M/S B.K. KHARE AND COMPANY,MUMBAI vs. ACIT - 11(2), MUMBAI

The appeal is barred by limitation by 562 days. The assessee has moved an application before the Bench requesting the bench to condone the delay. Learned AR submitted that one of the partners of the assessee firm was looking the matter of assessment before the Assessing Officer as well as learned CIT(A). Since he was a main partner and since he was busy with his routine audit and income tax works relating to the clients, he lost sight of the due date of filing the appeal. It was further submitted that the said partner was also facing health issues during that period. Accordingly it has been prayed that delay for filing the appeal before the Tribunal was not intentional. Learned AR submitted that the Courts have held that a liberal approach should be adopted in the matter relating to condonation. In this regard, he placed reliance on the decision rendered by Hon'ble Supreme Court in the 2 M/s. B.K. Khare & Company case of Collector, Land Acquisition Vs. Mst. Katiji and Others (1987) 167 ITR 471. On the contrary learned Departmental Representative strongly opposed the petition filed by the assessee.

Having heard the rival submissions as well as averments made in the petition filed by the assessee, we are of the view that there was a reasonable cause on the part of the assessee in filing the appeal beyond the limitation period. Accordingly, we condone the delay and admit the appeal for hearing.

At the time of hearing counsel did not press ground No. 1 relating to disallowance made u/s. 14A of the Act. Accordingly, the said ground is dismissed as not pressed.

Remaining grounds relate to addition of ` 6,99,350/- being difference in professional fees, noticed by the Assessing Officer on the basis of AIR information.

Learned counsel appearing for the assessee submitted that the assessee has since reconciled the difference and appropriate explanation relating to the same was offered during the course of penalty proceedings initiated u/s. 271(1)(c) of the Act for the year under consideration. Learned Counsel submitted that the Assessing Officer, on being satisfied with the explanation of the assessee, did not impose penalty u/s. 271(1)(c) of the Act. Learned Counsel submitted that the same explanation should be considered to delete the impugned addition made by the Assessing Officer.

On the contrary, the learned Departmental Representative submitted that the explanations furnished by the assessee during the course of penalty proceedings were not furnished before the Assessing Officer during the course of assessment proceedings. Accordingly, he submitted that the explanation of the assessee requires examination at the end of the Assessing Officer.

Having heard the rival submissions, we are of the view that this issue requires fresh examination at the end of the Assessing Officer by duly considering the explanation furnished by the assessee. Accordingly we set aside the order of learned CIT(A) passed on this issue and restore the same to the file of the Assessing Officer for examining the same afresh.

In the result, appeal filed by the assessee is treated as allowed for statistical purposes.