2023 (7) TMI 1404 - AT - Income Tax

Admission of appeal or permit filing of memorandum of cross-objections after expiry of relevant period by Tribunal - stand of the assessee is that their tax consultant did not communicate the notices received by him from the office of ld. CIT(A), therefore, they could not prosecute their remedy before the first appellate authority and similarly, he has not communicated the order of CIT(A) as well as prepared the appeal further - HELD THAT - It is pertinent to observe that no litigant would gain anything by making an appeal time barred. Therefore, such a step can never be taken at the end of the assessee to delay the disposal of the appeals. The demand has already been raised against the assessee and it is an adverse order against it unless it is deleted, no benefit would be there to the assessee. Therefore, to our mind, it was not adopted as a strategy to litigate with the Department. We condone the delay and proceed to decide the appeal on merit. Addition u/s 68 - large share premium received - assessee had raised fresh paid-up share capital - HELD THAT - AO recorded finding in one and a half page which has no coherence with the subject. It is just a jurisprudence taken out from some commentary or we do not know whether he has kept it as a readily available material. Order does not disclose who are the share applicants, how much money has been received by the assessee from these share applicants whether they are taxable entities or individuals. In the computation of income, AO has made addition of Rs. 4.70 Cr but in the next line observed that assessed total income is Rs. 3.32 Cr. In the next line, he again made taxable income at Rs. 4.70 Cr. All these things are discernible from perusal of the assessment order extracted . CIT(A), though, devoted 13 pages to record the finding that additions made by ld. AO deserves to be upheld but out of those 13 pages, he also reproduced the readily available material from some earlier discussions in some other case - he just cut paste from a readymade available material. It does not show any application of mind. It is pertinent to observe that order of the first appellate authority is an ex-parte order but sub-Section 6 of Section 250 of the Act contemplates that ld. first appellate authority would state the points in dispute and thereafter record reasons in support of his conclusion on those points. Both the authorities have not framed the points or explained who are the share applicants, how much money has been received by the assessee from each share applicant. A total figure has just been mentioned and which has been included in the taxable income of the assessee. Therefore, we are of the view that factual investigation is not complete on the record. In the absence of these details, it is very difficult to adjudicate this issue. Thus we deem it appropriate that we set aside the impugned orders of the authorities below and institute these proceedings to the file of ld. AO for afresh adjudication. Appeal filed by the assessee is allowed for statistical purposes.

Summary

Issues Involved:
1. Condonation of Delay in Filing the Appeal
2. Addition under Section 68 of the Income Tax Act
3. Assessment and Confirmation of Taxable Income

Issue 1: Condonation of Delay in Filing the Appeal

The assessee's appeal was time-barred by 165 days. To explain the delay, the assessee provided affidavits from directors stating that their tax consultant, Sh. Mukesh Gupta, failed to communicate notices and orders from the CIT(A). The Tribunal referenced the Supreme Court's liberal interpretation of "sufficient cause" in condoning delays, emphasizing substantial justice over technicalities. The Tribunal found the delay was not a deliberate strategy and condoned it, allowing the appeal to be heard on merits.

Issue 2: Addition under Section 68 of the Income Tax Act

The assessee contested the addition of Rs. 4,70,26,000/- under Section 68, which was confirmed by the CIT(A). The AO had assessed this amount as unexplained credit due to inadequate compliance by the assessee. The Tribunal noted that neither the AO nor the CIT(A) had specifically applied their minds or provided coherent findings regarding the identity, creditworthiness, and genuineness of the share applicants. The Tribunal criticized the orders for lacking detailed investigation and factual clarity.

Issue 3: Assessment and Confirmation of Taxable Income

The AO's assessment order was brief and lacked specifics about the share applicants, while the CIT(A) reproduced generic material without addressing the case's particulars. The Tribunal found these orders insufficient for a fair adjudication. Given the new material presented by the assessee, the Tribunal set aside the impugned orders and remanded the case to the AO for fresh adjudication, instructing the assessee to cooperate and provide necessary details.

Conclusion:

The Tribunal condoned the delay in filing the appeal, criticized the lack of detailed investigation by the AO and CIT(A), and remanded the case for fresh adjudication to ensure a thorough and just examination of the facts.