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PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of ld. Commissioner of Income-tax (Appeals)-1, Thane (the ld. CIT(A) dated 27.02.2015, which in turn arises from the assessment order dated 06.03.2014 passed under section 144 of the Act for Assessment Year 2011-12.
2. Brief facts of the case are that the assessee filed his return of income for Assessment Year 2011-12 on 30.09.2011 declaring taxable income at Rs. 3,53,050/-. The return of income was selected for scrutiny. The assessment was completed on 06.03.2014 under section 144 read with Mum 2018-Satinder Jainarayan Sharma section 143(3) assessing total income at Rs. 2,62,99,650/- The Assessing Officer while passing the assessment order besides the addition of Rs. 1.01 Crore on account of unexplained investment in purchase of property at Bhyander with in jurisdiction of sub-registrar Thane, also made addition of Rs. 1.57 Crore on account of cash credit in the Saving Bank Account of assessee. The Assessing Officer made addition on the basis of AIR information that the assessee has deposited cash of Rs. 1.57 Crore in his Saving Bank Account of Axis Bank, Yamuna Nagar Haryana. Before making addition of Rs. 1.57 Crore, the assessee was asked to explain the source of cash deposit. The assessing officer also issued notice to the banker of the assessee. In response to the banker of assessee i.e. Axis Bank confirmed that the assessee has made cash deposit of Rs. 1.57 Crore. The assessing officer recorded that no compliance to the show cause notice was made by assessee. The Assessing Officer made addition of Rs.1.57 Crore on account of unexplained cash credit.
3. On appeal before the ld. CIT(A), the assessee contended that the assessee has sold his agriculture land of 12 acre in Haryana and received Rs. 1.21 Crore through cheque and cash of Rs. 1.57 crore. The ld CIT(A) asked the assessee to substantiate his contention and to furnish the documentary evidences. The assessee furnished the necessary evidences, the ld CIT(A)refereed those evidences to assessing officer for his remand report. The assessing officer was also directed to be present during the 2 ITA No. 4133 Mum 2018-Satinder Jainarayan Sharma hearing before ld. CIT (A). The ld. CIT (A) after considering the explanation and the evidences deleted the addition of Rs.1.01 Crore holding the amount invested by the assessee in purchase of the property was received on sale of agriculture land. However, the addition of Rs. 1.57 Crore on account of cash credit was confirmed by ld. CIT(A) holding that the Authorised Representative (AR) of assessee has not pressed the ground of appeal on the pretext that the assessee should not be subjected to any penalty. Aggrieved by the order of ld. CIT(A), the assessee has filed the present appeal before us challenging the addition of Rs. 1.57 Crore on account of cash credit. The assessee has raised the following grounds of appeal:
“1.0n facts and circumstances of the case and in law, the learned AO has erred in passing order u/s 144 rendering assessment null and void. 2.0n facts and circumstances of the case and in law, the learned CIT(A) has erred in impression of immunity and the order hurriedly. 3.0n facts and circumstances of the case and in law, the learned AO and CIT (A) has erred in ignoring material at their disposal as well as denying verification of fresh evidence. 4.0n facts and circumstances of the case and in law, the learned AO has erred in treating cash deposit as unexplained cash credit. 5.On facts and circumstances of the case and in law, the learned AO and CIT(A) has erred in not offering opportunity to cross check material/third party on statements that is relied upon.
4. Perusal of record reveals that the first appeal of the assessee was decided by ld CIT(A) on 27.02.2015. However, present appeal was filed only on 05.07.2018. Thus, the appeal is filed after 1100 days of prescribed period Mum 2018-Satinder Jainarayan Sharma of limitation. The applicant / assessee has filed an application for condonation of delay in filing the present appeal. For appreciation of averment made in the application for condonation of delay, we have extracted the contents of application, which are as under:
“1. That I am proprietor of M/s S K Foundry engaged in business of manufacturing of CI Casting Die castings. My PAN is: ANUPS3562L.
That I was assisted and under guidance of one CA Rajesh Sharma. We had attended number of times office of ITA 2(2), Thane in response to scrutiny proceedings. CA Rajesh Sharma would attend the officer. I was under the impression that my property transactions have been properly explained. Unfortunately, order was passed u/s 144 with heavy additions. My income was assessed at Rs. 2.63 crores against returned income of Rs. 3.53 lakhs. Demand was of Rs. 1.08 crores.
That being aggrieved, I expressed inability to pay tax. On advice and guidance of CA Rajesh Sharma, I filed appeal before CIT(A). Again during appeal proceedings, CA Rajesh Sharma would attend the CIT(A). I was again given impression that all additions were unjustified and that same shall be dropped.
That in his appellate order, CIT(A) gave part relief. One of the main ground raised regarding source of cash deposit of Rs. 1.57 crores is stated to not have been pressed. I submit that this is totally incorrect. I deny to have agreed to treat said cash deposit as my income. I did sign few documents prepared by my CA from time to time as I was under his trust. In fact, the source of said cash deposit has been clearly confirmed by none other than DDI Haryana. This further confirms my stand on having received cash from buyers of my agricultural land.
That the recording by CIT(A) of my not having pressed ground as referred above, I submit that same is under some misrepresentation made by my counsel to whom I had never given any such instructions. 4 Mum 2018-Satinder Jainarayan Sharma
6. That I submit that there is no reason whatsoever for me to forego my any ground of appeal during the appellate proceedings before CIT(A) and the same may therefore be taken as pressed.
7. That I have affirmed earlier that I did not receive due cooperation from CA Rajesh Sharma during appellate proceedings nor for filing 2nd appeal before Honorable ITA T. It is submitted that inspite of my repeated instructions and requests, he has failed to file the appeal though he gave me the impression that the appeal before the Honorable IT AT has been submitted by him.
That CA Rajesh Sharma has been arrested for some allegations on professional matters.
9. That I am making this affidavit with a view to support my ground raised
before ITAT, Mumbai and also my application for condonation of delay in filing tax appeal for A Y 2011-12.”
5. In support of condonation of delay, the ld. AR of the assessee submits that assessee has engaged a well qualified Charted Accountant (CA) for representing him before the lower authorities. The said C.A has not properly advised the assessee nor acted in accordance with his instruction. The assessee never agreed for not pressing the issue of addition of Rs. 1.57 Crore on account of cash credit before the ld. CIT(A). The assessee is a small businessman and has relied on the advice of the C.A. The said C.A neither disclosed the outcome of appeal nor advice the assessee to file appeal in time before the Tribunal. The assessee came to know about the dismissal of appeal for the year under consideration, only when the penalty proceedings were initiated by assessing officer. The ld. AR for the assessee also submits that when the 5 Mum 2018-Satinder Jainarayan Sharma assessee tried to approach his CA, the assessee came to know that he has committed serious professional misconduct and he is lodged in Jail. The ld. AR for the assessee prayed that the delay in filing of the appeal may be condoned and the appeal may be decide on merit. In support of his submissions the ld. AR for assessee relied upon the decision of Hon’ble Apex Court in Land Acquisition Collector vs. Mst Katiji & Ors [167 ITR 471 (SC)].
On the other hand, the ld. Departmental Representative (DR) for the revenue opposed the condonation of delay in filing the appeal. The ld. DR further submits that there is an ordinary delay in filing the appeal. The delay is not properly explained by the assessee. Therefore, no ground for condoning the delay is made out on the facts disclosed by assessee.
In the rejoinder submission, the ld. AR of the assessee submits that there was no malafide intention or there is no benefit for the assessee in filing appeal belatedly. The non-filing of appeal in time was due to bonafide mistake and that the assessee was not aware of the passing of the impugned order. The ld. AR of the assessee submits that he has already filed affidavit of assessee. The ld. AR submits that he has good case on merit and is likely to succeed.
8. We have considered the submission of the parties and have gone through the orders of authorities below. We have noted that the first appeal of the assessee was dismissed ld CIT(A) on 27.02.2015. However, the appeal 6 ITA No. 4133 Mum 2018-Satinder Jainarayan Sharma was filed only on 05.07.2018. Thus, there is delay of 1100 days in filing the present. In support of his condonation of delay, the assessee filed his affidavit explaining the fact that he has engaged Rajesh Sharma, C.A. to attend the proceeding before the Assessing Officer as well as to pursue appeal before the ld. CIT(A). It is the contention of ld. AR of the assessee that Shri Rajesh Sharma; C.A neither disclosed the outcome of appeal before ld CIT(A) nor filed appeal before the Tribunal within time. The ld. AR of the assessee also contended that not filing of appeal in time would not benefit the assessee rather the assessee is facing hardship and harassment.
The Hon’ble Supreme Court in B. Madhuri Goud Vs B. Damodar Reddy (2012) 12 SCC 693, by referring various earlier decisions of Superior Courts held that while considering the application for condonation of delay the following principal must be kept in mind;
(i) There should be a liberal, pragmatic, justice oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice. (ii) The terms “sufficient cause” should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact-situation. (iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis. (iv) No presumption can be attached to deliberate cause of delay but, gross negligence on the part of the counsel or litigant is to be taken note of.
ITA No. 4133 Mum 2018-Satinder Jainarayan Sharma (v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact. (vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice. (vii) The concept of liberal approach has to encapsulate the conception of reasonableness and it cannot be allowed a totally unfettered free play. (viii)There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation. (ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach. (x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such litigation. (xi) It is to be borne in mind that no one gets away with fraud, is representation or interpolation by taking recourse to the technicalities of law of limitation. (xii) The entire gamut of facts is to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception. (xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude.
Considering the aforesaid legal position and the submission of ld. AR of the assessee that the assessee that non filing of the appeal by assessee in time has not given any benefit to the assessee and the delay in filing appeal was due to bonafide reasons as explained in the application, which we have narrated above. The application for condonation of delay is supported by affidavit of assessee. Therefore, keeping in view the 8 Mum 2018-Satinder Jainarayan Sharma aforesaid principle that when substantial justice and technicalities are pitted against each other the consideration of substantial justice must prevailed. Hence, keeping in view the aforesaid principles the delay in filing of the appeal of the present appeal is condoned.
We have heard the submissions of the ld. representatives of the parties on merit and also perused the material on record. On merit, the ld. AR of the assessee submits that the Assessing Officer passed the assessment order under section 143(3) rws 144 dated 06.03.2014. During the first appellate stage the assessee furnished details of the amount received by the assessee on sale of agriculture land in Haryana. The assessee received sale consideration of Rs. 1.21 Crore by cheques and Rs. 1.57 Crore in cash. The addition of Rs. 1.01 crore on account of unexplained investment was deleted by the ld CIT(A) the assessee was also granted benefit of section 54. However, with regard to another cash credit the ld CIT(A) forwarded the submissions and the evidence furnished by the assessee to the assessing officer for his remand. The Assessing Officer issued a Commission under section 131(1)(d) of the Act. The report of commission was sent through DDIT(Inv.), Ambala, vide their report dated 18.03.2015. Before, the report of commission could be received the ld CIT(A) passed the impugned order, without waiting of remand. The assessee came to know about the report furnished by DDIT (Inv.), Ambala during the re-assessment proceeding for Assessment Year 2009- 9 Mum 2018-Satinder Jainarayan Sharma
10. The ld. AR further submits that the Assessing Officer, who passed the assessment order for Assessment Year 2009-10 under section 144 r.w.s.
147 made the said report as a part of Assessment Order dated 19.12.2016, copy of which is placed on record.
The ld. AR further submits that the assessee has already filed an application for admitting additional evidence. In the application for additional evidence, the assessee intends to place on record the report of DDIT(Inv.), Ambala dated 18.03.2015. The said report is already available with the Assessing Officer. The contents of said report/ commission have direct bearing qua the impugned addition under challenge in the present appeal. The ld. AR submits that during the relevant period relevant to the assessment period under consideration, the assessee had sold agricultural land (admeasuring 91Canal and 1 Marla equallent to 12 Acre) at his native place at village Nagla Jagir, District- Yamuna Nagar Haryana. This fact was confirmed by the purchaser and is duly reflected in the report of DDIT (Inv.), Ambala. The ld. AR further submits that the purchaser of land was examined by Investigation Wing and their identity is established. The purchasers have also confirmed the consideration paid to the assessee. The purchaser confirmed that the sale proceed was paid by them from the compensation of Rs. 2.12 Crore, received from Haryana Urban Development Authority (HUDA), therefore, the said report clearly establishes the identity and 10 Mum 2018-Satinder Jainarayan Sharma creditworthiness of the parties. Genuineness of transaction was also proved as the credit in the banks account is the sale consideration of the land. The ld. AR for the assessee submits that the additional evidence may be admitted and in view of the facts established from the report of DDIT (investigation) the entire additions be deleted.
The ld. AR for the assessee further submits that the sale consideration of 12 acre of land was agreed @ Rs. 23,25,000/- ( Rupee twenty three lakhs and twenty three thousand) per acre i.e. total sale consideration of Rs. 2,79,00,000/- (two Crore seventy nine lakhs). The purchaser at the time of execution of agreement on 03.08.2010 paid Rs. 50,00,000/- (Fifty lakhs) in cash. On the date of execution of sale deed on 16.08.2010 a sum of Rs. 1,21,00,000/- (one crore twenty one lakh) was paid by way of cheque drawn on PNB Prem Market Yamuna Nagar and remaining of Rs. 108,00,000/- (one crore eight lakh) was paid in cash. To support his contention the ld. AR for the assessee filed the copy of the agreement to sale date 03.08.2010, copy of the affidavit of Sandeep Kumar S/o Sh.
Laxman Singh of Village Dharamkot Tehsil Bilaspur, District Yamuna nagar, and Sh. Randhir Tyagi S/o Desh Raj R/o Village Mimdi, Tehsil Jagadhari, District Yamunanagar, witnesses of the transaction. The ld. AR would submits that these evidences are clearly established the fact that the assessee received cash money from the purchaser of the land. Mum 2018-Satinder Jainarayan Sharma
The ld. AR prayed for deleting the entire addition. The ld. AR also submits that the assessee never consented for making addition during the first appellate stage as recorded by ld CIT (A) in his impugned order. The assessee has already filed his affidavit that he never gave such consent to his representative who was representing him before ld. CIT (A).
On the other hand, the ld. DR for the revenue supported the order of lower authorities. The ld. DR further submits that the assessee has relied on evidence which is filed for the first time before the Tribunal.
Therefore, the in case the additional evidences furnished by the assessee is admitted the grounds of appeal may be restored to the file of Assessing Officer for verification of fact and to decide the issue afresh. On the merit of the case the ld DR for the revenue supported the order of the ld CIT(A). It was argued that the facts now pleaded by the assessee was not examined by the lower authorities therefore needs to be examined by the lower authorities.
16. We have considered the submission of the parties and gone through the orders of authorities below. We have noted that the assessee has filed application for admission of the additional evidences i.e the report of DDIT (Investigation) Ambala, which is the part of the assessment order for assessment year 2009-10. We have further noted that the said report of DDIT (Inv.) was sent to Assessing Officer by the DDIT (Inv.) Ambala, vide their report dated 18.03.2015. We may further note that the remand 12 Mum 2018-Satinder Jainarayan Sharma report was sent in compliance of direction of ld CIT(A). Before, the said report could be received the ld CIT(A) passed the impugned order on 27.02.2015. Though, the ld CIT(A) deleted the addition of Rs.1.01 Crore.
However, the other addition of Rs. 1.57 Crore was upheld holding the assessee failed to prove receipt of cash from the buyer, the buyers were not produced nor their confirmation was filed. The ld CIT(A) also recorded that the assessee did not pressed the grounds, thus, the unexplained cash deposit was confirmed. It is also matter of fact that the Assessing Officer passed the assessment order on 06.03.2014 under section 143(3) rws 144 of the Act.
Considering the relevancy of documents filed that the report of DDIT (investigation) Ambala has direct relevance on the grounds of appeal before us. Therefore, we admit the additional evidence filed by assessee.
The perusal of the report of DDIT (Inv.) dated 18.03.2015, (which is the part of the assessment order for AY 2009-10 dated 19/12/2016) shows that the purchaser namely Praveen Kumar, Raj Kumar and Varinder Kumar entered in agreement with assessee for purchase of a agriculture land admeasuring 91 Kanal 1 Marla (12 acre), consequent on the agreement the sale deed of the land was executed on 16.08.2010, on the day of execution of sale deed the assessee received Rs. 1.21 Crore through cheque. The said report also proves the genuineness of the transaction and the creditworthy of the purchaser. 13 Mum 2018-Satinder Jainarayan Sharma
From the report of DDIT (Investigation) the stand of the assessee appears to be plausible that the credit in his bank account was on account of the sale proceeds of agriculture land sold by assessee. In any case, since this material was not before the Assessing Officer, and it involves a factual appreciation of affairs, the matter is required to be verified by the Assessing Officer.
Therefore, considering the other documentary evidences filed by the assessee which consist of copy of the agreement to sale date 03.08.2010, copy of the affidavit of Sandeep Kumar S/o Sh. Laxman Singh of Village Dharamkot Tehsil Bilaspur, District Yamuna Nagar, and Sh. Randhir Tyagi S/o Desh Raj R/o Village Mimdi, Tehsil Jagadhari, District Yamunaagar, witnesses of the transaction which clearly shows that the purchaser of the land paid total sum of Rs.2.79 Crore to the assessee, we restore this ground of appeal to the file of assessing officer to verify the facts and grant necessary relief to the assessee in accordance with laws. Needless to say before passing the order, the Assessing Officer shall grant sufficient opportunity to the assessee of being heard. The assessee is also directed to provide all necessary information and evidence to the Assessing Officer without any further delay.
19. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 26/07/2019.