SENA JAISHI,AIZAWL, MIZORAM V. DCIT ACIT , SILCHAR

ITA 89/GTY/2024

AI Insights

The case involves an appeal by Sena Jaishi against the order of the Ld. Addl/JCIT (A), which was dismissed due to an inordinate delay of 969 days in filing the appeal. The original assessment by the Ld. AO included additions to the business income and unexplained cash deposits, which the assessee contested. The Tribunal found that the delay should be condoned considering the circumstances and directed the Ld. CIT(A) to re-examine the case on its merits.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 46715 (ITAT-GUWAHATI)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-09-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 24-04-2024
• Other Referred Cases: Vedabhai alias Vaijayantabai Baburao Patil vs. Shantaram Baburao Patil [2002] 122 Taxman 114
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Set aside; Business income; Gross profit estimation
• Section: 143(3); 250; 143(1); 69A

Judgement Text

"आयकर अपीलीय अधिकरण गुवाहाटी पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI BENCH AT KOLKATA [वर्ुुअल कोटु] [Virtual Court] श्री मनमोहन दास, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SRI MANOMOHAN DAS, JUDICIAL MEMBER & SRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 89/GTY/2024 Assessment Year: 2017-18 Sena Jaishi Vs. DCIT, ACIT, Silchar (Appellant) (Respondent) PAN: AQJPJ7/092A Appearances: Assessee represented by : Siddhant Sharma, ACA. Department represented by : Kausik Ray, JCIT. Date of concluding the hearing : September 24th, 2024 Date of pronouncing the order : November 27th, 2024 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Ld. Addl./Jt. Commissioner of Income Tax (Appeals), Udaipur [hereinafter referred to as “the Ld. Addl./Joint CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2017-18 dated Page | 2 I.T.A. No.: 89/GTY/2024 Assessment Year: 2017-18 Sena Jaishi. Page 2 of 6 23.02.2024, which has been passed against the assessment order u/s 143(3) of the Act, dated 24.12.2019. 2. The grounds of appeal are as under: 1. For that the Ld. CIT(A)/ADDL/JCIT(A) was not justified in not condoning the delay in filing the appeal and not deciding the case on merits 2. For that the Ld. Assessing Officer was not justified in making addition of Rs. 15,39,326/- to the business income of the appellant. 3. For that the Ld. Assessing Officer was not justified in making addition of cash deposit amounting to Rs. 2,42,000/- u/s 69A of the I.T. Act, 1961. 4. The Appellant craves the leave to raise additional grounds of appeal and/or alter, revise the grounds of appeal during the course of hearing. 3. Brief facts of the case are that the assessee e-filed the return of income for the Assessment Year 2017-18 on 31/03/2018, declaring total income of Rs. 11,01,240/-, which was processed u/s 143(1) of the Act. The case was selected for scrutiny. The assessment u/s 143(3) of the Act was completed vide order dated 24/12/2019 determining the total income at Rs. 28,82,569/- after making additions on account of (1) undisclosed income from business at Rs 15,39,326/- and (ii) unexplained cash deposit in bank account treated as unexplained money u/s 69A at Rs. 2,42,000/-. Aggrieved, with the assessment order of the Assessing Officer (hereinafter referred to as ‘the Ld. AO’), the assessee filed an appeal before the Ld. Addl/JCIT (A). However, the appellant filed the appeal beyond the time limit with delay of 969 days. The Ld. Addl/JCIT (A), however, did not condone the delay as according to him there was no sufficient cause for the delay in filing of the appeal and the appeal was dismissed as not maintainable as per para 5 of the appeal order which is reproduced as under: Page | 3 I.T.A. No.: 89/GTY/2024 Assessment Year: 2017-18 Sena Jaishi. Page 3 of 6 “5.1 The facts of the case have been gone through and the grounds raised by the appellant in this appeal have been considered carefully. There is inordinate delay in the filing of appeal for which no sufficient reason has been given by the appellant. The appellant has failed to justify the inordinate delay in filing appeal. From the factual position which emerges it appears that a conscious and considered decision was taken by the assessee at the relevant point of time for not filing of appeal against the impugned order. It is well-settled law that a distinction must be made between a case where the delay is inordinate and where the delay is of few days only. The inordinate delay in the instant case clearly demonstrates that this appeal was not prosecuted with due care. On the issue of a routine delay and an inordinate delay, the Hon'ble Supreme Court in the case of Vedabhai alias Vaijayantabai Baburao Patil vs. Shantaram Baburao Patil [2002] reported in 122 Taxman 114, has made a distinction between delays that are trivial and cases where inordinately large delays/had occurred. The Hon'ble Supreme Court further held that the cases of trivial delays have to be liberally considered, however the cases of inordinate delays have to be approached cautiously. The relevant portion of the order of the Hon'ble Supreme Court is reproduced as under: \"In exercising discretion, under section 5 of the Limitation Act the courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case, the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard.\" In view of the above detailed discussion, it is held that the appellant has no \"sufficient cause\" in terms of section 249(3) of the Income-tax Act,1961 for not presenting the appeal within the prescribed time period/ limit. It is well- settled law that an appellant is not entitled to the condonation as a matter of right. For an appellant to succeed, the existence of sufficient cause is sine qua non and a condition precedent. It is manifestly evident that this ingredient is woefully lacking in this belated appeal filed by the appellant. Thus, the delay in filing the appeal by the appellant, is not considered as sufficient cause and the delay is, therefore, not condoned. Accordingly, the present appeal is not found fit for condonation and the same is dismissed without making any discussion/ adjudication on merits or on any other aspect. Considering the above discussion and facts of this case, the appeal filed is not in conformity with the provisions of Sec 249(2) of the Act, and there is Page | 4 I.T.A. No.: 89/GTY/2024 Assessment Year: 2017-18 Sena Jaishi. Page 4 of 6 no sufficient cause for condonation of the delay in filing of the appeal, the present appeal is dismissed as not maintainable.” 4. Before the Tribunal, the ld. AR submitted that Ld. Addl/JCIT (A) was not justified in not condoning the delay of 969 days and if the COVID period is excluded till 28.02.2021, the actual delay was only of 163 days. The reasons for the delay in filing the appeal was that the assessee belongs to Mizoram and there is lack of good consultants there, therefore, the tax consultant was chosen from Assam. The assessee was under quarantine for 2-3 months and the appeal was filed on 19th September, 2022. As regards the merits of the case, it was further submitted that the Ld. AO did not reject the books of accounts and applied a GP rate of 5.3% as against the GP rate of 4.87% shown by the assessee. It was further submitted that the books of accounts are audited and neither any query was asked regarding the same nor were they rejected. The Ld. AO has mentioned at page 15 of the assessment order a chart relating to the financial results from AY 2015- 16 to AY 2018-19. There was another issue of cash deposit in bank account for which the details have been mentioned from pages 4 to 14 of the assessment order. Since the assessee failed to furnish details and vouchers, as against the GP rate of 4.87% shown in AY 2017-18, the Ld. AO applied the GP rate of 5.30% shown in the immediately preceding assessment year. It was submitted that the turnover had increased during the impugned assessment year which was Rs. 35,84,52,156/- as against Rs. 34,83,35,265/- in the immediately preceding year. The GP rate in AY 2015-16 was 4.36% in which the turnover was less than that of the current AY while it was further reduced to 3.41% in the AY 2018-19 in which the turnover was greater than that of the current Page | 5 I.T.A. No.: 89/GTY/2024 Assessment Year: 2017-18 Sena Jaishi. Page 5 of 6 assessment year. A sum of Rs. 15,39,326/- was added on account of low GP rate. A sum of Rs. 2,42,000/- being the amount deposited in the assessee’s savings bank account was considered as not from the business of the assessee and was treated as the assessee’s income from undisclosed sources. 5. We have considered the submissions and are of the view that the delay, which was effectively of 163 days, ought to have been condoned by the Ld. CIT(A) as there was lack of communication between the consultant at Assam and the assessee who is a resident of Mizoram and the delay attributable to the COVID period ought to have been excluded. Therefore, we deem it proper that there being sufficient cause for the delay, the delay is hereby condoned and since the Ld. CIT(A) has not decided the issues relating to the merits of the addition, which according to the assessee was not justified as books of accounts were not rejected nor the other addition of Rs. 2,42,000/- has been adjudicated upon and the appeal has been dismissed only on the ground of delay, therefore, in the interest of justice the appeal order of the Ld. CIT(A) is set aside to decide the appeal on merits in accordance with law. The assessee shall file necessary evidence before the Ld. CIT(A) in support of the claim that the additions were not justified. Hence, Ground No. 1 of the appeal is allowed. 6. As regards Ground Nos. 2 & 3, the same are not adjudicated upon as the appeal order has been set aside to the Ld. Addl/JCIT (A). 7. Ground No. 4 being general in nature does not require any separate adjudication. 8. In the result, the appeal is allowed for statistical purposes. Page | 6 I.T.A. No.: 89/GTY/2024 Assessment Year: 2017-18 Sena Jaishi. Page 6 of 6 Order pronounced as per Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 on 27th November, 2024. Sd/- Sd/- [Manomohan Das] [Rakesh Mishra] Judicial Member Accountant Member Dated: 27.11.2024 Bidhan (P.S.) Copy of the order forwarded to: 1. Sena Jaishi, C/o Sena Store, Thuampui Aizawl, Mizoram, 796017. 2. DCIT, ACIT, Silchar. 3. CIT(A)-Udaipur. 4. CIT- 5. CIT(DR), Guwahati Benches, Guwahati. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "