MAHENDRA SINGH, JAIPUR,JAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX-1(1), RAIPUR, RAIPUR

ITA 66/RPR/2024

AI Insights

The case involves Mahendra Singh, the appellant, who contested the orders passed by the Assistant Commissioner of Income Tax-1(1), Raipur, and upheld by the CIT(Appeals)-9, Mumbai. The primary contention was regarding the validity of the assessment order passed under Section 144 of the Income Tax Act, 1961, which treated a cash deposit of Rs. 7,00,000 as unexplained cash credit under Section 68 of the Act. The appellant argued that the assessment was made by a non-jurisdictional officer and without a valid transfer order under Section 127, making the assessment invalid. Additionally, the appellant faced issues with the delay in filing the appeal, which was not condoned by the CIT(Appeals), leading to the dismissal of the appeal on procedural grounds.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 469755 (ITAT-RAIPUR)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 01-10-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 01-03-2024
• Other Referred Cases: National Thermal Power Co. Ltd. Vs. CIT, Maji Sinnemma Vs Reddy Sridevi, Ajay Dabra vs Pyare Ram & Ors, Balwant Singh (Dead) vs Jagdish Singh & Ors
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: PRAVEEN JAIN
• Keywords: Condonation of delay; Reasonable cause; Unexplained cash credit; Period of limitation; Principle of natural justice; Competent authority
• Section: 144; 143(3); 143(2); 250; 271(1)(c); 22

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No. 66/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2016-17 Mahendra Singh C/o. Santosh Sharma, H. No.414, Surya City, Behind Tilak Hospital, Sumel, Jaipur Agra Highway, Jaipur-302031 PAN: AZKPS6905R .......अपीलाथȸ / Appellant बनाम / V/s. The Assistant Commissioner of Income Tax-1(1), Raipur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Praveen Jain, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 01.10.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 08.10.2024 2 Mahendra Singh Vs. ACIT-1(1), Raipur ITA No. 66/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the ADDL/JCIT(A)-9, Mumbai, dated 01.02.2024, which in turn arises from the order passed by the A.O under Sec. 144 of the Income- tax Act, 1961 (in short ‘the Act’) dated 19.12.2018 for the assessment year 2016-17. The assessee has assailed the impugned order on the following grounds of appeal: “1. Ground 1: That the Order of the AO as well as CIT(A) is opposed to both facts and law and may kindly be quashed. 2. Ground 2: That Hon. CIT(A) has dismissed the appeal without considering submission made by assessee which is against the law of natural justice and bad in law. 3. Ground 3: That on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not condoning the delay in filing the appeal by the assessee. 4. Ground 4: That on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in mentioning that there are delay in filing of appeal by 678 days instead of delay in 313 days. 5. Ground 5: That on the facts and on the circumstances of the case, Ld. Assessing Officer erred in making addition of Rs. 7,00,000/- treating \"Cash deposit\" as unexplained cash credit. Ld.AO has made addition without considering entire facts of the case. Thus, addition made by Ld. AO and sustained by Ld. CIT(A) is bad in law, against law of natural justice and uncalled for and may kindly be deleted. 6. Ground 6: That for the purpose of computation of total income, Ld. AO has erred in not giving set off of loss of House Property amounting of Rs.75,986/- which is bad in law and uncalled for. 7. Ground 7: That on the facts and on the circumstances of the case, Ld. Assessing Officer erred in initiating/levying penalty u/s 3 Mahendra Singh Vs. ACIT-1(1), Raipur ITA No. 66/RPR/2024 271(1)(c) on account of furnishing inaccurate particulars and concealment of income. Ld.AO has initiated/levied penalty without considering entire facts of the case. Hence, penalty levied is bad in law, against law of natural justice and uncalled for and may kindly be dropped. 8. Ground 8: The appellant reserves the right to add, amend, alter and delete the ground(s) of appeal at the time of hearing the appeal. III. RELIEF SOUGHT That above-mentioned additions amounting to Rs. 7,00,000/- made by Ld. AO and sustained by CIT(A) may kindly be deleted. Also, AO be directed to delete the penalty levied u/s. 271(1)(c) of the Income Tax Act, 1961.” Also, the assessee has raised additional grounds of appeal which reads as under: “1. Ground 9: On the facts and circumstances of the case and in law, the Ld. AO i.e. ACIT, Circle 1(1), Raipur has passed order u/s.143(3) dt.19.12.2018 who was not having pecuniary jurisdiction to make assessment u/s.143(3) for A.Y.2016-17 since 'returned income' shown at Rs. 6,66,740/- as per CBDT Instruction No. 1/2011 dt. 31.01.11 which is binding on IT authorities u/s.119; assessment made u/s.143(3) Dt. 19.12.2018 by 'non- jurisdictional A.O.' is invalid, bad in law, non-est and is liable to be quashed. Accordingly, both Assessment Order as well as CIT(A) Order is bad in law and may kindly be quashed. 2. Ground 10: That the competent authority has not passed any transferred order u/s. 127 of transferring the assessee's file from the ITO, Ward 2(1), Jodhpur to ACIT, Circle 1(1), Raipur. As such, without transferred order u/s. 127 the ACIT, Circle 1(1), Raipur cannot assume the jurisdiction over the assessee. Hence, the assessment order passed u/s. 143(3), dated 19.12.2018 passed by ACIT, Circle 1(1), Raipur without jurisdiction over the assessee is invalid, bad-in-law and void-ab-initio, and liable to be quashed. Accordingly, both Assessment Order as well as CIT(A) Order is bad in law and may kindly be quashed. 3. Ground 11: The case of the assessee was selected for limited scrutiny and notice u/s 143(2) of the Act was issued by ITO, Ward 2(1), Jodhpur on 18.09.017 however, the assessment was framed 4 Mahendra Singh Vs. ACIT-1(1), Raipur ITA No. 66/RPR/2024 by the ACIT, Circle 1(1), Raipur vide order dated 19.12.2018 passed u/s 144 of the Act. No notice u/s 143(2) of the Act was issued by the Assessing Officer completed the assessment. Hence the Assessment passed u/s 144 of the Act dated 19.12.2018 is void, ultra vires and nullity in the eyes of law. Accordingly, both Assessment Order as well as CIT(A) Order is bad in law and may kindly be quashed. 4. Ground 12: That the notice under Section 143(2) of the Act was never issued by the Ld. Assessing Officer who has passed the Assessment Order. Issuance of notice under Section 143(2) of the Act being prerequisite, in the absence of such notice, the entire proceedings would be invalid. Accordingly, both Assessment Order as well as CIT(A) Order is bad in law and may kindly be quashed. 5. Ground 13: That no Valid Notice u/s 143(2) has been served to the assessee within statutory time lift Accordingly, both Assessment Order as well as CIT(A) Order is bad in law and may kindly be quashed. 6. Ground 14: That the Assessing Officer passing Assessment Order u/s 144 did not have valid jurisdiction Accordingly, both Assessment Order as well as CIT(A) Order is bad in law and may kindly be quashed. 7. Ground 15: That the officer issuing notice u/s 143(2) has not passed Assessment Order. Accordingly, both Assessment Order as well as CIT(A) Order is bad in law and may kindly be quashed. 8. Ground 16: That the Assessing Officer passing Assessment Order u/s 144 and officer issuing notice u/s 143(2) is not same. Accordingly, both Assessment Order as well as CIT(A). Order is bad in law and may kindly be quashed. 9. Ground 17: That assessee is employed at DB Corp Ltd. and his job is on transferrable basis. He has been transferred from Raipur, thus no notice or Order could be received by him. Accordingly, both Assessment Order as well as CIT(A) Order is bad in law and may kindly be quashed. II. Reason for not taking Additional Ground earlier: Assessee's job is on transferrable basis. He has been transferred and due to change in address no notice or Order could be received by him. And Order u/s 127 is not available at Income tax Portal. III. Prayer: Looking to the above facts and circumstances of the case, the assessee may kindly be permitted to take addition ground of Appeal.” 5 Mahendra Singh Vs. ACIT-1(1), Raipur ITA No. 66/RPR/2024 As the assessee by raising the aforesaid “additional grounds of appeal” has sought my indulgence for adjudicating legal issues, i.e validity of the jurisdiction assumed by the A.O for framing the assessment, which would not require looking any further beyond the facts available on record, therefore, being guided by the judgment of the Hon’ble Apex Court in the case of National Thermal Power Co. Ltd. Vs. CIT (1998) 229 ITR 383 (SC) I have no hesitation in admitting the same. 2. Succinctly stated, the assessee had e-filed his return of income for A.Y.2016-17 on 24.12.2016, declaring an income of Rs.6,66,740/-. Subsequently, the case of the assessee was selected for limited scrutiny u/s. 143(2) of the Act. 3. During the course of the assessment proceedings, it was observed by the A.O that the assessee during the year under consideration had made cash deposits of Rs.7,00,000/- in his bank account with IDBI Bank. As the assessee despite sufficient opportunity had failed to come forth with any explanation as regards the source of the aforesaid cash deposits, therefore, the A.O vide his order passed u/s.144 of the Act, dated 19.12.2018 after treating the amount of Rs.7,00,000/- as his unexplained cash credit u/s.68 of the Act, determined the income at Rs.13,66,740/-. 6 Mahendra Singh Vs. ACIT-1(1), Raipur ITA No. 66/RPR/2024 4. Aggrieved, the assessee carried the matter in appeal before the ADDL/JCIT(A)-9, Mumbai but without success. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: “3.4. I have carefully considered the appellant's submissions above. I am unable to agree with the appellant's reasons on account of the following: i. In the present case, the appellant has merely submitted the sequence of events leading to his discovery of the order while logging in to his e-filing Portal. The appellant has tried to explain the gross negligence on his part by trying to take umbrage under the fact of transfer of job. I am unable to accept this plea since the appellant has not intimated the department till date of change of address as is evident from the addresses on the assessment order as well as the notice u/s 250 of the Act dated 23/01/2024.Both the addresses are of Raipur. Further, the appeal, has been filed from Jalandhar address and the letter of transfer dated 04/04/2018 speaks of being transferred from Raipur to Jodhpur w.e.f. 16/04/2018. Further, letter dated 30/10/2019 from the Authorised Signatory certifies that appellant is a permanent employee of Dainik Bhaskar, Chandigarh and working there as AGM since 17/03/1997. The address as per appeal memo is that of Jalandhar. Hence these facts are contrary to appellant's explanation and cannot be accepted without a single shred of evidence in support of his claim. ii. Further, the appellant has claimed that notices were not received in Raipur office as he was transferred. It was mandatory on the part of the appellant to inform the AO/Department of such change of address. Further, as regards his claim that he came to know of the ex-parte order on logging into his e-filing portal is absurd since it defies logic as to how he could log in without his login id and password. Further, the returns for A.Y. 2017-18 and A.Y. 2018-19 has been duly e- filed by him on 11.03.2018 & 14.08.2018. The appellant has merely tries to take shelter under the excuses of ignorance, transfer of job, etc. This plea therefore fails. Also, the appellant is working in a big organization/n like Danik Bhaskar. in case the appellant was transferred, the physical notices would definitely have been mailed to him. The assessment order also specifically mentions that the notices have been duly served upon the appellant. Also, the appellant has been transferred wef 16/04/2018. The case was selected for scrutiny vide issue of notice u/s. 143(2) dated 18/09/2017 fixing hearing 26/09/2017 .i.e. before his transfer from Raipur to Jodhpur wef 16/04/2018. Hence 7 Mahendra Singh Vs. ACIT-1(1), Raipur ITA No. 66/RPR/2024 all these explanations appear to be an afterthought and cannot be accepted. iii. An appeal has to be filed within the stipulated period, prescribed under the Law. Belated appeals can only be condoned, when sufficient reason is shown for delay. The appellant who seeks condonation of delay therefore must explain the delay of each day. It is true that the Courts have held a pedantic approach must not be adopted while condoning delay in filing of appeal and explanation of each day's delay should not be taken literally, but the fact remains that there must be a reasonable explanation for the delay. In the present case, the reasons cited are not reasonable by any measure and bereft of an attempt to explain the delay by showing sufficient cause warranting condonation of the same. The inordinate delay is attributable to the gross/sheer negligence on the part of the appellant and not sufficient cause which prevented it from filing the appeal within limitation date. The delay is considerable and it cannot be disputed that the onus to show that sufficient cause exists for condonation of delay lies upon the applicant. It is obligatory upon the applicant to show sufficient cause due to which he was prevented from filing the appeal in time. The Hon'ble Apex Court in the case of Maji Sinnemma Vs Reddy Sridevi 2021 SSC online SC 1260 dated 16/12/2021 has held as under: \"Even though limitation may harshly affect the rights of a party, but it has to be applied with all its rigour when prescribed by the statute. The expression sufficient cause cannot be liberally interpreted if negligence in action or lack of bonafide is attributed to the party. If the court starts condoning delay where no sufficient cause is made out by imposing conditions, then that would amount to violation of statutory principle and showing utter disregard to logistics\". Recently, the Hon'ble Supreme Court in the case of Ajay Dabra vs Pyare Ram & Ors arising out of SLP (C) No. 15793/2019 dated 31/01/2023 dismissed the delay condonation applications filed under Section 5 of the Limitation Act, 1963, declining to condone a delay of 254 days, because the reasons assigned for the condonation were not sufficient reasons for condonation of the delay. I am further fortified by the decision of the Hon'ble Supreme Court in the case of Balwant Singh (Dead) vs Jagdish Singh & Ors, dated 08/07/2010, where it has held in para 6that \"Law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribed and the courts have no power to extend the period of limitation on equitable grounds\". The order supra also refers to various judgements where it has been held that \"here is no question of construing the expression 8 Mahendra Singh Vs. ACIT-1(1), Raipur ITA No. 66/RPR/2024 'sufficient cause' liberally either because the party in default is the Government or because the question arises in connection with the impleading of the legal representatives of the deceased respondent. The provisions of the Code are with a view to advance the cause of justice by applying the principle of 'reasonable time' This, however, does not mean that the Court should readily accept whatever the appellant alleges to explain away his default. The decision supra also holds that Section 5 of the Limitation Act are to apply para materia. Section 3 of the Limitation Act requires that suits or proceedings instituted after the prescribed period of limitation shall be dismissed. However, in terms of Section 5, the discretion is vested in the Court/Appellate Authority to admit an appeal or an application, after the expiry of the prescribed period of limitation, if the appellant shows 'sufficient cause' for not preferring the application within the prescribed time. The expression 'sufficient cause' commonly appears in the provisions of Order 22 Rule 9 (2), CPC and Section 5 of the Limitation Act, thus categorically demonstrating that they are to be decided on similar grounds. 3.5. In the present case, the appellant has not adduced any reasonable cause which prevented him from filing the appeal for 678 days. From the facts of the case it is clear that the statutory right to appeal which was vested with the appellant was not exercised within the stipulated time u/s. 249(3) of the Act. Thus, it is clearly a case of lapse and is a direct result of deliberate inaction on the part of the appellant. Respectfully following the ratio in the decisions of the Hon'ble Supreme Court supra, delay of 678 days in filing of appeal is not condoned. In view of the above, the delay of 678 days in filing of appeal in this case is not condoned as no \"sufficient cause\" has been shown under section 249(3) of the Income Tax Act for the appellants failure to file the appeal within prescribed period of limitation u/s 249(2) of the Act r.w.s 5 of the Limitation Act. Since, the delay in filing of appeal has not been condoned, consequently the appeal of the appellant becomes non-est and therefore the same is not admitted. Keeping in view the facts and circumstances and the decision of the Honourable Courts and also the fact that since the appeal of the appellant is not admitted, the grounds of appeal raised by the appellant are not adjudicated on merit and the appeal is dismissed.” 5. The assessee being aggrieved with the order of the ADDL/JCIT(A)-9, Mumbai has carried the matter in appeal before the Tribunal. 9 Mahendra Singh Vs. ACIT-1(1), Raipur ITA No. 66/RPR/2024 6. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 7. Shri Praveen Jain, Ld. Authorized Representative (for short ‘AR’) for the assessee at the threshold submitted that as in the present case, the assessee had filed his return of income declaring an income of Rs.6,66,740/- , therefore, as per the CBDT Instruction No.1/2011, dated 31.01.2011, the pecuniary jurisdiction to frame assessment in his case was exclusively vested with the ITO. Elaborating further on his contention, the Ld. A.R submitted that as assessment in the assessee’s case had been framed vide order passed u/s 143(3) of the Act, dated 19.12.2018 by the ACIT, Circle 1(1), Raipur, i.e an A.O who was not vested with the pecuniary jurisdiction over the case of the assessee, therefore, the same was liable to be quashed as invalid and bad in law. It was further submitted by the Ld. AR that as there was no order of transfer u/s. 127 of the Act transferring of the assessee’s case from ITO, Ward-2(1), Jodhpur to ACIT, Circle-1(1), Raipur, therefore, the assessment framed by the A.O, i.e. ACIT, Circle-1(1), Raipur was even otherwise liable to be quashed on the said count itself. 8. Per contra, the Ld. Sr. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. It was submitted by the Ld. DR 10 Mahendra Singh Vs. ACIT-1(1), Raipur ITA No. 66/RPR/2024 that as there was a substantial delay of 678 days involved in filing of the appeal before the CIT(Appeals), for which, the assessee had failed to come forth with any justifiable reason, therefore, the latter had rightly dismissed his appeal as barred by limitation. 9. I have given thoughtful consideration to the contentions advanced by the Ld. Authorized Representatives of both the parties in the backdrop of the orders of the lower authorities. The assessee had filed before me an “affidavit”, dated 30.03.2024 stating that the delay in filing of the appeal before the CIT(Appeals) was due to the fact that he had remained unaware about of the assessment order dated 19.12.2018 till 11.11.2019. For the sake of clarity, the contents of the aforesaid “affidavit” are culled out as under: 11 Mahendra Singh Vs. ACIT-1(1), Raipur ITA No. 66/RPR/2024 10. As is discernible from the assessment order as the assessee had failed to participate in the proceedings before the A.O, therefore, the latter was constrained to frame the assessment to the best of his judgment u/s. 144 of the Act. Even before the CIT(Appeals), the assessee was not vigilant enough to file the appeal within the stipulated time period, which, thus had resulted to a delay of 678 days. On a perusal of the “affidavit”, dated 30.03.2024, it transpires that as regards the delay involved in filing of the 12 Mahendra Singh Vs. ACIT-1(1), Raipur ITA No. 66/RPR/2024 appeal before the CIT(Appeals), the assessee without giving any cogent reason, had come up before him with a general submission that he was not aware about the assessment order. I find that before the CIT(Appeals) the assessee had failed to come forth with any plausible explanation as regards the delay that was involved in filing of the appeal before him. Also, I further find that the CIT(Appeals) after relying upon the judgments of the Hon’ble Apex Court in the cases, viz. (i) Maji Sinnemma Vs. Reddy Sridevi 2021 SSC Online SC 1260, dated 16.12.2021; (ii) Ajay Dabra Vs. Pyare Ram & Ors arising out of SLP(C) No.15793/2019, dated 31.01.2023; and (iii) Balwant Singh (Dead) Vs. Jagdish Singh & Ors, dated 08.07.2010, had declined to condone the inordinate delay involved in filing of the appeal by the assessee before him, observing as under: “In view of the above, the delay of 678 days in filing of appeal in this case is not condoned as no \"sufficient cause\" has been shown under section 249(3) of the Income Tax Act for the appellants failure to file the appeal within prescribed period of limitation u/s 249(2) of the Act r.w.s 5 of the Limitation Act. Since, the delay in filing of appeal has not been condoned, consequently the appeal of the appellant becomes non-est and therefore the same is not admitted.” 11. Considering the totality of the facts, I am of the view that as the assessee had failed to come forth with any plausible reasons as regards the inordinate delay of 678 days involved in filing of the appeal before the CIT(Appeals), therefore, the latter had rightly dismissed the same as barred 13 Mahendra Singh Vs. ACIT-1(1), Raipur ITA No. 66/RPR/2024 by limitation. I, thus, finding no infirmity in the view taken by the CIT(Appeals), uphold the same. 12. In the result, the appeal of the assessee is dismissed in terms of the aforesaid observations. Order pronounced in open court on 08th day of October, 2024 Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 08th October, 2024 ***SB, Sr. PS. आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "