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PER PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeal by assessee are directed against the separate orders of Commissioner (Appeals)-14, Mumbai dated 27th September 2016 for
assessment year 2012-13, which in turn arises from the assessment order passed by assessing officer under section under section 143(3) dated 31st March 2015 and order of penalty levied under section 271(1)(c) dated 18th
September 2015. In ITA No.7000/M/2016, the appeal in quantum
assessment the assessee has raised following grounds of appeal;
Ground I:
ITA No. 7000 & 7001/M/2016- M/s Spykar Lifestyles Pvt. Ltd.
On the facts and circumstances of the case and in law, the CIT(A) erred in rejecting the Appellant's application for condonation of delay in filing the appeal to the CIT(A) without giving proper reason 1 justification.
The CIT(A) rejected the condonation merely by stating that submission made by the Appellant is not convincing and devoid of any evidence.
The CIT(A) ought to have explained as to how the submission of the Appellant is not convincing/what evidence the Appellant ought to have given.
The Appellant prays that the rejection of condonation by CIT(A) be quashed.
Without prejudice to Ground I Ground II: 1. On the facts and circumstances of the case and in law, the Assistant Commissioner of Income Tax 8(2)(2) ("the Act)") erred in making addition of Rs. 16,95,000/- being cash deposited in bank account by the Appellant on the alleged ground that the cash deposits made were non-bonafide and unexplained.
The AO failed to appreciate and ought to have held that the cash was deposited by the Appellant in its normal course of business and was duly explained in the assessment proceedings
The Appellant prays that the said addition on account of the alleged unexplained cash credit be deleted.
Without prejudice to Ground I Ground III: 1. On the facts and circumstances of the case and in law, the AO erred in disallowing an amount of Rs. 4,39,00,000/- on acco.unt of the provision of Rate Difference on the alleged ground that the entire provision is estimated and therefore distorts the income under consideration and thus correct income is not reported.
The AO ought to have held that provision for rate difference was made with proper basis and was in compliance with the accounting principles and thus it is allowable as an expense u/s. 37(1) of the Act.
The Appellant prays that the said disallowance of provision on account of Rate Difference be deleted.
Without prejudice to Ground I Ground IV: 1. On the facts and in the circumstances of the case and in law, the AO erred in not complying with the provisions of sub-section (2) to section 50C.
ITA No. 7000 & 7001/M/2016- M/s Spykar Lifestyles Pvt. Ltd.
The AO ought to have referred the valuation of the property to a Valuation Officer’ as the Appellant had submitted that it was a distress sale and therefore fair value was less than the stamp duty value. 3. The Appellant prays that as the AO has failed to follow the mandate of the Act, the addition made under section 50C of the Act be held as bad in law. 4. Without prejudice to the above, the Appellant prays that the AO may be directed to follow the procedure of section 50C(2) by referring the valuation of the property to a valuation officer. Ground V: The Appellant craves leave to add, to alter and to amend above grounds of appeal at the time of hearing. 2. In ITA No. 7001/M/2016, the appeal against the confirmation of penalty
levied under section 271(1)(c) the assessee has raised following grounds of
appeal.
Ground I: 1. On the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals)-14, Mumbai ("the CIT") erred in upholding the validity of the penalty order passed by the Dy. Commissioner of Income Tax-8(2)(2) ("the AO"). 2. He failed to appreciate and inter-alia ought to have held that: a. The AO has passed penalty order by inter-alia discussing the facts not pertaining to the Appellant's case and therefore the penalty order was passed without proper application of mind and completely in haste and without any basis. b. No clear satisfaction for levy of penalty has been recorded by the AO in the assessment order. c. No clear charge has been alleged by the AO on the penalty notice rendering the notice to be invalid. d. The AO has failed to give any findings on merits for levy of penalty in the penalty order 3. The Appellant prays that the penalty order be held as void-ab-initio and be quashed accordingly. Without Prejudice to Ground I Ground 11: 1. On the facts and circumstances of the case and in law, the CIT erred in confirming the action of the AO in levying penalty in respect of disallowance on account of the provision of Rate Difference amounting to Rs. 4,39,00,000/-. 3
ITA No. 7000 & 7001/M/2016- M/s Spykar Lifestyles Pvt. Ltd.
He failed to appreciate and ought to have held that the Appellant has explained the necessity and basis of making the provision and complete and true disclosures were made by the Appellant in its return of income and computation of income. 3. Brief facts of the appeals are that assessee is a Private Limited Company
engaged in the business of Manufacturing and selling of branded Ready- made garments, apparels and accessories through network of multi-branded outlet, exclusive brand outlets consisting of large retail chains, filed its return of income for relevant assessment year on 28th September 2012 declaring nil income. The assessment was completed under section 143(3) on 31st March 2015. The assessing officer while passing assessment order besides other additions, made additions on account of cash deposit of Rs.
16,95,000/-, disallowed Rs. 4,39,00,000/-on account of disallowance. As no appeal against various additions in the assessment order was filed by assessee within prescribed period of limitation. The Assessing Officer after
service of notice under section 274rws 271(1)(c), levied the penalty on the disallowance made in the assessment order. The Assessing Officer levied the penalty under section 271(1) (c) , @ 100% of tax sought to be evaded
vide order dated 18 September 2015. The Assessing Officer worked out the penalty of Rs.2,14,88,357/-. On appeal before Commissioner (Appeals) the order penalty was confirmed. 4. In quantum assessment the assessee filed appeal before Commissioner (Appeals) on 21st October 2015. The appeal was filed belatedly. Along with
ITA No. 7000 & 7001/M/2016- M/s Spykar Lifestyles Pvt. Ltd.
the appeal the assessee filed an application for condonation of delay of 166
days in filing of appeal. The Commissioner (Appeals) dismissed the
application for condonation of delay; consequent upon the appeal was not
admitted. With this background the assessee has preferred both the appeals
before the Tribunal. 5. We have heard learned AR of the assessee and ld. DR for the revenue and
perused the material available on record. The ld. AR of the assessee argued
that before the learned Commissioner (Appeals) the assessee filed an
application for condonation of delay. The delay was properly explained by
the assessee. The learned Commissioner (Appeals) dismissed the
application by passing non-speaking order. It was submitted that the delay
in filing appeal in quantum assessment was due to inappropriate advice
given by their representative who were looking after the income tax
assessment proceedings. The assessee was advised that assessee is not
supposed to file appeal because the Nil demand was raised in notice under
section 156 issued by Assessing Officer. Further delay was occurred due to
changes of Management and its structure and due to non availability of
Chief Financing Officer who could take the decision on high-level matters.
It was submitted that the non filing of appeal within the statutory period of
limitation was not intentional and deliberate but due to ill-advised of
consultant of assessee. The assessee has good case on merit and likely to
succeed if the appeal of the assessee is decided on merit. In support of his 5
ITA No. 7000 & 7001/M/2016- M/s Spykar Lifestyles Pvt. Ltd.
submission the ld AR of the assessee relied upon the decision of Hon’ble
Bombay High Court in case of Vijay Vishin Meghani Versus DCIT [2017]
86 taxman.com 98 (Bombay). On the contrary the ld. DR for the revenue
supported the order of Commissioner (Appeals). It was submitted that the
assessee failed to explain the delay in filing appeal beyond the prescribed
period of limitation. The explanation furnished before the Commissioner
(Appeals) was not plausible and adequate. The learned Commissioner
(Appeals) considered the submissions of the assessee, and after considering
the contents of application for condonation of delay, dismissed the same.
The assessee is a corporate entity and may have been advised by seasoned
consultants. The assessee cannot take a lame excuse or shift the burden by
making vague allegations against the consultant. 6. We have considered the rival submission of the parties and perused the
material available on record carefully. We have noticed that assessment
order under section 143(3) was passed on 31 March 2015. The notice of
demand under section 156 was received by assessee on 9 April 2015. The
assessee was required to file appeal on or before 8 May 2015. The appeal
before the ld. Commissioner (Appeals) was filed on 21 October 2015, thus
appeal was filed 166 days beyond the prescribed period of limitation. Along
with appeal the assessee filed an application for condonation of delay, copy
of which is placed before the Tribunal (page No.226 of PB). In the
application for condonation of delay the assessee has contended the same 6
ITA No. 7000 & 7001/M/2016- M/s Spykar Lifestyles Pvt. Ltd.
fact as submitted by ld AR for the assessee before us. However, the perusal
of order passed by ld. Commissioner (Appeals) shows that the order is non-
speaking order. The learned Commissioner (Appeals) passed single line order that submission made by appellant is not convincing in nature and devoid of any evidence. 7. The Hon’ble Supreme Court in Concord of India Insurance Co. Ltd. v. Smt.
Nirmala Devi AIR 1979 SC 1666, has held that a legal advice tendered by a
professional and the litigant acting upon it one way or the other could be a
sufficient cause to seek condonation of delay and coupled with the other
circumstances and factors for applying liberal principles and then said delay
can be condoned. Eventually, an overall view in the larger interest of justice
has to be taken. None should be deprived of adjudication on merits unless
the Court of law or the Tribunal/Appellate Authority finds that the litigant
has deliberately and intentionally delayed filing of the appeal that he is
careless, negligent and his conduct is lacking in bona fides. We are
conscious of the facts that when technicalities and substantial justice are
pitted against each other, the technicalities must be avoided. Considering
the facts of the present case we have seen that substantial right of the
assessee is an involved in the appeals, hence, we deem it appropriate to
condone the delay in filing appeal in quantum assessment before learned
Commissioner (Appeals) and set aside the impugned order and restored
back the appeal to the file of learned Commissioner (Appeals) to decide the 7
ITA No. 7000 & 7001/M/2016- M/s Spykar Lifestyles Pvt. Ltd.
same on merit in accordance with law. Needless to say that learned
Commissioner (Appeals) shall afford sufficient and adequate opportunity to
the assessee before passing the order on merit. In the result the appeal of
assessee (ITA No.7000/M/2016) on quantum assessment is allowed for
statistical purpose. 8. Since we have already remanded the appeal of the assessee in quantum
assessment to the file of ld. Commissioner (Appeals), as the penalty was
levied on the similar disallowance, hence, we also deem it appropriate to
restore the appeal (ITA No. 7001/M/2016) to the file of ld Commissioner
(Appeals) to decided the appeal afresh, after deciding the quantum appeal
on merit. 9. In the result, both the appeal filed by assessee is allowed for statistical
purpose. Order pronounced in the open court on 7th day of February 2018. Sd/- Sd/- (R.C.SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 07/02/2018 S.K.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT BY ORDER, 5. DR, ITAT, Mumbai 6. Guard file. (Asstt.Registrar) स�ािपत�ित //True Copy/ ITAT, Mumbai