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2016 (12) TMI 300 - AT - Income TaxUnexplained investment in Saving Bank Account - Held that - AIR wing of the Department transmitted information to the AO that a sum of ₹ 21,76,820/- was deposited in the saving bank account by way of cash. The assessee failed to give any plausible explanation of the source of deposits. Accordingly, the ld.AO has made addition with the aid of section 69 of the Income Tax Act. Appeal to the ld.CIT(A) did not bring any relief to the assessee. On due consideration of the record, find that first notice under section 143(2) was issued upon the assessee on 27.8.2010. Thereafter, the AO was transferred and new incumbent took seat of the AO. He initiated assessment proceedings effectively from the month of October, 2011. He passed assessment order on 14.12.2011. Time gap given to the assessee in this process was very short. Similarly, before the ld.CIT(A), the assessee did not prosecute the appeal properly as alleged by the assessee. Taking into consideration all these aspects, we deem it proper that ends of justice will be met if I set aside the impugned order and restore this issue to the file of the ld.AO for re-adjudication. The assessee is directed cooperate with the AO and not act negligently as acted in erstwhile proceedings. The ld.AO shall grant due opportunity of hearing to the assessee and pass fresh assessment in accordance with law - Decided in favour of assessee for statistical purpose.
Issues:
1. Condonation of delay in filing appeal before the Tribunal. 2. Addition of unexplained investment in Saving Bank Account. 3. Merits of the appeal. Issue 1: Condonation of delay in filing appeal before the Tribunal: The assessee filed an appeal before the Tribunal against the order of the ld.CIT(A), which was time-barred by 208 days. The assessee explained the delay by stating that the tax consultant failed to communicate the order of the ld.CIT(A), leading to the delayed filing of the appeal. The ld.DR argued that the assessee was negligent and did not submit details on time. The Tribunal considered the explanation provided by the assessee and referred to legal precedents emphasizing a liberal interpretation of the term "sufficient cause" for condonation of delay. The Tribunal concluded that the delay was unintentional and that the assessee would not benefit from a time-barred appeal. Therefore, the Tribunal condoned the delay and allowed the application. Issue 2: Addition of unexplained investment in Saving Bank Account: The AO added a sum of &8377;21,76,820 to the assessee's income on account of unexplained investment in a Saving Bank Account. The ld.CIT(A) upheld this addition as the assessee failed to provide a plausible explanation for the source of the deposits. Upon review, the Tribunal noted that the assessee received a notice under section 143(2) in August 2010, and the assessment order was passed in December 2011 with a short time gap for the assessee to respond. Considering the circumstances and the need for proper adjudication, the Tribunal set aside the ld.CIT(A)'s order and directed the issue to be re-adjudicated by the AO. The assessee was instructed to cooperate with the AO in the fresh assessment process. The Tribunal allowed the appeal for statistical purposes. Issue 3: Merits of the appeal: The Tribunal, after condoning the delay and addressing the issue of unexplained investment, proceeded to decide the appeal on its merits. It was observed that the assessee failed to provide a satisfactory explanation for the deposits in the Saving Bank Account. The Tribunal set aside the ld.CIT(A)'s order and directed the issue to be re-examined by the AO, emphasizing the need for proper assessment proceedings and the assessee's cooperation. The appeal was allowed for statistical purposes, indicating a procedural victory for the assessee without altering the tax liability. In conclusion, the Tribunal's judgment addressed the delay in filing the appeal, the addition of unexplained investment, and the subsequent re-adjudication of the issue by the AO. The decision highlighted the importance of a just and fair approach in considering delays and ensuring proper assessment procedures for tax matters.
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