SUMANTA KUMAR DAS,BHUBANESWAR vs. ACIT, CIRCLE-1(2), BHUBANESWAR

आयकर अपीऱीय अधिकरण, कटक न्यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM आयकर अपीऱ सं./ITA No.36/CTK/2019 (नििाारण वषा / Assessment Year :2011-2012) Sumanta Kumar Das, Vs. ACIT, Circle-1(2), Plot No.-LB-118, Stage-IV, Bhubaneswar Budheswari, Laxmisagar, Bhubaneswar-751006 स्थायी लेखा सं./PAN No. : ADYPD 8979 L (अऩीलाथी /Appellant) (प्रत्यथी / Respondent) .. ननधाारिती की ओर से /Assessee by : Shri K.K.Bal, Advocate िाजस्व की ओर से /Revenue by : Shri Subhendu Dutta, DR सुनवाई की तािीख / Date of Hearing : 26/11/2019 घोषणा की तािीख/Date of Pronouncement : 06/12/2019 आदेश / O R D E R Per L.P.Sahu, AM: This is an appeal filed by the assessee against the order of CIT(A)-1, Bhubaneswar, dated 27.10.2015 for the assessment year 2011-2012. 2. As per the office note, there is a delay of three years three months and five days in filing the appeal of assessee. The assessee has filed an application for condonation of delay along with affidavit stating therein that due to prolonged illness and negligence of the previous counsel, he could not file the appeal in time. On the other hand, ld. DR did not object to condone the delay. We have also gone through the said application along with the affidavit filed by the assessee explaining

2 ITA No.36/CTK/2019

the reasons for delay. The Hon'ble Supreme Court in the case

of Collector, Land Acquisition vs. MST Katji & Others (167 ITR 471)

observed that:

"The legislature has conferred the power to condone delay by enacting sec 5 of limitation Act in order to enable the courts to do substantial justice to parties disposing of matter on "merits". The expression "sufficient cause", employed by the legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which sub serves the ends of justice that being the life purpose of the existence of the institution of court. It is common knowledge that this court has been making justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other Courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that:

(i) Ordinarily, a litigant does not stand to benefit by lodging an appeal late. (ii) Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (iii) "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense and pragmatic manner. (iv) When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. (v) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (vi) It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so." 3. The Hon'ble Apex Court further in the case of N. Bal Krishnan v/s. M. Krishnamurthy - [(1998) 7 SCC 123] observed that: "The primary function of a court is to adjudicate the dispute between the parties & to advance substantial justice. The time limit fixed for approaching the court in different situations is not because on the expiry of such time a bad cause would transform in to a good cause. Rules of limitation are not meant to destroy the rights of parties. They

3 ITA No.36/CTK/2019 are meant to see that parties do not resort to dilatory tactics, but seen their remedy promptly. Law of limitation is thus founded on public policy. It is enshrined in the maxim "interest republic up sit finis lithium" (it is for general welfare that a period be put to litigation). Rules of limitation are not meant to destroy the rights of the parties. There is no presumption that delay in approaching the court is always deliberate. In every case of delay, there can be some lapse on the party of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as per of a dilatory strategy, the court must show utmost consideration to the suitor." 6. In the case of Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi AIR 1979 SC 1666, the Supreme Court has held that a legal advice tendered by a professional and the litigant acting upon it one way or the other could be a sufficient cause to seek condonation of delay and coupled with the other circumstances and factors for applying liberal principles and then said delay can be condoned. Eventually, an overall view in the larger interest of justice has to be taken. None should be deprived of adjudication on merits unless the Court of law or the Tribunal/Appellate Authority finds that the litigant has deliberately and intentionally delayed filing of the appeal that he is careless, negligent and his conduct is lacking in bona fides.

assessee for condonation of delay and respectfully following the above

decisions of Hon’ble Supreme Court, we condone the delay in filing the

appeal and the appeal is heard finally.

4 ITA No.36/CTK/2019 bank deposits amount to double taxation. Therefore the income assessed is illegal and liable to be reduced accordingly. 4. For that the assessee craves for addition, modification any grounds of Appeal either before the hearing of the Appeal or at the time of hearing of the Appeal.

engaged in the business of plying commercial vehicles in the name and

style of “Life Transports” and filed his return of income electronically

on 12.10.2011 declaring total income at Rs.15,00,604/-. The case of the

assessee was selected for scrutiny and statutory notices were issued to

the assessee. During the course of assessment proceedings, the AO

found that the assessee is receiving the income from business

profession, house property and income from other sources. On

verification of records, the AO found that the assessee has concealed

his income and accordingly, the AO rejecting the books of accounts of

the assessee u/s.145(3) of the Act estimated @12% of the gross

receipts of Rs.5,34,92,958/- which comes to Rs.64,19,155/- and added

the same to the total income of the assessee. Further with regard to

house property, the AO has accepted the same as claimed in the return

of income. However, with regard to income from bank deposits, the AO

found that the assessee has received interest of rs.1864/- and as the

assessee has declared interest only Rs.1418/- in the return, therefore,

the AO deducted the same and added Rs.446/- to the total income of

the assessee. Finally, the AO assessed the total income of the assessee

5 ITA No.36/CTK/2019 at Rs.20,29,710/- making additions under the different heads and

passed order u/s.143(3) of the Act vide dated 28.03.2014.

before the CIT(A) agitating the addition made by the AO adopting rate

of profit @12% on the total turnover along with penalty u/s.271(1)(c)

of the Act, however, the CIT(A) dismissed the appeal of the assessee on

both the counts.

is in appeal before the Income Tax Appellate Tribunal against the

addition confirmed by the CIT(A) estimating the profit of the assessee

@12% on the total turnover.

not considered the income of business, turnover and assessee’s net

profit rate shown in the preceding assessment years and providing any

comparative case of similar line of business. It was also the contention

of ld. AR that the total bank deposits at Rs.5,34,92,958/- includes

turnover disclosed at Rs.1,47,51,785/-. Since the assessee has already

disclosed the income of Rs.1,47,51,785/-, therefore, the AO has

wrongly deducted from Rs.5,34,92,958/- for the purpose of estimation

of income on the entire bank deposits, which amounts to double

taxation. Ld. AR further submitted that there is no basis on which the

AO has estimated the profit from transport business @12%. It was also

6 ITA No.36/CTK/2019 submitted that in transport business, normal profit is around 4 to 5%

and, hence, both the authorities below are not justified in estimating

and confirming the profit at a very high rate of 12%. Therefore, the ld.

AR submitted that a reasonable percentage of profit may kindly be

directed to be estimated.

below.

perusing the entire material available on record, we find that the AO

has estimated net profit of the assessee on the gross turnover @12%

after rejecting books of accounts of the assessee on account of non-

satisfaction with the correctness & completeness of the accounts of the

assessee. The CIT(A) also thumbed to the view taken by the AO. As per

the submissions made by the assessee before us that the assessee is engaged in transport business and the entire credit made into the bank account are the business receipts. This act of the AO amounts to double standard. During the course of hearing, the assessee produced a copy of assessment order in assessee’s own case for the assessment year 2009-2010 and submitted that during the Asst. Year 2009-10 the profit from Transport Business and Business and sale of used vehicle has been accepted @ 5.76% of the gross receipts at Rs.1,38,82,346/- and profit percentage from transport Business is 7.5%. Therefore, the estimation of net profit @12 % is

7 ITA No.36/CTK/2019 quite high in comparison to the percentage of net profit accepted by the department in assesee's own case. Considering the above facts and circumstances of the case and the fact that the assessee is engaged in the transport business, to meet the end of justice, we restrict the estimation made by the AO and confirmed by the CIT(A) to 10% and direct the AO to apply 10% of the gross receipt as `against 12%. Accordingly, we modify the impugned order and partly allow the grounds of appeal of the assessee.