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Facts
The assessee's appeal was filed with a delay of 126 days. The delay was attributed to the assessee's representative not noticing the notice for hearing and the assessee only realizing about the orders upon receiving the notice of demand. The core issue involves the addition made on cash deposits during the demonetization period.
Held
The Tribunal condoned the delay in filing the appeal, prioritizing substantive justice over procedural technicalities. The issue regarding the addition made on cash deposits after November 14, 2016, was remanded back to the AO for necessary verification, considering relevant CBDT circulars and granting the assessee an opportunity to be heard.
Key Issues
Whether there is a reasonable cause for the delay in filing the appeal and whether the addition made on cash deposits during the demonetization period is justified.
Sections Cited
68
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Income Tax Appellate Tribunal, SMC-‘A’ BENCH : BANGALORE
Before: SMT. BEENA PILLAI
Assessee by : Shri Varun Bhat, CA Shri Ganesh R Ghale, Revenue by : Advocate, Standing Counsel for Revenue Date of Hearing : 27-06-2024 Date of Pronouncement : 11-07-2024 ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal arises out of order passed by NFAC, Delhi dated 24.11.2023 for A.Y. 2017-18.
At the outset, the Ld.AR submitted that, there was delay of 126 days in filing the appeal before the Tribunal. The Ld.AR filed an affidavit of assessee dated 04.06.2024, wherein it is stated that, the email ID and the mobile no. reflecting in the portal of Page 2 of Income Tax pertained to income tax practitioner being the assessee’s representative, who did not notice the issuance of notice for hearing. The Ld.AR submitted that, it is only when the assessee received the notice of demand that it realized regarding the orders having passed and immediately took necessary steps to file the present appeal.
The Ld.AR submitted that, the only issue based on which the addition is made is regarding the cash deposits of Rs. 28,02,500/- made in SBN during demonetization period on various dates. It is submitted that upto 14.11.2016, the cash deposited amounting to Rs. 17,28,000/- was only taken into consideration by the Ld.CIT(A) and the balance cash made after 14.11.2016, was added as unexplained cash credits u/s. 68 of the act by the Ld.AO which was upheld by the Ld.CIT(A).
He submitted that assessee was not aware of the appellate order being passed and therefore there is a reasonable cause in the delay caused to file the present appeal before this Tribunal.
On the contrary, the Ld.DR though vehemently opposed the condonation submitted that no affidavit has been furnished of the alleged consultant in support of the contentions of the assessee.
We have perused the arguments advanced by both sides. We note that in form 35, the email ID that is provided is bvrcli49@gmail.com and the email address mentioned in Form 36
Page 3 of is different. There is nothing on record filed by the Ld.DR to substantiate that the email ID mentioned in form 35 belongs to the assessee.
In any event, though the procedural law pertaining to the limitation has been drafted to construe it strictly, the fact remains that, considering such technicalities will not advance the cause of justice.
I take support from the observations of Justice Krishna Iyer wherein he has quoted at various occasion while dealing with technicalities that “any interpretation that alludes substantive justice is not to be followed and that substantive justice must always prevail over procedural technicalities”. Even Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 has laid down a ratio of similar principles. Respectfully following the thoughts propounded by Late Hon’ble Justice Krishna Iyer, as well as various decisions of Hon’ble Supreme Court on similar issues, I condone the delay caused in filing the present appeal before this Tribunal. Accordingly, the appeal stands admitted.
On merits, the issue is regarding addition made u/s. 68 of the SBN notes during the demonetisation period deposited by the assessee after 14.11.2016. It is noted that the authorities below has not considered the following CBDT Circulars.
Page 4 of 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. 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.
Accordingly, I remand the issue back to the Ld.AO to carry out necessary verification having regard to the evidences furnished by the assessee. Needless to say that proper opportunity of being heard must be granted to assessee. Accordingly, the grounds raised by the assessee stands partly allowed for statistical purposes. In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 11th July, 2024.