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Income Tax Appellate Tribunal, “C” BENCH,
Before: Shri P.M Jagtap & Shri S.S. Viswanethra Ravi
ORDER SHRI S.S. VISWANETHRA RAVI, JM This appeal filed by the assessee is directed against the order CIT(A), Jalpaiguri dated 19-10-2012 for the assessment year 2008-09 against the order of assessment framed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’).
2. The only issue in this appeal to be decided is as to whether the CIT-A justified in dismissing the petition for condonation of delay in filing first appeal.
The brief facts of the case are that the Assessee is an individual and engaged in whole sale cum retail trade of stationery items. The Assessee had filed his return of income for the A.Y. 2008-09 on 22.09.2008 declaring a total income at Rs. 2,51,279.78. Under scrutiny, notices u/s. 143(2) & 142(1) were issued in time & served upon the assessee. In response to the said notices, the assessee himself appeared in person along with his brother Shri Suresh Kumar Agarwal time to time produced the books of account, bills & vouchers, inventoried material etc. and other information called for which are test checked.
Prior to the above, a survey was conducted u/s 133A of the Act on 17.08.2007 where the AO found, firstly the stock was physically verified at Rs. 16,66,797/- and but as per books it was at Rs. 28,16,330/- and found a shortage of stock amounting to Rs. 11,49,533/- According to AO the assessee explained vide his statement u/s 131 of the Act on 23.08.2007 that the said shortage of stock was as undisclosed sales out of the purchase recorded in books. As assessee did not taken into account the gross profit of undisclosed sales in computing the income and the AO added @ 3.76% of Rs. 43,222/ to the total income as the assessee offered the same for taxation.
Secondly, cash was found at Rs. 11,05,000/- from the cash box during survey and it was stated that the cash belongs to assessee’s firm i.e M/s. Narayan Enterprise vide statement u/s. 131 of the Act on 23.08.2007 and the AO found Rs. 2,22,235/- only in cash book. The assessee offered for taxation the difference of cash amounting to Rs. 8,82,765/- as undisclosed income and found not offered for taxation in the return filed subsequently. According to AO the assessee was agreed for taxation during the assessment proceedings and the same was treated as income of the assessee and added to the total income.
Thirdly, Assessee had shown Sundry Creditor of Rs. 11,11,502.46 in the name of Radiohms Agencies but as per confirmation u/s. 133(6) it was found the closing balance at Rs. 11,24,528.46. The assessee submitted that it made a purchase of Rs. 13,026/- on 3l.0l.2008 and the goods were lifted on 20.08.2008 and the said purchase was entered in the books for the F.Y. 2008-09 causing difference of Rs. 13,026/- and for failure to produce any evidence the excess Gross Profit @ 3.76% on the purchase of 13,026/- which comes to Rs. 490/- is added to the total income.
7. Fourthly, the AO found the assessee has debited Rs. 1,02,642/- under the head Carriage Outward in Profit and Loss account, in support of which, assessee produced self made debit vouchers and the AO disallowed 10% of such expenses of Rs. 10,264/- and added to the total income.
8. Fifthly, the AO added Rs.10,584/- being 20% of Rs.52,922/- debited under the head Car Running Expenses treating as used for personal purpose.
As aggrieved by the order of AO, the assessee preferred an appeal before the CIT-A with delay of 136 days, while considering the petition for delay condonation, the CIT-A found the reasons as submitted by the assessee not satisfactory and dismissed the appeal in limine, the observations of which reproduced as under:
In this case, the assessment order was passed u/s. 143(3) on 27.12.2010. As per Form-35, same was received by the assessee on 31.12.2010. However, he filed the appeal on 16.06.2011. Thus, there was a delay of 136 days in filing the appeal, but no condonation prayer was filed with Form No.35. In course of hearing, the assessee filed one condonation prayer without mentioning the reason for the delay but referred to two medical certificates filed with the prayer. On going through the medical certificates, several contradictions are noticed which are mentioned below:
The first certificate was issued by the physician on 15,01.2011 mentioning that the assessee has been under his treatment from 01.01.20 11 to 15 .01.2011 for Hepatitis and advised three months bed rest.
In the other certificate issued on 10,04,20 It, the physician mentioned that the assessee was suffering from Chronic Active Hepatitis -B and advised to take bed rest up to 10,07,20] L
3. The signature of the patient as usually taken on the certificates is no available.
4. In the 1st certificate it was mentioned that the assessee was suffering from Hepatitis, However in the 2nd certificate it was mentioned as Chronic Active Hepatitis -B, when the assessee was not under his treatment.
5. When the 2nd certificate was issued, the assessee was not under the treatment of that physician
6. When bed rest is advised a longer period. normally the period of time is mentioned not the point of time. In the 2nd certificate, the physician had advised rest up to 10,07.2011 which is abnormal.
No prescription or pathology report from the physician was filed. Therefore, it is unascertainable the nature of ailment or the assessee and nature of treatment.
It is gathered from the AO that in the subsequent years. the turnover or the business performance of the assessee was not at an affected due to his ailment. If he was on bed rest for 7 months. it would have affected his business
I have carefully considered the contents of the prayer of the asssessee. The assessee could not produce any prescription from the physician, Normally. a Chrome Active Hepatitis-B patient requires prolonged treatment and prescriptions arc maintained for purchasing medicine.
It is, thus, held that the explanation given by the assessee is not satisfactory as the AR failed to establish the same with any material evidence. It is a prerequisite for condoning delay that the Authority concern must record satisfaction that the explanation for the delay was either reasonable or satisfactory as held in P K Ramchandran v State of Kerala (1997) 7 ACC 556.
In the instant case, the explanation for the delay is found not either reasonable or satisfactory. Filing of a medical report along with the condonation application in case of illness is necessary as held in the case of Khunne Lal Baburam vs CST (1981) Tax LR (NOC) 223.
In absence of any evidence, the reason given for the delay in filing the appeal cannot be accepted as genuine. On this ground, the delay in filing the appeal cannot be considered and the appeal is not admitted. Thus, no decision on merit is given.
In this appeal, the Ld. AR submits that the CIT-A did not afford an opportunity to the assessee to defend his claims as made before the AO and did not appreciate the medical certificate as issued by the Physician who treated the assessee and not accepting the same as genuine is against to established law and prayed to remit the case to CIT-A for fresh consideration of appeal. The Ld. DR relied on order of CIT-A.
Heard rival submissions and perused the material available on record. We find that the assessee filed two medical certificates issued by the Physician which goes to show that the assessee suffering from Hepatitis and chronic Hepatitis-B since January 2011, where the Physician who was treating the assessee advised him to take bed rest upto 10-07-2011. The finding of the CIT-was that the assessee did not produce medical prescription and discharge certificate to support the reasons stated in the petition. But, however, in the interest of the justice, we remand the appeal to the file of CIT-A for fresh adjudication treating the reasons as stated in the delay condonation petition filed before the CIT-A as reasonable by affording an opportunity to assessee and we also direct the assessee to produce any evidence, if any, necessary for the fair adjudication of the case and we also make it clear that the assessee shall not seek any further adjournments.
In the result, the appeal of the assessee is allowed 12.
THIS ORDER IS PRONOUNCED IN OPEN COURT ON 15 /06 /2016