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Facts
The assessee, Jaimin Jewellery Exports Private Limited, filed an appeal against the order of the CIT(A) for Assessment Year 2008-09. The appeal involves additions made by the Assessing Officer related to survey reconciliation and cash purchases. The assessee claims a lack of sufficient opportunity and challenges the validity of the additions.
Held
The Tribunal condoned the inordinate delay in filing the appeal, citing sufficient cause. However, as the assessee did not make compliance before the CIT(A) and the merits of the case were not argued, the Tribunal remitted the issues back to the CIT(A) for de novo adjudication. A cost of Rs. 10,000 was also imposed.
Key Issues
Whether there was a violation of natural justice due to insufficient opportunity and whether the additions made by the AO on account of survey reconciliation and cash purchases were justified.
Sections Cited
250 of the Income Tax Act, 1961, 133A of the Act, 143(3) of the Act, 143(1) of the Act, 143(2) of the Act, 142(1) of the Act, 147 of the Act, 148 of the Act
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: Dr. G. Deshmukh Marg, Pedder Road,
O R D E R Per Kavitha Rajagopal, J M:
This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2008-09.
The assessee has challenged the order of the ld. CIT(A) on the ground that sufficient opportunity was not provided to the assessee, thereby violating the principles of natural justice and also the addition of Rs.1,36,74,755/- on the following issues : a) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the addition of Rs.93,54,732/- being the difference in the survey reconciliation during survey proceeding by ignoring the statement filed by the appellant while doing so the learned CIT(A) further erred and ignored the facts of the case that the excess stock found has already been forming part of the books of accounts.
(A.Y.2008-09) Jaimin Jewellery Exports Private Limited vs. ACIT b) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the addition of Rs.43,20,023/- as cash purchases by ignoring the facts of the case that there was no cash purchases during the year under consideration.
The brief facts are that the assessee is a partnership firm engaged in the business of import and export of diamond studded, gold, imitation jewellery and loose diamonds and had filed its return of income dated 30.09.2008, declaring total income on Rs.2,48,82,070/- and the same was proceeded u/s. 143(1) of the Act. The assessee’s case was selected for scrutiny and notice u/s. 143(2) and 142(1) of the Act was issued and served upon the assessee.
The ld. learned Assessing Officer ('ld. A.O.' for short) observed that the assessee had declared sale of Rs.150.33 crores for which gross profit @ 5.27% as against sale of Rs.102.57 crores and GP @ 3.44% for the remaining sales were declared by the assessee.
Pursuant to which, survey action u/s. 133A of the Act dated 01.10.2007 were undertaken and the assessee then declared additional income of Rs.1,36,74,755/- on account of unaccounted cash purchase of Rs.43,20,023/- and Rs.93,54,732/- on account of excess physical stock over and above the book stock was declared as ‘additional income’ by the assessee. The ld. A.O. made an addition on the same and passed the assessment order dated 28.12.2010 u/s. 143(3) of the Act.
Aggrieved, the assessee was in appeal before the first appellate authority who vide order dated 08.11.2019, upheld the addition made by the ld. A.O. vide an ex parte order.
The assessee is in appeal before us, challenging the order of the ld. CIT(A).
During the appellate proceeding, it is observed that the present appeal has been filed with an inordinate delay for which the learned Authorised Representative ('ld. AR' for AR contended that the ld. CIT(A) had passed the impugned order dated 08.11.2019, which was said to have been uploaded in the portal in ‘notice/letter’ section and the assessee was not in receipt of the same as the said order could not be downloaded from the portal for various technical reasons. The ld. AR further stated that for the same assessment year, there was also reassessment proceeding carried out in the assessee’s case where the ld. A.O. had passed the assessment order u/s. 143(3) r.w.s. 147 of the Act, vide order dated 21.03.2016 which was appealed against before the ld. CIT(A) and was subsequently in appeal before the co-ordinate bench where the Tribunal vide order dated 05.04.2022 had remanded these issues back to the ld. CIT(A) for de nova adjudication.
The ld. AR further impliedly stated that the assessee has complied with the notices in the reassessment proceeding, but as far as the impugned order u/s. 143(3) is concerned, the assessee had no notice of the order of the ld. CIT(A) and was also unbale to download the same from the portal and even otherwise if viewed by the employee/Chartered Accountant of the assessee company, the same was not brought to the notice of the Management. The ld. AR stated that the delay in filing the present appeal is not intentional or wanton, but only for the reason specified in the Affidavit, the assessee was prevented from filing the appeal on time. Furthermore, the ld. AR contended that on receipt of the ld. CIT(A)’s order, the assessee had promptly filed an appeal before the Tribunal pursuant to the said notice. The ld. AR prayed that the delay, if any, shall be condoned. The learned Departmental Representative (ld. DR for short), on the other hand, contended that the ld. CIT(A) vide his submission dated 02.08.2024 had stated that the appeal order has been registered email id of the assessee and further in the ITBA portal, it shows as if the assessee has read the order on 06.05.2021 at 15:14 p.m. which shows that the assessee was in notice of the said order. The ld. DR vehemently opposed to the condonation of the delay.
We have heard the rival submissions and perused the materials available on record.
It is observed that there were two proceedings going on in the assessee’s case for the impugned year, which was the original assessment proceeding u/s. 143(3) for which the assessee is in appeal before us and the other reassessment proceeding u/s. 148 of the Act for which the Tribunal had remanded the issue for de nova adjudication before the ld. CIT(A). The order of the ld. A.O. u/s. 143(3) r.w.s. 147 of the Act dated 16.05.2019 and the corresponding appeal before the ld. CIT(A) was decided on 21.03.2016. In the present case in hand, the assessment order was passed on 28.12.2010 and the corresponding ld. CIT(A)’s order was passed on 08.11.2019. The Revenue’s contention is that the date of issue of order is on 08.11.2019 as per the ITBA portal and further the assessee has read the same on 06.05.2021 but had filed the appeal only on 20.02.2024. On the contrary, the assessee contends that the date of service or communication of the order was only on 25.01.2024. Apart from this, the assessee vide an Affidavit has stated various reasons that there was change of address of successor company during the pendency of the appellate proceedings, as the erstwhile office was auctioned by the bank which prevented the assessee company to operate from the said address and the old address continued to be in the records of the department which was the reason that the assessee had not received any of the notices sent by the Department. The director of the assessee company further stated rest, pre covid and also during covid pandemic. For this reason and along with the other reasons, the assessee had stated that there was “sufficient cause” for the said delay in filing the appeal before the Tribunal.
Upon hearing the rival contentions and on perusal of the materials available on record, it is observed that the Tribunal in for A.Y. 2008-09 vide order dated 05.04.2022 had set aside the issue back to the file of the ld. CIT(A) for de nova adjudication in the reassessment proceeding citing the medical reason of the Director of the assessee company, though has not mentioned anything about the condonation of the delay in the said appeal. Pertinently, there is an inordinate delay in filing the present appeal before us, we are of the considered view that the Hon'ble Apex Court as well as various high courts have led precedence on delay condonation even in case of condoning huge delay has held that the adjudicating authority should not dismiss the case on mere technicalities and should take a liberal approach while deciding the issue of delay condonation. It has also been held in various cases that strict interpretation is be given on the substantial issue, i.e., on the merits of the case and not on technicalities. By adhering to the said proposition, we are of the view that the inordinate delay in filing the present appeal has been substantiated with “sufficient cause” by the assessee before us and we are, therefore, inclined to condone the delay. Delay condoned.
As it is seen that the assessee has not made compliance before the ld. CIT(A) and the merits of the case is also not argued before us, we deem it fit to remit all these issues back to the file of the ld. CIT(A) for de nova adjudication on the merits of the case. We to deposit within two months from the receipt of the said order to the Prime Minister Relief Fund account and the same shall be verified by the ld. CIT(A).
In the result, the appeal filed by the assessee is allowed for statistical purpose.