VIPUL ARJANBHAI PARMAR,MANGROL vs. INCOME TAX OFFICER, WARD -1, JUNAGADH

On the other hand, Ld. DR for the Revenue opposed the prayer of the assessee for condonation of delay and stated that such huge delay should not be condoned, as the assessee has completely failed to explain the sufficient cause. The Vipul Arjanbhai Parmar vs. ITO mistake of the advocate should not be considered as a sufficient cause to condone the delay.

I have heard both the parties on this preliminary issue and I note that because of the mistake of Tax Consultant of the assessee, assessee should not be penalized.On professional advice, the Courts and Tribunals have consistently held that in the matter of condonation of delay, a pragmatic and liberal approach should be taken. The Hon'ble Gujarat High Court has also considered this aspect of condonation of delay in case of Gujarat State Fertilizers & Chemicals Ltd. (283 ITR 149) and held as follows:

Reliance is also placed on the decision of I.T.A.T., 'C' Bench, Kolkata in the case of M/s. Garg Bros. Pvt. Ltd. & Others vs. DCIT [ITA Nos.2519 to 2521/Kol/2017, order dated 18.04.2018], wherein under similar set of facts and reasons, the Hon'ble Tribunal was pleased to condone the delay of 211 days by holding as under: "3. We have heard both the parties on this preliminary issue. Having regard to the reasons given in the application for condonation of delay, we are of the considered opinion that assessee was under a bona fide belief that the impugned order of Pr. CIT was not appealable before this Tribunal since they were not advised by their Tax Consultants about this legal right. Later on, when a Senior Lawyer advised them to file an appeal, the assessees immediately took steps to file the appeals. Therefore, the delay caused. We note that delay was occurred because of the wrong advice of the Tax Professional for which assessees cannot be penalized. For the ends of justice, we condone the delay and admit the appeal for hearing.” Vipul Arjanbhai Parmar vs. ITO

I note that the reasons given in the affidavit for condonation of delay were convincing and these reasons would constitute reasonable and sufficient cause for the delay in filing this appeal. Having heard both the parties and after having gone through the affidavit as well as the delay condonation, application, I am of the considered opinion that in the interest of justice, the delay deserves to be condoned. I, accordingly, condone the delay.

The grounds of appeal raised by the assessee, on merit, are as follows:

Brief facts quat the issue are that the assessee did not file his return of income for the assessment year (A.Y.) 2010-11. The department came to notice that during the relevant previous year, the assessee has given Rs. 15,00,000/- to Shri Ajitbhai/Shri Yogeshbhai for investment in shop/land in cash. As the assessee did not file his return of income, the source of cash of Rs. 15,00,000/- given to Shri Ajitbhai/Shri Yogeshbhai for investment in shop/land remain unexplained. In view of above facts, the case was reopened u/s 147 of the I.T. Act after recording the reasons regarding income escaping assessment within the meaning of Section 147 of the I.T. Act, 1961 and obtaining the approval of the Pr. Commissioner of Income tax-3, Rajkot for reopening of assessment u/s. 147 of the I.T. Act, 1961. The Notice u/s 148 of the Act dated 27.03.2017 was issued and duly served upon the assessee. In response to the notice, the assessee has submitted return of income declaring total income of Rs.Nil and agriculture income of Rs.4,30,700/- on 01.08.2017. Notice Vipul Arjanbhai Parmar vs. ITO was 143(2) & 142(1) of the Act dated 07.08.2017 were issued and duly served upon the assessee. The reasons for re-opening of the assessment were also provided to the assessee alongwith above referred notices.

In response to these notices, the assessee attended from time to time and filed written submissions. The assessee is agriculturist and derived income from agricultural activities. During the relevant previous year, the assessee has given Rs. 15,00,000/- to Shri Ajitbhai/Shri Yogeshbhai for investment in shop/land in cash. To explain the source of above cash of Rs.15,00,000/-, the assessee, vide, his reply dated nil received by the assessing officer on 22.11.2017, has stated that he is an agriculturist and having only agriculture income and did not maintain any books of account. The assessee has given the chart regarding agriculture income along with copy of sale bills of agriculture produce sold during the F.Ys.2008-09 & 2009-10, copy of vouchers of agriculture expenses for F.Y.2009-10, figure of drawing for house hold withdrawal and net income for the last three years are as under:

In reply, the assessee has filed written submission dated 22.12.2017. The relevant parts of said reply is reproduced as under:

Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld. CIT(A) who has confirmed the action of the assessing officer. Therefore, the assessee is in appeal before this Tribunal.

I have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. Shri Vimal Desai, Learned Counsel for the assessee, vehemently argued that assessee has shown pure agricultural income, and assessee does not have any source of income, other than the agricultural income. However, the assessing officer treated the agricultural income, as non-genuine to the extent of Rs.5,00,000/- out of Rs.15 Lakhs. The assessing officer ought to have treated the agricultural income at Rs.15 Lakhs, and no disallowance should have been made, based on the same facts and circumstances. The assessee, has submitted the required documents and evidences to prove the agricultural income before the lower authorities, however, despite of this, addition was made by the assessing officer. Therefore, the addition so made by the assessing officer may be deleted.On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity.

I have considered submissions of both the parties and noted that the ‘tail’ cannot wag the ‘dog’, meaning thereby, when the substantial proposed addition of Rs.10,00,000/- have been accepted by the assessing officer, out of total addition of Rs.15,00,000/- (which was to be made by the assessing officer, as per his show notice), then in that circumstances, small addition of Rs.5,00,000/-should not have been made by the assessing officer, particularly, when the assessee does not have any source of income except agricultural income, and as the assessing officer decided not to make addition of Rs. 10,00,000/-, in the hands of assessee, based on the assessee`s agricultural income. I note that the assessee, under consideration is an agriculturist, and it is not possible for him to run the full accounts department on his agricultural land and monitor his activities in an organized manner. The assessee has provided land holding and other details. It is to be appreciated that the assessee has explained the source and proved genuineness of the transaction and source of money, therefore, I am of the view that no addition deserves to be made in his hand.

As I have already noted that assessee is an agriculturist and exclusively engaged in agricultural activities and did not have any other source of income. The assessing officer also admitted that the source of income of the assessee is only agricultural income. This is evident from para 3 of the assessment order wherein the assessing officer observed as under:

Based on the above factual position, I am not inclined to accept the contention of the Assessing Officer in any manner and hence the addition so made is deleted. Hence, this appeal of the assessee is allowed.

In the result, appeal filed by the assessee is allowed.