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Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SHRI PRAKASH CHAND YADAV
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal by assessee is directed against order of NFAC for the assessment year 2017-18 dated 5.4.2024 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”). The assessee raised following grounds:
1. “The orders of the authorities below are against the fact and circumstances of the case.
2. On the fact and circumstances of the case, the Assessing Officer erred in making the addition of Rs.85,00,000/- as unexplained investment u/s 69A for cash deposits made during the period other than demonetization period, as the same cash deposits were not belonging to the Appellant, but belonged to one Mr. E Ramakrishnaiah having PAN: AQQPR 9064B.
3. On the fact and circumstances of the case, the Assessing Officer erred in making the addition of Rs.85,00,000/- though he was -having knowledge of the beneficiary of the said cash deposits was Mr. E.
Malaya Radha Krishna Akashdeep, Chikaballapur Dist. Page 2 of 5 Ramakrishnaiah for payment of his outstanding of excise duty dues to the Government of Karnataka and the Assessing Officer fails to make proper enquiry with Mr. E. Ramakrishnaiah u/s 133(6) or by issuing summons u/s 131 of Income Tax Act, 1961.
On the fact & circumstances of the case, under the provisions of law, the Assessing Officer erred in computing the tax liability as per the provision u/s 115BBE of the Income Tax Act, 1961 for the addition made u/s 69A of the Income Tax Act, 1961 for the transactions of the F.Y 2016-17. The amendment to the Sec. 115BBE of the Income Tax Act, 1961 made by Taxation Laws (Second Amendment) Act, 2016 which got the assent from The President of India on 15th Dec. 2016. The said amendment states that the change shall be effective from 01/04/2017. It does not say A.Y 2017-18.
On the fact and circumstances of the case and under the provisions of the law, the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi erred in dismissing the appeal of the Appellant Firm in lamine without condoning the delay of 55 days even after considering the merit of the case in detail and also considered the additional evidences in the form of Affidavit in the appeal order.
For these and other reasons which may be adduced at the time of hearing, Your Honour is requested to delete the addition made by the A.O, as the cash deposited amount owned up by Mr. E. Ramakrishnaiah, which has been accounted in his books of accounts and also, he has used Appellant's account for remittance of Government dues as his accounts were seized by the sales tax department for non-payment of VAT.
The Appellant craves leaves, to add, to alter, to amend and to delete any other grounds at the time of hearing.
Facts of the case are that during the demonetization period, there was a deposit at Rs.88 lakhs to the assessee’s bank account. On the same day, there was a RTGS to M/s. Sarvani Projects at Rs.88 lakhs. The ld. AO called for various information as seen from the assessment order at page 3 to explain the source of that deposit for which there was no response. Hence, the ld. AO made addition of Rs.85 lakhs u/s 69A of the Act as unexplained investment on account of cash deposited to assessee’s bank account. Against this assessee carried appeal before NFAC belatedly by 55 days. The Malaya Radha Krishna Akashdeep, Chikaballapur Dist. Page 3 of 5 assessee has filed an affidavit before NFAC mentioning the reasons for delay as follows: 1. “I am not a Income Tax assessee and non filer of Income Tax returns, as my income was below the minimum exempt limit for all the years prior to financial year 2019-20.
2. In my case I.T.O, Ward — 1, Chikkaballapur passed the order u/ s 144 on 26-12-2019 which has been served on me by mail on the same day.
3. The last date for filing the appeal before CIT(Appeals)-6, Bangalore was on 25-01-2020. Now, I prefer this appeal on this day 20th March, 2020. Hence there was a delay of 55 days in filing the appeal. 4. The reason for delay is that I was unaware of the proceedings of filing the appeal against the said order and also the cash deposits were made in my account was not belongs to me, which was to one Mr. Ramakrishnaiah S/o E. Bhimayya having PAN: AQQPR 9064 B. Mr. E. Ramakrishnaiah was assured me that he will look into the matter and do the necessary acts in this regard. Even after waiting for two months, Mr. E. Ramakrishnaiah not filed appeal or paid tax on my behalf. On being Mr. E. Ramakrishnaiah failed in his promise. I decided to file the appeal with delay of 55 days to protect my interest.”
2.1 The NFAC found that there was no reasonable cause for filing the appeal belatedly by 55 days before the NFAC by observing that there was no reasonable cause for filing the appeal belatedly and the reason advanced by the assessee is not good and sufficient reason to condone the delay. Against this assessee is in appeal before us.
We have heard the rival submissions and perused the materials available on record. Admittedly, there was a delay of 55 days in filing the appeal belatedly before the NFAC. The assessee explained the delay by way of an affidavit as discussed in earlier para. In these circumstances, on going through the reasons as mentioned in his affidavit, it cannot be said that assessee is very callous in its approach in filing the appeal before the ld. CIT(A). In the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471), Hon’ble Supreme Court laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:
Malaya Radha Krishna Akashdeep, Chikaballapur Dist. Page 4 of 5 “(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 nondeliberate 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.
3.1 Being so, 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 for injustice being done because of non-deliberate delay. In our opinion, this is a fit case to condone the short delay of 55 days in filing the appeal before ld. CIT(A). Accordingly, the delay is condoned. 3.2 After condoning the delay, in our opinion, it is appropriate to remit the issue in dispute with regard to merit of the addition made by ld. AO to the file of ld. CIT(A) as he failed to adjudicate the same. Accordingly, the issue in dispute is remitted to the file of ld. CIT(A) for fresh adjudication.
Malaya Radha Krishna Akashdeep, Chikaballapur Dist. Page 5 of 5 4. In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 24th June, 2024