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Facts
The assessee filed an appeal against the order of the CIT(A) which had dismissed the appeal. The assessee had declared a total income of Rs. 21,65,740/- in his original return, later revised to Rs. 16,00,100/-. The Assessing Officer (AO) observed cash deposits of Rs. 16,18,000/- in the bank account, of which Rs. 8,18,000/- was treated as unexplained income under Section 69A of the Income Tax Act.
Held
The Tribunal noted that the assessee's initial appeal to the CIT(A) was dismissed for lack of evidence, and the present appeal was filed with a delay of 198 days due to the assessee's lack of technical expertise and reliance on a former consultant. The Tribunal, referencing Apex Court judgments on condoning delay in the interest of substantial justice, decided to condone the delay.
Key Issues
Whether the delay in filing the appeal should be condoned, and whether the addition of Rs. 8,18,000/- as unexplained cash deposit under Section 69A was justified.
Sections Cited
69A, 143(3), 250, 5, 253(5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C’’BENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of the Addl/JCIT (A)-6, Kolkata dated 28.12.2023 vide DIN & Order No. ITBA/APL/S/250/2023-24/1059139983(1) for the AY 2017-18. The assessee has raised following grounds of appeal:
2. There is a delay of 198 days in filing the present appeal before this Tribunal. The assessee has filed an application for condonation of delay along with an affidavit dated 11/09/2024 and prayed to condone the delay and admit the appeal for adjudication. The affidavit placed before us is reproduced below for ease of reference and convenience- DarekoppaKrishnaiahshettyKeshavshetty, Bangalore Page 7 of 12 2.1 The main reason as stated in the Affidavit for the delay in filing the Appeal before this Tribunal is that the assessee is not well versed with the modern technology & email communication & therefore he was not accessing his emails & the income tax portals. Further the assessee stated that e-portal was accessed only by erstwhile Auditor/tax consultant & inadvertently he did not notice the order & communicate the same in time to the assessee. It is only when the assessee accessed his e-portal to file his Return of Income, noticed that the ld. CIT(A) had passed the Order dismissing the appeal. Thereafter immediately the assessee approached to a new Chartered Accountant who advised him to file an appeal with an application for condonation of delay. The AR of the assessee submitted that the delay in filing appeal is neither intentional nor due to any negligence on the part of the assessee and accordingly prayed that in the interest of justice the delay may be condoned.
2.2 The ld. DR on the one hand though opposed for the condonation of delay but could not controvert the submissions made therein.
We have heard the rival submissions and perused the materials available on record. In our opinion, it cannot be said that the assessee is very callous in its approach in filing the appeal before us. At this juncture, it is appropriate to mention the judgment of the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:
DarekoppaKrishnaiahshettyKeshavshetty, Bangalore Page 8 of 12 (1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late (2) Refusing to condone delay can result in a meritorious matter being thrown 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, commonsense and pragmatic manner.
(4) When substantial justice and technical consideration are pitted against each other, the 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.
(5) 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.
(6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.
3.2 Being so, when substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserve to be preferred, for the other side cannot claim to have vested right for injustice being done because of non-deliberate delay. Moreover no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the belated appeal was filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. Therefore, in our opinion, this is a fit case to condone the delay of 198 days in filing the appeal before this Tribunal. Accordingly, the delay is condoned and admitted the appeal for adjudication.
Now the brief facts of the case are that the assessee being an individual derived income from salary, house property, business income from catering & financial services and income from other sources. For the Asst. year 2017-18 under appeal, the assessee had filed his return of income u/s 139(4) of the Act on 2.11.2017 by declaring total income of Rs.21,65,740/-. Subsequently, on the very same day the assessee had also filed the revised return by declaring total income of Rs.16,00,100/- as interest expenditure had not been claimed u/s 24(b) of the Act to the extent of Rs.5,65,640/- (Rs.15,40,048 (-) Rs.9,74,408/-). The return was processed u/s 143(1) of the Act. Thereafter the case was selected for complete scrutiny through CASS reason being reduction of income in the revised return. Accordingly, notices u/s 143(2) as well as notice u/s 142(1) of the Act were issued to the assessee. The assessee furnished various details like copy of ITR-3, statement of income, bank statements, copy of 26AS, form No.16, confirmation letter from Bank, etc. which were verified by the AO. During the course of assessment proceedings, on perusal of the bank statement/pass book furnished by the assessee, the AO observed that the cash deposit made by the assessee is Rs.16,18,000/-. Further, ld. AO noticed that in ITR 3 filed for the AY 2017-18, in respective column, the assessee has furnished cash deposit detail of Rs.10,45,000/-, in respect of column cash deposit from 9.11.2016 to 30.12.2016. On verification of details furnished by the assessee, the AO found that total cash deposited during the year is Rs.16,18,000/- and total cash withdrawal and redeposited into the bank account were Rs.8,00,000/- and accordingly, balance of Rs.8,18,000/-(16,18,000-8,18,000) were treated as unexplained money u/s 69A of the Act in the absence of any reply, proof and explanation in response to the show cause notices dated 8.11.2019 and 15.11.2019 and accordingly assessed on a total income of DarekoppaKrishnaiahshettyKeshavshetty, Bangalore Page 10 of 12 Rs.29,83,740/-. Aggrieved by the assessment completed u/s 143(3) of the Act dated 19.11.2019, the assessee preferred an appeal before the ld. CIT(A)/NFAC. The ld. CIT(A) dismissed the appeal of the assessee by observing that the assessee had merely asserts that the facts pointed out by AO is not correct but failed to furnish any evidence before this office like bank statement, cash book, etc. as evidence contrary to AO’s observation. Aggrieved by the order of Addl./JCIT (A) dated 28.12.2023, the assessee has filed the present appeal before this Tribunal. The assessee has filed the paper book containing 84 pages enclosing therein following documents:
4.1 Before us, ld. A.R. of the assessee vehemently submitted that the cash deposit of Rs.8,18,000/- were sourced from assessee’s regular business activity of catering which was duly accounted in the books of accounts of the assessee. It is submitted that since the assessee had already offered the income from catering business, the gross receipts from the catering cannot be once again treated as unexplained money u/s 69A of the Act. Further, ld. A.R. of the DarekoppaKrishnaiahshettyKeshavshetty, Bangalore Page 11 of 12 assessee vehemently submitted that the ld. AO has wrongly observed that assessee had declared Rs.10,45,000/- in respect of column cash deposit during 9.11.2016 to 30.12.2016 in the ITR-3 filed for AY 2017-18, whereas the assessee has only declared Rs.1,45,000/- deposited during the demonetization period and accordingly prayed to allow the appeal of the assessee.
The ld. D.R. on the other hand supported the orders of the authorities below.
We have heard the rival submissions and perused the materials available on record. On going through the Income Tax Return in Form ITR-3 (Placed in pages 39-83 of paper book), First we find that the nature of business mentioned by the assessee is financial service provider only under the trade name of Harsha Financial Corporation and there is no mentioned of Catering business which need to be verified by the AO. Further, we also verified that in the return of income the profit & loss account and balance sheet were filled up as required in a case where regular books of accounts are maintained. Further, we also found that the assessee has declared cash deposit during the period 9.11.2016 to 30.12.2016 in his return in Karnataka Bank amounting to Rs.1 lakh and in the Hotel Industrialist Co-operative Bank Ltd. amounting to Rs.45,000/- totaling Rs.1,45,000/-, where as the AO has wrongly observed in the assessment order that assessee has furnished cash deposit detail of Rs.10,45,000/- in respect of column cash deposit during 9.11.2016 to 30.12.2016 in his return of income. The assessee claimed that cash Rs. 16,18,000/- were deposited during entire financial year 2016-17 out of his Catering & Financial Services & not during the demonetization period. We are of the opinion that all these needs to be verified. Before us, the AR of the assessee submitted that the assessee maintains books of accounts on a regular basis and also produced profit & loss account and balance sheet, which is placed in page 84 of the paper book.
DarekoppaKrishnaiahshettyKeshavshetty, Bangalore Page 12 of 12 The AO has added the difference of Rs.8,18,000/- (Rs.16,18,000/- (-) Rs.8,00,000/-) as unexplained money u/s 69A of the Act as the assessee could not furnish any reply, proof, explanation and sources. We also find that ld. CIT(A) has also dismissed the appeal in the absence of furnishing any evidence before him like bank statement, cash book, etc. as evidenced contrary to AO’s observations. Therefore, we are of the considered opinion that in the interest of justice & fair play, the entire issue in dispute may be restored to the file of AO to decide the same afresh in accordance with law after providing reasonable opportunity of being heard to the assessee. The assessee is also directed to substantiate his claim by producing/submitting the details/information/evidences as required by the AO for proper adjudication of the case. It is ordered accordingly.
In the result, appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 25th Nov, 2024 Sd/- Sd/- (Waseem Ahmed) (Keshav Dubey) Accountant Member Judicial Member Bangalore, Dated 25th Nov, 2024. VG/SPS Copy to:
The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore.