Late Sri Ramesh Bhardwaj Through Legal Heir Sachin Bhardwaj, New Delhi V. ACIT, New Delhi

ITA 6722/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5215 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 29-06-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 30-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Period of limitation; Agreed addition; Condonation of delay
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC: NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.6721 & 6722/DEL./2016 ASSESSMENT YEAR 2006-2007 LATE SRI RAMESH BHARADWAJ, THROUGH LEGAL HEIR SACHIN BHARDWAJ, C-117, MOHAN GARDEN, NEAR SHIV MANDIR, UTTAM NAGAR, NEW DELHI-059. PAN AFDPB0986L VS. ACIT, CIRCLE-66(1) NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI RAJAT JAIN & SHRI AKSHAT JAIN, C.A. FOR REVENUE : SHRI T. VASANTHAN, SR. D.R. DATE OF HEARING : 09.08.2017 DATE OF PRONOUNCEMENT : 16.08.2017 ORDER THESE BOTH APPEALS BY THE SAME ASSESSEE ARE DIRECTE D AGAINST THE DIFFERENT ORDERS OF LD. CIT(A)-28, NEW DEL HI, DATED 25 TH APRIL, 2016 FOR A.Y. 2006-2007, CHALLENGING THE QUAN TUM ADDITION AS WELL AS LEVY OF PENALTY UNDER SECTION 271(1)(C) OF TH E I.T. ACT, 1961. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT ASSESSEE FI LED RETURN OF INCOME AT RS.3,10,990. THE CASE WAS SELECTED FOR SCRUTINY. THE A.O. NOTED IN THE ASSESSMENT ORDER THAT AIR INFORMATION HAVE BEEN RECEIVED TO SHOW THAT ASSESSEE HAD MADE EXPENDITURE OF RS.2,20,328 THROUGH SBI CARD. THE ASSESSEE WAS ASKED TO EXPLAIN S OURCE OF THE PAYMENT MADE IN RESPECT OF THIS CREDIT CARD. THE ASSESS EE JOINING THE ASSESSMENT PROCEEDINGS STATED THAT HE DID NOT REMEMBER AS TO FROM WHERE PAYMENT IN RESPECT OF SBI CARD HAVE BEEN MADE. THE ASSESSEE THEREFORE, FAILED TO EXPLAIN THE SOURCE OF THE PAYMENT. THEREFORE, THE 2 ITA.NO.6721 & 6722/DEL./2016 LATE SHRI RAMESH BHARD WAJ THROUGH L.R. SACHIN BHARDWAJ, NEW DELHI. A.O. MADE ADDITION OF RS.2,20,328. THE A.O. FURTHER NOTED THAT ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 24 AMOUN TING TO RS.67,388 AS INTEREST ON HOUSING LOAN. IT HAS BEEN STATE D BY THE ASSESSEE THAT HOUSE IN RESPECT OF WHICH THIS LOAN HAS B EEN CLAIMED IS IN THE NAME OF HIS WIFE SMT. ROSHNI DEVI. THEREFORE, DEDUCTION WILL NOT BE ALLOWED TO THE ASSESSEE. THE A.O. ACCORDINGLY, MAD E THE ADDITION OF RS.67,388 AND COMPUTED THE ASSESSED INCOME OF THE ASSE SSEE AT RS.5,98,710 VIDE ORDER DATED 26 TH DECEMBER, 2008 UNDER SECTION 143(3) OF THE I.T. ACT. THE ASSESSEE DID NOT APPEAR B EFORE THE LD. CIT(A) DESPITE GIVING VARIOUS SUFFICIENT OPPORTUNITIE S. THEREFORE, LD. CIT(A) DISMISSED THE APPEAL OF ASSESSEE BECAUSE THE ASSESSEE FAILED TO EXPLAIN BOTH THE ABOVE ADDITIONS. 2.1. THE A.O. ON THESE ADDITIONS LEVIED THE PENALTY U NDER SECTION 271(1)(C) OF THE ACT. AGAIN ASSESSEE DID NOT AP PEAR BEFORE THE LD. CIT(A) AND DID NOT EXPLAIN THE ISSUE OF LEVY OF P ENALTY. THE LD. CIT(A), THEREFORE, DISMISSED THE APPEAL OF ASSESSEE. IT MAY ALSO BE NOTED HERE THAT ASSESSEE DID NOT RESPOND TO THE NOTICE IS SUED FOR LEVY OF PENALTY. 3. I HAVE HEARD LEARNED REPRESENTATIVES OF BOTH THE P ARTIES AND PERUSED THE MATERIAL ON RECORD. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSE SSEE HAS EXPIRED ON 4 TH SEPTEMBER, 2016. THEREFORE, BOTH THE APPEALS ARE FILED BY LEGAL HEIR OF THE ASSESSEE. IN COLUMN NO.9 OF FORM NO.36, 5 TH MAY, 2016 HAS BEEN MENTIONED AS DATE OF COMMUNICATIO N OF THE ORDER APPEALED AGAINST. HOWEVER, BOTH THE APPEALS HAVE BEEN FILED IN THE O/O. TRIBUNAL ON 30 TH DECEMBER, 2016. THUS, BOTH THE APPEALS ARE TIME BARRED BY 179 DAYS. THE LEGAL HEIR OF THE ASSESS EE FILED APPLICATIONS FOR CONDONATION OF DELAY IN FILING THE AP PEALS. IT IS STATED IN THE APPLICATIONS THAT THE DECEASED ASSESSEE HAD OFTE N FAILED TO 3 ITA.NO.6721 & 6722/DEL./2016 LATE SHRI RAMESH BHARD WAJ THROUGH L.R. SACHIN BHARDWAJ, NEW DELHI. APPEAR BEFORE THE LD. CIT(A) AND A.O. AND BECAUSE OF THE DISMISSAL OF APPEALS, THE LEGAL HEIR ARE BURDENED WITH HUGE LIABIL ITIES. IT IS ALSO STATED THAT DECEASED ASSESSEE WAS A HEAVY DRINKER AND M ENTALLY DISTURBED AND DEPRESSED PERSON ALWAYS. HE DIED ON 4 TH DECEMBER, 2016 DUE TO LIVER AND ORGAN FAILURES, DUE TO HIS RECU RRENT DRINKING HABITS. THE FACILITIES OF FREE CREDIT CARDS WERE VIR TUALLY MISUSED BY HIM DUE TO HIS ADVERSE DRINKING HABITS. IT IS EXPLAINED THA T LEGAL HEIR IS ABLE TO SOMEWHERE RELATE THESE FACTS. HOWEVER, WITHOUT A NY DETAILS OR DATA IN HAND, THE LEGAL-HEIR IS COMPLETELY UNABLE TO DEFEND HIS DECEASED FATHER AND THUS HE IS NOT ABLE TO OFFER ANY EX PLANATION IN RESPECT OF HIS MATTER. LEARNED COUNSEL FOR THE ASSESSEE , THEREFORE, SUBMITTED THAT DELAY IN FILING BOTH THE APPEALS MAY BE C ONDONED. 5. LD. D.R. ON THE OTHER HAND SUBMITTED THAT ASSESSEE HA S NO PRIMA FACIE CASE ON MERIT AND FURTHER ASSESSEE DELIBE RATELY DID NOT FILE THE APPEALS WITHIN TIME. THEREFORE, THE DELAY IN FILIN G THE APPEALS BY LEGAL-HEIR MAY NOT BE CONDONED. 6. I HAVE CONSIDERED THE RIVAL CONTENTIONS. THE FAC TS NOTED ABOVE ARE NOT IN DISPUTE THAT ASSESSEE APPEARED BEFORE THE A.O. AT ASSESSMENT STAGE BUT WAS NOT ABLE TO EXPLAIN THE EXPENDIT URE INCURRED THROUGH SBI CREDIT CARD. ASSESSEE WAS NOT ENTITLED FOR D EDUCTION OF INTEREST ON HOUSING LOAN BECAUSE THE PROPERTY ON WHICH HOUSING LOAN WAS TAKEN WAS NOT IN THE NAME OF THE ASSESSEE. THEREFOR E, ASSESSEE ON MERIT HAS NO CASE AT ALL. MAY BE DUE TO THIS REASON, WH EN ASSESSEE IS NOT ABLE TO EXPLAIN ANYTHING, THE DECEASED ASSESSEE DID NOT APPEAR BEFORE THE LD. CIT(A) BECAUSE HE WAS HAVING NO EXPLA NATION AT ALL TO REBUT THE FINDING OF FACT RECORDED BY THE A.O. VIRTUALLY , THE A.O. PASSED THE ASSESSMENT ORDER ON ADMISSION OF THE ASSESS EE TO MAKE BOTH THE ADDITIONS. IT IS WELL SETTLED LAW THAT NO APPEAL LIES ON AGREED ADDITION. I RELY UPON THE DECISION OF KERALA HIGH CO URT IN THE CASE OF 4 ITA.NO.6721 & 6722/DEL./2016 LATE SHRI RAMESH BHARD WAJ THROUGH L.R. SACHIN BHARDWAJ, NEW DELHI. VAMA DAVAN BHANU 330 ITR 559. THE LD. CIT(A) NOTED THAT HE HAS ISSUED SEVERAL STATUTORY NOTICES BUT NONE HAVE BEEN CO MPLIED WITH BY THE ASSESSEE. IT THEREFORE, APPEARS THAT SINCE THE DECEA SED ASSESSEE WAS HAVING NO CASE AT ALL TO DEFEND THE ADDITIONS MAD E BY THE A.O. THE DECEASED ASSESSEE DID NOT CHOOSE TO FILE ANY APPEAL B EFORE THE TRIBUNAL EITHER AGAINST QUANTUM ADDITION OR AGAINST THE PENALTY ORDER. THE DECEASED ASSESSEE ALSO DID NOT APPEAR EITHER AT THE PENALTY STAGE OR THE APPELLATE PROCEEDINGS BEFORE LD. CIT(A) AND N O EXPLANATION HAVE BEEN OFFERED. THESE FACTS CLEARLY PROVE THAT WHEN THE A SSESSEE DIED ON 4 TH SEPTEMBER, 2016, BY THAT TIME THE LIMITATION FOR FILIN G OF APPEAL BEFORE THE TRIBUNAL HAD ALREADY EXPIRED. THE LEGAL H EIR OF THE ASSESSEE ALSO STATED IN THE APPLICATION THAT HE HAS NO DETAILS OR D ATA TO DEFEND HIS DECEASED FATHER IN THESE PROCEEDINGS AND HE IS NO T ABLE TO OFFER ANY EXPLANATION. IT THEREFORE, APPEARS THAT THE LEGAL HEIR H AVE NO EXPLANATION AT ALL TO EXPLAIN THE DELAY IN FILING THE A PPEALS BEFORE THE TRIBUNAL. IT IS MERELY STATED IN THE APPLICATION THAT DEC EASED WAS DRUNKARD AND AS SUCH HE DID NOT FILE APPEAL BEFORE TH E TRIBUNAL. WHEN A PERSON WAS DRINKER AND HE DID NOT EXPLAIN ANY OF TH E ADDITIONS BEFORE A.O. AS WELL AS BEFORE LD. CIT(A) AND VIRTUA LLY ADMITTED THE CASE OF THE A.O. THERE WERE NO REASON FOR HIM TO FILE ANY A PPEAL BEFORE THE TRIBUNAL. MERELY BECAUSE A PERSON IS DRINKER IS NO GROUND TO CONDONE THE DELAY, OTHERWISE, IT WOULD GIVE LICENCE TO OTHER DRI NKERS TO SEEK FOR CONDONATION OF DELAY IN EACH AND EVERY MATTER. IT IS P RACTICALLY NO GROUND TO SEEK CONDONATION OF DELAY IN FILING THE AP PEAL. IT WOULD BE APPROPRIATE TO REFER TO SOME OF THE JUDICIAL PRONOUNCEM ENTS ON THE ISSUE OF DELAY IN FILING THE APPEALS. 7. IN THE CAS E OF HIND DEVELOPMENT CORPN. V. ITO [1979] 118 ITR 873, THE CALCUTTA HIGH COURT HELD TH AT A TRIBUNAL CAN CONDONE THE DELA Y IF THERE WAS SUFFICIENT CAUSE 5 ITA.NO.6721 & 6722/DEL./2016 LATE SHRI RAMESH BHARD WAJ THROUGH L.R. SACHIN BHARDWAJ, NEW DELHI. FOR THE DELAY IN THE SUBMISSION OF THE APPEAL . IN THE CASE OF VEDABAI ALIAS VIJAYANATABAI BABURAO PATIL V. SHANTA RAM BABURAO PATIL [2002] 253 ITR 798 ' (SC), WHERE IT WAS H E LD THAT WHIL E EX E R CI SING DISCRETION UNDER SECTION 5 OF THE LIMITATION A C T, 1963, TO CONDONE DELAY FOR SUFFICIENT CAUSE IN NOT FILING THE APPEAL WITHIN THE PERIOD PRESCRIBED, COURTS SHOULD ADOP T A PRAGMATIC APPROACH. A DISTINCTION MUST BE MADE BETWEEN A CASE WH E RE THE DELAY IS INORDINATE AND A CASE WHERE THE DELAY IS OF A F EW D AY S. TH E COURT OBSERVED THAT WHEREAS IN TH E FORMER CONS I D ERATI O N OF PR E JUDICE TO THE OTHER SIDE WILL BE A RELEVANT FACTOR AND CALLS FOR A MORE CAUTIOUS APPROACH. IN THE LATTER CASE NO SUCH CONSI D E R ATION MAY ARISE AND SUCH A CASE DESERVES A LIBERAL APPROA CH. NOW IN THE PRESENT CAS ES D ELAY IS NO T OF A FEW DA Y S BUT OF 179 DAYS. B ESIDES , TH E R E IS ABSOLUTELY N O VA L ID EX P LANATI ON/ REAS ON FOR THE DELA Y . IN T H E CA S E O F CIT V. RAM M O H AN KABRA [ 2002] 25 7 ITR 773, THE HON ' BLE PUN J AB & HAR ANA H I GH C O UR T H A S HELD OB SER VED THAT W HER E TH E L EGI S LATU R E SP ELL S OUT A P E RIOD OF LIMI T A TION AND PRO V ID E S F O R P OWER TO CON D O N E T HE DELA Y AS WELL, SUCH DELAY CAN ONL Y B E CON D ONED ONL Y FO R SUFFICIENT AND GOOD REASONS SUPPOR TED BY COG E NT A ND P ROPER EVI D E NC E. IT IS A SETTLED PRINCIPL E OF LA W TH AT PRO V ISIONS RE L ATING TO T H E SPECIFIED PERIOD OF LIMITATION MUS T BE APPLIED W ITH T H EIR RIG OUR AND EFFECTIVE CONSEQUENCES. IN TH I S CAS E DELAY FOR FILIN G TH E APPEAL LATE FOR ONLY A FEW DAYS WAS N OT CONDON E D. IN TH E CA SE OF ASSTT . CIT V. TAGGAS INDUSTRIES DE VELOP MENT LTD. [200 2 ] 80 ITD 21 (CAL . ) , TRIBUNAL, CALCUTTA B E N CH, CALCUTTA, DID NOT CONDONE THE DELAY FOR FILING THE APPEAL LATE B Y 13 DAYS BECAUSE THE DELAY WAS NOT DUE TO SUFFICIENT CAUSE. THUS , RELYING ON THE ABOVE JUDGMENTS , I 6 ITA.NO.6721 & 6722/DEL./2016 LATE SHRI RAMESH BHARD WAJ THROUGH L.R. SACHIN BHARDWAJ, NEW DELHI. HOLD THAT ASSESSEE FAILED T O EXPLAIN THAT DELAY IN FILING THE APPEALS WAS DUE TO SUFFICIENT CAUS E. 8. CONSIDERING THE ABOVE DISCUSSION, I REJECT THE APPLICATION FOR CONDONATION OF DELAY AND TREAT BOTH THE APPEALS AS TIME BARRED. CONSEQUENTLY, BOTH THE APPE ALS OF THE ASSESSEE ARE DISMISSED BEING TIME BARRED. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DELHI, DATED 16 TH AUGUST, 2017 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH 6. GUARD FILE // BY ORDER // ASST. REGISTRAR ITAT : DELHI BENCHES : DELHI.