SHANTIBHAI H JOGANI, SURAT V. ITO, WARD-3(3)(4), SURAT

ITA 91/SRT/2020

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9081 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 11-10-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 20-05-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Period of limitation; Revised return
• Section: 68; 44AD; 143(3)

Judgement Text

आयकर अपीलȣय अͬधकरण, स ु रत Ûयायपीठ, स ु रत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT ‘SMC BENCH’ BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER आ.अ.सं./ITA No.91/SRT/2020 (AY 2014-15) (Hearing in Physical Court) Shri Shantibhai H Jogani, 4, 2 nd Floor, Old Shakati Vijay Society, Varachha Road, Surat-395006 PAN : AGLPJ 7542 D Vs Income Tax Officer, Ward-3(3)(4), Surat Aayakar Bhawan, Near Majura Gate, Surat-395001 अपीलाथȸ/Appellant Ĥ×यथȸ /Respondent Ǔनधा[ǐरती कȧ ओर से /Assessee by Shri Sapnesh R Sheth, C.A राजèव कȧ ओर से /Revenue by Shri Vinod Kumar, Sr-DR सुनवाई की तारीख/Date of hearing 12.10.2022 उɮघोषणा कȧ तारȣख/Date of pronouncement 02.11.2022 Order under section 254(1) of Income Tax Act Pawan Singh Judicial Member; 1. This appeal by assessee is directed against the order of Ld. Commissioner of Income-tax (Appeals)-3 Surat [for short to as “Ld. CIT(A)”] dated 12.03.2022 for the assessment year 2014-15, which in turn arises out of assessment order passed by Assessing Officer under section 143(3) of Income- Tax Act (Act) dated 28.09.2016. The assessee has raised the following grounds of appeal: “1. On the facts and circumstances of the assessee as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer ITA No.91/SRT/2020 (A.Y 14-15) Sh. Shantibhai H Jogani 2 in making addition of Rs.8,24,191/- as unexplained cash credit u/s 68 of the Act. 2. It is therefore prayed that above addition made by assessing officer and confirmed by Commissioner of Income-tax (Appeals) may please be deleted.” 2. Perusal of record shows that Ld. CIT(A) passed the impugned order on 01.03.2019, however, the present appeal is filed on 21.05.2020, thus there is substantial delay in filing of appeal before the Tribunal. The Registry of this Tribunal has issued defect memo to the assessee, narrating the time period of delay of 387 in filing appeal, beyond period of limitation. The assessee has filed his affidavit for explaining the cause of delay and seeking condonation thereof. In affidavit, the assessee has contended that impugned order was passed on 01.03.2019 and the appeal was required to be filed on or before 30.04.2019. The assessee could not file his appeal before Tribunal as the physical copy of impugned order was not received by assessee. Subsequently, the assessee came to know that when he logged into his account on income tax portal to verify the tax particulars. The assessee accordingly downloaded the said order on 06.03.2020 and immediately ITA No.91/SRT/2020 (A.Y 14-15) Sh. Shantibhai H Jogani 3 approached his counsel whether or not to file an appeal before the Tribunal and deposited appeal fees on 07.03.2020. Thereafter, due to Covid-19 pandemic there was a nationwide lockdown and appeal could be filed only on 31.05.2020. The delay in filing in appeal was neither intentional nor deliberate but due to reason that assessee was never served with the physical copy of impugned order of Ld. CIT(A). The Ld. Authorized Representative (AR) for the assessee submits that assessee has a good case on merit and likely to succeed, the assessee has no mala fide intention in filing appeal before the Tribunal. The Ld. AR for the assessee submits that assessee would not get any benefit in filing appeal belatedly and rather there is chance that application for condonation of delay may not be admitted for technical reasons. The Ld. AR for the assessee submits that part of delay period from the month of March to May 2020 is already covered by the decision of Hon'ble Apex Court in suo motu Writ Petition (C) No.3 of 2020 has already allowed a period of limitation till from 15.03.202 to 01.03.2022 and further 90 days’ period was granted to file ITA No.91/SRT/2020 (A.Y 14-15) Sh. Shantibhai H Jogani 4 appeal before various courts. The Ld. AR for the assessee submits that when technical composition at cause of substantial justice are fitted against each and the cause of substantial justice must prevail. The ld. AR for the assessee further submits that assessee is a senior and law binding citizen and never committed similar mistake in past. For the year under consideration, the assessee was not at all aware about the passing of impugned order of Ld. CIT(A) on 01.03.2019. 3. On the other hand, Ld. Senior Departmental Representative (Sr-DR) for the Revenue submits that assessee has given a self-declaration certificate by filling his affidavit that physical copy of order of Ld. CIT(A) was not received by assessee. The Ld. Sr-DR for the Revenue further submits that assessee is casually in explaining the cause of delay and delay is substantial and may not be condoned. 4. I have considered the submission of both the parties and have gone through the contents of affidavit filed by assessee. In the affidavit, the assessee categorically deposed that no physical copy of Ld. CIT(A) was received by him and ITA No.91/SRT/2020 (A.Y 14-15) Sh. Shantibhai H Jogani 5 subsequently he came to know only when downloaded in his income tax portal to verify the status of tax liability. No contrary evidence against the affidavit of assessee is shown to us that the impugned order was served on the assessee with in ordinary circumstances. Therefore, I have no reason to disbelieve the contents of affidavit filed by assessee. I am also of the view that where technical consideration are pitted against the cause of substantial justice, the cause of substantial justice must be prevailed as held by Hon'ble Apex Court in the case of Collector of Land Acquisition vs Mst. Katiji and others, reported in 167 ITR 471, (1988 SC 897). 5. Considering these facts, I note that there seems to be reasonable cause for condonation of delay. Therefore, I condone the delay and admit the appeal for hearing. Now adverting the merits of the case. 6. Brief facts of the case are that during the assessment proceedings, the assessee officer noted that assessee has shown income under section 44AD of the Act. In the income shown under section 44AD, it is mandatory to show the ITA No.91/SRT/2020 (A.Y 14-15) Sh. Shantibhai H Jogani 6 details of sundry creditors, sundry debtors, total stock-in- trade and amount of cash in hand (balance) as on last day of financial year. During the assessment proceedings, the submitted copy of Income tax return, computation of income and other required details on 30.08.2016. In the computation of income, the assessee has shown opening cash balance as on 01.04.2013 at Rs.8,24,191/-. However, there was no such closing cash balance shown in the preceding assessment year 2013-14 in the income tax return filed by assessee. On the basis of such discrepancy, the Assessing Officer issued show cause notice to assessee as to why such cash balance of Rs.8,24,191/- should not be treated as unexplained cash credit under section 68 of the Act and added to the income of assessee. 7. The assessee filed his reply dated 26.09.2016. In the reply, the assessee is extracted in para-5 of assessment order. In the reply, the assessee stated that due to inadvertent in while filing return of income, cash-in-hand has not been filled up in the return of income in Form-4S. The assessee furnished his return of income for preceding assessment ITA No.91/SRT/2020 (A.Y 14-15) Sh. Shantibhai H Jogani 7 year 2013-14 along with monthly cash flow statement for the year under consideration. The assessee also stated that in filing his return of income for preceding assessment year 2013-14, there was inadvertent mistake. The reply of assessee was not accepted by Assessing Officer by taking view that on verification of return of income for preceding assessment year 2013-14, it was seen that the assessee has not shown cash balance in his return of income. The assessee has not proved with credible evidence that mistake was bona fide and occurred inadvertently while filing his return of income for the year under consideration. The Assessing Officer treated the amount of Rs.8,24,191/- as income of assessee. 8. On appeal before the Ld. CIT(A), the assessee challenged the addition made in the assessment order. Before Ld. CIT(A) the assessee besides reiterating the submission made before the Assessing Officer also contended that Assessing Officer made huge addition of entire opening cash balance by treating it as unexplained cash credit. The assessing officer has not verified the complete facts of the case of assessee in ITA No.91/SRT/2020 (A.Y 14-15) Sh. Shantibhai H Jogani 8 assessment years 2011-12 and 2012-13, wherein the assessee has shown cash balance of Rs.1,34,171/- and Rs.3,05,483/- respectively. The assessee also furnished cash balance in subsequent assessment years also and tried to impress that not showing the cash balance as on 31.03.2013 was a bona fide mistake. The assessee further stated that in the income-tax return filed for assessment year 2014-15, the assessee has shown cash balance of Rs.4,56,732/-. 9. The Ld. CIT(A) after considering the contents of assessment order and the submission of the assessee held that assessee’s finding is correct that in preceding assessment year 2013-14, the assessee had shown nil cash balance as on 31.03.2013 while in opening cash balance for assessment year 2014-15, the assessee has shown Rs.8,24,191/-, the error, if any, occurred, it was the duty of assessee to file revised return of income. The contention of assessee that it is a typographical mistake and the cash flow of earlier years are to be considered is devoid of merit. The assessee himself has disclosed nil cash balance as on ITA No.91/SRT/2020 (A.Y 14-15) Sh. Shantibhai H Jogani 9 31.03.2013, so no stretch of imagination the opening cash balance as on 01.04.2015 can be taken at Rs.8,24,191/- and confirmed the addition. Further aggrieved the assessee has filed present appeal before the Tribunal. 10. I have heard the submission of Ld. AR for the assessee and Ld. Sr-DR for the Revenue. The Ld. AR for the assessee submits that opening cash balance of Rs.8,24,191/- for current assessment year was not reflected in return of income for preceding assessment year was only due to a typographical error which occurred inadvertently. The assessee furnished the monthly cash flow statement for the year under consideration. The Assessing Officer without considering the reply of assessee made the addition of entire opening cash balance under section 68 of the Act. The Ld. AR for the assessee submits that assessee is filing regular return of income and showing income on presumptive basis under section 44AD. The assessee is not required to maintain his books of account. This fact is accepted by Assessing Officer. When assessee’s books of account are not maintained by the assessee, then question ITA No.91/SRT/2020 (A.Y 14-15) Sh. Shantibhai H Jogani 10 of making addition under section 68 of the Act does not arise. There was a bona fide mistake in not mentioning the cash-in-hand at the end of 31.03.2014. The Ld. AR for the assessee shows the returns of income for assessment years 2010-11 to 2016-17 respectively; in assessment year 2010- 11, the assessee has shown cash-in-hand of Rs.2,64,707/-; in assessment year 2011-12 the assessee has shown cash- in-hand of Rs.1,34,171/-; in assessment year 2012-13, the assessee has shown cash-in-hand of Rs.3,05,483/-. In assessment year 2013-14, the Ld. AR of the assessee submits that due to inadvertently the cash-in-hand was shown at zero. The Ld. AR for the assessee further submits that keeping in view the back history of assessee of his business transaction, the addition of opening cash balance may be deleted. To support of his submiss, the Ld. AR for the assessee relied on the decision of Delhi Tribunal in Babbal Bhatia vs. ITO (2018) 53 CCH 0566 Delhi-Trib and the decision of Hon'ble Bombay High Court in the case of CIT vs. Bhaichand N. Gandhi (1982) 11 Taman 59 (Bom)/(1983) 141 ITR 67 (Bom). ITA No.91/SRT/2020 (A.Y 14-15) Sh. Shantibhai H Jogani 11 11. On the other hand, Ld. Sr-DR for the Revenue supported the order of lower authorities. The Ld. Sr-DR for the Revenue submits that in the return of income for preceding assessment year i.e. 2013-14, the assessee has shown cash-in-hand at zero. Further, the assessee has shown sundry creditor, sundry debtor and stock-in-trade at zero for the year under consideration, the assessee against shown sundry debtor, sundry creditor and stock-in-trade at zero. Thus, the business activities of assessee are doubtful and the assessee lame excuse of inadvertent mistake only. The closing balance of previous year can be considered as opening balance of subsequent years. The fact of the assessee’s case is contrary to the set principle of accounting. The Ld. Sr-DR for the Revenue prayed before me for dismissal of appeal of assessee. 12. I have considered the rival submission of both the parties and have gone through the orders of lower authorities carefully. I find that Assessing Officer made the addition by taking view that there was no closing cash balance in hand in the preceding assessment year as the assessee has ITA No.91/SRT/2020 (A.Y 14-15) Sh. Shantibhai H Jogani 12 himself has shown cash in hand as ‘zero’. The assessing officer treated such opening balance as unexplained cash credit under section 68 of the Act. The Ld. CIT(A) confirmed the action of Assessing Officer by holding that the if any error occurred, it was the duty of assessee to file revised return of income, the that it is a typographical mistake is devoid of merit. The assessee himself has disclosed nil cash balance as on 31.03.2013, so no stretch of imagination the opening cash balance as on 01.04.2015 can be taken at Rs.8,24,191/-. Before me, the ld AR for the assessee made similar submission as made before the lower authorities. However, neither name of such person is disclosed nor any evidence or any letter of corresponding of communication with the persons who has filed return of income and committed such mistake, is filed. The contention of assessee such plea does not inspire confidence. I find merit in the submissions of ld DR for the revenue that the business activities of assessee are doubtful and the assessee has raised lame excuse of inadvertent mistake ITA No.91/SRT/2020 (A.Y 14-15) Sh. Shantibhai H Jogani 13 only. Therefore, I do not find any merit in the grounds of appeal raised by assessee. 13. The case laws relied by ld AR for the assessee is not applicable on the facts of the present case. In the case of Babbal Bhatia (supra), the issue before the bench was of cash deposit in bank account and addition was made on the basis of cash deposit in the bank account. In the case of Bhaichand N. Gandhi (supra) there was a cash credit in the bank account. Thus, none of the case law is based on closing and opening cash balance. 14. In the result, the grounds of appeal raised by the assessee are dismissed. 15. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 02/11/2022 and the result was also placed on the Notice Board. Sd/- (PAWAN SINGH) [᭠याियक सद᭭य JUDICIAL MEMBER] स ू रत /Surat, Dated: 02/11/2022 Dkp. Out Sourcing Sr.P.S ITA No.91/SRT/2020 (A.Y 14-15) Sh. Shantibhai H Jogani 14 Copy to: 1. Appellant- 2. Respondent- 3. CIT(A)- 4. CIT 5. DR 6. Guard File True copy/ By order // True Copy // Sr.P.S./Assistant Registrar, ITAT, Surat