RAM CHAND PANJWANI, RAIPUR,RAIPUR vs. INCOME TAX OFFICER-1(2), RAIPUR, RAIPUR

Succinctly stated, the assessee who is engaged in the business of rice milling and trading of paddy, rice, broken rice etc. had e-filed his return of income on 13.02.2015 declaring an income of Rs.8,02,440/-. During the course of assessment proceedings, it was observed by the A.O that the assessee had claimed to have purchased paddy/broken rice from the following four local parties:

A survey operation u/s.133A of the Act was conducted at the business premises of Shri Sanjay Sharma, Hanuman market, Raipur and Shri Kamlesh Kesharwani, commission Agent, Ramsagarpara, Raipur on 15.03.2016, which revealed that certain rice millers would procure bogus bills from brokers/entry operators without any actual purchase of goods. It was observed by the A.O that substantial incriminating material evidencing the aforesaid facts were found in the course of the aforesaid proceedings. The A.O also noticed that survey action was carried out in the case of Nagarik Sahakari Bank, Raipur where some of the brokers/entry operators maintained their bank accounts. It was further observed by the A.O that brokers/entry operators had in their respective statements that were recorded on oath u/s.131 of the Act had admitted of having provided bogus bills to rice traders and millers without any actual supply of goods. Also, it was noticed by the A.O that certain rice millers had in their statements that were recorded on oath admitted of being involved in the nefarious activities of providing bogus bills without any corresponding sales of goods. After deliberating at length on the modus-

Considering the fact that the 4 parties from whom the assessee had claimed to have made purchases of Rs.82,75,000/- were in the course of investigation found to be bogus firms, the A.O called upon the assessee to substantiate the authenticity of the impugned purchase transactions on the basis of supporting documentary evidence. In reply the assessee in his attempt to substantiate the authenticity of the aforesaid purchase transactions submitted before the A.O that he had made genuine purchases and sales during the year, which were duly recorded in his books of account. At the same time, the assessee in order to purchase peace of mind offered for tax 10% of the purchases of Rs.28.25 lacs i.e. Rs.3,27,500/-. However, A.O did not find fafour with the aforesaid explanation of the assessee. The A.O observed that the invoices of the aforesaid suppliers were

After treating the impugned purchases in question as bogus the A.O rejected the books of accounts of the assessee u/s.145(3) of the Act. The A.O by relying on the order of the ITAT, Ahmadabad in the case of Vijay Proteins Vs. ACIT, (1996) 58 ITD 428 (Ahd.), and impliedly being of the view that the assessee had purchased the goods in question not from the aforementioned tainted parties from whom only bills were procured for routing the same through his books of account, but had procured such goods at a discounted value from the open/grey market, thus, disallowed 25% of the value of bogus purchases and made a consequential addition of Rs.20,68,750/- to the assessee’s returned income. Apart from that the A.O had also made two additions viz. (i) Rs.1,00,000/- on account of freight expenses and hamali expenses as against claimed by the assessee of

Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) who dismissed the appeal of the assessee in limine. For the sake of clarity, the relevant observations of the CIT(Appeals) are culled out as under:

The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal.

The Ld. Departmental Representative (for short ‘DR’) took a strong exception as regards the maintainability of the appeal for the reason that the same involves an inordinate delay of 137 days.

Apropos the delay involved in filing of the present appeal, the Ld. Authorized Representative (for short ‘AR’) for the assessee submitted that the same had occasioned for the reason that the assessee had inadvertently failed to open his e-

I have given a thoughtful consideration on the reasons leading to the delay in filing of the present appeal and am unable to persuade myself to subscribe to the same. Ostensibly, the assessee in the course of the proceedings before the CIT(Appeals) had despite having been afforded sufficient opportunity failed to put up an appearance before him on four occasions when the matter was fixed for hearing, i.e., 01.03.2021, 26.11.2021, 06.01.2022 and 06.05.2022. Also, no details in support of the grounds on the basis of which the impugned order was assailed before the first appellate authority were filed in the course of proceeding before him. On a perusal of the records, I find that the assessee in the course of proceedings before the CIT(Appeals) had adopted a lackadaisical approach and did not participate in the proceedings before the him. It is also evident from record that the assessee had filed the present appeal with a delay of 137 days, which reveals his callous conduct to participate in the process of law. Apropos the explanation given by the assessee for the aforesaid delay in filing of the present

In the totality of the facts leading to the delay in filing of the present appeal r.w the conduct of the assessee appellant before the lower authorities and also before me, I would mince no words in observing that the same does not merit acceptance. In fact, if I condone the inordinate delay involved in the present case where the assessee had not only delayed filing of the present appeal even before me, but also not participated in the appellate proceedings, then, it would send a wrong message and would lay down a wrong precedent for the times to come. I am of a strong conviction that as the assessee had on account of his callous conduct and a lackadaisical approach delayed the filing of the present appeal by a substantial period of 137 days, therefore, the application filed by him seeking condonation of the delay therein involved does not merit acceptance and is liable to be rejected at the threshold.

The co-ordinate bench of the Tribunal in the case of M/s. Phoenix Mills Ltd. Vs. Asstt. CIT in ITA No.6240/MUM/2007 for A.Y.1999-2000, dated 23.03.2020, had held that where an application for condonation of delay has been moved bonafide, then, the Court would normally condone the delay, but where the delay has not been explained at all and in fact there is an unexplained and inordinate delay coupled with negligence or sheer carelessness, then, the discretion of the court in such cases would normally tilt against the applicant.

I may herein observe that in the case of State of West Bengal Vs. Administrator, Howrah 1972 AIR SC 749, the Hon’ble Apex Court had held that the expression “sufficient cause” should receive a liberal construction so as to advance substantial justice, particularly when there is no motive behind the delay. The expression “sufficient cause” will always have relevancy to reasonableness. The action which can be condoned by the court should fall within the realm of normal human conduct or normal conduct of a litigant. However, as observed by me hereinabove, as the assessee appellant in the present case is habitually acting in defiance of law, therefore, there can be no reason to allow his application and

Also, I may herein draw support from a Third Member decision of a co- ordinate Bench of the Tribunal, in the case of Jt. CIT Vs. Tractors and Farm Equipments Ltd. (2007) 104 ITD 149 (Chennai), wherein a fine distinction was drawn between normal delay and inordinate delay. It was held as under:

Also, as observed by the Hon’ble Supreme Court in the case of Ramlal, Motilal and Chotelal Vs. Rewa Coalfields Ltd. AIR (1962) 361 (SC) that seeker of justice must come with clean hands, therefore, now when in the present appeal the assessee appellant had failed to come forth with any good and sufficient

In the result, appeal of the assessee is dismissed in terms of my aforesaid observations.