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Income Tax Appellate Tribunal, BANGALORE BENCHES “B”, BANGALORE
Before: Shri George George K, JM & Shri B.R.Baskaran, AM
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES “B”, BANGALORE Before Shri George George K, JM & Shri B.R.Baskaran, AM ITA No.1006/Bang/2015 : Asst.Year 2005-2006 Late Sri.Syed Wahid The Deputy Commissioner of (Legal Heir Sri.Zoheb Ahmed Syed) Income-tax, Circle 1(4) v. F-72, Diamond District Kodihalli Bangalore. Bangalore – 560 008. PAN : AGGPA1709J. (Appellant) (Respondent) Appellant by : --- None --- Respondent by : Capt.Pradeep Shoury Arya, Addl.CIT Date of Pronouncement : 23.12.2021 Date of Hearing : 22.12.2021 O R D E R Per George George K, JM This appeal at the instance of the assessee is directed against CIT(A)’s order dated 25.03.2011. The relevant assessment year is 2005-2006.
There is a delay of three years and three months in filing this appeal. The assessee has filed a petition for condonation of delay and also an affidavit of the Auditor (CA Sri.Ravichandran). The Auditor in his affidavit stated that the assessee has handed over the CIT(A)’s order to him in the month of April 2011 itself for filing an appeal before the Tribunal (CIT’s order is dated 25.03.2011). It is stated that the Auditor, due to his spinal disc problem went for treatment at Mangalore for more than one year and he totally forgotten to file the appeal before the Tribunal. It was submitted that
2 ITA No.1006/Bang/2015 Late Sri.Syed Wahid (L/H Zoheb Ahmed Syed). only when the assessee approached him in the first week of July 2015 inquiring about the fate of the appeal filed before the ITAT, the Auditor realized his mistake of not filing the appeal before the Tribunal and apologized to the assessee. Thereafter, immediately appeal was filed in the second week of July. The relevant observation of the Affidavit of the Auditor reads as follows:- “6. I was suffering from Spinal Disc Problem and I was taking treatment at Mangalore for more than a year and when I returned to Bangalore I had totally forgotten the matter of filing appeal to the ITAT. 7. In the first week of June 2015 Mr.Syed Waheed Ahmed came and met me and informed that Tax Recovery Officer of Income Tax Department was coercing him for payment of tax demand of Rs.1,32,06,735/- and in fact Income Tax Inspector has come to his residence several times for recovery of the tax. Mr.Syed Waheed Ahmed then asked me at what stage the appeal is, which was filed to ITAT. 8. I was taken aback by his enquiry and in the first week of June 2015, I realized my mistake of not filing the appeal to ITAT in the month of April / May 2011. Then I aplogised to my client and assured him that I would file the appeal to ITAT immediately. 9. In the second week of June 2015 I approached my advocate Sri Ganesh Rao and requested him to file the appeal to ITAT. 10. Therefore, the delay in filing the appeal to ITAT is entirely is due to my mistake and my negligence and I request that ITAT to condone the delay and admit this appeal. 11.I once again pray with folded hands that the delay is entirely is due to my fault and for this default of mine, my client should not be penalized.” 3. The learned Departmental Representative was duly heard.
3 ITA No.1006/Bang/2015 Late Sri.Syed Wahid (L/H Zoheb Ahmed Syed). 4. The Auditor has filed an affidavit stating that he had audited the accounts of the assessee and filed the return of income for assessment year 2005-2006. He candidly admits that the delay in filing this appeal is entirely due to his mistake. It is a settled position of law that due to lapse or fault on the part of the Auditor or the Advocate, the client should not suffer. Therefore, we condone the delay in filing this appeal and proceed to dispose of the case on merits.
The grounds raised reads as follows:-
“1. The learned AO erred in adding the entire credit in the bank account amounting to Rs.2,34,00,000/- and the credits are genuine receipts. 2. The AO is not justified in treating agl. Income of Rs.2,77,154/- as non-agricultural. 3. The learned CIT(A) erred in dismissing the appeal on the ground that taxes on the declared income had not been paid, and in fact, the AO had passed a modified order on 17.10.2011 (copy enclosed) wherein he has given effect to Advance-tax of Rs.1,53,250/- and 140A tax of Rs.5,05,215/-. 4. For these and such other grounds which may be urged at the time of hearing, it is prayed t hat the additions made may be deleted.” 6. The brief facts of the case are as follows: The assessee is an individual, who is doing the business as real estate agent. For the assessment year 2005-2006, the return of income was filed on 24.07.2006, which was later revised on 10.09.2008 declaring total income of RS.25,97,812 inclusive of agricultural income of Rs.2,77,157. The assessment was completed ex parte u/s 144 of the I.T.Act vide order dated 31.12.2009 on a total income of
4 ITA No.1006/Bang/2015 Late Sri.Syed Wahid (L/H Zoheb Ahmed Syed). Rs.2,42,48,040. In the said assessment, the A.O. made an addition of Rs.2,34,00,000 being bank credits.
Aggrieved by the order of the assessment, the assessee filed an appeal before the first appellate authority. The CIT(A) vide his order dated 25.03.2011 dismissed the appeal of the assessee in limine on the ground that tax on the declared income has not been paid.
Aggrieved by the order of the CIT(A), the assessee has filed this appeal before the tribunal. None appeared on behalf of the assessee.
The learned Departmental Representative supported the orders of the Income Tax Authorities.
We have heard learned Departmental Representative and perused the material on record. The CIT(A) has dismissed the appeal in limine since the assessee did not pay the admitted tax (The appeal is not entertained in view of the provisions of section 249(4) of the Act). The CIT(A) in the impugned order has observed as follows:-
“At the time of hearing on 18.03.2011, Shri Ganesh Rao, the AR, attended in the4 company of the appellant Shri Wahid and accountant Shri Ravichandran. It was explained that the appellant had filed a return of income on 10.09.2008 in response to the 153C notice. In this return the appellant had disclosed total income of Rs.25,97,812/-. The tax payable was worked out to be Rs.4,25,550/- after allowing credit for the advance tax, self assessment tax and other prepaid taxes. It was explained by the appellant that this tax has not been paid so far because of severe financial problems. The appellant’s AR requested that the default may be condoned and the appeal may be admitted.”
5 ITA No.1006/Bang/2015 Late Sri.Syed Wahid (L/H Zoheb Ahmed Syed). 10.1 From the above observation of the CIT(A), it is clear that after due credit of advance tax (Rs.1,53,250), the tax payable on the returned income of Rs.25,97,812 is Rs.4,25,550. However, it is seen that the assessee had paid the self-assessment tax amounting to Rs.5,05,215. This is evident from the order of the A.O. passed u/s 154 of the Act (order dated 17.10.2011). The order of the A.O. dated 17.10.2011 passed u/s 154 of the Act, reads as follows:- “ORDER UNDER SECTION 154 OF THE INCOME TAX ACT, 1961. While passing order u/s 153C r.w.s. 144 on 31.12.2009 in the above case, credit for Advance tax of Rs.1,53,250/- and Self assessment tax of Rs.5,05,215/- paid by assessee is not considered. The assessee has filed an application with copies of paid challans requesting for rectification for giving credit to taxes paid. On verification it is found that the claim of the assessee is found to be correct. Hence the order u/s 153C r.w.s. 144 on 31.12.2009 is rectified as under: Total income as per assessment order Rs.2,42,48,043 Tax thereon Rs.72,48,413 Add : Surcharge @ 10% Rs.7,24,841 ----------------------- Rs.79,73,254 Add : EC @ 2% Rs.1,59,465 --------------------- Total tax payable Rs.81,32,719 Less : Advance tax Rs.1,53,250 --------------------- Total tax payable Rs.79,79,469 Add : interest u/s 234A Rs.13,56,509 Interest u/s 234B Rs.45,48,297 Interest u/s 234C Rs.31,730 --------------------- Total tax payable Rs.1,39,16,005 Less : Self assessment tax paid Rs.5,05,215 ------------------------ Tax payable Rs.1,34,10,790 ============
6 ITA No.1006/Bang/2015 Late Sri.Syed Wahid (L/H Zoheb Ahmed Syed). 10.2 The impugned order of the CIT(A) is dated 25.03.2011 (i.e. prior to the A.O.’s order passed u/s 154 of the Act). Hence, the CIT(A) would not have been aware of the self-assessment tax being paid by the assessee. Therefore, in the interest of justice and equity, we set aside the CIT(A)’s order and direct him to adjudicate the case on merits. It is ordered accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on this 23rd day of December, 2021. Sd/- Sd/- (B.R.Baskaran) (George George K) ACCOUNTANT MEMBER JUDICIAL MEMBER Bangalore; Dated : 23rd December, 2021. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT(A)-Mysuru. 4. The CIT Central, Bangalore. 5. The DR, ITAT, Bengaluru. 6. Guard File. Asst.Registrar/ITAT, Bangalore