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Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
ORDER PER KUL BHARAT, JM : Both appeals filed by the assessee, one in quantum proceedings in against the order of Ld.CIT(A), Ghaziabad dated 31.12.2018 for the assessment year 2009-10 and another in penalty proceedings against the order of Ld.CIT(A), Ghaziabad dated 29.06.2019 for the assessment year 2009-10. The appeals are taken up together for hearing and are being disposed off by way of consolidated order for the sake of brevity. ITA No.1727/Del/2023 [Assessment Year : 2009-10] 2. First, I take assessee’s appeal in quantum proceedings wherein assessee has raised following grounds of appeal:-
1. “That on facts and circumstances of the case and in law the Ld. A.O. erred in passing order u/s 144/147 of I.T. Act, which ought to have been set-aside.
2. That on facts and circumstances of the case and in law the Ld. CIT(A) also erred in confirming the assessment order in dismissing the appeal in limine.
3. That the letter dated 17-12-2018 initiating the defect was not received by assessee till the date of order. 4. Without prejudice, the assessee's father was in hospital during this time and after obtaining certified copy of assessment order, the appeal was filed within the time. This fact has been explained in statement of facts filed before Ld. CIT(A). 5. That on the facts there was a reasonable cause in filing the appeal late, its dismissal is wrong. 6. That apart from the above, the assessee is challenging on the basis of reasons on record, the re-assessment proceedings and the order as being without the authority of law. 7. That the above ground being fundamental to the assessment order should be resolved first being purely legal in nature to determine the validity of the re-assessment order passed u/s 144/147 of the Act. 8. That without prejudice to above and even otherwise too "where assessee made cash deposit in his bank and Ld. A.O. initiated re- assessment proceedings on a fallacious assumption that bank deposit constituted undisclosed income overlooking the fact that source of deposit need not necessarily be income of assessee, assessment proceedings so initiated were to be set-aside". That the appellant craves leave to modify/amend or add any one or more grounds.” 3. Facts giving rise to the present appeal are that in this case, the Assessing Officer (“AO”) was having information regarding cash deposited by the assessee in his saving bank account amounting to INR 10,74,550/-. Therefore, the assessment was framed u/s 147 r.w.s. 144 of the Income Tax Act, 1961 (“the Act”) vide order dated 18.11.2016. However, the assessee failed to comply with the statutory notices issued by Competent Authority. Therefore, the AO proceeded ex-parte to the assessee and treated the entire cash deposits as income of the assessee and assessed the income at INR 12,60,850/-. The AO also initiated penalty proceedings u/s 271(1)(c) of the Act.
4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions, dismissed the appeal ex-parte to the assessee on the ground of delay in filing the appeal.
5. Aggrieved against the order of Ld.CIT(A), the assessee preferred appeal before this Tribunal.
At the outset, Ld. Counsel for the assessee submitted that the assessee is a small time businessman and is not aware about the consequences of law. He submitted that in the interest of principle of natural justice, the assessee may be given opportunity to represent its case on merit atleast before First Appellate Authority. He submitted that the assessee would not seek any adjournment without reasonable cause. He submitted that the assessee would explain the source of cash deposits if opportunity is given to him.
On the other hand, Ld. Sr. DR opposed these submissions and supported the orders of the authorities below.
I have heard Ld. Authorized Representatives of the parties and perused the material available on record and gone through the orders of the authorities below. I find that Ld.CIT(A) has dismissed the appeal of the assessee by observing as under:- Page | 3
2. “The appellant filed the appeal on 29.07.2017 which is found to be delayed by more than 7 months. The defect notice for explaining the delay was sent to the appellant on 17.12.2018 at the address given in Form 35 for the communication through the speed post and e- mail. No reply has been received in response to the above said notice. Examination of facts reveals that the notice of demand was served on 25.11.2016 as per ITNS. Thus there is unjustifiable delay in filing the appeal. Condonation of delay is not a matter of right since appellant has failed to show reasons of delay on last day of limitation and thereafter for each day, it is felt that appellant has not acted with reasonable diligence in prosecuting the appeal. Reliance in this regard is placed on decision in the case of Rankak & Ors, Vs Rewa Coalfields Ltd. AIR 1962 SC 361, JCIT vs Tractors & Farm Equipments Ltd. (ITAT, Chennai-TM) 104 ITD 149, Madhu Dadha vs ACIT (Mad) 317 ITR 458. Considering above facts and circumstances this appeal preferred by the appellant is treated as non-est being defective.” 9. I have considered the facts on record. It is not the case of Revenue that by filing appeal, the assessee has taken any advantage. But on the contrary, the assessee has put himself into risk of dismissal of appeal on limitation. The Hon’ble Supreme Court in the case of Collector of Land Acquisition vs Mst . Katiji & Ors. 167 ITR 471 dated 19.02.1987 held as under:-
“Ordinarily a litigant does not stand to benefit by lodging an appeal late.
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 con- doned the highest that can happen is that a cause would be decided on merits after hearing the parties.
Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.
When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.” 9.1. Therefore, respectfully following the ratio laid in the case of Collector of Land Acquisition vs Mst . Katiji & Ors. (supra), I hereby, set aside the order of Ld.CIT(A) and restore the grounds of appeal for decision afresh on merit of case after giving adequate opportunity of hearing. The grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Year : 2009-10] 11. Now, I take assessee’s appeal in penalty proceedings wherein the assessee has raised following grounds of appeal:-
1. “That the Ld. CIT(A) erred in law, on facts and in surrounding circumstances in dismissing the appeal in limine, in a cursory and Page | 5 summary manner without discussing the merits of appeal leading to injustice to the hapless appellant.
2. That the Ld. CIT(A) also erred in law in failing to appreciate that the penalty is imposable either for concealment of particulars of income or for furnishing of inaccurate particulars of such income and consequently the imposition of impugned penalty for both limbs by Ld. A.O. tantamounts to violation of statutory provisions of section 271(1) (c) of I.T. Act.
3. That the Ld. CIT(A) also erred in law in ignoring the fundamental error in impugned assessment order and penalty notice, having no indication as to for which limb, the penalty proceedings are proposed to be initiated.
4. That the Ld. CIT(A) also erred in law, on facts and in surrounding circumstances in failing to consider the written explanation dated 15-05-2019 and the issue of condonation of delay with empathically pragmatically, resulting in a meritorious matter being thrown out at the very threshold and cause of justice being defeated.
5. That the Ld. CIT(A) also erred in failing to appreciated that mere issuance of notices, without ensuring valid service as per law is nothing but an exercise in futility having no legal sanctity. That the appellant craves leave to modify/amend or add any one or more grounds.”
I have heard Ld. Authorized representatives of the parties and perused the material available on record. I find that the facts and issues are similar [AY 2009-10]. and identical to the Ld. Representatives of the parties have adopted the same arguments in respect of grounds of appeal. Therefore, for the same reasoning, I hereby set aside the impugned order to Ld.CIT(A) and restore the grounds of appeal for decision afresh. My decision in ITA No.1727/Del/2023 [AY 2009-10] would apply Page | 6 Mutatis Mutandi in this appeal filed by the assessee as well. Grounds raised by the assessee are thus, allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
In the final result, both appeals filed by the assessee in & 1728/Del/2023 [Assessment Year 2009-10] are allowed for statistical purposes.