The Barot Co-operative Multipurpose Society Limited, Mandi V. Income Tax Officer, Mandi

ITA 671/CHANDI/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1190 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-06-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 02-11-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL SOHU
• Keywords: Condonation of delay; Set aside
• Section: 148; 142(1); 250; 69A

Judgement Text

आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘B’, CHANDIGARH BEFORE DR KRINWANT SAHAY, ACCOUNTANT MEMBER & SHRI PARESH M. JOSHI, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 671/CHD/2023 Ǔनधा[रण वष[ / Assessment Year: 2017-18 The Barot Cooperative Multipurpose Society Limited, Mandi, Himachal Pradesh 176120 Vs. बनाम The ITO, Mandi èथायी लेखा सं./PAN No: AACAT9554D अपीलाथȸ/ APPELLANT Ĥ×यथȸ/ REPSONDENT ( Hybrid Hearing ) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Ashwani Kumar, CA राजèव कȧ ओर से/ Revenue by : Shri Rahul Sohu, JCIT, Sr. DR स ु नवाई कȧ तारȣख/Date of Hearing : 01.07.2024 उदघोषणा कȧ तारȣख/Date of Pronouncement : 04.07.2024 आदेश/Order Per PARESH M JOSHI, A.M.: This is an appeal filed before this Tribunal under section 253 of the Income Tax Act, 1961. The Assessee is aggrieved by the order under section 250 of the Income Tax Act, 1961 bearing No; ITBA/NFAC/5/250/2023-24/1105-689277 (1) dated 09/10/2023 which is hereinafter referred to as the “impugned order”. The Assessee 671-Chd-2023 The Barot Cooperative Multipurpose Society Limited, Mandi, H.P. 2 PAN is AACAT9554D. The A.Y. is 2017-18 corresponding to the F.Y. from 01.4.2016 to 31.03.2017. Factual Matrix 2. The Assessee has raised following Grounds of appeal in Form No. 36 before us. 1. That order passed u/s 250 of the Income Tax Act, 1961 by the Learned Commissioner of Income Tax (Appeals), NFAC. Delhi is against law and facts on the file in as much as NFAC was not justified to uphold the action of the Learned Assessing Officer in making an addition of Rs. 48,95,755/- on account of cash deposited in the bank account by the said society. 2. That the NFAC was not justified to dismiss the appeal in-limini and without providing any opportunity to the appellant on the ground that the appellant had not shown any sufficient cause for the delay in filing of the appeal. 3. The brief facts of the case are as under:- “Based on information received from DDIT(lnv.), Shimla, the assessment proceedings was taken up for AY 2017-18 u/s.143(3) in the case of M/s. H.P. Co-operative Bank Ltd.,(AABFH7694E) by ACIT. Shimla Circle. Information gathered during investigation relating to large sum of cash deposits in the bank accounts of HP Co-operative Bank accounts was forwarded by ACIT, Shimla Circle to the DCIT, Circle, Mandi vide letter in No. ACIT/Cir/Shimla/2019-20/458 dated 30-12-019 enclosing list of cases relating cash deposits exceeding Rs.10 lakhs during demonetization period and post demonetization period of Financial Year 2016-17. 671-Chd-2023 The Barot Cooperative Multipurpose Society Limited, Mandi, H.P. 3 3. As per the above information, the assessee THE BAROT CO OPERATIVE MULTIPURPOSE SOCIETY LIMITED had deposited cash amounting to Rs.29,41,055/- in M/s. H.P. Co- operative Bank Ltd. during the FY 2016-17. 4. Based on the above information in the assessee's case relating to cash deposits and the fact that the assessee was non-filer for AY 2017-18, reasons were recorded for escapement of income for AY 2017-18 and necessary approval u/s.151(2) of IT Act, 1961 was obtained from Joint Commissioner of Income Tax, Shimla Range, Shimla. Notice u/s 148 IT Act dated 28.03.2021 was issued and served on 30-3-2021 requiring the assesse to file return for AY 2017-18 within 30 days of receipt of the notice. 5. The assessee has not filed return of income in response to the said notice. Subsequently, notices u/s 142(1) dated 02.07.2021 was issued to the assessee alongwith the questionnaire to explain the sources for cash deposits, to furnish financial statement of accounts, bank accounts operated during the year. The assessee filed to corrfply with the information called for u/s. 142(1). 6. Consequent to the transfer of the case to Regional E- Assessment Unit on 11.11.2021, a letter was sent to assessee on 23.11.2021 calling for return of income in response to notice issued u/s.148 of IT Act by 06.12.2021. 7. Further to the above, a notice u/s.142(1) dated 18.02.2022 was issued and served to the registered email of the assessee calling for specific information relating to cash deposit. It is observed that the assessee has been non responsive to the notices issued during course of scrutiny proceedings and failed to furnish the information called for within the due date of compliance. 8. In view of the continued non response from the assessee, the case was referred to designated Verification Unit for service 671-Chd-2023 The Barot Cooperative Multipurpose Society Limited, Mandi, H.P. 4 of physical copy of the notices issued during scrutiny proceedings. 9. During the course of scrutiny notice u/s.133(6) dated 16.03.2022 was issued to HP. State Co-operative Bank Ltd and copies of bank accounts operated by the assessee society were obtained on 22.03.2022. 10 The assessee was operating the following bank accounts with HP. State Co-operative Bank Ltd., and the details of total deposits by cash and other credits during the FY 2016-17 are as under: SI. No. Bank A/c. No. Bank Name Total credit (in Rs.) Cash Credit (In Rs.) other credits (In Rs.) 1 30410200010 HP STATE CO-OP BANK LTD. 732113 563000 1,69,112 2 30450000001 HP STATE CO-OP BANK LTD. 3188055 2971055 247000 3 30450100002 HP STATE CO-OP BANK LTD. 1387700 1361700 26000 4 30430305156 HP STATE CO-OP BANK LTD. 372019 0 372019 Total 5679886 4895755 814131 11. From the above table it is seen that that total cash deposits in four accounts maintained with HP. State Co- operative Bank Society Ltd during the FY 2016-17 amounts to Rs.48,95,755/-. 671-Chd-2023 The Barot Cooperative Multipurpose Society Limited, Mandi, H.P. 5 The assessee's failure to respond to the notices goes to prove that the assessee has failed to substantiate with supporting books of accounts the evidence of cash deposits and therefore failed to discharge its onus to explain the cash deposits. 12. As per sec.69A, where in any financial year the assessee is found to be the owner of any money and such money is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, then the money may be deemed to be the income of the assessee for such financial year. Accordingly, in terms of Section 69A of the Income-tax Act, 1961 the cash deposit of Rs.48,95,755/- is being treated as unexplained money for AY 2017-18 and taxed as income under the head Other Sources and taxed @ 60% u/s. 115BBE of the Income-tax Act, 1961. Showcause Notice: In connection with the proposed addition as above showcause was issued to the assessee for compliance on 29-3-2022. The assessee has failed to furnish any reply. Hence, it is construed that assessee has not submission to make and the assessment is completed as under as under: Penalty proceedings u/s 271AAC of the Income-tax Act, 1961 is being initiated for income assessed u/s.69A of the Income-tax Act, 1961. Based on verification of information on record, the assessment in the case is completed as per provisions of sec.144 r.w.s.147 r.w.s.144B as under:- Returned income NIL Add: 671-Chd-2023 The Barot Cooperative Multipurpose Society Limited, Mandi, H.P. 6 Addition u/s 69A Rs.48 95,755/- Assessed Income Rs.48,95,755/- 4. The ld. CIT(A) in the impugned order has observed as under: “Condonation of delay In this case, it is found that there is a delay of about 5 months in filing of the Appeal. As per Form 35 filed by the appellant on 27/09/2022, the date of service of Notice of Demand is mentioned as 18/09/2022, whereas, the assessment order was passed by the A.O. on 30/03/2022. The appellant has not mentioned at column No. 14 filed by him that there is delay in filing of the appeal and has not stated grounds for condonation of delay in filing of the appeal on time in column No. 15 of the same form, neither has the appellant filed any condonation of delay petition. In column No. 14 of form 35 filed by the appellant on 27/09/2022, the appellant stated that there is no delay in filing of the instant appeal. First of all the appellant has not explained as to how an order dated 30.03.2022 and demand notice for the same, has been received by it on 18.09.2022. It may be construed that the appellant has intentionally not mentioned the fact of delay in filing the appeal and hasn't filed any letter/affidavit to substantiate the reasons for not filing the appeal within the time limit allowed u/s 249(2) of the Income Tax Act, 1961. It is clear that there is a delay of about 5 months in filing of the appeal. Reasons for Delay : In this regard, the appeal memo is not accompanied with any petition seeking condonation of delay in 671-Chd-2023 The Barot Cooperative Multipurpose Society Limited, Mandi, H.P. 7 preferring the impugned appeal and the appellant has not stated any reason for Condonation of Delay in filing of the appeal. Adjudication on Delay : It is seen from the facts of the case that the order appealed against is dated 30/03/2022. The appeal was filed on 27/09/2022 and the appellant has not filed any condonation application. This appeal should have been filed by 30.04.2022. As per the provisions of Sec. 249(2), \ n appeal before the CIT(A) is to be filed within 30 days of the receipt of notice of demand. Further, the delay may be condoned only when the CIT(A) is satisfied that the appellant had sufficient cause for not presenting it within the clue date. Unfortunately, the appellant has not furnished any petition seeking condonation of the delay in filing the appeal or even explaining the purported 'sufficient cause' for not preferring the appeal within the time limit as prescribed under Section 249(2) of the Income Tax Act, 1961. "The law on the issue can be summarised to the effect that where a case has been presented in the court beyond limitation, the applicant has to explain the court as to what was the sufficient cause which means an adequate and enough reason which prevented him to approach the court within limitation. In case a party is found to be negligent, or for want of bonafide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay. No court could be justified in condoning such an inordinate delay by imposing any condition whatsoever. The application is to be decided only within the parameters laid down by this Court in regard to the condonation of 671-Chd-2023 The Barot Cooperative Multipurpose Society Limited, Mandi, H.P. 8 delay. In case there was no sufficient cause to prevent a litigant to approach the Court on time condoning the delay without any justification, putting any condition whatsoever, amounts to passing an order in violation of the statutory provisions and it tantamounts to showing utter disregard to the legislature." The Hon'ble Supreme Court in its judgement in the ease of Basawaraj &Anr. Vs. Spl. Land Acqn. Officer in Civil Appeal No. 6974 of 2013 vide its order dated 22.08.2013 have pointed out that- "9. Sufficient cause is the cause for which defendant could not be blamed for his absence. The meaning of the word "sufficient" is "adequate" or "enough" in as much as may be necessary to answer the purpose intended. Therefore, the word "sufficient" embraces no more than that which provides a platitude, which when the act done suffices to accomplish the purpose intended in the facts and circumstances existing in a case, duly examined from the view point of a reasonable standard of a cautious man. In this context, "sufficient cause" means that the party should not have acted in a negligent manner or there was a want of bonafide on its part in view of the facts and circumstances of a case or it cannot be alleged that the party has "not acted diligently" or "remained inactive". However, the facts and circumstances of each case must afford sufficient ground to enable the Court concerned to exercise discretion for the reason that whenever the Court exercises discretion, it has to be exercised judiciously. The applicant must satisfy the Court that he was prevented by any sufficient cause from prosecuting his case, and unless a satisfactory explanation is 671-Chd-2023 The Barot Cooperative Multipurpose Society Limited, Mandi, H.P. 9 furnished, the Court should not allow the application for condonation of delay." The Hon. Supreme Court finally held that - "15. The law on the issue can be summarised to the effect that where a case has been presented in the court beyond limitation, the applicant has to explain the court as to what was the sufficient cause which means an adequate and enough reason which prevented him to approach the court within limitation. In case a party is found to be negligent, or for want of bonafide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay*. No court could be justified in condoning such an inordinate delay by imposing, any condition whatsoever. The application is to be decided only within the parameters laid down by this Court in regard to the condonation of delay. In case there was no sufficient cause to prevent a litigant to approach the Court on time condoning the delay without any justification, putting any condition whatsoever, amounts to passing an order in violation of the statutory provisions and it tantamounts to showing utter disregard to the legislature." In this case, the appellant has not shown any sufficient cause. The appeal is therefore dismissed in limine under the provision of Section 249(3) r.w.s. 250 of the Income- Tax Act, 1961. In the result, the appeal is dismissed. In view of the above, the appeal is, accordingly, dismissed.” 671-Chd-2023 The Barot Cooperative Multipurpose Society Limited, Mandi, H.P. 10 5. The hearing was held on 01.07.2024 when both the ld. AR and Ld. DR were heard at length on the g rounds raised in the Appeal and so also grounds against appeal of the Assessee. The ld. AR contended finally that No opportunity was provided by the ld. CIT(A) both on the Condonation of delay as well as on Merits of the case. He prayed for remand of the case back to the file of ld. CIT(A) so that Assessee could offer explanations both on delay and merits of the case. The ld. DR conceded to the request made by the ld. AR. Findings and Conclusions 6. In the light of the above Factual Matrix we now examine the legality, validity and the propritory of the impugned order. We observe and hold that before passing the impugned order the ld. CIT(A) ought to have given an opportunity to the Assessee to file a Condonation of delay application or ought to have expressly called upon the Assessee to show cause why their appeal in Form No. 35 should not be dismissed as Time barred as delay is seen per se. In the absence of such an opportunity the impugned order is against the Principles of Natural Justice and we set aside the same and remand the case back to the file of ld. CIT(A) to first give an opportunity to the Assessee to explain delay and if delay explained is satisfactory the same should be condoned in 671-Chd-2023 The Barot Cooperative Multipurpose Society Limited, Mandi, H.P. 11 accordance with law and thereafter hear the Assessee on merits and pass a speaking order which should be well reasoned. Order 7. The impugned order is Set Aside as and by way of Remand with directions as aforesaid, back to file of CIT(A). 8. The appeal of the Assessee is allowed for statistical purposes. Order pronounced on .07.2024. Sd/- Sd/- (DR KRINWANT SAHAY) Accountant Member (PARESH M. JOSHI) Judicial Member “rkk” आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आय ु Èत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar