Akilbhai Safimahmad Vahora, Anand V. The Income Tax Officer, Ward-1(3)(1), Petlad

ITA 504/AHD/2023

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9462 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-12-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 14-06-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Principle of natural justice; Reasonable cause; Right to appeal; Condonation of delay
• Section: 234B; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I .T .A . N o . 5 0 4/ A h d /2 0 23 ( A s se ss m e nt Y e a r : 20 17- 18 ) A k ilb h a i S a f i ma h m ad Va ho r a , V a h or aw a d , Pe tla n d , A t . Ch an ga Ta l . Pe tl a d, A na nd-3 8 84 21 V s .I nc o me Ta x Of f ic e r , War d- 1 ( 3 ) (1 ) , Pet la nd [ P A N N o . AU K P V 5 25 2B ] (Appellant) .. (Respondent) Appellant by : Ms. Amrin Pathan, A.R. Respondent by: Shri Ashok Kumar Suthar, Sr. D.R. D at e of H ea r i ng 11.12.2023 D at e of P r o no u n ce me nt 20.12.2023 O R D E R PER SIDDHARTHA NAUTIYAL, JM: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals) (in short “Ld. CIT(A)”), National Faceless Appeal Centre, (in short “”NFAC”), Delhi in DIN & Order No. ITBA/NFAC/S/250/2022-23/1044278470(1) vide order dated 29.07.2022 passed for the Assessment Year 2017-18. 2. The assessee has raised the following grounds of appeal:- “Violation of Principle of Natural Justice: 1) The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi ["CIT(A)"] erred in fact and in law in passing an exparte order. 2) The learned CIT(A) erred in fact and in law in not admitting the appeal and rejecting the application of the appellant to condone the delay. ITA No. 504/Ahd/2023 Akilbhai Safimahmad Vahora vs. ITO Asst. Year –2017-18 - 2 - 3) The learned CIT(A) erred in fact and in law in passing the order against the principle of natural justice. Without prejudice to the above: Addition u/s 69A: 4) The learned CIT(A) erred in fact and in law in confirming the addition made by the AO of Rs. 86,08,517/- u/s. 689A of the Act despite the fact that the Appellant had filed business return and credits are of business receipts. 5) The learned CIT(A) erred in fact and in law in confirming the addition made by AO of Rs. Rs. 86,08,517/- u/s 69A on the basis of assumptions and suspicions. Other Grounds: 6) The learned CIT(A) erred in fact and in law in confirming the action of the AO in charging interest u/s 234B of the Act. 7) The learned CIT(A) erred in fact and in law in confirming the action of the AO in charging interest u/s 234C of the Act. 8) The learned C1T(A) erred in fact and in law in confirming the action of learned AO in initiating penalty proceedings u/s 271AAC of the Act. Your Appellant craves the right to add to or alter, amend, substitute, delete or modify all or any of the above grounds of appeal.” 3. The brief facts of the case are that the assessee filed return of income on 30.06.2017 declaring total income of Rs. 46,382/-. The case of the assessee was selected for scrutiny to verify the reason “large cash deposits during the demonetisation period and business return filed for the first time”. Thereafter, the Assessing Officer issued several notices, which remained un-complied with. Accordingly, the Assessing Officer held that the assessee could not substantiate the cash credits made in the bank account maintained by the assessee with Bank of Baroda. Accordingly, the Assessing Officer made an addition of Rs. 86,08,517/- under Section 69A of the Act. ITA No. 504/Ahd/2023 Akilbhai Safimahmad Vahora vs. ITO Asst. Year –2017-18 - 3 - 4. In appeal, the Ld. CIT(Appeals) observed that there was a substantial delay of 315 days delay in filing of appeal. Accordingly, Ld. CIT(Appeals) dismissed the appeal of the assessee with the following observations: “5.5 The appellant has offered no reason for delay in filing of appeal. It may also be not out of place to mention that, reasons proffered, if any, must have a sufficient cause with proper explanation. The reason offered in column 15 of Form 35 is for assessment proceeding given to request permission for submitting additional evidence. The appellant has to first justify the delay in filing appeal before proceeding any further with additional evidences, if any. Thus, the appellant has failed to explain the delay despite specific notices issued. 5.6 I find that delay of 315 days is an inordinate delay. A pragmatic approach can be espoused when delay is short. While interpreting 'sufficient cause' vs. advancing cause of 'substantial justice', period of delay cannot be ignored out of hand. Such a long delay will also cause grave prejudice to revenue. State as a party to this litigation need to be given equal treatment. 5.7 Decision of Hon'ble Punjab & Haryana High Court in the case of CST v. Ram Mohan Kabra is relevant, which reads as under: “The provisions relating to prescription of limitation in every statute must not be construed so liberally that it would have the effect of taking away the benefit accruing to the other party in a mechanical manner. Where the Legislature spells out a period of limitation and provides for power to condone the delay as well, then such delay can be condoned only for sufficient and good reasons supported by cogent and proper evidence. Now, it is a settled principle of law that provisions relating to specified period of limitation must be applied with their rigour and effective consequences.” 5.8 In case of JCIT Vs. Tractors & Farm Equipments Ltd., [2007] 104 ITD 149 (Chennai)(TM) delay was not condoned by the Hon'ble ITAT as it was due to negligence and inaction on part of appellant which could have very well be avoided by exercise of due care and attention. 5.9 Hon'ble ITAT in the case of ITO V. Hemraj Onkarji Mali, [2007] 108 TTJ 1061 ITD 513(Indore) decided that there was no reasonable cause for delay on part of revenue. This decision once taken cannot justify delay to file appeal. Hence, the reasonable cause for delay was not established. 5.10 In the case of Madhu Dadha Vs. ACIT, [2009] 317 ITR 458 (Mad.) court while dismissing appeal noticed that assessee had not explained cause of delay in filing appeal. It held as under: ITA No. 504/Ahd/2023 Akilbhai Safimahmad Vahora vs. ITO Asst. Year –2017-18 - 4 - “14. At this juncture, we have to be guided by the judgment reported in [1990] 1 LLN 457 in the case of T.N.M. BANK LTD. v. APP. AUTY., SHOPS ACT. In that particular case, the Division Bench of this court has held that, “.................. We are of the view that the question of limitation is not merely a technical consideration. Rules of limitation are based on principles of sound policy and principles of equity, is a litigant liable to have a Damocles' sword hanging over his head indefinitely for a period to be determined at the whims and fancies of the opponent?” In that decision, this Court has held that the delay of 285 days in preferring the appeal could not be condoned. It was held that the condonation of delay was not justified on facts and evidence of the case. As rightly pointed out that the Rules of limitation are based on principles of sound public policy and principles of equity. Though there is no presumption that the delay is occasioned deliberately or on account of culpable negligence, if the admitted facts in that case are taken note of, there is no doubt that the delay on the part of the appellant is deliberate and the appellant is clearly guilty of culpable negligence. Such negligent attitude of the appellant was not taken care to preserve the right of appeal and having been slept over for more than 558 days and not explained the delay without any reasonable doubt, the appellant cannot avail sympathy or discretion of this Court. 15. In any way of the matter, the discretion having been rightly refused by the Tribunal, there is no sufficient reason or cause to interfere with the order passed by the Tribunal. Hence, the appeal is dismissed. No costs. Consequently, connected TAMP is also dismissed. 6. In view of the aforesaid discussion, I believe that in the present case, cause of substantial justice would not be served by condoning inordinate delay of 315 days. Therefore, appeal stand dismissed in limine in view of provision of section 249(3) of Income tax Act, 1961 read with Faceless Appeal Scheme 2020 Paragraph 5(1)(ii).” 5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(Appeals). At the outset, we observe that the present appeal is time- barred by 261 days. Before us, the assessee filed application for condonation of delay and submitted that the assessee is an individual residing in a small village near Petlad. The assessee is completely dependent upon his consultant and when the assessee received a letter of demand from the Assessing Officer, the assessee approached his consultant, who advised the assessee to file appeal against the additions made by the Assessing Officer before Ld. CIT(Appeals). ITA No. 504/Ahd/2023 Akilbhai Safimahmad Vahora vs. ITO Asst. Year –2017-18 - 5 - Owing to large quantum of demand, amounting to Rs. 87 lakhs approximately, the assessee was suffering from stress and severe chest pain and was undergoing medical treatment. Accordingly, the assessee could not cause appearance before Ld. CIT(Appeals) as well, owing to his medical condition. Subsequently, the assessee was advised by his consultants to approach the Tribunal against the order passed by Ld. CIT(Appeals). Accordingly, it was submitted that it owing to the aforesaid conditions that there was a delay of 261 days in filing of the present appeal. Further, the counsel for the assessee also submitted that there was a genuine reason for non-appearance before Ld. CIT(Appeals), since the assessee was residing in village and was completely dependent upon his consultants and hence could not cause appearance. It was further submitted that the addition amounting to Rs. 87 lakhs approximately by the Assessing Officer is a substantial addition and if given an opportunity, the assessee is in a position to fully justify the cash deposits made in his bank account during the demonetisation period. Accordingly, it was submitted that in the interest of justice, the delay in filing of the present appeal condoned and the matter may be restored to the file of Ld. CIT(Appeals) for fresh adjudication, since the order was passed against the principles of natural justice. 6. In response, DR placed reliance on the observations made by Assessing Officer and Ld. CIT(Appeals) in their respective orders. 7. We have heard the rival contentions and perused the material on record. On going to the records of the case, we observe that firstly the assessee is an individual and residing in a small village near Petlad and is completely dependent upon the advice of his consultants, relating to tax matters. We observe that from the medical records produced before us, the assessee was ITA No. 504/Ahd/2023 Akilbhai Safimahmad Vahora vs. ITO Asst. Year –2017-18 - 6 - undergoing medical treatment around the due date of filing of appeal against order of Ld. CIT(Appeals). Accordingly, looking into the instant facts and in the interest of justice, we are hereby condoning the delay of 261 days in filing of the present appeal. 8. On merits, we observe that the assessee is an individual and substantial addition amounting to Rs. 87 lakhs has been made in the hands of the assessee on account of cash deposit in the bank account of the assessee, during the demonetisation period. Before us, the counsel for the assessee submitted that if given an opportunity of hearing, the assessee would be able to substantiate the source of cash deposited by the assessee in his bank account during the demonetisation period. Accordingly, looking into the aforesaid facts and the fact that a substantial amount of addition of Rs. 87 lakh has been made to the returned income of the assessee, we are of the considered view that the assessee deserves an opportunity to substantiate his case on merits. Further, we are also mindful of the fact that the assessee was suffering from stress and chest pain on account of substantial additions to his return of income. Accordingly, the matter is being restored to the file of Ld. CIT(Appeals) for de novo consideration, after giving due opportunity to the assessee to present his case on merits. 9. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 20/12/2023 Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 20/12/2023 TANMAY, Sr. PS TRUE COPY ITA No. 504/Ahd/2023 Akilbhai Safimahmad Vahora vs. ITO Asst. Year –2017-18 - 7 - आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 18.12.2023 (Dictation given by Hon’ble Member on his Dragon Software) 2. Date on which the typed draft is placed before the Dictating Member 18.12.2023 3. Other Member..................... 4. Date on which the approved draft comes to the Sr.P.S./P.S 19.12.2023 5. Date on which the fair order is placed before the Dictating Member for pronouncement .12.2023 6. Date on which the fair order comes back to the Sr.P.S./P.S 20.12.2023 7. Date on which the file goes to the Bench Clerk 20.12.2023 8. Date on which the file goes to the Head Clerk.......................................... 9. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 10. Date of Despatch of the Order..........................................