MR. MOHAMMED SHAFEEQ UR REHMAN ,HASSAN vs. INCOME TAX OFFICER, WARD 2, HASSAN

There is a delay of about 19 days in filing this appeal by the assessee. It has been explained by the assessee in the affidavit filed before us that the erstwhile CA, Shri Yedunandan, who appeared before the AO filed the appeal before the CIT(A), but did not represent before the CIT(A) when the appeal was fixed for hearing. The erstwhile CA informed the assessee that he would take appropriate steps against the order of CIT(A), but later on informed the assessee that he was not in a position to handle the further proceedings and thereafter the assessee approached the present CA to file the appeal. In the meantime, there occurred a delay of 19 days in preferring the present appeal. I am of the view that the delay in filing the appeal is not wilful or wanton, but due to bonafide circumstances explained above. I therefore condone the delay in filing the appeal by the assessee.

As far as the merits of the appeal of the assessee is concerned, the only issue raised is with regard to an addition of a sum of Rs.21,86,718 made by the AO on account of unexplained sundry creditors which was confirmed by the CITA.

The assessee is an individual. He derives income by trading in poultry feeds and general commodities. In the course of assessment proceedings, the AO called for details of sundry creditors appearing in the balance sheet totalling Rs.2,97,08,736. The assessee furnished details of sundry creditors. The AO on enquiry from sundry creditors noticed variation in the amounts due as stated by sundry creditors and as shown by the assessee in the books of account. The variation was with reference to 19 creditors and details in this regard were as follows:- Sl. Difference No. Name & Address

Globe Cotton Corporation 176894 7 Kavi Agencies 62700 8 Kedarnath Sajjan Kumar 590435 9. Madhav Feeds & Fats Ltd. 449474 10 Mohan Kumar (Maize) 89638 Omkareshwar Solvex Pvt. Ltd. 87256 11. Raj Pharma Pvt. 21876 12. R.B Traders 50000 13. Shiva Parvathi Poultry Farm 50000 14. Shyamkala Agro 27300 15. Siddhi Vet Chem 72831 16. Siddon Biotech 17475 17. Venkys India Ltd. 44468 18.

According to the AO, the assessee could not explain the difference. Therefore, the AO added the aforesaid difference to the total income of assessee as unexplained credits.

Aggrieved by the aforesaid order, the assessee has filed the appeal before the Tribunal.

The ld. counsel for the assessee stated before me that only one opportunity was afforded by the CITA and it has already been explained in the affidavit of assessee filed in support of application for condonation of delay that the erstwhile CA did not attend the proceedings before the CITA. It was pointed out that all the creditors in whose account there was difference, were paid by cheques by the assessee in the subsequent assessment year and therefore the discrepancy between the sums shown as payable in the books of account and in the books of sundry creditors is not correct. Therefore, the addition made should be deleted.

The ld. DR relied on the order of CITA.

I have considered the rival submissions and am of the view that the assessee did not have proper opportunity of being heard before the CITA. There was only one hearing before the CITA and that hearing was not represented by the erstwhile CA of assessee. In these circumstances, I set aside the order of CITA and remand for fresh consideration by the CITA the issue with regard to the addition of Rs.21,86,798, after affording assessee opportunity of being heard.

For statistical purposes, the appeal of assessee is treated as allowed. Pronounced in the open court on this 3rd day of October, 2018.