2019 (6) TMI 91 - AT - Income Tax

Condonation of delay - Failure to explain delay in filing this appeal late by 364 days beyond time stipulated u/s 253(3) with sufficient cause - Disallowance of bad debts, Legal Financial Charges and Depreciation claimed - best judgment assessment - ex-parte order by Tribunal - HELD THAT - The notice which was sent to the assessee by tribunal on 14.02.2019 vide registered A.D. to the registered address has returned un-served with remark left premises‟. The said envelop is placed in file. The assessee has not furnished new address with the Registry of the tribunal as is required under Rule 9A of the Income-Tax (Appellate Tribunal) Rules, 1963, as no revised form No. 36 has been filed by the assessee. Thus, we have observed that the assessee is consistently adopting a casual approach in dealing with the appeal filed with the tribunal. The litigant has to be vigilant to its rights and duties under law. There has to be a plausible and sufficient cause for seeking condonation of delay in filing appeal late beyond time prescribed under statute, which we found lacking in this appeal as the assessee could not explain substantial delay of 364 days in filing this appeal late. The delay in filing appeal in instant case is as much 364 days which by no standards is a small delay and since assessee had failed to explain delay in filing this appeal late by 364 days beyond time stipulated u/s 253(3) with sufficient cause, we dismiss the condonation of delay application filed by the assessee. Even on merits we have observed that the assessee has with respect to all the three claims of deduction of expenditure which stood disallowed by the AO and added to income vide best judgment assessment which later stood confirmed by learned CIT(A), had not filed any details and justifications with respect to these claim of deduction of expenditure with respect to all the three issues before AO as well as before Ld. CIT(A). Even before us none appeared on behalf of the assessee when the appeal was called for hearing and no details as well justifications of claiming these expenses as deduction for computing income of the assessee for impugned assessment year are filed. The assessee has also not filed paper book containing evidences with tribunal to justify its claim of deduction of aforesaid expenses. Under these circumstances there is no reason and justification for us to interfere with well reasoned appellate order passed by Ld. CIT(A) as there is a failure on the part of the assessee to give details and justification for its claim of deduction with respect to all the issues - decided against assessee

Issues Involved:
1. Addition on account of Bad Debts.
2. Addition on account of Legal & Financial Charges.
3. Addition on account of Depreciation claimed.
4. Consequential relief in respect of interest charged under sections 234B and 234C.
5. Condonation of delay in filing the appeal.

Detailed Analysis:

1. Addition on Account of Bad Debts:
The assessee claimed bad debts amounting to ?8,44,93,063 in the revised return of income. The AO disallowed this claim as the assessee did not offer corresponding income to tax, nor did it provide details or justification for the bad debts. The CIT(A) upheld this disallowance, noting that the bad debts were neither written off in the books of accounts nor a provision created for them. The claim should have been made in the subsequent assessment year (AY 2014-15) as per the accounting period.

2. Addition on Account of Legal & Financial Charges:
The assessee claimed a deduction of ?13,96,242 for legal and financial charges. The AO disallowed this claim due to the absence of supporting evidence and justification. The CIT(A) confirmed the disallowance, noting that the assessee failed to provide details regarding the purpose, utilization, and terms of the loans even during the appellate proceedings.

3. Addition on Account of Depreciation Claimed:
The assessee claimed depreciation of ?18,56,259 on fixed assets acquired/constructed during the year. The AO disallowed this claim as the assessee did not submit necessary details such as bills, agreements, or evidence of the assets being put to use. The CIT(A) upheld the disallowance due to the lack of supporting documentation and evidence of the assets being used for business purposes.

4. Consequential Relief in Respect of Interest Charged Under Sections 234B and 234C:
The assessee sought consequential relief for interest charged under sections 234B and 234C. However, since the primary additions were upheld, no specific relief was granted in this regard.

5. Condonation of Delay in Filing the Appeal:
The appeal was filed 364 days late. The assessee attributed the delay to the appellate order being received by a peon who did not hand it over to a responsible officer. The tribunal found this explanation insufficient and incomprehensible, given the involvement of a Chartered Accountant who represented the assessee before the CIT(A). The tribunal rejected the condonation application due to the lack of a plausible explanation for the substantial delay.

Conclusion:
The tribunal dismissed the appeal filed by the assessee on all grounds. The disallowances made by the AO, which were upheld by the CIT(A), were confirmed due to the assessee's failure to provide necessary details and justifications. The tribunal also dismissed the application for condonation of delay in filing the appeal, citing insufficient cause for the delay. The appeal was pronounced dismissed in the open court on 29.05.2019.

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