In absence of sufficient cause delay in filing of return cannot be condoned

Mr. C. Jegaveerapandian Vs ITO (ITAT Chennai)

The A.O has passed the assessment order on 25.03.2004. When the A.O has issued notice u/s. 148 of the Act, the assessee only filed income-tax return in respect of three Assessment years 1995-96, 1996-97 & 1997- 98 for remaining five years i.e., 1998-99 to 2002-03 he has chosen not to file a return. The assessee along with Chartered Accountant appeared before the A.O on 19.03.2003, 18.10.2004, 26.02.2004 in respect of three Assessment Years 1995-96, 1996-97 & 1997-98. The remaining five Assessment Years, the assessee has not responded, ultimately the A.O has passed assessment orders on 25.03.2004. From the above, it is clear that the assessee knows that there are proceedings pending before the A.O for which he has appeared already along with his C.A and also other assessment years pending before the A.O. Under these facts and circumstances, we are of the view that the assessee knowingly not to choose file an appeal in time before the Ld. CIT(A). Apart from that the assessee filed an affidavit before the ITAT, wherein he has stated in paragraph-I that he is away from family since 11.07.2001, which is factually not correct because the assessee has appeared before the A.O on 19.03.2003, 18.10.2004, 26.02.2004 therefore, the plea of the assessee that he is away from the family cannot be accepted. Further, as per the remand report submitted by the A.O that the assessee suffering from sugar, joint pain since 20.01.2002 for that he is taking treatment from Dr. Muralidharan, BAMS and the assessee is visiting the hospital for the period from 20.01.2002 to 28.08.2010 as an outpatient. From the above, it is clear that his state of mind is perfect and he is taking treatment for his ill-health therefore, he must also aware that there was an assessment order and appeal also to be filed. After careful reading of the remand report and also detailed order of the Ld. CIT(A), we find that the assessee was away from the family for 10 years is not believable. For the condonation of the delay, the assessee has to show that there must be a sufficient cause to condone the delay. In this case, the assessee himself decided as per his affidavit not to go to his house knowingly that there must be an assessment order. No one is prevented the assessee to go to his house therefore, we are of the opinion that there is no sufficient cause to condone delay. Accordingly, the appeals filed by the assessee are dismissed.

FULL TEXT OF THE ORDER OF ITAT CHENNAI

These eight appeals filed by the assessee are directed against the orders of the learned Commissioner of Income Tax (Appeals)-1, Madurai in ITA Nos. 182 to 189/2015-16 dated 03.07.2019 relevant to the Assessment Years 1995-1996 to 2002-2003 respectively.

2. In all these appeals the issue is common i.e., whether the Ld. CIT(A) is correct in not condoning the delay in pursuance to the directions given by the Hon’ble ITAT.

3. The brief facts of the case are that the assessee is an individual. A survey u/s. 133A of the Income Tax Act, 1961 (hereinafter as “the Act”) was conducted in the business premises of M/s. JVP Associates and other sister concerns on 11.07.2001. During the course of survey, some documents evidencing business transactions of the assessee were found. Based on the documents found in the survey, the A.O has reopened the assessment by issuing a notice u/s. 148 of the Act and after following the due procedure, an assessment was completed u/s. 143(3) r/w. s. 147 of the Act for the Assessment Years 1999-96 to 1997-98 and s. 144 r/w s. 147 of the Act for the Assessment Years 1998-99 to 2002-03. Aggrieved by these assessment orders, the assessee filed an appeal on 21.09.2012 before the CIT(A) along with the delay condonation petition for 8 1/2 years.

4. The Ld. CIT(A) dismissed the appeal filed by the assessee by rejecting the delay condonation petition filed by him vide order dated 12.2013.

5. Aggrieved by the order passed by the Ld. CIT(A), the assessee carried the matter before the Tribunal. The Hon’ble ITAT ‘A’ Bench, Chennai in ITA Nos. 343, 2904, 2905, 2906, 2907, 2908, 2909 & 2910/Mds/2014 dated 18.03.2015 has set aside the order passed by the Ld. CIT(A) dated 19.12.2013 and remitted the issue of delay condonation to the Ld. CIT(A) vide order dated 18.03.2015.

6. In compliance with the directions by the Hon’ble ITAT, the Ld. CIT(A) directed the A.O to conduct an enquiry regarding averments made by the assessee in his affidavit and called the remand report. The A.O after conducting an enquiry submitted a remand report dated 17.05.2017 to Ld. CIT(A), the same remand report is extracted by Ld. CIT(A) as under:

“As directed by the Commissioner of Income Tax (Appeals), Madurai, a summon u/s 131 of the Income Tax Act, 1961 was issued to Dr. Muralidharan, BAMS who appeared before the undersigned and a sworn statement was taken.

In his sworn statement, Dr. Muralidharan, BAMS stated that the assessee was suffering from High Blood pressure. Sugar and Joint pain since 20.0 1.2002 and he was taking ayurvedic treatment at Government Hospital Tuticorin as a outpatient.

Further, Dr. Muralidharan BAMS., has stated that the assessee visited his clinic several times for ayurvedic treatment from 20.0 1,2002 to 28.08.2010 as outpatient (Copy of sworn statement recorded from Dr. Muralidharan BAMS submitted). In support of his statement Dr. Murafidharan BAMS., has submitted a copy of OP register extract and a copy of prescription for having taken treatment by Shri C. Jegaveerapandian (Copy submitted).

Regarding the assessee’s stay in an isolated place for the past 10 years, this office inspector was deputed to enquire about the genuineness of the claim. On meeting the assessee in person the assessee has stated that he was away in mental depression due to the financial crisis and stayed away from his family at different addresses. However, when assessee was asked to file evidence for staying at different isolated places for so many years he could not produce any evidence. (Copy of ITI submitted)

When asked about the receipt of assessment orders, the assessee stated that the assessment orders were received by his family members.

On verifying the office records, it is noticed that the assessment orders of Shri C. Jegaveerapandian were received by his son Shri Saravanan.

As far as the date of notices issued by TRO, in respect of the assessee is concerned the iTCP- 1 was issued to the assessee on 09-3-2016.

The assessee has filed a letter dated, 05-4-2017 stating that he had gone out of his family and business and had led an isolated life outside due to his mental depression and financial crisis. He stated that he was suffering from Blood Pressure, Chronic diabetics for which he was taking ayurvedic treatment at Govt. Hospital, Tuticoirn. Further vide letter dated, 17-5-2017 he stated that

he was living at the houses of his friends and relatives at Tirupur and Alwartirunagari during the period under treatment for the period from 26-01- 2002 to 28-10-2010.”

7. The Ld. CIT(A) has considered the remand report given by the A.O and passed the detailed order and also rejected the condonation of delay, which reads as under:

“The assessment orders for all the eight years from assessment year 1995-96 to 2002-03 were ptrused. The details regarding filing of return, appearance of the appellant and the authorised representative, issue of notices u/s 148/142(1)/143(2), the date of orders and the total income assessed etc., for sake of clarity are given in the following table:

6.2 From the above table, it is clear that in response to the findings made during the course of survey on 11.07.2001, several instances of concealment of income were detected and therefore, notices u/s 148 were issued for all the eight assessment years in the month of February 2003. In response to these notices, the appellant chose to file the Income Tax return in respect of only three assessment years i.e. 1995-96, 1996-97 a 1997-98. He, however, chose not to file any Income Tax return in respect of the other five assessment years i.e. assessment years 1998-99 to 2002-03. It can also been seen that the appellant himself along with his Chartered Accountant appeared before the Assessing Officer .03.2003, 06.01.2004 and 26.02.2004 for the assessment proceedings for three assessment years 1995-96 , 1996-97 & 1997-98. He, however, chose not to respond to the notices u/s 148 and 142{1) in respect of five assessment years i.e. assessment years 1998-99 to 2002-03. it is very much clear from this factual background that the appellant was fully aware of the nature of concealment which was detected in his presence on 11.07.2001. He was also fully aware of the notices issued u/s 148/142(1) in 2003 and also due to the fact that he was attending assessment proceedings for three assessment years before the same Income Tax Officer who was also dealing with the assessment proceedings for other five assessment years i.e. 1998-99 to 2002-03. The appellant, however, chose not to cooperate and attend in respect of these five assessment years. As he was appearing before the same Assessing Officer, he was aware of the potential area of addition and the quantum of concealment of income which was likely to be determined for all these eight assessment years. In the assessment orders, for three assessment years i.e. 1995- 96, 1996-97 & 1997-98, the Assessing Officer has recorded his presence before him along with his authorised representative upto 26.02.2004. The re-assessment order u/s 143(3) r.w.s. 147 for all the assessment years 1995-96, 1996-97, 1997-98 a 1998- 99 were passed on 25.03.2004, naturally he would be fully aware of the assessment orders for these four assessment years.

6.3. In the shown affidavit which was filed before the Hon’ble ITAT, at point No.1, the appellant has stated that immediately after the survey on 11.07.2001, he had gone out of family and business and had led an isolated life outside due to loss in business and his inability to continue the business. From the clear facts discussed above, the averments of the appellant are completely false as his presence has been recorded by the Assessing Officer upto 26.02.2004, almost upto 2 1/2 years from the date of survey.

6.4. It has also been submitted in the affidavit that the appellant was not present in his residence and did not receive any assessment orders and notices issued by the Assessing Officer, but he later stated that orders and notices had been received by his son and wife. This averment is again blatantly false because was available when the notices u/s 148/143(2) and 142(1) were issued in 2003 he was attending the assessment proceedings. His averments are completely contrary to the recorded facts in the assessment order. Dr. Muralidharan, BAMS has stated in his sworn statement that the appellant was under his ayurvedic treatment at the Government Hospital, Tuticorin between 20.01.2002 to 28.08.2010. As he attended before the Assessing Officer upto 26.02.2004, at least during the period from 20.01.2002 to 26.02.2004 he must have stayed at his residence which is in the same town as the location of the Government hospital.

6.5. Dr. Muralidharan, BAMS, at Government hospital, Tuticorin has stated that he had been giving ayurvedic treatment to the appellant from 20.01.2002 to 28.08.2010 as outpatient. In support of which Dr. Muralidharan, BAMS, has submitted the extract of outpatient register and copy of prescriptions for having given treatment to the appellant, it is, therefore, clear that the appellant was under treatment from January 2002 and was available at his residence atleast up to March 2004, which is the appellant has, denied in his averment at point no.1.

In the letter dated 05.04.2017, the appellant has submitted that he had led an isolated life outside due to mental depression and financial crisis and during this period he was living at the house of his friends and relatives at Thiruppur and Alwarthirunagiri. It is also clear from the sworn statement of Dr. Muralidharan, BAMS, that he was attending ayurvedic treatment at the Government hospital at Tuticorin. The places like Thiruppur and Alwarthirunagiri are far away from Tuticorin. The appellant had been coming for such treatment from a far-off places to take ayurvedic treatment at Government hospital at Tuticorin, it is highly unlikely that he will not go to his own house and meet his family members. Therefore, from the recorded facts, the averments made by the appellant in his affidavit are contrary to facts and are blatantly false. The appellant did not have regard for the laws of the land, he did not cooperate in assessment proceedings for five assessment years and did not file Income Tax return. In response to notices u/s 148 and 142(1) despite being fully aware of the outcome of the assessment proceedings atleast for three assessment years i.e. 1995-96, 1996-97 & 1997-98 for which he personally appeared with his Chartered Accountant for which the assessment order was passed on 25.03.2004 he chose not to file the appeal within the statutory period granted to him. Under the backgrounds facts of this case, it is highly unlikely that he would not have interacted even after March 2004 onwards with his family members particularly his son and wife. Therefore, the story made out in his affidavit is blatantly false and the version is not tenable at all.

6.6. It appears that he faced a grim scenario, when he received notice from TRO, Tuticorin somewhere in the year 2012 he then probably realized that he had no other option but to file appeal before this office and accordingly, he would have filed appeal for all these eight assessment years on 21.09.20 12. During the course of proceedings before TRO, Tuticorin finally the ITCP- 1 was issued on 09.03.2016, as a consequence of which, there was clear danger of attachment and auction of the properties owned by the appellant. From the overall factual canvass arising out of the recorded facts in the assessment order, findings of the Assessing Officer during the course of remand proceedings, it is clear that the averments made in the affidavit by the appellant are false and has been given to mis-lead the higher appellate forum and is guilty of mis-conduct under the law. In view of the above discussion it is clear that the appellant was not prevented by a sufficient cause. From the facts available on record in the assessment orders and recorded during the course of remand proceedings, it is established that it was due to total negligence and disregard to the provisions to the Income tax Act, the appellant chose not to file the appeals within the statutory time allowed to him. Based on the background documents as discussed above, it is clear that the appellant has not been able to prove with any documentary evidence that he was prevented by any sufficient cause to explain the delay in filing the appeals. The appellant was not only negligent but had complete disregard to the law which led to a delay of 8 1/2 years.

6.7. In short he has failed to prove that there were reasons beyond his control which prevented him from filing the appeal within the statutory time allowed to him. The story which has been given in his affidavit and the result of investigation conducted by the Assessing Officer does not instill confidence in the truthfulness of his story, in my considered view, he was not prevented by sufficient reasonable cause in filing the appeals for eight assessment years within the statutory time allowed to him, as he has failed to explain the abnormal delay of about 8 Vi years and the reasons given by him appear to be unrealiabte and false. In view of this, the delay in filing of appeal cannot be condoned. The appeal is dismissed in-limine.”

8. On being aggrieved, the assessee filed an appeal before the Tribunal. The counsel for the assessee has submitted that the assessee has not attended the family for 10 years and stayed in an isolated place and he is suffering with sugar, blood pressure and other ailments therefore, he is not aware of the order passed by the A.O hence, the delay may be condoned.

9. On the other hand, the ld. Departmental Representative has pointed out that as per affidavit filed by the assessee for condonaton of delay, the assessee stated that immediately after survey i.e., on 07.2001 he is away from the family leading an isolated life, which is not correct for the reason that the assessee himself appeared before the A.O on 06.01.2004 and 26.02.2004 and therefore, the averments made in the affidavit are false. The ld. D.R further submitted that the assessee having participated in assessment proceedings, he ought to have aware that the A.O must have passed assessment order. Having known to the fact that there must be an assessment order the assessee himself decided not to go to his house for the reason that he does not want to receive the order of the A.O. It is also a fact that the assessee is consulting the Doctor regularly to take treatment for his ill-health. Further the Ld. DR submitted that there is no sufficient cause prevented the assessee to go to his house to collect the assessment order and file an appeal. Hence, the delay may not be condoned.

10. We have heard both the sides, perused the materials available on record and gone through the orders of the authorities below. The A.O has passed the assessment order on 25.03.2004. When the A.O has issued notice u/s. 148 of the Act, the assessee only filed income-tax return in respect of three Assessment years 1995-96, 1996-97 & 1997- 98 for remaining five years i.e., 1998-99 to 2002-03 he has chosen not to file a return. The assessee along with Chartered Accountant appeared before the A.O on 19.03.2003, 18.10.2004, 26.02.2004 in respect of three Assessment Years 1995-96, 1996-97 & 1997-98. The remaining five Assessment Years, the assessee has not responded, ultimately the A.O has passed assessment orders on 25.03.2004. From the above, it is clear that the assessee knows that there are proceedings pending before the A.O for which he has appeared already along with his C.A and also other assessment years pending before the A.O. Under these facts and circumstances, we are of the view that the assessee knowingly not to choose file an appeal in time before the Ld. CIT(A). Apart from that the assessee filed an affidavit before the ITAT, wherein he has stated in paragraph-I that he is away from family since 11.07.2001, which is factually not correct because the assessee has appeared before the A.O on 19.03.2003, 18.10.2004, 26.02.2004 therefore, the plea of the assessee that he is away from the family cannot be accepted. Further, as per the remand report submitted by the A.O that the assessee suffering from sugar, joint pain since 20.01.2002 for that he is taking treatment from Dr. Muralidharan, BAMS and the assessee is visiting the hospital for the period from 20.01.2002 to 28.08.2010 as an outpatient. From the above, it is clear that his state of mind is perfect and he is taking treatment for his ill-health therefore, he must also aware that there was an assessment order and appeal also to be filed. After careful reading of the remand report and also detailed order of the Ld. CIT(A), we find that the assessee was away from the family for 10 years is not believable. For the condonation of the delay, the assessee has to show that there must be a sufficient cause to condone the delay. In this case, the assessee himself decided as per his affidavit not to go to his house knowingly that there must be an assessment order. No one is prevented the assessee to go to his house therefore, we are of the opinion that there is no sufficient cause to condone delay. Accordingly, the appeals filed by the assessee are dismissed.

11. In the result, all the appeals filed by the assessee are dismissed.

Order pronounced on 24^th September, 2021 in Chennai.