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Facts
The assessee's appeal to the Tribunal was filed with a significant delay of 590 days. The assessee attributed this delay to the unfortunate demise of their previous counsel, Mr. Kapil Aggarwal, who possessed all the appeal-related documents. The Tribunal, while acknowledging the substantial delay and some intentional neglect, condoned the delay in the interest of justice, imposing a token cost. The primary grievances relate to additions made by the Assessing Officer (AO) and confirmed by the CIT(A) regarding estimated profits on gross receipts and cash credits.
Held
The Tribunal condoned the delay in filing the appeal due to the death of the previous counsel, but imposed a token cost on the assessee. Since the assessee failed to provide necessary documentary evidence regarding the creditworthiness of loan creditors and the first appellate authority had dismissed the appeal without a detailed adjudication on merits, the Tribunal decided to remand the matter back to the first appellate authority for a fresh consideration.
Key Issues
Whether the delay in filing the appeal can be condoned given the circumstances, and whether the matter should be remanded for fresh adjudication due to lack of proper documentation and prior dismissal without merits.
Sections Cited
147, 148, 143(3), 250, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. MANOJ KUMAR AGGARWAL & SH. UDAYAN DASGUPTA
This appeal is filed by the assessee against the order of the ld. CIT (A) NFAC, Delhi dated 14.06.2023 passed u/s 250 of the Income Tax Act, 1961 (henceforth the Act) which has emanated from the order of the DCIT/ACIT, Circle-1, Jammu dated 26.12.2017 passed u/s 143(3)/147 of the Income Tax Act, 1961. belatedly by 590 (five hundred ninety) days. He has filed an explanation along with an affidavit where it has been stated that the earlier income tax matters were handled by Sh. Kapil Aggarwal and the entire appeal folder along with the requisite documents were in his possession. But due to unfortunate demise of the late Mr. Aggarwal, the assessee was totally unaware of existence of the appellate order passed u/s 250 of the Act on 14.06.2023. Thereafter, the assessee appointed a new counsel with the help of whom this particular appeal is being filed with a delay of 590 (five hundred ninety) days.
The ld. DR objected to the same, considering the enormous delay of 590 days, he submitted that proper and sufficient cause has not been shown by the assessee.
We have considered the application for condonation and the reasons put-forth therein, and we are not fully convinced with the reasons put-forth and we are of the opinion that the intentional neglect is there on the part of the assessee. However, considering the unfortunate demise of the chartered accountant, Sh. Kapil Aggarwal and also in the interest of justice, we condone the delay and admit the appeal for hearing on merits.
However, we are of the opinion that it is a fit case where cost should be imposed and we hereby imposed a token cost of Rs. 5,000/- payable to the ‘Prime Minister’s National Relief Fund’ to be paid within 15 days from the date of communication of this order (evidenced to be submitted before the JAO).
Grounds of appeal taken by the assessee in Form No. 36 are as follows:
“(1) On the facts and circumstances of the case, the Ld. CIT(A) vide order u/s 250 dated 14.06.2023 has erred in confirming the addition made by the learned AO to the tune of Rs. 484563/- on account of 8% profit on account of difference in gross receipts and Rs. 450000/- on account of cash credits u/s 68.
(2) That the addition confirmed by the CIT(A) is bad in law as the reopening has been made merely on the basis of AIR information.
(3) That the CIT(A) failed to consider the replies of the appellant that investment of Rs. 6.07 crores were made out of unsecured loans received from parties and the appellant has duly submitted details of the person along with the PAN of the persons. Therefore, addition of Rs. 484563.00 i.e 8% profit on account of difference in gross receipts of Rs. 6057040/- is based on wrong basis.
(4) That the CIT(A) has erred in confirming the action of reassessment made by the AO u/s 148 ignoring the fact that the assessment in the case of the assessee stood already completed u/s 143(3) and there was no new material which could warrant action u/s 147.
(5) That the addition of Rs. 450000/-made on account of unexplained cash credits u/s 68 confirmed by CIT(A) only on the basis that no PAN was submitted without appreciating that the said amount is part of regular books of accounts.
(6) That the appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed off.” main grievance is the addition of Rs. 4,84,563/- on account of 8% estimated profits arising out of difference in gross receipt and an amount of Rs.4,50,000/- on account of cash credit u/s 68.
Brief facts of the case are that the assessee has made an advance of Rs.6.07 crores to ‘DGM Geology and Mining Department’, J & K Government as royalty collection fees for the purpose of collecting royalty from sale of sand, bajri and allied materials, from the river beds. The advance as per the assessee has been made by obtaining loans from various persons whose PAN number, name and details has been furnished. Upon verification in course of assessment proceedings, it was found that the genuineness and the creditworthiness of one of the loan creditors “Lagbir Singh S/o Jagat Singh”, who has advanced an amount of Rs. 4,50,000/- could not be substantiated, leading to its addition.
Apart from the above, the AO has also added back an amount calculated @ 8% of difference in gross receipt disclosed and actual receipts which amounted to Rs.4,84,563/-.
The matter carried in appeal has been dismissed by the ld. first appellate authority in absence of any representation on at least three separate dates of hearing as evident from para 1.5.3 of the appellate order without any adjudication on merits.
However, before this Tribunal, the ld. AR has not submitted any paper book and has simply prayed for deletion of the said addition and has not filed any documents before us to establish the creditworthiness of the disputed loan creditor.
As such, in the interest of justice, we remand the matter back to the ld. first appellate authority and we direct the assessee to file necessary documentary evidences to establish the creditworthiness of the loan creditors and to co-operate in appellate proceedings and to prove his case forthwith.
Since, the matter is remanded back to the ld. first appellate authority all legal issues are also kept open.
In the result, the appeal of the assessee is allowed for statistical purpose.