SABYASACHI RAY,MUMBAI vs. ITO 11(1)(4), MUMBAI

At the outset, the ld. Counsel for the assessee submitted that this appeal is delayed by 576 days in filing of the appeal before the Tribunal. He submitted that the order of the learned CIT(A) was received by the assessee on 17th January, 2012 , whereby the due date of filing the appeal was 17th March, 2012, however, the appeal with the Tribunal was filed on 14th October, 2013 resulting in delay of 576 days in filing of the instant appeal before the Tribunal. In this connection, the assessee filed an application along with affidavit for condonation of the delay whereby prayers for the condonation of delay of 576 days was made. It is the say of the ld. Counsel for the assessee that the assessee is a salaried employee and was not supported by any professional. There was three deaths in the family of the assessee within a span of 15 to 17 months i.e. his sister, father and mother died on 26-10-2010, 02-09-2010 and 11-10-2011 respectively which had adversely affected the assessee and the assessee was not in proper state of mind and health. There were also property litigations after the death of assessee’s mother and the assessee is originally from Kolkatta whereby he has to pursue continuously the litigation by attending the Courtz in Kolkatta in connection with property disputes. It is submitted that the financial position of the assessee was very precarious and no professional work was coming to the assessee for two/three years. From the meager amount of salary earned by the assessee, the assessee was not able to pull on his daily life and there was no money even to pay the legal and professional cost. The assessee submitted that there was no permanent place of stay in Mumbai though he had filed return in Mumbai. It was submitted that the assessee was having no knowledge of tax related matters and was not in a position to hire any professional to take up his matter. The assessee submitted that there is strong case on merits and balance of convenience is in favour of the assessee. The assessee submitted that there were additions of Rs. ITA 6042/Mum/2013 4 38,27,799/- made by the AO and sustained by the learned CIT(A) with respect to the cash deposits in bank account and now the assessee is able to produce necessary evidences and details, if an opportunity is given to the assessee by condoning the delay in filing the appeal. The additional evidences which the assessee relies upon to support his case on merits are filed in the paper book with the Tribunal at page 24-79 which are filed for the first time before the Tribunal. In support, the assessee relied upon the decision of Hon’ble Supreme Court in the case of Collector of Land Acquisition v. Mst. Katiz and Others, 167 ITR 471 , N. Balkrishna v. Krishnamurthy (1998) 7 SCC 123 and other cases as per details filed.

We have considered the rival submissions and perused the material on record. We have observed from the assessee’s application along affidavit dated 11-10-2013, that the assessee was prevented by sufficient cause in delay in filing his appeal before the Tribunal. The assessee was stated to be not in a position to file the appeal in time on account of three deaths in his family and the precarious financial position on account of his meager salary and the litigations with respect to properties after the family member’s death. The assessee was stated to be suffering from precarious financial problem, which was brought out in his affidavit filed with the Tribunal. In our considered view based on the affidavit filed by the assessee and the reasons cited therein along with additional evidences filed in the paper book, there is no deliberate delay on the part of the assessee in filing appeal with the Tribunal. In view of the reasons cited by the assessee reflecting from his application for condonation of delay and the affidavit filed along with , and the decision of Hon’ble Supreme Court in the case of Collector of Land Acquisition v. Mst. Katiz and Others and N. Balkrishna v. Krishnamurthy (supra), we are ITA 6042/Mum/2013 5 inclined to condone the delay of 576 days in filing this appeal before the Tribunal and accordingly the delay in filing of the appeal is hereby condoned .

The brief facts of the case are that the case of the assessee was selected for scrutiny under CASS based upon the information received from AIR with respect to the cash deposit of Rs. 38,27,799/- in the bank account . The assessee was asked to explain the source of cash deposit by the A.O., but there was no response from the assessee. The assessee sought adjournment from time to time in the assessment proceedings u/s 143(2) read with Section 143(3) of the Act. Show cause notice was issued to the assessee by the AO but there was no response from the assessee. Notice u/s 133(6) of the Act was issued to the Axis bank on the basis of AIR information , whereby the bank submitted copies of statement of bank accounts for the previous year relevant to the assessment year. From the bank statement, the A.O. observed that assessee has deposited an amount of Rs. 38,27,799/- in the bank account in cash. Thus, the A.O. computed the total income of the assessee at Rs. 38,27,799/- treating the same as undisclosed income which was added to the total income of the assessee vide assessment orders dated 15th December, 2009 passed by the AO u/s 143(3) of the Act.

Aggrieved by the assessment orders dated 15-12-2009 passed by the A.O. u/s 143(3) of the Act, the assessee filed first appeal before the learned CIT(A).

Before the learned CIT(A), the assessee submitted that the cash deposits in the bank are cash loans by the assessee from number of persons and the cash deposits are liabilities of the assessee which does have any element of income, therefore the assessment order u/s 143(3) of the Act passed by the AO dated 15-12-2009 may be set aside and the addition may be deleted. The learned CIT(A) rejected the contentions of the assessee and held that the assessee has failed to furnish proper explanation to substantiate ITA 6042/Mum/2013 6 the sources of the cash deposit and accordingly the learned CIT(A) confirmed the assessment orders dated 15-12-2009 passed by the AO u/s 143(3) of the Act , vide orders dated 11.01.2012.

Aggrieved by the orders dated 11.01.2012 of the learned CIT(A) the assessee is in appeal before the Tribunal.

The ld. Counsel for the assessee submitted that the assessee could not make proper representation before the authorities below. There was serious family problems in the family of the assessee whereby there were three death within a span to 15 to 17 months of father, mother and sister of the assessee. The assessee borrowed money from various persons as cash loans. The assessee is in the profession of TV serial editing and there was losses in the work of the assessee and the assessee was suffering from severe financial difficulties. The assessee submitted copies of cheques which were bounced,which are placed in the paper book filed with the Tribunal. The assessee submitted that he could not make proper representation of the case before the authorities below and did not have proper advice from professional to present his case. The assessee counsel prayed and made statement before the Bench that now the assessee is in a position to explain properly and represent his case along with cogent evidences to substantiate his contentions and hence an opportunity to represent his case may be provided to the assessee in the interest of justice and merely on technical grounds the case may not be thrown out at threshold. The ld counsel submitted that the assessee has placed in the paper book filed with the Tribunal ,additional evidences in page 24-79 of paper book whereby details of loans raised agreements with parties from whom loans were raised . The assessee counsel also submitted various several legal notices and litigations in the Courts being raised against the assessee due to bouncing of cheques which are all placed in paper book filed with the Tribunal, which the assessee’s counsel submitted ITA 6042/Mum/2013 7 proves that financial hardships and difficulties were faced by the assessee as also it evidences that the loans were raised by the assessee. These are additional evidences which need verification by authorities below and it is submitted that these additional evidences are vital and relevant evidences to prove the contentions and claims of the assessee. The learned counsel for the assessee submitted and prayed that matter be set aside to the file of AO for examination of these additional evidences and de-novo determination on merits by the AO.

The ld. D.R. submitted that he has no objection if the matter is set aside to the file of the A.O. for de novo re-determination of the issue after examination of the additional evidences being submitted by the assessee.

We have considered the rival contentions and also perused the material available on record. We have observed that as facts are emerging from records produced before us, the assessee could not represent his case properly before the authorities below due to various personal and financial difficulties as cited by the assessee in the documents and affidavit placed before the Tribunal. The cash deposit of Rs. 38,77,799/- reflecting in the bank account of the assessee for which the sources was to be furnished with cogent evidences by the assessee were not produced before the AO nor there was representation by the assessee before the AO when the assessment u/s 143(3) of the Act was framed by the AO . The AO was not left with any other option but to proceed to frame assessment u/s 143(3) of the Act based on the material on record. The assessee contended that due to various personal and family problems faced by the assessee in his family including death of three family members i.e. father, mother and sister, the assessee could not represent his case during the assessment proceedings u/s 143(3) read with Section 143(2) of the Act properly and also during appellate proceedings before the learned CIT(A) and if an opportunity is now provided to the ITA 6042/Mum/2013 8 assessee, then he can represent his case before the AO with cogent evidences and explanations to justify and substantiate his claims and contentions. The assessee has also placed on record additional evidences for the first time before the Tribunal and sought admission of such additional evidences as per Rule 29 of Income Tax(Appellate Tribunal) Rules, 1963, which are placed in paper book filed with the Tribunal.We have gone through the additional evidences which are filed before the Tribunal for the first time and we are of considered view that the same need to be admitted as they are relevant evidences , however, these evidences needs examination and verification by the Revenue. In our considered view and looking into the family and personal problems faced by the assessee as enumerated by the assessee in his pleadings before the Tribunal and also production of relevant additional evidences placed in paper book page 24-79 for the first time before the Tribunal, we set aside the appellate order dated 11-01-2012 of the learned CIT(A) and the assessment order dated 15-12-2009 passed by the AO u/s. 143(3) of the Act, and restore the framing of the de-novo assessment to the file of the A.O. in accordance with provisions of the Act. The assessee is allowed to raise all relevant claims and contentions both on law and on facts before the AO and is allowed to produce all relevant evidences and explanations to support and prove its contentions and claims, which shall be admitted by the AO and adjudicated on merits in accordance with law. Needless to say that the proper and sufficient opportunity of being heard will be provided by the AO to the assessee in accordance with the principles of natural justice and in accordance with law before framing de-novo assessment under the provisions of the Act. This dispose’s of all the grounds raised by the assessee. We order accordingly.

In the result, the appeal filed by the assessee in ITA N0. 6042/Mum/2013 for the assessment year 2007-08 is allowed for statistical purposes.