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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI D. KARUNAKARA RAO, AM & SHRI AMARJIT SINGH, JM
Assessee by: Shri Gaurang Unadkat Department by: Shri Manoj Kumar सुनवाईकीतारीख / Date of Hearing:03.10.2016 घोषणाकीतारीख /Date of Pronouncement: 06.01.2017 आदेश / O R D E R
PER AMARJIT SINGH, JM:
The assessee has filed the above mentioned appeals against the order dated 20.02.2013 passed by the Commissioner of Income Tax (Appeals)-34, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2001- 02 & 2002-03.
The assessee has raised the following grounds:- &3180.M.13 A.Y. 2001-02 &2002-03 “1. Disallowance of interest paid to various parties of Rs.4,35,122/- (a) CIT(A) erred in confirming the additions on account of amount paid as interest to various parties for Rs.4,35,122/- due to non- submission of information. (b) CIT(A) completely ignored the submission made by the appellant to the Assessing Officer as well as to CIT(A). (c) Appellant prays that above disallowances of Rs.4,35,122/- be deleted.
2. Additions of Interest disallowance at Rs.33,750/- (a) CIT(A) erred in confirming the disallowance of interest of Rs.33,750/- on interest free loan / advances given to M/s. Gauri Shankar Textiles Pvt. Ltd. (b) CIT(A) completely ignored the submission made by the appellant to the Assessing Officer as well as to CIT(A). (c) Appellant prays that above disallowance of Rs.33,750/- be deleted.
3. Additions of Conveyance, shop and staff welfare expenses of Rs.10,000/- (a) CIT(A) erred in confirming the disallowance of expenses paid during the year viz. Conveyance, shop and staff welfare expenses of Rs.10,000/-. (b) CIT(A) completely ignored the submission made by the appellant to the Assessing Officer as well as to CIT(A). (c) Appellant prays that above disallowance of Rs.10,000/- be deleted.
3. The brief facts of the case are that the assessee filed his return of income on 29.10.2001 declaring total income to the tune of Rs.1,04,380/-. The return was accompanied by the Tax Audit Report in &3180.M.13 A.Y. 2001-02 &2002-03 Form No.3CB and 3CD as per the provisions of section 44AB of the Income Tax Act, 1961 ( in short “the Act”). The return was processed u/s.143(1) of the Act. Thereafter, the case was selected for scrutiny and notice u/s.143(2) and 142(1) of the Act were issued and served upon the assessee. The assessee’s sources of income was of the salary and interest on capital from the firm, M/s. Tirupati Textiles. Thereafter, the assessee took over the registered firm as his proprietary concern with effect from 01.07.2000. The Assessing Officer disallowed the interest on loans to the tune of Rs.4,21,422/- and also disallowed the interest on loans and advances to the tune of Rs.33,750/- and disallowed the conveyance, shop expenses and staff welfare expenses to the tune of Rs.10,000/- but the assessee was not satisfied, therefore, the assessee filed an appeal before the CIT(A) but the CIT(A) considered the same delayed for the period of 55 months and 7 days, therefore dismissed the application for the condonation of delay, hence the assessee has filed the present appeal before us. ISSUE NO.1 TO 3:- 4. Issue no.1 to 3 are in connection with the disallowance of certain expenses but on appraisal of the order dated 20.02.2013, it came into the notice that the CIT(A) did not dismiss the appeal on merits but dismissed the application for the condonation of delay, therefore, the appeal filed before him was ordered to be dismissed on 20.02.2013. At the very outset the learned representative of the assessee has argued that the assessee was heavily disturbed on account of bank liability because the bank was pressuring him to sell his flat to recover the dues and the financial position &3180.M.13 A.Y. 2001-02 &2002-03 of the assessee was not well and the assessee was unable to engaged the Chartered Accountant to represent the matter, therefore, the delay is liable to be condoned in the interest of justice. However, on the other hand the learned representative of the department has placed reliance upon the order passed by the CIT(A) in question. Before discussing further, it is necessary to advert the finding of the CIT(A) on record:- “2.3 I have carefully considered the submissions of the appellant. The assessment was completed on 31.03.2004 and in the normal course, if one week is allowed for service of notice, the appellant should have received the order by 7.4.2005 and the appeal should have been filed by 6.5.2005. There was a delay of 55 months and 7 days in filing the appeal. No reasonable cause for delay in filing the appeal was brought before me. During the course of hearing on 12.2.2013, the Authorized Representative was specifically directed to file the reasons leading to the delay in filing the appeal and the justification for that. The Authorized Representative was further directed to file evidences to show that the assessment order passed u/s.143(3) dated 31.03.2004 was really served on to the appellant on 28.9.2007. The Authorized Representative has expressed his inability and informed me at the time of hearing that there is no specific gather some evidences in this regard and to file the same by 15.2.2013. The Authorized Representative was not able to furnish any evidence till completing the order. In the absence of any evidence, the claim of the appellant that the 4 &3180.M.13 A.Y. 2001-02 &2002-03
assessment order was received two years and 7 months after the order was passed is not acceptable. The letter filed by the appellant seeking condonation of delay filed along with Form No.35 is reproduced for the sake of convenience:- “The assessment order u/s.143(3) was served on the assessee on 28.09.2007 but the appeal for the same could not be filed till date. The following is the reason for the delay. The assessee Mr. Babulal Lavti was very disturbed at that time as he had a very heavy bank liability and the bank was pressuring him to sell his flats to recover the dues. From the above, it is evident that his financial position was not stable and he was not in a position nor he had knowledge about the Income tax proceedings and the time limits stipulated in the Act for filing the appeal. Further, we would like toad that the assessee’s accounts were handled by Ms. Monika R. Porwal who was an accountant by profession. She did not have the knowledge about Income Tax matters and the assessee’s case was never handled by a CA till now. Your honour, as mentioned above we can draw the conclusion that due to the assessee’s financial instability he could not recruit a CA to handle his case.
&3180.M.13 A.Y. 2001-02 &2002-03 Your honour we humbly and deeply request you to please accept our plea for delay in filing the appeal and accept our appeal for our above we can draw the conclusion that due to the assesee’s financial instability he could not recruit a CA to handle his case. Your honour we humbly and deeply request your to please accept our plea for delay in filing the appeal and accept our appeal for our above mentioned client and we regret the delay as such there was no intention on the part of the assessee to hide or conceal any matter which is against the interest of revenue.”
On appraisal of the above mentioned order, it is not in dispute that the assessment was completed on 31.03.2004 and the assessee ought to be received the said order by 07.04.2005 and ought to be file the appeal before the CIT(A) on or before 06.05.2005. In the instant case the delay is of 55 months and 7 days. There is no plausible explanation on record to which it can be assumed that the delay is liable to be condoned in the interest of justice. The assessee took the plea that he received order dated 31.03.2004 from the Assessing Officer on 28.09.2007 but in this regard nothing was produced before the CIT(A) as well as before us. No evidence of any king was produced before the CIT(A) and no evidence of any king was produced before us to substantiate the claim of the assessee in connection with the condonation of delay. The assessee took the plea that the assessee was not in a good financial position at that time and the bank was pressuring him to &3180.M.13 A.Y. 2001-02 &2002-03 sale the flat to recover the dues. But in this regard no evidence of any kind was produced before CIT(A) as well as before us. The assessee took the plea of his bad financial position as he was unable to engaged the Chartered Accountant to represent the matter before the CIT(A) as well as before the Hon’ble Income Tax Appellate Tribunal. But No evidence of any kind in connection with the financial status of the assessee and in connection with the unable to engaged the advocate has been produced before CIT(A) as well as before us. The point which has been taken before us has been considered by the CIT(A) and decided the matter accordingly. Before us no distinguishable material has been produced to which it can be assumed that the learned CIT(A) did not consider the specific point of the assessee raised for the condonation of delay. Each day’s delay is required to be explained but the assessee failed to explain in accordance with law. Coming to the merit of the case also no material of any kind was produced before as to which it can be assumed that the Assessing Officer has wrongly disallowed his claim in connection with the interest as well as expenses. Without any material before us, we are also enable to consider the delay in view of the merit of the case of the assessee also. Considering the case of the assessee from every angle and law discussed by the CIT(A) in connection with the delay, we are of the view that the CIT(A) has decided the matter judiciously and correctly which is not require to be interfere with at this appellate stage.
The assessee has raised the following grounds:- “1. Addition of Weaving Charges at Rs.4,22,683/- &3180.M.13 A.Y. 2001-02 &2002-03 (a) CIT(A) erred in confirming the additions on account of amount paid as Weaving charges to M/s. Gauri Shankar Textile Pvt. Ltd. In which assessee is a director for Rs.4,22,683/- (b) CIT(A) completely ignored the submission made by the appellant to the Assessing Officer as well as to CIT(A). (c) Appellant prays that above disallowances of Rs.4,22,683/- be deleted.
2. Additions of Brokerage and Commission Expenses at Rs.42,007/- (a) CIT(A) erred in confirming the disallowance of Brokerage and Commission paid of Rs.42,007/- on account of non submission of information. (b) CIT(A) completely ignored the submission made by the appellant to the Assessing Officer as well as to CIT(A). (c) Appellant prays that above disallowance of Rs.42,007/- be deleted.
3. Additions of Interest paid at Rs.1,09,054/- (a) CIT(A) erred in confirming the disallowance of interest paid during the year to various parties of Rs.1,09,054/- on account of non-submission of information. (b) CIT(A) completely ignored the submission made by the appellant to the Assessing Officer as well as to CIT(A). (c) Appellant prays that above disallowance of Rs.1,09,054/- be deleted.
The facts of the case are quite similar of the facts of the case as mentioned in , however, the figure is different.
On appraisal of the order passed by the CIT(A) in question, it came into the notice that the CIT(A) has decided the matter by not condoning the &3180.M.13 A.Y. 2001-02 &2002-03 delay and dismissed the appeal. On appraisal of the order in question, it came into the notice that the assessee filed the appeal before the CIT(A) delayed for the period of 55 months and 7 days. The facts and circumstances in connection with the delay in filing the appeal is quite similar as discussed above while discussing in ITA No.3179/M/2013. There is no need to repeat the reasons again because the reasons which has been taken in this appeal has already discussed and decided in the above mentioned appeal i.e. I.T.A.3179/Mum/2013. Accordingly, we are unable to condoned the delay in this appeal also hence dismissed the appeal of the assessee on the ground of the delay.