M.FAISAL V. THE COMMISSION OF INCOME TAX

ITA/45/2017

AI Insights

The case involves M. Faisal, the proprietor of a jewelry business, who appealed against the order of the Income Tax Appellate Tribunal concerning an assessment order for the year 2008-09. The appeal was filed with a significant delay of 1282 days, which the court found unjustifiable. The background of the case includes the seizure of Rs. 33,00,000 by the Sulthan Bathery Police, which was claimed to belong to the assessee. The subsequent assessment and penalty orders led to multiple appeals, with the final appeal to the High Court being dismissed due to the excessive delay in filing.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 752537 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 02-09-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: SUNNY MATHEW; SONU AUGUSTINE
• Keywords: Assessment Order; Condonation of delay; Income tax appeal; Jewellery business; Penalty proceedings; Seizure of cash
• Section: 143(3); 271(1)(c)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE VIJU ABRAHAM THURSDAY, THE 2ND DAY OF SEPTEMBER 2021 / 11TH BHADRA, 1943 ITA NO. 45 OF 2017 AGAINST THE ORDER/JUDGMENT IN ITA 259/2013 OF I.T.A.TRIBUNAL,COCHIN BENCH, ERNAKULAM APPELLANT/APPELLANT: M.FAISAL AGED 38 YEARS S/O. ABU HAJI, MULLAMBALATH HOUSE,KODUVALLY, CALICUT BY ADV SRI.SUNNY MATHEW ADV SONU AUGUSTINE RESPONDENT/RESPONDENT: THE COMMISSIONER OF INCOME TAX, CALICUT SC CHRISTOPHER ABRAHAM., THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 02.09.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA NO. 45 OF 2017 -2- J U D G M E N T S.V.Bhatti,J. Heard Adv.Sonu Augustin and Standing Counsel Mr.Christopher Abraham for parties. 2. The assessee is the appellant. The Income Tax Appeal is filed questioning the order of the Income Tax Appellate Tribunal dated 05.09.2013 in I.T.A No.259/Coch/2013. The disputes relate to the orders made by the Assessing Officer for the assessment order 2008-09. The appeal is filed with a delay of 1282 days. The Standing Counsel Mr.Christopher Abraham opposes the prayer for condonation of delay of 1282 days. The circumstances necessary in this behalf are stated thus: ITA NO. 45 OF 2017 -3- 3. The assessee is the proprietor of a jewellery at Koduvally, Kozhikode. On 07.11.2007, a sum of Rs.33,00,000/- was seized by the Sulthan Bathery Police. The individuals from whom the said amount was claimed stated that the seized amount belonged to the assessee. Upon seizure, statements were recorded by the authorities, then the assessment proceedings were initiated and finally, the Assessment order under Section 143(3) of the Income Tax Act, 1961 (for short, the Act) was made on 29.12.2010, determining the tax payable by the assessee as Rs.12,17,384/-. The assessee filed the appeal against the order dated 29.12.2010 before the Commissioner of Income Tax (Appeals) and the Appellate Authority vide order dated 28.02.2013 dismissed the appeal. The assessee filed I.T.A No.259/Coch/2013 before the Income Tax Appellate Tribunal and the Tribunal on the merits of the matter recorded the following findings and dismissed the appeal: ITA NO. 45 OF 2017 -4- “We have considered the rival submissions on either side and also perused the material available on record. Though the assessee claims that he purchased gold ornaments in the neighbourhood and sold the same in Bangalore, there is no material to substantiate either the purchase or sale of gold. However, from the assessment order it appears that the assessing officer called for the details form Dulhan Fine Jewellers, Bangalore and it was found that Dulhan Fine Jewellers purchased gold from the assessee for an amount of Rs.33,30,000/- and the payment was made through cheque. When the payment was made by cheque to the assessee against sale of Jewellery, it is not known how the assessee was able to get Rs.30 lakhs in cash at Bangalore so as to bring the same to Calicut through individual carriers. This fact is unexplained by the assessee, in view of this unsatisfactory explanation offered by the assessee to bring Rs.30 lakhs from Bangalore to Calicut through three different individuals, this Tribunal is of the considered opinion that the assessing officer has rightly disbelieved the statement made by the five persons, who claim themselves that they have advanced money for purchase of jewelleries. As rightly submitted by the Id.DR, there is no occasion for a middlemen to borrow money from assessee's own brother and loan the same to the assessee for making investment in the gold jewellery. This kind of explanation clearly shows that the assessee is suppressing the material fact. Therefore, this Tribunal do not find any infirmity in the order of the lower authority. Accordingly, the same is confirmed.” 4. The assessee was subjected to the penalty proceedings under Section 271(1)(c) of the Act and on ITA NO. 45 OF 2017 -5- 30.09.2013 the penalty order was levied on the assessee. The assessee filed appeal before the Commissioner of Income Tax (Appeals) and on 04.05.2016 the Commissioner of Income Tax (Appeals) set aside the order dated 30.09.2013. The instant appeal before this Court was filed on 24.07.2017. Hence the delay of 1282 days. 5. Adv.Sonu Augustin submits that the order of Commissioner of Income Tax (Appeals) dated 04.05.2016 is a pointer to the case stated by the assessee and which was not properly understood by the Authorities while passing the order under Section 143(3) of the Act. He invites our attention to the affidavit of assessee filed for condoning the delay which is to the effect that the assessee could raise substantial questions of law only by taking note of the findings recorded by the Commissioner of Income Tax (Appeals) in the penalty order dated 04.05.2016. The affidavit as pointed out by ITA NO. 45 OF 2017 -6- Mr.Christopher Abraham is with sufficient over-writings and that this Court is concerned with the cause shown by the assessee for filing the appeal with a delay of 1282 days. The reasons set out are that the assessee waited till a finding is recorded in the penalty proceedings by the Commissioner and chosen to review that remedy of appeal. The order of the Commissioner is dated 04.05.2016. The appeal is filed on 24.07.2021, merely after one year and two months from the date of order by Commissioner of Income Tax (Appeals) in penalty proceedings. We are of the view that the assessee if desirous to question the order of the Income Tax Appellate Tribunal dated 05.09.2013, the assessee is expected to act duly and diligent. The assessee waits firstly, to see the outcome of the penalty proceedings and secondly, by treating the findings recorded in the penalty proceedings, intends to challenge the findings ITA NO. 45 OF 2017 -7- recorded in the assessment proceedings. We are of the view that the assessee is not duly and diligently prosecuting the lis and cause shown does not satisfy even a liberal understanding of reason and no sufficient cause is not made out for condoning the delay of 1282 days. Hence the prayer to condone the delay is rejected. Consequently, Income Tax Appeal is dismissed. No order as to costs. Sd/- S.V.BHATTI JUDGE Sd/- VIJU ABRAHAM JUDGE JS ITA NO. 45 OF 2017 -8- APPENDIX APPELLANT'S ANNEXURES: ANNEXURE A A TRUE COPY OF THE ASSESSMENT ORDER DATED 29.12.2010 ANNEXURE B A TRUE COPY OF THE ORDER No.ITA- 74/R2/CIT/CLT/2010-11 DATED 28.2.2013 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) ANNEXURE C A TRUE COPY OF THE ORDER OF THE TRIBUNAL DATED 5.9.2013 ANNEXURE D A TRUE COPY OF THE ORDER No.ITA 265/R2/CIT/CLT/2013-14 BY THE COMMISSIONER OF INCOME TAX (APPEALS), KOZHIKODE "