1983 (5) TMI 63 - AT - Income Tax

Summary

Issues: Appeal against order of AAC for asst. yrs. 1976-77 and 1977-78, delay in filing appeal, double taxation, addition of income based on seized materials, reasonable cause for delay, imposition of penalty, uncalled for assessment in subsequent year.

Analysis:

1. Delay in Filing Appeal for Asst. Yr. 1976-77:
The appeal for the assessment year 1976-77 was dismissed by the AAC due to being belated without any reasonable cause for the delay. The assessee argued that the delay was justified as they felt aggrieved only upon receiving the assessment order for the subsequent year, 1977-78, where the same materials were revised by the department. However, the tribunal held that the delay of over 4 years in filing the appeal cannot be considered reasonable, as it would open the floodgates of litigation on impermissible grounds. The AAC's decision to dismiss the appeal was deemed justified.

2. Assessment for Asst. Yr. 1977-78:
Regarding the assessment year 1977-78, the ITO initially accepted the assessee's offer to tax a certain sum as income from undisclosed sources due to inability to explain seized materials. Subsequently, the ITO imposed a penalty for the previous year and made additional additions for the current year based on the same seized materials. The tribunal found that the income was being taxed twice without a definite basis, as the seized materials did not clearly indicate income relevant to both years. The tribunal concluded that the ITO's actions in assessing the disputed addition for the subsequent year were unwarranted, leading to the deletion of the additional amounts.

3. Final Decision:
The tribunal dismissed the appeal for the assessment year 1976-77 due to the belated filing without reasonable cause. However, for the assessment year 1977-78, the appeal was allowed by deleting the addition of Rs. 11,218, which comprised various amounts. The tribunal emphasized that the actions of the ITO in assessing the additional income for the subsequent year were unjustified based on the facts and circumstances of the case, leading to the deletion of the contested additions.