M/S. MULTI TEK INTERIOR SOLUTIONS ,BENGALURU vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(4) , BENGALURU

The learned Commissioner of Income-tax [Appeals], failed to appreciate that the learned assessing officer is not justified in making an addition of Rs. 1,51 ,07,577/-, wherein the profit of the appellant was estimated at 10% on the total turnover which is not just and proper, on the facts and circumstances of the case, 6. The learned Commissioner of Income-tax [Appeals], ought to have appreciated that the appellant has maintained proper books of accounts and the same are subject to audit under section 44AB of the Act for the impugned assessment year 2020-21 and the profit declared by the appellant in the return of income is O just and proper and consequently no addition was warranted on account of alleged declaration of lower profit which is against the principles of taxation without rejecting the books of accounts maintained by the appellant, on the facts and circumstances of the case. 7. Without prejudice, the learned Commissioner of Income-tax [Appeals], failed to appreciate that the estimation of income at 10% made by the learned assessing officer is substantially higher and the learned assessing officer ought to have adopted and assessed proper income by considering the comparable cases and assessed the income of the appellant, on the facts and circumstances of the case. 8. The learned Commissioner of Income-tax [Appeals] and the learned assessing officer ought to have appreciated that that consent does not confer jurisdiction and taxes are to paid in accordance with the scheme of the act and no tax can be collected without the authority of law and not based on an erroneous admission made during the course of survey, on the facts and circumstances of the case. 9. Without prejudice though not conceding the estimation of profit at 10% by the learned assessing officer is on a very higher side and the same requires to be reduced substantially, on the facts and circumstances of the case. 10. The learned Commissioner of Income-tax [Appeals] is not justified in not holding that the learned assessing officer was not justified in making a disallowance of a sum of Rs. 3,00,000/- by invoking the provisions of- section 40[b] of the Act, on the facts and circumstances of the case. 11. Without prejudice, to the right to seek waiver as per the parity of reasoning of the decision of the Hon'ble Apex Court in the case of M/s. Multi Tek Interior Solutions, Bangalore Page 3 of 8 Karanvir Singh 349 IT R 692, the Appellant denies itself liable to be charged to interest under section 234 A, 234 B and 234 C of the Income Tax Act on the facts and circumstances of o the case. The appellant contends that the levy of interest under section 234 A, 234 B and 234 C of the Act is also bad in law as the period, rate, quantum and method of calculation adopted by the learned assessing officer on which interest is levied are not discernible and are wrong on the facts of the case.

12. The appellant craves leave to add, alter, amend, substitute or delete any or all of the grounds of appeal

urged above.

13. For the above and other grounds to be urged during the course of hearing of the appeal the Appellant prays that the appeal be allowed in the interest of equity and justice.

2. The first issue for our consideration is that ground Nos.2 & 3 with regard to dismissal of appeal by ld. CIT(A) in limine without condoning the delay of 182 days in filing the appeal. Before the ld. CIT(A), there was a delay of 182 days in filing the appeal. The assessee explained the delay by way of condonation petition stating as follows: 1. “An order of assessment under section 143 [3] of the Income Tax Act, 1961 was passed on 28/02/2022 for the Assessment Year 2020-21 by the Deputy Commissioner of Income-tax, Central Circle - 2[2], Bengaluru. Since the appellant is not sure about the correct date of receipt of the impugned order of assessment, for the purpose of limitation the date of passing the impugned order of assessment i.e. 28/02/2022 is considered as the date of receipt of the impugned assessment order and as per the provisions of the Act the statutory appeal under 246A of the Act against the said order of assessment ought to have been filed on or before 30/03/2022 i.e. within 30 days from the date of receipt of the order. 2. The Appellant is a registered partnership firm carrying on the business of turnkey projects and interiors for corporates. The said business of the appellant is carried on in the name and style M/S. Multi Tek Interior Solutions.

3. A survey under section 133A of the Act was conducted in the premises of the appellant on 10/02/2020. The appellant during the course of statement recorded under section 131 of the Act had without any basis had inadvertently declared and estimated the profit from the business of the appellant at 10% of the total turnover achieved during the previous assessment years. i.e. 2018-19 & 2019-20. It is further submitted that for the impugned assessment year i.e. 2020-21 the M/s. Multi Tek Interior Solutions, Bangalore Page 4 of 8 appellant during the course of survey had agreed to offer of the profit since the appellant was handicapped with the status of the accounts maintained and consequently the appellant at the time of survey accepted to offer 8% of the as profits on the turnover achieved.by it.

4. It is submitted that during the impugned assessment year 2020-21, the appellant had maintained proper books of accounts and all supporting documents and evidences in support of the claims made in the books of accounts. The appellant though in the statement recorded during the course of survey had inadvertently declared the profit from the business at 8% on the total turnover, the appellant after verifying the records declared the actual business profit as per the books which worked out to Rs. 11,29,130/- as against the erroneous declaration made by the appellant at 8% on the total receipt during the course of survey.

5. The appellant for the impugned assessment year 2020-21, filed its return of income on 31/03/2021 reporting a proper and correct total income of Rs. 165,98,740/-. The said return of income filed by the appellant was processed under section 143 [1] of the Act. The appellant for the impugned assessment year i.e. 2020-21 had maintained proper and regular books of accounts and the said books of accounts maintained by the appellant was subject to statutory audit under section 44AB of the Act.

M/s. Multi Tek Interior Solutions, Bangalore Page 6 of 8 13. Wherefore the appellant / Petitioner once again humbly pray before your Honour to kindly condone the delay in filing of about 182 days in filing the present appeal and hear the same on merits of the matter for the advancement of substantial cause of justice.”

2.1 The ld. CIT(A) was of the opinion that there was no good and sufficient reason in filing the appeal belatedly before him. Accordingly, she dismissed the appeal in limine to adjudicate the grounds raised by assessee on merits. Against this assessee is in appeal before us. 2.2. The ld. A.R. reiterated the submissions made by him before the ld. CIT(A). 2.3 On the other hand, ld. D.R. relied on the order of ld. CIT(A).

3. We have carefully gone through the reason advanced by the assessee for delay in filing the appeal before ld. CIT(A). It was the submission of the ld. A.R. that the assessee has handed over the impugned assessment order to his accountant to hand over the same to the assessee’s counsel Shri V. Chandra Sekhar, Advocate, Bangalore. However, the said accountant has not handed over the assessment order to Shri V. Chandra Sekhar for further action. The assessee was of the bonafide belief that the accountant has handed over the impugned assessment order to Shri V. Chandra Sekhar. The assessee came to know about the failure on the part of his accountant of handing over the impugned assessment order to assessee’s advocate only on receipt of the penalty order u/s 270A of the Income Tax Act, 1961 (in short “The Act”). After enquiring the accountant, once again assessee made arrangement to consult with him and consulted the present advocate and thereafter the present advocate has taken steps to file appeal before the ld. CIT(A) and the present counsel has filed the appeal with a condonation petition before ld. CIT(A). Hence, there was a delay of 182 days in filing the appeal before the ld. CIT(A). 3.1 In our opinion, the explanation given is bona fide and it is a good and sufficient reason to condone the delay in filing the appeal M/s. Multi Tek Interior Solutions, Bangalore Page 7 of 8 before the first appellate authority. In these circumstances, it cannot be said that assessee is very callous in its approach in filing the appeal before the ld. CIT(A). 3.2 At this stage, it is appropriate to refer to the judgement of Hon’ble Supreme Court 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: “(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.

3.3 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 M/s. Multi Tek Interior Solutions, Bangalore Page 8 of 8 182 days in filing the appeal before ld. CIT(A). Accordingly, the delay is condoned. 3.4 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.