Yagnesh R. Patel, Surat V. Income Tax Officer, Ward- 1(3)(9), Surat

ITA 44/SRT/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2929 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 22-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: RASESH SHAH
• Keywords: Income from undisclosed sources; Bonafide belief; Period of limitation; Condonation of delay; Set aside
• Section: 64

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA NO.44/SRT/2018 (AY 2008-09) (H EARING IN VIRTUAL COURT) YAGNESH R. PATEL, 18, RUTURAJ ROW HOUSE, OPP. T.G.B. CIRCLE, NEW ADAJAN ROAD, SURAT 395009. PAN : ACVPP3661P VS THE ITO, WARD-1(3)(9) ROOM NO. 603, 6 TH FLOOR, AAYAKAR BHAVAN, MAJURA GATE, SURAT. ASSESSEE/ APPELLANT REVENUE/RESPONDENT ASSESSEE BY SHRI RASESH SHAH CA REVENUE BY MS. ANUPAMA SINGLA SR.DR DATE OF HEARING 15.06.2021 DATE OF PRONOUNCEMENT 15.06.2021 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-2 [HEREINAFTER REFERRED AS LD. CIT(A) SURAT DATED 18.09.2017 FOR THE ASSESSMENT YEAR (AY) 2008-09. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN NOT ADJUDICATING GROUNDS OF APPEAL. HE OUGHT TO HAVE PASSED THE SPEAKING ORDER AFTER GIVING THE REASON FOR HIS DECISION. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKING THE ADDITION OF RS.1,29,35,385/- ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES ON PROTECTIVE BASIS. ITA NO.44/SRT/2018 YAGNESH R. PATEL (AY 2008-09) 2 3. THE ORDER PASSED BY THE CIT(A) MAY PLEASE BE SET ASIDE AND THE MATTER MAY PLEASE BE RESTORED TO THE FILE OF CIT(A) FOR FRESH DECISION AND/OR THE ADDITION MADE BY THE ASSESSING OFFICER MAY PLEASE BE DELETED. 2. PERUSAL OF RECORD SHOWS THAT THE APPEAL IS FILED AFTER 64 DAYS OF PRESCRIBED PERIOD OF LIMITATION. THE ASSESSEE HAS FILED APPLICATION FOR CONDONATION OF DELAY WHICH IS SUPPORTED BY AFFIDAVIT OF ASSESSEE. IN THE APPLICATION, THE ASSESSEE HAS CONTENDED THAT ORDER PASSED BY LD. CIT(A) WAS RECEIVED ON 20.09.2017, HOWEVER, THE APPEAL IS FILED ON 22.01.2018. NO APPEAL WAS FILED WITHIN PERIOD OF LIMITATION AS INITIALLY THE ASSESSEE WAS ADVISED BY HIS OLD COUNSEL THAT THERE IS NO NEED TO FILE APPEAL AS THE ADDITIONS ARE MADE ON PROTECTIVE BASIS, HOWEVER, LATER ON THE ASSESSEE WAS LATER ON ADVISED TO FILE APPEAL. THE LD. AUTHORIZED REPRESENTATIVE (AR) FOR THE ASSESSEE SUBMITS THAT INITIALLY THE ASSESSEE WAS ADVISED NOT FILE APPEAL BEFORE THE TRIBUNAL AS THE ADDITION OF RS. 1.29 CRORE ON ACCOUNT OF UNDISCLOSED INCOME FROM UNDISCLOSED SOURCE WAS MADE AT THE HAND OF ASSESSEE ON PROTECTIVE BASIS. THE SUBSTANTIVE ADDITION WAS IN CASE OF M/S SAHELI DEVELOPERS, WHERE THE ASSESSEE IS PARTNER. THE ASSESSEE WAS ADVISED LATER ON TO CHALLENGE THE ADDITION BEFORE THE TRIBUNAL THAT IN CASE SUBSTANTIVE ADDITION IS NOT SUSTAINED IN THE HAND OF SAHELI DEVELOPERS, THE PROTECTIVE ADDITION WILL CONVERT INTO SUBSTANTIVE ADDITION. THE NON-FILING OF APPEAL IN TIME WAS DUE TO BONAFIDE BELIEF, WHICH WAS BASED ON WRONG ADVICE. THE LD. AR FOR THE ASSESSEE ITA NO.44/SRT/2018 YAGNESH R. PATEL (AY 2008-09) 3 SUBMITS THAT NON-FILING OF APPEAL IN TIME WAS NEITHER INTENTIONAL OR DELIBERATE BUT DUE TO THE WRONG ADVISE AND PRAYED FOR CONDONING THE DELAY IN FILING APPEAL BEFORE THE TRIBUNAL. THE LD. AR SUBMITS THAT ASSESSEE HAS GOOD CASE ON MERIT AND IS LIKELY TO SUCCEED. 3. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE NOT SERIOUSLY OPPOSED THE CONTENTION OF LD. AR OF ASSESSEE. 4. WE HAVE CONSIDERED THE CONTENTION OF BOTH THE PARTIES. WE HAVE ALSO GONE THROUGH THE CONTENTS OF APPLICATION FILED BY ASSESSEE FOR CONDONING THE DELAY IN FILING APPEAL, WHICH IS SUPPORTED BY AFFIDAVIT OF ASSESSEE. CONSIDERING THE FACT THAT INITIALLY ASSESSEE WAS ADVISED NOT TO FILE APPEAL AS ADDITION WAS MADE ON PROTECTIVE BASIS. NON-FILING APPEAL WAS BASED ON ADVISE OF CONSULTANT. CONSIDERING THE CONTENTS OF APPLICATION AND THE SUBMISSION MADE BY LD. AR OF THE ASSESSEE, THE DELAY OF 64 DAYS IN FILING APPEAL IS CONDONED. 5. ON MERITS OF THE CASE THE LD. AR OF THE ASSESSEE SUBMITS THAT THE AO MADE PROTECTIVE ADDITION OF RS. 1.29 CRORE AT THE HAND OF ASSESSEE. THE LD. CIT(A) DISMISSED THE APPEAL IN NON-PROSECUTION. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE SUBSTANTIVE ADDITION WAS MADE IN THE HAND OF M/S SAHELI DEVELOPERS, WHEREIN THE ASSESSEE IS ONE OF THE PARTNER. THIS FACT IS DULY RECORDED BY AO IN PARA-6.3 OF THE ASSESSMENT ORDER. THE LD. AR OF THE ASSESSEE SUBMITS THAT M/S SAHELI DEVELOPERS ACCEPTED THE ADDITION AND FILED APPLICATION FOR SETTLEMENT OF DISPUTE ON TAX WITH THE DEPARTMENT UNDER VSVS SCHEME, 2020 ITA NO.44/SRT/2018 YAGNESH R. PATEL (AY 2008-09) 4 AND HAVE SETTLED THE CASE AND PAID DUE TAX. THE LD. AR SUBMITS THAT UNDERTAKE TO FILE THE COPY OF FORM-3 OF VSVS SCHEME, 2020 ISSUED BY DESIGNATED AUTHORITY TO THE M/S SAHELI DEVELOPERS. THE LD. AR PRAYED THAT SINCE THE SUBSTANTIVE ADDITION HAS BEEN ACCEPTED BY M/S SAHELI DEVELOPERS, THEREFORE, PROTECTIVE ADDITION WILL NOT SURVIVE. 6. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUBMITS THAT THE LD. CIT(A) PASSED THE ORDER EX-PARTE AS THE ASSESSEE FAILED TO MAKE THE COMPLIANCE OF VARIOUS NOTICES, THEREFORE, MATTER MAY BE RESTORED TO THE FILE OF LD. CIT(A) TO CONSIDER THE CONTENTION RAISED BY THE LEARNED AR FOR THE ASSESSEE. THE ASSESSEE MAY BE GIVEN DIRECTION TO BRING THE FACT OF SETTLEMENT AND ACCEPTANCE FOR SUBSTANTIVE ADDITION BY M/S SAHELI DEVELOPERS TO LD. CIT(A). 7. IN THE REJOINDER SUBMISSION, THE LD. AR FOR THE ASSESSEE SUBMITS THAT THE MATTER MAY BE RESTORED TO THE FILE OF AO WITH THE DIRECTION TO VERIFY THE FACT, IF THE SUBSTANTIVE ADDITION HAS BEEN ACCEPTED AND DUE TAX HAS BEEN PAID BY M/S SAHELI DEVELOPERS THEN THE PROTECTIVE ADDITION MAY BE DELETED AT THE HAND OF ASSESSEE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITIES. THERE IS NO DISPUTE THAT AO MADE ADDITION OF RS. 1.29 CRORE ON PROTECTIVE BASIS AT THE HAND OF ASSESSEE. THE SUBSTANTIVE ADDITION IS MADE AGAINST THE M/S SAHELI DEVELOPERS IN ASSESSMENT ORDER DATED 23.03.2015 PASSED BY ITO WART-2(3)(6), SURAT. THE ITA NO.44/SRT/2018 YAGNESH R. PATEL (AY 2008-09) 5 LEARNED AR FOR THE ASSESSEE HAS ALSO FILED THE COPY OF THE ASSESSMENT ORDER IN CASE OF SAHELI DEVELOPER HAVING PAN ABLFS 4624 G. FURTHER, WE FIND THAT SAHELI DEVELOPER FILED APPLICATION UNDER VSV-20 FOR SETTLEMENT OF DISPUTE OF TAX AND THE DESIGNATED AUTHORITY CONCERN HAS ISSUED FORM-3 VIDE ACKNOWLEDGMENT NO. 110537100060121 DATED 06.01.2021, COPY OF WHICH IS ALSO PLACED ON RECORD. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE SUBSTANTIVE ADDITION HAS BEEN ACCEPTED BY M/S SAHELI DEVELOPERS AND THEY HAVE PAID THE DUE TAX BY AVAILING THE BENEFIT OF VSV-20. THEREFORE, WE DIRECT THE AO TO VERIFY THE FACT AND DELETE THE PROTECTIVE ADDITION AT THE HAND OF THE ASSESSEE. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER ANNOUNCED ON 15TH JUNE, 2021 AT THE TIME OF HEARING IN VIRTUAL COURT. SD/ SD/- ( DR ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER SURAT, DATED: 16 /06/2021 /SK, PS COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR 6. GUARD FILE TRUE COPY/ BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, ITAT, SURAT