VIJAYA KUMAR KARROTHU,VIZIANAGARAM vs. INCOME TAX OFFICER, WARD-2, VIZIANAGARAM

Grounds of appeal taken by the assessee in Form No. 36 are as under: -

Brief facts emerging from records are that in absence of any return on record and on the basis of information contained in AIR ( ITBA ) portal regarding cash deposits by the assessee in bank account amounting to Rs. 31.36 lakhs ( being SBN during demonetization period ) the AO initiated proceedings vide notice u/s 142(1) dated 28/11/2017 , calling for return and in absence of any compliance to the same and to all subsequent notices issued, the assessment has been completed exparte on a total income of Rs.31,36,000/- treating the same as unexplained u/s 69A.

The matter carried in appeal has been dismissed by the Ld CIT ( A ) refusing to admit the appeal for adjudication on merits by invoking the provisions of section 249(3) of the Act on account of delay of 221 (Two hundred and twenty one days ) in filing the appeal, not being satisfied with the sufficiency of the reasons explaining the delay, contained in Form No.35.

Now the assessee is before the Tribunal on the grounds contained in the memorandum of appeal and in course of hearing the Learned Authorized Representative (for short “Ld.AR”) submitted that the assessee is the proprietor of M/s SVR Wine shop and is engaged in the business of retail trading of IMFL (alcoholic liquor for human consumption) , which are evidenced by TCS certificates as reflected in form 26AS , and the cash deposits in bank are out of sale proceeds of regular trading of liquor business and since the assessment has also been completed exparte the assessee had no opportunity to produce necessary evidences and books to explain the source of cash deposits in bank.

Ld. DR relied on the order of the Ld. CIT(A), but has no objection if the matter is remanded for consideration of evidence on merits .

We have heard the rival submissions and considered the materials on record and on perusal of the assessment order, it is observed that even though Ld.AO has provided opportunity on several occasions, assessee could not appear nor complied to the notices issued, accordingly, the assessment was passed exparte. The Ld. CIT(A) has also dismissed the appeal without adjudicating on the grounds contained in form 35 on merits of the case because of the delay of 221 days (two hundred and twenty one days) in filing the same, ( even though as stated by the AR , the submissions on merits were filed before the Ld first appellate authority ) .

Considering the submissions of the Ld.AR and totality of facts and keeping in view the nature of additions / disallowance made by the Ld.AO, we are of the considered view that the delay of 221 days in filing the first appeal may be condoned in the interest of justice and the assessee should be given an opportunity of being heard on merits to explain his case with supporting documentary evidences. As such we condone the delay 221 days and direct the appeal to be admitted for adjudication on merits, and we remand the matter back to the Ld CIT ( A ) for admitting the same and for adjudication on the grounds contained in Form No.35 on merits of the case and we also direct the assessee to file all evidences and submissions and to fully cooperate in appellate proceedings.

Before we conclude, we are also of the opinion that in this case, the willful neglect on the part of the assessee in filing the first appeal belatedly cannot be completely ignored and also non compliance with various notices issued by departmental authorities, cannot be overlooked. As such, we consider it to be a fit case for imposition of cost for causing intentional loss of judicial hours and as such we impose a token cost on the assessee amounting to Rs. 10,000/- ( Rupees Ten thousand only ) payable to the credit of “AP State Legal Services Authority”, payable within 30 ( thirty days) from the date of communication of this order ( evidence to be filed before JAO ) .

The assessee will be allowed proper and reasonable opportunity of being heard and notice to be issued in e-mail ID in the portal and also in e-mail mentioned in Form No.35 and the assessee is also directed to file necessary documentary evidences and submissions before the Ld First Appellate Authority for proper disposal of the appeal. Necessary report may be obtained from the AO as per procedure, if necessary.

We have not expressed any opinion on merits of the case and all legal issues are left open.

In the result the appeal is allowed for statistical purpose.