MR. MANGESH TUKARAM SAWANT,MUMBAI vs. ACIT - 25(2), MUMBAI

The aforesaid appeal has been filed by the Assessee against order dated 11.03.2016, passed by the CIT (Appeals) 44 Mumbai for 2 Mangesh Tukaram SAwant the quantum of assessment passed u/s 144 of that for the AY 2011-2012. 2. In the grounds of appeal, the assessee has challenged, firstly, ex-parte order passed by Ld. CIT (Appeals) without deciding on merits; secondly, Ld. Assessing Officer as erred in law and on facts upholding the action of the Assessing Officer in framing the Assessment Order u/s 144; thirdly, addition of Rs. 1,39,88,468/- being unsecured loans as appearing in the balance sheet; fourthly, disallowance of Rs. 46,74,112/- being financial expanses debited to the profit and loss account; and lastly, addition of Rs.11,59,91,405/- being increase in current liability as appearing in the balance sheet for the year ending 31st March 2011. 3. At the outset, the appeal of the Assessee is time barred by 1763 days. Before us, the Ld. Counsel filed the affidavit of the Assessee explaining the reasons for condo nation delay. The averment made in the affidavit reads as under:

He further, submitted that there were no latches on part of Assessee, except that the Accountant of the assessee had misled the Assessee and he was not aware of income tax proceeding and he was completely dependent on his accountant. Thus, he submitted that in the interest of substantial justice, delay should be condoned.

After considering the facts and circumstances and the reasons given for condonation of delay, it is seen that, the accountant of the Assessee Mr. Dakshesh Goyal was looking after the matters of the Assessee who had left the job on 30th Nov, 2020 and then only all the papers and documents including notices were handed over to the Assessee and then, Assessee had made arrangement for filing of the appeal before us. Though, the Assessee has neither made compliance before the Assessing Officer nor before the CIT (Appeals) nor even filed the second appeal before the Tribunal in time. However, looking to the reasons given for condonation of delay, there appears to be sufficient cause not representing the matter as he was dependent upon his accountant who had neither informed the Assessee properly and had misled him from time to time.

The Assessee is engaged in the business of building construction who has declared income of Rs.25,645/-. As against that, the Assessing Officer has made very high pitch assessment by making addition of Rs.13.47 crores by adding the entire unsecured loans and sundry creditors and also disallowed the entire financial expenses. Even if the assessment order has been passed u/s 144 by making best judgment assessment that does not been that the Assessing Officer should make such a high pitch assessment. Thus, under these circumstances that there was sufficient and reasonable cause for not filing the Appeal in time; therefore, in the interest of substantial justice, we are condoning the delay of 1763 days.

On merits’ we find that the Ld. CIT (A) has passed ex-parte order on the ground that Assessee has not complied with the notices. He did not decide appeal on merits.

Since, very high pitch assessment has been made by making addition of Rs. 13.48 Cores as against return income of Rs. 25,645/- therefore, we are of the opinion that matter should be restored back to the file of the Assessing Officer to pass fresh

Accordingly, all the issues and grounds raised before us are remitted to the file of the AO to pass fresh assessment order de novo and in accordance with the law.

Accordingly, Appeal of the Assessee is allowed for statistical purposes. Orders pronounced in the open court on 31st Oct.,2022. (S Rifaur Rahman) (Amit Shukla) Accountant Member Judicial Member मुंबई Mumbai;ददनांक Dated : 31.10.2022