Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
PER S. BALAKRISHNAN, Accountant Member :
This appeal is filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [NFAC] in DIN & Order No. ITBA/NFAC/S/250/2023-24/1054057061(1), dated 30/06/2023
2 for the AY 2012-13 arising out of the order passed U/s. 154 of the Income Tax Act, 1961 [the Act], dated 30/06/2017.
Briefly stated the facts of the case are that the assessee is an individual engaged in transport business in the name and style of M/s. Mahendra Transport Agency. The assessee filed his return of income for the AY 2012-13 on 25/09/2012 declaring a total income of Rs. 4,86,590/-. Subsequently, the case was scrutinized and an order U/s. 143(3) was passed on 28/02/2014 assessing the total income of the assessee at Rs. 5,89,190/-. Thereafter, the case of the assessee was taken up for review by the Ld. Pr.
CIT by invoking the provisions of section 263 of the Act and passed the order on 27/11/2015. In the order U/s. 263 of the Act, the Ld. Pr. CIT set-aside the assessment made by the Ld. AO and directed the Ld. AO to re-do the assessment after making enquiries with regard to cash payments made by the assessee towards lorry hire charges to the drivers. Adhering to the directions of the Ld. Pr. CIT, the Ld. AO issued a notice U/s. 148 of the Act dated 11/12/2015 and after considering the submissions of the assessee in response to the said notice, the Ld. AO completed the re-assessment U/s. 143(3) r.w.s 147 of the Act vide order dated 30/12/2016 wherein the Ld. AO made
3 certain additions aggregating to Rs. 35,39,213/- and assessed the total income at Rs. 41,28,403/-. Aggrieved by the order of the Ld. AO passed U/s. 143(3) r.w.s 147, the assessee filed an appeal before the Ld. CIT(A), NFAC. In the meanwhile, the assessee filed a rectification petition U/s. 154 of the Act before the Ld. AO as there are certain omissions in the assessment order. The Ld. AO on perusal of the rectification petition filed by the assessee, granted relief to the extent of claim made by the assessee.
However, in the order passed U/s. 154, the Ld. AO enhanced the disallowances U/s. 40A(3) of the Act to the extent of Rs. 47,78,100/- against the original amount of Rs. 26,36,900/- and raised a tax demand of Rs. 34,06,117/- in his order dated 30/06/2017. Against this order of the Ld. AO passed U/s. 154 of the Act, the assessee filed an appeal before the Ld. CIT (A)-NFAC with a delay of 570 days.
3. Before the Ld. CIT(A)-NFAC the assessee contended the decision of the Ld. AO while passing the order U/s. 154 of the Act wherein the Ld. AO enhanced the disallowances U/s. 40A(3) of the Act and also agitated that the assessee has not been provided proper opportunity of being heard. The assessee has also contended before the Ld. CIT (A)-NFAC that since there is a delay
4 of 570 days in filing the appeal before the First Appellate Authority, the reasons and circumstances that led to belated filing of the appeal are explained in the affidavit filed before the Ld. CIT(A)-NFAC. On perusal of the affidavit filed by the assessee wherein the assessee sought for condonation of delay, the Ld. CIT(A)-NFAC found that there is no any sufficient and reasonable cause for filing the appeal with a delay of 570 days and rejected the condonation petition filed by the assessee and dismissed the appeal. Aggrieved by the order of the Ld. CIT(A)-NFAC, the assessee is in appeal before us by raising the following grounds of appeal:
“1. That under the facts and circumstances of the case, the order passed U/s. 154 of the Act dated 30/06/2017 confirmed by the CIT(A)-NFAC, dated 30/06/2022 is not in accordance with the provisions of law.
2. The Ld. CIT(A) ought to have condoned the delay of 570 days in filing the appeal when the delay was explained with cause vide petition filed before the Ld. CIT(A) along with affidavit.
The Ld. CIT(A) in a summary and casual manner observed that assessee failed to explain the delay reasonably ignoring the contents of petition filed along with affidavit, which by themselves indicate that there is a reasonable cause for the delay in filing of appeal.
The Ld. CIT(A) without considering the following grounds of appeal urged before him, which he
5 ought to have done so, disposed off the appeal upon which the assessee is aggrieved.
That under the facts and circumstances of the case the Ld. AO is not correct in passing order U/s. 154 of the Act.
2. The Ld. AO ought to have known that there is no mistake apparent from the record therefore the orders passed U/s. 154 of the Act is nullify in law. The disallowance of cash payments is governed by the provisions of section 40A(3) of the Act and Rule 6DD of the IT Rules. The disallowance is contemplated only after examining the payments vis-à-vis sec. 40A(3) and Rule 6DD. Therefore the disputed additions do not come under the category of prima facie mistake to invoke the provisions of section 154 of the Act. 3. The AO ought to have known that provisions of section 154 of the Act can be invoked to rectify prima facie mistakes. In the present case it is not simple mistake to rectify but it is a case of disallowance U/s. 40A(3) and before applying the section it is to be examined whether such cash payments fall in the scope of this section or not vis- à-vis Rule 6DD the explanation of the assessee with evidences. Therefore the order passed is not within the scope of section 154 of the Act. 4. The issue involved and considered in the impugned order passed U/s. 154 of the Act is an issue to be deliberated upon and is of long drawn process therefore the same is outside the scope of section 154 of the Act. 5. The Ld. AO while making additions on account of disallowances U/s. 40A(3) of the Act failed to given an opportunity thus violated the principles of natural justice therefore the addition made is to be deleted on this count alone. 6. For these and other reasons that are to be urged at the time of hearing that the appellant prays that the orders passed U/s. 154 of the Act are to be quashed in the interest of justice.
6 5. For these and such other grounds that may be urged at the time of hearing of subject appeal the appellant prays that the orders of the Ld. CIT(A) passed U/s. 250 of the Act are to be aside in the interest of justice.”
4. Before us, the Ld. Authorized Representative of the assessee drawn our attention to the affidavit filed by the assessee before the Ld. CIT(A)-NFAC and explained the reasons for belated filing of the appeal before the First Appellate Authority. The Ld. AR further submitted that the Ld. CIT(A)-NFAC did not consider the assessee’s explanation for filing the appeal beyond the prescribed time limit and dismissed the appeal and thereby a meritorious case was thrown out. It was therefore pleaded that the matter may be remitted back to the file of the Ld CIT (A)-NFAC in order to provide one more opportunity to the assessee of being heard.
The Ld. DR, on the other hand, vehemently opposed to the submissions of the Ld. AR and argued that the onus is on the assessee to give sufficient and reasonable cause for each day’s delay which lacks in the case of the assessee. Therefore the Ld. CIT (A)-NFAC had no other option but to pass the order based on the materials available on record.
Hence, it was pleaded that the order passed by the Ld. CIT(A)-NFAC does not call for any interference.
7 6. We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. Admittedly, the assessee has filed the appeal before the First appellate Authority with a huge delay of 570 days.
Further, we also observed that while seeking the condonation of delay before the Ld. CIT(A)-NFAC, the assessee has mentioned that “there is a delay in filing the appeal by 570 days. The appeal is to be filed on or before 30th July 2017 but the same is filed on 20th Feb’ 2019. The reasons and circumstances in filing the appeal are explained in the enclosed affidavit”. However, on perusal of the contents of the affidavit filed by the assessee, which is extracted in the order of the Ld. CIT(A)-NFAC, the Ld. CIT(A)-NFAC observed that the reasons adduced by the assessee do not constitute any sufficient and reasonable cause for condoning the delay and accordingly dismissed the appeal by observing as under:
“8………..I find that although it appears, the appellant may not be deriving any benefit by not filing the appeal within the due date prescribed under the Act, but, from contents of petition filed by the appellant, the undersigned make out a case that the appellant had made an afterthought to file the appeal against the order of the AO. Therefore, in my considered view, for these vague reasons, such huge delay of 570 days in filing the appeal even though it may not be malafide, cannot be condoned.”
8 We have also gone through the affidavit filed by the assessee before the Ld. CIT(A)-NFAC. On perusal of the affidavit filed by the assessee before the Ld. CIT(A)-NFAC seeking condonation of delay, explaining the reasons for such delay, we are of the considered opinion, the reasons advanced by the assessee do not constitute a ‘reasonable / sufficient cause’ for filing the appeal beyond the prescribed time limit as whatever the reason put forth by the assessee it should be supported by an evidence / certificate which lacks in this case. It is a settled principle that in each case of the delay it has to be examined on its individual merits and jurisprudence does not extend to accommodating and condoning all inordinate delays. As per section 5 of the Limitation Act, 1963, any appeal or any application, ……………..may be admitted after the prescribed period, if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period. It implies that the delay of each day needs to be justified and there must be sufficient cause supported by an evidence for not preferring the appeal which is lacking in the instant case.
Therefore, in the given facts and circumstances of the instant case, we are of the considered opinion, since there is no valid reason for the belated filing of the appeal before the Ld. CIT(A)-NFAC and even before the 9 Tribunal, we do not find any infirmity in the order passed by the Ld. CIT(A)-NFAC and it does not call for any interference. It is ordered accordingly.
In the result, appeal of the assessee is dismissed.
Pronounced in the open Court on 22nd November, 2023.