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Facts
The appeals were filed with a delay of 131 days for AY 2015-16 and 10 days for AY 2017-18. The assessee attributed the delay to a severe illness and advised bed rest, supported by a medical certificate. The Revenue objected to the condonation of delay but could not controvert the assessee's submissions.
Held
The Tribunal noted that the delay was unintentional and due to circumstances beyond the assessee's control. Citing the Supreme Court's decision in Collector Land Acquisition Vs. Mst. Katiji & Ors., the Tribunal emphasized a liberal approach to condoning delays when there is sufficient cause. The Tribunal found reasonable cause for the delay.
Key Issues
Whether the delay in filing the appeals could be condoned due to the assessee's illness and whether a denovo assessment is required due to the assessee's inability to furnish evidence during the assessment proceedings.
Sections Cited
Section 51 of the Limitation Act, 1963, Section 40A(2b) of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, ‘C’ BENCH : BANGALORE
Before: SMT. BEENA PILLAI & SHRI LAXMI PRASAD SAHU
Date of Hearing : 20-08-2024 Date of Pronouncement : 23-08-2024 ORDER PER BENCH Present appeals arises out of order passed by NFAC, Delhi dated 31/12/2023 for A.Y. 2015-16 and 30/04/2024 for A.Y. 2017-18. At the outset, it is submitted that there is a delay of 131 days for A.Y. 2015-16 and a delay of 10 days for A.Y. 2017-18 in filing the appeals before this Tribunal.
& 1307/Bang/2024 2.1. The Ld.AR has filed affidavit of the assessee, explaining the delay which is as under: & 1307/Bang/2024 & 1307/Bang/2024 2.2. For A.Y. 2017-18 also, similar affidavit has been filed seeking condonation of 10 days delay caused in filing the appeal before this Tribunal.
& 1307/Bang/2024 2.3. The Ld.AR submitted that, the assessee was not keeping well and was admitted to the hospital from 15/02/2024 and was advised for bed rest. The assessee has also annexed the medical certificate of the doctor in support of the illness that he was suffering during the relevant period. The Ld.AR submitted that, the delay in filing the appeal before this Tribunal is unintentional and is due to the circumstances that prevailed, beyond the control of the assessee. She prayed for the delay to be condoned in filing both the appeals before this Tribunal.
2.4. On the contrary, the Ld.DR though objected for condonation could not controvert the prayer of the assessee.
We have perused the submissions advanced by both sides in the light of records placed before us.
2.5. From the submissions of assessee reproduced in the impugned order, we note that there does not arise any malafide intention on behalf of the assessee for not filing the present appeals before this Tribunal in the period of limitation.
2.5.1. In our view, the assessee has made out reasonable cause for the delay caused in filing the appeals before this Tribunal. Nothing to establish any contrary was brought on record by the revenue before this Tribunal. In our opinion there is sufficient and reasonable cause to condone the delay of 131 days for A.Y. 2015-16 and 10 days for A.Y. 2017-18 in filing appeals before this Tribunal as observed by Hon’ble Supreme Court in case of & 1307/Bang/2024 Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 in support of his contentions.
2.5.2. We also place reliance on following observations by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 wherein, Hon’ble Court observed as under:- “The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de 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-purpose of the existence of the institution of courts. It is common knowledge that this court has been making a justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that :
1. 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 out 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. ......................................................1.Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.”
2.5.3. Considering the submissions of the assessee and respectfully following the observation by Hon’ble Supreme Court, & 1307/Bang/2024 we find it fit to condone the delay caused in filing the present appeals as it is not attributable to the assessee. Accordingly, the delay of 131 days for A.Y. 2015-16 and 10 days for A.Y. 2017-18 stands condoned.
The Ld.AR on merits submitted that assessee could not file that sufficient evidence and supportive documents during the assessment proceedings. She submitting that for A.Y. 2015-16, the appeal was taken up for scrutiny to examine the following issues: 1) Mismatch in the amount paid to related persons u/s. 40A(2b) reported in the audit report and ITR. 2) Low profit shown by the transporters. 3) Large increase in the sundry creditors and reduction in the business income as compared to the preceding year.
And for A.Y. 2017-18, she submitted that, the scrutiny assessment was taken up for verifying the following: 1) Unsecured loans 2) Cash deposits during demonetisation period 3.1. She submitted that, the assessee could not furnish relevant details before the appellate authorities and prayed for an opportunity of being heard on the issues. She submitted that the assessee may also be given liberty to furnish necessary evidences in support of the claims which is verifiable.
& 1307/Bang/2024 3.2. On the contrary, the Ld.DR submitted that assessee during the assessment proceedings has not furnished any documents and therefore the additions has been made even before the Ld.CIT(A) assessee has failed to furnish evidences.
We have perused the submissions advanced by both sides in the light of records placed before us.
We note that though various notices were issued to the assessee, on ITBA portal, the same were not brought to the notice of the assessee because of which necessary steps could not be taken. In the interest of justice, without commenting anything on the merits of the issues in both the assessment years, we remit the appeals back to the Ld.AO to carry out a denovo assessment.
4.1. Assessee is directed to furnish all evidences / documents in support of its claim. The Ld.AO shall verify the documents and evidences in the light of the records and in accordance with law.
4.2. Insofar as the cash deposits during the demonetisation period is concerned, the Ld.AO shall verify the claim of assessee based on the applicable circular issued by the CBDT to the facts of this case. a) The 1st instruction was issued on 21/02/2017 by instruction number 03/2017. b) The 2nd instruction was issued on 03/03/2017 instruction number 4/2017.
& 1307/Bang/2024 c) The 3rd instruction was in the form of a circular dated 15/11/2017 in F.No. 225/363/2017-ITA.II and the last one dated 09/08/2019 in F.no.225/145/2019-ITA.II. Needless to say that proper opportunity of being heard must be granted to assessee. Accordingly, the grounds raised by the assessee for both the years under consideration stands partly allowed for statistical purposes. In the result, both the appeals filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 23rd August, 2024.