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Income Tax Appellate Tribunal, MUMBAI BENCHES “SMC”, MUMBAI
Before: Shri Joginder Singh,
आदेश / O R D E R
The assessee is aggrieved by the impugned order dated 19/05/2014 of the Ld. First Appellate Authority, Mumbai. The only ground raised in this appeal pertains to confirming the addition of Rs.5 lakh made by the Assessing Officer u/s 68 of the Income Tax Act, 1961.
During hearing, it is noted that the appeal is time barred by 79 days. The assessee explained the reasons of delay. The ld. DR though contended that the assessee has to explain the delay of each day. No doubt filing of an appeal is a right granted under the statute to the assessee and is not an automatic privilege, therefore, the assessee is expected to be vigilant in adhering to the manner and mode in which the appeals are to be filed in terms of the relevant provisions of the Act. Nevertheless, a liberal approach has to be adopted by the appellate authorities, where delay has occurred for bona fide reasons on the part of the assessee or the Revenue in filing the appeals. In matters concerning the filing of appeals, in exercise of the statutory right, a refusal to condoned the delay can result in a meritorious matter being thrown out at the threshold, which may lead to miscarriage of justice. The judiciary is respected not on account of its power to legalize in justice on technical grounds but because it is capable of removing injustice and is expected to do so.
2.1. The Hon’ble Apex Court in a celebrated decision in Collector, Land Acquisition vs Mst. Katiji & Ors. 167 ITR 471 opined that when technical consideration and substantial justice are pitted against each other, the courts are expected to further the cause of substantial justice. This is for the reason that an opposing party, in a dispute, cannot have a vested right in injustice being done because of a non- deliberate delay. Therefore, it follows that while considering matters relating to the condonation of delay, judicious and liberal approach is to be adopted. If sufficient cause is found to exist, which is bona-fide one, and not due to negligence of the assessee, the delay needs to condoned in such cases. The expression ‘sufficient cause’ is adequately elastic to enable the courts to apply law in a meaningful manner, which sub- serves the end of justice- that being the life purpose of the existence of the institution of the courts. When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred. The Hon’ble Apex Court in Vedabhai vs Santaram 253 ITR 798 observed that inordinate delay calls of cautious approach. This means that there should be no malafide or dilatory tactics. Sufficient cause should receive liberal construction to advance substantial justice. The Hon’ble Apex Court in 167 ITR 471 observed as under:- “3. The legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits. The expression “sufficient cause” employed by the legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making a justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the others courts in the hierarchy.”
Furthermore, the Hon'ble Supreme Court in the case of Vedabai Alia Vaijayanatabai Baburao Patil vs. Shantaram Baburao Patil 253 ITR 798 held that the court has to exercise the discretion on the facts of each case keeping in mind that in construing the expression ‘sufficient cause’, the principle of advancing substantial justice is of prime importance. The court held that the expression “sufficient cause” should receive liberal construction. In view of the foregoing discussion, the delay is condoned.
2.2. So far as, sustaining the addition of Rs.5 lakh is concerned, the ld. counsel for the assessee explained that the assessee purchased one residential house for which loan of Rs.32 lakh was obtained from six parties and on satisfactorily explanation by the assessee, the addition to the tune of Rs.27 lakh was granted by the Assessing Officer itself and the remaining amount of Rs.5 lakh was given by the in-laws of the assessee (Rs.2.5 lakh each by mother in-law and father in-law). The assessee gave the PAN number, bank statement of in-laws and payment was explained to be made through account payee cheque and further confirmation was also filed from them. It was pointed out that the entire amount of Rs.5 lakh was repaid in assessment year 2011-12 for which my attention was invited to pages 8 and 9 of the paper book.
Reliance was placed upon the decision in the case of CIT vs Vrindavan Farms Pvt. ltd. (ITA No.71 & 72 of 2015 order dated 12/08/2015) from Hon’ble Delhi High Court and CIT vs Mark Hospitals Pvt. Ltd. (2015) 373 ITR 115 (Madras). On the other hand, the ld. DR, defended the conclusion arrived at in the impugned order by supporting the addition made by the ld. Assessing Officer and sustained by the ld. Commissioner of Income Tax (Appeals).
2.3. I have considered the rival submissions and perused the material available on record. Under the facts narrated hereinabove, there is no dispute to the facts that the amount of Rs.2.5 lakh each was paid to the assessee (Son-in- law) by the in-laws through account payee cheque and the amount was returned through cheque in A.Y. 2011-12 as is evident from record. In such a situation, question arises whether addition was rightly made by the Assessing Officer. No doubt, onus of proving the source satisfactorily, under section 68 of the Act, is upon the assessee. In the present appeal, the identity of the in-laws, their creditworthiness, genuineness of the transaction, payment through cheque is not in dispute, therefore, in my opinion, no addition u/s 68 of the Act was warranted. If the explanation made by the assessee is found unacceptable by the Assessing Officer onus shifts to him to prove otherwise. The genuineness of the assessee is fortified by the fact that the remaining amount of Rs.27 lakh was deleted by the ld. Assessing Officer himself as the assessee furnished plausible explanation along with necessary evidence. In the present appeal, the amount of Rs.2.5 lakh each was paid through cheque by the in-laws to the assessee for specific purposes of purchasing a residential house. In such a situation, I am satisfied that it is a fit case, where the addition has to be deleted, more specifically, when the onus cast upon the assessee has been discharged, therefore, the impugned addition is deleted.
Finally, the appeal of the assessee is allowed.
This order was pronounced in the open Court in the presence of ld. representative from both sides at the conclusion of the hearing on 07/01/2016.