2013 (11) TMI 227 - AT - Income Tax

Condonation of delay Held that - Inordinate delay in filing the appeal before the Tribunal in the present case is said to have happened due to laxity on the part of one of the staff of office of the Chartered Accountants who is engaged by the assessee. Considering the entire facts and circumstances of the case, in order to advance substantial justice, a liberal presumption is to be made to the above submissions of the assessee that the delay is beyond its control, and reasonable cause for condonation of the delay, more so, when the affidavit filed by the staff of the counsel of the assessee has not been doubted by the Revenue Decided in favor of Assessee. Additions u/s 68 of the Income Tax Act - Impugned transaction is cheque badli transaction Held that - Shri Bholabhai Kakiya, has not responded to the notice under section 133(6) issued by the AO, and the AO has noted that neither any reply nor any evidence was filed by the assessee to prove that the impugned transaction is genuine, and hence remained unverifiable. The additional evidences such as PAN card and the bank statement of Shri Bholabhai with Progress Mercantile Co-op. Bank were not before the AO at the time of finalization of the assessment. Nevertheless, the CIT(A) has not found the same to be satisfactory to explain genuineness, identity and credit worthiness of the cash transaction undertaken by the assessee Since the assessee has stated that the AO has not given proper opportunity to furnish further evidences in this regard, it is proper to give one more opportunity to the assessee to furnish all the details and evidences in respect of the impugned loan of Rs.33,01,000/- taken from Shri Bholabhai Kakiya Issue remanded to the file of AO.

Summary

Issues:
1. Delay in filing appeal condonation.
2. Addition of Rs.33,01,000/- u/s. 68 for loan received.

Issue 1: Delay in filing appeal condonation

The appeal was filed late by 883 days, leading to the ITAT declining to condone the delay initially. The appellant approached the Hon'ble Gujarat High Court, which directed the Tribunal to reconsider the condonation issue after considering the affidavit of the office boy involved in the delay. The office boy explained that due to his heavy workload and other time-bound tasks, the appeal for the assessment year 2000-2001 was inadvertently not filed on time. The appellant argued that the delay was not due to negligence but circumstances beyond their control. The Tribunal, after reviewing the facts and circumstances, decided to condone the delay and admit the appeal for adjudication on merit.

Issue 2: Addition of Rs.33,01,000/- u/s. 68 for loan received

The AO made an addition of Rs.33,01,000/- u/s. 68 for a loan received, suspecting it to be a 'cheque badli' transaction. The appellant provided a confirmation letter and PAN of the lender, Shri Bholabhai, to establish the genuineness of the transaction. However, the AO noted discrepancies in the bank account transactions and lack of response from Shri Bholabhai to the notice under section 133(6). The CIT(A) upheld the addition, considering it a 'cheque badli' case. The Tribunal observed that additional evidence submitted before the CIT(A) was not available to the AO during assessment. To ensure justice, the Tribunal set aside the orders and directed the AO to allow the appellant to present all necessary details and evidence regarding the loan. The AO was instructed to reevaluate the issue after providing a fair opportunity to the appellant for clarification, cooperation, and hearing.

In conclusion, the Tribunal decided to condone the delay in filing the appeal and admitted it for further consideration. Regarding the addition of Rs.33,01,000/- for the loan received, the Tribunal set aside the previous decisions and directed a fresh assessment by the AO after allowing the appellant to present all relevant details and evidence.