VIRENDRA KUMAR JAIN,NAVI MUMBAI vs. ACIT 22)3), MUMBAI

Order on the petition for condonation of delay in filing this appeal for A.Y. 2009-10 before the Tribunal. 2.1 The assessee has filed a petition for condonation of delay of 11 days in filing the appeal before the Tribunal, enclosing an affidavit dated 05.09.2012 sworn to by the assessee. In the petition and accompanying affidavit, it is submitted that since the impugned order of the learned CIT(A) was received by the assessee on 24.06.2012 the appeal was to be filed within 60 days thereof, but was filed belatedly by 11 days on 03.09.2012. According to the averments in the affidavit, the assessee submits that his consultant was requested to prepare the appeal to be Shri Virendra Kumar Jain filed, but since he himself was out of station on business tour, the same could not be signed and filed in time, which led to a delay of 11 days in filing the appeal. It was pleaded by the learned A.R. for the assessee that the delay was not intentional and with reasonable cause and if the meagre delay of 11 days was not condoned the assessee would be put to great hardship. It was prayed that a lenient view be taken in the matter, the delay be condoned and the appeal be heard on merits instead of dismissing the appeal on mere technicalities. In support of this proposition, the learned A.R. for the assessee has, inter alia, placed reliance on the following judicial pronouncements: - i) Collector, Land Acquisition vs. MST Katiji and Others (1987) 167 ITR 471 (SC) ii) CIT vs. ISRO Satellite Centre in (Kar. HC) 2.2 Per contra, the learned D.R. opposed the assessee’s prayer for condonation of delay. 2.3.1 We have heard the rival contentions and perused and carefully considered the material on record. In the landmark judgement of the Hon'ble Apex Court in the case of Collector, Land Acquisition vs. MST Katiji (supra), cited by the assessee, wherein the Hon'ble Court laid down the principles for dealing with matters of condonation of delay, the Hon'ble Court stated that substantial justice should prevail over technicalities. The doctrine must be applied in a natural, common sense and pragmatic manner. In view of the facts of the matter as emerge from the assessee’s petition for condonation of delay and accompanying affidavit, we are of the view that this is a fit case for condonation of the delay of 11 days in filing the appeal before the Tribunal and accordingly condone the same. The appeal is accordingly admitted for hearing.

The facts of the case, briefly, are as under: - 3.1 The assessee, Proprietor of Vinit Consultants, filed his return of income for A.Y. 2009-10 on 30.09.2009 declaring income of `21,18,111/-. The return was processed under section 143(1) of the Act and the case was subsequently taken up for scrutiny. The assessment was completed under Shri Virendra Kumar Jain section 143(3) of the Act vide order dated 19.12.2011, wherein the income of the assessee was determined at `41,14,110/-, in view of an addition of `19,96,000/- on account of unexplained cash deposits to this extent in his savings bank account with Development Credit Bank in the year under consideration. 3.2 On appeal, the learned CIT(A) dismissed the assessee’s appeal for A.Y. 2009-10 vide the impugned order dated 24.05.2012. 4.1 Aggrieved by the order of the CIT(A)-33, Mumbai, the assessee has preferred this appeal, raising certain grounds. The assessee subsequently, vide letter dated 15.04.2015, filed concise grounds of appeal which are as under: - “On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals)-33, Mumbai, erred in sustaining the addition of Rs.19,96,000/- entirely on presumptions, conjectures and surmises and without appreciating the fact that the amount was received by an assessee as gift from his mother-in-law and the transaction was supported by Declaration Cum Affidavit and was exempt from Income Tax.” 4.2.1 The learned A.R. for the assessee submitted that in the course of assessment proceedings, the Assessing Officer (AO), on the basis of information received through AIR that the assessee had deposited cash of `19,96,000/- in his savings bank account with Development Credit Bank in the year under consideration, required the assessee to furnish certain information in this regard. According to the learned A.R., in response thereto, the assessee’s mother-in-law, Smt. Manorama Gangwal submitted vide an affidavit that she had given gift of `20,00,000/- to the assessee out of, inter alia, the following sources, money received at the time of her husband’s death, own savings since marriage, rental income from Indore property for 10-12 years, money received on various occasions from relatives, sale proceeds of gold and silver ornaments/utensils, etc. The learned A.R. contends that when the affidavit is filed, it is to be presumed to be true until the contrary is proved. But in this case the AO, without putting the assessee on notice, drew adverse inferences that the affidavit is not reliable as sources of cash, proof of rental income, sale of gold Shri Virendra Kumar Jain ornaments, past savings, were not furnished. It is contended that if defects were observed by the AO or verifications were to be carried out, the AO ought to have put the assessee on notice by affording him opportunity to place on record his rebuttals to the AO’s observations. From the order of assessment, it is very clear that the AO rejected the assessee’s contentions vide the affidavit of his mother-in-law on presumptions, suspicions and surmises behind the assessee’s back in gross violation of the principles of natural justice, i.e. by denying the assessee opportunity of being heard in the matter before coming to a finding in the matter. 4.2.2 The learned A.R. for the assessee submits that on appeal submissions were also made before the learned CIT(A), that apart from sale of jewellery/ornaments, part of the gift to the assessee, her son-in-law, is also out of her share in the sale proceeds of an immovable property sold vide agreement dated 17.07.2007 for `45 lakhs, a portion of which was also given to her daughter, the assessee’s wife; both out of natural love and affection and also for the reason that she is dependent and lives with them after the demise of her husband. The learned A.R. submitted that the learned CIT(A) also not only brushed aside the affidavit filed by the assessee’s mother-in-law as unreliable and disbelieved the authenticity of the assessee’s claim that the sale deed filed by the assessee, was an explanation for being the source of a part of the gift to the assessee from his mother-in-law. Here too, the learned A.R. contends, the learned CIT(A) after admitting that fresh evidence, in the form of the said sale deed ought to have had the same examined and verified by the AO and afforded the assessee adequate opportunity of being heard in the matter before drawing an adverse inference. It is contended that in the aforesaid circumstances, it is evident that the impugned order of the learned CIT(A) in brushing aside documents put forth by the assessee to explain source of the gift from his mother-in-law, without proper verification and putting the assessee on notice with reference to any requ9irements/explanations in this regard, establishes that the findings of the learned CIT(A) are based on suspicions, surmises and presumptions. It is prayed that in the aforesaid circumstances, the impugned order is not sustainable.