MAHENDRA MAMTORA,MUMBAI vs. ITO 30(2)(3), MUMBAI

2) On the facts and circumstances of the case and in law the authorities below have erred in making an addition of Rs. 4,06,30,248/- by estimation u/s 68 of the IT Act, and the reasons assigned for doing so were wholly wrong, irrelevant and contrary to the facts of the case, particularly despite having submitted/explained all the relevant details and therefore this is not in accordance with the provisions of Income Tax Act, 1961, and rules made thereunder and against the principles of natural justice, and not the market reality of the facts and is very much excessive.

3) On the facts and circumstances of the case and in law, the Authorities below have erred in levying the interest u/s 234B and 234C of the I T which was wholly wrong, and against the provisions of Income Tax At, 1961 and rules made thereunder.

4) On the facts and circumstances of the case and in law, the Authorities below have erred in initiating the penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961 which were wholly wrong, irrelevant, and not in accordance with the facts and circumstances of the case as no income is concealed nor any inaccurate particulars were furnished.

5) The appellant craves leave to add, alter, modify and delete all or any of the aforesaid grounds of appeals on or before the date of hearing. 2. The brief facts of the case are that, the Assessing Officer (AO) has received information from DGIT(Inv), Mumbai that the assessee has made cash deposits below Rs.50,000/- in the bank accounts and there are aggregate credits amounting to Rs.50,72,98,591/-in the bank accounts in F.Y.2010-11. The AO has reason to believe that the

3 ITA No. 1119/MUM/2024 (A.Y.: 2011-12) Mahendra Mamtora income has escaped assessment and issued notice u/s 148 of the Act and there was no compliance to the notice. Subsequently the AO has issued notice u/sec 133(6) of the Act on the Cosmos Co-operative Bank, Kandivali (West) branch Mumbai & ICICI Bank, Malad (East) branch Mumbai calling for the assessees bank account statement for the period from 01.04.2010 to 31.03.2011.In compliance, the banks have furnished the bank account statements. The AO on perusal of the bank statements found that there are substantial debits and credits in the bank accounts and has issued notice u/sec 142(1) of the Act calling for the explanations and the information and further the A.O has issued summons u/sec 131 of the Act and the statement of the asssessee was recorded. Finally the AO has dealt on the facts and information and estimated the profit @8% on the aggregate bank credits which worked out to Rs.4,06,30,248/- and assessed the total income of Rs.4,07,14,250/ and passed the order u/sec143(3) r.w.s 147 of the Act dated 27.12.2018.

4 ITA No. 1119/MUM/2024 (A.Y.: 2011-12) Mahendra Mamtora issued notice and there was no proper compliance by the assessee and also there is a delay in filling the appeal, which remained unexplained. Therefore the CIT(A) has dismissed the assessee appeal as not maintainable.Aggrieved by the CIT(A)order, the assessee has filed an appeal before the Hon’ble Tribunal.

5 ITA No. 1119/MUM/2024 (A.Y.: 2011-12) Mahendra Mamtora no proper compliance by the assessee in spite of providing adequate opportunity of hearing and the delay in filling the appeal was not explained with the reasonable cause. Whereas the assessee has raised grounds of appeal challenging the additions of the A.O and there could be various reasons for non appearance which cannot be overruled. The Ld. AR emphasized that there are genuine reasons of the assessee for non appearance before the CIT(A) and the delay was not wanton Act. The assessee has filed application for condonation of delay before the CIT(A) referred at Page 2 Para2.1 of the CIT(A) order read as under:

“”"The assessee was suffering from depression and amnesia for the last one year so he had appointed Mr. Ashwin Darji a Tax Consultant as his representative and he didn't have any knowledge about ongoing proceeding. The assessee was in impression that Mr. Ashwin Darji was regularly attending the proceeding and the matter in question is resolved. Now the assessee comes to know about assessment order and demand notice and he doesn't have any other way but to file appeal against order issued to prove his innocence and seek justice. We are hereby requesting you to kindly condone the delay for filling the appeal. 6. We considering the facts, provisions and the contents of the condonation application found that there is a reasonable cause explained and there is no benefit is derived in causing delay in filing appeal

6 ITA No. 1119/MUM/2024 (A.Y.: 2011-12) Mahendra Mamtora before the CIT(A). The Hon’ble Supreme Court in the case of B. Madhuri Goud vs. B. Damodar Reddy (2012) 12 SCC 693, has held that the following principles must be kept in mind while considering the application for condonation of delay;

(i) There should be a liberal, pragmatic, justice oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice. (ii) The terms “sufficient cause” should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact-situation. (iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis. (iv) No presumption can be attached to deliberate cause of delay but, gross negligence on the part of the counsel or litigant is to be taken note of. (v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact. (vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice. (vii) The concept of liberal approach has to encapsulate the conception of reasonableness and it cannot be allowed a totally unfettered free play. (viii)There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted

7 ITA No. 1119/MUM/2024 (A.Y.: 2011-12) Mahendra Mamtora whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation. (ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach. (x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such litigation. (xi) It is to be borne in mind that no one gets away with fraud, is representation or interpolation by taking recourse to the technicalities of law of limitation. (xii) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception. (xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude.” 7. The Hon'ble supreme court in the case of Collector, Land Acquisition Vs. MST Katiji & others (167 ITR 471) (SC) has observed as under :

“ The legislature has conferred the power to condone delay by enacting s. 5 of the Limitation Act of 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on "merits". The expression "sufficient cause" employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice—that being the life-

8 ITA No. 1119/MUM/2024 (A.Y.: 2011-12) Mahendra Mamtora purpose of the existence of the institution of Courts. The doctrine of equality before law demands that all litigants, including the State as a litigant, are accorded the same treatment and the law is administered in an even-handed manner. There is no warrant for according a step-motherly treatment when the "State" is the applicant praying for condonation of delay. In fact, experience shows that on account of an impersonal machinery (no one in charge of the matter is directly hit or hurt by the judgment sought to be subjected to appeal) and the inherent bureaucratic methodology imbued with the note-making, file- pushing, and passing-on-the-buck ethos, delay on its part is less difficult to understand though more difficult to approve. In any event, the State which represents the collective cause of the community does not deserve a litigant non grata status. The Courts, therefore, have to be informed of the spirit and philosophy of the provision in the course of the interpretation of the expression "sufficient cause". So also the same approach has to be evidenced in its application to matters at hand with the end in view to do even-handed justice on merits in preference to the approach which scuttles a decision on merits.”

9 ITA No. 1119/MUM/2024 (A.Y.: 2011-12) Mahendra Mamtora to the assessee to substantiate the case along with the evidences. Accordingly, set aside the order of the CIT(A) and restore the disputed issues to the file of the CIT(A) to adjudicate afresh on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information and comply with appeal filling rules. Accordingly, we allow the grounds of appeal of the assessee for statistical purposes. 9. In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.

Order pronounced in the open court on 26.06.2024.

Sd/- Sd/- Sd/- (RENU JAUHRI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated:25/06/2024 KRK Copy of the Order forwarded to: 1. The Appellant, 2. The Respondent 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy//