Income Tax Appellate Tribunal - Pune
Kush Properties & Developers Pvt.Ltd,, ... vs Deputy Commissioner Of Income Tax,, on 17 March, 2017
आयकर अपील य अ धकरण] पण ु े यायपीठ "ए" पण ु े म
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
स
ु ी सषु मा चावला, या यक सद य एवं ी आर. के. पांडा, लेखा सद य
BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM
आयकर अपील सं. / ITA No.2073/PUN/2014
Block Period : 1997-98 to 2003-04
M/s. Kush Properties & Developers Pvt Ltd., .......... अपीलाथ /
122 Sterling Centre,
Appellant
11 Moledina Road,
Pune - 411 001.
PAN : AAACK8694D
बनाम v/s
The Dy.Commissioner of Income Tax,
Central Circle 2(1), Pune,
PMT Building, 'C Wing' 4th Floor, .......... यथ /
Shankarseth Road, Swargate, Respondent
Pune 411 037.
आयकर अपील सं. / ITA No.2658/PUN/2016
Block Period : 1997-98 to 2003-04
M/s. Kush Properties & Developers Pvt Ltd., .......... अपीलाथ /
122 Sterling Centre,
Appellant
11 Moledina Road,
Pune - 411 001.
PAN : AAACK8694D
बनाम v/s
The Dy.Commissioner of Income Tax,
Central Circle 2(1), Pune,
PMT Building, 'C Wing' 4th Floor, .......... यथ /
Shankarseth Road, Swargate, Respondent
Pune 411 037.
अपीलाथ क ओर से / Appellant by : Shri P.D. Kudwa
यथ क ओर से / Respondent by : Shri Rajeev Kumar
सन
ु वाई क तार ख / घोषणा क तार ख /
Date of Hearing : 15.03.2017 Date of Pronouncement: 17.03.2017
आदे श / ORDER
PER SUSHMA CHOWLA , JM :
Out of the bunch of two appeals, the first appeal in ITA No.2073/PN/2014 is filed by the assessee against the order of 2 ITA No.2073/PUN/2014 Block Period : 1997-98 to 2003-04 & ITA No.2658/PUN/2016 Block Period : 1997-98 to 2003-04.
Commissioner of Income Tax - (Appeals) dt.17.10.2014 passed under Section 154 of the Income Tax Act, 1961 (in short 'the Act') relating to Block Period 1997-98 to 2003-04. The assessee in ITA No.2658/PUN/2016 has filed an appeal against the order of Commissioner of Income Tax (Appeals) - Central, Pune dt.31.01.2013 against the order passed under Section 158BC(c) of the Act relating to Block Period 1997-98 to 2003-04.
2. Both the appeals relating to the same assessee were heard together and are being disposed of by this consolidated order for the sake of convenience.
3. The assessee in ITA No.2073/PUN/2014 has raised the following grounds of appeal :
"1. The CIT(A) erred in rejecting the appellant's application seeking rectification of CIT(A) order dt 30.01.2013 confirming the addition of Rs. 3,39,073 made in the Block Asst Order, based on the seized trial balance as on 31.03.2001 found in search action on 27.06.2002 at the assessee's business premises. The CIT(A) failed to appreciate that the subject amount was in respect of y.e. 31.3.2000 and included addition of Rs.16,20,674 based on seized document reflecting profit on sale of premises in y.e .. 31.03.2000 at page no 122B Bundle No. A-9 of Party No A-12 which was held by CIT(A) in appellate order dt 30.01.2013 as not in fact made and was only a calculation.
2. The CIT(A) erred in confirming the addition of Rs.3,39,073 without appreciating the factual explanation of documents on record and the submissions made by the appellant. The appellant pleads that the rectification application ought to have been accepted and the addition of Rs. 339073 made in the block assessment and confirmed by CIT(A) in his order dt 30.01.2013 ought to be deleted."
4. The assessee in ITA No.2658/PUN/2016 has raised the following grounds of appeal :
3ITA No.2073/PUN/2014
Block Period : 1997-98 to 2003-04 & ITA No.2658/PUN/2016 Block Period : 1997-98 to 2003-04.
"1. The Hon. CIT(A) erred in confirming the addition of Rs.339073 made in Assessment Year 01-02 by the AO based on trial balance as on 31.03.2001 being seized document at Pg. No. 121 Bundle No A-9 Party A-12. found in search action on 27.06.2002.
2. The appellant pleads that the amount of Rs.3,39,073 pertained to YE 31.03.2000 and arose out of tentative accounts based on projected sale of property for consideration of Rs.26,40,000 jotted in seized document no 122B Bundle No A-9 Party A-12.
3. The Hon CIT(A) erred in not appreciating that the figure of Rs.3,39,073 in the Trial Balance was consequential to the estimated profit of Rs.16,26,074 from the projected sale of property for Rs.26,40,000 which was held by CIT(A) as not a real transaction and that no real income was earned from the sale.
4. The AO and Hon CIT(A) failed to appreciate that the profit figure of Rs.3,39,073 did not appear in the accounts of the assessee available at the time of search action on 27.06.02.
5. The appellant pleads that the addition of Rs.3,39,073 made by the AO and confirmed by the CIT(A) is not justified."
5. The appeal in ITA.No.2658/PUN/2016 was filed after delay of 1305 days. The assessee filed an application for condonation of delay in filing the appeal late. The order of Commissioner of Income Tax (Appeals) was served upon the assessee on 26.02.2013 and the appeal was required to be filed on or before 27.04.2013. However, the said appeal was filed on 23.11.2016 i.e., after delay of 1305 days / 1364 days as mentioned in the condonation petition. The assessee claims that it had applied to the Commissioner of Income Tax (Appeals) for rectification under Section 154 of the Act which was decided vide order dt.17.10.2014 wherein the claim of the assessee was rejected. The assessee during the course of hearing of the appeal before the Tribunal thought it fit to file an appeal against the original addition made in the hands of the assessee and confirmed by 4 ITA No.2073/PUN/2014 Block Period : 1997-98 to 2003-04 & ITA No.2658/PUN/2016 Block Period : 1997-98 to 2003-04.
Commissioner of Income Tax (Appeals) to the extent of Rs.3,39,073/-. The assessee in support has filed an Affidavit of the Managing Director of the assessee company which reads as under :
AFFIDAVIT "I Kishore Shetty Managing Director of Kush Properties & Developers Pvt. Ltd. Registered address 122 Sterling Centre, 11 Moledina Road, Pune 411001 do solemnly declare and affirm as under :
That the company was incorporated on 31.10.1989 and filed its income tax returns upto A Y 1999-2000 with the Asst CIT Circle 1(2), Pune under PAN AAACK8694D The company continuously suffered losses and the book losses as on 31.03.1999 were Rs.11,68,960 and the losses under the Income Tax Act, 1961 were Rs.16,45,125/-.
That on 27.06.2002 following search action under section 132 of the Income Tax Act, 1961 on the premises of the company and its directors, the company filed block return on 15.07.2004 declaring Nil undisclosed income for AY 1997-98 to AY 2003-04 (upto 27.06.2002).
The AO i.e. Deputy CIT Central 2(1), Pune vide block assessment order dt 21.07.2004 assessed undisclosed income at Rs.59,55,928.
The company contested the assessment in appeal before CIT(A), Central who by order dt 31.01.2013 granted relief deleting five additions and sustaining one addition of Rs. 3,39,073 made by the AO in block assessment. The relief granted to the company has not been contested by the Department.
The addition of Rs.3,39,073 represented a consequential addition which arose from a projected profit of Rs. 16,20,674 arising out of a proposed sale of property for Rs.26,40,000. The CIT(A) in Ground No 5 of the said appeal in the Appellate Order has held that the sale transaction is not a real transaction resulting in any income.
As legally advised, the company preferred an application u/s 154 seeking rectification of the order pointing out the aforesaid facts. The said application was rejected by the CIT(A) resulting in the addition of Rs.3,39,073 being contested in appeal before the ITAT 'A' Bench, Pune in ITA No. 2073/PN/2014.
In the course of preparation for hearing of the appeal before the ITAT we feel that we have pursued our grievance about the addition of Rs. 3,39,073 before a wrong forum whereby the 5 ITA No.2073/PUN/2014 Block Period : 1997-98 to 2003-04 & ITA No.2658/PUN/2016 Block Period : 1997-98 to 2003-04.
present appeal is against order under Section 154 and not against the addition of Rs.3,39,073 on merits. The company is aggrieved by the addition of Rs. 3,39,073 and has filed an appeal memo in Form 36 against the said addition on merits in the office of the Tribunal.
I hereby declare that the above statement is true and correct to the best of my knowledge and belief."
6. The Learned Authorised Representative for the assessee states that the delay in filing the present appeal should be condoned and the matter be heard both on merits and against the order passed under Section 154 of the Act. The Learned Departmental Representative for the Revenue had strongly opposed the condonation application filed by the assessee.
7. We have heard the rival contentions and perused the record for the limited issue of deciding whether the assessee has a good case of condonation of delay in filing the appeal late by about 1305 days. The assessee in the condonation application mentions that the delay is of 1364 days whereas the Registry has notified the delay to be 1305 days. Whatever be the period of delay, the said issue is to be seen keeping in mind the facts and circumstances of the case. As per the assessee the Assessing Officer had made two additions i.e., of Rs.3,39,073/- and Rs.16,20,674/-, against which rectification application was filed under Section 154 of the Act before the Commissioner of Income Tax (Appeals) Vide order passed under Section 154 of the Act, the Commissioner of Income Tax (Appeals) deleted the addition of Rs.16,20,674/- but retained the addition of Rs.3,39,073/-. The order of rectification under Section 154 of the 6 ITA No.2073/PUN/2014 Block Period : 1997-98 to 2003-04 & ITA No.2658/PUN/2016 Block Period : 1997-98 to 2003-04.
Act was passed on 17.10.2014 and the assessee filed an appeal against the said order on 19.11.2014. In other words, the assessee in the month of October - 2014 / November - 2014 was aware that the addition of Rs.3,39,073/- has been confirmed in the hands of the assessee. However, the assessee did not file any appeal against the same, while it was filing the appeal against the dismissal of its rectification plea under Section 154 of the Act. However the assessee filed an appeal against the original order of the Commissioner of Income Tax (Appeals), confirming the addition of Rs.3,39,073/- on 22.11.2016. The assessee is duty bound to explain the reasons for delay in filing the appeal late.
8. We can understand the case of the assessee to the extent that till the pendency of the rectification application under Section 154 of the Act before the Commissioner of Income Tax (Appeals) the assessee did not seek the alternate remedy of filing an appeal before the Tribunal against the addition of Rs.3,39,073/-, which was confirmed by the Commissioner of Income Tax (Appeals). However once the Commissioner of Income Tax (Appeals) had disposed of the said plea of the assessee and decided the same against the assessee, the course of action for filing the appeal before the Tribunal should have been initiated immediately. However the assessee files the appeal as late as on 22.11.2016, whereas the order of Commissioner of Income Tax (Appeals) under Section 154 of the Act was passed on 17.10.2014. The assessee has failed to explain the delay between October - 2014 to November - 2016. Undoubtedly a pragmatic view 7 ITA No.2073/PUN/2014 Block Period : 1997-98 to 2003-04 & ITA No.2658/PUN/2016 Block Period : 1997-98 to 2003-04.
has to be taken while deciding the appeals relating to condonation of delay, but the onus is upon the assessee to explain the delay in filing the appeal late. In the absence of assessee discharging his onus, there is no merit in the plea of the assessee before us.
9. The Hon'ble Supreme Court in Collector, Land Acquisition V/s. MST. Katiji & Ors reported in 167 ITR 0471 has held as under:
"3. The legislature has conferred the power to condone delay by enacting s.5 of the Limitation Act of 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on "merits". The expression "sufficient cause" employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice- that being the life- purpose of the existence of the institution of Courts."
10. The Hon'ble Supreme Court in the said case was deciding issue of delay of 4 days by the "State", in filing appeal late and it was observed that the liberal approach should be adopted while condoning the delay. However, the doctrine must be applied in a rational common sense and pragmatic manner.
11. In another decision, the Hon'ble Supreme Court in Vedabai alias Vaijayanatabai Baburao Patil V/s. Shantaram Baburao Patil reported in 253 ITR 798 (SC) while condoning the delay of seven days on ground of illness, it was held that a distinction must be made where delay is inordinate and a case where the delay is of few days and where the assessee's appeal of condonation of delay only seven days on genuine ground of illness, the same should be condoned. The Hon'ble Supreme Court further held as under : 8 ITA No.2073/PUN/2014
Block Period : 1997-98 to 2003-04 & ITA No.2658/PUN/2016 Block Period : 1997-98 to 2003-04.
"In exercising discretion under section 5 of the Limitation Act, the Courts should adopt pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of few days. Whereas in the former case the consideration of prejudice to the other side will be relevant factor so the case calls for a more cautions approach but in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The Court has to exercise the discretion on the facts of each case keeping in mind that in construing the expression 'sufficient cause', the principle of advancing substantial justice is of prime importance."
12. In another decision, Hon'ble Supreme Court in State of Haryana V/s. Chandra Mani in Civil Appeal Nos. 4118 & 4119 of 1996, had also condoned the delay of 109 days in filing appeal by the "State" on the ground that State is impersonal machinery working through its officers or servants.
13. However, the Hon'ble Supreme Court in the case of Improvement Trust, Ludhiana Vs. Ujagar Singh & Ors in Civil Appeal Nos. 2395 of 2008 had considered the case of delay of 90 days and had held that in case where the delay was not huge, the same could have been condoned without putting the respondent to harm or prejudices. Applying the above principle, we dismiss the condonation application filed by assessee. Accordingly, the appeal filed by the assessee in ITA No.2658/PUN/2016 is dismissed on preliminary issue itself.
14. Now coming to the appeal filed by the assessee against the order under Section 154 of the Act, the Learned Authorised Representative for the assessee pointed out that certain additions 9 ITA No.2073/PUN/2014 Block Period : 1997-98 to 2003-04 & ITA No.2658/PUN/2016 Block Period : 1997-98 to 2003-04.
were made in the hands of the assessee on the basis of documents found during the course of search. One addition on account of sale of property at Rs.16,20,674/- which was made for the Assessment Year 2000 - 01, the Learned Authorised Representative for the assessee pointed out that the said addition has been deleted by the Commissioner of Income Tax (Appeals) vide order passed under Section 154 of the Act. He further pointed that another addition was made to the extent of Rs.3,39,073/- which was also on the basis of the documents found. He stressed that the said addition related to Assessment Year 2000 - 01 and once no addition is made on account of Rs.16,20,674/-, the other addition also merits to be deleted.
15. The Learned Departmental Representative for the Revenue on the other hand pointed out that the two additions referred to by the assessee are separate i.e., on the basis of different documents found during the course of search. The addition of Rs.16,20,674/- was made for Assessment Year 2000 - 01 and Rs.3,39,073/- was made for Assessment Year 2001 - 02. Hence, there is no merit in the contention of the Learned Authorised Representative for the assessee. It was also pointed that the issue raised by the assessee is not a mistake apparent from the record and hence cannot be part of the proceedings under Section 154 of the Act.
16. We have heard the rival contentions and perused the record. The dispute arising in the present appeal is against the order passed by the Commissioner of Income Tax (Appeals) under Section 154 of 10 ITA No.2073/PUN/2014 Block Period : 1997-98 to 2003-04 & ITA No.2658/PUN/2016 Block Period : 1997-98 to 2003-04.
the Act. The said Section prescribes that when there is any mistake apparent from record, the same may be rectified, when it is either pointed out by the assessee or comes to the knowledge of the authority concerned. In the present set of facts, the assessee had filed an application for rectification under Section 154 of the Act before the Commissioner of Income Tax (Appeals) against the additions i.e., Rs.16,20,674/- and Rs.3,39,073/-. The first addition of Rs.16,20,674/- was made by the Assessing Officer on the basis of Page No.122B of Bundle No.A-9 of Party No.A-12 relating to Assessment Year 2000 - 01. The said addition was deleted by the Commissioner of Income Tax (Appeals) vide order passed under Section 154 of the Act. The second addition which was made on the basis of Page 110 to 121 of Bundle A-9 of Party No.A-12 relating to Assessment Year 2001 - 02, the assessee had not filed the return of income for the said Assessment Year and only on the basis of trial balance net profit was worked out on Rs.3,39,073/-. The assessee claims that the said net profit is subsumed in the profit of Rs.16,20,674/- and once the same is deleted then no other addition is to be made.
17. The second plea raised by the assessee was that the perusal of the document itself would reflect that it is part of trial balance and the said figure is shown as the opening balance as on 01.04.2000. It was also stressed by the Learned Authorised Representative for the assessee that the documents on the basis of which the said addition 11 ITA No.2073/PUN/2014 Block Period : 1997-98 to 2003-04 & ITA No.2658/PUN/2016 Block Period : 1997-98 to 2003-04.
was not made available to the assessee, though, repeated requests were made to the Assessing Officer in this regard.
18. The limited issue which arises in the present appeal is against the order of rectification passed by the Commissioner of Income Tax (Appeals) under Section 154 of the Act. The scope of rectification is limited to correct any mistake which is apparent from the record. The submissions made by the assessee do not point out the said apparent mistake which could be rectified under Section 154 of the Act. We find no merit in the various contentions made by the assessee in this regard, since the scope of rectification under Section 154 of the Act is very limited. Accordingly, we dismiss the claim of the assessee. Upholding the order of the Commissioner of Income Tax (Appeals), we dismiss the appeal raised by the assessee.
19. In the result, both the appeals of the assessee are dismissed.
Order pronounced on 17th day of March, 2017.
Sd/- Sd/-
(R.K. PANDA) (SUSHMA CHOWLA)
लेखा सद य / ACCOUNTANT MEMBER या यक सद य / JUDICIAL MEMBER
पुणे Pune; दनांक Dated : 17th March, 2017.
Yamini
12
ITA No.2073/PUN/2014
Block Period : 1997-98 to 2003-04 &
ITA No.2658/PUN/2016
Block Period : 1997-98 to 2003-04.
आदे श क0 1 त3ल4प अ5े4षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. CIT-Central, Pune.
4. CIT (A) - 12, Pune.
5. #वभागीय &त&न'ध, आयकर अपील य अ'धकरण, "ए" / DR, ITAT, "A" Pune;
6. गाड, फाईल / Guard file.
आदे शानस ु ार/ BY ORDER,स // True Copy // सहायक रिज12ार/ Assistant Registrar, आयकर अपील य अ'धकरण ,पुणे / ITAT, Pune.