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Facts
The assessee's appeal was filed after a delay of 104 days, which was condoned due to the assessee suffering from Chicken Pox. The assessee's case was selected for scrutiny due to large cash deposits during demonetization and an increase in sales with decreased profitability. The Assessing Officer made additions related to sundry creditors and other items.
Held
The Tribunal admitted the additional evidence filed by the assessee under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963, as it was considered relevant to the controversy. The Tribunal remanded the issue of sundry creditors back to the Assessing Officer for verification of the additional evidence and contentions.
Key Issues
Whether the delay in filing the appeal is condonable and whether additional evidence should be admitted for verification by the Assessing Officer.
Sections Cited
143(3), Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963, Rule 46A(1)(c)
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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI MANU KUMAR GIRI, JM
आयकर अपीलीय अिधकरण ‘ए’ �ायपीठ चे�ई म�। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI माननीय �ी मनोज कुमार अ�वाल ,लेखा सद� एवं माननीय �ी मनु कुमार िग�र, �ाियक सद� के सम�। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI MANU KUMAR GIRI, JM आयकरअपील सं./ (िनधा�रणवष� / Assessment Year: 2017-2018) Boopathi Mouliswaran, Vs. The Assistant Commissioner of 758, Dr. Radhakrishnan Road, Income, Tatabad, Non Corporate Circle 2, Coimbatore 641 012. Coimbatore. [PAN: AHRPM 2004Q] (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/ Appellant by : Shri Shrenik Chardia, C.A., ��यथ� क� ओर से /Respondent by : Ms Kavitha, IRS, Addl. CIT. सुनवाई क� तार�ख/Date of Hearing : 28.08.2024 घोषणा क� तार�ख /Date of Pronouncement : 28.08.2024 आदेश / O R D E R PER MANU KUMAR GIRI (Judicial Member)
This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in order No.ITBA/NFAC/S/250/2023-24/1056128763(1) dated 15.09.2023. The assessment was framed by the Assistant Commissioner of Income, Non Corporate Circle 2,Coimbatore for the assessment year 2017-18 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’), vide order dated 30.12.2019.
2. The assessee has raised the following grounds of appeal:- ‘’1. The order of the Learned Assessing officer, is opposed to law and unsustainable in the facts and the circumstances of the case.
2. The Learned Assessing officer has exceeded his jurisdiction in finalising a case of Scrutiny beyond the Scope of CBDT Circular and without following due process of law and therefore be held as bad in law.
3. The Learned Assessing officer has failed to appreciate that the evidences given in the form of Audited Statements for the year ended 31.03.2019 and copy of the return filed to show that the difference in the opening balance of Creditors and Debtors were adjusted and the Net effect of Debit balance is written off during Α.Υ 2019-2020.
4. For these and other additional grounds of appeal that may be adduced at the time Of hearing, the order of the CIT(A) is opposed to law and unsustainable in the facts and circumstances of the case’’.
3. At the outset, it is noticed that the appeal filed by the assessee is barred by limitation by 104 days. The order of CIT(A) dated 15.09.2023 was received by the assessee on 15.09.2023 itself as per Form
36. The appeal has to be filed on or before 14.11.2023 but was filed only on 26.02.2024. The assessee has filed affidavit along with condonation petition stating the reason that he was affected with Chicken Pox and recovered only in the month of February, 2024 and filed the appeal immediately. When these facts were confronted to ld.Addl.CIT-DR, she objected for condoning the delay. We find the cause as reasonable and hence, condone the delay and admit the appeal for adjudication.
Brief facts of the case are as under:- The assessee is an individual and the proprietor of Sri Balaji Traders filed his return of income for the assessment year 2017-2018 on 24.03.2017 declaring a total income of Rs.14,46,700/-. The case of the assessee was selected for Scrutiny under CASS for the following reasons as mentioned in the Assessment order. i. large cash deposit during demonetization period ii. Abdominal increase in sales with decrease in profitability as compared to previous year The assessee offered the explanation with evidence in respect of both the items and the same were uploaded. The ld.AO noted the following difference with regard to Sundry Creditors and the same is illustrated hereunder:-
Creditor's name Closing balance as Closing balance as Difference per Appellant's per Party's book books of accounts Alstone 825745 813271 12,528
HIL 743255 639942 1,03,313
Ramco 1584961 1144647 4,40,315
Sheet King 916500 Closed business 9,16,500 14,72,956 Total The Ld. Assessing Officer completed the assessment and made the following addition of Rs.53,42,465/-. Sl.No Particulars Rs. i Difference in interest receipts 24,790 ii Disallowance under repairs and 2,70,719 maintenance iii Difference in sundry creditors A/c on 14,72,956 confirmation of balance iv Deposit on SBN over above the closing 35,74,000 balance as on 08.11.2017 Total 53,42,465
Aggrieved, by the same assessee preferred an appeal before the ld. CIT(A).
The ld. CIT(A) in its order at para 6.4 held as under:-
’6.4 The appellant in its ground of appeal no 4 to 7 assailed the AO in adding the difference in the confirmation of the Sundry Creditors without appreciating the submissions, the VAT returns and adding Rs. 1472956/- as sundry creditor written off. The AO in the assessment order noted that the assessee in his submission wherein it was seen that these. were written off in 2018-19, and in giving effect the assessee has further debited to the P& L Account which as per AO was not proper and accordingly, he added Rs. 1472956/- The appellant in its submissions stated that confirmation of balances was obtained to reconcile the Trade creditors balance and the difference in Debit/Credit balances over a period of time were written off in the books. There was a debit balance of Rs.22,46,325 to be adjusted against the Credit balance of Rs.8.74,678, which was comes to Rs. 1371647/- was adjusted during the year. Further the addition on account of Ramco and Steel King amounting to Rs. 13,56,815/- is unwarranted as a part amount amounting to Rs.5,84,000 has already paid and the balance is subsequently written off in the A.Y: 2019-20. The submission is perused and is not found to be convincing hence the difference of Rs. 1371647/- is sustained. The ground of appeal is dismissed’’.
Aggrieved, now the assessee is in further appeal before us.
At the outset, the ld. Authorized Representative submitted a petition under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 for admission of additional evidence with regard to Sundry Creditors and contended as under:-
‘’7. However, the Petitioner was unable to file the relevant details/documents during the course of assessment as the Petitioner could not obtain the Bank Statements with the stipulated period of time. Hence, the Petitioner now seeks Your Authority's permission to submit the following documents in line with the provisions of clause (c) of sub- section (1) of Rule 46A: Copy of the relevant extract of the bank statement held with City Union Bank bearing Account No.053120000127661 for the period 01.04.2017 to 31.03.2018 of the appellant. (Enclosed in Paperbook at page 27 to 31)
Copy of the relevant extract of the bank statement held with Indian Overseas Bank bearing Account No.352802000000117 for the period 01.04.2017 to 31.03.2018 of the appellant. (Enclosed in Paperbook at page 32 to 37) Copy of the relevant extract of the bank statement with Indian Overseas Bank bearing Account No.352802000000117 for the period 01.04.2018 to 31.03.2019 of the appellant. (Enclosed in Paperbook at page 38 to 39) Copy of the ledger account for M/s Ramco Industries Limited in the books of the appellant for the period 1.04.2018 to 31.03.2019. (Enclosed in Paperbook at page 40)’’.
Per contra, ld. Addl. CIT –Departmental Representative opposed the petition for admission of additional evidence filed under Rule 29 of the Income Tax (Appellate Tribunal) Rules 1963 on the addition of Sundry Creditors.
We have heard the rival submissions and perused the record of the lower authorities and petition for admission of additional evidence under Rule 29 of the Income Tax (Appellate Tribunal) Rules 1963. We find that the additional evidence filed goes root to the matter to decide controversy hence we admit the petition u/r.29 of the Income Tax (Appellate Tribunal) Rules 1963. Since we have admitted the additional evidence, therefore we remand back this issue to the file of the ld. Ld. Assessing Officer to verify the additional evidence and contentions of the assessee narrated in para 5 above. Needless to say that the ld. Ld. Assessing Officer will proceed with verification after affording the assessee an adequate opportunity of heard. The ld. Ld. Assessing Officer will recomputed the income thereafter.
In the result, the appeal filed by the assessee in for Order pronounced in the open court on 28th day of August, 2024 at Chennai.