NARAYANA REDDY EDUCATIONAL SOCIETY,NALGONDA vs. ACIT, CENTRAL CIRCLE-2(4), HYDERABAD

Issue involved in these appeals relates to certain expenditure said to have been incurred by the assessee, but not properly explained. During the survey that was conducted in the business premises of the assessee on 18/10/2019 certain documents were impounded and basing on that, the learned Assessing Officer concluded that the unexplained expenditure has to be taxed under section 69 read with section 115BBE of the Income Tax Act, 1961 (for short “the Act”).

Assessment order was passed under section 147 read with section 144 on the ground that in spite of granting several opportunities, the assessee failed to enter appearance and properly explain the expenditure. In the appeals preferred by the assessee, learned CIT(A) also recorded that the assessee failed to comply with the notices issued in this matter.

Aggrieved by such an action of the learned Assessing Officer, assessee preferred appeal before the Ld. CIT(A), but in spite of granting several opportunities, failed to avail the same to get the matters disposed of on merits. Having given a long rope of adjournments between 27/04/2022 and 30/12/2022, Ld. CIT(A) formed an opinion that the assessee was not really interested in pursuing the appeals and only interested in seeking adjournments. Ld. CIT(A), therefore, proceeded with the matter ex-parte and while referring to the material available on record, he dismissed the appeal.

Assessee is therefore, before us in these appeals mainly contending that due to lack of proper diligence on the part of the authorised representative, the proceedings before the authorities went un- represented. According to the learned AR now that the assessee realized that the authorised representative did not conduct the proceedings diligently.

Ld. AR submitted that given an opportunity the assessee will prosecute the appeals diligently and to get the appeals disposed of on merits before the Ld. CIT(A). He submitted that though the Ld. CIT(A) referred to the facts of the case basing on the material available before him, the fact remains that the assessee could not submit the material relevant to the appeals and to put forth his case in an effective way.

Per contra, Ld. DR submitted that the authorities were very lenient in granting so many adjournments, and the assessee cannot take advantage of his own conduct in not co-operating with them to dispose of the matters on merit. He is very vehement in submitting that no lenient view can be taken in this matter and, if for any reason, the Bench takes a view that an opportunity may be granted to the assessee, then such an opportunity could be conditioned with the assessee paying heavy costs.

We have gone through the record in the light of the submissions made on either side. It is an undeniable fact that between 27/04/2022 and 30/12/2022, adjournments were granted to the assessee and the assessee did not produce any material whatsoever in support thereof. Now, the assessee contends that for want of due diligence on the part of the authorised representative of the assessee the matter could not be conducted properly.

No doubt, all the endeavour of the authorities is to assess the correct tax liability of the assessee but in that process, the proceedings cannot be dragged on to unreasonable lengths. It’s not the only case of the assessee that the authorities will be dealing with and their time is also precious. In an attempt to balance between affording reasonable opportunity to the assessee and to see that compliance with the procedure is secured, we are of the considered opinion that fastening the assessee with costs will remedy the situation. With this view of the matter, we are inclined to set aside the impugned orders and restore the appeals to the file of the Ld. CIT(A) and the Ld. CIT(A) will entertain the appeals on the assessee producing the proof of remitting costs of Rs. 10,000/-, namely, @ Rs. 2,000/- in each of the appeals to the credit of the Prime Minister’s relief fund, on or before 1/4/2023. On that, Ld. CIT(A) will afford an opportunity to the assessee and take a view according to law. We make it amply clear to the assessee that this is the last opportunity afforded to him and if for any reason, the assessee fails to avail this opportunity, the Ld. CIT(A) is at liberty to proceed according to law. All these appeals are, accordingly, are treated as allowed for statistical purpose.

In the result, appeals are treated as allowed for statistical purpose.