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

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).

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.

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.

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.

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

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.

Resultantly, these appeals are allowed for statistical purpose.