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Income Tax Appellate Tribunal, SMC – “C” BENCH : BANGALORE
O R D E R Per Shri A.K. Garodia, Accountant Member; This appeal is filed by the assessee which is directed against the order of ld. CIT(A) – 5, Bangalore dated 27.09.2016 for Assessment Year 2006-07.
The grounds raised
by the assessee are as under. “1. The learned Assessing Officer had erred in passing the order in the manner passed by her and the learned Commissioner of Income tax (Appeals) has erred in confirming the same. The impugned orders are bad in law for want of jurisdiction and for not following the principles of natural justice and are liable to be quashed.
2. In any case, the conditions precedent for the issue of notice u/s. 148 of the Act being absent. the re-opening of assessment becomes bad in law and consequently the order as passed/confirmed being also bad in law is required to be quashed. 3.1 In any case the order passed in gross violation of the principles of natural justice and fair play, especially in the absence of the cross examinations of the person whose averments are sought to be relied upon by the Assessing Officer while passing the order. make the order totally bad in law and liable to be cancelled.
Page 2 of 6 3.2 The learned Commissioner of Income tax (Appeals) has instead of quashing the impugned order on the above grounds, has just confirmed the order of Assessing Officer without properly considering the fact and circumstances of the case, arguments of the appellant and the law applicable. 3.3 In any case and without prejudice, the orders passedby the authorities belowbeing contrary to binding dictum of the jurisdictional High Court are bad in law and are liable to be quashed.
4. In any case. the assessing officer had erred in holding that the appellant had not earned capital gains on sale of shares and also erred in taxing a sum of Rs.15,55.850/- as income from other sources and the learned Commissioner of Income tax (Appeals) has erred in confirming the same. Such a finding/ action of the assessing officer being against the facts of the case is to be ignored and the income from capital gain as returned by the appellant is to be accepted. 5.1 The lower authorities have also erred in observing that therewasactually no purchase/sale of shares; that the appellant had got accommodation entries and that the appellant's own money was introduced as sale consideration. Such findings being totally against the facts, wrong in law and also in a way implicating statutory Government Authorities are to be rejected in entirety. 5.2 The several observations made and various conclusions drawn by the lower authorities in the course of order are without basis and evidence and are made/drawn on surmises, probabilities and conjectures. Such observations and conclusions by quasi-judicial authorities have no support in law and deserve to be rejected in toto.
6. The appellant had actually sold shares through demat account and had earned Capital Gain thereon and same needs to be accepted as such.
The appellant denies the liability to pad Interest u/s 234A, 234B and 234C of the Act. The interest having been levied erroneously is to be deleted in entirety.
In view of the above and on other grounds to be adduced at the time of hearing, it is requested that the impugned order be quashed or atleast income assessed as income from other sources be treated as long term capital gains, income as returned by appellant be accepted and interest levied be deleted.”
This appeal is filed late by assessee after a delay of 331 days. The assessee has submitted an application for condonation of delay in filing the appeal along
Page 3 of 6 with an affidavit of the assessee. In the application for condonation of delay, it is submitted that the impugned order passed by the CIT(A) was served on the assessee on 21.11.2016 and the assessee was required to file the appeal before the Tribunal on or before 20.01.2017. It is further submitted that the assessee was suffering from severe back pain and skin allergies and on medical advice, the assessee had gone to his hometown savarkundla in Saurashtra for complete rest for two months. He further submitted in the said application that in the meanwhile, the appeal memo was drafted and mailed to the assessee. However, in the absence of the assessee, the docket containing appeal memo was not attended to and completely lost sight of. It is also submitted that the assessee was unware of this fact and therefore, even after coming back from native place, the assessee has not done anything with respect to this issue and the assessee was under bonafide belief that the appeal filed before CIT(A) was still pending before CIT(A). It is further submitted that after much lapse of time, the regular auditor of the assessee noticed some outstanding demand with respect to year under appeal in the income tax portal and upon enquiry, the assessee got to know that the appellate order has already been passed and no appeal has been filed against such order. Thereafter the assessee consulted his counsel who advised the assessee to file appeal immediately and after that the assessee has made arrangements to file the appeal before the Tribunal. In the course of hearing before us, the ld. AR of assessee submitted the medical prescriptions as per which the assessee was prescribed several medicines in the month of November, 2016. She also placed reliance on a judgment of Hon’ble Apex Court rendered in the case of K. Subbarayudu and Others Vs. The Special Deputy Collector (Land Acquisition) in Civil Appeal No. 9288 of 2017 dated 19.07.2017 and submitted a copy of this judgment. She pointed out that as per para no. 12 of this judgment, it was held that the term “sufficient cause” is to receive liberal construction so as to advance substantial justice, when no negligence, inaction or want of bona fide is attributable to the appellants, the Court should adopt a justice-oriented approach in condoning the delay. She further submitted that in that case, the delay was of 3671 days and even that much delay was condoned and therefore, in the present case also, the delay of 331 days should be condoned because there is no negligence, inaction or want
Page 4 of 6 of bona fide attributable to the assessee. The ld. DR of revenue strongly opposed the condonation of delay. He submitted that the medical prescriptions filed are of Bangalore only and there is no evidence produced that the assessee has proceeded to his hometown in Gujarat. He submitted that there is no reasonable cause shown by the assessee to explain this delay of 331 days and therefore, the delay should not be condoned.
I have considered the rival submissions. The facts and explanation of the assessee regarding the delay are already noted above. Now I reproduce para 12 of the judgement of Hon’ble Apex Court rendered in the case of K. Subbarayudu and Others Vs. The Special Deputy Collector (Land Acquisition) (supra). The same is as under.
“12. The term “sufficient cause” is to receive liberal construction so as to advance substantial justice, when no negligence, inaction or want of bona fide is attributable to the appellants, the Court should adopt a justice-oriented approach in condoning the delay. In State of Nagaland v. Lipok AO and Others (2005) 3 SCC 752: 2005 (4) JT 10, it was held as under:- “Section 5 is to be construed liberally so as to do substantial justice to the parties. The provision contemplates that the court has to go into the position of the person concerned and to find out if the delay can be said to have been resulted from the cause which he had adduced and whether the cause recorded in the peculiar circumstances of the case is sufficient”.”
From the above para of this judgement of Hon’ble Apex Court, it is seen that for the purpose of condoning the delay in filing the appeal, it is to be seen as to whether the delay is caused by negligence, inaction or want of bona fide attributable to the appellants. In the present case, this is not the allegation of the revenue that the assessee was negligent or inactive or there is lack of bona fide attributable to the assessee and therefore, in the facts of the present case, I respectfully follow this judgement of Hon’ble Apex Court and condone this delay of 331 days and admit the appeal of the assessee.
Regarding merit of the issue involved in the present appeal, it was submitted by ld. AR of assessee that similar issue was decided by the Tribunal in the case of Shri Mukesh Kumar Solanki vs. ITO in dated
Page 5 of 6 17.03.2017. She submitted a copy of this Tribunal order and pointed out that as per para nos. 5 and 6 of this Tribunal order, the Tribunal has followed the judgement of Hon'ble Karnataka High Court rendered in the case of Chandra Devi Kothari in Writ Petition No. 39370/2014 dated 02.02.2015. She also pointed out that in para 5 of this Tribunal order, the Tribunal has reproduced the relevant para 8 of the judgement of Hon'ble Karnataka High Court and restored the matter back to the file of AO for fresh decision with the same direction as were given by Hon'ble Karnataka High Court in para 8 of the judgement. She submitted that in the present case also, the matter may be restored back to the file of AO for fresh decision with similar directions. The ld. DR of revenue supported the order of CIT(A).
7. I have considered the rival submissions and first of all, I reproduce paras 5 and 6 of this Tribunal order rendered in the case of Shri Mukesh Kumar Solanki vs. ITO (supra). The same are as under. “5. I have considered the rival submissions and first of all, I reproduce Para No.8 of the judgment of Hon'ble Karnataka High Court rendered in the case of M/s Chandra Devi Kothari (Supra) and this is as under:- 8. In the light of the facts and circumstances as adverted to above, and as the petitioner has been denied an opportunity of fair hearing by providing copy of the statement and related details regarding the alleged share amount, I am of the view that the matter requires to be re-considered by the respondent by providing fair and reasonable opportunity of hearing to the petitioner and by furnishing the details/copy of the statement based on which the impugned assessment order has been passed." 6. From the above Para from the judgment of Hon'ble Karnataka High Court, it is seen that matter was restored back to the file of the AO for fresh decision after providing copy of the statement of Shri Mukesh Choksi. As per the facts noted by the High Court in the earlier paras of judgment and as per the facts of the present case, I find that the facts are similar and ld DR of the Revenue also could not point out anydifference in facts and hence, by respectfully following this judgment of Karnataka High Court, I set aside the order of ld CIT(A) and restore the matter to the file of the AO for fresh decision with the same directions as were given by the Hon'ble Karnataka High Court in the case as per Para No.8 of the judgment reproduced above. In view of this decision, no adjudication is called for at this stage regarding the merit of the addition.”
8. This is not the case of the revenue that there is difference in facts of the present case and that case and hence, I find no reason to take a contrary view in the present case. Respectfully following this Tribunal order, I set aside the order of CIT(A) in the present case also and restore the matter back to the file of AO for fresh decision with the same directions as were given by the Hon'ble Karnataka High Court in the judgment rendered in the case of Chandra Devi Kothari (supra) as per para 8 of the judgement already reproduced while reproducing para 5 of the Tribunal order. The AO should pass necessary order as per law and as per above discussion after providing adequate opportunity of being heard to assessee. In view of this decision, no adjudication is called for at this stage regarding the merit of the addition.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on the date mentioned on the caption page.