD/2013 / ASSTT. YEAR: 2009-2010 VIKRAM MOHANLAL RAWAL 19, AKSHAR BUNGLOWS NR. SMRUTI MANDIR GHODASAR AHMEDABAD 380 050. PAN : ADPRI 1980 K VS ITO, WARD - 6(4) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI SUNIL TALATI, AR REVENUE BY : SHRI ANTONY PARIATH, SR.DR / DATE OF HEARING : 11/11/2016 / DATE OF PRONOUNCEMENT: 15/11/2016 $%/ O R D E R ASSESSEE IS APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF LD.CIT(A)- XI, AHMEDABAD DATED 13.3.2013 PASSED FOR THE ASSTT. YEAR 2009-10. 2. SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CI T(A) HAS ERRED IN CONFIRMING ADDITION OF RS.21,76,820/- WHICH WAS ADD ED BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SAVING BANK ACCOUNT NO .039792. 3. REGISTRY HAS POINTED OUT THAT APPEAL OF THE ASSE SSEE IS TIME BARRED BY 208 DAYS. IN ORDER TO EXPLAIN THE DELAY, THE ASSES SEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY, AND ALSO FILED HIS AFFIDA VIT. ITA NO.2981/AHD/2013 2 4. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVE, I HAVE GONE THROUGH THE AFFIDAVIT. IT IS PLEADED IN THE AFFIDAVIT THAT IN RESPONSE TO THE NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961, HE HAS AUTHORIZED SHRI K.B. PATEL ADVOCATE FOR APPEARING ON BEHALF OF HIM BEFORE THE AO. SOMEHOW, THE LD.COUNSEL DID NOT APPEAR AFTER TAKING ADJOURNMENT AND ASSESSMENT ORDER WAS PASSED EX PARTE . IT IS ALSO PLEADED THAT NOTICE WAS ISSUED ON 2.1 1.2011. ASSESSMENT ORDER WAS PASSED ON 14.12.2011. THERE W AS A VERY SHORT SPAN OF TIME BETWEEN NOTICE AND PASSING OF THE ASSESSMENT O RDER. THE LD.COUNSEL FOR THE ASSESSEE COULD NOT SUBMIT DETAILS IN THIS SHORT SPAN. DISSATISFIED WITH THE ASSESSMENT ORDER, THE ASSESSEE FILED APPEAL BEFORE THE LD.CIT(A) AND AUHORISED SHI HITENDRA H. SHETH OF HITENDRA & ASSOC IATES AS LEGAL ADVISOR. SHE SETH DID NOT APPRISE ASSESSEE ABOUT SUBMISSION OF REQUISITE DETAILS AND THE LD.CIT(A) HAS ALSO DISMISSED THE APPEAL EX PARTE . THE ORDER OF THE LD.CIT(A) WAS NOT COMMUNICATED TO THE ASSESSEE BY THE LD.COUS NEL FOR THE ASSESSEE. HE CAME TO KNOW ABOUT THE ORDER FROM THE STAFF OF THE CIT(A) AND THEREAFTER ARRANGEMENT WAS MADE FOR FILING APPEAL BEFORE THE T RIBUNAL. THE LD.COUNSEL FOR THE ASSESSEE PRAYED THAT THERE IS NO DELIBERATE ATTEMPT AT THE END OF THE ASSESSEE TO MAKE HIS APPEAL TIME BARRED. SINCE TAX CONSULTANT FAILED TO FULFILL HIS PROFESSIONAL ASSIGNMENT BY INTIMATING THE ASSES SEE WITH COMPLETE DETAILS, THE ASSESSEE COULD NOT FILE APPEAL IN TIME. THE LD .DR, ON THE OTHER HAND, CONTENDED THAT THE ASSESSEE IS NEGLIGENT PERSON. HE DID NOT APPEAR BEFORE THE AO. HE DID NOT SUBMIT DETAILS EVEN BEFORE THE LD.F IRST APPELLATE AUTHORITY, AND THEREAFTER FILED A TIME BARRED APPEAL BEFORE TH E TRIBUNAL. ACCORDING TO THE LD.DR, NO SYMPATHY BE SHOWN TO SUCH A NEGLIGENT PERSON. 5. I HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GON E THROUGH THE RECORD. SUB-SECTION 5 OF SECTION 253 CONTEMPLATES THAT THE TRIBUNAL MAY ADMIT AN APPEAL OR PERMIT FILING OF MEMORANDUM OF CROSS-OBJE CTIONS AFTER EXPIRY OF ITA NO.2981/AHD/2013 3 RELEVANT PERIOD, IF IT IS SATISFIED THAT THERE WAS A SUFFICIENT CAUSE FOR NOT PRESENTING IT WITHIN THAT PERIOD. THIS EXPRESSION SUFFICIENT CAUSE EMPLOYED IN THE SECTION HAS ALSO BEEN USED IDENTICALLY IN SU B-SECTION 3 OF SECTION 249 OF INCOME TAX ACT, WHICH PROVIDES POWERS TO THE LD.COM MISSIONER TO CONDONE THE DELAY IN FILING THE APPEAL BEFORE THE COMMISSIO NER. SIMILARLY, IT HAS BEEN USED IN SECTION 5 OF INDIAN LIMITATION ACT, 1963. WHENEVER INTERPRETATION AND CONSTRUCTION OF THIS EXPRESSION HAS FALLEN FOR CONSIDERATION BEFORE HONBLE HIGH COURT AS WELL AS BEFORE THE HONBLE SU PREME COURT, THEN, HONBLE COURT WERE UNANIMOUS IN THEIR CONCLUSION TH AT THIS EXPRESSION IS TO BE USED LIBERALLY. I MAY MAKE REFERENCE TO THE FOL LOWING OBSERVATIONS OF THE HONBLE SUPREME COURT FROM THE DECISION IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST. KATIJI & OTHERS, 1987 AIR 1353 : 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTI CE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDONED THE HIGHEST THA T CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING TH E PARTIES. 3. 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT M EAN 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 C OMMON SENSE PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DE SERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGH T IN INJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MA LA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT HE RUNS A SERIOUS RISK. ITA NO.2981/AHD/2013 4 6. IT MUST BE GRASPED THAT JUDICIARY IS RESPECTED N OT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUNDS BU T BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 6. SIMILARLY, I WOULD LIKE TO MAKE REFERENCE TO AUT HORITATIVE PRONOUNCEMENT OF HONBLE SUPREME COURT IN THE CASE OF N.BALAKRISHNAN VS. M. KRISHNAMURTHY (SUPRA). IT READS AS UNDER: RULE OF LIMITATION ARE NOT MEANT TO DESTROY THE RI GHT OF PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILA TORY TACTICS, BUT SEEK THEIR REMEDY PROMPTLY. THE OBJECT OF PROVIDING A LE GAL REMEDY IS TO REPAIR THE DAMAGE CAUSED BY REASON OF LEGAL INJURY. LAW OF LIMITATION FIXES A LIFE-SPAN FOR SUCH LEGAL REMEDY FOR THE RED RESS OF THE LEGAL INJURY SO SUFFERED. TIME IS PRECIOUS AND THE WASTED TIME W OULD NEVER REVISIT. DURING EFFLUX OF TIME NEWER CAUSES WOULD SPROUT UP NECESSITATING NEWER PERSONS TO SEEK LEGAL REMEDY BY APPROACHING T HE COURTS. SO A LIFE SPAN MUST BE FIXED FOR EACH REMEDY. UNENDING PERIOD FOR LAUNCHING THE REMEDY MAY LEAD TO UNENDING UNCERTAINTY AND CONSEQU ENTIAL ANARCHY. LAW OF LIMITATION IS THUS FOUNDED ON PUBLIC POLICY. IT IS ENSHRINED IN THE MAXIM INTEREST REIPUBLICAE UP SIT FINIS LITIUM (IT IS FOR THE GENERAL WELFARE THAT A PERIOD BE PUTT TO LITIGATION). RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHT OF THE PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THEIR REMEDY PROMPTLY. THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT AL IVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. A COURT KNOWS THAT REFUSAL TO CONDONE DELAY WOULD R ESULT FORECLOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PR ESUMPTION THAT DELAY IN APPROACHING THE COURT IS ALWAYS DELIBERATE. THIS COURT HAS HELD THAT THE WORDS 'SUFFICIENT CAUSE' UNDER SECTION 5 OF THE LIMITATION ACT SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVA NCE SUBSTANTIAL JUSTICE VIDE SHAKUNTALA DEVI LAIN VS. KUNTAL KUMARI [AIR 1969 SC 575] AND STATE OF WEST BENGAL VS. THE ADMINISTRATOR , HOWRAH MUNICIPALITY [AIR 1972 SC 749]. IT MUST BE REMEMBER ED THAT IN EVERY CASE OF DELAY THERE CAN BE SOME LAPSE ON THE PART O F THE LITIGANT CONCERNED. THAT ALONE IS NOT ENOUGH TO TURN DOWN HI S PLEA AND TO SHUT THE DOOR AGAINST HIM. IF THE EXPLANATION DOES NOT S MACK OF MALA FIDES OR IT IS NOT PUT FORTH AS PART OF A DILATORY STRATEGY THE COURT MUST SHOW UTMOST CONSIDERATION TO THE SUITOR. BUT WHEN THERE IS REASONABLE GROUND ITA NO.2981/AHD/2013 5 TO THINK THAT THE DELAY WAS OCCASIONED BY THE PARTY DELIBERATELY TO GAIN TIME THEN THE COURT SHOULD LEAN AGAINST ACCEPTANCE OF THE EXPLANATION. WHILE CONDONING DELAY THE COULD SHOULD NOT FORGET T HE OPPOSITE PARTY ALTOGETHER. IT MUST BE BORNE IN MIND THAT HE IS A L OOSER AND HE TOO WOULD HAVE INCURRED QUIET A LARGE LITIGATION EXPENS ES. IT WOULD BE A SALUTARY GUIDELINE THAT WHEN COURTS CONDONE THE DEL AY DUE TO LACHES ON THE PART OF THE APPLICANT THE COURT SHALL COMPENSAT E THE OPPOSITE PARTY FOR HIS LOSS. I DO NOT DEEM IT NECESSARY TO RE-CITE OR RECAPITULA TE THE PROPOSITION LAID DOWN IN OTHER DECISIONS. IT IS SUFFICE TO SAY THAT THE HONBLE COURTS ARE UNANIMOUS IN THEIR APPROACH TO PROPOUND THAT WHENEVER THE REA SONS ASSIGNED BY AN APPLICANT FOR EXPLAINING THE DELAY, THEN SUCH REASO NS ARE TO BE CONSTRUED WITH A JUSTICE ORIENTED APPROACH. 7. IN THE LIGHT OF THE ABOVE, IF I EXAMINE EXPLANAT ION OF THE ASSESSEE, THEN IT WOULD REVEAL THAT THE ASSESSEE HAS NOT MADE HIS APPEAL TIME BARRED. HIS TAX CONSULTANT DID NOT COMMUNICATE HIM THE ORDER OF THE LD.CIT(A) AND DUE TO THIS REASON, THE APPEAL COULD NOT BE FILED WITHIN TIME. IT IS ALSO PERTINENT TO MENTION THAT BY MAKING THE APPEAL TIME BARED, THE A SSESSEE WILL NOT GAIN ANYTHING. THE TAX LIABILITY ON AN ADDITION OF RS.2 1,76,820/- ONLY BE SET ASIDE BY CHALLENGING THE ORDER OF THE LD.CIT(A). THEREFO RE, THE ASSESSEE CANNOT AFFORD TO IGNORE TAX LIABILITY WHICH HAS BEEN CONFI RMED BY THE LD.CIT(A). IN VIEW OF THE ABOVE DISCUSSION, I CONDONE THE DELAY I N FILING THE APPEAL BEFORE THE TRIBUNAL , AND ALLOW THE APPLICATION. 8. NOW I PROCEED TO DECIDE THE APPEAL ON MERIT. 9. IT EMERGES OUT FROM THE RECORD THAT AIR WING OF THE DEPARTMENT TRANSMITTED INFORMATION TO THE AO THAT A SUM OF RS. 21,76,820/- WAS DEPOSITED IN THE SAVING BANK ACCOUNT BY WAY OF CASH. THE ASS ESSEE FAILED TO GIVE ANY PLAUSIBLE EXPLANATION OF THE SOURCE OF DEPOSITS. A CCORDINGLY, THE LD.AO HAS ITA NO.2981/AHD/2013 6 MADE ADDITION OF RS.21,76,820/- WITH THE AID OF SEC TION 69 OF THE INCOME TAX ACT. APPEAL TO THE LD.CIT(A) DID NOT BRING ANY REL IEF TO THE ASSESSEE. 10. ON DUE CONSIDERATION OF THE RECORD, I FIND THAT FIRST NOTICE UNDER SECTION 143(2) WAS ISSUED UPON THE ASSESSEE ON 27.8.2010. THEREAFTER, THE AO WAS TRANSFERRED AND NEW INCUMBENT TOOK SEAT OF THE AO. HE INITIATED ASSESSMENT PROCEEDINGS EFFECTIVELY FROM THE MONTH OF OCTOBER, 2011. HE PASSED ASSESSMENT ORDER ON 14.12.2011. TIME GAP GIVEN TO THE ASSESSEE IN THIS PROCESS WAS VERY SHORT. SIMILARLY, BEFORE THE LD.C IT(A), THE LD.COUNSEL FOR THE ASSESSEE DID NOT PROSECUTE THE APPEAL PROPERLY AS A LLEGED BY THE ASSESSEE. TAKING INTO CONSIDERATION ALL THESE ASPECTS, I DEEM IT PROPER THAT ENDS OF JUSTICE WILL BE MET IF I SET ASIDE THE IMPUGNED ORD ER AND RESTORE THIS ISSUE TO THE FILE OF THE LD.AO FOR RE-ADJUDICATION. THE ASS ESSEE IS DIRECTED COOPERATE WITH THE AO AND NOT ACT NEGLIGENTLY AS ACTED IN ERS TWHILE PROCEEDINGS. THE LD.AO SHALL GRANT DUE OPPORTUNITY OF HEARING TO THE ASSESSEE AND PASS FRESH ASSESSMENT IN ACCORDANCE WITH LAW. IN VIEW OF THE ABOVE FACTS, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 15 TH NOVEMBER, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 15 /11/2016