KINZO EXPORTS P.LTD,NEW DELHI vs. DCIT, CENTRAL CIRCLE, NOIDA

Briefly the facts of the case are that a search and seizure operation under section 132 of the I.T. Act, 1961, was conducted on 27.11.2014 in the case of Maconns, 2 ITA.Nos.6553 & 6554/Del./2018 Kinzo Exports P. Ltd., New Delhi. Meenu and Yadav Singh Group, where certain incriminating documents were found and seized relating to the assessee company. Accordingly, notices under section 153C of the Act were issued on 27.06.2016, for both the assessment years. In response, assessee filed its return showing income of Rs.(-)23,088/- for A.Y. 2010-2011 and (Rs.(-)1,57,180/- for A.Y. 2011-2012. Later on, statutory notices were issued for completion of the assessment and the A.O. completed the assessment by making additions of Rs.9,75,374/- and Rs.12,07,441/- on account of unexplained/unaccounted investments for A.Y. 2010-2011 and A.Y. 2011-2012 respectively. The A.O. passed the assessment orders dated 31.12.2016.

The assessee filed appeals before Ld. CIT(A) on 26.06.2017. The Ld. CIT(A) observed that these appeals are filed belatedly by 175 days. The assessee filed application for condonation of delay stating therein that assessee had given instruction for filing of the appeals, but, due to inadvertence at the level of Counsel for the Assessee, the appeals could not be filed within the stipulated period. The 3 ITA.Nos.6553 & 6554/Del./2018 Kinzo Exports P. Ltd., New Delhi. Ld. CIT(A) found the explanation of assessee to be inadequate and unconvincing. The Ld. CIT(A) also observed that inspite of clear cut instructions from assessee, the Counsel for Assessee who has vast experience of profession in his field, has not cared to file the appeal on time. The explanation of assessee was not accepted. The Ld. CIT(A), accordingly, dismissed both the appeals as time barred.

Learned Counsel for the Assessee reiterated the submissions made before the Ld. CIT(A) and submitted that application for condonation of delay was supported by affidavit of Shri Rajesh Sharma, C.A. He has submitted that the Ld. CIT(A) should have taken a pragmatic view while condoning the delay in the matter and on technical matter the appeals should not be dismissed being time barred, when assessee has a merited case. In support of the above submissions, Learned Counsel for the Assessee relied upon the following Orders of various Benches of the Tribunal.

On the other hand, Ld. D.R. relied upon the impugned Orders and submitted that explanation of assessee would not disclosed any sufficient cause for not presenting the appeals within the period of limitation. Therefore, the Ld. CIT(A) correctly dismissed the appeals of assessee holding them to be time barred.

I have considered the rival submissions and perused the material on record. In A.Y. 2011-2012, the A.O. asked for the details of expenses incurred by assessee on construction of the property. However, no details have been filed. The A.O, therefore, in order to arrive at actual cost of construction made, a statutory reference under section 142A(1) of the I.T. Act for determination of the fair market value of the property. The A.O. accordingly made the 5 ITA.Nos.6553 & 6554/Del./2018 Kinzo Exports P. Ltd., New Delhi. addition because assessee failed to explain the issue before him. Similar is the position for A.Y. 2010-2011 in which the assessee similarly did not file any details of the expenses. Therefore, statutory reference was made for valuation of fair market of the cost of construction and addition was accordingly made. It is, therefore, clear that before the A.O. assessee did not lead any evidence in support of the contention raised before A.O. It would, therefore, make it clear that when nothing was adduced before A.O. and addition was made on the basis of difference in valuation as per statutory valuation obtained by A.O. under section 142A(1) of the I.T. Act, perhaps the assessee never wanted to challenge the additions before the Ld. CIT(A). It, therefore, appears that whatever explanation have been made by the assessee before the Ld. CIT(A) for condonation of delay was clearly an afterthought as assessee has no merit in his appeals. It may also be noted here that in the application for condonation of delay (copy of which is filed at page-21 of the PB) the assessee explained that assessee has instructed their Counsel Sharma Kapoor Associates for filing of the 6 ITA.Nos.6553 & 6554/Del./2018 Kinzo Exports P. Ltd., New Delhi. appeals in January, 2017. The assessee further explained that to his surprise, the above Counsels could not file the appeals due to misplace of the papers. The assessee also explained that their Counsels has committed a blunder mistake in not filing the appeals. The assessee also filed affidavit of Shri Rakesh Sharma, C.A. at Page-17 of the PB in which he has mentioned in para-3 that “I could not file the appeals intime inadvertently since it escaped my attention.” There is, thus, contradiction in the explanation of assessee as mentioned in the application for condonation of delay and in the affidavit of Shri Rakesh Sharma, C.A. The averments contained in the application for condonation of delay and affidavit are contradictory and as such both cannot be relied upon in support of the explanation of assessee. The assessee, thus, has failed to disclose any sufficient cause for not presenting the appeals within the period of limitation. According to Learned Counsel for the Assessee, when their earlier Counsels have committed a blunder mistake, but, what steps have been taken by the assessee against them has also not been explained during 7 ITA.Nos.6553 & 6554/Del./2018 Kinzo Exports P. Ltd., New Delhi. the course of arguments. The assessee, thus, failed to explain any bonafide reason on their part for seeking condonation of delay in the matter. Thus, the assessee acted negligently and never acted bonafidely in the matter. It would be appropriate to refer to some of the judicial pronouncements on the issue of delay in filing the appeals.

In the result, appeals of Assessee are dismissed.