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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Asst. Year: 2015-16 Ravindrabhai The ITO, Lakshmanrav Mane Ward-5(3)(5), B-4, Neelkanth Colony Vs Ahmedabad Nr. Vijaynagar Society, Kankariya, Ahmedabad Gujarat-380028 PAN: ANPPM3035P (Appellant) (Respondent) Assessee Represented: Shri Aseem L. Thakkar, A.R. Revenue Represented: Shri Kamlesh Makwana, CIT-DR & Shri Ashok Kumar Suthar, Sr. D.R. Date of hearing : 10-08-2024 Date of pronouncement : 22-08-2024 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- IT(SS)A No. 54/Ahd/2019 is filed by the assessee as against the appellate order dated 17.01.2018 passed by Commissioner of Income Tax (Appeals) arising out of the assessment order passed under section 143(3) r.w.s. 153B(1)(b) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2015-16 and are filed by the assessee as against the exparte appellate order dated 21.11.2019 passed by the I.T.(SS)A No. 54/Ahd/2019 & Ors. A.Ys. 2015-16 Page No 2 Ravindrabhai Lakshmanrav Mane vs. ITO Commissioner of Income Tax (Appeals) confirming of penalty levied u/s.271(1)(c) of the Act relating to the same Asst Year 2015-16. Since common issues are involved in these two appeals, the same are disposed of by this common order.
The Registry has noted that there is a delay of 326 days in filing the quantum appeal and 1 day delay in filing the penalty appeal by the assessee.
Ld. Counsel Shri Aseem L. Thakkar brought to our notice to the Affidavit filed by the assessee, wherein it is stated that the assessee is an individual, having small business income and share trading. During the seizure of cash from the possession of two persons at the State Bus Transport Depot at Valsad, pursuant to that warrant of authorization was executed in the name of the assessee on 04-09- 2014 following that notices u/s. 153A was issued to the assessee. In response, the assessee filed his Returns of Income and assessment was completed through his Chartered Accountant Shri R.K. Jindal, making addition on account of unexplained cash credits.
3.1. Aggrieved against the same, the assessee filed an appeal before Ld. CIT(A), who dismissed the appeal filed by the assessee. The same was not informed to the assessee by his former Chartered Accountant. It is thereafter, the AO initiated penalty proceedings and passed exparte penalty order on 07.09.2018. The assessee filed appeal against the penalty orders with a delay of 79 days before Ld. CIT(A), who gave various opportunities to the assessee, however the assessee failed to appear, therefore Ld. CIT(A) dismissed the appeal by not condoning the delay of 79 days in filing the appeal. Because of the I.T.(SS)A No. 54/Ahd/2019 & Ors. A.Ys. 2015-16 Page No 3 Ravindrabhai Lakshmanrav Mane vs. ITO non-communication by the former Tax Consultant, the assessee filed the quantum appeal before the Tribunal with a delay of 326 days and Penalty appeals with a delay of 1 day. The assessee further stated he paid the appropriate appeal fees on 11.01.2019 itself, however filed the appeal on 06.03.2019 because of the misguidance of the former Tax Consultant. It is thereafter, the assessee engaged the present Counsel to handle the above quantum appeal along with the penalty appeal. Thus the assessee expressed the genuine hardship and prayed to condone the delay and with direction to the Ld. CIT(A) to dispose the appeal on merits of the case.
Per contra Ld. CIT-DR Shri Kamlesh Makwana appearing for the Revenue strongly opposed the condonation petition and submitted that the assessee has not filed the Affidavit of the former Tax Consultant as supporting document to condone the substantial delay of 326 days. Ld. CIT-DR further relied on Madras High Court Judgment in the case of Royal Stitches Pvt. Ltd. -Vs- DCIT (2023) 156 taxmann.com 361 (Madras) and Jaipur Bench ITAT decision in the case of Ajay Kumar Jain vs. ACIT (2020) 121 taxmann.com 384 (Jaipur-Trib.) and strongly opposed not to condone the delay, since sufficient cause is not established by the assessee. Thus the appeals filed by the assessee are liable to be dismissed.
In response, Ld. Counsel Shri Aseem L. Thakkar brought to our attention to the Jurisdictional High Court judgment in the case of Jayvantsinh N. Vaghela -Vs- ITO reported in (2013) 40 taxmannn. com 491 (Guj.) wherein the Hon’ble High Court held that appeal cannot be dismissed on technical ground like delay, etc. unless it is I.T.(SS)A No. 54/Ahd/2019 & Ors. A.Ys. 2015-16 Page No 4 Ravindrabhai Lakshmanrav Mane vs. ITO found that there is gross negligence on the part of the assessee and there is any mala fide intention on the part of the assessee in not filing the appeal within the period of limitation prescribed under the Act. Therefore in the present case, there is no negligence on the part of the assessee in filing the above appeals, therefore Ld AR humbly prayed to condone the delay in filing the appeals and decide the case on merits.
We have given our thoughtful consideration and perused the materials available on record. As it can be seem from the assessment order, the Chartered Accountant Shri R.K. Jindal appeared before the Assessing Officer while framing the assessment as well as appeared in the quantum appeals before Ld. CIT(A). During the penalty proceedings, none appeared before the Assessing Officer which has resulted in passing an exparte penalty order as well as appellate order. It is thereafter, the assessee engaged the present Counsel with the delay of 326 days in filing the quantum appeal and 1 day delay in filing the penalty appeal. It is always to be kept in mind that the condonation of delay is always a double edged sword, which has sharp edges on both sides and to be handled carefully by any party.
6.1. The Madras High Court judgment namely Royal Stitches Pvt. Ltd. (cited supra) relied by the Ld. CIT-DR held as follows:
“….It is trite law that where a case has been presented in the Court beyond limitation, the petitioner has to explain the Court as to what was the 'sufficient cause' which means an adequate and enough reason which prevented him to approach the Court within limitation. It is crystal clear that the discretion to condone the delay has to be exercised judiciously based on facts and circumstances of each case and that, the expression 'sufficient cause' I.T.(SS)A No. 54/Ahd/2019 & Ors. A.Ys. 2015-16 Page No 5 Ravindrabhai Lakshmanrav Mane vs. ITO cannot be liberally interpreted, if negligence, inaction or lack of bona fides is attributed to the party. In the present case, the petitioner/appellant has not given 'sufficient cause' for condoning the huge delay of 1072 days in filing the appeals.” 6.2. In our considered view, the assessee has demonstrated a reasonable cause for not filing the appeals within the statutory period of limitation, on the mis-representation of former Tax Consultant resulting in passing exparte orders and filing appeals with delay.
6.3. Ld. CIT-DR’s next plea of former Tax Consultant supporting affidavit is not filed by the assessee before this Tribunal. Such a situation was considered by the Jurisdictional High Court in the case of Jayvantsinh N. Vaghela (cited supra) and held as follows:
“3. …….Considering the affidavits filed by the assessee before the Tribunal which are even reproduced by the learned Tribunal, we are of the view that the learned Tribunal has committed error in not condoning the delay and not considering the appeals on merits. It is required to be noted that there is no observation by the learned Tribunal that there was any deliberate delay on the part of the assessee and/or there was any mala fide intention on the part of the assessee in not preferring the appeals within a period of limitation. The reasoning given by the learned Tribunal that the assessee has not filed the affidavit of Income Tax Practitioner in support of the affidavits filed by the assessee is concerned, it is required to be noted that once the Income Tax Practitioner is changed it may not be possible for the assessee to get affidavit of Income Tax Practitioner. On the aforesaid ground, the condonation of delay was not required to be refused. It is a cardinal principle of law that normally by and large, the appeals are required to be decided on merits rather than dismissing the same on technical ground like delay etc. unless it is found that there was gross negligence on the part of the assessee and/or there was any mala fide intention on the part of the assessee in not preferring the appeal within the period of limitation and/or in filing the appeals belatedly. As observed by the Hon'ble Supreme Court in the case of Collector Land Acquisition, Anantnag v. Mst. Katiji [1987] 2 SCC 107 ordinarily a litigant does not stand to benefit by lodging an appeal late. It is further observed by I.T.(SS)A No. 54/Ahd/2019 & Ors. A.Ys. 2015-16 Page No 6 Ravindrabhai Lakshmanrav Mane vs. ITO the Hon'ble Supreme Court that refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.
Considering the aforesaid principles laid down by the Hon'ble Supreme Court and the facts of the case on hand, we are of the view that learned Tribunal ought to have condoned the delay and ought to have decided and disposed of the appeals on merits rather than dismissing the same on the ground of limitation.” 6.4. As held by the Jurisdictional High Court, it is practically not possible for the assessee to collect from the former Tax Consultant explaining his misconduct by way of affidavit to any Authorities. As the assessee could not pursue with the former Tax Consultant for getting such affidavit, rather he pursued the matter with the new Tax Professional for filing the appeals with delay petitions, explaining the above reasons. Therefore in our considered view, the assessee has demonstrated “sufficient cause” in filing the above quantum appeal with a delay of 326 days and delay of 1 day in filing penalty appeal. Thus we are satisfied with the reasonable cause as explained above and we hereby condone the delay in filing the above appeals and take up the appeals on merits of the case.
Amended Grounds of Appeal
filed by the assessee are as follows: “1. The learned Commissioner of Income Tax (Appeals)-11. Ahmedabad has erred in confirming the action of the Assessing Officer in passing an order u/s.143(3) r.w.s. 153A(1)(b) of the I.T. Act, 1961 which is illegal, without jurisdiction and suffers from legal defects hence requires to be cancelled.
2. The learned Commissioner of Income Tax (Appeals)-11, Ahmedabad has erred in confirming the additions made by the Assessing officer which are beyond the scope assessment u's. 153A of the Act.
I.T.(SS)A No. 54/Ahd/2019 & Ors. A.Ys. 2015-16 Page No 7 Ravindrabhai Lakshmanrav Mane vs. ITO
The learned Commissioner of Income Tax (Appeals) -11, Ahmedabad has erred in Confirming the addition of Rs.8,60,000/- made by the Assessing Officer treating the amount of gift received by the Appellant as alleged unexplained Cash Credits u/s.68 of the I.T. Act, 1961.
The learned Commissioner of Income Tax (Appeals) -11. Ahmedabad has erred in confirming the amount of Rs. 15,00,000/- taxed by the Assessing Officer as alleged unexplained money u/s.69A of the Act for the cash seized u/s.132A of the Act though the same has been declared by the appellant under the head "Income from other Sources" in the return of income filed. 5. The appellant prays that the delay in filing of appeal may kindly be condoned. 6. The appellant craves leave to add, alter, amend or modify any of the grounds of appeal on or before the date of hearing of appeal.” 7.1. Ld. Counsel Shri Aseem L. Thakkar submitted that he is not pressing Ground Nos. 1 & 2 which are dealing with jurisdiction of assessment. Recording the same Ground No.1 & 2 are dismissed as Not Pressed.
8. Regarding Ground No.3 additions made in this assessment year are unexplained cash credit u/s.68 of Rs.8,60,000/- received from relatives, which was found to be non-genuine since identity, credit worthiness and genuineness are not proved by the assessee. Further cash seized of Rs.15,00,000/= though declared in the Return of Income under “other sources” the source of the same was not properly explained by the assessee. However during the appellate proceedings the assessee filed additional documents [available at page no.58 to 127 of the Paper Book] wherein bank account, copy of bills, copy of water charges, pesticides for agricultural activities and also Affidavit explaining relationship details with Aadhar Card and driving license proofs the before Ld CIT[A]. However the same were not considered by the Ld CIT[A] and without calling for a Remand Report from the AO, I.T.(SS)A No. 54/Ahd/2019 & Ors. A.Ys. 2015-16 Page No 8 Ravindrabhai Lakshmanrav Mane vs. ITO confirmed the additions made by the AO and dismissed the assessee appeal. Therefore Ld Counsel requested to set aside the issue to the file of Ld CIT[A] and pass order on merits of the case after calling for Remand Report from the AO.
8.1. Per contra, Ld. CIT-DR supported the orders passed by the lower authorities and requested to uphold the additions.
We have given our thoughtful consideration and perused the materials available on record. It is clearly seen from the appellate order more particularly Para 6.1, the assessee made detailed submissions on the additions made of Rs.8.6 lakhs on the Gifts received from assessee’s grand mother namely Vajantabai Rajaram Mane, her PAN and Affidavit, Income Tax Return filed for A.Y.2015-16. Similarly his uncle Janardan Rajaram Mane with evidences of Bank statements, extracts from land revenue records in Form No.7 and 8A which were filed before Ld CIT[A] as Additional Documents available at page nos.56 to 138 of the Paper Book. However Ld CIT[A] has neither verified the same nor called for a remand report from the Assessing Officer, which is legally not tenable, but Ld. CIT(A) upheld the addition made by the AO. Therefore in the interest of Principle of Natural Justice and Fair Play, we deem it fit to setaside this issue to the file of Jurisdictional Assessing Officer to consider the additional documents that were filed before the Ld CIT[A] and direct the JAO to pass order in accordance with law by giving proper opportunity of hearing to the assessee. Thus the Ground No.3 filed by the assessee is partly allowed.
I.T.(SS)A No. 54/Ahd/2019 & Ors. A.Ys. 2015-16 Page No 9 Ravindrabhai Lakshmanrav Mane vs. ITO
Ground No.4 Addition of Rs.15 lakhs u/s.69A of the Act, though this cash seized u/s.132A was declared by the assessee as income from “other sources”, this issue does not arise from the appellate order passed by the Ld CIT[A]. Further the assessee has not filed any evidence in support of the claim that it is from “other sources”. In the absence of any details, this Ground no.4 is liable to be deleted.
Ground No.5 is to condone the delay in filing the appeal before this Tribunal, which is already condoned in Paragraph 6 to 6.4 of this order.
Ground No.6 is General in nature which does not require specific adjudication.
In the result the appeal filed by the assessee in IT(SS)A No. 54/Ahd/2019 is partly allowed for Statistical purpose.
CIT(Appeals) and refusing to condone the delay in filing the appeal and thereby confirmed the penalty levied u/s.271(1)(c) of the Act. It is seen that Penalty was levied on the unexplained income of Rs.8,60,000/-, which is now setaside by us in para 9 of this order in 2019 to the file of JAO. Therefore the Penalty issue is also setaside to the file of JAO to proceed in accordance with law after deciding the quantum issue. Thus the Grounds raised by the assessee are partly allowed.
I.T.(SS)A No. 54/Ahd/2019 & Ors. A.Ys. 2015-16 Page No 10 Ravindrabhai Lakshmanrav Mane vs. ITO Order pronounced in the open court on 22-08-2024 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 22/08/2024 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद