M/S MANMOHAK INFRASTRUCDTURE PVT. LTD. ,KOLKATA vs. ITO, WARD-10(2), KOLKATA

(A.Y. 2012-2013) M/s. Manmohak Infrastructure Pvt. Ltd. Faceless Appeal Centre (NFAC), Delhi dated 22.09.2023 passed for A.Y. 2012-13.

The assessee has taken four grounds of appeal. However, its grievances revolve around a single issue, namely ld. CIT(Appeals) has erred in confirming the addition of Rs.3,77,00,000/-, which was added by the ld. Assessing Officer with the aid of Section 68 of the Income Tax Act.

Brief facts of the case are that the assessee has filed its return of income on 30.09.2012, declaring ‘NIL” income. The case of the assessee was selected for scrutiny assessment and notices under sections 143(2)/142(1) were issued and served upon the assessee. The assessee did not respond to those notices. The ld. Assessing Officer passed the assessment order under section 144(1) of the Income Tax Act, i.e. according to his best judgment. He observed that on verification of Income Tax Data Base, it revealed that assessee-company had issued paid-up shares including share premium amounting to Rs.3,77,00,000/-. As observed earlier, the assessee did not respond any of the notices, therefore, the ld. Assessing Officer treated receipts of such money as unexplained cash credit and made an addition of Rs.3,77,00,000/-.

Dissatisfied with the assessment order, the assessee carried the matter in appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) has issued five notices in a row, but the assessee did not submit anything. Hence the addition stands confirmed. The ld. CIT(Appeals) has dismissed the appeal.

The Registry has pointed out that appeal is time-barred by 24 days. In order to explain the delay, the assessee has annexed a letter alongwith the appeal, which reads as under:-

In response to the notice of hearing, the assessee did not come present before the Tribunal. With the assistance of ld. D.R., we have gone through the record carefully. A perusal of the assessment order would reveal that it is an assessment framed according to the best judgment of the ld. Assessing Officer. It is an ex-parte order. The first available opportunity for the assessee was when it filed an appeal before the ld. CIT(Appeals) and submitted the statement of facts. We have perused that statement of facts available on the record, but in the statement of facts, the assessee has only raised a plea that proper opportunity of hearing was not granted by the ld. Assessing Officer as contemplated in proviso to section 144(1) of the Income Tax Act. The assessee has not pleaded its case on merit. It has not pleaded the details of applicants, their source of money or anything else. In response to four notices, no one has appeared before the ld. CIT(Appeals). The appeal before the Tribunal has made time barred by 24 days. No one has appeared before the Tribunal nor any paper book has been filed, wherein details on merit have been demonstrated before the ld. 2nd Appellate Authority.

We are conscious of the facts that punishment in the shape of taxes and penalty could be disproportionate to the negligence of assessee for not appearing before the ld. Assessing Officer or before the ld. 1st and 2nd Appellate Authority, but failure of the assessee to plead its case on merit do exhibit that it is a Company which is on papers only. The shadow prosecutor of the proceeding do ensure procedural compliance of filing appeals before the Appellate Authority in time. Our experience of more than twenty years in (A.Y. 2012-2013) M/s. Manmohak Infrastructure Pvt. Ltd. adjudicating such type of litigation do suggest that this type of stand is being taken intentionally so that the time limit to take action in the case of those share applicants could be expired and a plea be raised before the Higher Appellate Forum that matter be remitted back for deciding afresh on merit. After expiry of six years earlier prior to 2021 and now ten years, action in the case of share applicant would not be taken up by the Income Tax Authorities. When we examine these facts and try to strike a balance between the adjudicatory process, then sometime it gives us pain and disappointment. But nevertheless, we have to resolve this dispute according to the material available on record.

A perusal of the application filed for condonation of delay, we are of the view that neither an affidavit of the Director is being filed nor exact details are submitted as to how this delay has happened. The assessee has not filed any confirmation from Ms. Devuani Dutta showing that appeal papers were submitted to her within time and she was busy in other tax matters and, therefore, could not file the appeal. To our mind, it is just an effort to persuade us to believe in this make belief story, otherwise there is no substance. Therefore, the delay in filing the appeal is not condoned. The appeal is dismissed being time barred.

In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on 02/04/2024. Sd/- Sd/- (Manish Borad) (Rajpal Yadav) Accountant Member Vice-President (KZ) Kolkata, the 2nd day of April, 2024