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Income Tax Appellate Tribunal, “SMC – B” BENCH : BANGALORE
Before: SHRI SUNIL KUMAR YADAV
Per Sunil Kumar Yadav, Judicial Member
This appeal is preferred by the assessee against the order of CIT(Appeals) inter alia on the following grounds:-
“1. The impugned order of the Commissioner of Income Tax (Appeals), Gulbarga, passed under section 250 of the Income Tax Act, 1961 is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case.
2. The learned Commissioner of Income Tax (Appeals) is not justified in dismissing in limine the appeal preferred by the appellant without condoning the short delay in filing of the appeal on the facts and circumstances of the case.
3. The learned Commissioner of Income Tax (Appeals) ought to have appreciated that the appellant had shown sufficient cause for delay in filing of the appeal before the Commissioner of Income Tax (Appeals) and hence the said delay ought to have been condoned on the facts and circumstances of the case. 4. The learned Commissioner of Income Tax (Appeals) is not justified in passing an order dismissing the appeal on question of delay when the learned Commissioner of Income Tax (Appeals) has also adjudicated the appeal on the merits of the grounds of appeal
on the facts and circumstances of the case.
5. The learned Commissioner of Income Tax (Appeals), erred in sustaining the addition of Rs. 6,00,000/- on account of loan taken from one Sri. Chandrasekhar Pasargi when the said addition was only made on protective basis in the case of the appellant and the appeal in the case of Sri. Chandrasekhar Pasargi itself is pending before the appellate authorities on the facts and circumstances of the case.
6. The learned Commissioner of Income Tax (Appeals) ought to have appreciated that the Commissioner of Income Tax (Appeals)-VI, Bangalore had in the case of Sri. Chandrasekhar Pasargi for the assessment year 2004-05 categorically held that Sri. Chandrasekhar Pasargi had given a loan to the appellant in the financial year 2001-02 which resulted in reopening of his case for the assessment year 2002-03 and such an action could not have had any implication in the case of the appellant on the facts and circumstances of the case.
7. The learned Commissioner of Income Tax (Appeals) erred in not appreciating that the once the said amount of Rs. 6,00,000/- is said to be a loan given by Sri. Chandrasekhar Pasargi, thereafter, it could not be an income of the appellant under the provisions of the Act on the facts and circumstances of the case.
The learned Commissioner of Income Tax (Appeals) ought to have appreciated that the assessing officer could not have brought to tax the amount of Rs. 6,00,000/- on protective basis as advance/deposit made with Sri. Chandrasekhar Pasargi when the very premise of the department's case is the Sri. Chandrasekhar Pasargi has lent the amount to the appellant.
The learned Commissioner of Income Tax (Appeals), erred in sustaining the addition of Rs. 1,08,000/- said to be the accrued interest on the loan of Rs. 6,00,000/- taken from Sri. Chandrasekhar Pasargi on the facts and circumstances of the case. 10. The learned Commissioner of Income Tax (Appeals) failed to appreciate that once the appellant is said to have taken loan from Sri. Chandrasekhar Pasargi, there is no question of the appellant earning any interest income on a loan taken by him and hence the same ought to have been deleted on the facts and circumstances of the case. 11. The learned Commissioner of Income Tax (Appeals) erred in sustaining the disallowance of Rs. 75,500/- being the interest paid by the appellant on housing loan availed on the facts and circumstances of the case. 12. The appellant craves for leave of this Hon'ble Tribunal, to add, alter, delete, amend or substitute any or all of the above grounds of appeal as may be necessary at the time of hearing. For these and other grounds that may be urged at the time of hearing of appeal, the appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity.”
There is a delay of 30 days in filing the appeal before the Tribunal in respect of which the assessee has filed application for condonation of delay along with affidavit. It is explained that delay has caused since the assessee’s husband was seriously ill and the assessee was preoccupied in attending him. Copy of medical certificate is filed along with the petition.
Reliance is placed on the judgment of Hon’ble Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji & Ors., 167 ITR 471 with the submission for condonation of delay. I am satisfied with the explanation furnished by the assessee for delay in filing the appeal before the Tribunal by 30 days and therefore I condone the delay.
During the course of hearing, the ld. counsel for the assessee has invited our attention that CIT(Appeals) has dismissed the appeal being barred by limitation, after rejecting the request for condonation of delay in filing the appeal. Besides dismissing the appeal being barred by limitation, the CIT(Appeals) has also decided the appeal on merits.
The ld. counsel for the assessee has contended that the assessment was framed in the hands of assessee on protective basis, whereas substantive addition was made in the hands of Shri Chandrasekhar Pasargi. The appeal could not be filed before the CIT(Appeals) on the advice of the professional. The delay was only 170 days which was not condoned by the CIT(Appeals). It was further contended that the appeal in the substantive addition is still pending before the CIT(Appeals), therefore, in the interest of justice, the delay in filing the appeal before the CIT(A) be condoned and the appeal may be restored back to the CIT(A)’s file with a direction to readjudicate it along with the appeal filed on the substantive addition in the case of Shri Chandrasekhar Pasargi.
The ld. DR, however, placed reliance on the order of CIT(Appeals), besides contending that the appeal was not filed intentionally in time and that is why the CIT(Appeals) has rejected the request for condoning the delay in filing the appeal before him.
Having examined the orders of lower authorities in the light of rival submissions, I find that undisputedly substantive addition was made in the hands of Shri Chandrasekhar Pasargi and the addition in the hands of assessee was made only on protective basis. Though assessee has furnished bonafide reasons for not filing the appeal in time, but it was not properly considered by the CIT(Appeals) and he rejected the request for condonation of delay. The CIT(Appeals) having dismissed the appeal being barred by limitation, has decided the appeal on merits also, though it was not required. But while dealing with the issue on merits, he has not examined the aspect with regard to such addition made on substantive basis in the hands of the lender. Therefore, I am of the view that this issue requires fresh adjudication by the CIT(Appeals) along with the appeal of the lender in whose hands substantive addition was made. Accordingly, the order of CIT(Appeals) is set aside and matter is restored to his file with a direction to readjudicate the appeal afresh along with the appeal filed by Shri Chandrasekhar Pasargi.
In the result, the appeal of assessee is allowed for statistical purposes.
Pronounced in the open court on this 26th day of May, 2017.