GANPATH JAIN PINKY,CHENNAI vs. DCIT, CHENNAI

The National Faceless Appeal Centre (NFAC) erred in refusing to condone delay consequently foreclosing the appellant from putting forth his case on merits. The NFAC failed to see that there is no presumption that delay in approaching the court is always deliberate and that the Limitation Act should receive a liberal construction so as to advance substantial justice.

The National Faceless Appeal Centre (NFAC) ought to have seen that the explanation offered by the appellant for condoning the delay in filing the appeal does not smack of mala fides or it is not put forth as part of a dilatory strategy neither does the appellant stand to benefit by lodging an appeal late. Therefore, the NFAC ought to have adopted a liberal approach in condoning the delay so as to advance substantial justice.

The National Faceless Appeal Centre (NFAC) while refusing to condone the delay ought to have seen that is a settled position of law that whenever there is a conflict between the substantial justice and technicality then the substantial justice should be preferred to avoid the defeat for the ends of justice,

The National Faceless Appeal Centre ought to have seen that the Assessment unit erred in disallowing the interest and related expenses without properly appreciating that the loans were genuine and routed through banking channels, and that the interest expenditure was incurred wholly and exclusively for the purpose of earning income.

The National Faceless Appeal Centre ought to have seen that the Assessment unit erred in disallowing deduction under section 80C without granting opportunity to furnish supporting evidence.

The National Faceless Appeal Centre ought to have seen that the Assessment unit erred in treating the bank credits and deposits as amounting to 96,99,682 as unexplained money under section 69A, without appreciating that the transactions were routed through disclosed bank accounts, and that such entries cannot be regarded as unexplained in the absence of proper enquiry and verification.

The National Faceless Appeal Centre ought to have seen that the Assessment unit erred in not considering the applicability of the peak credit theory and telescoping of transactions while making addition under section 69A. The AO failed to appreciate that the bank deposits and withdrawals form part of a continuous cycle of transactions, and without identifying the peak

The brief facts of the case are that the assessee was amongst the non-filers of return. As per the insight portal under Risk Management System an information was received that the assessee has received interest of Rs. 17, 04,638/- from M/s. Zebro Officemate Pvt. Ltd. Based on this information a notice u/s. 148 of the Act was issued on 27.03.2024, in response to the same the assessee filed her return of income u/s. 148 of the Act on 24.05.2024 declaring total income at Rs. 7, 85,560/-. However, the case of the assessee was assessed after making disallowance of Rs. 8,91,528/- on account of interest on loan, Rs. 27,550/- on account of deduction claimed u/s. 80C and addition of Rs. 96,99,682/- u/s. 69A of the Act as unexplained money. The assessee being aggrieved with this order preferred an appeal before the Ld. CIT (A), who in turn dismissed the appeal of the assessee in limine as the same was time barred by 90 days. The assessee being further aggrieved with the order of the Ld. CIT (A) preferred the present appeal before us.

We have gone through the order of the AO, order of the Ld. CIT (A) and submissions of the assessee alongwith grounds taken before us. It is observed that the assessee under consideration participated in proceedings before the AO, but the appeal filed before the Ld. CIT (A) was delayed by 90 days. We have given our thoughtful attention to the orders of the AO and Ld. CIT (A) and it is observed that prima-facie, the assessee is interested in pursuing the matter and the intentions were not to avoid the proceedings at any stage. Moreover, it is in the assessee’s own benefit to do so. Hence, bonafide of the claim made by the assessee before the Ld. CIT (A) can’t be doubted and in our view the assessee deserves a substantial hearing on the matter, instead of rejection in limine on the ground of delay.

In view of the above, the delay of the assessee before the Ld. CIT (A) is condoned and matter is restored back to the file of the Ld. CIT (A) for de-novo hearing on the matter originally under consideration after giving a proper opportunity