Loading judgment…
Facts
The assessee's assessment for AY 2014-15 was reopened under Section 147, and an addition of Rs. 1.37 Cr was made under Section 68 as unexplained cash credit. The CIT(A) dismissed the assessee's appeal as non-maintainable due to a 4-month delay in filing, without condoning the delay or addressing the merits.
Held
While noting the assessee's failure to provide reasonable cause for the delay, the Tribunal, in the interest of justice, granted another opportunity. The appeal is remanded to the Assessing Officer for a fresh order after providing the assessee a full opportunity to present evidence and be heard.
Key Issues
Whether the addition of unexplained cash credit under Section 68 was justified and if the CIT(A) was correct in dismissing the appeal due to delay, considering the principles of natural justice and opportunity of hearing.
Sections Cited
147, 148, 144B, 68, 69A, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”, HYDERABAD
Before: SHRI LALIET KUMAR & SHRI MADHUSUDAN SAWDIA
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), National Faceless Appeal Centre (NFAC), Delhi dated 28.05.2024 for the AY 2014-15.
2 ITA 728/Hyd/2024
The grounds raised
by the assessee read as under : “1. The learned CIT (A) has erred in upholding the wrongly opened assessment order by assessing officer under section 148 and wrongly passed the order under section 147 read with section 1448 of the Income Tax Act, 1961 as the amount is received from a bank and the assesse does not have an account in that bank.
2. The learned CIT (A) has erred in upholding the wrongly passed order by assessing officer under section 147 read with section 144B of the Income Tax Act 1961, which is against the principles of natural justice as the assessing officer has not given the opportunity to the assesse to represent himself.
3. The learned CIT (A) has erred upholding the addition made by the assessing officer amounting to Rs. 1,37,20,000/- as unexplained cash credits and has added the said cash credits to the total income of the assesse u/s 68 of the Income tax Act, 1961.
4. The learned CIT (A) has erred in not considering the request of condonation of delay filed by the assessee, despite a valid reason given for the delay.”
3. The brief facts of the case are that assessee being a company filed its return of income for A.Y. 2014-15 declaring total income of Rs.37,87,034/-. The case was reopened under section 147 of the Income Tax Act based on information from a search operation involving M/s Shri Renuka Mata Multi State Urban Co-operative Credit Society Limited. It was found that the society facilitated large-scale cash deposits into bank accounts, which were subsequently transferred to various entities, including the assessee company. The assessee received Rs. 1,37,20,000 from the society, which was unexplained under sections 68/69A of the Act. During the course of assessment proceedings, Assessing Officer provided multiple opportunities to the assessee to substantiate its case. Even though, assessee failed to provide satisfactory evidence regarding the source of this amount and the 3 ITA 728/Hyd/2024 assessee claimed that the society acted as a bank and that payments made to them were from customers, not directly from the society. However, no documentary evidence was provided to substantiate this claim. As a result, the income of Rs. 1,37,20,000 was added by the Assessing Officer to the total income of the assessee under section 68 of the Act and penalty proceedings were initiated under section 271(1)(c) for concealing income. Thereafter, Assessing Officer completed the assessment u/s 147 r.w.s. 144B of the Act assessing the total income at Rs.1,75,07,034/- and passed assessment order on 31.03.2022.
Aggrieved with such assessment order, the assessee has filed the appeal, before the LD.CIT(A), who dismissed the appeal of the assessee as non-maintainable, by observing as under :
“6.2.5 In the instant case, the appellant has been clearly negligent by not taking the necessary steps for filing the appeal within the time prescribed by the statute. It has not given any sufficient cause to explain the late filing of appeal which could make it eligible for the condonation of the delay. In granting the indulgence and condoning the delay, it must be proved beyond the shadow of doubt that the assessee was diligent and was not guilty of negligence whatsoever. The appellant has failed to prove its bonafide in filing belated appeal. The conduct of the appellant in the act of filing of appeal has been found to be wanting as far as reasonableness is concerned. The various Hon’ble Courts have ruled that the expression sufficient cause should receive liberal construction but the same is not applicable in the case of appellant as it is found wanting in due diligence. The reason given by the appellant for the delay in filing the appeal shows the careless attitude on the part of the appellant and does not seem plausible as the appellant is a private limited company which has dedicated employees who look after accounting work and other office work. Condoning the delay in the case of the appellant would mean making mockery of the legal system where anybody can walk in anytime
4 ITA 728/Hyd/2024 without any regard to the time lines provided for in the law. The ground taken by the appellant for condonation of delay is a mere concocted story which lacks merit. As the appellant has been unable to give a reasonable cause explaining the delay in filing of the appeal the condonation of delay cannot be granted in this case. 6.3 In view of the overall discussion, the appeal is dismissed being not maintainable.”
Aggrieved with the order of LD.CIT(A), the assessee is now in appeal before us.
Before us, ld.AR submitted that Assessing Officer has erred in making the addition under section 68 of the Income Tax Act without properly considering the explanations and evidence provided by the assessee. It was further contended that the assessee was not given adequate opportunity to substantiate its claims and present its case. The learned Authorized Representative further submitted that the lower authorities decided the issue without discussing the factual details of the case and hence, requested that the matter may be sent back to the lower authorities for a fresh review, taking into consideration of the circumstances.
Per contra, Ld.DR relied upon the orders of the lower authorities and contended that sufficient opportunities were provided to the assessee during the assessment proceedings, but the assessee failed to furnish the requisite details or explanations
5 ITA 728/Hyd/2024 to discharge its onus. The Ld.DR argued that the addition made under section 68 of the Act by the Assessing Officer is in accordance with law and does not warrant any interference.
We have heard the rival submissions and perused the material on record. In the present case, during the course of assessment, the assessee had failed to provide any satisfactory reply regarding the source of credits in its books of accounts. Before the LD.CIT(A), assessee filed the appeal with a delay of 4 months and the LD.CIT(A) dismissed the appeal filed by the assessee as time- barred without condoning the delay or addressing the merits of the case holding that the reason given by the assessee for condonation of delay is mere concocted story which lacks merit. In light of the above, though, invariably the appeal of the assessee is required to be dismissed on account of failure to give reasonable cause explaining the delay in filing the appeal, however, considering the totality of the facts and circumstances and in the interests of justice, one more opportunity is granted to the assessee to appear and contest the case before the Assessing Officer. Hence, we remand back the appeal to the file of Assessing Officer for passing fresh order after affording due opportunity of hearing to the assessee in accordance with law. Further, the assessee is directed to appear before the Assessing Officer on the date of hearing fixed by the Assessing Officer and shall file all the documents / evidence in support of its case. In case, the assessee failed to file any documents in support of its case, Assessing Officer shall
6 ITA 728/Hyd/2024 decide the matter in accordance with the law. Accordingly, the appeal of assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.