DIPIKA TANNA, MUMBAI V. ITO 25(3)(2), MUMBAI

ITA 3832/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3176 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 12-03-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 14-05-2013
• Court: TRIBUNAL
• Department Lawyers: RAJIV
• Keywords: Income from undisclosed sources; Principle of natural justice; Period of limitation; Reasonable cause; Tax effect; Time period of passing order; Condonation of delay
• Section: 147; 148; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER I.T.A. NO.3832/M/2013 (ASSESSMENT YEAR: 2003 - 2004 ) C.O. NO.110/M/2015 (ARISING OUT OF ITA NO.5402/M/2012) (AY 2009 - 2010) SMT. DIPIKA J. TANNA, A1 - 801, BRIZY CORNER, ABOVE PIZZA HUT, MAHAVIR NAGAR, KANDIVALI (W), MUMBAI - 67. / VS. ITO - 25(3)(2), MUMBAI. ./ PAN : ABJPT5903D ( / APPELLANT) .. ( / RESPONDENT ) ITA NO.5402/M/2012 (AY 2009 - 2010) ITO - 25(3)(2), MUMBAI. / VS. SMT. DIPIKA J. TANNA, A1 - 801, BRIZY CORNER, ABOVE PIZZA HUT, MAHAVIR NAGAR, KANDIVALI (W), MUMBAI - 67. ./ PAN : ABJPT5903D ( / APPELLANT) .. ( / RESPONDENT ) / ASSESSEE BY : SHRI ANIL THAKRAR / REVENUE BY : SHRI RAJIV PANT, SR. DR / DATE OF HEARING : 23 .03.2016 / DATE OF PRONOUNCEMENT : 31 .03.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS AND ONE CROSS OBJECTION ARE UNDER CONSIDERATION. ITA NO. 3832/M/2013 AND CO NO.110/M/2015 ARE FILED BY THE ASSESSEE AND THE OTHER APPEAL ITA NO.5402/M/2012 IS FILED BY THE REVENUE INVOLVING THE ASSESSMENT YEARS 2003 - 04 AND 2009 - 2010. SINCE, THE ISSUES RAISED IN THESE APPEALS ARE INTERCONNECTED, THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD TOGETHER AND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAGRAPHS OF THIS ORDER. 2 ITA NO.3832/M/2013 (AY 2003 - 2004) (BY ASSESSEE) 2. THIS APPEAL FILED BY THE ASSESSEE ON 14.5.2013 IS AGAINST THE ORDER OF THE CIT (A) - 35, MUMBAI DATED 4.3.2013 FOR THE ASSESSMENT YEAR 2003 - 2004. IN THIS APPEAL, ASSESSEE RAISED TWO GROUNDS IN TOTO AND THEY REVOLVE AROUND THE ADDITION OF RS. 5 LAKHS MADE ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES. 3. BRIEFLY STATED RELEVANT FACTS IN THIS CASE ARE THAT THE ASSESSEE, WHO IS AN INDIVIDUAL, FILED THE RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT DECLARING THE TOTAL INCOME OF RS. 48,250/ - . AO COMPLETED THE ASSESSMENT U/S 144 R.W.S 147 AND THE ASSESSED INCOME WAS DETERMINED AT RS. 5,48,250/ - . IN THE R E ASSESSMENT, AO MADE ADDITION OF RS. 5 LAKHS ON ACCOUNT OF UNDISCLOSED INCOME. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) DISMISSED THE A PPEAL VIDE PARA 5.3 OF HIS ORDER. AGAIN AGGRIEVED, ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 5. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. IT IS THE CASE OF THE ASS ESSEE THAT THE SAID ADDITION WAS MADE BY THE AO MERELY ON THE BASIS OF LIST OF CLIENTS / BENEFICIARIES, WHO HAVE TAKEN ENTRIES FOR BOGUS SHARE TRADING BILL FROM M/S. MAHASAGAR SECURITIES PVT LTD (NOW ALAG SECURITIES PVT LTD). HE FURTHER MENTIONED THAT AFT ER LAPSE OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR UNDER CONSIDERATION, THE AO INITIATED THE PROCEEDINGS U/S 147 OF THE ACT AND ISSUED NOTICE U/S 148 OF THE ACT ON 31.3.2010. FURTHER, HE SUBMITTED THAT THE CIT (A) ALSO ERRED IN UPHOLDING THE DECIS ION OF THE AO. 6. ON THE OTHER HAND, LD DR FOR THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 7. WE HAVE HEARD BOTH THE PARTIES AND PURSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. ON PERUSAL OF THE ORDER OF THE CIT (A) IN GENERAL AND PARA 5.3 IN PARTICULAR, WE FIND THE SAME IS RELEVANT IN THIS REGARD. CONSIDERING THE SIGNIFICANCE OF THE SAID PARA 5.3 OF CIT (A)S ORDER AND ALSO FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAME IS EXTRACTED A S UNDER: - 3 5.3. I HAVE CONSIDERED THE STAND OF THE AO AS WELL AS THE APPELLANTS SUBMISSION. IT IS A CASE WHERE THE APPELLANT HAS RECEIVED CERTAIN BOGUS ENTRIES CLAIMING BOGUS SPECULATION PROFIT / LOSS. DURING THE COURSE OF SEARCH ACTION U/S 132 IN THE CA SE OF MAHASAGAR SECURITIES PVT LTD., NOW ALAG SECURITIES PVT LTD AND OTHER GROUP CONCERNS, IT CAME TO LIGHT THAT PROFIT / LOSS / SHORT TERM / LONG TERM CAPITAL GAIN / LOSS ETC WAS BEING DONE AND CERTAIN ASSESSEES WERE THE BENEFICIARIES. SUCH ASSESSEES USE D TO INTRODUCE THEIR OWN UNDISCLOSED INCOME AND ROTATE BACK THE SAME IN THEIR BANK ACCOUNT/BOOKS OF ACCOUNT / THROUGH BOGUS ENTRIES OF BOGUS SHARE TRANSACTIONS. THE PRESENT APPELLANT IS ALSO FOUND TO BE ONE OF THE BENEFICIARIES. IN FACT, DURING THE COURS E OF SEARCH, SHRI MUKESH CHOWKSEY, THE MASTER MIND OF SUCH ACTIVITY AND ENTRY PROVIDER MADE STATEMENT BEFORE THE INCOME TAX AUTHORITIES CONFIRMING THE OUTCOME OF THE INVESTIGATION BY SEARCH WING OF THE INCOME TAX DEPARTMENT, MUMBAI. UNDER THE CIRCUMSTANCE S, THE ADDITION MADE BY THE AO IN THE PRESENT CASE AMOUNTING TO RS. 5 LAKHS UNDER THE HEADING INCOME FROM UNDISCLOSED SOURCES IS UPHELD. 8. FROM THE ABOVE, WE FIND THE CIT (A) DISCUSSED THE ISSUE AT LENGTH BEFORE CONFIRMING THE ADDITION MADE BY THE AO. FURTHER, WE FIND, NONE APPEARED BEFORE THE CIT (A) TO REPRESENT THE CASE OF THE ASSESSEE. DESPITE NO GROUND IS RAISED BEFORE US ON THE PRINCIPLES OF NATURAL JUSTICE, NO EXPLANATION HAS GIVEN IN THIS REGARD. CONSIDERING THE ABOVE, WE ARE OF THE OPINION, THE DECISION TAKEN BY THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED . ITA NO.5402/M/2012 (AY 2009 - 2010) (BY R EVENUE) 10. THIS APPEAL FILED BY THE REVENUE ON 28.8.2012 IS AGAINST THE ORDER OF THE CIT (A) - 35, MUMBAI DATED 28.6.2012 FOR THE ASSESSMENT YEAR 2009 - 2010. 11 . AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE GROUNDS RAISED BY THE REVENUE AND MENTIONED THAT THE TAX EFFECT IN THIS APPEAL IS BELOW RS. 10 LAKHS AND THEREFORE, THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE. IN SUPPORT OF HIS AR GUMENT, HE BROUGHT OUR ATTENTION TO THE CBDT CIRCULAR NO.21/2015, DATED 10.12.2015 AND SUBMITTED THAT THE APPEALS FILED BY THE REVENUE WITH A TAX EFFECT OF RS. 10 LAKHS AND BELOW ARE TO BE EITHER DISMISSED BY THE TRIBUNAL AS NOT MAINTAINABLE OR NOT PRESSED BY THE REVENUE. REFERRING TO THE ABOVE MENTIONED BOARD CIRCULAR NO.21/2015, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO PARA 10 AND SUBMITTED THAT THE SAID MONETARY LIMITATION OF RS. 10 LAKHS APPLIES TO ALL THE APPEALS FILED BY THE REVENUE RETRO SPECTIVELY. CONSIDERING THE SIGNIFICANCE OF THE SAID PARA 10 OF THE CBDT CIRCULAR (SUPRA) IS EXTRACTED AS UNDER: - 4 10. THIS I NSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS / TRIBUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN / NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 12 . CONSIDERING THE ABOVE, THE APPEAL FILED BY THE REVENUE, WHEREIN THE TAX EFFECT IS BELOW THE ABOVE STATED TAX LIMIT OF RS. 10 LAKHS, IS DISMISSED AS NOT MAINTAINABLE. 13 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. CO NO. 110/M/2012 (AY 2009 - 2010) (BY ASSESSEE) 14. THIS CROSS OBJECTION IS FILED BY THE ASSESSEE ON 31.7.2015 AGAINST THE ORDER OF THE CIT (A) - 35, MUMBAI DATED 28.6.2012. 15. BEFORE US, LD COUNSEL FOR THE A SSESSEE MENTIONED THAT THE PRESENT CO WAS FILED BELATEDLY WITH A DELAY OF 561 DAYS AND BROUGHT TO OUR ATTENTION THE CONTENTS OF THE ACCOMPANYING APPLICATION AND THE AFFIDAVIT FILED BY THE ASSESSEE. FROM THE SAID AFFIDAVIT DATED 23.6.2015 FOR CONDONATION, THE ASSESSEE READ OUT THE REASON FOR THE SAID DELAY AND THE SAME READ AS UNDER: T HAT I HAD FILED AN APPEAL BEFORE THE CIT (A) - 35, MUMBAI AND HAD RECEIVED APPEAL ORDER ON 28.6.2012 WITH THE UNDERSTANDING THAT ALL MY GROUNDS OF APPEAL ARE ALLOWED IN MY FAVOUR, BUT WHILE GOING THROUGH THE RECORDS AS DEPARTMENTAL APPEAL FOR THE YEAR UNDER CONSIDERATION HAS COME UP FOR HEARING ( D BENCH , ITAT, MUMBAI ON 10.8.2015) OUR CONSULTANTS POINTED OUT THAT THE FULL APPEAL IS NOT CLEARED AND STILL THERE REMAINS ADDITION TO THE TUNE OF RS. 9,01,324/ - FOR WHICH THE CROSS OBJECTION IS NEEDED TO BE FILED WITH THE REQUEST OF CONDONATION OF DELAY. 2. THEREFORE, I REQUEST YOUR HONORS TO CONDONE THE DELAY IN FILING THE CROSS OBJECTION, WHICH IS NOT INTENTIONAL, AND FURTHER MY HUSBANDS HEALTH ALSO IS NOT IN GOOD CONDITION SINCE VERY LONG TIME, AS HE HAD KIDNEY , LUNGS AND OTHER SEVERE PROBLEMS, AND I AM ALONE TO HANDLE ALL MY PERSONAL AS WELL AS FINANCIAL MATTERS. 16. THUS, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ABOVE REASON FOR NOT FILING THE APPEAL WITHIN THE PRESCRIBED TIME LIMIT BEFORE THE TRIB UNAL MAY BE CONSIDERED AS REASONABLE CAUSE / SUFFICIENT CAUSE AND PRAYED FOR CONDONATION OF DELAY OF 561 DAYS. 17 . PER CONTRA , LEARNED DR VEHEMENTLY OPPOSED THE SAID PRAYER OF LD COUNSEL FOR THE ASSESSEE AND MENTIONED THAT THE ABOVE REASON SHOULD BE CONS TRUED AS ASSESSEES NEGLIGENCE IN FILING THE CO IN TIME AND THE SAME DOES NOT AMOUNT TO 5 SUFFICIENT CAUSE WITHIN THE MEA NING SECTION 253(5) OF THE ACT. HE FURTHER MENTIONED THAT THERE IS NO EVIDENCE OR REASONABLE EXPLANATION IN SUPPORT OF THE REQUEST FOR CONDONATION OF DELAY. AS PER LEARNED DR, THE REQUEST OF THE ASSESSEE FOR CONDONATION OF DELAY SHOULD BE REJECTED IN VIEW OF THE SPECIFIC PROVISIONS OF SECTION 253(5) OF THE ACT. 18 . WE HAVE HEARD BOTH THE PARTIES OF THE LITIGATION ON THE PRELIMINARY ISSUE OF CONDONATION OF DELAY OF 561 DAYS AND PERUSED THE CONTENTS OF THE SAID APPLICATION FOR CONDONATION AND THE AFFIDAVIT SUBMITTED BY THE ASSESSEE. THERE IS NO DISPUTE ON THE FACT OF DELAY OF 561 DAYS. FURTHER, THERE IS NO EXPLANATION AS TO WHY AND UNDER WHAT CIRCUMSTANCES THE ASSESSEE HAD NOT APPROACHED THE COUNSELS WITHIN 30 DAYS FROM THE RECEIPT OF THE NOTICE. THE EXPLANATION GIVEN BY THE ASSESSEE, BOTH IN THE APPLICATION OF COND ONATION AS WELL AS IN THE AFFIDAVIT OF THE ASSESSEE, ARE NOT EXPLAINED WITH SUPPORTIVE EVIDENCES. IN THIS REGARD, WE HAVE PERUSED THE RELEVANT PROVISIONS OF SUBSECTION (4) AND (5) OF THE SECTION 253 OF THE ACT AND THE SAME ARE REPRODUCED HERE FOR READY R EFERENCE AS UNDER: (4) THE ASSESSING OFFICER OR THE ASSESSEE, AS THE CASE MAY BE, ON RECEIPT OF NOTICE THAT AN APPEAL AGAINST THE ORDER OF THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS) OR THE ASSESSING OFFICER IN PURSUANCE OF THE DIRECTION S OF THE DISPUTE RESOLUTION PANEL HAS BEEN PREFERRED UNDER SUB - SECTION (1) OR SUB - SECTION (2) OR SUB - SECTION (2A) BY THE OTHER PARTY, MAY, NOTWITHSTANDING THAT HE MAY NOT HAVE APPEALED AGAINST SUCH ORDER OR ANY PART THEREOF; WITHIN THIRTY DAYS OF THE RECEI PT OF THE NOTICE, FILE A MEMORANDUM OF CROSS - OBJECTIONS, VERIFIED IN THE PRESCRIBED MANNER, AGAINST ANY PART OF THE ORDER OF THE ASSESSING OFFICER (IN PURSUANCE OF THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL) OR DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS), AND SUCH MEMORANDUM SHALL BE DISPOSED OF BY THE APPELLATE TRIBUNAL AS IF IT WERE AN APPEAL PRESENTED WITHIN THE TIME SPECIFIED IN SUB - SECTION (3) OR SUB - SECTION (3A). (5) THE APPELLATE TRIBUNAL MAY ADMIT AN APPEAL O R PERMIT THE FILING OF A MEMORANDUM OF CROSS - OBJECTIONS AFTER THE EXPIRY OF THE RELEVANT PERIOD REFERRED TO IN SUB - SECTION (3) OR SUB - SECTION (4), IF IT IS SATISFIED THAT THERE WAS SUFFICIENT CAUSE FOR NOT PRESENTING IT WITHIN THAT PERIOD. 19 . SUB - SECTION (4) OF SECTION 253 OF THE ACT MANDATES THAT THE ASSESSEE SHOULD FILE CROSS OBJECTIONS WITHIN THE 30 DAYS FROM THE DATE OF RECEIPT OF THE NOTICE. IN CASE OF FAILURE TO FILE IN THAT PERIOD, SUBSECTION (5) CONFERS POWERS ON THE TRIBUNAL TO PERMIT THE FILING OF CO AFTER THE EXPIRY OF 30 DAYS AND THE SAME SUBJECTED FULFILLMENT OF CERTAIN CONDITIONS BY THE ASSESSEE. THE ASSESSEE HAS THE DUTY OF SATISFYING THE 6 TRIBUNAL ABOUT THE EXISTENCE OF CAUSE AND IT SHOULD BE SUFFICIENT ENOUGH FOR NOT PRESENTIN G THE CO WITHIN 30 DAYS SPECIFIED IN SUBSECTION (4) OF SECTION 253 OF THE ACT. THUS, THE ONUS IS ON THE ASSESSEE TO EXPLAIN TO THE TRIBUNAL ABOUT THE SUFFICIENT CAUSE FOR THE DELAY AND THE TRIBUNAL SHOULD BE SATISFIED ABOUT THE SAID SUFFICIENT CAUSE. IT IS TRUE THAT THE WORDS SUFFICIENT CAUSE FOR NOT FILING THE CO WITHIN THE PERIOD OF LIMITATION NO DOUBT IS TO BE APPLIED IN A REASONABLE MANNER BUT DEPENDING UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE. PARTY HAS TO GIVE SATISFACTORY EXPLANATION. IN AN Y CASE, IT WAS THE DUTY OF CROSS OBJECTOR TO GIVE SATISFACTORY EXPLANATION TO THE TRIBUNAL ABOUT THE DELAY IN FILING THE CO. IN THE ABSENCE OF THE SAME, THE PRAYER FOR CONDONATION MUST NOT BE GRANTED. IT CANNOT BE OVERLOOKED THAT ON EXPIRY OF THE PERIOD OF LIMITATION PRESCRIBED FOR SEEKING LEGAL REMEDY, RIGHTS ACCRUE IN FAVOUR OF THE OTHER PARTY OF THE LITIGATION. 20 . IN THE PRESENT CASE, ASSESSEE FAILED TO EXPLAIN THE CAUSE OF DELAY OF 561 DAYS IN FILING THE CROSS OBJECTION. FURTHER, THE EXPLANATION OF THE ASSESSEE, IN OUR OPINION DOES NOT CONSTITUTE SUFFICIENT CAUSE WITHIN THE MEANING OF SECTION 253(5) OF THE ACT. AS SUCH THERE IS NO CONFIRMATION FROM THE SAID COUNSEL BY WAY OF ANY AFFIDAVIT THAT THE ASSESSEE HAD IMPUGNED CONFERENCE TO ADVISE FOR FIL ING THE IMPUGNED CO. IN OUR OPINION, THE DELAY SHOWS THE INDIFFERENT ATTITUDE OF THE ASSESSEE TO THE MATTER. IN SUCH A FACTUAL SITUATION, THE SUFFICIENT CAUSE AS CONTEMPLATED U/S 253 (5) OF THE ACT DOES NOT EXIST. IN THE PRESENT CASE, THERE IS A NEGLIGENC E ON PART OF THE APPELLANT AND IT IS A CASE OF ABSENCE OF DUE DILIGENCE. FURTHER ALSO, THE ASSESSEE HAS NOT DEMONSTRATED THAT IT WAS BEYOND HIS CONTROL THAT THE CROSS OBJECTION COULD NOT BE FILED BEFORE THE EXPIRY OF THE LIMITATION PERIOD OF 30 DAYS SPECI FIED IN SECTION 253(4) OF THE ACT. THEREFORE, DELAY IN FILING THE CROSS OBJECTION REMAINS UNEXPLAINED. IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISCUSSION, WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO SUFFICIENT CAUSE FOR CONDONATION OF DELAY OF 561 DAYS. CONSEQUENTLY, THE IMPUGNED APPLICATION FOR CONDONATION OF DELAY BY THE CROSS OBJECTOR, RESPONDENT IS DISMISSED . 21 . IN THE RESULT, CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED . 22. IN THE RESULT, THE APPEAL AND THE CO OF THE ASSESSEE AS WELL AS THE APPEAL FO THE REVENUE ARE DISMISSED. 7 ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH, 2016. S D / - S D / - ( RAM LAL NEGI ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 31.3.2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI