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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI INTURI RAMA RAO
आदेश / ORDER
PER INTURI RAMA RAO, AM:
This is an appeal filed by the assessee directed against the order of the CIT(A), Pune-12 dated 07.02.2023 for the assessment year 2018-19.
Brief facts of the case are as under :
The appellant is an individual carrying on the Medical Profession. The Return of Income for the A.Y. 2018-19 was filed on 15.10.2018 declaring income of Rs.66,07,520/-. Subsequently, survey operations u/s.133A of the Income-tax Act, 1961 (hereinafter also as called ‘The Act’) were conducted in the business of the appellant on 11.03.2019. The Return of Income was revised on 31.03.2019 at a total income of Rs.38,96,920/-.
Against the said return of income, the assessment was completed by the Assessing Officer (AO) vide order dated 28.08.2021 passed u/s.143(3) at a total income of Rs.38,18,920/-. The assessed income includes addition of Rs.9,80,780/- on account of unexplained investments as discussed vide para 12 of the assessment order. The income was assessed to tax based on the admission made by the assessee during the course of survey proceedings. The AO also brought to tax the said amount under the provisions of section 115BBE of the Act.
Being aggrieved, an appeal was before the CIT(A) contesting that the addition on account of unexplained source for the investment is not required to be made, as the investments were not made during the previous year relevant to the assessment year under consideration. It is further contended that no addition can be made merely based on the admission, if the same is patently not taxable for the year under consideration. However, the ld. CIT(A) had upheld the addition, as according to him, the appellant had failed to explain the source of the investment.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
When the appeal was called on, none appeared on behalf of the assessee despite due service of notice of hearing. Therefore, I proceed to dispose of the matter after hearing the ld. Sr. DR.
At the outset, I find there is a delay of 408 days in appeal the present appeal. The appellant had filed an affidavit seeking condonation of delay by stating that delay in filing the appeal was attributable to the Chartered Accountant Shri Ravindranath Narayan Khairnar and the affidavit from the said CA is also filed.
The affidavit of Shri Ravindranath Narayan Khairnar, Chartered Accountant clearly states that the appeal could not be filed in time as he was undergoing treatment for prostate cancer.
I heard the ld. Sr.DR and examined the facts of the case. I had carefully perused the averments made in the affidavit. There is nothing on record to counterfeit the explanation offered by the appellant in support of the reasons for the delay in filing the appeal. It cannot be said that the appellant had obtained any undue advantage out of the delay in filing the present appeal. As observed by the Hon’ble Bombay High Court in the case of Sitaldas K. Motwani v. DGIT 323 ITR 223 (Bom), when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of malafides. Therefore, keeping in mind the above settled principles governing the condonation of delay, I am of the considered opinion that it is a fit case to condone the delay in filing the appeal.
As regards the merits of the addition, on mere perusal of contents of para 7 of the CIT(A) order as well as para 12 of the assessment order, it would be evident that the relevant assets were not acquired during the previous year relevant to the year under consideration. This is an undisputed fact. The AO made the addition merely based on the fact that the assessee made disclosure of his income during the course of survey operations. Even the CIT(A) confirmed the addition by holding that the appellant had failed to explain the source of investment. In my considered opinion both the AO as well as the CIT(A) had fell in serious error in resorting to the provisions of section 69, inasmuch as, the investments were not made during the previous year relevant to the assessment year under consideration. No doubt, the admission is extremely an important piece of evidence but it cannot be said that it is conclusive as observed by the Hon’ble Supreme Court in the case of Pullangode Rubber Produce Co. Ltd. v. State of Kerala (1973) 91 ITR 0081. It is always open to an assesee to show that it is incorrect. From the material on record, it is patently clear that the acquisition of assets in respect of which the addition was made were acquired prior to the previous year relevant to the assessment year under consideration. Therefore, in the facts and circumstances, the provisions of section 69 cannot be invoked for the year under consideration. The question of offering any explanation in support of the source for the acquisition of the said assets does not arise for the year under consideration as said investment was not made during the previous year relevant to the assessment year under consideration. Therefore, the reasoning adopted by the CIT(A) is totally contrary to the settled position of law, which cannot be appreciated/sustained. The orders of the lower authorities are hereby set-aside. I therefore direct the AO to delete the addition of Rs.9,80,780/-.
In the result, the appeal filed by the assessee stands allowed. Order pronounced on this 20th day of May, 2024.