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Income Tax Appellate Tribunal, DELHI BENCHES : E : NEW DELHI
Before: SHRI H.S. SIDHU & SHRI PRASHANT MAHARISHI
ORDER PER H.S. SIDHU, JM This appeal filed by the assessee is directed against the order passed by the Ld. CIT(A)-6, Delhi on 09.10.2017 in relation to the assessment year 2003-04 on the following grounds:-
1. The AO has erred in law and facts by passing the order u/s. 144 read with section 147 of the Income Tax Act, 1961 which is bad in law and against the facts and circumstances of the case. The order therefore deserves to be quashed.
2. The AO has erred in law and facts by issuing notice u/s. 148
of the Income Tax Act, 1961 as reasons recorded and satisfaction accorded is not within the meaning of section 151 of the Income Tax Act, 1961. The order therefore is liable to be quashed.
3. The AO has erred in law and facts by making addition of Rs.
93,45,714/- made by the AO by erroneously invoking provisions of section 68 of the Income Tax Act, 1961.
4. That the appellant craves leave to add, alter, amend, forgo
any of the grounds of appeal at the time of hearing.
2. The facts in brief are that the in this case information has been received from the Director of Income Tax (Investigation), New Delhi that the assessee has received an amount of Rs. 1,53,11,000/- from various parties.
On perusal of the bank statement, there is a cash deposit in the bank on the preceding day of the day of entry given. Hence, it was presumed that the assessee has given cash to the parties and has taken the cheques after paying commission at prevailing rates i.e. from 1 to 2% of amount involved.
Hence, the assessee has given a commission of Rs. 1,38,114/- @ 1.5% of amount involved. hence the assessee has given a commission of Rs. 1,38,114/- @ 1.5% of the amount involved in the entries taken from the parties. Therefore, an amount of Rs. 93,45,714/- )Rs. 92,07,600 + Rs. 1,38,114) was considered to be the undisclosed income of the assessee which was added back to the income of the assessee u/s. 68 of the Act and AO completed the assessment at Rs. 94,45,720/- vided his order dated 27.12.2010 passed u/s. 147/144 of the Income Tax Act, 1961.
Aggrieved with the aforesaid assessment order dated 27.12.2010, assessee appealed before the Ld. CIT(A) who vide his impugned order dated 9.10.2017 has affirmed the action of the AO and dismissed the appeal of the assessee.
At the time of hearing, Ld. A.R. for the assessee stated that there is a delay in filing the present appeal of 283 days for which the Assessee has filed the Application for condonation of delay alongwith its affidavit. In the said application, the assessee has submitted that the delay was occurred due to the serious injury that the Director of the assessee suffered in his leg. The Director was operated and was advised 14 weeks completed bed rest followed by rehabilitation, which last till days. It was further stated in the application that assessee is a 71 years old who got operated and his rehabilitation and recovery took longer and soon after somehow recovery of the assessee, the assessee has filed the present appeal before the Tribunal.
Alongwith this application, the assessee has also attached the Medical /Sickness Certificate. In support of his contention, he relied upon the decision of the Hon’ble Supreme Court of India in the case of N.
Balakrishnan vs. M. Krishnamurthy, AIR 1998 SC 3222; Shakuntala Devi Jain vs. Kuntal Kumari AIR 1969 SC 575; State of West Bengal vs. the 3 Administrator, Howrah Muni Capacity, AIR 1972 SC 749 and the ITAT Mumbai Bench decision in the case of Phoenix Mills Ltd. decided in in which delay of 1357 days has been condoned. In view of the above, he requested to condone the delay of 283 days.
On the other hand, Ld. DR stated that in this case Ld. CIT(A) passed his order on 9.10.2017 and communicated to the assessee on 30.10.2017.
The assessee filed appeal on 8.10.2018 after a delay of 283 days. The explanation submitted by the assessee in this regard is not satisfactory in view of following submissions:- i) Order of CIT(A) was received on 30.10.2007 and hence the time limit for filing appeal to the ITAT, as per section 253(3) was till 31.12.2017. The assessee did not file appeal during this period and there is no explanation for this delay. ii) The assessee has furnished a medical certificate for explaining this delay. This certificate shows that the assessee was operated on 18.1.2018 i.e. well after the time for filing appeal had expired. iii) Further, as per the same certificate, the assessee was discharged on 21.1.2018 and advised bed rest of 14 weeks, which would have expired on 15.5.2018. Even then the assessee did not file appeal till 8.10.2018.
Therefore, even the medical certificate submitted by the assesse does not explain the inordinate delay in filing the appeal. In this regard, he relied upon the following case laws:- a) M/s Kolte Patil Developers Ltd. vs. DCIT (2016
TIOL 3158 HC-Mum-IT) wherein Hon’ble Bombay
High Court held that when there is no explanation given for delay in filing of appeal, such delay in filing cannot be condoned. b) M/s Kolte Patil Developers Ltd. vs. DCIT (2017
TIOL 185-SC-IT). On appeal, the Supreme Court condoned the delay and dismissed the petition by upholding the decision of High Court on the issue of condonation of delay.
Sh. Subodh Prakash vs. JCIT (2017-TIOL-2249-
HC)P&H-IT) Hon’ble Bombay High Court held that when the explanation submitted by the assessee does not satisfy the test of ‘sufficient cause’ as required u/s. 5 of the Limitation Act, 1963, the delay cannot be condoned.
Accordingly, she requested to dismiss the appeal on this ground.
We have heard both the parties and perused the records. After perusing the medical records as well as the application for condonation and its affidavit and the case laws cited by both the parties, we are of the considered view that in the interest of justice as well as on the prima facie of the merits of the case, there is a plausible reason with evidence for condoning the delay of 283 days, hence, we condone the delay in dispute and admit the appeal for adjudication and proceeded to decide the ground no. 1 and 2, argued by the Ld. AR for the assessee. The case laws cited by the Ld. AR are applicable being on identical facts and circumstances.
However, the case laws cited by the Ld. DR are distinguished on facts of the present case.
Ld. A.R for the assessee at the time of hearing has filed the Paper Book containing pages 1 to 55, especially the page no. 12 in which Addl.
CIT (Range-6), New Delhi has granted the approval in a mechanical manner, for issuing of notice u/s. 148 of the Income Tax Act, 1961, hence, reasons recorded and satisfaction accorded is not within the meaning of section 151 of the I.T. Act, 1961 and therefore, the reassessment needs to be quashed. In view of above, he requested to quash the reassessment. To support his contention, Ld. Counsel of the assessee has filed the copy of the decision dated 11.1.2017 of the Hon’ble Delhi High Court in the case of Pr.
CIT-06 vs. M/s NC Cables Ltd. by which the issues raised by the assessee in the present appeal are squarely covered.
On the contrary, Ld. DR relied upon the orders of the authorities below and stated that record were sent for approval to the Addl. CIT on 16.3.2010 and approval was given on 19.3.2010, which was shows that the Range head had ample time to look into the records and he has applied his mind for satisfaction before giving approval. Hence, the reasons recorded and satisfaction accorded is within the meaning of section 151 of the Act and need not to be quashed.
We have heard both the parties and carefully considered the case laws and the relevant documents available on record especially the assessment order, impugned order, reasons recorded and the as well as the Paper Book filed by the Assessee containing pages 1 to 55 in which he has attached the copy of written submissions; copy of reasons and satisfaction recorded; judgment of the Hon’ble Delhi High Court in the case of NC Cables Ltd. vs. ITO; in the case of Sarthak Securities Co. Pvt. Ltd. vs. ITO; CIT vs. Gangeshwari Metals (P) Ltd.; CIT vs. Divine Leasing and Finance Ltd. and CIT vs. Lovely Exports Private Limited 216 CTR 195 (SC) and the ITAT decision dated 25.2.2015 in the case of ITO vs. Direct Sales Pvt. Ltd. (AY 2002-03) and CO No. 138/Del/2010 (AY 2002-03) in the case of Direct Sales Pvt. Ltd. vs. ITO. We note that in this case, Reasons for the belief that income has escaped assessment are that information has 7 been received from the Director of Income Tax, (Investigation), New Delhi that the assessee has received an amount of Rs. 1,53,11,000/- from various parties as follows:-
PATE BANK BENHICIARY VALUE BANK NAM1-: BHNI'JCIARY ON FROM OF BENIFIOARY'S BRANCH OF A/C NO. ENTRY BANK WHICH WHICH NAME ENTRY ENTRY GIVING GIVING BRANCH INSTRUMENT NO. NAME OE ACCOUNT BANK ACCOUNJ ENTRY ENTRY 1AKEN BY WHICH ENTRY HOLDER OF ENTRY TAKEN TAKEN GIVING ACCOUNT GIVEN HDD V 21-Jan-03 XDINANATH K Ci MARC 7(XXX)0 SBP DG 50103 MARKS OONSOKHM LUHARIWAI. SPT. B (I) BUSINESS LIB MILL HDEC MARKS / DINANATH K G MARC 700000 21-Jan-03 SBP DG 50103 CONSOLIDATED LUHARIWAL SP1. BUSINESS L I D MILL HDEC BANK ; SWL1U S TONE PV MARKS K G MARG 7Q000G 21-Jan-03 SBP DG 50106 CONSOLIDATED BUSINESS L I D HDEC BANK SWE1U S i ONE PV MARKS K G MARG 700000| 21-Jan-03 SBP DG 50106 CONSOLIDATED BUSINESS LTD HDEC MARKS yC'HIN 1PURNI K<J MARG 70CXX)0 27-Jan-03 CREDITS SBP DG 50058 CONSOLIDATED BUSINESS LTD HDFC CHIN I PURNI MARKS CREDITS K G MARG 700000 2 7-Jan-03 SBP DG 50058 CONSOLIDATED BUSINESS LTD HDFC PARTICULAR MARKS MANAGE K G MARG 70IXXX) 27-Jan-03 ' SBP DG 50050 CONSOLIDATED BUSINESS LTD TIN I .EASE P. I. ID. HDI-C PARTICULAR MARKS MANAGE K G MARG 7(XXXX) 27-Jan-03 SBP DG 50050 CONSOLIDATED BUSINESS L I D 1-INI.EASE P. LTD. HDFC II-Feb- MARKS CONSOL1D i/ NISH ANT T IN VES T 03 A1 ED BUSINESS LED P. L I D. K G MARG <>00000 SBP DG 50080' HDFC MARKS 11 -Feb NISH ANT TIN VES T P. L TD. K G MARG lXXXXX) SBP DG 50080 03 CONSOLIDATED BUSINESS 1 ID ^SHRIT. MARKS N DELHI 701050 I3-Jan-03 SBP DG CONSOLIDATED ' GUP l iSHWAR MKI. BUSINESS LTD P.I/TI). 50099 I SHREE 50099 MARKS N DELHI 701050 r 3-Jan-03 SBP DG CONSOLIDATED GUP I ISHWAR MK T. BUSINESS L I D P. L I D. MARKS NISH ANT TIN VIST P. LTD. PO-ISS 701050 13-Jan 03 SBP DG 50080 CONSOLIDATED BUSINESS L ID , MARKS NISH ANT I IN VIST P. LID. PO-LSS 701050 I3-Jan-03 SBP 1X1 50080 CONSOLIDATED BUSINESS LID HDI-C BANK SAURABH JAJLAXMI MARKS CONSOLII WEED BUSNIESS LTI) PEI KOCHEM(P) COOP 40(XXX) 5-Ocr-02 Fatehpuri 3381 EAST PATEL LTD BANK NAGAR 2/10 " 258430| HDEC BANK JAJLAXMI MARKS EAST PATEL SAURABH PL ”t?NAGAR 2/10 TROCHLM(P) TED COOP 400000 5-Oct-02 - Fatehpuri 258430 ) CONSOLIDATED BUSNIESS LTD BANK 3381 HDFC BANK JAITAXM1 EAST PATEL ACOOT INDIA i PVT. MARES NAGAR 2/10 LTD 3(XXXX) 5I647<> 5-Ocr-02 Fatehpuri 3365 COOP CONSOLIDATED BUSNIESS LTD BANK DD SBI \ SHAKUN TLA , DEVI JAII.AXM1 MARES NEW DELHI 400680 164384 3-Oct-02 I Fatehpuri) 5807 COOP CONSOLIDATED BUSNIESS I. ID BANK DDSBI vSHAKUNTI .A JAJLAXMI MARES DT;VI COOP NEW DELHI -KXI680 164384 • 3-Oct-O 2 Fatehpuri 5807 CONSOLIDA.1 ID BUSNIESS L ID BANK DDSBI SHAKUN TLA DLVJ JAJLAXMI MARES CONSOLIDA LED BUSNIESS LTD COOP NEW-DELHI 40068X) 164384 3-0 ci -02 Fatehpuri 5807 BANK DDSBI SHAKUN 11.A DEVI JA1LAXMI MARES COOP NEW DELHI 400680 164384 3-Oct-02 Fatehpuri 5807 CONSOLIDATED BUSNIESS L I D BANK
DD SB] SHAKUNI LA DEVI JAJLAXMI MARES COOP NEW DELHI 400680 164384 3-Oct-02 I Fatehpuri 5807 CONSOLIDATE, BUSNIESS l/ID BANK DD SB] SHAKUNI LA DEVI JAJLAXMI MARES COOP NEW DELHI 400680 164384 3-Oct-02 I Fatehpuri 5807 CONSOLIDATE, BUSNIESS l/ID BANK DD SB] SHAKUNI LA DEVI JAJLAXMI MARES COOP NEW DELHI 400680 164384 3-Oct-02 I- Fatehpuri 5807 CONSOLIDATE, BUSNIESS l/ID BANK DD SB] SHAKUNI LA DEVI JAJLAXMI MARES COOP NEW DELHI 400680 164384 3-Oct-02 I Fatehpuri 5807 CONSOLIDATE, BUSNIESS l/ID BANK DD SB] SHAKUNI LA DEVI JAJLAXMI MARES COOP NEW DELHI 400680 164384 3-Oct-02 Fatehpuri 5807 CONSOLIDATE, BUSNIESS l/ID BANK DD SB] SHAKUNI LA DEVI JAJLAXMI MARES COOP NEW DELHI 400680 164384 3-Oct-02 Fatehpuri 5807 CONSOLIDATE, BUSNIESS l/ID BANK The abovesaid instruments are in the nature of accommodation entry, which the assessee has taken after paying unaccounted cash to the accommodation entry giver, who is a known entry operator as per the report of the Investigation Wing. In view of these facts, the alleged transaction is not the bonafide one. Therefore, I have reason to believe that an Income of Rs. 1,53,11,000/- has escaped assessment in the assessment year 2003-04 due to the failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment so far as this amount is concerned. Therefore, this case is fit for issuing notice u/s 148 of the Income Tax Act, 1961. In this case the assessment was made U/s 143(1), not U/s 143(3) of the I.T. Act, 1961. I am therefore, satisfied that the said income, on account of accommodation entry worth Rs. 1,53,11,000/- received by the assessee has escaped assessment and accordingly after recording the above said reasons as laid down under the provisions of Section 148(2) of the Income Tax Act, 1961 notice u/s 148 is being issued. Sd/- (H.C. BANTWAL) INCOME TAX OFFICER, WARD-6(2), NEW DELHI Approved.