K.Mannar, CHENNAI V. ITO, CHENNAI

ITA 618/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64335 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-09-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 23-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: MRS G VARDINI KARTHIK
• Keywords: Proportionate interest
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NOS. 460/MDS/2012 & I.T.A. NO. 618/MDS/2012 (ASSESSMENT YEAR : 2008-09) SHRI K. MANNAR, PLOT NO.55, 2 ND MAIN ROAD, SVS NAGAR, VALASARAVAKKAM, CHENNAI - 600 087. PAN : AHDPM6951G (APPELLANT) V. THE INCOME TAX OFFICER, BUSINESS WARD IV(2), CHENNAI - 600 034 . (RESPONDENT) APPELLANT BY : MRS. G. VARDINI KARTHIK, ADVOCATE RESPONDENT BY : SHRI S. DASGUPTA, JCIT DATE OF HEARING : 25.09.2012 DATE OF PRONOUNCEMENT : 25.09.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THESE ARE APPEALS FILED BY ASSESSEE AGAINST ORDER S DATED 7.12.2011 AND DATED 30.1.2012 OF COMMISSIONER OF IN COME TAX (APPEALS)-VIII, CHENNAI, FOR THE IMPUGNED ASSESSMEN T YEAR. FIRST ONE IS AN APPEAL AGAINST ADDITIONS MADE IN AN ASSESSMENT D ONE UNDER SECTION 143(3) OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') , WHEREAS, SECOND ONE 2 I.T.A. NOS. 460 & 618/MDS 12 IS AN APPEAL AGAINST PENALTY LEVIED UNDER SECTION 2 71(1)(C) OF THE ACT, FOR THE VERY SAME ASSESSMENT YEAR. 2. APPEAL OF THE ASSESSEE AGAINST THE ORDER OF CIT( APPEALS) ARISING OUT OF ASSESSMENT DONE UNDER SECTION 143(3) OF THE ACT, IS CONSIDERED FIRST. 3. FACTS APROPOS ARE THAT ASSESSEE HAD FILED HIS RE TURN FOR THE IMPUGNED ASSESSMENT YEAR DECLARING AN INCOME OF ` 4,58,380/- ON 19.9.2008. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, ASSESSING OFFICER NOTED THAT ASSESSEE HAD MADE CASH DEPOSITS OF ` 25,48,000/- IN KOTAK MAHINDRA BANK LTD. EXPLANATION OF THE ASSESS EE WAS THAT SUCH DEPOSITS WERE MADE OUT OF FUNDS DRAWN FROM AN OVER DRAFT ACCOUNT WITH BANK OF BARODA. AS PER THE A.O., THE DEPOSITS IN K OTAK MAHINDRA BANK LTD. WERE DIVERTED FOR DOING SPECULATIVE BUSINESS I N SHARES ON WHICH LOSSES OF ` 28 LAKHS WERE CLAIMED. SINCE EFFECTIVELY OVER DRA FT AMOUNTS WERE PARTLY DIVERTED TO SPECULATIVE BUSINESS, A.O. DISALLOWED A PROPORTIONATE INTEREST AMOUNT OF ` 1,64,956/-. ASSESSING OFFICER ALSO FOUND THAT ASSESSEE WAS NOT HAVING EXPLAINABLE SOUR CE FOR A SUM OF ` 8,50,000/- INTRODUCED IN HIS BUSINESS. AN ADDITION TO THIS EFFECT WAS ALSO MADE. 3 I.T.A. NOS. 460 & 618/MDS 12 4. ASSESSEE MOVED IN APPEAL BEFORE CIT(APPEALS), BU T, SUCH APPEAL WAS FILED WITH A DELAY OF 171 DAYS. THOUGH THE ASS ESSEE PRAYED FOR CONDONATION THROUGH A PETITION FOR CONDONATION, CIT (APPEALS) WAS OF THE OPINION THAT NO REASONABLE AND SUFFICIENT CAUSE WER E SHOWN BY THE ASSESSEE FOR CONDONING THE DELAY. AS PER CIT(APPEAL S), ASSESSEE SHOULD HAVE TAKEN CARE TO FILE THE APPEAL IMMEDIATE LY ON RECEIPT OF ASSESSMENT ORDER AND THERE BEING INORDINATE DELAY O F MORE THAN FIVE MONTHS IN FILING THE APPEAL, HE REFUSED TO CONSIDER THE APPEAL FILED BY THE ASSESSEE. WITHOUT GOING INTO THE MERITS OF THE CAS E, CIT(APPEALS) DISMISSED ASSESSEES APPEAL. 5. NOW BEFORE US, LEARNED A.R., STRONGLY ASSAILING THE ORDER OF CIT(APPEALS), SUBMITTED THAT ASSESSEE HAD FILED A C ONDONATION PETITION WHEREIN HE HAD GIVEN DETAILED EXPLANATION WHY THE A PPEAL COULD NOT BE FILED IN TIME. ACCORDING TO LEARNED A.R., ASSESSEE HAD ELDERLY PARENTS, BOTH OF WHOM WERE SICK AND HE HAD TO ATTEND TO THEI R AILMENTS. ASSESSEES MOTHER WAS ADMITTED IN APOLLO HOSPITAL F OR A LONG PERIOD AND IN SUCH CIRCUMSTANCES, HE COULD NOT FILE THE APPEAL IN TIME. IN THE RESULT, THERE WAS A DELAY IN FILING THE APPEAL IN TIME. 6. PER CONTRA, LEARNED D.R. SUBMITTED THAT ASSESSEE DID NOT FILE A PETITION FOR CONDONATION IN PROPER FORMAT AND THERE FORE, THE CIT(APPEALS) WAS JUSTIFIED IN REFUSING THE CONDONATION OF DELAY. 4 I.T.A. NOS. 460 & 618/MDS 12 7. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DISPUTE THAT CIT(APPEALS) HAD DISMISSED THE APPEAL CITING DELAY, WITHOUT GOING INTO THE MERITS OF THE CASE. ASSESSEE HAD FILED A CONDONATION PETITION BEFORE CIT(APPEALS) IN WHICH I T WAS BROUGHT OUT BY HIM THAT HIS PARENTS WERE SICK AND HE HAD TO ATTEND TO THEIR AILMENTS, LEADING TO DELAY. NO DOUBT, IT MIGHT BE TRUE THAT THE CONDONATION PETITION WAS NOT FILED IN A PROPER AFFIDAVIT. NEVERTHELESS , WE ARE OF THE OPINION THAT CIT(APPEALS) OUGHT TO PROVIDE ONE MORE CHANCE TO THE ASSESSEE TO RECTIFY THE DEFECT. ASSESSEE SHALL FILE A CONDONAT ION PETITION IN A PROPER FORMAT BEFORE THE LD. CIT(APPEALS) AND HE SHALL PRO CEED IN ACCORDANCE WITH LAW. 8. SECOND APPEAL OF THE ASSESSEE IS AGAINST THE PEN ALTY LEVIED FOR SAME ASSESSMENT YEAR, WHICH WAS CONFIRMED BY THE CI T(APPEALS). 9. SINCE WE HAVE REMITTED THE APPEAL OF THE ASSES SEE WITH REGARD TO THE ASSESSMENT, BACK TO THE FILE OF THE CIT(APPEALS ) FOR CONSIDERATION AFRESH, WE ARE OF THE OPINION THAT THE ISSUE OF PEN ALTY ALSO REQUIRE A FRESH LOOK, BASED ON THE OUTCOME OF THE MAIN APPEAL . WE, THEREFORE, SET ASIDE THE ORDER OF CIT(APPEALS) AND REMIT THE ISSUE OF PENALTY ALSO BACK TO HIS FILE FOR CONSIDERATION AFRESH, IN ACCORDANCE WITH LAW. 5 I.T.A. NOS. 460 & 618/MDS 12 10. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER WAS PRONOUNCED IN THE COURT ON TUESDAY, T HE 25 TH OF SEPTEMBER, 2012, AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 25 TH SEPTEMBER, 2012. KRI. COPY TO: APPELLANT/RESPONDENT/CIT(A)-VIII, CHENNAI / CIT-VI, CHENNAI-34/D.R./GUARD FILE