SH. ARUN NARULA,AMRITSAR vs. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE , AMRITSAR

The assessee has preferred the instant appeals against the separate orders dated 31.10.2018 passed by the Ld. CIT(A)-5, Ludhiana, u/s 250(6) of the Income Tax Act, 1961 (hereinafter called as ‘the Act’).

In both the appeals the issues are identical, therefore, for the sake of brevity have been taken simultaneously for adjudication by this composite order and the facts of the case of shall be quoted and results of the same shall apply mutatis mutandis to .

At the outset, it was observed that there is delay of 34 days in filing of the instant appeals, for which the assessee has prayed for condonation of delay on the ground that though the impugned orders were served upon the assessee on dated 09.11.2018 and therefore, the appeals were supposed to be filed on or before 8th January, 2019. Consequently, impugned order and documents related to the appeals were handed over to the assessee’s employee for transmition to assessee’s counsel with direction to file the appeals before the Hon’ble ITAT, Amritsar, however, the impugned orders were misplaced at the assessee employee’s end and after frantic search, the original orders could not be traced, however, later on the same have been procured and provided to the counsel who filed the instant appeals. Consequently delay of around 34 days occurred in filing of the instant appeals. As the assessee was prevented by a reasonable cause for non-filing of the appeals within the prescribed time, therefore, in the interest of justice, the delay is liable to be condoned. The assessee has also filed affidavit in support of his contentions.

The Ld. DR, on the contrary refuted the claim of the assessee and submitted that the assessee is not entitled for any leniency of his latches.

Having considered the submissions of the parties. The assesse has duly filed his affidavit in support of his contention. Delay as explained by the assessee as to handing over the documents to his employee, which could not be transmitted to the assessee’s counsel but later on the orders have been procured and consequently the appeals have been filed with delay. In our considered view, the reasons for not filing the appeal within limitation time seems to be reasonable and beyond the reach of the assessee. Hence, considering the same as genuine and bonafide, we are inclined to condone the delay of 34 days in filing of the instant appeals. Hence, the delay in filling of the appeals under consideration stands condoned.

In , the assessee had filed his original return of income by declaring a net income amounting to Rs.4,07,000/- on dated 30.03.2011 which was processed and completed by the Revenue Department on dated 23.11.2011 u/s 143(1) of the Act. Thereafter, a search was carried u/s 132(1) of the Act at the residence of assessee and his family on dated 05.12.2013. Consequently, the notice dated 18.07.2014 u/s 153A was issued to the assessee and the assessee vide letter dated 21.03.2015 stated that the original return filed may be treated as having been filed in response to the said notice. Thereafter, various statutory notices have been issued which remained un-complied. Ultimately the Assessing Officer made an addition of Rs.2,90,000/- as an agriculture income and Rs.29,65,000/- as unexplained credits in the accounts of the assessee u/s 68 of the Act.

The assessee challenged the said addition before the Ld. CIT(A) and raised various grounds and submitted that assessment in the instant case has already been completed and no incriminating material has been found, therefore, no addition could be made u/s. 153A/144 of the Act. The Ld. CIT(A) vide impugned order on the same footing as held by Assessing Officer partly upheld the order of the Assessing officer and reduced the addition of Rs.29,65,000/- to Rs.22,75,000/- u/s 68 of the Act, against which the assessee is in appeal before us.

The Assesse while relying upon the judgment of Delhi High Court in the case of CIT vs. Kabul Chawla {61 taxmann.com 412}, reiterated the same stand taken by the Asseeee before the authorities below.

On the contrary, the Ld. DR relied upon the various judgments and submitted that though the incriminating material was recovered during the time search operation, however in law there is no necessity of any incriminating material while initiating proceedings u/s 153 of the Act as held by various High Courts and the addition can be made without any incriminating material qua the years covered by Sec.153A.

Having heard the parties at length and perused the material available on record. Though the Asseeee has claimed before the authorities below that where no assessment proceedings for the year under consideration were pending, in that eventuality, in the absence of any incriminating evidence found during the course of search and seizure proceedings, no addition/disallowance can be made qua unabated assessment for the said year, however the authorities below held have held that as per Kerala high Court judgment in the case of Kerala High Court in the case of ‘E.N. Gopal Kumar vs. CIT(Central)’ (Supra), there is no condition that the Department has to unearth some incriminating material to conclude some method against the assessee in events where the assessment is triggered by a notice under Section 153(1)(a) of the Act.

In the result, the both the appeals filed by the assessee stands allowed.