2018 (4) TMI 1283 - HC - Income Tax

Maintainability of appeal under Section 260-A - substantial question of law - Held that - To be substantial a question of law must be debatable, not previously settled by law of the land or a binding precedent, and must have a material bearing on the decision of the case, if answered either way, insofar as the rights of the parties before it are concerned. The question is whether the explanation given by the appellant assessee for cash deposits in his personal bank account was substantiated by materials and/or evidence on record. The Appellate Commissioner, in substance, held that there were no materials to explain the deposits. It cannot possibly be held that is any substantial question of law is involved in this appeal. The appeal cannot be entertained and the same is dismissed

Summary

Issues Involved:
1. Whether the appeal against the order of the Income Tax Appellate Tribunal was barred by delay.
2. Whether there was a substantial question of law involved in the appeal.
3. Whether the explanation for cash deposits in the appellant assessee's bank account was substantiated by evidence.

Issue-wise Detailed Analysis:

1. Delay in Filing the Appeal:
The appeal was dismissed by the Income Tax Appellate Tribunal on the ground that it was barred by a delay of 72 days. Section 260A(2)(a) of the Income Tax Act, 1961, mandates that an appeal to the High Court must be filed within 120 days from the date the order is received. The High Court noted that while the law permits condonation of delay if there is "sufficient cause," it also emphasized that the Law of Limitation is valid and cannot be ignored. The Court stated, "Whether the cause for the delay in filing an appeal is sufficient cause to warrant condonation of the delay and admission of the appeal, is basically an issue of fact."

2. Substantial Question of Law:
The High Court reiterated that an appeal under Section 260A is permissible only if it involves a substantial question of law. The Court found that "there does not appear to be any question of law involved in this appeal, not to speak of substantial question of law." The principles for determining a substantial question of law were discussed, citing various judgments, including Sir Chunilal V. Mehta & Sons Ltd. vs Century Spg. & Mfg. Co. Ltd. and Hero Vinoth Vs. Seshammal. The Court concluded that the appeal did not meet these criteria, stating, "To be substantial, a question of law must be debatable, not previously settled by law of the land or a binding precedent, and must have a material bearing on the decision of the case."

3. Explanation for Cash Deposits:
The appellant assessee had deposited ?33,17,177/- in cash in his IDBI bank account, which was added as undisclosed income by the Assessing Officer. The appellant contended that the cash deposits were from customers for travelers' cheques and loans from his sister-in-law, Mrs. Gnanagandhi. However, the Appellate Commissioner found that the appellant "was not able to substantiate the source of this deposit before the Assessing Officer." The Court noted that the appellant failed to provide cogent evidence to support his claims. The Appellate Commissioner observed, "The assessee was not able to produce the copy of the sale deed. Mere production of copy of agreement for sale is not sufficient to prove the source of deposit."

Conclusion:
The High Court dismissed the appeal, emphasizing that no substantial question of law was involved, and the explanation for the cash deposits was not substantiated by evidence. The Court concluded, "The appeal cannot be entertained and the same is dismissed. No costs."