ABHAY SINGH,INDORE vs. ITO-3(1), INDORE, INDORE

PDF · subscribers
ITA 51/IND/2025Status: DisposedITAT Indore25 June 2025AY 2011-126 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeals, citing Section 253(5) of the Act and the Supreme Court's decision in Collector, Land Acquisition Vs Mst. Katiji and others, emphasizing a justice-oriented approach. Regarding the substantive issue, the Tribunal, in view of the submissions of both parties and the principle of natural justice, decided to remand the matters to the Assessing Officer (AO) for fresh adjudication. The Tribunal noted that restoring the matters to the AO would lead to better adjudication based on correct facts and law, without causing prejudice to the revenue. The AO was directed to grant a necessary opportunity of hearing to the assessee and pass appropriate orders uninfluenced by his earlier orders. The assessee was cautioned to be vigilant and ensure participation in hearings, failing which the AO would be at liberty to pass orders in accordance with law. The issue of whether the bank account belonged to the assessee or the partnership firm and the sustainability of additions were effectively left for the AO to decide afresh.

What were the facts?

The assessee, Abhay Singh, filed appeals before the Income Tax Appellate Tribunal (ITAT) challenging orders dated 22.04.2024 passed by the Commissioner of Income-Tax (Appeals)-NFAC, Delhi. These orders arose from assessment orders dated 19.12.2018 passed by the Income Tax Officer (ITO)-3(1), Indore, under Section 144 read with Section 147 of the Income-tax Act, 1961. The assessment years under dispute are 2011-12 and 2012-13. The appeals were filed with a delay of 12 days. The assessee contended that the delay was due to the previous counsel's error, not the assessee's negligence. The revenue did not object to the condonation of delay. The core of the dispute pertains to additions made by the AO based on cash deposits in a bank account. The assessee argued that the bank account, though operated by him, belonged to a partnership firm, M/s Prakash Motors, and his PAN was mistakenly linked to it.

What were the issues?

1. Whether the delay in filing the appeals by the assessee should be condoned, considering the explanation provided and the provisions of Section 253(5) of the Income-tax Act, 1961, and the principle of substantial justice. Assessee's contention: The delay of 12 days was due to the previous counsel's failure to file the appeals in time, despite the assessee taking immediate steps after receiving the impugned orders. There was no malafide intention or negligence on the part of the assessee, and a "sufficient cause" exists for the delay. Revenue's contention: No objection was raised against the condonation of delay. 2. Whether the additions made by the Assessing Officer (AO) on account of estimated business income, based on deposits in a particular bank account, are sustainable in the hands of the assessee, when the said bank account allegedly belongs to a partnership firm and not the assessee individually. Assessee's contention: The bank account (ICICI Bank, A/c No. 004105012592) belonged to the partnership firm "M/s Prakash Motors," constituted by Shri J.P. Gupta and Shri Ajay Gupta. The assessee was merely an employee of the firm, authorized to operate the account via a General Power of Attorney. The firm is a separate assessee, files returns, and its accounts are audited, duly recording these transactions. The assessee's PAN was mistakenly fed into the banking system. Therefore, the additions made in the assessee's hands are not sustainable and the matter should be remanded to the AO. Revenue's contention: The Revenue's learned Departmental Representative agreed with the submissions of the assessee's Authorized Representative.

Which sections of the Income-tax Act were involved?

Section 144,Section 147,Section 253(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI

For Appellant: Shri Harsh Vijaywargiya, AR
For Respondent: Shri Ashish Porwal, Sr. DR
Hearing: 23.06.2025Pronounced: 25.06.2025

आदेश/ O R D E R

Per B.M. Biyani, A.M.:

1.

Feeling aggrieved by two separate orders of first-appeal, both dated 22.04.2024 and both passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] for Assessment-Year [“AY”] 2011-12 & 2012-13, which in turn arises out of respective assessment-orders dated 19.12.2018 passed by learned ITO-3(1), Indore [“AO”] u/s 144 r.w.s. 147 of Income-tax Act, 1961 [“the Act”], the assessee has filed these appeals on the grounds mentioned in Appeal Memo (Form No. 36).

Page 1 of 6 & 52 /Ind/2025 - AY 2011-12 & 2013-14

2.

The registry has informed that these appeals are delayed by 12 days and therefore time-barred. Ld. AR for assessee submitted that the assessee has filed applications for condonation of delay supported by affidavits on stamp. Referring to same, Ld. AR submitted that the assessee immediately after receipt of impugned orders, handed over the same to previous counsel and paid appeal filing fee also but the previous counsel did not file appeals in time. Ultimately, the assessee approached present counsel and with his assistance, filed these appeals to ITAT. Ld. AR submitted that there is no lethargy, negligence, mala fide intention or ulterior motive of assessee in making delay and the assessee does not stand to derive any benefit because of delay. He further submitted that the sole reason of delay is previous counsel’s mistake. He submitted that there is a “sufficient cause” for delay and hence the delay should be condoned. Ld. DR for Revenue did not raise objection against condonation of delay. We have considered the explanation advanced by assessee and in absence of any contrary fact or material on record, the assessee is found to have a “sufficient cause” for delay in filing present appeal. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a “sufficient cause” for not presenting appeal within prescribed time. It is also a settled position by Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst.

Katiji and others 1987 AIR 1353, 1987 2 SCC 387 that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting a justice-

Page 2 of 6 & 52 /Ind/2025 - AY 2011-12 & 2013-14 oriented approach. Thus, taking into account the provision of section 253(5) and the decision of Hon’ble Supreme Court, we take a judicious view, condone delay, admit these appeals and proceed with hearing.

3.

Ld. AR next submitted that in both of these matters, the AO has acted u/s 147 on the basis of AIR information revealing cash deposits in bank a/c and ultimately, in the assessment-orders passed, the AO has made additions of estimated business income on the basis of impugned deposits in bank a/c. But the relevant Bank A/c No. 004105012592 with ICICI Bank considered by AO belonged to a partnership firm “M/s Prakash Motors”. Ld. AR submitted that the said firm was constituted by two partners Shri J.P.

Gupta and Shri Ajay Gupta and the assessee was just an employee of the firm. He submitted that a “General Power of Attorney” was given by partners of firm to assessee-employee to open and operate bank a/c in the name of firm and based on such authority, the assessee maintained the aforesaid A/c with ICICI Bank in the name of firm. Ld. AR submitted that although the a/c belonged to partnership firm “M/s Prakash Motors” but by mistake the assessee-employee’s PAN was fed in the banking system. The assessee has filed following certificate issued by bank to demonstrate these facts:

Page 3 of 6 & 52 /Ind/2025 - AY 2011-12 & 2013-14

Page 4 of 6 & 52 /Ind/2025 - AY 2011-12 & 2013-14

4.

Ld. AR submitted in open court that “M/s Prakash Motors” is a separate assessee and regularly getting accounts audited and filing income- tax returns in which the transactions of said bank a/c have been duly recorded. Thus, in nutshell, Ld. AR submitted that the said bank a/c does not belong to assessee and the transactions made therein cannot be considered for taxation in assessee’s hands. Ld. AR submitted that the addition made by AO in the hands of assessee on accounts of estimated business income on the basis of deposits in impugned bank a/c is not sustainable. Therefore, the present matters must be remanded to the file of AO for a fresh adjudication after necessary verification.

5.

Ld. DR for revenue agrees to the submissions of Ld. AR.

6.

In view of above submissions of parties; having regard to the principle of natural justice and also bearing in mind that no prejudice would be caused to revenue if the present matters are restored at the level of AO rather it would result in a better adjudication as per correct facts and law, we remand these matters to the file of AO for adjudication afresh, at the risk and responsibility of assessee. The AO shall give necessary opportunity of hearing to assessee and pass appropriate orders uninfluenced by his earlier orders. The assessee is also directed to remain vigilant and ensure participation in the hearings as may be fixed by AO and do not seek unnecessary adjournments failing which the AO shall be at liberty to pass appropriate orders in accordance with law. Ordered accordingly.

Page 5 of 6 & 52 /Ind/2025 - AY 2011-12 & 2013-14

7.

Resultantly, these appeals are allowed for statistical purpose.

Order pronounced in open court on 25/06/2025

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →