2017 (3) TMI 1801 - AT - Income Tax

Condonation of delay filling Rectification application - whether the assessee has a good case of condonation of delay in filing the appeal late by about 1305 days? - HELD THAT - Hon ble Supreme Court in the case of Improvement Trust Ludhiana Vs. Ujagar Singh Ors 2010 (6) TMI 660 - SUPREME COURT 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 is dismissed on preliminary issue itself. 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 . The first addition 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 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 3, 39, 073/-. The assessee claims that the said net profit is subsumed in the profit of 16, 20, 674/- and once the same is deleted then no other addition is to be made. 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 was not made available to the assessee though repeated requests were made to the Assessing Officer in this regard. 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.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal (1305 days).
2. Rectification under Section 154 of the Income Tax Act, 1961.
3. Addition of ?3,39,073 based on trial balance as on 31.03.2001.
4. Addition of ?16,20,674 based on a projected sale of property.

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The assessee filed the appeal in ITA No.2658/PUN/2016 after a delay of 1305 days. The delay was attributed to the pendency of a rectification application under Section 154 of the Income Tax Act, 1961, which was ultimately rejected on 17.10.2014. The assessee then filed the appeal on 22.11.2016. The Tribunal noted that the assessee was aware of the addition of ?3,39,073 as early as October 2014 but failed to file the appeal promptly. The Tribunal emphasized that while a pragmatic view should be taken in condonation matters, the onus is on the assessee to explain the delay. The Tribunal found no sufficient cause for the delay and dismissed the condonation application, thereby dismissing the appeal in ITA No.2658/PUN/2016 on preliminary grounds.

2. Rectification under Section 154 of the Income Tax Act, 1961:
The assessee sought rectification under Section 154 for the addition of ?3,39,073, arguing that it was part of a larger amount of ?16,20,674, which was already deleted by the Commissioner of Income Tax (Appeals). The Tribunal clarified that rectification under Section 154 is limited to correcting mistakes apparent from the record. The Tribunal found that the issues raised by the assessee did not constitute apparent mistakes that could be rectified under Section 154, thereby dismissing the rectification appeal.

3. Addition of ?3,39,073 Based on Trial Balance as on 31.03.2001:
The addition of ?3,39,073 was based on a trial balance found during a search action on 27.06.2002. The assessee contended that this amount pertained to the financial year ending 31.03.2000 and was part of a tentative account based on a projected sale of property. The Tribunal noted that the addition was made for the Assessment Year 2001-02 and was based on different documents from those related to the ?16,20,674 addition. The Tribunal upheld the Commissioner of Income Tax (Appeals)' decision, finding no merit in the assessee's contention that the amount should be deleted.

4. Addition of ?16,20,674 Based on a Projected Sale of Property:
The addition of ?16,20,674 was initially made based on a document reflecting a projected sale of property, which was later deleted by the Commissioner of Income Tax (Appeals) under Section 154. The assessee argued that since this addition was deleted, the related amount of ?3,39,073 should also be deleted. However, the Tribunal found that the two additions were based on separate documents and related to different assessment years. The Tribunal concluded that the deletion of ?16,20,674 did not warrant the deletion of ?3,39,073.

Conclusion:
The Tribunal dismissed both appeals filed by the assessee. The appeal in ITA No.2658/PUN/2016 was dismissed due to the failure to condone the delay in filing. The appeal against the rectification under Section 154 (ITA No.2073/PUN/2014) was dismissed because the issues raised did not constitute apparent mistakes that could be rectified under the said section.