SMT C I INDIRA ,DAVANGERE vs. INCOME TAX OFFICER WARD-1(1), DAVANGERE

Per Shri Jason P Boaz, A.M. : This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Davangere dt.26.03.2018 for the Assessment Year 2015-16.

2.2 Aggrieved by the order of assessment dt.27.12.2017 for Assessment Year 2015-16, the assessee preferred an appeal before the CIT(Appeals), Davangere. The learned CIT(Appeals) disposed off the appeal, vide the impugned order dt.26.3.2018, allowing the assessee partial relief.

ORDER ON PETITION FOR CONDONATION OF DELAY OF 65 DAYS IN FILING APPEAL BEFORE THE TRIBUNAL.

4.1 As per the petition and Affidavit sworn to by the assessee, now filed before the Tribunal, admittedly there has been a delay of 65 days in filing the appeal. I have heard both parties and perused the Affidavit filed by the assessee seeking condonation of delay in filing the appeal and the judicial precedents in this regard. The Hon'ble Apex Court in the case of MST Katiji & Others (167 ITR 471) (SC), while explaining and laying down the principles that need to be kept in mind while considering an application for condonation of delay, has emphasised that substantial justice should prevail over technical considerations. The Hon'ble Court also explained that a litigant does not stand to benefit by lodging the appeal late and that the expression ‘every day’s delay must be explained’ does not mean that a pedantic approach should be taken. The doctrine should be applied in a rational, common sense and pragmatic manner.

4.2 Taking into account the account the aforesaid principles laid down by the Hon'ble Apex Court and after careful consideration of the submissions / reasons put forth by the assessee in the Affidavit, I am of the considered opinion that there was sufficient and reasonable cause for the delay of 65 days in filing this appeal, as even if the said delay is condoned, no loss would be caused to Revenue, as legitimate taxes payable in accordance with law alone will be collected. In the aforesaid factual matrix of the case in hand and judicial precedents on the subject, referred to above, I condone the delay of 65 days in filing this appeal before the Tribunal and admit the appeal for consideration and adjudication. It is accordingly ordered.

5. Ground No.1 – Unexplained Gift.

5.1 In this ground, the assessee contends that the learned CIT(Appeals) had erred in confirming the addition of Rs.8,00,000 credited to the Capital Account, which is a gift from her husband.

5.2 The facts of the matter, as emanate from the record, are that in the course of assessment proceedings, the Assessing Officer noticed that in the period under consideration, the assessee had credited a sum of Rs.8 lakhs in her Capital Account, with the narration “Gift from C.I.

Indudhara (spouse)”. On being required by the Assessing Officer to file details such as copies of gift deed, copy of return of income and financial statements, etc of the donor, the assessee failed to do so. In the absence of details / proof of having received the gift, the said sum amounting to Rs.8 lakhs was held to be an unexplained credit and brought to tax in the assessee's hands. On appeal also, the learned CIT(Appeals) dismissed the assessee's ground observing “Before me also, no evidences on materials are produced in support of their claims.”

5.3.1 In respect of this ground, the learned Authorised Representative for the assessee filed an application of Rule 29 of the Appellate Tribunal Rules, 1963 (in short ‘the Rules’) seeking to admit additional evidence in the form of gift deed dt.19.2.2014 and acknowledgements of Income Tax Returns filed by Sri C.C. Indudhara, husband of the assessee, who the assessee claims in the donor of the gift of Rs.8 lakhs to her. As per the accompanying Affidavit dt.1.10.2018, the assessee submits as under at paras 3 to 5 thereof :-

5.3.2 I have heard both parties and perused and carefully considered the material on record. Taking into account the facts and circumstances of the case on this issue, where the addition of Rs.8 lakhs has been made and sustained for want of filing of required details / supporting documents to prove the gift by the assessee, in my considered view, the interest of substantial justice would be served by admitting the additional evidence in the form of documents, i.e. copies of gift deed dt.19.2.2014 and IT Returns for Assessment Year 2014-15 & 2015-16; placed at pages 4 to 7 of the assessee's paper book dt.1.10.2018, since they are necessary and relevant and could go to the root of the matter for proper adjudication of this issue. In these circumstances, I admit the additional evidence as laid out above.

5.3.3 Having admitted the additional evidences filed by the assessee under Rule 29 of the Rules (supra), I set aside the orders of the authorities below and restore to the file of the Assessing Officer; the matter of the examination of the veracity of the assessee's claim that the credit of Rs.8 lakhs in her Capital Account is really a gift received from her husband. Needless to add, the assessee shall be afforded adequate opportunity of being heard in the matter and to file details / submissions required, which shall be duly considered before deciding the issue by way of a speaking and reasoned order. Consequently, Ground No.1 of the assessee's appeal is allowed for statistical purposes.

6.1 in this ground, the assessee assails the orders of the authorities below in making / confirming disallowance of Rs.1 lac on account of payment of Advance Tax.

6.2 I have heard both parties and perused and carefully considered the material on record. I find from a perusal of the orders of the Rs.1 lac was made by the Assessing Officer on account of Income Tax paid by the assessee as he was of the view that no such payment of Advance Tax has been made as claimed in the assessee's Capital Account. The learned Authorised Representative drew the attention of the Bench to pages 1 to 3 of Paper Book, containing a copy of the assessee’s I T Return for Assessment Year 2015-16 and the statement of computation of income to show that only Self Assessment Tax of Rs.1 lakh was paid and therefore the addition / disallowance was unwarranted. In my view, on an appreciation of the facts on record, I find that NIL Advance Tax was paid by the assessee in the year under consideration, as is reflected in the assessee's Income Tax Return for Assessment Year 2015-16 (copy placed at page 1 of Paper Book). Therefore, I find merit in the Assessing Officer’s view that no Advance Tax of Rs.1 lac was paid by the assessee in the year under consideration as shown in her Capital Account for the year ending 31.3.2015. Further, I also find that the assessee has actually paid only Self Assessment Tax of Rs.1 lac vide Axis Bank Cheque on 1.5.2015 which would be reflected in the assessee's Capital Account for the next financial year. In the factual circumstances of the case, as I find no merit in this ground raised by the assessee and accordingly dismiss the same.

In these grounds, the assessee denies itself liable to be charged interest under Section 234A, 234B & 234D of the Act. The charging of interest is consequential and mandatory and the Assessing Officer has no discretion in the matter. This proposition has been upheld by the Hon'ble Apex Court in the case of Anjum H Ghaswala (252 ITR 1) (SC) and we therefore uphold the action of the Assessing Officer in charging the said interest in the case on hand. The Assessing Officer is, however, directed to recompute the interest chargeable under Section 234A, 234B & 234D of the Act, if any, while giving effect to this order.