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Facts
The assessee filed a return of income for AY 2020-21. A search and seizure operation was conducted, leading to the discovery of cash. The Assessing Officer treated unsecured loans as unexplained cash credits and assessed total income at Rs. 1,42,88,670/-. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal held that the assessee failed to provide a sufficient explanation for the inordinate delay in filing the appeal and that the delay was attributable to negligence and lack of diligence. The condonation petition was dismissed, and consequently, the appeal was dismissed as time-barred.
Key Issues
Whether the delay of 615 days in filing the appeal can be condoned due to the alleged non-communication by the previous Chartered Accountant, and if the assessee's explanation constitutes a 'sufficient cause'.
Sections Cited
68, 143(3), 153A, 234B, 132, 143(2), 142(1), 226(3), 249(3)
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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” , HYDERABAD
Before: SHRI LALIET KUMAR, HON’BLE & SHRI G. MANJUNATHA, HON’BLE
O R D E R PER LALIET KUMAR, J.M.
This appeal is filed by the assessee, feeling aggrieved by the order passed by the Commissioner of Income Tax (Appeals) – 11, Hyderabad dated 18.01.2023 for the AY 2020-21 on the following grounds :
“1. The impugned order of the learned Authorities below in so far as it is against the Appellant is opposed to law, weight of evidence, natural justice, probabilities, facts and circumstances of the Appellant’s case.
2. The Appellant denies himself liable to be assessed on a total income of Rs. 1,42,88,670/-, as against the income returned Rs. 37,38,670/-, under the facts and circumstances of the case.
3. Whether the learned Authorities below are justified in making addition of Rs. 1,05,50,000/- by invoking the provisions of section 68 of the Act, under the facts and circumstances of the case.
Whether the learned Authorities below are justified in making an addition of Rs. 1,05,50,000/-, by invoking the provisions of section 68 of the Act, only on the basis of not filing confirmation letter, even when it is demonstrated that the amount was received through banking channels, under the facts and circumstances of the case.
The Appellant denies himself liable to be charged to interest under section 234B of the Income-Tax Act, 1961, under the facts and circumstances of the case.”
Facts of the case, in brief, are that assessee, assessee filed his return of income for A.Y. 2020-21 on 10.01.2021 admitting total income of Rs. 37,38,670/-. On credible information that assessee and one Chetan Agarwal are regularly conducting dabba trading search and seizure operation u/s 132 has been conducted on 17.03.2020 in the office cum residential premises of the assessee. During course of search and seizure operation cash of Rs.2,11,82,000 was found and out which an amount of Rs.2,09,000/- was seized as unaccounted business income of M/s Maa Jagadamba Jewellers, Proprietary concern of Sri. Chetan Agarwal for the A.Y.2020-21 as the assessee has not been able to furnish any evidences for the source of cash. Subsequently the case was centralized to the Central Circle-1(1). Hyderabad on 12.10.2020. The assessment year 2020-21 being a Search year, the case has been taken up for scrutiny and accordingly, notice u/s. 143(2) of IT Act was issued on 10.03.2021 and the same was served on the assessee. Subsequently, notices u/s.142(1) of the IT Act were issued calling for the required information. The assessee furnished required information. After verification of the information submitted by the assessee, Assessing Officer opined that the explanation offered by the assessee was not acceptable in view of the settled legal position as held by the Hon'ble High Court of Kolkata in the case CIT Vs. Precision Finance Ltd. reported in 1994 208 ITR. Thereafter, Assessing Officer treated the unsecured loans amounting to Rs.1,05,50,000/- as unexplained cash credits u/s 68 of the Act in view of failure of assessee in proving the identity, creditworthiness and genuineness of the transactions. Accordingly, the Assessing Officer completed the assessment u/s 143(3) r.w.s. 153A of the Act on 17.09.2021, assessing the total income at Rs.1,42,88,670/-.
Feeling aggrieved by the order passed by the assessing officer, assessee filed appeal before the Ld. CIT(A), who dismissed the appeal of assessee on account of non-prosecution and on merits.
4. Feeling aggrieved with the order of ld.CIT(A), assessee is now in appeal before us.
5. Before us, the ld. AR filed an application for condonation of delay of 615 days in filing the appeal. The gist of the application is that the delay was caused due to the fact that the order of the ld. CIT(A) was served on the email ID of the assessee’s Chartered Accountant, Shri R.P. Nagla, who had represented the case before the AO. The assessee remained unaware of the dismissal of the appeal until 04/12/2024, when the banker informed them about a notice under section 226(3) for the recovery of Rs. 1,01,28,454/-. Upon further inquiry, the assessee came to know that the appeal had been dismissed on 18/01/2023. Immediately thereafter, they sought professional advice and filed the present appeal along with the condonation petition. The ld. AR for the assessee contended that the delay was unintentional and beyond their control and, as such, prayed that the delay be condoned and the appeal be admitted for hearing.
Per contra, the ld. DR opposed the condonation petition, stating that the delay of 615 days is inordinate and lacks sufficient cause. He argued that the order was duly served on the assessee’s authorized representative, and ignorance of the dismissal cannot be a valid ground for condonation. He further contended that the assessee failed to exercise due diligence in following up on the appeal. Therefore, he prayed for the dismissal of the condonation petition and the appeal as time-barred.
We have heard the rival submissions and perused the material on record. In the present case, the issue is whether the delay of 615 days in filing the appeal can be condoned under Section 249(3) of the Income Tax Act, 1961. The ld.AR submitted that the appellant was unaware of the dismissal of the appeal by the LD.CIT(A) and came to know about it only when the banker informed him of the recovery proceedings initiated under Section 226(3) of the Act. The ld.AR contended that the delay was due to the previous Chartered Accountant’s failure to inform the Appellant and argued that this constituted a "sufficient cause" for condonation and placed reliance on Collector, Land Acquisition Vs. Mst. Katiji (1987) 167 ITR 471, emphasizing a liberal approach in matters of delay condonation. However, the principle of liberal interpretation is not absolute. The Hon’ble Supreme Court in N. Balakrishnan v. M. Krishnamurthy (1998) held that negligence or lack of diligence does not constitute "sufficient cause" for condonation of delay.
In the present case, the Appellant has failed to provide a day- to-day explanation for the inordinate delay of 627 days, as required by Collector, Land Acquisition v. Mst. Katiji (1987). The contention of ld.AR that the previous Chartered Accountant failed to inform the Appellant is unsupported by any affidavit or documentary evidence. Given these facts, we find that the delay in filing the appeal by the assessee is attributable to sheer negligence and lack of diligence, which does not constitute a "sufficient cause" under Section 249(3). We may further rely upon identical case of co-ordinate Bench of the Tribunal in the case of Smt. Renuka Datla Vs. DCIT, Hyderabad in dt.27.07.2023, wherein the co-ordinate Bench of the Tribunal had dismissed the appeal of assessee by holding as under :
“7.1 Despite granting sufficient opportunities, the assessee failed to appear in the appellate proceedings for which the learned CIT (A) confirmed the order passed by the Assessing Officer based on the material available on record. In the present case, the order was passed by the learned CIT (A) on 5.10.2021 and the limitation to file the appeal expired within 60 days from the date of receipt of the appellate order. However, the submission made by the learned AR in the month of Feb. 2022 whereby the learned AR asked the assessee to sent back the unsigned copy of the appeal. In our view no steps have been taken by the assessee or by the AR after 12th Feb. 2022 to file appeal within the stipulated time. The plea of the learned Counsel for the assessee that the email has gone to junk mail has no legs to stand as the assessee has not filed any evidence corroborating the above stand. Further the assessee has not shown from record that any efforts were made for filing of the appeal after Feb. 2022. It is the duty of the assessee to file the appeal within the stipulated time provided under the Act unless the assessee is prevented by a reasonable cause from filing of the appeal in time. In the present case, the assessee has failed to give any reason much less the reasonable cause which prevented the assessee to file appeal before the Tribunal. The plea raised by the assessee that the assessee was busy in Hon'ble Supreme Court is required to be noted for the purpose of rejecting the same. Merely, because the assessee was busy in contesting her matter before the Hon'ble Supreme Court is no ground to condone the delay in filing of the appeal before the Tribunal. In the present case more than 479 days have already been lapsed after passing of the impugned order on 5.10.2021 and the appeal was filed by the assessee in March, 2023. Undoubtedly during the period of October, 2021 to March, 2023, the assessee has been participating before the Hon'ble Supreme Court in contesting her matters without any impediment or disability. However, for the reasons best known to her, the assessee has not filed the appeal before this Tribunal. The assessee was well aware of her right being highly educated and qualified person and also happens to be the Director of various medical companies and infrastructure companies. In our view, the onus is on the assessee to prove that the assessee has a reasonable cause for not filing the appeal in time by supporting cogent evidence. In the present case after examining the documents on record, we are of the opinion that the assessee miserably failed to prove her case for a reasonable cause not to file the appeals in time. In the light of the above, we do not find any merit in the application of condonation of delay. Though, a part of the period of delay, is covered by the direction of the Hon'ble Supreme Court issued on account of pandemic, however, the assessee was required to explain each day of delay of the remaining period of 301 days. It is pertinent to mention here that the assessee during the earlier period was also before the various Courts including the Hon'ble Supreme Court. 7.2 We may also rely upon the decision cited by the learned DR where we have in the case of Vishwabharati Mutually Aided Cooperative Credit Society Ltd vs. Income Tax Officer in to 364/Hyd/2022 for the A.Ys 2010-11, 2011-12, and 2013-14 to 2015-16 dated 13.02.2023 wherein the Tribunal in Para 14 & 15 held as under: “14. Further, the assessee's reasons in the condonation petition do not come under .reasonable cause. as prescribed under the Act, for condonation of delay and the explanation given by the assessee for delay is not proper and casual in nature. The reasons given by the assessee are devoid of any merit and not sustainable in the eyes of law. The law requires the assessee to be vigilant and careful in prosecuting its rights under the Act. Considering the totality of the facts and circumstances of the case and the conduct of the assessee, we do not find any reason to entertain the present appeal as the same is barred by limitation.
We also draw strength from the decision of Hon'ble Supreme Court in the case of Majji Sannemma @ Sanyasirao Vs. Reddy Sridevi and others (Civil Appeal No.7696 of 2021 dt.16.12.2021 relied upon by the ld.DR, wherein the Hon'ble Supreme Court dismissed the condonation petition. The facts of this case are identical to the facts of the present case. The Hon'ble Supreme Court at Para 6.2 had reproduced the facts of the case to the following effect : "6.2 We have gone through the averments in the application for the condonation of delay. There is no sufficient explanation for the period from 15.03.2017 till the Second Appeal was preferred in the year 2021. In the application seeking condonation of delay it was stated that she is aged 45 years and was looking after the entire litigation and that she was suffering from health issues and she had fallen sick from 01.01.2017 to 15.03.2017 and she was advised to take bed rest for the said period. However, there is no explanation for the period after 15.03.2017. Thus, the period of delay from 15.03.2017 till the Second Appeal was filed in the year
2021 has not at all been explained. Therefore, the High Court has not exercised the discretion judiciously." In our view, the facts of the present appeal are identical rather situated in a worse footing than that of the case of Majji Sannemma @ Sanyasirao (supra). Hence, the ld.CIT(A) was right in dismissing the condonation application and the appeal of the assessee. We do not find any reasons to interfere with the finding of ld.CIT(A) and accordingly, the appeal of assessee is dismissed. We have not discussed the other decisions cited by the ld.DR, mentioned hereinabove as the decision in the case of Majji Sannemma @ Sanyasirao (supra) was latest in time. Further, the decisions referred by the ld.AR were all prior to the decision in the case of Majji Sannemma @ Sanyasirao (supra) and are distinguishable on facts.” 7.3 In view of the above discussions, the condonation petition is dismissed. As a sequence thereof, the appeal filed by the assessee is also dismissed being barred by limitation.
Respectfully, following the same and in view of the foregoing reasoning, we dismiss the application for condonation of delay filed by the assessee and consequently, the appeal stands dismissed as time-barred. Accordingly, the appeal of the assessee is dismissed.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the Open Court on 11th February, 2025.