SARANGA ANIL AGGARWAL,MUMBAI vs. ACIT, CIRCLE 14(1)(1), MUMBAI

There was delay in filing the appeal by 340 days. Before us, the assessee has filed application for condonation of delay in filing the appeal along with affidavit dated 08.02.2024, Before us, the ld. Counsel submitted that assessee came to know about the order passed by the First Appellate Authority only on 02.02.2024 from the portal of the Income Tax Department through one of her consultant Mr. Suraj Nair who accessed her account on the e-filing portal of the Income Tax Department. The assessee is a senior citizen lady having age of 65 years and she depends upon others for communications through e-mails etc. because of demised of the Chairman of the group Late Shri Anil Agarwal the business of the group almost to a standstill situation and the day to day activities could not be managed professionally. However, the employees of the assessee has not communicated about the information of passing of the order in the e-mails of the assessee. It is also submitted that because of various financial default occurred in the companies of the group, there are various proceedings launched against the entire group of the assessee as a result 90% of the employees of the group of the assessee left the organization consequently most of the mails remained unattended due to lack of adequate manpower. It was also informed that at that time the entire corporate office was not

Heard both the sides on the issue of delay in filing the appeal.

We have perused the contents of the affidavit 08.02.2024 filed by the assessee for condoning the delay in filing the appeal. In the affidavit, assessee has reported the similar facts and circumstances which resulted delay in filing the impugned appeal also referred above in this order. The assessee has also referred various judicial pronouncement for condoning the delay in filing the appeal as under:

Looking to the above facts and circumstances it appeared that there is a reasonable cause for delay in filing this appeal particularly because of recovery proceedings initiated by the bank under the IBC proceedings, the corporate office premises of the assessee was sealed and there was no access to the e-mail ID of the assessee which was maintained on the specified computer in the corporate office. Further most of the employees of the assessee group had left the organization and there were no senior employees to manage the day to day affairs of the group of the assessee.

We have also perused the decision of Hon’ble Supreme Court in the case of Collector Land Acquisition vs Mst.Katiji and ors – 167 ITR 471 (SC) wherein it is held that sufficient cause for the purpose of condonation of delay should be interpreted with the view to do even

Fact in brief is that return of income declaring Nil income was filed on 30.10.2018. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 23.09.2019. During the course of assessment, the assessing officer has issued various notices u/s 142(1) of the Act, however, the assessee has not made any compliance to the notices issued by the assessing officer during the course of assessment proceedings. Therefore, the assessing officer has completed the assessment ex-parte u/s 144 r.w.s. 143(3A) and 143(3B) of I.T. Act. The assessee was engaged in the business of construction and property developer. During the course of assessment, the assessing officer has noticed from the details available with his office that assessee has shown outstanding unsecured loan of Rs. 4,75,56,71,897/- as on 31.03.2017 which was increased by Rs. 4,19,96,68,462/- during F.Y. 2017-18. Since the assessee has not made any compliance during the course of assessment proceedings to explain the genuineness of the aforesaid unsecured loan, therefore, the assessing officer has treated the amount of Rs. 4,19,96,68,462/- as unexplained cash credit u/s 68 of the Act and the same was added to the total income of the assessee. Further, at the time of assessment, the AO noticed that assessee has shown share capital in the balance sheet as on 31.03.2017 at Rs. 2,97,75,80,634/- however in the ITR filed on A.Y. 2018-19, the assessee has shown capital of Rs. 3,14,99,32,230/-. Therefore, the AO observed that share capital to the assessee was increased by the amount of Rs. 17,23,51,596/- during the F.Y. 2017- 18. Since the assessee has failed to make any submission to explain increased share capital, therefore, the AO has treated the increased amount of Rs. 17,23,51,596/- as unexplained cash credit u/s 68 and

Further, on perusal of ITR filed by the assessee, the AO observed that in the P & L A/c, the assessee has shown closing stock of finished goods at value of Rs. 7,00,62,248/- whereas in the balance sheet the assessee had disclosed the closing stock at value of Rs. 1260,69,68,960/-. Since the assessee has not made any submission and details during the course of assessment proceedings, therefore, the difference amount of Rs. 1253,69,06,712/- was added to the total income of the assessee.

Aggrieved assessee filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee as the assessee has failed to make compliance to the various notices of hearing issued by the ld. CIT(A).

During the course of appellate proceeding before us, the ld. Counsel submitted that assessee could not make compliance before the ld. CIT(A) because of the facts and circumstances as reported in the affidavit filed by the assessee that there were various litigations going on and the office premises of the group where the relevant record pertaining to the assessee maintained was sealed under the IBC proceedings. Further, the assessee could not keep track on the various

On the other hand, ld. DR supported the order of ld. CIT(A).

Heard both the sides and perused the material on record. The case of the assessee was subject to scrutiny assessment. However, the assessee has not made any compliance before the assessing officer. Therefore, the assessing officer has added the difference amount of unsecured loan reflected in F.Y. 2016-17 and F.Y. 2017-18 as unexplained cash credit u/s 68 of the Act. Similarly, the assessing officer has also added the increased amount of Rs. 17,23,51,596/- in the share capital account of the assessee reflected in the balance sheet for the F.Y. 2017-18 after comparing the same with the balance sheet for F.Y. 2016-17 for the aforesaid two periods treating the same as unexplained cash credit u/s 68 of the Act. The AO has also made addition of Rs. 1,72,51,247/- under the head income from other sources since the assessee had shown less interest income in the ITR vis-a-vis the interest income reflected in Form No. 26AS. The AO has also made addition of Rs. 12,53,69,06,716/- as undisclosed closing stock of the assessee in the year under consideration being the difference in the amount of closing stock reflected in the profit and loss account and balance sheet of the assessee. After looking to the aforesaid facts and circumstances it is evident that assessing officer has

It is demonstrated from the aforesaid facts and circumstances that the case of the assessee was not decided on merit at the level of lower authorities as discussed above in this order.

Normally whenever any irregularities crept in the proceedings then after removing the irregularity proceedings is to be initiated from that stage but by remitting the issue to the First Appellate Authority, we would be multiplying the litigation because the ld. CIT(A) could call for a remand report from the assessing officer and proceedings would commence on two stage, in order to avoid that situation, we would deem it proper to set aside the order to the file of assessing officer for deciding de novo on merit after examination and verification of the relevant details to be furnished by the assessee. It is needless to say that observation made by us will not injure or impair, the case of the assessing officer and will not cause any prejudice to the defense explanation of the assessee. Therefore, the appeal of the assessee is allowed for statistical purposes.

The assessee has filed the following additional grounds of appeal:

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