2024 (4) TMI 705 - AT - Income Tax

Delay in filling appeal before the Tribunal - appeal is time-barred by 24 days - The assessee failed to respond to notices issued u/s 143(2)/142(1) for scrutiny assessment leading to the ld. Assessing Officer passing the assessment order ex-parte u/s 144(1) based on best judgment - HELD THAT - Punishment in the shape of taxes and penalty could be disproportionate to the negligence of assessee for not appearing before the AO or before the ld. 1st and 2nd Appellate Authority but failure of the assessee to plead its case on merit do exhibit that it is a Company which is on papers only. The shadow prosecutor of the proceeding do ensure procedural compliance of filing appeals before the Appellate Authority in time. Our experience of more than twenty years in adjudicating such type of litigation do suggest that this type of stand is being taken intentionally so that the time limit to take action in the case of those share applicants could be expired and a plea be raised before the Higher Appellate Forum that matter be remitted back for deciding afresh on merit. After expiry of six years earlier prior to 2021 and now ten years action in the case of share applicant would not be taken up by the Income Tax Authorities. When we examine these facts and try to strike a balance between the adjudicatory process then sometime it gives us pain and disappointment. But nevertheless we have to resolve this dispute according to the material available on record. A perusal of the application filed for condonation of delay we are of the view that neither an affidavit of the Director is being filed nor exact details are submitted as to how this delay has happened. The assessee has not filed any confirmation from Ms. Devuani Dutta showing that appeal papers were submitted to her within time and she was busy in other tax matters and therefore could not file the appeal. Appeal of the assessee is dismissed.

Summary

Issues Involved:
The appeal revolves around the addition of Rs. 3,77,00,000/- made by the Assessing Officer under Section 68 of the Income Tax Act.

Issue 1: Addition u/s 68 of the Income Tax Act

The assessee, a company, filed its return declaring 'NIL' income for A.Y. 2012-13. The Assessing Officer passed an ex-parte assessment order under section 144(1) as the assessee did not respond to notices under sections 143(2)/142(1). The AO observed unexplained cash credit of Rs. 3,77,00,000/- related to paid-up shares and share premium issued by the company. The assessee did not participate in the assessment process, leading to the addition. The CIT(Appeals) confirmed the addition after the assessee failed to respond to multiple notices issued during the appeal process.

The Tribunal noted that the assessee failed to present its case on merit throughout the proceedings. Despite being given opportunities, the assessee did not provide details regarding the share applicants or the source of funds. The Tribunal expressed concern over the intentional delay tactics employed by the assessee to avoid scrutiny of the share applicants. The Tribunal, after considering the lack of substantive explanations and the delayed appeal, dismissed the appeal as time-barred.

The Tribunal found the application for condonation of delay lacking in essential details and dismissed it. The assessee's attempt to explain the delay was deemed insufficient, as no affidavit or concrete evidence was provided to support the claim. The Tribunal concluded that the appeal was rightly dismissed due to being time-barred, emphasizing the importance of complying with procedural requirements in tax matters.

In conclusion, the Tribunal upheld the decision to dismiss the appeal, highlighting the importance of timely compliance and substantive engagement in the assessment and appeal processes.