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Income Tax Appellate Tribunal, SMC BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM
आदेश आदेश / ORDER आदेश आदेश
PER D. KARUNAKARA RAO, AM :
This is the appeal filed by the assessee against the order of CIT(A)-2,
Thane, dated 27.03.2017 for the Assessment Year 2009-10.
Grounds raised by the assessee are as under:
“1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not condoning the delay in filing appeal and thereby erred in not admitting the appeal. Looking to the facts and in the circumstances of the case and in law the Appellant submits that Learned CIT(A) ought to have given the Appellant a fair, proper and reasonable opportunity to file an application for condonation of delay and ought to have condone the delay and ought to have admitted and heard the appeal on merits. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) ought to have held that the reopening of the assessment was bad in law and void and ought to have quashed the same.
2 ITA No.1010/PUN/2017 P.P. Enterprises.
On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the addition of Rs.17,69,894 on account of alleged bogus purchase.
Looking to the facts and in the circumstances of the case and in law the Appellant submits that Learned CIT(A) ought to have held that the said addition made by the A.O. is incorrect and invalid and ought to have deleted the same.
Looking to the facts and in the circumstances of the case and in law the Appellant submits that Learned CIT(A) ought to have held that the assessment is made in gross violation of Principles of Natural Justice and ought to have quashed the same.
The Appellant craves leave to add to alter, amend, modify and / or delete any or all of the abovesaid ground(s) of appeal.”
From the above, it is evident that Ground Nos. 1 and 4 relate to the
assessee’s request for grant of reasonable opportunity before the officers qua
the request for condonation of delay of 3 months 17 days. CIT(A) did not
condone the delay in filing the appeal before him. Further, as required under
the provisions of section 250(6) of the Act, CIT(A) failed to adjudicate the issue
on merits. Otherwise, there is an addition of Rs.17,69,894/- made by the AO in
this case on account of bogus purchases.
Before me, there is none to represent the assessee despite the service of
notice. Acknowledgement is placed on record. However, considering the
smallness of the issue as well as the grounds 1 to 4 of the appeal, I proceed to
decide the issue with the assistance of Ld. DR for the Revenue and also the
material available on record.
Briefly stated relevant facts are that assessee is a firm and is engaged in
the wholesale business of building material suppliers. Assessee filed the return
of income on 15.09.2009 declaring total income of Rs.3,16,469/- for the
assessment year under consideration. On the basis of information received
from the Investigation Wing of Sales Tax Department to the effect that certain
persons have provided accommodation entries along with other beneficiaries for
3 ITA No.1010/PUN/2017 P.P. Enterprises.
bogus purchases bills, AO found that assessee made the alleged bogus
purchases from two suppliers, namely, (1) Rekha Trading Company and (2)
Siddhivinayak Trading Company amounting to Rs.17,69,894/-. The names of
these suppliers appear in the list of persons. Therefore, the AO opined that the
income of assessee to that extent had escaped assessment. Accordingly, AO
issued notice u/s.148 of the Act to the assessee. Thereafter, statutory notice
u/s. 143(2)/142(1) of the Act along with questionnaire were issued to the
assessee. In response to the said notices issued, the assessee filed written
submission before the Assessing Officer. The Assessing Officer after considering
the submission, finalized the re-assessment order u/s. 144 r.w.s. 147 of the Act
and assessed the total income of assessee at Rs.20,86,360/- after making an
addition of Rs.17,69,894/- on account of bogus purchases. Aggrieved with the
order of Assessing Officer, assessee filed appeal before CIT(A).
During the First Appellate proceedings, the CIT(A) upon perusing Form
No.35, observed that the assessee filed appeal before him with a delay of 3
months 17 days. Eventually, the CIT(A) dismissed the appeal of the assessee
on the ground of delay itself holding as under :
“4. As per declaration in Form No.35, filed with the department, the date of service of the demand notice/assessment order is stated to be 01-03-2014, therefore, the appeal was late by 3 months 17 days. While filing the appeal the appellant did not file any application/affidavit for condonation of delay nor furnished any reason for not filing the appeal in time. Even during appellate proceedings, the appellant has not filed any valid reason, with credible documents, for not filing the appeal in time, therefore, the same is not a valid appeal. Since the appeal is filed late by 3 months 17 days without any valid reason, therefore, the same is not admitted, as per provision of sub-section 3 of section 249 of the Act. In this regard I would like to place my reliance on following rulings :
Rankak & Ors Vs. Rewa Coalfields Ltd. AIR 1962 SC 361 JCIT Vs. Tractors & Farm Equipments Ltd. (ITA, Chennai-TM) 104 ITD 149 Madhu Dasha Vs. ACIT (Mad) 317 ITR 458. Party has to show reason for delay on last day of limitation period and therefore for each day thereafter-condonation is not matter of right-Court has to exercise the discretionary jurisdiction.
4 ITA No.1010/PUN/2017 P.P. Enterprises.
In the result, the appeal is dismissed.”
From the above, it is evident that the CIT(A) has not admitted the appeal
of the assessee and thus not adjudicated the issue on merits.
Aggrieved with such order of the CIT(A), assessee filed the present
appeal before the Tribunal with the grounds extracted above.
On hearing the Ld. DR for the Revenue and on perusing the material
available on record. I find in the present case the assessment was completed
u/s.144 r.w.s. 147 of the Act and made addition of Rs.17,69,894/- on account
of bogus purchases as per the discussion given in Para No.10 of the AO.
Accordingly, as per the contents of Para No.10, assessee purchased the said
goods from couple of parties namely (1) Rekha Trading Company and (2)
Siddhivinayak Trading Company. Enquiries undertaken by the AO did not take
the investigation anywhere. During the First Appellate proceedings, the appeal
was found filed belatedly. CIT(A) did not condone the delay in absence of any
specific request for condonation of delay, leavealone, the reasons for delay.
On considering these facts, I find that the re-assessment was not
completed in a proper way qua the principles of natural justice. Similar is the
case with the CIT(A). Therefore, it is the case where the assessee is not
disciplined in matters of representation before the Govt. authorities. Assessee
did not appear even before us despite the service of notice. Notwithstanding
the same, I find there is specific ground by the assessee for fair opportunity.
Therefore, the assessee raised a ground about the principles of natural justice
and providing of reasonable opportunity to remove the defect with regard to
application for condonation of delay. In my view, the CIT(A) should have
issued a show cause notice before refusing to admit the appeal of the assessee.
5 ITA No.1010/PUN/2017 P.P. Enterprises.
Considering the same, I am of the view that the assessee should be given one
more opportunity to explain the reasons for filing the appeal late to the
satisfaction of the CIT(A). CIT(A) is free to reject the same, in case the
assessee fail to meet the requirements qua the prayer for condonation and
reasonable cause issues. It goes without saying that the CIT(A) is free to take
some conclusion in case of non-compliance by assessee. Keeping the issues on
merit alive, with the said directions, all the issues raised by the appeal are
restored to the file of CIT(A) for one more round of adjudication. CIT(A) is
directed to afford reasonable opportunity of being heard to the assessee in
accordance with the set principles of natural justice.
Further, assessee is also directed to make a formal prayer before the
CIT(A) and also file the application and an affidavit or other evidences giving
the reasons for filing of appeal with the delay of 3 months 17 days. CIT(A) also
is directed to adjudicate the issues on merits notwithstanding the decision on
the condonation of delay as required under the provisions of section 256 of the
Act. Accordingly, the grounds raised by the assessee are allowed for statistical
purposes.
In the result, the appeal of the assessee is allowed for statistical
purposes.
Order pronounced on this 23rd day of May, 2018.
Sd/- (D.KARUNAKARA RAO) लेखा सद� / ACCOUNTANT MEMBER पुणे / Pune; �दनांक Dated : 23rd May, 2018. Satish
6 ITA No.1010/PUN/2017 P.P. Enterprises.
आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to : अ�ेिषत
अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / The CIT(A)-2, Thane 3. आयकर आयु� / The Pr.CIT-2, Thane 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “SMC” / 5. DR ‘SMC’, ITAT, Pune; गाड� फाईल / Guard file. 6.
आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER,स आदेशानुसार
स�यािपत �ित //True Copy//
Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune