SHRI SHAILENDRA BANSAL,BARWAHA vs. THE ITO-5(2), INDORE

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ITA 306/IND/2016Status: DisposedITAT Indore15 February 2018AY 2008-097 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal before the CIT(A) and directed the CIT(A) to admit the appeal for fresh adjudication on merits. The penalty proceedings were also set aside to the CIT(A) as consequential to the quantum addition.

What were the facts?

The assessee, whose main income is from interest, made unexplained cash deposits of Rs. 9,50,000/-. The assessee's appeal before the CIT(A) against the addition was dismissed for being time-barred by 32 months, reportedly due to wrong advice from a counsel.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) should be condoned, and whether the quantum addition and consequential penalty are sustainable.

Which sections of the Income-tax Act were involved?

Section 69,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCHE, INDORE

Before: SHRI KUL BHARAT & SHRI MANISH BORAD

For Appellant: Shri Girish Agrawal
For Respondent: Shri R.P. Mourya
Hearing: 13.02.2018Pronounced: 15.02.2018

आदेश / O R D E R

PER MANISH BORAD, A.M: These two appeals by the same assessee pertaining to the A.Y.

2008-09 out of which ITA No. 306/Ind/2016 relates to quantum

addition and is directed against the order of the CIT(A)-II, Indore,

dated 29.1.2016 which is arising out of the order u/s 143(3) of the

Act dated 29.10.2010 framed by the ITO 5(2), Indore. The second

appeal i.e. ITA No. 313/Ind/2016 relates to penalty u/s 271(1)(c) of

the act and is directed against the order of the learned CIT(A) dated

29.1.2016 against the penalty order framed on 27.4.2011 by the

ITO 5(2), Indore.

2.

Briefly stated, the facts, as culled out from record, are that the

assesseen is an Individual and his main source of income is from

interest. The return of income filed on 8.9.2008 declaring income at

Rs.1,11,960/-. The case picked up through CASS. Notice u/s

143(2) of the Act duly served on the assessee. In the course of

assessment proceedings the Assessing Officer observed that the

assessee made deposits of Rs. 9,50,000/- (i.e. Rs. 6,50,000/- on

13.7.2007 and Rs. 3 lacs on 27.3.2008) with State Bank of Indore.

Necessary details, as called for, were not supplied by the assessee

and the Assessing Officer accordingly made the addition of

Rs.9,50,000/- u/s 69 of the Act towards unexplained investments.

Aggrieved, the assessee preferred appeal before the CIT(A) against

the impugned additions. However, the appeal was time barred by 32

months. The CIT(A) even though discussed the facts of the case but

finally dismissed the appeal for being barred and did not admit it

for adjudication.

3.

However, penalty proceedings u/s 271(1)(c) of the Act were

initiated before the assessee could appeal before the CIT(A) and the

assessee remained non-compliant during the penalty proceedings

and accordingly penalty of Rs. 3,02,980/- was imposed under

section 271(1)(c) of the Act.

4.

The appeal by the assessee before the CIT(A) against penalty

imposed u/s 271(1)(c) of the Act did not find favour from the CIT(A).

5.

Now, the assessee is in appeal before the Tribunal against

quantum addition, delay not condoned by the CIT(A) as well as

penalty sustained by the CIT(A).

6.

We will first take up ITA No. 306/Ind/2016 relating to

quantum addition. The learned counsel for the assessee submitted

that the delay in filing the appeal before the CIT(A) arose due to

wrong advice given by the counsel of the assessee, Shri K.K. Sarda,

and reference was made to page 5 of the paper book showing the

certificate given by Shri K.K. sarda admitting that he advised the

assessee for not filing the appeal.

7.

On the other hand, the learned DR supported the orders of

the authorities below.

8.

We have heard the rival contentions and perused the record

placed before us. In the instant appeal the assessee has challenged

the addition of Rs.9,50,000/- sustained by the CIT(A). From a

perusal of the findings of the learned CIT(A) we observe that the

appeal of the assessee was dismissed by the CIT(A) for delay in filing

the same which was around 32 months. It was pleaded by the

learned counsel for the assessee before us as well as before the

CIT(A) that the assessee could not file the appeal due to wrong

advice given by the counsel, Shri K.K. sarda. From perusal of the

certificate placed at page 5 of the paper book issued by Shri K.K.

Sarda wherein he has mentioned “That the facts of the case of Shri

Shailendra Bansal relating to assessment year 2008-09 (F.Y. 2007-

08) appeared to me not favourable and as such I advised him for not

filing the appeal”. The alleged advice of the CA seems to have

restrained the assessee from filing the appeal. It is well evident that

for the purpose of taxation, the assessee has to take

consultancy/guidance from the tax experts who are mainly

CAs/advocates of tax practitioners. It is not possible for the

assessee to be well-verse with taxation laws and to decide on critical

issues such as filing of appeal, etc. Even though the reason for the

alleged delay in filing the appeal before the CIT(A) is not so

enterprising, but still looking to the factual aspect of the case as

well as the interest of justice, the assessee deserves one more

opportunity of being heard. Further, from perusal of the order of the

CIT(A) we find that the facts of the alleged cash deposits, alleged

link of source of cash deposit with the cash withdrawn from the

mother’s account and also non-availability of any evidence in

support of the source of cash have been duly discussed in the body

of the order of the CIT(A) but there is no concrete finding on merits

and the appeal has been dismissed due to delay in filing the appeal.

We, therefore, in the given facts and circumstances of the case,

condone the delay in filing the appeal before the CIT(A) and direct

him to admit the same for fresh adjudication with the direction to

decide the issues raised in the instant appeal after affording proper

opportunity of being heard to the assessee.

9.

In the result, the appeal of the assessee in ITA No.

306/Ind/2016 is allowed for statistical purposes.

10.

Apropos ITA No. 313/Ind/2016 wherein the assessee has

challenged the order of the CIT(A) confirming the penalty u/s

271(1)(c) of the Act, we are of the view that as we have set aside the

issue of quantum addition to the file of the CIT(A) and the outcome

of the order of the CIT(A) will be the basis to decide as to whether

the penalty is leviable u/s 271(1)(c) of the Act or not, we set aside

the issue of penalty u/s 271(1)(c) of the Act also to the file of the

CIT(A) being consequential to the quantum issue, for deciding the

same afresh after affording reasonable opportunity of being heard to

the assessee.

10.

In the result, ITA No. 313/Ind/2016 is allowed for statistical

purposes.

11.

Finally, both the appeals of the assessee are allowed for

statistical purposes.

Order was pronounced in the open court on 15.2.2018.

sd sd (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER

Indore; �दनांक Dated : 15/02/2018

Dn/-

Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. Dn/- By order

Private Secretary/DDO, Indore

1.

Date of dictation : 8.2.2018 2. Date on which the typed draft is placed before the Dictating Member : 9.2.2018 3. Date on which approved draft comes to the Sr.P.S./P.S: 10.1.2018 4. Date on which the fair order is placed before the dictating Member for pronouncement: 5. Date on which the fair order comes back to the Sr.P.S./P.S.: 6. Date on which the file goes to the Bench Clerk: 7. Date on which the file goes to the Head Clerk: 8. The date on which the file goes to the Assisstant Registrar for signature of the order. 9. Date of Despatch of the Order:

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