2019 (4) TMI 707 - AT - Income Tax

Condonation of the delay of 248 days - non receipt of proper directions to take further course of action against the order of the CIT(A) by AR who appeared before the CIT(A) - HELD THAT - As relying on MST. KATIJI AND OTHERS 1987 (2) TMI 61 - SUPREME COURT while explaining and laying down the principles that need to be kept in mind while considering an application for condonation of delay, has emphasized that substantial justice should prevail over technical considerations. The Hon ble Court also explained that a litigant does not stand to benefit by lodging the appeal late and that the expression everyday s delay must be explained does not mean that a pedantic approach should be taken. The doctrine should be applied in a rational, common sense and pragmatic manner - there was sufficient and reasonable cause for delay of 248 days in filing the appeal before the Tribunal and that it is a fit case for condonation of the aforesaid delay and do so. Failure to pay self assessment tax on the originally declared income - assessee had neither furnished details nor supporting documents to reconcile the difference of income in the revised return vis- -vis the income declared in the original return of income - HELD THAT - There has not been proper examination / verification of the matter as though the AO states that no details / corroborating evidences were field, the learned AR submits that corroborating details / reconciliation etc., for revised income of ₹ 15,73,400/- are available on the records of the Department, filed as part of the audited financial statements along with the revised returns. The interest of substantial justice would be served by setting aside the impugned orders of the authorities below and therefore restore the matter to the file of the AO for examination, verification and determination of the correct income of the assessee viz., whether at ₹ 27,94,350/- as per original return of income for Assessment Year 2014- 15 or at ₹ 15,73,400/- as per the revised return of income filed for this year taking into account and addressing all the claims of the assessee. Needless to add, the AO shall afford the assessee adequate opportunity of being heard and to file details / submissions required

Summary

Issues:
1. Condonation of delay in filing the appeal before the Tribunal.
2. Assessment of total income for Assessment Year 2014-15 based on original vs. revised return.

Condonation of Delay:
The appeal before the Tribunal for Assessment Year 2014-15 was filed belatedly by 248 days. The assessee sought condonation of delay citing ignorance about further action after receiving the order from the Commissioner of Income Tax (Appeals). The authorized representative's failure to provide proper guidance was also highlighted. The Tribunal, considering judicial pronouncements emphasizing substantial justice over technicalities, granted condonation of the delay, admitting the appeal for consideration and adjudication.

Assessment of Total Income:
The assessee, engaged in real estate business, filed a return of income for Assessment Year 2014-15, initially declaring &8377; 27,94,350/- and later revising it to &8377; 15,73,400/-. The assessing officer concluded the assessment based on the original return, disregarding the revised income, citing lack of supporting documents for the difference. The CIT(A) upheld this decision, stating the revised return was an attempt to cover up non-payment of self-assessment tax. However, the assessee argued that the original return was based on unaudited financial statements, while the revised return was based on audited financial statements, a fact confirmed by the Revenue's representative. The Tribunal found discrepancies in the assessment process, noting that while the AO claimed lack of evidence, the audited financial statements containing reconciliations were on record. Consequently, the Tribunal set aside the lower authorities' orders and remanded the case to the AO for a thorough examination, verification, and determination of the correct income, ensuring all claims are duly considered.

In conclusion, the Tribunal allowed the assessee's appeal for Assessment Year 2014-15, emphasizing the need for a comprehensive assessment process considering all relevant evidence and claims. The judgment highlighted the importance of substantial justice and proper verification in tax assessments, ensuring fairness and equity in the resolution of tax disputes.