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Income Tax Appellate Tribunal, DELHI BENCHES “SMC” : DELHI
Before: SHRI BHAVNESH SAINI
For Assessee : Shri B.L. Gupta, Income Tax Practitioner. For Revenue : Shri S.L. Anuragi, Sr. D.R. Date of Hearing : 29.04.2019 Date of Pronouncement : 02.05.2019 ORDER Both the appeals by the same assessee are directed against the common Order of the Ld. CIT(A)-IV, Kanpur, Dated 24.09.2018, for the A.Ys. 2010-2011 and 2011-2012.
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.
(i) ITAT, Cochin Bench in the case of M/s. Midas Polymer Compounds Pvt. Ltd., Kottayam in ITA.No.288/Coch/2017 Dated 25.06.2018.
4 ITA.Nos.6553 & 6554/Del./2018 Kinzo Exports P. Ltd., New Delhi. (ii) Order of ITAT, Delhi, SMC Bench in the case of Jagdeep Singh, Panipat vs. ITO, Ward-3, Panipat in ITA.No.1462/Del./2017, Dated 18.01.2019. (iii) Order of ITAT, Cuttack Bench in the case of Maruti Estates (India) Pvt. Ltd., Bhubaneswar vs. ACIT, Circle-2(1), Bhubaneswar in ITA.No.321/ CTK/2017, Dated 17.04.2018.
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.
6.1. In the case of Hind Development Corpn. v. ITO [1979] 118 ITR 873, the Calcutta H i gh Court held that a Tribunal can condone the delay if there was sufficient cause for the delay in the submission of the appeal. In the case of Vedabai alias Vijayanatabai Baburao Patil v. Shantaram Baburao Patil [2002] 253 ITR 798 (SC), where it was held that while exercising discretion under section 5 of the Limitation Act, 1963, to condone delay for sufficient cause in not filing the appeal within the period prescribed, Courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. The Court observed that whereas in the former consideration of prejudice to the other side will be a relevant factor and calls for a more 8 ITA.Nos.6553 & 6554/Del./2018 Kinzo Exports P. Ltd., New Delhi. cautious approach. In the latter case no such consideration may arise and such a case deserves a liberal approach. Now in the present case, the delay is not of a few days but of 175 days. Besides, there is absolutely no valid explanation/reason for the delay. In the case of CIT v. Ram Mohan Kabra [2002] 257 ITR 773, the Hon'ble Punjab & Haryana High Court has observed that where the Legislature spells out a period of limitation and provides for power to condone the delay as well, such delay can only be condoned only for sufficient and good reasons supported by cogent and proper evidence. It is a settled principle of law that provisions relating to the specified period of limitation must be applied with their rigor and effective consequences. In this case, delay for filing the appeal late for only a few days was not condoned. In the case of Asstt. CIT vs. Taggas Industries Development Ltd. [2002] 80 ITD 21 (Cal.),Tribunal, Calcutta Bench, Calcutta, did not condone the delay for filing the appeal late by 13 days because the delay was not due to sufficient cause.
9 ITA.Nos.6553 & 6554/Del./2018 Kinzo Exports P. Ltd., New Delhi. 6.2. Thus, relying on the above judgments, I hold that assessee failed to explain that delay in filing the appeals was due to sufficient cause. Considering the above discussion, I am of the view that Ld. CIT(A) correctly dismissed the appeal of assessee by holding them to be time barred. No interference is required in the matter. Appeals of assessee are dismissed.
In the result, appeals of Assessee are dismissed.