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Income Tax Appellate Tribunal, ‘C’ BENCH : BANGALORE
Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI
ORDER
PER CHANDRA POOJARI, ACCOUNTANT MEMBER This is an appeal by assessee directed against order of Ld.CIT(A) dated 10/10/2013 for A.Y. 2009-10. 2. The assessee raised following grounds. Tax Effect relating to each GROUNDS OF APPEAL Ground of appeal On the facts and circumstances of the case, the CIT(A) erred in upholding the 1. addition of Rs.40,17,124/- being the Rs.13,75,425/- amount credited in the Appellant's bank account.
The learned CIT(A) failed to appreciate that the amount was towards discharge of loan to HDFC Bank account as explained by the Appellant and the same 2. Rs.13,75,425/- was paid by M/s.Scope & Co., who are the other co-owners of the property to get the property released from the liability to HDFC Bank.
The learned CIT(A) ought to have appreciated that the payment made was to get the property released to sell the property for a total consideration of Rs.2,37,33,500/- to Mr.John B. Lasrado 3. Rs. 13,75,425/ - and Mrs. Flavy Daisy Lasrado and the payment had been duly recorded in the Sale Deed, a copy of which had already been furnished to the AO which was part of IT records, examined by the AO. On the facts, the learned CIT(A) ought to have appreciated the source of payment to HDFC Bank which has been fully 4. Rs.13,75,425/ - explained and accordingly the impugned addition as made by the AO was uncalled for and she ought to have deleted the addition. Without prejudice, even if the CIT (A) required any clarification, in the interest of justice, she ought to have given one more opportunity to the Appellant before 5. concluding the appeal by upholding the Rs.13,75,425/ - addition and having failed to do so, the order of the CIT(A) in this regard is unsustainable and the impugned addition is liable to be deleted. The learned CIT(A) ought to have appreciated that the amount paid by M/s.Scope & Co was for and on behalf of the Appellant, her brother and her sister who have equal interest in 50% of the property sold and accordingly the addition if any required to be made is 6. Rs.13,75,425/ - only to the extent of……… percentage and only that percentage of the amount is required to be assessed in the hands of the Appellant and accordingly the impugned amount of entire addition even otherwise is unwarranted and thus the addition was liable to be deleted in toto.
Without prejudice, the impugned addition as sustained by the learned CIT(A) is 7. Rs.13,75,425/- unwarranted, excessive and ought to be deleted in full.
For these and such other grounds that may be urged at the time of hearing, the 8. General Appellant prays that the appeal may be allowed.
TOTAL TAX EFFECT Rs.13,75,425/-
There was a delay of 2878 days in filing the appeal. The assessee filed petition explaining the delay that on marriage on 27/06/2004, she moved to Davangere and during these period, she loss track of her income tax matters and she was involved in domestic affairs and failed to take necessary steps to file appeal before this Tribunal and further the Ld.AR made submissions before us as follows. “In furtherance to the submissions made at the time of hearing on 28.07.2022, we wish to clarify as under:
1. 1. The delay from 09.12.2013 to 26.10.2021 amounts to 2,877 days, out of which the COVID period was from 24.03.2020 to 27:10.2021. The delay during this period is 582 days. If this is excluded, the delay would be 2,295 days. The delay has been explained in the Affidavit furnished along with the appeal memo.
2. The Appellant was married on 27.06.2004 and moved out to her husband's place in Davangere and all the income-tax matters were being handled by her father's auditor all along. In the meanwhile, the Appellant moved out to Bengaluru in June, 2012 and thereafter she had appointed an auditor in Bengaluru to handle her income- tax matters. The auditor at Bengalure was handling all her matters with regard to filing of IT returns for the years after 2012 and he had no records for the past years. Accordingly, for the relevant year i.e., 2009-10 the returns were prepared at Belgaum by the previous auditor who filed it at Bengaluru. Even after the assessment made on 19.12.2009, the appeal was filed through his Office which was given for representation to Sri K.Kotresh, CA who represented the case before the CIT(A). The regular auditor at Bengaluru has no connection with the above matters. Thus, immediately after the receipt of the appellate order, the Appellant forwarded the same to her father's office at Page 4 of Belgaum to take further course of action through the earlier auditor. Thereafter, the Appellant being at Bengaluru, lost track of it and could not have any knowledge about the matter until when recovery notice was issued to her on 30.01.2020 from the Deputy Commissioner of Income-tax, Circle-1(2)(1), Bengaluru with regard to outstanding demand of Rs.19,22,199/- (for AY 2009-10) as against the refund of Rs.10,27,712/- (for AY 2019-20) expected by the Appellant. It was immediately thereafter the Appellant made enquiries at her father's place. In the meanwhile, even the refund due to the Appellant for 2019-20 was appropriated towards the demand on 30.04.2020. Since the file was handled by the previous auditor and also the representation at Bengaluru before the CIT(A) through CA.K.Kotresh, she had to enquire about the status of the appeal filing before the ITAT. In the meantime, on account of COVID and on account of lock down from time to time, she could not get the details and it was only in October, 2021 she was able to ascertain that no appeal was filed by the previous auditor. Thereafter, the Appellant collected the order and proceeded to file this appeal. The appellate order having been uploaded on 10.10.2013, the appeal should have been filed on or before 09.12.2013. Thus, there is a delay of 2,295 days as stated herein above and the delay as explained in the Affidavit was on account of reasonable cause. Accordingly it is prayed that the delay may kindly be condoned. The following judgments support the case of the Appellant to consider the delay and to condone the same (a) Collector, Land Acquisition vs. MST.Katiji And Others, 167 ITR 471 (SC). This judgment has also been followed by the ITAT, Bengaluru Bench, Bengaluru in the case of (a) EIT Services India Pvt.Ltd vs. ACIT in & 1556/Bang/2017 dt. 03.11.2020, (b) M/s.Raghavendra Constructions vs. ITO in ITA No.425/Bang/2012 dt. 14.12.2012, (c) Anand Somashekar Markal vs. DCIT in ITA Nos.460 to 466/Bang/2021 86 ITA No.467/Bang/2021 dt. 18.11.2021 and (d) Premalatha Pagaria vs. ITO by the High Court of Karnataka dt. 27.07.2021 in ITA No.511/2017 and (e) Ram Nath Sao @ Ram Nath Sahu And ... vs. Gobardhan Sao And Others by the Supreme Court dated 27.02.2002 in Appeal (Civil) 1704/2002. Copies of above judgments are enclosed to this NOTE.”
The Ld.DR strongly opposed the admission of the appeal by the Tribunal and she submitted that the Tribunal cannot be walk in place for an assessee to file appeals any time irrespective of Page 5 of limitation period. We have heard both the parties and perused the material on record. In this case, these was a delay of 2878 days in filing the appeal before this Tribunal. Out of this period, from 24.03.2020 to 27.10.2021 amounting to 582 days are due to covid pandemic which need not be explained by assessee as Supreme Court suspended the limitation provisions. The assessee has to explain the delay of 2295 days which has been explained by assessee by way of condonation petition filed before us. According to assessee, the assessee was married on 27/06/2004 and moved to Davangere and during this period she lost tract of her income tax matters and busy in domestic affairs. The assessee being a lady aged about 44 years and she hailed from a respected family and she was said to be busy in her domestic affairs and reasons explained by assessee is very reasonable and it is not unnatural. In our opinion, there is a good and sufficient reason to condone this kind of delay and the expression “sufficient cause” should be interpreted to advance substantial justice, therefore advancement of substantial justice is a prime factor while considering the reasons for condoning the delay in this case on hand. The issue arises for consideration on merits is with regard to unexplained deposit into bank account which the assessee explained with the sufficient document and on merit assessee is having a very good case. But there is a technical defect in the appeal since the appeal was not filed within the period of limitation, the assessee explained the delay with condonation petition, the revenue has not filed any affidavit to deny the submission made by assessee while considering the Page 6 of Apex Court in the case of Collector, Land Acquisition vs. Mst. Katiji [1987] 167 ITR 471(SC) held as under: “(1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late. (2) Refusing to condone delay can result in a meritorious matter being thrown 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. (3) "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. (4) When substantial justice and technical consideration 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. (5) 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. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.”
When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of non-deliberate delay. In the case on our hand, on merit, the assessee is having a prima facie case. Being so, in our opinion, the liberal view have to be taken in considering such delay. Accordingly we condone the delay of 2878 Page 7 of Tribunal and admit the appeal for adjudication.
On merit, the Assessing Officer made addition of Rs.40,17,124/- towards the credit made to the assessee bank account as unexplained. The CIT(A) confirmed the same. The Ld.AR submitted that the amount of Rs.40,17,124/- which was found credited to the assessee’s bank account was the amount paid by the purchaser of the property to the bank to discharge the loan of the assessee which was taken as part of sale consideration for purchase of the property from the co-owners out of which the Appellant was one. The sale deed records this payment of consideration. The sale deed was placed at Pages 50 to 70 of the Paper Book. While recording the consideration of Rs.2,37,33,500/- in the sale deed, the break-up had been given and Rs.40,17,124/- being the loan amount from HDFC Bank borrowed by the assessee had been discharged directly by the buyer and it has been recorded in the sale deed. He drew our attention to Page 60 of the Paper Book at clause (c). Further, the analysis of consideration had also been provided at Page 71 of the Paper Book wherein Smt.Deepti Prabhakar Kore's share of Rs.40,17,124/-to HDFC Bank loan account has been noted. Thus, the total sale consideration of Rs.2,37,33,500/- has been recorded which had been shared by the co-owners in accordance with their respective share in the co-ownership and Smt.Deepti Prabhakar Kore has been provided Rs.14,83,344/-. Smt.Deepti Prabhakar Kore is known as Smt.Deepti Aradhya after she got married. The amount of Rs.14,83,344/- assigned to her has been Page 8 of Page Nos.73 to 77 of the Paper Book. The long term capital gain has been shown at Page No.75 of the Paper Book wherein the consideration of Rs.14,83,344/- has been declared. Thus, the impugned addition is part of the sale consideration on sale of the property 209 and had been considered in the account of the assessee. The amount paid to the Bank by the purchaser has been credited and it has been fully explained by the above transaction. However, both the appellate authorities below without considering the documents placed before them had confirmed the addition. In other words, the AO made the addition as unexplained credit which has been upheld by the CIT(A) without passing a speaking order. He submitted that the impugned addition is uncalled for and liable to be deleted. In the alternative, the matter may be restored to the file of the AO to consider the evidence and to give a proper conclusion.
The Ld.DR relied on order of CIT(A). 7.1 We have heard both the parties and perused the material on record. We have carefully gone through the paper book filed by the assessee along with the sale deed copy placed in page nos. 50 to 70. We found from the sale deed that the total sale consideration for sale of property Commercial Unit No. 209, 2nd Floor in Wing Beta in the project ‘Raheja Towers’ at Old No. 113-134, New No. 177, Anna Salai, Chennai – 600 002, with a built up area of about 4230 sq.ft., was sold for a consideration of Rs.2,37,33,500/-. The payment has been made towards this as follows:
Page 9 of Rs.10,00,000/- (Rupees Ten Lakhs only) vide Cheque No. 212129, dated 04.04.2008, drawn on Canara Bank, on the instruction of the VENDORS in favour of M/s Scope & Co.; b) Rs. 79,01,024/- (Rupees Seventy Nine Lakhs One Thousand and Twenty Four Only) vide D.D.No.309707, dated 07.07.2008, drawn on Deutsche Bank, Nungambakkam Branch, on the instruction of the VENDORS in favour of M/s Scope & Co.; c) Rs.40,17,124/- (Rupees Forty Lakhs Seventeen Thousand One Hundred and Twenty Four Only) vide D.D.No.309708, dated 07.07.2008, drawn on Deutsche Bank, Nungambakkam Branch, on the instruction of the VENDORS of HDFC Bank in Loan A/c No. 1130019; d) Rs. 8,14,378/- (Rupees Eight Lakhs Fourteen Thousand Three Hundred and Seventy Eight Only) vide D.D.No.309709, dated 07.07.2008, drawn on Deutsche Bank, Nungambakkam Branch, on the instruction of the VENDORS in favour of HDFC Bank in Loan A/c No. 1675947; e) Rs.22,67,474/- (Rupees Twenty Two Lakhs Sixty Seven Thousand Four Hundred and Seventy Four Only) vide D.D.No.309710, dated 07.07.2008, drawn on Deutsche Bank, Nungambakkam Branch, on the instruction of the VENDORS in favour of the HDFC Bank in Loan A/c No. 2120299; f) Rs.50,00,000/- (Rupees Fifty Lakhs Only) vide D.D.No.000084, dated 08.07.2008, drawn on HDFC Bank, Thiruvanmiyur Branch, on the instruction of the VENDORS in favour of M/s. Scope & Co.; g) Rs.26,33,500/- (Rupees Twenty Six Lakhs Thirty Three Thousand and Five Hundred Only) vide D.D.No.357017, dated 08.07.2008, drawn on Canara Bank, Valmiki Nagar Branch, on the instruction of the VENDORS in favour of M/s. Scope & Co.; h) Rs. 1,00,000/- (Rupees One Lakh Only) by cash to the VENDORS;
As seen from above, an amount of Rs.40,17,124/- has been deposited in HDFC Bank Loan A/c No. 1130019. Being so, an amount of Rs.40,17,124/- cannot be considered as unexplained amount deposited into assessee’s loan account. In view of this, we are inclined to delete the addition of Rs.40,17,124/- made by the Assessing Officer.
In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 05th August, 2022.