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Income Tax Appellate Tribunal, “H”, BENCH MUMBAI
Before: SHRI RAJENDRA, AM & SHRI RAM LAL NEGI, JM
आदेश / O R D E R
PER BENCH:-
These appeals have been filed by the assessee Mr. Dushyant M. Khona & his wife Mrs. Pushpa M. Khona against two separate orders dated 05/08/2016 passed by the Ld. CIT(Appeals)-36, Mumbai pertaining to the assessment year 2006-07, 2009-10 respectively, whereby the Ld. CIT dismissed both the appeals filed by the assessee against assessment order dated 22/03/2014 & 25/03/2014 passed u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (for short ‘the Act’), by rejecting the application for condonation of delay in filing the sais appeals. Since the issues involved in both the appeals are common, both the appeals were clubbed, heard together and are being disposed of by this common order for the sake of convenience.
ITA No. 6390/Mum/2016 Asst. year 2009-10
Brief facts of this case are that the assessee filed his return of income for the assessment year 2009-10 declaring the total income of Rs. 6,99,740/- The assessment proceedings u/s 143(3) of the Act was completed, determining the total income of Rs. 8,33,380/-. The case was later on reopened as during the search and seizure operation carried out in the case of M/s Mahasagar Securities Pvt. Ltd. and its related group companies and Shri Mukesh Choksi stated that he and his group through the Mahanagar Securities private Ltd and its related group of 34 companies used to give accommodation entries in order to enable the clients to declare speculation profit/loss, short term capital gain/loss, long term capital gain/loss profit on account of commodity trading, introduce share application money or introduce money in the form of gifts. Shri Mukesh Choksi identified the names of the beneficiaries including the assessee in the present case who availed financial accommodation entries for bogus
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capital gain/loss for shares of Maha Polybute and its depository was during the financial year 2008-09 relevant to the assessment year 2009-10. Accordingly, the assessee was asked to furnish details of all transactions carried out with M/s Alliance intermediaries & Network private Ltd. The explanation filed by the assessee was not accepted by the AO and holding that the sale of shares: profit amounting to Rs.8,93,724/-was out of undisclosed sources of income, made addition of Rs. 8,93,724/-to the income of the assessee and assessed the total income at Rs. 17,27,110/-(rounded off).
Felling aggrieved, by the assessment order the assessee filed the appeal against the said order. However, the appeal was filed after the expiry of limitation period. The Ld. CIT(A) relying on the decision of Hon’ble Delhi High Court passed in the case of Surinder Kumar Boveja vs. CWT 287 ITR 52 and decision of Hon’ble Supreme Court in the case of Rankak and others vs. Rewa Coalfields Ltd. reported at AIR 1962 SC 361, dismissed the application for condonation of delay submitted by the assessee and dismissed the appeal in limine. The assessee is in appeal before the tribunal against impugned order passed by the Ld. CIT(A) on the following effective grounds of appeal:-
On facts and circumstances of the case and in law, the learned CIT(A) has not granted the condonation of delay and dismissed the appeal against the principal of natural justice.
On facts and circumstances of the case and in law, the learned CIT(A) has confirmed assessed income at Rs. 17,27,110/- against income assessed as per order u/s. 143(3) of the Income Tax Act, 1961 dated 15.12.2011 Rs. 8,33,380/-.
On facts and circumstances of the case and in law, the learned CIT(A) has confirmed additions of Rs. 8,93,724/- as undisclosed income in shares of M/s. Maha Polybute without considering the facts of the case that no such shares have been purchased by the Appellant.
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On facts and circumstances of the case and in law, the learned CIT(A) has not considered the reopening of assessment u/s 148 unreasonable and wrong information.
At the very outset the Ld. Counsel for the assessee submitted that the Ld. CIT(A) has dismissed the appeal of the assessee by wrongly rejecting the application for condonation of delay. The assessee was prevented from filing the first appeal within limitation period due to sufficient reasons mentioned in the application which is duly supported by an affidavit.
On the other hand, the Ld. Departmental Representative (DR), submitted that the Ld. CIT(A) has rightly rejected the application for condonation of delay as the assessee has failed to prove the sufficient cause which presented the assessee to file the appeal within the limitation period.
We have heard the rival submissions and also perused the material placed on record in the light of the rival submissions. In support of the application for condonation of delay the assessee has furnished an affidavit before the Ld. CIT(A) the relevant portion of which reads as under:-
“That, the appeal order passed by Ld. ITO, Wd-20(2)(1), Mumbai dated25/03/2014 was served to me on31/03/2014 and 1st appeal ought to have been filed before 30/04/2014. However, the said appeal could not be filed on 30/04/2014 which is late by 30 days. The delay in filing of the appeal has occurred under the bonafides reasons and compelling circumstances beyond my control since I was required to re-verify the several documents relating to the period over 5years. Due to shift of my residence from Vile Parle(East), Mumbai to Andheri(East), Mumbai, the various documents related to Asst. year 2009 – 10 got mixed up and were mutilated. On receipt of the assessment order dated25/03/2014 , my
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Chartered Accountant asked me to furnish all purchase bills, sale bills, Shreyas aggregates, D-mat statements, bank statements and other documents and two re-verify the fact that I had not entered into any transaction of purchase and sales of shares of M/s Mahasagar Polubute Ltd to enable him to draft the Grounds of appeal and facts of the case. As I was required to re-verify the old documents, thus the 1st appeal would not be filed in time. Further, my regular Chartered Accountant Mr. Jayprakash Tiwari was not handling the appeal matter and it took certain time to appoint a new counsel named Mr. Sanjay Jain, Chartered Accountant to highly appeal.”
The law of limitation is prescribed by the Act, under section 249(3) which envisages that there should have been a sufficient cause for not presenting the appeal within the prescribed period and where the appellant fails to show sufficient cause for condonation of delay the application for condonation of delay is liable to be rejected. From the contents of the affidavit it does not appear that the delay is prolonged and the assessee has failed to show that the delay had occurred in spite of exercise of due attention and diligence. Hon’ble Supreme Court in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353 has laid down the parameters to be followed while deciding the application for condonation of delay in filing an appeal. The relevant part of the judgment reads as under: “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. 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
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delay? The doctrine must be applied in a rational common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, 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 non-deliberate 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 judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.” 7. In view of the principles of law laid down by the Hon’able apex court, are of the considered opinion that the delay in filing the appeal was neither intentional nor due to negligence on his part and the assessee was prevent from filing the appeal within limitation period due to the circumstances beyond his control. Therefore, in the interest of justice the assessee should get an opportunity to present his case on merits. We therefore, set-aside the impugned order passed vide which the Ld. CIT(A) rejected the application of the assessee for condonation of delay and dismissed the appeal and send the appeal back the Ld. CIT(A), to decide the same on merits after affording reasonable opportunity of being heard to the assessee.
ITA No. 6391/Mum/2016 Asst. year 2006-07
Brief facts of the case are that on the basis of AIR information that during the financial year 2005–06 relevant assessment year 2006-07 the assessee had made payments for acquiring shares of different companies however as per ITD system since the appellant had not filed return of income the said transition could not be verified. Accordingly the assessment was reopened under section
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147 of the act and after receiving explanations from the assessee the claim of exempted long term capital gain was rejected by the AO and the same was a date to the total income of the appellant.
Felling aggrieved, by the assessment order the assessee filed the appeal against the said order. However, the appeal was filed after the expiry of limitation period. The Ld. CIT(A) relying on the decision of Hon’ble Delhi High Court passed in the case of Surinder Kumar Boveja vs. CWT 287 ITR 52 and decision of Hon’ble Supreme Court in the case of Rankak and others vs. Rewa Coalfields Ltd. reported at AIR 1962 SC 361, dismissed the application for condonation of delay submitted by the assessee and dismissed the appeal in limine. The assessee is in appeal before the tribunal against impugned order passed by the Ld. CIT(A) on the following effective grounds of appeal:-
“1. On facts and circumstances of the case and in law, the learned CIT(A) has not granted the condonation of delay and dismissed the appeal against the principal of natural justice.
On facts and circumstances of the case and in law, the learned CIT(A) has confirmed assessed income at Rs. 40,00,842/- against returned income of Rs. 9,29,502/-.
On facts and circumstances of the case and in law, the learned CIT(A) has not considered the reopening of assessment u/s. 148 as unreasonable and on wrong information, therefore reopening is bad in law.
On facts and circumstances of the case and in law, the learned CIT(A) confirmed in treating the Long term capital gains of Rs. 30,71,340/- as normal income and not allowed the exemption u/s 10(38) of the Income Tax Act, 1961.”
Before us, Ld. Counsel for the assessee submitted that the Ld. CIT(A) has dismissed the appeal without giving an opportunity of being heard by rejecting
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the application for condonation of delay. The assessee was prevented from filing form the first appeal due to the sufficient cause mentioned in the application duly supported by an affidavit. Hence, the order is liable to be set aside.
On the other hand, the Ld. Departmental Representative (DR), submitted that the Ld. CIT(A) has rightly rejected the application for condonation of delay and dismissed the appeal as the assessee has failed to prove the sufficient cause which presented the assessee to file the present appeal within the limitation period. 5. We have heard the rival submissions and also perused the material placed on record in the light of the rival submissions. We notice that the facts and circumstances under which the Ld. CIT(A) has dismissed the appeal by rejecting the application for condonation of delay, in ITA No 6390/Mum/2016 Asst. year 2009-10 are identical to the facts and circumstances of the present case and the reasons mentioned in the affidavits in both the cases are similar. Since we have set aside the impugned order in ITA No6390/Mum/2016 aforesaid, on the same reasoning we also set aside the impugned order passed in the present case and sent the appeal back to the Ld. CIT(A) for deciding the appeal on merits after affording a reasonable opportunity of being heard to the assessee.
In the result, the appeals filed by the assessee’s for Asst. year 2006-07 & 2009-10 are allowed for statistical purposes.
Order pronounced in the open court on 22nd February, 2017
Sd/- Sd/- (RAJENDRA) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER मुंबई Mumbai; �दनांक Dated:22/02/2017
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आदेश ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. आयकर आयु�त(अपील) / The CIT(A)- 4. आयकर आयु�त / CIT 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाईल / Guard file.
आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील�य अ�धकरण, मुंबई / ITAT, Mumbai
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