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Income Tax Appellate Tribunal, MUMBAI BENCHES “B”, MUMBAI
Before: SHRI R.C. SHARMA(AM) & SHRI SANDEEP GOSAIN (JM)
Date of Hearing : 25/07/2016 Date of pronouncement : 07/09/2016 O R D ER PER SANDEEP GOSAIN, JUDICIAL MEMBER :
The present appeal has been filed by the assessee against the order of Ld. CIT(A)-35, Mumbai dt. 22/09/2014 for AY 2009-10 on the ground mentioned herein below:
Delay condonation 1. The learned CIT(A) erred in rejecting the assessee’s application for condonation of delay of 127 days in filing the appeal, without appreciating that assessee had acted on bonafide belief to file appeal only after gathering the relevant documents, thus the delay in filing the appeal was due to reasonable cause and delay may be condone in interest of justice by providing the assessee an opportunity to represent the case on merit. On Merits 2. The learned CIT(A) erred in not adjudicating the matter on merits in regards to disallowance of Rs. 16,75,677/- being purchases and Rs. 72,283/- being motor car expenses.
At the very outset, it is noticed that none has appeared on behalf of assessee in spite of various calls and even no application for adjournment was moved today. On the other hand ld. DR is present in the court and is ready with arguments. Therefore we have decided to proceed with the hearing of the case ex-parte with the assistance of the ld. DR and the material on record.
From the records we have noticed that the Assessee has raised this ground No.1 and mentioned that Ld. CIT(A) erred in rejecting the assesses application for condonation of delay of 127 days in filing the appeal, without appreciating that assessee had acted on bonafide belief and the delay in filing the appeal was unintentional.
Since this ground goes to the roots of the case therefore we have decided to take up this ground firstly.
The Ld. CIT(A)has also dismissed the appeal while disallowing the application for condonation of delay. The operative para of the Ld. CIT(A) is reproduced hereunder:
4. Facts of the case Return of income was filed on 29/09/2009 at a total income of Rs. 36,27,710/-. The assessee is a partnership firm engaged in civil contract. During the year the additions were made on account of non genuine purchases of Rs. 16,75,677/- and 20% disallowance out of motor car expenses claimed on account of personal usage. The assessment order was made on 26/12/2011 and the same was received by the representative of the appellant on 30/12/2011 which was subsequently handed over to the appellant on 31/12/2011. As per section 249(2) the appeal should have been filed within a period of 30 days from the receipt of the order and the notice of demand i.e. on 30/12/2011. However, the appeal has been filed on 15/06/2012 being delayed by more than 4 months and 1 week (127 days). The appellant has filed for condonation of delay u/s 249(3). The reason given by the appellant is as under:
“ We have discussed the issue and the basis of addition made by the AO in our assessment of AY 2009-10 with our chartered accountant who has informed us to collect analytical data of Stock and proper documentary evidence about the dispatch proof of goods such as RC record from delivery agency or transport agency. The said documentary evidence and analysis of stock prepared by us and then we concluded that we have proper evidence to identify the genuineness of our transaction with the supplier. We have filed an appeal on 15/06/2012, which is late by 127 days (around four months and one week). Our Chartered Accountant has insisted that he will represent our matter only after receipt of stock records and documentary evidence for dispatch.
We have to inform you that AO has passed the assessment order on the basis of MVAT information and disallowed the purchases made from defaulter dealer under MVAT Act. We have made inquiry with our different legal consultant and found that court will not allow such purchases even under Income Tax also, where as in fact we found that we can prove the delivery of goods, weight measurement and existence of party. We have analyzed the court judgment on such issue and found that our case is fit for appeal. Hence our appeal has delayed by 127 days (around four months and one week) due to delay in collecting of data and case citation for representation in appeal, as the matters represented by Income Tax Department as a very high value and its legal cost is ery high. Out tax advisor has informed that we have to pay penalty u/s. 271(1)(c) of I.T. Act, 1961 and we should file appeal on the basis of available citation and details of consumption of material.
We have collected the information as required by our Chartered Accountant and to sustain our appeal before your honour for identifying the genuineness of our transaction. We have filed our appeal late due to delay in collection of information and evidence to sustain our appeal and to save the time of your honour in devoting the time in improper appeal filed without evidence or any analysis. Our delay is mainly due to collection of data and ethics of our Chartered Accountant that to file appeal only after satisfactory evidence or analysis. Also, our lady accountant was on leave since January 2012 till April due to her sickness and pregnancy period. Hence she was unable to attend the office which is an another reason for delay in filing of appeal as she use to handle accounting party and to follow the matters before our CA when ever required due to which delay occurred.
We have made appeal to protect our right on the basis of principal of natural justice, as assessing officer has made addition without verifying consumption and delivery records and citation of court cases.”
Decision I have gone through the contents of the reasoning given by the appellant for late filing. However, I do not find any merit in the reasoning given by the appellant regarding collection of analytical data of stock etc. on the basis of which delay seems to have been caused. If we see the details now as part of the appeal proceedings, the appellant has filed ledger account, bank statement and few of the invoices. The addition under section 69C has been made only with respect to one property M/s Centurian Sales Corporation and there is absolutely no cogent reason given by the appellant as to why it should have taken as long as it did to collect documents which are only part of its own final accounts once the appellant was aware of the reasons of the genuineness of the transaction with M/s. Centurian Sales Corporation then all it needed to do was to draft the appeal objecting to the addition. In the light of the absence of any reasonable cause being brought forth by the appellant for seeking condonation of delay I reject the admission of the appeal.
We have heard Ld. Representative of the department and perused the material place on record.
5. We have noted that Ld. CIT(A) has rejected the application of the assessee for seeking condonation of delay on the ground that no cogent reasons have been given by the assessee as to why it should have taken so long to collect documents which are only part of its own financial accounts.
Ld. CIT(A) also found that there was no reasonable cause for seeking condonation of delay.
After considering the fact of the present case and while drawing support from the judgment of Hon'ble’ble Supreme Court in case of Collector Land Acquisition, Vs Mst. Katiji & Ors reported in 1987 AIR 1353 (SC) wherein it has been held that The expression 'sufficient cause' employed by the legislature in Section 5 of the Indian Limitation Act, 1963 is adequately elastic to enable the Courts to do substantial justice to parties by disposing of matters on merits.
The Hon'ble Supreme Court has further held that ordinarily a litigant does not stand to benefit by lodging an appeal late and moreover 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 con- doned the highest that can happen is that a cause would be decided on merits after hearing the parties.
In the present case also considering the same principle and while taking into consideration in the interest of justice, we condone the dealy and remit the case back to the file of Ld. CIT(A)to decide the case on merits. Assessee is directed to approach the office of the Ld. CIT(A) with in 30 days from the date of receipt of the copy of order and assessee is further directed not to take unnecessary adjournment before the Ld. CIT(A). Needless to mention, the Ld. CIT(A) would decide the matter on merits after providing opportunity to the assessee.
In the result appeal of the assessee is allowed for statistical purposes.