SH. NARESH KUMAR JAGGI,NEW DELHI vs. ACIT, NEW DELHI

This appeal by the Assessee is directed against the Order dated 17.2.2014 of Ld. CIT(A)-XXXI, New Delhi pertaining to assessment year 2009-10 on the following grounds:-

2. That under the facts and circumstances of the case, the Ld. CIT (A) was totally wrong and unjustified by not following the judicial discipline

6. That under the facts of the case, the addition of Rs. 58775000/- made by the Ld. AO in the sales consideration is unjustified and deserves to be deleted.

3. At the time of hearing Ld. Counsel of the assesse stated that Ld. First Appellate Authority has dismissed the Appeal of the Assessee being time barred without appreciating the grounds raised by the assesse for condonation of delay. He further stated that assesse has not paid the admitted tax at the time of originally filing the Appeal, but later on after making arrangement of loan, assessee has paid the admitted tax. He stated that ITAT vide order dated 28.6.2013 directed the ld. CIT(A) to decide the issue of admission of entertainment of Appeal and delay if any, be condoned. Ld. CIT(A) has not condoned the delay. Actually there is no delay in filing he Appeal, but due to non-payment of admitted tax, the Appeal is time barred which is beyond the control of the Assessee, because assessee was having financial crisis at that time. Ld. Counsel of the Assessee requested that issue in dispute is squarely covered in favour of the assessee by the decision of the co-seller passed by the ITAT and upheld by the Hon’ble Delhi High Court. Therefore, delay if any, may be condoned and the addition in dispute may be deleted being covered. He has also filed the copy of the judgment of the Hon’ble Delhi High Court passed in the cases of Jasjit Singh and Bhupinder Pal Singh Sarna in the shape of one small Paper Book containing pages 1 to 30.

4. On the contrary, Ld. DR strongly opposed the request of the Assessee’s counsel and stated that assessee has not paid the admitted tax at the time of filing Appeal before the Ld. CIT(A) and used the money received from sale consideration of property for his personal purpose, but did not deposit the admitted tax with the return. He stated that no doubt that the assessee has paid the admitted tax later on, but did not explain the delay properly. Therefore, the Appeal filed by the Assessee may be dismissed.

5. We have heard both the parties and perused the relevant records especially the order passed by the Revenue Authorities. We are of the considered view that assessee has filed the present Appeal challenging the impugned order wherein the Ld. CIT(A) has dismissed the Appeal being time barred. After perusing the impugned order, we are of the view that Ld. CIT(A) has not discussed the merits of the case and only dismissed the Appeal of the assessee on limitation issue. We have also perused the Form No. 35 filed before the ld. First Appellate Authority and find that the date of service of relevant notice of demand is 30.12.2010 and assessee has filed the Appeal before the ld. CIT(A) on 27.1.2011 whereas the assessment order passed by the AO is dated 28.12.2010 passed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred as the Act) meaning thereby the assessee has filed the Appeal before the Ld. First Appellate Authority within time, but did not deposit the admitted tax for the reasons mentioned by the Ld. CIT(A) in para no. 3.2 in his impugned order which is reproduced as under:-

“3.2 Vide his letter dated 09.10.2013, the AR informed that Hon’ble ITAT has set aside the matter as above and requested to hear the appeal on merits and also to condone the delay. The AR has made the following submission requesting for condonation of delay.

With reference to above matter this for your kind information that the assesee’s appeal was dismissed by the CIT-31 on the ground of non deposited of the admitted tax u/s./ 29(4) of the Act, 1961 and due to aggrieved by the said order the assessee filed the appeal before the ITAT-Delhi and ITAT Delhi has accepted and allowed the appeal of the assessee and restore the matter back to the CIT to heard the case on the basis of merit of the case.

Further in support of our claimed the assessee has already filed the copy of the order of the ITAT, Delhi on 18.10.2013 in his earlier letter dated 9.10.2013.

You are therefore requested to please heard the case of appellant on merits and please be condone the delay, if any as directed by the ITAT, Delhi that the appeal be admitted on the day when the admitted tax was paid by the appellant i.e. 24.4.2011, as the appellant was not in the position to pay the admit tax at the time of filing the appeal this can be establish through the fact that the appellant had taken the loan from India Bulls against the property and the said funds has been used by the appellant to pay the admitted tax, further the support of this appellant has file the loan documents and the bank statement of the appellant.

That the appellant had used the funds which was received against the sale of sales of share i.e. Rs.

8,27,78,250/- (Rs. 9,15,00,000 – 87,21,750) to make the advance payment to buy the shares / property, advance given were as Rs. 60,50,000/- to Colour Buildwell Pvt. Ltd. and Rs. 1,16,62,820/- to Kamdhenu Agro Pvt. Ltd. and Rs.

90,00,000/- to Seagull Buildwell Pvt. Ltd. and Rs.

2,15,07,082/- to Phugu Resort Pvt. Ltd. Rs. 94,09,493/- to Colour Infrastructure Pvt. Ltd. and Rs. 49,85,000/- to Seagull Buildwell Pvt. Ltd. and Rs. 1,97,56,507/- on account of Loss in shares. And the payment of Advance tax of Rs. 14,00,000/- and further the appellant has made his best affords to recovered the advance give but when he fails to recover which create the hardship to him for the deposit the tax when he take the loan from the India Bulls for the payment of taxes.

You are requested to please condone the delay if any as it is clear from the facts of the case that he funds were not available with the appellant to pay the admitted tax at the time of filing the appeal and it is beyond his control.”

5.1 Ld. CIT(A) did not condone the delay by stating that assessee has received Rs. 9.15 crores by cheque as sale consideration and have not discharged his duty towards the exchequer. Ld. CIT(A) has mentioned other various reasons in the impugned order for not condoning the delay in dispute, but we find that are not relevant on the issue in dispute. We also find that Ld. CIT(A) has also mentioned in para 3.12 of the impugned order that right to Appeal might be a statutory right, but however, the same comes alongwith certain duties. The law helps to protect the rights of those who are diligent and not of those who sleep over their rights and delay of each day need to be explained. There must be genuine reasonable cause for delay. In the instant case the assessee has used his money for personal purposes and he did not consider that the Assessee has been able to show reasonable cause for day in filing the Appeal which is on account of his diversion of tax amount from his personal use and he dismissed the appeal of the assessee being time barred.

5.2 After going through the contentions raised by the assessee on the delay point, we find that assessee has challenged the assessment order dated 28.12.2010 passed by the AO before the Ld.CIT(A) by way of filing the appeal on 27.1.2011 within 30 days meaning thereby there is no delay in filing the appeal filed by the asessee, but the only fault of the assessee is at that time, the assessee has not paid the admitted tax which he has later paid. It is not disputed that assessee has paid the tax during the course of appellate proceedings. As admitted by the Ld. CIT(A) that right to Appeal might be a statutory right of the assessee, we are of the considered view that assessee cannot be deprived from the right of filing the appeal on small technical ground. The assessee has paid the admitted tax during the course of appellate proceedings and appeal filed by the assessee cannot be dismissed on this plea. Actually there is no delay in filing the appeal, but the delay if any, is on account of non-payment of admitted tax and the reasons mentioned by the assessee in para 3.2 of the impugned order are reproduced above is very reasonable and plausible which cannot be ignored in a routine manner. So in the interest of justice, we are condoning the delay in paying the admitted tax by the assessee, and directed the Ld. CIT(A) to decide the issue in dispute on merits, after giving full opportunity to the assessee for substantiating his claim.

Order pronounced in the Open Court on 03/08/2016.