2022 (3) TMI 70 - AT - Income Tax

Condonation of delay - delay of 712 days in filing appeal before the Tribunal - as stated impugned appellate order dated 6.3.2014 was stated to have been received by the assessee-company by its the then Accounts Manager, Shri Prakash Mannari who was in-charge of the accounts and finance of the company. It is also stated that he left the assessee-company in the month of May, 2016 and left country for better job opportunity. The assessee came to know about the disposal of the appeal when it received recovery notices from the Department - HELD THAT - The assessee is a private limited. No doubt it has its own Accounts Manager to look after accounts and financial management. Even before the Ld. CIT(A) they had engaged a Chartered Accountant to represent the case on their behalf. The reason stated in their affidavit are not convincing for the fact that the impugned order received by the then Accounts Manager in 2014 itself, but he was stated to have left company and the country in the month of May, 2016 i.e. almost about 25 months after passing of the impugned order. Further reason assigned by the assessee is that the assessee came to know disposal of the appeal by the CIT(A) only after the department initiated recovery proceedings against the assessee in March, 2016, which is also not convincing and not a reasonable cause, because the assessee being a private limited company, would have reasonable manpower back-up, and would not have left the income-tax matter unattended for such a long period. Further, it is also not explained, when the then Accounts Manager had received the impugned order. Reasonable diligence is expected, where time is essence in taxation matters. In the absence of the same, the reasons attributable by the assessee are not convincing wherein a substantial delay of 712 days in filing appeal before the Tribunal has occurred. Therefore, we cannot accept the proposition put forth by the assessee-company as good and sufficient reason to condone such delay. As enough opportunities were given to the assessee to prove its case both by the AO as well as by the Ld. Commissioner of Income-tax (Appeals). Further no new material or evidence is produced by the assessee before this Tribunal. The assessment year being 2010-11 no useful purpose will be served by entertaining this appeal at this point of time, wherein there is a delay of 712 days in filing of appeal. The reasons narrated by the assessee-company in its affidavit do not demonstrate sufficient cause or reasons so as to condone a huge delay of 712 days. - Decided against assessee.

Summary

Issues:
1. Condonation of delay in filing appeal before the Tribunal.
2. Addition of ?33,61,451 on account of unverified purchases under Sec. 68 of the Income Tax Act, 1961.

Issue 1: Condonation of Delay in Filing Appeal Before the Tribunal:
The appeal was filed by the assessee against an order dated 6.3.2014 passed by the Ld. Commissioner of Income-tax (Appeals)-IV, Baroda, relating to the assessment year 2009-10. The Registry pointed out a delay of 712 days in filing the appeal, rendering it time-barred. The assessee submitted an affidavit seeking condonation of delay, attributing it to the Accounts Manager leaving the company and the country, resulting in a lack of awareness about the appeal's disposal until the initiation of recovery proceedings. The Tribunal found the reasons provided by the assessee unconvincing, emphasizing the lack of diligence and reasonable cause for the substantial delay. The Tribunal concluded that the delay could not be condoned based on the reasons presented, leading to the dismissal of the appeal as unadmitted due to being time-barred.

Issue 2: Addition of ?33,61,451 on Account of Unverified Purchases under Sec. 68 of the Income Tax Act, 1961:
The assessee contested the addition made by the assessing officer on account of unverified purchases under Sec. 68 of the Income Tax Act, 1961. The Ld. CIT(A) upheld the addition after multiple opportunities were granted to the assessee to substantiate the genuineness of the expenses. The CIT(A) noted the appellant's failure to provide confirmations from parties, lack of efforts to establish the genuineness of expenses, and the unwillingness to submit evidence sought by the AO. Despite several chances during assessment and appellate proceedings, the appellant did not adequately support the transactions, leading to the additions being upheld. The CIT(A) directed the deletion of certain amounts where verifications were made and confirmations were filed. Ultimately, the Tribunal observed the laxity in the assessee's conduct during the appellate proceedings and the lack of new material or evidence presented before them. Given the delay in filing the appeal and the insufficiency of reasons provided, the Tribunal declined to condone the delay, resulting in the dismissal of the appeal.

In conclusion, the Tribunal dismissed the appeal as unadmitted due to being time-barred, highlighting the inadequacy of reasons for the delay in filing the appeal and the failure to substantiate the unverified purchases, leading to the additions being upheld.