2018 (10) TMI 495 - AT - Income Tax

Condone the delay on technical ground - CIT(A) rejected the appeal filed by the assessee on the ground that there is a delay of 285 days in filing the appeal and the assessee has not explained the delay in filing the appeal with sufficient and reasonable cause - Held that - There is no change in the facts existed at the time of assessment proceedings and at the time of filing appeal before the CIT(A). The only change in facts is that there are divergent statements by way of affidavits from two Chartered Accountants, one in favour of the assessee and one is against the assessee. Except this the assessee has not brought out any records to prove its bonafide attempts made in filing appeal against the order passed by the AO. Had it been the case of the assessee that it has handed over all papers to the professional for filing the appeal, but the professional who had advised the assessee to not to file the appeal. In the absence of any evidence to prove bonafideness of the assessee, merely on the basis of self serving documents, huge delay in filing appeal cannot be condoned. Therefore, the assessee has failed to make out sufficient and reasonable cause for condonation of delay in filing the appeal filed before the CIT(A). Although, the assessee has relied upon various decision in support of its arguments, the facts remain that the term sufficient cause is not explained and hence whether to condone the delay or not is purely depends upon the facts and circumstance of each case. Therefore all the case law relied upon by the assessee are considered to be not applicable to the assessee s case and accordingly not considered. The assessee has failed to make out sufficient and reasonable case before the CIT(A) for condonation of delay in filing of the appeal by 285 days.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal before CIT(A).
2. Reopening of assessment under Section 147 of the Income Tax Act, 1961.
3. Addition of income based on alleged bogus purchase transactions.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal Before CIT(A):
The primary issue revolves around the rejection of the assessee's request for condonation of a 285-day delay in filing the appeal before the CIT(A). The assessee argued that the delay was due to the initial advice from their Chartered Accountant, who believed there was no merit in the case. Later, another Chartered Accountant advised filing the appeal, leading to the delay. The CIT(A) rejected this explanation, stating that the assessee failed to show sufficient and reasonable cause for the delay. The CIT(A) emphasized that the decision not to file the appeal was a conscious one, and subsequent advice from another professional did not constitute a valid reason for condonation. The Tribunal upheld the CIT(A)'s decision, noting that the assessee did not provide adequate evidence to prove a bona fide attempt to file the appeal on time.

2. Reopening of Assessment Under Section 147 of the Income Tax Act, 1961:
The case involved the reopening of the assessment for A.Y. 2009-10 under Section 147 based on information from the DGIT (Inv), suggesting that the assessee was a beneficiary of accommodation entries from a hawala operator. The AO issued a notice under Section 148 and conducted a survey under Section 133A, during which the Director of the company admitted that the transactions with the hawala operator were non-genuine. The AO, considering the survey findings, concluded that the assessee had purchased raw materials instead of capital goods, leading to an addition of `45,90,435/- to the total income.

3. Addition of Income Based on Alleged Bogus Purchase Transactions:
The AO's addition was based on the claim that the assessee failed to provide sufficient evidence to substantiate the purchase of capital goods from the alleged hawala operator. The assessee's inability to produce relevant documents and reliance on journal entries were deemed insufficient to prove the genuineness of the transactions. The CIT(A) and the Tribunal both upheld the AO's decision, agreeing that the assessee did not present a convincing case to challenge the findings of the assessment order.

Conclusion:
The Tribunal dismissed the appeal filed by the assessee, agreeing with the CIT(A) that there was no sufficient and reasonable cause for the delay in filing the appeal. The Tribunal also upheld the AO's findings regarding the non-genuine transactions and the subsequent addition to the income. The decision highlights the importance of timely filing appeals and providing substantial evidence to support claims in tax assessments.