SRI. SRUSTI ASSCIATES ,BELLARY V. INCOME TAX OFFICER, WARD-1 & TPS, BELLARY

ITA 1856/BANG/2024

AI Insights

The case involves Sri Srusti Associates, the appellant, who appealed against the order of the CIT(Appeals), National Faceless Appeal Centre, Delhi, for the assessment year 2018-19. The appellant was initially assessed for unexplained money in the bank account amounting to Rs. 80,99,081 under section 69A of the Income Tax Act, 1961, and was taxed under section 115BBE. The appellant's appeal to the FAA was dismissed due to a delay of 68 days in filing, which the FAA did not condone. The ITAT found sufficient cause for the delay, citing the circumstances of the business being almost discontinued and ongoing court cases, and thus condoned the delay and remitted the case back to the FAA for re-evaluation.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 470988 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-10-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 23-09-2024
• Other Referred Cases: Collector, Land Acquisition Vs. MST. Katiji and Others (1987) 167 ITR 471
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BHAVANA
• Keywords: Opportunity of being heard; Reassessment proceedings
• Section: 148; 142(1); 143(2); 69A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI PRAKASH CHAND YADAV, JUDICIAL MEMBER ITA No. 1856/Bang/2024 Assessment year : 2018-19 Sri Srusti Associates, 1st Floor, Ramakrishna Complex, Opp. Radhika Theatre, Bellary – 583 101. PAN : ACLFS 6984L Vs. The Income Tax Officer, Ward 1 & TPS, Bellary. APPELLANT RESPONDENT Appellant by : Ms. Bhavana, Advocate Respondent by : Shri Chinmay Anand Jain, Jt.CIT(DR)(ITAT), Bengaluru. Date of hearing : 30.10.2024 Date of Pronouncement : 20.11.2024 O R D E R Per Laxmi Prasad Sahu, Accountant Member This appeal is filed by the assessee against the order dated 16.8.2024 of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], for the AY 2018-19. 2. Briefly stated the facts of the case are that the assessee is a non- filer and information is received through Insight Portal during the year under consideration that assessee has entered into financial transactions and deposited cash in its bank account amounting to Rs.1,05,00,610. Accordingly a show cause notice u/s. 148A(b) was issued to assessee. ITA No.1856/Bang/2024 Page 2 of 5 In response, the assessee submitted reply and order u/s. 148A(d) was passed on the basis of material on record and notice u/s. 148 was issued on 31.03.2022. Subsequently various statutory notices were issued to assessee. The assessee filed return of income on 28.04.2022 declaring NIL income. Subsequently notices u/s. 143(2) and 142(1) was issued to the assessee. The assessee furnished reply. Show cause notice was issued to assessee and VC was fixed on 22.03.2023 at 3.00 PM. However, no one attended on the appointed date and time. The AO from the submissions noted that reply given by the assessee is not acceptable and assessee has not submitted any documentary evidence in support of its claim. There was specific query raised to assessee to explain why it is using Saving account instead of Current account for the purpose of business. It was found that entries were not tallied. The AO after considering the entire documents submitted and following Indian Evidence Act, section 114, he restricted addition to the tune of Rs. 80,99,081 and it was treated as unexplained money in the bank account u/s. 69A and applied section 115BBE for tax purpose. Accordingly assessment order was passed on 27.3.2023. 3. Aggrieved from the above order, the assessee filed appeal before the First Appellate Authority (FAA) with a delay of 68 days. The assessee in Form 35 has explained reasons for the delay stating that assessment order is passed on 27.03.2023 hence appeal should have been filed within 30 days i.e., on or before 26.04.2022. As the business is almost discontinued and court cases are pending, it took some time to coordinate between the records and the CA and ITA No.1856/Bang/2024 Page 3 of 5 compiling the data, hence there is delay of 68 days in filing the appeal. As the delay caused is unintentional and due to reasons beyond control, it is prayed that delay may be condoned in the interest of justice and equity. The ld. FAA on going through the reasons submitted by the assessee, he observed that there was no sufficient cause which prevented the appellant from exercising its legal remedy of filing appeal within the prescribed period of 30 days and delay was not condoned and he relied on the judgment quoted in his order and dismissed the appeal of the assessee without going into the merits of the case. Aggrieved, the assessee is in appeal before the ITAT. 4. The ld. AR reiterated the submissions made before the ld. CIT(Appeals) explaining the reasons brought out in Form 35 before the FAA for condonation of delay. The ld. AR reiterated para 5 of the Statement of Facts. He also submitted that information was submitted from time to time during the reassessment proceedings which includes computation of income, financial statements, FIR copy along with photograph registering case involving appellant and its landlord indicating the fact that premises is locked by landlord, extract of bank indicating that there are cash withdrawals of Rs.89,05,392, bank book, cash book containing narration, bank statement, partnership deed (new and old), GST return for FY 2017-18. The ld. AR further submitted that business premises is locked and the same cannot be opened without court’s permission. In view of this, the assessee could not produce entire documents to the satisfaction of the AO and there was delay in filing appeal before the FAA. The ld. AR further submitted ITA No.1856/Bang/2024 Page 4 of 5 that the assessee has good case on merits and each and every debit and credit entry was explained to AO and requested that the delay may be condoned. 5. The ld. DR relied on the order of lower authorities. 6. Considering the rival submissions and perusing the entire material on record in the light of order of authorities below, it is clear that assessee did not file appeal before the FAA within the period of 30 days prescribed under the Act from the date of receipt of the assessment order. The assessee has disclosed the reasons in Form 35 at sl.no.15 quoted supra. On going through the above reasons, the written submissions along with documentary evidence at page 109 to 112 of PB, proof that FIR has been registered and documents produced during the course of first appellate proceedings, we note that assessee has sufficient cause for delay in filing the appeal. Accordingly we note that assessee has sufficient cause for the delay and following the judgment of the Hon'ble Apex Court in the case of Collector, Land Acquisition Vs. MST. Katiji and Others (1987) 167 ITR 471, we condone the delay in filing appeal before the FAA and remit back the issues to the file of CIT(Appeals) for fresh consideration and decision as per law. The assessee is directed to file necessary documents that would be essential and required for substantiating his case and for proper adjudication by the revenue authorities. Needless to say that reasonable opportunity of being heard be given to the assessee. The ITA No.1856/Bang/2024 Page 5 of 5 assessee is directed to cooperate with the proceedings and in case of further default, the assessee shall not be entitled to any leniency. 7. In the result, the appeal by the assessee is allowed for statistical purposes. Pronounced in the open court on this 20th day of November, 2024. Sd/- Sd/- ( PRAKASH CHAND YADAV ) ( LAXMI PRASAD SAHU ) JUDICIAL MEMBER ACCOUNTANT MEMBER Bangalore, Dated, the 20th November, 2024. /Desai S Murthy / Copy to: 1. Appellant 2. Respondent 3. Pr.CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore. "