Case Law Details
V. Babu Vs ACIT (ITAT Chennai)
In a recent development, the Income Tax Appellate Tribunal (ITAT), Chennai has passed an order that directs re-adjudication of the appeal filed by an individual assessee, V. Babu against the ACIT. The appeal was initially rejected by the Commissioner of Income Tax (Appeals) [CIT(A)] due to a delay in its filing by the assessee. This case presents an intriguing scenario regarding the circumstances and reasons accepted for condoning a delay in the filing of an appeal.
In this case, the assessee had experienced a delay in filing his appeal before the CIT(A) due to the ill health of his authorized representative. Despite this reasoning, the CIT(A) rejected the appeal, stating that the appeal was digitally signed by the assessee himself. This led to the assessee’s appeal to the ITAT. The Tribunal, in contrast to the CIT(A), took into account the health situation of the representative and concluded that it offered a reasonable cause for the delay. Consequently, it overruled the CIT(A)’s order, directing the CIT(A) to condone the delay and re-adjudicate the case on its merits.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi dated 10.02.2023 for the assessment year 2007-08 passed under section 271(1)(c) of the Income Tax Act, 1961 [“Act” in short].
2. The appeal filed by the assessee is delayed by one day in filing the appeal and filed a petition for condonation of delay in the form of an affidavit to which; the ld. DR has not raised any serious objection. Consequently, since the assessee was prevented by sufficient cause, the delay of five days in filing of the appeal stands condoned and the appeal is admitted for adjudication.
3. Brief facts of the case are that the assessee is an individual and filed his return of income for the assessment year 2007-08 on 13.11.2007 admitting total income of ₹.16,27,456/-. Since the assessee had received a sum of ₹.10 crores credited into his account on 09.02.2007 and the source was not explained, an action under section 133A of the Act was conducted at the premises of the assessee on 03.03.2010. During the course of survey, it was explained by the assessee that the said amount was received through RTGS in his account held at State Bank of India, CIT Nagar Branch from M/s. Commercial Buildtech Pvt. Ltd. The assessee claimed to have received the said sum of ₹.10 crores on behalf of Shri K.R. Elangovan of Omnigate, close friend and as per his instructions transferred ₹.9.97 crores to M/s. Mohanlal Jewellers. He stated that he had only earned a commission of ₹. 3 lakhs in acting as a conduit to the transaction. Thus, the assessment was reopened under section 148 of the Act on 22.07.2011. During the course of post survey proceedings, both Shri K.R. Elangovan and Shri Mohanlal Khatri denied the happenings in the narrative articulated by the assessee. In his sworn statement, Shri K.R. Elangovan squarely replied that he did not know about this transaction and had no role to play in it. Shri Mohanlal Khatri stated that gold bullion worth ₹.9.97 crores was collected by the assessee after issue of cheque by him. Since the assessee could not adduce any evidence to support his claim consequent to the explanation given by the alleged parties to the transaction and the source of ₹.10 crores was not satisfactorily explained, the Assessing Officer treated the entire credit of ₹.10 crores as unexplained and added to the taxable income under section 68 of the Act. Accordingly, the Assessing Officer completed the assessment under section 143(3) r.w.s. 147 of the Act dated 18.03.2013 assessing total income of the assessee at ₹.10,16,27,456/-. On appeal, the ld. CIT(A) confirmed the quantum addition, which was sustained by the ITAT vide its order in I.T.A. No. 296/Mds/2015 dated 21 .08.2015. On further appeal, the Hon’ble Madras High Court in TCA No. 104/2016 dated 23.02.2016 dismissed the appeal filed by the assessee.
4. Consequently, penalty proceedings under section 271(1 )(c) of the Act has been initiated by issuing show-cause notice dated 07.04.2016. After considering the submissions of the assessee, the Assessing Officer levied penalty of ₹.3,50,00,000/- under section 271(1 )(c) of the Act dated 22.04.2016. Against the penalty order, the assessee preferred further appeal before the ld. CIT(A) with a delay of 67 days in filing the appeal before the ld. CIT(A). The ld. CIT(A) rejected the appeal of the assessee by not condoning the delay in filing the appeal as no sufficient cause was shown by the assessee.
5. On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the appeal filed before the ld. CIT(A) was dismissed on the ground that the delay in filing the appeal before the ld. CIT(A) was not properly substantiated. It was submitted before the ld. CIT(A) that the Authorized Representative of the assessee was suffering from heart problem and already undergone surgery twice was the reason for the delay in filing the appeal. The ld. Counsel for the assessee has also submitted that the ld. CIT(A) has not adjudicated the case on merits and prayed for condoning the delay in filing the appeal before the ld. CIT(A) and may be directed the ld. CIT(A) to adjudicate the case on merits by affording an opportunity of being heard to the assessee.
6. On the other hand, the ld. DR supported the order passed by the ld. CIT(A).
7. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. On perusal of the appellate order, we find that there was delay of 67 days in filing the appeal before the ld. CIT(A) for which the assessee has stated that due to the ill health of the authorized representative, there was a delay in filing the appeal and this statement was not in dispute. However, the ld. CIT(A) has disputed for the reason that the appeal was filed and digitally signed by the assessee himself. Since it was not possible to discuss the tax matter or any other important matters with a person ailing from heart disease seeking expert opinion, we are of the considered opinion that there was reasonable cause for the delay in filing the appeal before the ld. CIT(A). Thus, we set aside the appellate order and direct the ld. CIT(A) to condone the delay as well as adjudicate the case on merits by affording an opportunity of being heard to the assessee.
8. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 07th June, 2023 at Chennai.
