KISHORSINGH PRATAPSINGHJI RATHOD,MUMBAI vs. ITO 20(2)-3, MUMBAI

On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals), NFAC erred in confirming the addition Rs.1,07,69,990/- made by the Ld. AO in respect of Cash deposits made in ICICI Bank u/s.68 without appreciating that the appellant had not made any credit in the books of accounts in respect of said Cash deposits and therefore the addition u/s.68 was uncalled as laid down by Honourable High Court in case of BHAICHAND GANDHI, [1983] 141 ITR 67 (Bombay).

On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals), NFAC erred in confirming the addition Rs.6,68,500/- made by the Ld. AO in respect of Cash Deposits in Bank of India without appreciating that the actual Cash deposit was only Rs.1,50,000/- and the source of the same was duly explained during the assessment.

On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals), NFAC failed to appreciate that addition, if any must be restricted to income involved in the Cash deposits and the total cash deposits cannot be added.

Brief facts of the case are that the assessee is an individual engaged in Small Trading business of Electronic Goods. He filed the return of Income on 6.12.2014, reporting the total Income at Rs.2,39,140/-. The said return was processed u/s.143(1) and subsequently based on CASS, the case was selected for scrutiny u/s.143(2). Assessee did not receive any Assessment Order for Assessment Year 2013-14, in respect of which a separate Affidavit is filed. He came to know of the order in the month of March, 2017, when the Department pressurized for the recovery proceedings. In view of the above, the Assessee filed a Letter on 10.4.2017 before the Assessing Officer stating that he had not received any Assessment Order passed u/s.143(3) for Assessment Year 2013-14 and therefore requested to Kishorsingh Pratapsinghji Rathod., AY 2013-14 issue the Original or Certified true copy of the said Order. In response to the said letter dated 10.4.2017, the ld. Assessing Officer vide its Letter dated 20.4.2017 provided the certified true copy of Assessment Order passed u/s.143(3) dated 23.3.2016 along with Demand Notice u/s.156 for amount of Rs.52,59,580/-. The certified true copy of the order along with a copy of the Demand Notice was received by the assessee on 24.4.2017 and therefore the said appeal is filed by the assessee, based on the said receipt date.

From Ground no.1 and 2, we note that assessee has contested on ld. CIT(A) not allowing the condonation of delay by granting opportunity of being heard and dismissing the appeal in limine. In this respect, we perused the order of ld. CIT(A) wherein in para 5, he has observed that assessment order u/s. 143(3) was passed on 23.03.2016 while the appeal was filed by the assessee on 23.05.2017 in Form No.35. This filing is beyond the statutory time limit provided for filing the appeal as per section 249(2)(c), according to which appeal should be presented within 30 days of the following date on which the notice of demand is sought to be appealed, is served. Ld. CIT(A), noted that there is a delay of 396 days for which there is no sufficient cause in terms of section 249(3) put forth by the assessee for claiming condonation of the said delay though assessee had furnished its justification explaining the delay which has been reproduced in his order.

From the said reproduced explanation, we note that there is a delay of 396 days in filing the appeal, before the ld. CTI(A) for which assessee has given the cause for the delay. According to the assessee, the reasons for delay were beyond its control and are sufficient cause in terms of section 249(3) for condoning the same and admitting the appeal for its meritorious adjudication.

Before us, ld. Counsel for the assessee reiterated the submissions made before the ld. CIT(A) on the issue of condonation of delay. He also stated that no reasonable opportunity was given by the ld. CIT(A) before dismissing the appeal as not maintainable on account of delay. Ld. Counsel thus prayed that matter may be remitted back to the file of ld. CIT(A) by condoning the delay at the first appellate stage for its admission and meritorious adjudication on the grounds taken at the first appellate stage. On confrontation of these facts and submissions on the prayer made by the ld. Counsel of remitting the matter back to the file of CIT(A) by condoning the delay, ld. Sr. DR objected on the same, since there is a considerable delay of 396 days in filing the first appeal.

We have heard both the parties and considered the material placed on record. The primary issue before us is on admission of the appeal at the first appellate stage by condoning the delay in filing the appeal by the assessee. Assessee had furnished detailed explanations before the ld. CIT(A) for the delay caused in filing the appeal.

To address the issue in hand before us, we need to delve into the understanding of the expression “sufficient cause”. Sub-section 3 of Section 249 contemplates that the CIT(A) may admit an appeal after expiry of relevant period, if he is satisfied that there was a “sufficient cause” for not presenting it within that period. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon'ble High Court as well as before the Hon'ble Supreme Court, then, Hon'ble Court were unanimous in their conclusion that this expression is to be used liberally.

Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.

When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non- deliberate delay.

There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk.

It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so."

Since the first appeal has been disposed of by the ld. CIT(A) as “dismissed in limine”, we remit the matter back to the file of ld. CIT(A)

Since the matter is restored to the file of Ld. CIT(A) for meritorious adjudication by passing a speaking order in terms of our observations made hereinabove, we are not expressing any views on the merits of the case so as to limit the appellate procedure before the Ld. CIT(A). The observations herein made by us in remanding the matter back to the file of Ld. CIT(A) will not impair or injure the case of the Revenue nor will it cause any prejudice to the defense/explanation of the assessee.

In the result, appeal of the assessee is allowed for statistical purposes.