2018 (4) TMI 1847 - AT - Income Tax

Condonation of delay - CIT(A) in deleted the addition in violation of Rule 46A of the I.T. Rules 1962 - CIT(A) on admitting the additional evidences directed the AO to examine the case properly by calling the books of accounts and other details and file a Remand Report - HELD THAT - Despite giving several sufficient opportunities the AO did not file the Remand Report before CIT(A). He did not examine books of account and other details. Therefore AO has shown negligency in not filing the Remand Report before Ld.CIT(A). The same conduct of the AO continued even after passing of the impugned appellate order because the appellate order was kept pending without any action and no appeal has been filed by the Department within the period of limitation. It is simply stated in the application for condonation of delay that due to time barring assessment the impugned order was overlooked and got barred by limitation. It is a fact that AO was aware that departmental appeal would be meritless. It is therefore clear that the AO deliberately overlooked the impugned order and did not file appeal before the Tribunal within the period of limitation. Even the authorization by Ld. Pr. CIT to file the appeal have been granted after the period of limitation to file the appeal on 07.06.2016. Therefore no sufficient cause has been shown to explain the delay in filing the appeal before the Tribunal beyond the period of limitation. The application is not supported by any evidence. We therefore hold that the Revenue Department has failed to explain the delay in filing the appeal was due to sufficient cause therefore the appeal of the Revenue shall have to be dismissed as time barred. We reject the application for condonation of delay and treat the departmental appeal as time barred and dismiss the same in limine.

Summary

Issues: Appeal against deletion of addition under Rule 46A of IT Rules, 1962; Condonation of delay in filing appeal by Revenue.

Analysis:

1. Deletion of Addition under Rule 46A of IT Rules, 1962:
The appeal was directed against the order of Ld.CIT(A) deleting the addition of ?3,26,01,780 in violation of Rule 46A of the IT Rules, 1962. The assessee had filed a return of income declaring a loss, which the AO disallowed as unverifiable due to lack of details and documents. The assessee, citing financial constraints and staff shortage, sought admission of additional evidences under Rule 46A. Ld.CIT(A) admitted the additional evidences and set aside the AO's order, directing proper examination by calling for books of accounts. Despite reminders, the AO did not submit a report, leading Ld.CIT(A) to consider the additional evidences and allow the appeal. The AO's negligence in not furnishing the report and solely disallowing the loss for lack of documents was highlighted. The appeal of the Revenue was dismissed as the AO failed to justify the disallowance and the deletion of the addition was upheld.

2. Condonation of Delay in Filing Appeal by Revenue:
The appeal filed by the Revenue was found to be time-barred by 92 days. The ITO filed an application for condonation of delay citing oversight due to time-barring scrutiny assessment. The Department sought condonation, emphasizing the oversight, while the assessee opposed, attributing the delay to negligence. The Tribunal considered previous legal precedents and held that delay condonation requires sufficient cause. Citing cases where delays were not condoned due to oversight or workload pressure, the Tribunal emphasized the need for proper justification for delay. In this case, despite opportunities, the AO failed to file the Remand Report and neglected to take action within the limitation period. The Tribunal found no sufficient cause for the delay, noting the lack of evidence supporting the oversight claim. Consequently, the application for condonation was rejected, and the Revenue's appeal was dismissed as time-barred.

In conclusion, the Tribunal upheld the deletion of the addition under Rule 46A, emphasizing the need for proper examination and justification by the AO. Additionally, the Tribunal dismissed the Revenue's appeal due to the lack of sufficient cause for the delay in filing, highlighting the importance of timely actions and justifiable reasons in legal proceedings.